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Health Policy
April 4, 2019

The Implications of “Medicare for All” for US Hospitals

Author Affiliations
  • 1Clinical Excellence Research Center, Stanford University School of Medicine, Stanford, California
  • 2Stanford University Graduate School of Business, Stanford, California
JAMA. 2019;321(17):1661-1662. doi:10.1001/jama.2019.3134

Health care has already emerged as a major 2020 campaign topic for the Democrats, with some candidates advancing the concept of “Medicare for all.” As an aspiration, the initiative is intended to offer affordable health insurance as an essential right for all individuals in the United States. With health care costs at 18% of the gross domestic product and the number of uninsured persons once again increasing, finding a policy approach that insures more individuals while attenuating projected increases in health care spending remains a goal that has been elusive for more than 5 decades of US policy making.1

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    9 Comments for this article
    Uninsured and morality
    Laura Hart Cole, MPA Health Policy and Man | Retired
    Unless I missed it, the analysis did not factor in how much increased revenue there would would be due to the previously uninsured now being covered. Also there would likely be increased utilization overall since people would no longer fear medical bankruptcy for going to a hospital.

    And then there’s the morality issue: arguing to maintain the current high cost, poor outcomes system is to argue that it’s OK for people to suffer, die, and/or go bankrupt rather than for American hospitals to figure out how to survive like all other developed countries’ hospitals do.
    Elephants in the Room
    Dwight Burdick, BA, MD | private practice of medicine
    The elephants in the room in this discussion is uninsured patients and those not able to personally pay in full generating significant ED uncompensated care, and EMTALA mandates generating even more significant inpatient uncompensated care. Medicare For All would come close to wiping out these losses. Another - significantly lower administrative, billing, and collecting costs. Off in the distance - a large press on government to generate long term savings by enhancing health education and emphasizing preventive healthcare, hacking away at the costs associated with preventable chronic diseases associated with negative lifestyle choices and aging.
    Why can't organized medicine get
    behind a program which has the potential of lifting the outrageous physician burdens of dealing with the profiteers of big insurance, and of using multiple arcane and non-communicating EHR processes by interjecting an open source uniform and clinically weighted EHR? Why not free the physician's office of a financial gatekeeper role? Why the resistance to supporting practicing physicians in getting back to providing evidence-based and cost-effective healthcare for our patients without regard for their ability to pay?
    Health care competition drives up cost
    Lawrence Danto, MD | University of California, Davis - Retired
    The reality is that competition in a closed or regulated healthcare market increases the cost of care to patients. In eliminating competition via a single payer there will definitely be some "painful" adjustments in US healthcare delivery. However, the reality is we can't go on spending as we do on empty hospital beds, unused hospital equipment, and a burdening private healthcare administration.
    What’s Missing?
    Paul Saskin, PhD | Private citizen
    Curious that the authors present a well reasoned economic argument but fail to address one of the significant drivers of hospital overhead, administrative mid-level and management that add little to the hospital revenue stream. We have seen explosive growth in health administrators whose primary function seems to be to maximize institutional profit in order to seemingly justify inflated salaries. This is occurring in both for-profit and non-profit health care systems. Six and seven figure incomes for hospital CEO’s and COO’s are an obscenity and only encourage the continued drive for profits, often with little consideration of patient care. There is also a conspicuous absence by the authors to address the tremendous overhead associated with billing and collections. Granted, as for the health insurance industry, there will be significant job loss and re-alignment as hospital systems adapt to a new reality of a single payer system. The costs of maintaining contractual relationships, financial commitments, and marketing to ensure market share can all be dramatically reduced if the “business” of health care is redirected to simply providing health care.
    Health Promotion & Illness Prevention
    Ann Mayo, DNSc | Nursing Professor
    Also lacking from the evidence in this article is information on health promotion & illness prevention that would come with Medicare for all. Everyone will have access to this type of care with a resulting decreasing need for ED visits & hospitalizations; or at a minimum the hospital length of stays should decrease due to fewer co-morbidities among the hospitalized patients (e. g. admitting dx of pneumonia for a patient with Type II diabetes).
    Alternative to Medicare for All
    George Faulkner, BA, MPhil. | Retired health care benefits consulant
    An alternative to Medicare-for-All’s solution to controlling hospital costs would be to move to all-payer rates (as has often been advocated), where each hospital (and other providers) has to charge all of its payers the same rates. Where competition exists, or could exist after some antitrust actions, hospitals would then have to compete on price (including bundling of services) and quality.

    Private plans and a public option replacing Medicare and Medicaid would then compete on a level playing field, with no discounted payment advantages that merely shift costs to payers (and individual patients) lacking large purchaser clout.
    Where competition cannot be made to work effectively, hospitals, etc. would have to be regulated like public utilities, with prices negotiated in advance by agencies representing all payers, as is being done in Maryland and most European nations.

    Each insurer (including the government’s public option) could offer plans that cover up to some percentile of area provider rates, such as up to the 25th, 50th, and 75th percentile. The plans could pay in full up to the covered percentile (or have some of the usual cost sharing features), but also would need to be allowed to balance bills in full or at some percentage if a patient goes to a provider charging above the covered percentile. This approach would stimulate provider competition (except in locations where the possibility is nil), eliminate the disadvantages of networks for patients and providers, prevent the federal government from underpaying hospitals, pressure insurance companies to reduce overhead and profit margins to compete against the public option, and allow patients who can afford it to still opt for what they perceive as top-of-the-line care. The approach might also have more chance of getting support from both free-market conservatives and liberals who want universal coverage and more affordable costs.
    The Human Costs of the Current System
    Amirhossein Modabbernia, MD | University Hospital
    I would like to remind readers of the human costs of the current system as the premise in this article seems to be that the two systems are morally equivalent and the main area open for debate is money. Almost 1 million Americans are uninsured and 44 million are underinsured. Nearly 45000 death happens annually in this group of Americans. Financial costs aside (and surely they are important), I don't think in a developed prosperous country such as the US this should be the case. It is therefore critical to highlight the stark difference in moral choices opponents and proponents of M4A are making
    Medicine as a Public Utility. Regulated Private Insurance
    David Smith, MD | Retired
    Dr Uwe Reinhardt has said regulating private sector insurance companies is more in line with our present process and can provide universal coverage and reduced costs - similar to the process in Switzerland, Germany and Singapore. Medicare for All is a big change that will likely meet greater resistance. 
    Medicare For All Is a Horrible Idea
    Daniel Anderson, MD | University Hospital
    Medicare for all Is a horrible idea. How about the millions of good-paying jobs that would be lost in the insurance, pharmaceutical, and medical device industries, and the hospitals that have to cut costs to adjust to decreased Medicare reimbursements? Millions will be left out of work at a time when a larger tax base is needed. As a result, you will be paying significantly more in taxes at the same time you would likely get worse care (due to the cuts in hospital expenditures and rationing). If you think the "billionaires" are going to pay for it, I have a bridge to sell you. Nationalizing a huge chunk of our economy is a horrible idea. There is a reason why socialist/communist governments fail in organizing their centrally planned economies every time, end up with shortages, and murder or send to the gulags a good portion of the population.