This piece is about single-payer health care in the United States. It includes extensive information about Vermont and highlights recent efforts to create a publicly funded universal health care system.
Don Berwick, MD, helped launch the Affordable Care Act (ACA) – considered at the time to be the only health reform this country would need – when he was administrator of the Centers for Medicare and Medicaid Services (CMS) in 2010 to 2011.
But five years later, Dr. Berwick and millions of other Americans are calling for a new round of reform that would involve much more profound changes: a single payer system.
Dr. Berwick says he still supports the ACA – "it’s been a step forward for the country," he says – but adds: "The ACA does not deal with problem of waste and complexity in the system." Other single payer advocates are less forgiving. They think the ACA is pampering the commercial insurance industry – providing it with millions more customers and allowing it to jack up charges to levels that fewer Americans can afford.
The Single Payer Would be the US Government
Single payer reform would take an audacious step. It would virtually eliminate the entire commercial insurance industry – with $730 billion in revenues and 470,000 employees – and replace it with one unified payer run by the federal government. A small vestige of the industry would remain to cover non-essential services, such as Lasik surgery.
Advocates often envision single payer as an expansion of Medicare, or "Medicare for all." Single payer systems in Canada, Australia, Denmark, Norway and Sweden have much lower per capita health spending and generally better health outcomes than the United States [1]. This is also true for government-run systems such as in the United Kingdom (UK), which are another form of single payer. Multi-payer health systems in other developed countries also have lower costs than the United States, through use of price controls and approval processes for medical technology.
Single payer has a moral argument – that everyone has a right to health care – but it also has a practical one, says James Burdick, MD, a transplant surgeon at Johns Hopkins University School of Medicine and author of "Talking About SINGLE PAYER!" which will be published later this year. "It’s a more economical way to use health care resources," Dr. Burdick says. "You could reduce expenses and still improve quality. That’s a tremendous opportunity that you don’t have in many other fields."
According to a 2014 study [2], the new, streamlined system would save U.S. health care $375 billion a year, due mainly to removing the inefficient administrative costs of multiple payers. The authors calculated that the savings would cover millions of people who are still uninsured and terminate high deductibles and other out-of-pocket costs levied by commercial insurers.
Restoring Doctors’ Authority
Terrence McAllister, a solo pediatrician in Plymouth, Mass., believes that single payer would restore the medical profession’s independence and authority. Dealing with the current system of multiple commercial insurers, he says, makes it very difficult to be independent, forcing many doctors into employment. "The profession is becoming more and more dependent on employment, and that usually means serving the needs of hospitals," he says.
His wife Leann, who administers the practice, thinks single payer would create a renaissance for small practices. In the United States, small practices often have to make do with lower reimbursements because they lack negotiating leverage with insurers, but there are no such negotiations in a single payer system. As a small practice, "I could build a business plan with far more certainty," she says.
For all practices, administrative costs would plummet because there would be only one set of payment rules. Prior authorizations, narrow networks, and out-of-pocket payments – commercial insurers’ methods of controlling utilization – would be eliminated, proponents say.
Under the Canadian single-payer system, physicians turn in a slip of paper for each encounter. Dr. Burdick says a Canadian orthopedic surgeon who moved from the United States told him he was greatly relieved to no longer have an extra room in the back for coding clerks and claims files. "I fill out the chits for each encounter and my secretary bundles them up and sends them in," he told Dr. Burdick. Indeed, a 2011 study [3] found that U.S. doctors spend almost four times more money dealing with payers than do doctors in Ontario, Canada.
Dr. Berwick did not support single payer until late 2013 – several months into his campaign to be the Democratic nominee for governor of Massachusetts, his first foray into electoral politics. While campaigning, "I became more and more familiar with all the obstacles people faced in education, housing and employment," he says. "I concluded that our health care system takes money away from these things."
He thinks single payer could clean up a highly inefficient system. "There is too much complexity and administrative hassle in our health care system," he says. "We need to simplify the payment structure."
Evidence of Growing Physician Support
Dr. Berwick lost the primary in September 2014, but during the campaign he felt his single payer message resonated with doctors. It definitely did so with the McAllisters in Plymouth. "He helped solidify our support for single payer," Leann McAllister recalls. In March, Dr. McAllister joined Physicians for a National Health Program (PNHP), a single payer advocacy group that has more than 19,000 members nationwide.
Are more doctors flocking to single payer? The only known recent poll of doctors is a 2014 survey of Maine physicians [4] conducted for the Maine Medical Association (MMA). The poll found that nearly 65% of MMA members preferred the single-payer option very trying to fix the current system – up from 52% in a 2008 survey.
MMA’s 2014 survey showed that single payer is especially popular among primary care and employed physicians. For example, more than three-quarters of family physicians endorsed single payer, compared with one-third of radiologists. And while only 40.7% of physicians at fully physician-owned practices endorsed single payer, 72.6% of those in fully hospital-operated practices did so.
Physicians seem more open to single payer as the profession moves toward the Democratic Party, a stronghold of single payer. According to a study [5] published in July, 55% of doctors making political contributions in the 2013-2014 election cycle gave to Democrats. That’s a substantial change from 18 years earlier, when 72% of contributing doctors gave to Republicans.
Proponents say there are plenty of other reasons for doctors to like single payer, in addition to restoring physicians’ authority and simplifying claims. Dr. McAlister says single payer would simplify the clinical process, thereby boosting quality of care. "From a clinical perspective, the main advantage is that I don’t have to consider which insurance the patient has and make my plans for patients based on that," he says.
Single payer is also being touted as a way to reduce malpractice litigation. There would be no need to file a lawsuit to get future medical care, because single payer would cover it. Still, it would not cover pain and suffering or economic damage.
Americans are Warming up to Single Payer
There are signs that the public is also warming up to single payer. A slight majority of Americans (51%) support Medicare for all, according to a national poll [6] released in January for the Progressive Change Institute, a liberal-leaning group. The survey also found, however, that more than one-third oppose Medicare for all. Also, there is a wide partisan divide. While 79% of Democrats supported single payer, only 23% of Republicans did so.
Interest in single payer may continue to grow, due to the rise of high deductibles and other out-of-pocket costs for patients, according Steffie Woolhandler, MD, a Harvard internist and co-founder of the PHNP. While the ACA expanded coverage to millions more Americans, she says it also accelerated the trend toward high deductibles. "Now people with insurance are finding they can’t afford to use it," she says.
There is nothing in the way a single payer system operates that precludes it from adding deductibles. However, none of the single payer systems in other countries do so, and current single payer legislation [7] in the U.S. House of Representatives specifically bars providers from "balance billing" – levying any payments from patients.
In the United States, meanwhile, health insurers are rapidly embracing high deductibles. A study [8] released by the Commonwealth Fund in May found that the proportion of U.S. adults with high deductibles tripled from 2003 to 2014. It estimated that almost one-quarter of insured U.S. adults had such high out-of-pocket costs relative to their incomes that they were deemed underinsured. Half of this population reported problems with medical bills or debt and more than two of five said they didn’t seek needed care because of the cost.
"The trend in this nation is to shift the costs of health care more and more onto individual families," Dr. Berwick says. "High deductibles take money out of people’s pockets under the guise personal responsibility. There is a great shift of wealth away from the middle class and working people."
Dr. Woolhandler says it may take years for many Americans with high deductibles to understand just how toxic they are. "People might need to have a major medical event to see how badly the system is failing them," she says.
Leann McAllister makes an analogy to parents who deny pediatric vaccines until they understand that their own child could die without them. "Americans are often motivated by fear," she says. "They may react only when they see that our health care system could fall apart."
The Massachusetts practice administrator also says high deductibles produce an imbalance in physician supply. In less wealthy areas like Plymouth, she says, patients faced with large out-of-pocket expenses simply forgo care, permanently reducing demand for doctors. She says no new physicians have come into the area for many years, despite a growing population.
Movement May Start on the State Level
The movement encountered a setback in December 2014, when Vermont pulled the plug on its single payer initiative, the only one in the nation. The Vermont governor cited high projected costs for businesses and taxpayers, which cooled Vermonters’ enthusiasm and almost lost him his re-election bid the month before.
Dr. Berwick says it’s only a temporary setback. "What happened in Vermont gives us lessons for the next wave of efforts," he says. Advocates within the state are already working on new approaches. Deborah Richter, MD, a family physician in Berlin, Vermont, and a leader of the state’s single payer movement, says she is working with legislators on a plan to publicly fund primary care activities only, and fold in specialists later. "We realize that you can’t just flip the switch and suddenly have single payer," she says, adding that specialists could be folded in later.
The Vermont setback shows that people need to gain a better understanding of how single payer would work, Dr. Berwick adds. While taxes and fees would rise substantially to pay for the system, these costs are less than what people had to pay for their own insurance. Businesses that already cover their employees would also see lower costs due to efficiencies.
Dr. Berwick thinks it’s possible that single payer systems will initially emerge at the state level. "The current polarization in Washington makes it difficult to enact it on the federal level right now," he says. Dr. Richter likes the idea of state-operated systems within a national system, similar to the way Canada’s single payer system is run by each province. While the federal government would determine what services are covered, each state would determine reimbursement levels.
Dr. McAllister, however, doubts a one-state single payer system would work well. He recalls that when Massachusetts instituted its own pre-ACA version of health reform, out-of-state patients flocked to emergency departments there, driving up the program’s costs.
Public Distrust Must Still be Overcome
One potential barrier for the movement is the public’s abiding mistrust of government. "A very big obstacle to progressing this policy is the widespread perception that government is unable to solve problems," Dr. Berwick told [9] a national meeting of the PHNP last November. "We need to make the case that government can solve problems and manage its business well."
Dr. Berwick and others in the movement see government as a mechanism for doing good. "Trying to make government look less functional, that’s the agenda on the right," he says. But if the anti-government attitudes prove insurmountable, he thinks a single-payer operation could be handed over to an independent board.
Leann McAllister said another unfair criticism of single payer is that it would be bureaucratic.
"We have an even bigger bureaucracy with commercial insurers," she says. "They have plenty of unnecessary rules." For instance, when patients in her practice move to a different plan, they sometimes assigned a new doctor, even when her husband is in-network. "It takes a lot of paperwork to correct that," she says.
Yet another common target is Canada’s wait lists for certain elective procedures, like hip and knee operations. The problem exists but it’s "way overstated," Dr. Berwick says. "The fact is that Canadians wouldn’t trade their system for ours."
Dr. Burdick asserts that comparisons between U.S. and Canadian wait lists are unfair, because Canada scrupulously measures its waits and we don’t. "We know the numbers of Canadians on waiting lists because they are counted, but no one keeps track of how long you have to wait for care in the United States," he says.
Dr. Richter also discounts critics’ tales of a vast movement of Canadians to the United States to receive care denied back home. Most Canadians who get care in the states, she asserts, fell ill or had accidents while visiting.
What Would it be Like for Doctors?
It’s hard to predict exactly how single payer would affect U.S. doctors, because it could be implemented in a variety of different ways. For example, Canadian doctors get fee-for-service payments, but Dr. Berwick says U.S doctors could instead receive value-based payments, which Medicare is moving toward.
"There is really a wide range of choices," says the former CMS administrator, who helped develop value-based payments for Medicare. "A global payment or capitated payment system could be quite flexible. This would allow funds to be easily shifted to where they’re most needed."
Many specialists are concerned their reimbursements would be slashed under a single payer system, but Dr. Burdick says this doesn’t have to happen. "The spending problem in U.S. health care does not really have to do with physician reimbursements," he says. "It has to do with the payments physicians are generating."
Dr. Burdick added that services covered by single payer could be determined by a board of experts like the UK’s National Institute for Health and Clinical Excellence (NICE). He wants the U.S. board to be dominated by physicians – as NICE is – but it should also be completely independent of political influence, which he says NICE is not.
Dr. Berwick agrees that physicians should have a central role on policy-making committees. "Doctors would have a voice in the terms of their work, and rules for paying them would have to be maintained in a fair way," he says. "Right now, nobody knows how fees are set, and most doctors don’t at all feel they’re in the driver’s seat."
Dr. Berwick is also a strong proponent of use of outcomes and quality data, as well as use of electronic medical records (EMRs). "Data would be an integral part of a single payer system," he says. "This is already going on with commercial payers, and they are using data in ways that are not accountable or transparent. You need rules so that the data isn’t misused and there are privacy protections."
Under single payer, EMRs would be simpler to use and there would be fewer data-reporting requirements under single payer, Dr. Berwick says. "Right now doctors are driven crazy by multiple reporting and payment structures," he says. "It’s very complicated and highly demoralizing. A single payment system would be a lot simpler."
Conclusion
Dr. Woolhandler says more work is needed before the United States embraces single payer. "We have to get the word out about problems in the current system, and the ability of a single payer system to resolve them," she says. "And we need good political leadership that can explain the advantages. Political challenges in Washington make it very challenging to adopt single payer right now, but the situation could change rapidly. Look at the late 1950s. Who could have predicted all the reforms that happened the 1960s?"
References
1 Commonwealth Fund. Mirror, Mirror On The Wall – 2014 Update: How the U.S. Health Care System Compares Internationally. June 16, 2014.
http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror (Accessed Sept. 1, 2015)
2 Jiwani A, Himmelstein D, Woolhandler S, et al. Billing and insurance-related administrative costs in United States’ health care: synthesis of micro-costing evidence. BMC Health Services Research (2014)14:556
http://www.biomedcentral.com/content/pdf/s12913-014-0556-7.pdf (Accessed Sept. 1, 2015)
3 Morra, D, Nicholson S, Levinson W, et al. US Physician Practices Versus Canadians: Spending Nearly Four Times As Much Money Interacting With Payers. Health Affairs August 2011 30:1443-1450 [Abstract only]
http://content.healthaffairs.org/content/30/8/1443.abstract (Accessed Sept. 1, 2015)
4 Maine Medical Association. Payment Reform Survey. January 2014
https://www.mainemed.com/sites/default/files/content/Payment%20Reform%20Survey%20-%20(Crescendo).pdf (Accessed Sept. 1, 2015)
5 Bonica A, Rosenthal H, Rothman D. The Political Alignment of US Physicians: An Update Including Campaign Contributions to the Congressional Midterm Elections in 2014. JAMA Intern Med. 2015;175(7):1236-1237. doi:10.1001/jamainternmed.2015.1332.
http://archinte.jamanetwork.com/article.aspx?articleid=2278948 (Accessed Sept. 1, 2015)
6 Progressive Change Institute. Big ideas polling results. January 2015
https://s3.amazonaws.com/s3.boldprogressives.org/images/Big_Ideas-Polling_PDF-1.pdf (Accessed Sept. 1, 2015)
7 Conyers J. Expanded & Improved Medicare For All Act – H.R. 676. February 2014
http://conyers.house.gov/_cache/files/c73603de-2756-42c8-bae0-555df35f7fc3/HR%20676%202.4.15.pdf (Accessed Sept. 3, 2015)
8 Collins R, Rasmussen P, Beutel S, et al. The Problem of Underinsurance and How Rising Deductibles Will Make It Worse: Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2014. Commonwealth Fund, May 20, 2015.
http://www.commonwealthfund.org/publications/issue-briefs/2015/may/problem-of-underinsurance (Accessed Sept. 1, 2015)
9 Berwick, D. Single payer: a powerful tool for better care, better health and reduced costs.
Speech to Physicians for a National Health Program, November 25, 2014
http://www.pnhp.org/news/2014/november/single-payer-a-powerful-tool-for-better-care-better-health-and-reduced-costs (Accessed Sept. 1, 2015)