OUR COVID EXPERIENCE AND HOW SINGLE PAYER WILL USE THE BUSINESS MODEL TO CONTROL HEALTH CARE COSTS
Our current health payment system is bankrupting us, over-taxing us, minimizing corporate profits, and diverting massive resources from other public priorities. The cost of health care and its yearly escalation under the multiple-payer model is unsustainable. We will spend $255 billion, or 14% of our State Gross Domestic Product for 2020, on healthcare. By 2026, that number will be $350 billion, representing 17% of our State GDP. In addition, COVID-19 has shown how tenuous the multiple payer system is in the face of a pandemic, or other widespread emergency, especially with massive job loss and the subsequent loss of insurance coverage. This model has failed and there is no meaningful way to fix it.
A Single Payer healthcare plan (also known as Medicare for All) creates substantial administrative efficiencies. It eliminates the massive bureaucracies operated by thousands of insurance companies and self-insured large employers, each with its own rules, forms, procedures, and payment levels. Using a very conservative methodology, we would save about $30 billion the first year and the savings would increase thereafter. Employers don’t tolerate inefficiency so why should we tolerate it in health care.
A Single Payer system is the only model with the capacity and authority to effectively control annual health cost increases and manage system-wide unexpected costs, like a pandemic. Just like the business that creates a company-wide budget and uses company-wide cost controls, a Single Payer will create a statewide health care budget and implement statewide cost controls, while remaining nimble enough to manage unexpected cost overruns or budget shortfalls. Individual insurance companies are competitors and are incapable of controlling costs at this scale and magnitude. When a pandemic strikes, we can shift budgetary dollars from procedures not performed to developing and purchasing test kits, new medications, and masks. A shift of even 2% would result in $5 billion freed up to manage a pandemic, yet still leave $250 billion for other “normal” healthcare expenses. We have learned from COVID-19 we cannot count on health insurance plans to forego their various procedures and business plans to assure that we get the health care we need in a crisis.
The myriad rules for patients and providers under the multi-payer system leads to poorer, more fragmented care, with narrow networks and a system that discourages people from getting the care they need and, instead of encouraging providers to recommend the best care, leaves them to recommend care their patients can afford. I do not believe that we, as a society, would tolerate employers dictating where we get our hair cut, or our nails done, or where we do our shopping, or what brand of cereal we eat. Yet, we live in a society where who we work for determines which physicians you can see, which medical professionals you have access to, which hospitals you can go to, which medications you can take, and even which procedures can be performed. Moreover, when employers switch to a different insurance company, the employees must scramble to find all new providers in their new network. A single payer gives true choice back to the consumers of health care services- the people themselves.
As a business owner myself, it is my fundamental belief that employers should focus on job creation and real wage growth, instead of deciding which insurance company might help get our employees the care they need at a manageable cost. We must enact the New York Health Act (A. 5248A – Gottfried, S.3577A – Rivera) to create a Single Payer in NYS. It will bring the business model to budgeting and controlling health care costs, which will ultimately ensure we all have comprehensive health coverage that is affordable and sustainable even in the midst of a pandemic.
Jason M Matuszak MD FAAFP FAMSSM is President, New York State Academy of Family Physicians, Chief of Sports Medicine at Excelsior Orthopaedics and Director at American Medical Society for Sports Medicine.