ALBUQUERQUE, N.M. — Anyone in need of an argument in favor of a single-payer health system need look no further than the ongoing war between Lovelace Health Plan, the state’s third-largest health insurer, and ABQ Health Partners, the largest medical practice that is not owned by one of the big, integrated health systems in the state.
But not for the reason generally advanced in support of it.
Advocates often argue that a single-payer system would be cheaper than commercial health insurance. I don’t think the evidence supports that view. The studies that try to make the case seem to be badly flawed.
Without question, medical groups and consumers have to support a level of overhead cost and occasional administrative chaos that come with health insurers. These costs are trivial compared with the absurd amount of waste that occurs during the manufacture of health care: unnecessary tests, failed procedures, hospital deaths. Worst of all are the incentives that fee-for-service payment mechanisms used both by Medicare (which is a single-payer system for older people and the disabled) and private insurance systems give to medical providers to practice inefficiently. These mechanisms pay more money when providers do more, regardless of whether the services provided are necessary or successful.
Simply paying for the same inefficient service out of your taxpayer pocket instead of your commercial insurance pocket isn’t going to make the industry less wasteful. It will take a revolution in the way medical care is manufactured.
That revolution is, indeed, under way. The Lovelace/ABQ Health Partners dispute began when ABQ HP said it wanted a new contract that was based not on fee-for-service. Lovelace Health Plan officials, along with their competitors at Presbyterian Health Plan and Blue Cross Blue Shield, all know the existing payment paradigm is doomed. The Affordable Care Act requires Medicare to experiment with new payment mechanisms designed to improve care and efficiency. In the lifetime of most of us, we will see health care payment that is based on the medical manufacturers’ ability to improve quality of care and produce healthy and productive people at a more reasonable cost.
The best argument for a single-payer system is found in the misery thousands of New Mexicans have endured as they try to sort out the Lovelace/ABQ HP mess. The two companies could not reach agreement on a new contract, so as of last week people with Lovelace insurance had to decide if they wanted to change insurers to stay with their ABQ HP doctors or change doctors and stay with Lovelace.
To the extent they could make a choice, that is. Most of us get insurance through our employers. Employers choose insurers for their own reasons, but the cost of coverage is a major factor. Companies routinely change insurers, and if those insurers happen to have our current medical providers in their panels, we’re good. If they are not in the panel, the employees begin the scramble to find new medical providers who take our employers’ new insurance.
The Lovelace/ABQ HP dispute isn’t new either. Blue Cross Blue Shield of New Mexico and Presbyterian Healthcare Services had a similar falling-out in 2003, forcing 35,000 customers to sort out how to match provider with payer or payer with provider.
A true, Canadian-style single-payer system makes such choices impossible. All medical providers are paid by the same governmental agency. Benefits packages and payments are standardized. The chaos, anger and fear that have accompanied these contract cancellations are gone.
Our nation isn’t moving toward single-payer, but the Affordable Care Act (Obama-care) seems to be nudging us in the direction of the model used by Germany, the Netherlands, Belgium and France. All residents, whether citizens or not, are required to purchase insurance of their own choosing, with help from their employers, their pension funds, or the government.
There are about 200 of what are called “sickness funds” in Germany, about 10 percent of them offered by for-profit companies. Most of the rest are controlled by employers, trade organizations, unions or community groups. The government closely supervises the funds to be sure they offer acceptable coverage at affordable prices. The health care delivery system remains in private hands.
It is a system that closely resembles the ACA’s health insurance exchanges, which are to be up and running by late next year. Obamacare is designed to preserve the insurance industry and private medical providers, and employers who want to keep offering insurance to employees are welcome to do so. However, exchanges give employers an easy way out of providing coverage. Like a German employer, they will be able to give employees cash and tell them to use it to buy coverage in the exchange.
My hunch is that over time more and more employers will find the exchanges a way to lower their own costs, end the annual hassle of buying insurance, and avoid being put in the middle of a Lovelace/ABQ HP imbroglio.
UpFront is a daily front-page news and opinion column. Comment directly to Winthrop Quigley at 823-3896 or firstname.lastname@example.org. Go to www.abqjournal.com/letters/new to submit a letter to the editor.
— This article appeared on page A1 of the Albuquerque Journal