The Health Care Affordability Debate: Is Single-Payer the Answer?
There has been increasing buzz surrounding health care reform concepts that which seek to address the singular issue of individual health care coverage affordability.
Recently, there has been increasing buzz surrounding health care reform concepts, such as Medicare for all at age 55 or the establishment of a single-payer plan, that which seek to address the singular issue of individual health care coverage affordability.
What we have learned from the Affordable Care Act is that although we like the idea of guaranteed health care, we do not like the price tag associated with it, as premium costs have risen in many cases. With these factors in mind, some states, such as California, have had special interest groups push for a single state health coverage plan. In reviewing these types of proposals, it appears that the key issue is how individuals evaluate the issue of affordable coverage.
The insurance market is actuarially based, so that the cost (risk) is spread across all of the plan members and individuals who have only a minimal need for care help to pay for services for individuals who are high-cost users. This has led to spending growth as plans now must pay for preexisting conditions that typically are more expensive to treat. The net impact has been increased premium costs for all plan members.
Another factor in rising costs is the data that indicate individuals with lower coverage needs are more reluctant to pay higher premiums. As a result, fewer members translates to a smaller number of people to absorb the spending, causing premiums to increase since the cost cannot be spread over a larger membership.
These ongoing challenges have given rise to proposals, such as single-payer plans, which conceptually would increase the size of plan membership to spread out the cost. However, we seem to overlook that these are government-based approaches and in order for the government to be able to pay for these types of programs, it must find a way to simultaneously increase funding and decrease costs. Funding would typically be addressed by increasing tax rates or a likely increase in Social Security contributions on an individual level, as is the case of the Medicare proposal. How these revenue needs will be addressed is up in the air. On the cost side of the equation, we are already seeing some progress; for example, the value-based agreements and pay-for-performance concepts growing in popularity.
How these proposals will ultimately be structured and implemented is unknown at this time. Additionally, the single-payer proposals raise questions as to how the current market will be affected and what will happen to the thousands of people currently employed across the health insurance industry. Another unknown is how specialty pharmacy services would be incorporated and what the value of those services would be. The overriding issue of health care affordability and accessibility affects everyone in some manner. It doesn’t really matter which groups are bringing the issues forward, because their basic concerns are similar: Can we access care and at what cost? If costs are so great that most individuals cannot afford coverage or if the plan patients can afford is structured in such a way that they must endure a significant financial burden before they receive coverage, then have we accomplished our goals?
In specialty pharmacy, these challenges become extremely problematic in that the services rendered typically have a higher cost due to the complexity of the conditions being treated. When considering cost and care issues—such as data needs and reporting requirements, delivery mecha- nisms, and the multiplicity of requirements for specialty pharmacy—how to adequately address those needs while keeping costs down is likely to be a discussion that will evolve over time. It remains to be seen how potential changes in structure will impact the accessibility of those services both geographically and touch wise.
Could these programs lead to rationed care in order to control cost? What we have seen in countries with single-payer programs is not uniform, and as time has passed, we have seen the emergence of certain types of supplemental insurance programs. These appear to be somewhat akin to Medicare supplemental programs in that they provide additional coverage or coverage options. So, where will we end up in terms of how we, as a nation, provide care and which benefits a single-payer program will? To date, the discussion has focused on the issue of patient access to health care coverage, with little discussion on access to actual care. Providers of all forms must still be able to offer their various services. Therefore, a single-payer coverage model will need to have a methodology established to set payment rates for these services. Consider that under this system, providers would have to choose between either accepting this payment rate or opting out of the plan.
These changes to the health care system also have the potential to greatly impact the pharmaceutical marketplace, specifically in terms of innovation in care management and new drug development. There are many unanswered questions, but there also appears to be a significant need to discuss the details of how a program of this nature would actually operate. Will these new models be more restrictive in how patients obtain care and limit services offered? Will care be rationed, and if so, how would that affect specialty pharmacy services?
Dreaming of a program that grants widespread access to care is great, but without certain key details as to how it will operate, which services would be accessible, and what limitations would be on these services, if any, makes it no more than a rhetorical political talking point. We don’t know whether the program would end up being a significant improvement over our current system, but there are concerns that it may end up being like one size fits all, which basically means it won’t fit anyone well.
Single-payer systems were primarily developed after World War II, and now that we have the benefit of experience, we can parse out which aspects of these systems are good and not so good. What we have seen is that most single-payer health systems around the world become multipayer systems over time, due in large part to what appears to be a lack of access to care. As such, the nations that do have a single-payer type of system, in essence, really don’t have one. So we have to ask ourselves, is the United States willing to pay more in taxes since the government can only use some form of a tax to increase revenue? Are we willing to ration care if that is part of the actual program design? Are we willing to reduce the current financial incentives tied to becoming a health care provider?
Specialty pharmacies, care providers, and manufacturers of life-altering specialty drugs need to be active in the discussion and engaged with the process. Most legislators will remain unaware of the value and outcomes a specialty pharmacy can help deliver unless the industry informs them. Also keep in mind that many of the individuals debating these various approaches are more focused on getting elected rather than solving the challenges of health care affordability and access.