UPDATE: Bernie is promising too much, too quickly. Is Hillary not promising enough, ever?
2018 MIDTERM ELECTION
Time: D H M S
UPDATE: I've expanded the second half of this entry.
A week or so ago, I took a good look at Bernie Sanders's Single Payer healthcare proposal and was, as I put it, "beyond disappointed" due to it's lack of detail, and naiveté about not only the political realities of trying to get such a plan through (which is the biggest issue that Sanders supporters insist can be overcome through a "political revolution" etc etc), but also due to the sheer mountain of legal, economic, infrastructure and logistical headaches that would have to be navigated.
The irony is that, for me, the math behind such a plan (ie, how much it would end up saving people overall in terms of actual dollar savings as well as reduced administrative overhead, greater efficiency, etc) was something which I didn't even get into. I was operating on the assumption that, while the specifics would obviously jump up and down here and there, the numbers were generally in the right ballpark. HOWEVER, according to Emory University expert Kenneth Thorpe (who's actually a strong single-payer advocate who has authored several SP plans himself), that may not be the case whatsoever. Dylan Matthews of Vox writes:
Bernie Sanders's health care plan is underfunded by almost $1.1 trillion a year, a new analysis by Emory University health care expert Kenneth Thorpe finds.
Thorpe isn't some right-wing critic skeptical of all single-payer proposals. Indeed, in 2006 he laid out a single-payer proposal for Vermont after being hired by the legislature, and was retained by progressive Vermont lawmakers again in 2014 as the state seriously considered single-payer, authoring a memo laying out alternative ways to expand coverage. A 2005 report he wrote estimated that a single-payer system would save $1.1 trillion in health spending from 2006 to 2015.
This number is important: Thorpe's estimate has national single payer saving around $110 billion per year nationally over the appx. $3.0 trillion per year which is being spent under the current system. Don't get me wrong, that's still a lot of money, but it's not jaw-droppingly cheaper; that amounts to roughly a 4% overall reduction in spending.
But he nonetheless concludes that single-payer at a national level would be significantly more expensive than the Sanders campaign believes, and would require workers to pay an additional 20 percent of their compensation in taxes. He also argues it would leave 71 percent of households with private insurance worse off once you take both tax increases and reduced health care expenditures into account.
The $1.1 Trillion/year discrepancy between Sanders and Thorpe is broken into 5 chunks:
- Sanders assumes $438 billion more per year in administrative savings than Thorpe; Thorpe assumes that total health spending will fall by 4.7 percent because single-payer is simpler to administer, while the campaign has anticipated a reduction of 16 percent (changed in a later email to 13 percent).
OK, that's the overhead/red tape simplification factor. I haven't a clue which is more realistic, but Matthews writes: "A follow-up email also revised down the assumed administrative savings from 16 percent to 13 percent." Why did the Sanders campaign drop their estimate from 16% to 13%? Was there a typo in the original? That 3% drop is a $90 billion per year difference, not exactly a rounding error.
- Sanders assumes $324 billion more per year in prescription drug savings than Thorpe does. Thorpe argues that this is wildly implausible. "In 2014 private health plans paid a TOTAL of $132 billion on prescription drugs and nationally we spent $305 billion," he writes in an email. "With their savings drug spending nationally would be negative." (Emphasis mine.) The Sanders camp revised the number down to $241 billion when I pointed this out.
Good grief. Sure enough, I checked it out and according to the 2014 National Health Expenditures report:
Prescription Drugs: Retail prescription drug spending accelerated in 2014, growing 12.2 percent to $297.7 billion compared to the 2.4 growth in 2013. The rapid growth in 2014 was due to increased spending for new medications (particularly for specialty drugs such as hepatitis C), a smaller impact from patent expirations, and brand-name drug price increases. Private health insurance, Medicare, and Medicaid spending on prescription drugs all accelerated in 2014.
OK, that's a few billion lower than Thorpe's number, but that just makes his point even more valid. How could the Sanders campaign claim to be able to cut prescription drug spending by more than is actually being spent to begin with? And just like the administrative savings change, how could they simply reduce the number by $83 billion by just saying "oh, we meant this much instead of that much"? For that matter, that would still mean reducing prescription drug costs by around 80%, which I still find highly implausible.
What bothers me most of all here is that the "16%...no, 13%!" drop, and especially the prescription drug dollar change make it seem as though the Sanders campaign literally slapped this plan together in the course of a few hours. Considering that some sort of single payer plan is supposed to be one of the cornerstones of Sen. Sanders's campaign, and that he's been loudly advocating for single payer for many years, I'm a bit disturbed that his plan--even as a "broad outline" for campaign purposes--is so seemingly haphazardly put together.
- Sanders assumes $216 billion more per year in savings because Thorpe thinks eliminating copayments and deductibles will lead to people using a lot more health care (10 percent more, to be exact), and Sanders's camp is more skeptical (they assume 6 percent more).
Ah-hah!! THIS is my "an appointment for every hangnail" theory, which was widely derided by Sanders supporters. Of course, some of this simply means people who currently have high deductibles no longer avoiding appropriate treatment, but even so, even the Sanders campaign seems to admit that complete elimination of all co-pays and deductibles would lead to at least some excessive increase in appointments.
- Sanders assumes $160 billion per year in savings relative to Thorpe because, they argue, he includes elective procedures like plastic surgery, which single-payer wouldn't cover. Thorpe disputes this: "Cosmetic surgery, really? That's $12 billion a year and in the second decimal of rounding." In other words: There's no way excluding plastic surgery can give you $160 billion of savings.
As an aside, "elective" surgery also includes medically necessary surgeries like inguinal hernias, cataracts, mastectomy and kidney donations. I don't know how much these other procedures add up to now, but it looks like there's perhaps 150,000 mastectomies or so per year costing around $30,000 (full-price) apiece, which adds up to around $4.5 billion per year. Then again, I presume Sanders plan would cover medically necessary procedures anyway, so that's not really relevant to the discussion here.
- Sanders assumes that states will pay $100 billion more per year in Medicaid and SCHIP spending than Thorpe does, because they think states will keep paying in the exact same amount they currently pay into those programs. Thorpe is skeptical, noting that in the Supreme Court's 2012 Obamacare ruling, it "said in essence you cannot force states to make spending on a expansion of Medicaid —how is the world can you expect states to contribute toward the costs of programs that are eliminated?"
Hmmm...I'm not sure about this one; it really depends on how Sanders plan is structured and the legalities involved. I'll give him a pass on this, but that still leaves about $1 trillion per year unaccounted for.
Thorpe finds that Sanders's plan would cost an average of $2.47 trillion per year from 2017 to 2026, on top of existing federal spending on health care. Sanders's campaign's analysis, by contrast, estimated an average cost of $1.377 trillion.
In short, Thorpe thinks that a realistic Single Payer plan would save around 4% per year over what we're spending now, whereas Sanders's plan would save around 18%. Sanders campaign claims that his plan would save around 54% over what we're spending now.
The thing is, even if Thorpe's fairly nominal 4% savings estimate proves to be more accurate, there are other major benefits to such a system anyway. The biggest single one is that it would cover everyone (except, possibly, the 11 million or so undocumented immigrants in the U.S.?? His plan, as presented so far, doesn't address that...nor, for that matter, does it address the Hyde Amendment or a host of other potential legal headaches for what would or wouldn't be covered.) The uninsured rate would be lopped down from around 9% under the current system to perhaps 3.5%. In addition, the millions who are "undercovered" now due to narrow networks/high deductibles would have comprehensive coverage.
Still, the question becomes: Assuming it somehow got through, would it be worth reshaping the entire current U.S. healthcare system in order to achieve these goals?
I actually agree that it would be. I've never said anything else.
What I did say is that doing so CANNOT BE DONE ALL AT ONCE, OR EVEN OVER THE COURSE OF A FEW YEARS (and laid out my reasons why it would take so long).
HOWEVER, I was also very clear that as long as you're realistic about how long the process would take, it's still a goal worth pursuing.
Some people understood my point. Some people understood it but respectfully disagreed. Some people...didn't get the point whatsoever.
As I said in the title, my problem with Bernie isn't his end objective, it's that he's promising way too much, way too quickly.
THAT BRINGS ME TO THE SECOND HALF OF THIS POST:
So, I know in order to deal with the problems I want to, to get the economy working, creating more good jobs, getting incomes rising, making sure we build on the Affordable Care Act. Get costs down, but improve it, get to 100% coverage. Everything I want to do, I want to start from the belief that we can find common ground, and that is exactly what I intend to do.
OK, so she has stated that yes, she does intend to “get to 100% coverage”. Not necessarily via Single Payer, but still, some form of universal coverage.
To prove her point on Friday, Clinton asked Joan Hanna, a woman she met backstage here before a campaign event, to talk about how her daughter's brain cancer and coverage under the Affordable Care Act.
"I want you to understand why I am fighting so hard for the Affordable Care Act. I don't want it repealed. I don't want us to be thrown back into a terrible, terrible national debate," Clinton said as Hanna took the stage. "I don't want us to end up in gridlock. People can't wait. People who have health emergencies can't wait for us to have a theoretical debate about some better idea that will never, ever come to pass."
Hanna spoke about how her daughter has recovered from brain cancer and gained coverage despite her pre-existing condition, under Obamacare.
"My daughter has brain cancer and she was never asked about pre-existing conditions," Hanna said. "It was a great gift to our family."
Clinton added, "People can't wait. You daughter calls and says she has a mass in her forehead, you can't wait. You quit your job to take care of your sick daughter -- something I think a lot of us can relate to -- you can't wait."
After sticking my neck out, bigtime, a week or so ago, this was a bit of a gut punch to me...maybe. She needs to clarify what it is that she meant by this, and fast.
If she’s saying that the U.S. will never, ever go for TRUE single payer (which is what Bernie’s plan, as stated so far, would be, and which I don’t think is true of any other nation; Canada’s SP system isn’t comprehensive, while England has Socialized Medicine, which is not the same as SP), then that’s absolutely true. I see no circumstances under which that would happen, period.
If she’s saying that the U.S. will never, ever go for anything even close to single payer (ie, a system similar to that of Canada, Germany, Japan, Israel or other nations, each of which are somewhat different from one another but which are what SP advocates are really talking about when they use the catch-all term “Single Payer”), then I admit to being deeply disappointed, and will have to think long and hard about my prior endorsement on the topic.
If, however, she means that she can envision moving towards a system similar to Canada/Germany/etc. but that doing so would have to be done in multiple phases which would take many years or even a couple of decades, that it would be an excruciatingly difficult political battle which would suck all the oxygen out of the room for a dozen other important issues which need to be addressed as well, and that the existing system (consisting primarily of Medicare, Medicaid, the VA/TriCare, the ACA and ESI) would need to stay pretty much intact throughout this long, gradual process, then I agree with her; that was the entire point I was trying to make in the first place.
What gets lost in this is Hillary Clinton's actual position. She never said she prefers the ACA over single payer. In fact, we know she does not. The plan she proposed in 1993 was single payer, and I don't believe she has really changed her mind on that.
(Update: As moralhazard notes in the comments, Hillary's 1993 plan wasn't actually single payer, but it would have provided universal coverage, which is the larger point here).
This is actually true: Hillary stated, flat out, that Sanders's plan is potenitally better than the ACA...but she also stated that his plan won't happen, period. Not that it shouldn't happen, but that it won't.
What she said was something like this: We just turned a major corner in this country by convincing the public that universal health care is even a valid goal (and we've barely done that). To scrap it now, with GOP majorities in the House and Senate is to risk losing any concept of public health, entirely. It will divide the Democrats on the issue and leave the Republicans on the other side of the table with total unity (on this subject). It could tie up any forward momentum 2016 could provide us (just as the original ACA bill sucked up all of the oxygen in 2009, when we could have focused on the economy). What Clinton is saying is that the ACA was a hard fought victory with significant opportunity costs and our priority should be to fix it (where it needs fixing) and expand it (where it is succeeding), leaving a future administration the latitude to get more done in education, banking, campaign finance reform, etc.
She's running as a pragmatist who would rather, as she puts it, "get things done," as opposed to tilting at windmills. I'm not entirely sure I like the idea of another Clinton in the White House, and I'm not overly fond of her corporate ties or her hawkishness, but I don't think she has a flimsy argument on health care. I think she has a point.
So...the question I have is, what exactly does Hillary mean by “getting to 100% coverage”?
- Build on the Affordable Care Act and require plans to provide three sick visits without counting toward deductibles every year.
- Provide a new, progressive refundable tax credit of up to $5,000 per family for excessive out-of-pocket costs.
- Protect Americans from surprise medical bills.
- Enforce and Broaden the ACA’s Transparency Provisions.
- Strengthen authority to block or modify unreasonable health insurance rate increases.
- Vigorously enforce antitrust laws to scrutinize mergers and ensure they do not harm consumers.
- Reduce health care costs by building on delivery system reforms that reward value and quality.
- Encourage the next generation of health innovation and entrepreneurship.
- Stop direct-to-consumer drug company advertising subsidies, and reinvest funds in research.
- Require drug companies that benefit from taxpayers’ support to invest in research, not marketing or profits.
- Cap monthly and annual out-of-pocket costs for prescription drugs to save patients with chronic or serious health conditions hundreds or thousands of dollars.
- Increase competition for prescription drugs, including specialty drugs, to drive down prices and give consumers more choices.
- Clear out the FDA generic backlog
- Increase competition for specialty drugs including new “biologic” drugs – which are often the most expensive new treatments
- Prohibit “pay for delay” arrangements that keep generic competition off the market.
- Allow Americans to import drugs from abroad – with careful protections for safety and quality.
- Ensure American consumers are getting value for their drugs.
- Demand higher rebates for prescription drugs in Medicare.
- Allow Medicare to negotiate drug and biologic prices.
- (as President, she will...) Defend the Affordable Care Act. Clinton will continue to defend the Affordable Care Act (ACA) against Republican efforts to repeal it, while expanding on its successes to broaden access to care.
- (as President, she will...) Ensure women have access to reproductive health care. As president, she will continue defending Planned Parenthood, which provides critical health services including breast exams and cancer screenings to 2.7 million patients a year.
- (as President, she will...) Prevent, treat and make an Alzheimer's cure possible by 2025.
Every one of these measures seem reasonable, helpful, and most of them should be doable.
HOWEVER, by themselves, no, these measures won’t achieve universal healthcare coverage, so I’d want to know what additional steps would Hillary push for (or at least hope for) to get to 100% coverage, regardless of whether she saw it being completed during her (hopefully 8) years in office?
This is a question which she needs to answer, in clear, unequivocal terms.
Until then, the “never, ever gonna happen” bit has given me pause, and, I admit, makes me ask whether Hillary intends on not trying for enough, ever?
UPDATE x2 1/31 9:40am: Hmmm...Mike Casca, a field director for the Sanders campaign, just tweeted the following:
sec. clinton on @ThisWeekABC said she wants to get to universal health care and claimed she has a plan to do it.
fact check: she doesn’t.
— mike casca (@cascamike) January 31, 2016
Huh. Sorry I missed her appearance. I presume it'll be available online later today...
UPDATE x3: Several people have pointed out this rebuttal to Prof. Thorpe’s analysis of Sanders’s Single Payer plan by Prof. Himmelstein and Prof. Steffie Woolhandler of CUNY/Harvard Medical School. Here’s their main beefs with his analysis (read the piece for details); I have no idea how valid or not these are, any more than I know how valid some of Thorpe’s claims are:
1. He incorrectly assumes administrative savings of only 4.7 percent of expenditures, based on projections of administrative savings under Vermont's proposed reform.
2. Thorpe assumes huge increases in the utilization of care, increases far beyond those that were seen when national health insurance was implemented in Canada, and much larger than is possible given the supply of doctors and hospital beds.
3. Thorpe assumes that the program would be a huge bonanza for state governments, projecting that the federal government would relieve them of 10 percent of their current spending for Medicaid and CHIP -- equivalent to about $20 billion annually.
4. Thorpe's analysis also ignores the large savings that would accrue to state and local governments -- and hence taxpayers -- because they would be relieved of the costs of private coverage for public employees.
5. Thorpe's analysis also apparently ignores the huge tax subsidies that currently support private insurance, which are listed as "Tax Expenditures" in the federal government's official budget documents.
6. Thorpe assumes zero cost savings under single-payer on prescription drugs and devices.