Would A Single Payer System Be Good For America?

Brian Klepper

ALP_H_BK_0010berwick_donOn Vox, the vivacious new topical news site, staffed in part by former writers at the Washington Post Wonk Blog, Sarah Kliff writes how Donald Berwick, MD, the recent former Administrator of the Centers for Medicare and Medicaid Services and the Founder of the prestigious Institute for Healthcare Improvement, has concluded that a single payer health system would answer many of the US’ health care woes. Dr. Berwick is running for Governor of Massachusetts and this is an important plank of his platform. Of course, it is easy to show that single payer systems in other developed nations provide comparable or better quality care at about half the cost that we do in the US.

All else being equal, I might be inclined to agree with Dr. Berwick’s assessment. But the US is special in two ways that make a single payer system unlikely to produce anything but even higher health care costs than we already have.

First, it is very clear that the health care industry dominates our regulatory environment, so that nearly every law and rule is spun to the special rather than the common interest. In 2009, the year the Affordable Care Act (ACA) was formulated, health care organizations deployed 8 lobbyists for every member of Congress, and contributed an unprecedented $1.2 billion in campaign contributions in exchange for influence over the shape of the law. This is largely why, while it sets out the path to some important goals, the ACA is so flawed.

Understood in terms of its probable returns on a nearly $3 trillion current annual health care spend over, say, 25 years. the lobbying investment was a drop in a very large bucket. The negligible opportunity cost will generate returns for the industry for many years to come.

Second, every health industry sector – brokers, health plans, physicians, health systems, drug and device firms, health IT firms – has demonstrated and continues to demonstrate a willingness to employ institutionalized mechanisms of excess, most of them variants on over-treatment and stratospheric unit pricing, that allow them to extract more money than they are entitled to. This is why US health care costs double what it does in other developed nations.

It’s not that our people are sicker, but that we now accept distorted care and cost as normal. These practices unnecessarily expose patients to physical peril and cost purchasers double, displacing spending on other critical needs. Unfortunately, ACA does little to disrupt this waste.

Admittedly, employers and unions have so far failed to galvanize and mobilize their aggregated purchasing strength to demand greater health care value. But in a system in which the regulatory environment has been captured by health care, purchasers remain our most promising counterweight to the health care industry’s unrelenting cost growth.

Imagine what might transpire if employers and unions were removed from the equation, except for their contribution through taxes. The purchase of health care coverage would move from groups, who have latent but considerable power, to individuals, who have little to no power against monolithic health care organizations.

In the curious dynamic that has evolved, non-health care business and labor leaders could work collaboratively, serving as a counterweight to the health care industry’s excesses and holding their health care partners accountable. They could use their considerable purchasing leverage to reward organizations and professionals with good clinical and business practices and, frankly, punish those with bad ones.

But under single payer, we’d all be at the mercy of what occurs in the transactions between our Congressional Representatives and the health industry’s lobbyists. If the past is prologue, there would be little opposition, and the industry would have open field running.

Brian Klepper is a health care analyst and the new CEO of The National Business Coalition on Health.

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Klepper Interview – Midwest Business Group on Health Conference in Chicago, 4/30/14


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Klepper Interview at the World Health Care Congress 4/07/14

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Elaine Update – Feb 09, 2014

On Thursday Elaine had the first infusion of her next, 3rd major course of chemotherapy, a powerful combination of Avastin, Gemcitabine and Carboplatin that will be administered over the next 4.5 months. It was her 30th infusion of Avastin, a genomic drug that inhibits blood vessel growth that feeds the tumors and that has possibly been a key agent in keeping her cancer at bay. The Gemcitabine and Carboplatin are effectively poisons that we hope will push back on the advances made by the disease over the past several months. As I write this, she’s lounging on the living room couch, drifting in and out, but mostly fine. These are days to stay in and simply weather the process.

Elaine was first diagnosed with primary peritoneal cancer in late April of 2010, so we’re now approaching 46 months of living with this shape-shifting illness. Like long voyages, the daily experience is mostly unremarkable, but then there are intensely terrifying storms that strike intermittently, and then pass. You come through, shaken and wary, waiting for the next one.

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Getting Beyond Fee-For-Service

Brian Klepper

Posted 12/02/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010The catchy title of a recent Harvard Business Review Blog post, The Big Barrier To High Value Health Care: Destructive Self-Interest, suggested that the Institute for Healthcare Improvement (IHI) is forging arrangements that can overcome fee-for-service reimbursement’s propensity to drive excess. As the honest broker, IHI could advocate for arrangements of mutual self-interest based on the right care, better outcomes and less money. Employers and unions would get lower costs, with improved health and productivity. Health systems and health plans would win more market share (at their competitors’ expense), realizing longer term relationships that could facilitate sustainability as market forces intensify.

The substance of IHI’s description was less satisfying, though. Their principles – common goals, trust, new business models, and defining roles for competition and cooperation – are obvious ingredients in any workable business arrangement. But the authors never talked about the money. That left plenty of room for skepticism by those of us who have heard more than one CFO ask, “Why should we take less money until we have to?” What, exactly, is the incentive for health care organizations to moderate their care and cost patterns?

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Predatory Health Care

Brian Klepper

Posted 11/17/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010Recently I was asked to intervene on behalf of a patient who, trapped by circumstance, was paying off an enormous bill for a lithotripsy procedure. What I uncovered wasn’t news, but it drove home how egregious the current system can be, why it so badly needs to be fixed, and how the Affordable Care Act (ACA) helps move us in the right direction.

The patient had health insurance through her husband’s job. But it was cancelled just after the hospital validated it, because the employer failed to pay the premium. The procedure was performed, and the patient was charged as “self-pay.”

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Facilitating Interoperability

Cross-Posted 10/18/13 from The Health Affairs Blog

BK 711Health Affairs report on health information interoperability by staffers of the Office of the National Coordinator for Health Information Technology (ONC) provides a good enough summary of the situation. But it also is not news, and falls under the Bob Dylan Rule: You don’t need a weatherman to know which way the wind blows. From the article: “In general, limited interoperability across vendors, low motivation to share information in a fee-for-service payment environment, and the high cost of interfaces remain substantial barriers to widespread health information sharing.”

Two difficult but solvable structural problems block our exchange of health care information. The first is the “transport protocol.” Most health care data transport approaches lack the strong privacy and security safeguards that other industries now consider essential. The same industry that is moving toward clinical applications of mobile health, genomics, and nanotechnology still primarily relies on cumbersome, expensive faxes to transmit clinical information between organizations.

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