Is single payer the answer?
Years ago, an economist friend of mine and I would take long walks in the woods to talk about healthcare reform. As we navigated dozens of thorny topics, he often reminded me that having the right answer was far less important than asking the right questions. His advice is still worth heeding.
The notion of publicly financing healthcare in New York State has been on the Legislature’s agenda for more than 20 years and has recently sparked renewed interest as a possible way to achieve universal coverage and contain health spending growth. During my tenure as President of the Vermont Association of Hospitals and Health Systems, the Green Mountain state spent more than three years gearing up for single payer, until former Governor Peter Shumlin determined this extremely popular and painstakingly-studied model was infeasible and unaffordable.
Vermont is not New York, but policymakers, stakeholders, and consumers should take time to consider some tough questions before claiming that single payer is the answer for New York’s healthcare problems. Here are just a few.
First, what problems would publicly financing healthcare in New York aim to solve? If one of them is universal coverage, then it would be important to know that 95% of New Yorkers already have health coverage through their employer, Medicaid, Medicare, or via New York’s insurance market, the New York State of Health. Would a state-passed individual mandate work just as well to cover the remaining 5%?
One of the most obvious questions is related to cost. A recent poll commissioned by the Business Council of New York State found that 54% of voters who responded oppose a government-run single payer system. Sixty-six percent said the tax burden would be too high. Taxpayers and ratepayers want to pay less, not more. The goal of lowering costs in the short term and eventually achieving affordability for taxpayers, employers, and government raises many tough questions about what’s driving up healthcare prices and spending.
Vermonters argued that administrative savings via single payer would quickly and dramatically lower healthcare costs and thus achieve affordability. This turned out not to be true. While administrative costs were projected to decrease, studies found that the paper trail generated by the millions of annual healthcare interventions across the care continuum would not, and should not, disappear. Regulators need this information for oversight, and doctors and other caregivers need a record of visits, tests, medications, and more, to effectively care for patients for as long as they need treatment.
At the individual level, it’s a telling question to ask: Who can pay the full, market rate for commercial coverage? Almost no one. The cost of health insurance is almost always subsidized—by employers or the government. The current market cost of health coverage subsidized by employers is about $19,000 annually for family coverage in New York and across the country. Coverage for many hard-working New Yorkers is possible only through tax-subsidized health plans offered on the exchange or through Medicaid.
At the societal level, affordability equates to sustainability, leading to the question: How would a state-only, publicly-financed healthcare system contain costs without eroding access to care and coverage? Health spending growth has exceeded general economic growth at the state and federal level for decades. Many reasons contribute to excessive health spending growth, but one overlooked factor is the predictable, growing demand for medical services, given our aging population and the increasing prevalence of preventable chronic conditions, like diabetes. As I learned long ago, the (spending growth) “issue is in the tissue.”
Which gets me to the most important question: What are the healthcare needs of 19 million diverse New Yorkers? How do we improve access to the care and services they need? How can we eliminate persistent disparities in care or address the care needs of aging New Yorkers? New York has 3.7 million people age 60 and over; by 2025, at least 25% of the population of 51 counties will be 60 and over.
Failing to anticipate and address the changing health and medical needs of New Yorkers, young to old, well to severely disabled, and chronically ill, will result in a failed solution, regardless of its elegance at the outset. Given our demographics and our starting place, we have a plethora of important questions to ask before thinking we have any sure-fire answers to achieve our shared goals.
Our healthcare system is built on the value of access to care, regardless of ability to pay. If you or a family member is sick or injured, you seek care. For those without insurance, this access is limited to free clinics and emergency rooms. The fewer people with health coverage, the more people crowd our emergency rooms, which translates into higher health spending for all.
New York’s hospitals and health system leaders strongly support universal coverage, affordability, and access to high-quality care. Achieving and sustaining these goals will require a bipartisan, fact-based approach that stays true to New York’s values. Rather than a quick fix, consumers and taxpayers would benefit from a long-term approach that manages cost growth over time, takes advantage of technology and innovation, and strives to continuously find more effective and efficient ways to deliver high-quality care to all who need it. All in all, healthcare reform seems like fixing an airplane while you’re flying it. Best not to fly blind.