SINGLE PAYER HEALTH COVERAGE

I am presenting you my opinion about single payer health care systems because I believe in them.  I am also here to tell you that we here in the United States have three, yes, three single payer health care systems.  Not only do we have them, they work, and they work well.  They work so well that none of us would want to do without them.  One is Medicare; two is Workers Compensation and three is the Veterans Administration. The two that I know best are Medicare and Workers Compensation.  I therefore leave the comments about the VA to those who are better versed in that area than I am.   

I am considering Medicare and Workers Compensation side by side because both have a lot of exposure to the general population.  One of them is a slave to the traditional probabilistic underwriting system to determine the level of premiums.  The other operates on an experience rating system to determine the amount of premium to be paid by the buyer.  My deep disappointment with the current government team in Washington as well as with the ambitious pretenders is that neither one of them has the purity of morals nor the strength of convictions to do what is right by the people of our fair country.  Health care is not a political issue.  It is a moral one.  We all know what happens when politicians set themselves up as the arbiters and the deciders of how moral issues should be tackled.

So, who am I?

I am a seventy-five year old male who just 5 months ago failed a Low Testosterone test.  I am still at the 65% level of normal hormone level for a man of any age.  I am also a person who worked for more than thirty years managing benefits and safety programs for large and small manufacturing companies in the state of California.  During those thirty years I fought tooth and nail against the arrogant venality of health insurance providers.  As tough and as nasty as I can get, I was never able to come out ahead in the game.  I even went through a period of five years when I created and managed a self-insured program.  For the first three years, I was ahead, but then "medical care inflation" caught up to me too and it became a "wash" between self-insured plans and fully-insured ones.

I am also a person who for those thirty years managed the safety programs of these same manufacturing companies.  As such, I was the person who dealt with the Federal and State Occupational Safety and Health Administrations [OSHA] as well as with the accompanying Workers Compensation insurance providers.  In the second instance, I was able to get ahead of the game and stay there.  We took steps to bring the premiums down.   The administrative system of the workers' compensation health care is managed by the state and is a single payer system that works marvelously well and doesn't succumb to the wiles of the greedy insurance companies.  I tell you this because it is important for you to know that though I am not an expert in the field, I do have a lot of experience.

Finally, while I am telling you who I am, I will declare that I have been a patient in Italy, France, Philippines and Mexico.  They all have a combination government managed single payer system plus private access fee for service systems.  In all those countries, as in just about every other country on the planet, prescription drugs are less expensive than they are in the USA.  In every one of those countries, I walked in to the health care system and was treated competently and effectively without worrying about the bill.  I also got good follow-up care.  Yes, I know single payer systems.  I also know that the US politicians lie about them all the time.  It therefore follows, that simple folk believe the lies of the politicians because they have no experience outside of what they know in the US.  

Now what?

First things, first.  It is my observation that both of the single payer systems that we have for the civilians in the USA are satisfactory to the general population who have access to them.  Medicare operates through private corporation health care providers who bill Medicare for services rendered.  

Workers compensation is also operated by the government through private corporations according to very strict governmental regulations.  In the workers compensation model, the employer chooses the healthcare provider, but pays the premium to the government.  In some states, like California, the employee may elect to have a private family doctor be the primary contact for care.  

Medicare is funded by three distinct revenue streams.  The first is from premiums paid by the prospective patient (the employee) through payroll deduction during the earning portion of a person's life; the second is from the employer who matches the amount of the payroll deduction taken from the employee and submits that amount to the government; the third is from premiums paid by the retired employee, usually as a deduction from the social security benefit on a monthly basis.  At this time this amount is about $1,100 per year.  It is therefore clear that the lion's share of the premiums paid to the Medicare system come from the prospective patient and no one else.  On top of that, Medicare has a co-payment component that is paid by the patient whenever he/she accesses the health care system.  The prescription drug portion of the Medicare system is too grotesque to try to consider in this short essay.  All things being equal, Medicare is not an entitlement program.  Medicare is a contractual obligation that the government has to the people who have paid the premiums, and who continue to pay the premiums until they die.  

Workers compensation is funded wholly by the employer.   In both instances, private corporations are the direct and immediate health care providers.   Workers compensation is organized tightly around legal regulation for the protection of the prospective patient through safety programs meant to protect the employee from injury or bodily deterioration, while Medicare has a very weak wellness component.  

This leads me to my fundamental contention that what we need in this country is a strong single payer healthcare system that is a hybrid between Medicare and workers compensation.  My corollary contention is that if this is done correctly, our national healthcare costs would come down because the prospective patients would have strong monetary incentives to keep themselves healthier.

There is already an element of this included in the Affordable Health Care Act.

You mean "ObamaCare" right?

The short answer is "yes."  The Affordable Health Care Act has an element of "experience rating" in it that is beneficial to the policy holder, or the patient.  It is a provision that says that the insurance company must keep its expenditures for doctors, hospital bills and other activities to improve health care quality to a maximum of 85% of all the premiums collected.  If the insurance company spends less than 85% for all of the above, it must reimburse the amount of money that it took in but did not spend to the payers of the premiums.   The consequences of this provision are important.  Here's why.  

Employer Acme Explosives (Wylie Coyote's Company) has 500 employees.  They have a health care plan with RR Dust Cloud Ltd. (Beep, Beep!)  Last year Acme paid $1,000,000 in premiums.  The insurance company spent $750,000 of it for the items enumerated above.

It is easy that see that they amount spent is only 75% of the total $1,000,000.  In order to comply with the tenets of the Affordable Health Care Act, RR Dust Cloud Ltd. must reimburse Acme Explosives the 10% difference between $850,000 and $750,000 = $100,000.

It is easy to see that under these conditions, the people who pay the premiums have some leverage in the controlling of the cost of their health care.  It is in their better interests to develop healthier lifestyles so that they can save money in the subsequent year.

Not quite workers compensation, but...

The workers compensation model is somewhat similar, but not exactly identical.  Employers strive to keep their employees from incurring on-the-job accidents.  They also train them how to work properly so that their bodies do not develop aches, pains and strains through bad habits in the performing of repetitive tasks.  The fewer the medical claims incurred by the employees in a determined industry, the lower the premiums go because the expenses demanded of the insurance companies are less.  This measure of performance is called the "Experience Modification."  If the companies in a pool have an "Ex Mod" of let's say .85 and Acme Explosives has an "Ex Mod" of 2.0, Acme's premiums will be significantly higher than those who are at, around or less than the .85.  This statistic is maintained on a three year rolling average and is a large positive incentive for companies to focus on.  One company I worked in had an "Experience Modification" of .67.  Now that is a savings!

A "pipe dream?"

I don't think that creating positive economic incentives in the health care arena of employer funded health care benefits is a pipe dream.  After all, the employer has control over the lion's share of the premium.  If employers can teach employees how to work safely, they most assuredly can teach them how to live healthier lives and encourage them to do so.  For years now the cost of an emergency room visit has steadily increased to astronomical heights.  That's negative reinforcement.  Rebates are positive reinforcement.  

I think that the important psychological element of this provision of the law is the personal control that it gives to the payer of the premium who is also the payer of the co-pay.  So now the prospective patient can save two ways: Save the co-pay and work at saving an extra $10.00 per month next year.  Why not?  It is my opinion that this is an important facet of the new law.  It doesn't require government spending and it imposes a degree of prudence on both the insurer and the insured.  It encourages both the buyer and the seller to respect one another because both have a stake in managing the flow of resources to their mutual benefit.

I didn't make this up

I came to know this because I mistakenly opened a piece of mail that was addressed to my son.  It came to him from the insurance company that has the health care account at his work.  It was an eye-opener for me.  I wanted to blame people for not making it known more clearly as it was all developing, but as you can see, it is not an easy practice to explain in a 15 second sound bite.  It is not an easy concept to teach to people.  It is an entirely new concept of how people can manage their health care expenses.  Some of you remember the Health Maintenance Organization (HMO) concept from the past.  It didn't work because there was no significant tangible economic incentive attached to it.  It made it too easy to access the primary care physician for "wellness" visits.  Now, under this concept, the incentive is to care for yourself by staying away from the health care system by living under a healthier personal discipline.  I think that this is a good idea.  What we need now is for people to understand it and get on board.  Once we get this under control, then we can attack the immorality of massively expensive prescription drugs.  A strong single payer system would go a long way toward solving that problem.  We've got three systems going already.  Just make them all one.