SINGLE PAYER IN WASHINGTON STATE: CHALLENGES AND APPROACHES

1. SINGLE PAYER IN WASHINGTON STATE: CHALLENGES AND APPROACHES John Geyman M.D. Professor Emeritus of Family Medicine University of Washington November 9, 2013

2. THE BIG FOUR PROBLEMS REQUIRING REFORM 1. Soaring, uncontrolled health care costs. 2. Increasing unaffordability of health care. 3. Restricted access for uninsured & underinsured. 4. Variable, often mediocre quality of care.

3. ACA Potential Benefits • Extends Health Insurance to 27M people by 2019 • Subsidizes premiums for lower income • Allows children up to age 26 on parents’ policies • Prohibits insurance limitations on pre-existing illness and bans annual and lifetime limits • New funding for community health centers • Government sponsored insurance exchanges in each state • Establish Patient-Centered Outcomes Research Institute (PCORI) Geyman, J.P. Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform. Friday Harbor, WA. Copernicus Healthcare, 2010

4. How Insurers Are Gamingthe Affordable Care Act ･ Broad definition of medical loss ratio ･ Continued escalation of premiums ･ Limited benefit policies ･ Lobbying for minimal benefit requirement rules ･ Narrow networks ･ Short term policies ･ Cancellation of policies ･ Coordinated pushback against state regulators

5. HOW EMPLOYERS AREGAMING THE ACA • Shifting more employees to part-time • Limited benefit policies • High-deductible plans as only option • More cost shifting to employees • Low annual limits (e.g. McDonalds Corp. $2,000)

6. What Happens To InsurersAfter Passage of ACA 1. Consolidation through mergers and acquisitions. 2. Increased tiering of health plans (60 to 70 percent actuarial value) with higher deductibles 3. Decreasing choice of physicians and hospitals-”Narrow Networks” 4. More use of pre-authorizations. 5. Further privatization of Medicare and Medicaid. 6. PR blitz promoting “consumer-friendly” expanded roles.

7. Problems With ACOs In the grand scheme of healthcare spending, ACOs' savings will be slight. ACOs won't work when healthcare still operates in a fee-for-service system. So now the chatter is Pay-for-performance (P4P). ACO’s can’t work and/or can’t create competition in rural and many suburban areas.

8. Long-Term Harmful Effectsof the ACA Solidifies insurance company strangle-hold on the medical economy. Accelerates the migration of primary care to institutionalized medicine with new layers of waste and bureaucracy. Risks convincing the country that the government only makes health care worse. Legitimizes leaving 50 million people un-or under-insured.

9. ACA Does NotControl Costs of: • Fee for Service • Incentivized Salaries • Unnecessary Procedures • Administrative Waste • Multi-level Fraud • Upcoding • Insurance Company Overhead and Profits • Pharmaceuticals and DME

10. ACA Also Does Not: • Assure Access and Affordability • Improve Quality • Assure rebuilding of primary care • Defragment our national health care • Address the needs of rural health care • Address the costs of medicalization

11. Alternative Solutions • Free market with multi-payer financing • Single payer financing coupled with private delivery system

12. HOW HEALTH CARE FREE MARKETS FAIL PATIENTS 1. Predatory pricing 2. Perverse incentives for profit 3. Consolidation and market power 4. Inefficiency and bureaucracy 5. Inadequate quality control 6. Volatility and unreliability

13. FREE MARKETS (cont’d) 7. Unethical practices 8. Outright fraud 9. Opaque policies, procedures, prices 10. Emergency nature of many encounters 11. Asymmetric information

14. IS THE ACA A PATHWAYTO SINGLE PAYER? NO:for all its inherent flaws re inadequate access, lack of cost containment, increased bureaucracy, unsustainability, etc. YES:if its failures become widely understood and a broad non-partisan backlash promotes the only viable option—national single payer, with perhaps some states leading the way.

15. CHALLENGES TO SINGLE- PAYER IN STATES • Pass a strong bill for universal health care, including authority to set rates, establish claims processing, and plan capital expenditures (WHST) • Integrate all federal funds for health care into state budget (interagency process, IAP bill of Rep. Jim McDermott as enabling legislation). • Dealing with workers’ compensation benefits • Dealing with employers and getting waiver from ERISA • Determining how to pay for program; premium reduction vs. taxes

16. SOME APPROACHES TO SINGLE- PAYER IN WASHINGTON STATE • Complimentary emphasis on state and national efforts • Reframe the debate based on evidence • Educate legislators • Build coalitions; use of social media per California example? • Reach out to business and opponents of single payer • Build on experience of other states

17. REFRAMING THEHEALTH CARE DEBATE • Economic argument: Friedman’s and previous reports; all will save money and get more with single payer. • Social/political argument: single payer and American values; crosses party lines • Moral argument: health care as a right; U.S. as outsider in world; cruelty of present system; who is health care system for?

19. SHIFT IN CONSERVATIVE PUBLICATIONS “For-profit health insurance has undermined our economy and society. . . We lost the positive aspects of affiliation health insurance starting in the 1960s and through the 1980s when Wall Street discovered there was money to be made turning nonprofit health insurers, hospitals and nursing homes into investor-owned companies. What we got was a massive conflict-of-interest—profit vs. public good—that has culminated in a dysfunctional health delivery system that has undermined our economy, reduced our national wealth and torn our social fabric.” —John E. Girouard, The capitalist casefor nonprofit health insurance. Forbes, 2009

20. CONSERVATIVE CASE FOR UNIVERSAL HEALTH CARE “It is time for American conservatives to add health care to fire and police services as minimal government services needed to enable individuals to thrive at minimal financial costs. The question for conservative leaders who deplore wasted potential, free-riding, financial waste, and inefficiency is not whether they can support universal access to needed health care. It is how they can not support universal access without betraying their own values.” —Donald Light and Paul Mentzel,Hastings Center Report, 2006

21. REASONS FOR OPTIMISM THAT SINGLE-PAYER IS ACHIEVABLEIN OUR OWN TIME • ACA is failing, Republicans have no plan, and there’s no other alternative. • Rising public backlash; growing support for single payer • Increasing frustration among health care professionals. • Continued decline of employer-sponsored insurance • Needs of business to escape rising burden of health care costs • Probable liberal-conservative convergence for real reform • Power of social action from the grassroots • Stein’s Law: “If something cannot go on forever, it will stop.”