- The problem is that single payer means higher taxes, and not just for the richest 1%:
- Small retail and food service companies– who now contribute little or nothing for employee health insurance - -will not abide a payroll tax;
- Well-paid corporate employees -- who now get insurance tax-free -- will not abide an income tax increase;
- Well-off retirees on Medicare or TriCare will resist any new income taxes;
- Doctors and hospitals will resist a national fee schedule, if it relies on medicare rates;
- Single payer would require a massive re-write of state vs. federal obligations.
However:
Even without full Single Payer, we can do more – right now--
to protect vulnerable patients from
financial hardship. For this we need Tough Payer, not Single
Payer.
Here are five new
laws that will move us along, with a focus on patient protection, even if this
hurts providers, and with much smaller federal outlays:
New Law No. 1:
No balance billing for hospital care.
All hospital-based providers must accept insurance dollars as
payment in full.
This applies to ambulances, emergency rooms, anesthesiologists,
radiologists, et al.
It will not matter how small the insurer is, or how dominant
the hospital is locally.
If the patient has no insurance, or is caught “out of
network”, then the maximum bill will be 125% of the Medicare fee schedule.
(The Affordable Care
Act does have limited rules requiring non-profit hospitals to offer financial
aid to poor patients before walloping them with huge bills. Several states protect HMO members against
sneaky ER billings.
Butur new law would
apply to all citizens, in all states, for all hospital care.)
Example: A
patient has surgery and their insurer pays the claim. But a second non-network surgeon sends an extra bill for $12,000.
Is the patient
supposed to pop up from the operating table, to be sure that every attending
specialist is covered in their plan? Is a semi-comatose patient supposed to
stop every doctor who gives them a ‘bedside consultation’, and find out what
they are going to charge? The law must protect patients from ‘gang billing.’
From now on, if the second surgeon’s bill is denied, the
patient owes nothing. The surgeon and the insurer have to fight it out
themselves. (Medicare has operated this way for years.)
Eventually a patient will get one bill from the hospital,
and one bill alone. No more separate bills from obstetrics, pediatrics,
anesthesiology, radiology, et al. Emergency physicians can become hospital
employees again. It won’t kill them.
Example: A
patient with a cardiac emergency goes to an academic hospital, which happens to
be ‘out of network..’ The bill for tests
and procedures is $25,000.
This too is extortion. If the insurer pays $4,000, or no less than
the Medicare rate, that amount must be accepted as payment in full.
Chargemaster price gouging is ignored by Medicare. It is time for the rest of America to
catch up.
Cost to taxpayers of New Law #1 --
$0.
New Law No. 2:
Price ceilings on drugs with no substitutes.
Insurers and
pharmacies must be defended when they refuse to pay extortionate prices, and
when they force drug companies to compete for a place in their formulary.
Re-importation of
drugs from Canada, Germany, Italy, et al. must be allowed in all circumstances.
Class action suits against drug company profiteering must be encouraged. Sudden
price ncreases of 400% on older drugs must be banned.
The FDA must be authorized to create ‘price ceilings’ for specialty
drugs.
For example, the price ceiling for Sovaldi (for Hepatits C) could be set at $1,000 a
year. The drug company would still have
3 millon potential customers, and potential revenue of $3 billion a year.
Granted -- this may
discourage investment in drugs for less common diseases – i.e. , those which only
have a few thousand sufferers.
Therefore, extra federal funds and prize awards for drug
research should be available --in return for
price ceilings, plus the eventual elimination of patent protection
periods.
Cost to taxpayers of New Law #2 -- $20 billion a year
for drug research
New Law No.3
Allow patients to challenge ‘facility fees’ for outpatient care.
Example: If
a procedure has traditionally cost $200
in a doctor’s office, the hospital cannot add a charge of $650 just because they bought the doctor’s
practice.
To combat such bills, each state will establish health care
claims courts, where patients can challenge
outrageous billing. Providers would be forced to enter into binding
arbitration._
(Rep. Craig Coughlin
in the New Jersey House has already proposed such legislation.)
A medical bill is not holy writ. A patient can legally
refuse to pay any charge, if it is not
explained to them in advance. The
operating rule will be “No disclosure, No liability.”
Insurance claims
should be reviewed in advance for scheduled
procedures. A patient must be informed what they are likely to pay in
deductibles and coinsurance. If they see evidence of price gouging, they can
cancel the procedure or do it elsewhere.
We might then see on-line bidding for non-emergency
surgeries. Patients may choose to travel to another state or another country, to
find an honest entrepreneurial clinic.
Many providers will just give up on overcharging, to avoid
the potential expense of arbitration. Eventually, insurance companies and
Medicare will stop paying higher rates, just because care is administered in a
hospital.
However, if a hospital or physician persists in price-gouging
, we will need more judges willing to levy fines and sanctions against the
offender. See the attached article from Medscape:
Binding arbitration will cause a financial crisis for some hospitals –
those which are overbuilt, overstaffed, over-equipped, and overpaid. This
‘right-sizing’ will not be pleasant, but it is time to stop the extortion.
Cost to taxpayers of New Law #3 -- $250 million to
operate health courts and arbitration panels
New Law No. 4
Use Medicare to pay off large health care debts
Our new laws against balance billing will greatly reduce
future medical debts. However there are existing debts which must be dealt
with.
Example:
An uninsured patient
owes $25,000 (at chargemaster rates) for a hospital stay….
or an insured patient owes $10,000 due to
deductibles, coinsurance, or out-of-network care.
Solution:
These bills will no longer ‘go to collections.’ Private debt
collectors have no business in health care.
Instead the bill goes to Medicare, which first re-sets the
bill according to its own fee schedule.
This will lower the
amounts by about two -thirds in many cases. Medicare then pays the providers its
standard fee, on a mandatory-assignment basis. (This is a lot more than hospitals receive now on most uninsured patients.)
The patient pays income tax on the forgiven debt. Their
payments to the IRS can be spread over several years.
We must face the fact
that people of modest incomes will always need help from others if they have a
catastrophic medical event. As Dr. John Goodman has asked, what is the best way of getting help? Is it
through buying expensive health insurance with high deductibles and co-payments
---- or through government help to pay medical bills after the event occurs?
Medicare assistance after care may well replace the worst
types of high-deductible, swiss-cheese insurance policies that are still being
sold today. And that is fine.
Cost to taxpayers of New Law #4 -- About $25 billion a year for 5 years,
until balance billing rules take hold.
New Law No. 5
More federal aid to safety-net hospitals
With all the laws described above, hospitals will be less
able to cover expenses through price-gouging. Even having an emergency room at all could become
a money-losing proposition.
Federal funds for emergency and trauma care can help fill
the gap.
Medicare has for years paid subsidies to hospitals for
treating the uninsured.
The ACA has stupidly reduced these subsidies – instead they
should be at least tripled.
Americans have the foolish idea that all hospitals should be self-supporting. No
one expects this from fire or police stations. Emergency medical care should
also be considered a ‘social good’ – something we pay for
collectively, even if it does not “break even”, because it makes our society a better place to
live.
In Europe, Japan, and Australia, almost half the costs of
hospital operations are paid by broad-based taxes. User fees and insurance
claims are not expected to cover the whole institutional budget.
Any hospital which receives federal aid would have to spend
it on patient care, not on new
construction or lavish administrative salaries.
Cost to taxpayers of New Law #5 -- $30-$40 billion a
year
Final note:
Thank you for your review of these
new laws. Please feel free to reprint this article or quote from it.
Comments and criticism are always
welcome. You may contact me at
You can read further writing on
health reform at www.thehealthcarecrusade.com
Bob Hertz, Willow River, MN
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