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"Medicare for All" Still Misses Key Point

Posted by Chip Block on November 18, 2019 10:15 AM EST
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After having written a few blog postings in the past where I have opined about the.....

....ugly politics centered around the "Medicare for All" debate and the theory that what we need is some sort of centralized governance, whether that be done by the private sector or by the federal or state governments, I found another argument from a well-respected resource making the case yet again.  The argument of creating more privatized, open market competition seems good in theory.  And the idea of leveraging purchasing power, feasibly with the government or some private entity, applying the leverage against pricing of pharmacy products or healthcare services quality or both still miss the mark.

Both ends of the debate seem to focus only on the "supply-side" of the issue.  Rather than finding innovative solutions that reduce the demand for healthcare services, either through alternative healthcare services distribution (still a supply-side focus) or through improving population health and reducing demand for services related to chronic or self-managed health care.  

The most recent argument came in the form of quotes in a recent edition of the "Knowledge @ Wharton" e-newsletter and included a synopsis of a recent interview with Ezekial Emmanuel who played a pivotal role in the design of the Affordable Care Act under former President Barack Obama.  Mr. Emmanuel is clearly a very smart and knowledgeable person who has studied ways to improve the cost and quality of healthcare delivery services using insurance and other mechanisms.  However, you will see in the following quotes the same angle of focusing on the right oversight/governance model for the distribution, access, and support for healthcare.  Not much on the side of the innovator's dilemma for reducing the demand side by driving healthier lifestyles and better consumer education on purchasing healthcare or for support from others who care about the person and their overall health.

So, here are the quotes that make excellent points, but don't address the side of the healthcare crisis that needs some innovative new thinking-rewarding healthier lifestyles and smarter healthcare consumerism.

Ezekial Emmanuel Quotes in Knowledge@Wharton e-newlsetter article:

Emanuel pointed to a recent Rand Corporation study which showed that on average, private health plans pay more than 240% of Medicare rates for hospital services. “That seems way out of whack,” he said. “There are a lot of hospital monopolies, and consolidation has led to price increases – not quality increases as claimed. We do have to rein in hospital prices.” The big question is how that could be achieved, which may include placing a cap on those prices, he added.

The cost savings assumed by the Warren plan are overly ambitious, according to Emanuel. “If you want to control costs, there are at least three main areas you have to look at: drug costs, hospital costs to the private sector, and administrative costs,” he said. “All of them are out of whack. All of them are ballooned.”

On drug costs, for example, it is not clear if that would be achieved through negotiations with drug companies or by the government setting a price ceiling, Emanuel said. He suggested a way out: “We should have negotiations informed by value-based pricing,” he said. “How much health benefit does the drug give? The more the health benefit, the higher the price of the drug. But we do need to have caps.”

“Right now, each [U.S.] insurance company and each plan has a different format for the claims, and [asks for] different [types] of information,” Emanuel said. “[The U.S.] would also need a clearinghouse, so all of the bills look the same, use the same forms, and we don’t have a lot of variation.”

It's hard to argue with the points that Mr. Emmanuel makes in the interview.  Very logical and all should be explored.  Without a doubt, improving the economics of the American healthcare system and its pricing and quality of services are huge needs.  Yet, when we think about it, such solid arguments miss the point of what can be done to enable healthcare consumers, patients and their families and other support groups to seek improvements in their overall health and to be rewarded for improvements.

Still more work to be done on that front.....

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