Editors' pick: Originally published Jan. 20.
The devil is in the details.
That’s the takeaway from Senator Bernie Sanders’s health care plan, released Sunday night in preparation for the Democratic debate. Ambitiously titled “Medicare for All,” this is the single payer proposal that the Senator from Vermont has long promised would finally expand health care to all.
It’s a dud.
Of course, these proposal documents are less intended to be an instruction manual, after all, than a road map, and the real test of a candidate’s idea is internal consistency: given all fair assumptions, does it live up to its own claims?
That’s why Sanders shouldn't be knocked for the political realities of 2016 or for his rejection of Obamacare’s incremental progress. But his current plan is a vacuum of detail. Health care is a field where the “how” matters almost as much as the “what,” and it’s not too much to ask a candidate who wants to turn American medicine on its head to give some idea of just how he intends to do that.
Instead this document makes no gestures towards the bones of a new system. It settles for repeating the words “single payer” like some sort of magic talisman: complex problems solved with nothing more than a government checkbook.
This is a health care policy proposal with no health care, no policy and barely even a proposal. For a plan to rebuild American medicine from the ground up, that’s quite a thing.
Start with implementation. Making any changes to health care in America involves teams of industries and a cascade of side effects, many of which aren’t even knowable until after the fact. Even the Affordable Care Act, which was built on top of the existing insurance market, took years to roll out.
“There was a lot of hand wringing over the disruption that Obamacare caused,” said Lawrence Levitt, a senior vice president with the Kaiser Family Foundation, “and that would be child’s play compared to what we would see here."
“You’re talking about eliminating all private health insurance companies and requiring everyone in the country to change how they get health coverage, plus completely redistribute the financing of health care from premiums to taxes," he added. "The disruption would be tremendous, and would take years to implement.”
Managing the careful balancing act of cost, payment and incentives is no small thing. The Sanders plan washes it away in one 363- word section ambitiously titled “The Plan.” It begins short and to the point: “Bernie’s plan would create a federally administered single-payer health care program,” followed by a wish list kludge of Left Wing policy preferences that promise everything from dental to vision for consumers who’ll have to do nothing more than show their insurance card. Readers could be forgiven for not even knowing what role Medicare is to play in this new system (if any), given that the document is titled “Medicare for All” while at the same time promising to “create” that new insurance system.
The paper promises “no more copays, no more deductibles and no more fighting with insurance companies when they fail to pay for charges,” and, without further comment, moves briskly along to a subject Sanders favors so much it's practically a verbal tic: taxing the rich. With all due respect to the Senator, it’s getting old.
It’s also a missed opportunity. Why should there be no copays? Isn’t there a good argument to be made for putting some consumer skin in the game, or at least defraying costs out to the consumer at least somewhat? The same goes with deductibles. Wouldn’t an inequality warhorse like Sanders be all about pricing within the consumer’s means? Or at least why not?
These are complicated issues about which there is much to be considered and much to be said. Sanders has said little. It’s up to us to assume that he has considered more.
Costs suffer from the same hand waving, even if Sanders has given them more inches on the page.
“There’s a lot of detail missing,” said Levitt, noting that it’s “hard to judge” a plan without them. “How would doctors and hospitals be paid? Who would make decisions about whether care is medically necessary or not?”
“To make a pan like this work would require reducing health expenditures dramatically, which would create lots of winners and losers and be very disruptive to the health system,” he added.
That’s to say nothing of Sanders’s assumed $10 trillion in health savings over the next decade, which he anticipates while at the same time expanding access and quality of care dramatically. That neat trick is accomplished largely by relying on the magic of single payer to sort itself out.
“By moving to an integrated system, the government will finally have the ability to stand up to drug companies and negotiate fair prices for the American people collectively,” the Sanders plan says. Later: “Reforming our health care system, simplifying our payment structure and incentivizing new ways to make sure patients are actually getting better health care will generate massive savings.”
The assumption is: other countries do it, so we can too. It’s not entirely wrong, but it’s not that easy either.
“It’s very hard to know whether the presence of government run systems in other countries is what is allowing those countries to spend less, or if something else is going on there,” Levitt pointed out. “There’s some things about single payer that we can be sure would improve efficiencies like elimination of administrative overhead. But then how much single payer would actually reduce health spending depends a lot on the actual decisions that policy makers would make.”
And that’s the rub; we don’t know what those decisions are. We don’t even have a clue.
What we do have, in the words of University of Michigan Professor Richard Hirth, is a $2 trillion magic asterisk. Buried in the accompanying analysis provided by University of Massachusetts Professor Gerald Friedman is an assumption that “20% of out-of-pocket spending… would not be covered because they are deemed not medically necessary.”
Putting aside the decision to tuck a fifth of the budget away under a footnote, there’s no mention of who decides and with what criteria. That, to put it mildly, is a problem.
“I think there would be concern of, kind of the level of power that the government would have in such a system,” Hirth said. “Would the efficiency and cost reduction come at the cost of quality and access to care?”
In terms of Medicare, single payer can run lower overhead costs than most private insurance plans, but cutting down on administration is like funding tax cuts off of “waste, fraud and abuse.” There’s not enough money there. The only way to get to the kind of numbers that Sanders talks about is by seriously cutting back on either consumption or prices, and there’s no indication that this plan seriously tackles either of those.
What’s more, as Levitt pointed out, without any incentive for consumers to cut back on consumption (indeed, every reason to believe that it will dramatically expand), many doctors would have to take considerable pay cuts to achieve the kinds of savings that Sanders envisions. How long before the best doctors and hospitals flee to an elite insurance market? It’s not inevitable, but Sanders doesn’t try to talk about how he’d prevent it.
All of this is not to bash on single payer plans as an idea in the first place. In fact there are several good reasons why America might consider simply dropping the words over 65 from Medicare. As Hirth said, as a method of efficiently covering the most people for the least amount of money, “there’s a lot of evidence from around the world that it’s the best option.”
“You have both the model of other countries and you have the model of the Medicare system within our country, which although it doesn’t cover the majority of the country it [successfully] covers the highest spending portion of the population,” he said.
It’s not the only option though, and there are a lot of ways that doing something like this could go wrong. Sanders doesn’t engage them or even give meaningful shape to his vision of health care beyond government funding and progressive taxes. In this proposal Sanders has more in common with his Republican counterparts than he would care to admit, many of whom have the same magic-asterisk, wishful thinking policy on display here.
Single payer isn’t a bad idea, but it isn’t easy either. Sanders needs to stop posturing and get down to the hard work of running for office.