Health care is too expensive for Washingtonians. We have evidence that single payer is less expensive and more equitable. There are challenges to implementation. We must understand them to overcome them.
By Elaine Cox, Co-Lead, HCFA-WA Policy Team and Kelly Powers, HCFA-WA Vice- President
In 2018, HCFA-WA successfully lobbied for the Washington State Institute for Public Policy (WSIPP) to conduct a study of single-payer and universal health coverage systems. We wanted legislators to see evidence that single payer health care is a viable, desirable model and should be brought to the table in developing health reform in Olympia.
The study examined state-based initiatives to implement single-payer health care, gave an overview of national proposals, and analyzed other countries that have implemented a variety of national universal health coverage systems. One thing the report was not tasked with was quantifying the health care crisis for Washington families, especially the underinsured. This is a vital part of the message we want lawmakers to understand, and we will continue to bring it forward.
The Single-Payer and Universal Health Care Systems interim and final reports are significant because:
★ They are prepared by WSIPP, a nonpartisan public research group that conducts applied policy research for the state legislature to inform representatives as they consider legislative proposals.
★ They focus on single-payer and universal health care systems. This would have been unimaginable even three years ago.
★ They are in the public record with some remarkable conclusions.
★ They acknowledge that there are lessons to be learned from single-payer and universal health care systems.
★ They identify the challenges we must tackle.
We've identified 4 takeaways to help us prioritize our next steps. We hope our supporters will help us amplify why single payer is urgently needed and that it can be done in our state.
Takeaway 1: We are not getting our money's worth from our health care system.
"The United States' higher health expenditures do not translate to better health outcomes and quality of care for the entire US population." This suggests that our current system does not deliver the most cost-effective care in an equitable manner.
About 1/3 of healthcare spending provides little to no value due to:
★ Inflated prices: Market concentration (eg hospital mergers and acquisitions of physician practices) leads to imbalanced hospital bargaining power with multiple payers.
★ Pharmaceutical spending in the US accounts for 21% of the spending difference between the US and countries with universal health care systems that are better positioned to set prices and require the use of the most cost-effective medications.
★ Extra administrative costs of providers dealing with multiple insurers on claims, medical billing disputes, and provider enrollment.
★ Higher use of high-profit procedures, tests and drugs that have "modest or uncertain effectiveness," with the profit motive providing higher incentives to providers to promote their use.
Takeaway 2: Many people continue to experience significant cost barriers to accessing health care.
★ 400,000 Washingtonians, about 6%, remain uninsured since the ACA was implemented in 2014. Medicare patients as well as employer-based plan enrollees have considerable out-of-pocket medical expenses paid to providers through co-pays and deductibles. Many Medicare patients also pay out-of-pocket for supplemental insurance.
★ Many people do not purchase ACA marketplace insurance because of high premiums and/or cost-sharing.
★ Many Americans who do have insurance are underinsured, meaning that their deductibles and other health care costs are so high that they cannot afford needed care. They are more likely to "forgo needed medical care, tests, and medications, with potentially adverse health consequences...When people do not believe they will reach their deductible, they tend to act as if they were uninsured." The health impacts on medically vulnerable people, including low income, elderly and chronically ill individuals are particularly concerning.
★ Undocumented immigrants are ineligible for federal health care coverage.
Takeaway 3: Evidence from other countries and states shows that single payer health care can provide universal access to higher value/lower cost health care than what we currently have in the US.
★ Most studies of US single payer proposals predict an overall health care cost savings. These estimates do vary, between 1%-15% savings, and are dependent on assumptions about how much savings can be achieved from provider payment rates, drug price reductions, and plan administration costs
★ Single payer is better at limiting financial barriers to care and promoting more equitable access across income groups.
★ Single payer is able to promote wiser use of procedures, medical technologies such as imaging, and drugs.
★ WSIPP estimates that single payer could reduce plan administrative costs by 6-10%. These costs arise from multiple health plans using different systems for "eligibility determination, enrollment, developing and maintaining health care provider networks, billing, claims payment." It would also lower costs going to marketing, care management, and profit.
★ To be financially feasible, all universal health systems, including single payer, will have to use cost control tools to reduce spending on health care services and medicine. Several concepts under consideration:
- global budgets
- centralized price setting
- utilization management
- health technology assessment, which identifies the highest-value, safe and effective health interventions
★ Different state plan proposals have innovative components we can learn from -- such as an equitable, minimal cost sharing to manage utilization, passing along employer savings as wage gains, and more.
★ Money that is saved on delivery of health care may be used to promote prevention and "upstream" determinants of health. Reducing poverty, homelessness and economic inequality have been demonstrated to positively impact health.
Takeaway 4: There are significant hurdles and uncertainties to implementation of a state single payer system, but they are not insurmountable. (We need you to help us tackle these obstacles.)
★ Existing federal funds from Medicare, Medicaid, ACA marketplace subsidies, and VA care are needed to pay for the new system.
Note: Some Single-Payer proposals allow for a standalone Veteran's Administration like we have now.
★ New taxes would replace employer and household premium payments and out-of-pocket spending.
ERISA (Employee Retirement Income Security Act of 1974) bars states from regulating employer group health care plans, state law is "preempted" or replaced by federal law.
★ However, the State-Based Universal Care Act of 2019 proposed by Rep. Jayapal, and expected to be reintroduced by Rep. Khanna in the fall, would streamline changes to federal law and allow states to access federal healthcare funds in a unified waiver process, including waiving ERISA legal and funding restrictions.
★ Potential provider shortages: Providers may migrate to other states that do not adopt single payer because of changing reimbursement rates. We also have concerns that universal coverage will increase demand for physicians.
★ Ability to negotiate lower drug prices. Bargaining power at the state level is less than what could be achieved nationally.
★ Overall impact on health care spending estimates vary, but all but one estimates savings.
★ Questions remain about how applicable other countries' experiences are to the US.
Some will attempt to turn the hurdles in to stop signs, but we believe it is in the best interests of Washingtonians to approach them as the list of challenges we must tackle. Many of these have been successfully handled in other countries, and we are learning from our own state and other states' initiatives about what works and what doesn't.
HCFA-WA is positioned to advocate for single payer health care in Washington State and to mobilize and educate our supporters on what you can do move our legislators and other voters toward single payer health care. Stay tuned and sign up on the home page.
Read the full Reports: Interim Report | Final Report
Watch the Presentation on the Final Report to the Joint Select Committee on Health Care Oversight. WSIPP Report begins at 1:15:17.