These five topics are often used to distract or scare people away from the prospects of health insurance reform. First, let's make sure we all understand what a "red herring" is. It's an argument that is meant to mislead or distract attention away from an important topic. As it pertains to health insurance reform we will be looking at the following five (5) red herrings.
- The first is that Medicare4All is socialized medicine.
- Second is the question of whether Medicare pays enough.
- Third, what about selling insurance across state lines?
- The cost Malpractice Liability Insurance (i.e. Tort Reform)
- Physicians practicing "defensive medicine."
Would Medicare4All be Socialized Medicine?
In part this depends on your definition of "Socialized." In most discussion "Socialized Medicine" is something like England's system. In that system the government owns the hospitals, owns the labs, owns the MRI and CT machines, and all the doctors and support staff are on the government payroll. That’s not what Medicare is, it is not what most people Medicare to be in the future.
For other people "socialized" can simply mean something that benefits as large a part of the populace as possible. With this definition people will say that fire departments, police, public libraries, etc are examples of socialism.
One version sounds bad, the other sounds pretty decent. To a certain extent you have to decide which definition you are going to use.
Some on the right would argue that the doctors will effectively be working for Medicare if they are only getting paid by Medicare. Some analysts also say that Medicare doesn't pay enough to keep a doctors office in business. Let's examine those challenges....
Will all the doctors really just be working for the Government?
As for the question don't they really work for Medicare if Medicare is the key provider of compensation for procedures? Not to be political about it, but, again, I'd say it depends on your perspective somewhat.
For example: If a doctor works for a hospital then the hospital is likely paying a salary with some sort of bonus structure. The hospital is likely providing a benefits package including retirement, health insurance, life and disability insurance. The doctors contract with the hospital spells out hours expected and vacation time.
Does the doctor work for Medicare when so much of the doctors work environment is negotiated with their employer? If Medicare doesn't control all those things how is it socialized medicine?
Another example might be a smaller doctors office where a single or small group of doctors has a practice. They won't have a corporation providing retirement, healthcare, and other benefits. They won't have anything, but each other to negotiate with on hours and vacation time.
However the small office physician practice still will have lots of overall business decisions to make. How will they market their practice? How many staff will they hire? What do they want their patient load to be? Which hospitals will they try to get privileges at? Do they want to grow the practice or keep it small? Will they be providing care or supervising a team of Physicians Assistants and Nurse Practitioners? Regardless of who the payer is there is still independence in how a practice is run AND how care is given.
Does Medicare Pay Doctors Enough?
Right now physician practices and hospitals have to have significant staff to keep up with billing and collections from various insurance companies. A Medicare4All solution would minimize the need for all that staff. Claims would go to Medicare and claim forms for supplement companies could be standardized to make the business end of running an office or hospital much more efficient.
Maybe not in the case of Primary Care
One of the problems we have in American medicine is a lack of primary care doctors. Everybody wants to be a specialist. Why? Because generally, they can make more money for a couple of extra years of study. What a primary care physician makes now is not horribly different than what many made 20-30 years ago. Just like the middle and working class needs a raise, so do many primary care doctors.
There are also doctors that practice concierge medicine. The business model is roughly where a doctor charges their clients a monthly fee and they can go as many times as they need. Many concierge primary care doctors are not in network with any insurance company.
Some care givers have moved to a business models where the primary care doctor oversees a team of Physicians Assistants and Nurse Practitioners. That is probably the way of the future, but some doctors become doctors because they want that patient interaction.
A primary care doctor should be able to make between $150,00 to $300,000 a year depending on what part of the country they are in, what they want their patient load to be, and their business model.
All that is to say that a doctors ability to make a good living in a Medicare4All system depends on their business model, not just how much Medicare pays My own opinion is that we likely need to pay primary care doctors with direct patient care more than they get currently.
Should we allow health insurance to be sold over state lines?
The first thing to understand is that this can already be done. Insurance is a state regulated product so all a company has to do is to submit/file to a different state to sell it's policies in that state. However, most states have similar standards. So selling across state lines does little for anyone.
This whole argument rests on the idea that different states will have different standards for health insurance. Standards for health insurance would be things like:
- Annual Wellness checks being covered at 100%.
- Pre-existing health conditions cannot be held against people.
- Mental Health treatment gets paid just like physical health treatment.
- Prescription benefits standards, etc..
If some states did allow the sale of insurance that didn't have high standards then, sure it should be less expensive. At the same time people might find that once they have a health condition their coverage isn't very good.
The way I see it the human body needs pretty much the same care in Tennessee as it does in California. Some people get prostate cancer, some people break bones, some people pregnant, others have gall bladder issues. All these things require healthcare. All these things happen in each and every state. All these things should be covered.
When you allow different standards the risk is that large numbers of people gravitate to the lowest cost options which will likely be the least expensive options. Then when life happens and they have health claims they find their coverage isn't very good. If we allow business models of insurance with substandard coverage we risk having the same problems we have now with huge numbers of bankruptcies due to medical bills.
The Cost of Medical Malpractice Insurance
The next red herring is that the cost of Medical Malpractice Insurance is driving up the cost of healthcare because it is passed on to the patient and health insurance companies.The New York law school led some research into this area and this is what they found:
- States that enacted Tort reform did not see corresponding drops in the cost of Medical Malpractice insurance.
- When adjusted for inflation the cost of Medical Malpractice insurance is the lowest in four (4) decades.
- Claims are at their lowest (the research was from 2016) since 1982.
- Finally, Medical Malpractice insurance accounts for less than one half of one percent of overall healthcare costs and have never been over 1% of costs.
Clearly if an expense is less than one half of one percent of cost then dropping that cost incrementally isn't going to have much effect on the overall picture.
Inflated Costs due to "Defensive Medicine."
There are some people that want you to believe that a good number of doctors run unnecessary tests in order to confirm a diagnosis or rule something out so that if they get sued they can point to the record and say, "Hey, I tested for everything." It's really the corollary to red herring number four (the cost of medical malpractice insurance).
There is some truth in excessive testing. However, according to experts it has more to do with generating income and not being aware of best practices.
Combating excessive billing needs to happen whether or not we have health insurance reform or not. This is one of those things that will always be with us. We need to be continually combating it. This is not a fix it and forget it type of problem.
Old doctors retire, new doctors sign up and want to make more money. It's human nature. So for those say, let's not do health insurance reform until we fix issues like this, what they are really saying is, "let's not do health insurance reform at all."