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Universal Access or Government-Run Healthcare? Why Not?

January 5, 2009
by Rich Temple
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Much has been discussed about reforming the clearly dysfunctional healthcare reimbursement structure in the United States. People are paying more and more for less and less care. Providers are forced to absorb massive costs for taking care of patients with inadequate or non-existent insurance. Our health care model has allowed for the procurement of the greatest medical technology in the world but makes it largely inaccessible to all but those who have the most means to pay for it. Hospitals all over the country are barely able to keep their doors open, with the problem being particularly acute in New Jersey and New York.

I have been struck by the incredible degree of societal pushback when the notion of “single-payor” or “universal access” is raised. Terms like “socialized medicine” and “government health care” are put out there in a very scornful and dismissive kind of way. As I think about the problem of health care in this country, I feel that a much larger role for government, in whatever form it may take, would actually probably be very desirable.

Let’s look at Medicare, for instance. Medicare is by far the most efficient payor out in the health care landscape. Medicare spends about 15 cents of every premium dollar on “overhead”-related activities whereas most commercial payors spend about 35 cents of every dollar on overhead. Medicare has been a pioneer in cost-savings initiatives (not always, perhaps, in a way that providers may like) and in electronic billing initiatives, which have increased claim processing efficiencies. Imperfect though it may be, government-run Medicare has provided critical access to care for the elderly and disabled without forcing them to sacrifice “choice”. All private health insurance models that I can think of out there involve at least some sacrifice of choice by the patient.

Shifting a bit to the VA, the VA’s VistA clinical information system has been a catalyst in the transformation of care for veterans. The VA has been lauded in the industry for extensive improvements in patient care over the past decade and its homegrown VistA system has been recognized as a major component of that success story. Innovative and comprehensive, the VA was one of the first large-scale systems to embrace EMR technology, and our veterans are the beneficiaries of this foresight. When Hurricane Katrina hit New Orleans, the only group of people who didn’t lose most, if not all, of their respective medical histories, was VA patients. Something to think about.

Private insurers, by virtue of having to watch the bottom line, are incentivized to restrict access to care, to the extent possible. They also frequently generously compensate their executives and are accountable to their stockholders to make a profit. Both of these realities often preclude doing what is necessarily “right” for the patient. Because people switch jobs often, even investments in “wellness” services that insurers might find cost-effective aren’t appealing, because the insurer won’t realize the savings in acute-care costs down the road, because the patient may likely be with another insurer at that time.

With a government-run health care program, taxes would inevitably have to rise. No doubt about it. But when one realizes that employee benefit costs often wind up exceeding over 20% of what an individual’s salary is, the savings that employers would realize from having the burden of paying for health insurance removed can be funneled back into the employee’s pocket in the form of increased salaries. Because the Medicare model allows for “choice”, does not seek “profit” in the classical sense, and has demonstrated superior cost efficiencies, it would seem to follow logically that society would benefit from having a benevolent, though watchful, insurer (i.e., an expanded version of Medicare) taking care of its needs. To summarize: we as a society would pay increased taxes but would likely see fair-market wages go up by a larger amount than the increased taxes. We retain full provider choice and cover many, many more people.

I don’t paint this as a panacea for all of the ills of our current health care system, but would love to see this explored as a much more serious option than it typically is in our current environment.



Rich, you are very brave to tackle such a controversial issue.

I think that in this economy, the problem is that as soon as people hear the words "increased taxes," they want to run for the hills. I already cringe at the amount of money I fork over to the government, and the idea of paying more is hard to swallow, even though it might cause fair-market wages to go up at some point.

Yesterday's New York Times ran an article reporting that Gov. Paterson is proposing a law requiring private employers to offer health insurance to dependents up to age 29. I think that's going to meet a lot of resistance from New Yorkers, and honestly, I can't say I blame them.

I commend you for bringing this point to light, but I think that right now, it's really hard for people to look past seeing even more of their salaries go elsewhere.

Good morning, Kate. I can definitely understand the resistance to paying more taxes, not much caring for it myself (although with a trillion dollar deficit, you almost wonder how we can avoid it). But, if I were to put on my "Marketing" hat for the type of endeavor I am laying out, I would try to package this notion as a tax CUT (odd though that may sound). Here's my rationale: an employee would no longer have to have money taken out of his/her paycheck to cover health benefits and furthermore, an employee would be able to expect to see a lot more actual salary dollars appear in his/her paycheck because "salary" money that one's employer currently is paying a commercial insurer on the employee's behalf can now be paid directly to the employee. Stripping the profit motive and the historical excess waste and overhead out of the act of providing insurance should allow, perhaps, for MORE money to go into employee pockets, even factoring in the inevitable increase in Federal taxes that would occur (and provide extra efficiency in the US health care system).

Would this be a tough sell? Heck, yeah — I think you are totally spot-on as far as the challenges of bringing the body politic on-board with this. But I do think that the argument I am positing could hold water and could work. Certainly worth putting out there as a concept to explore.