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Why Single-Payer Insurance May Be Closer Than You Think (and What to Do About It)

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Sen. Bernie Sanders, I-Vermont, is a big proponent of a Medicare-for-All healthcare system.

Government-controlled health care has been on the minds of benefits advisors for years now, looming as a distant threat, but often pushed aside for more pressing concerns. But during the opening keynote of the NextGen Growth & Leadership Summit in Nashville in early February, Nelson Griswold warned that the benefits industry underestimates the threat of single-payer at its own peril.

Citing a progression from Hillary Clinton to Bernie Sanders, and a lack of clarity from President Trump, Griswold, a benefits industry thought leader and strategist, discussed the growing momentum around the idea of Medicare for All, adding that although government-controlled health care doesn’t generally poll well, everything changes when you ask Americans if they’re interested in Medicare for All.

For example, recent surveys have found that 70 percent of Americans are open to adopting Medicare for All, while even 52 percent of Republicans support it.

(Related: Sanders Begins Presidential Run, Calls Trump ‘Embarrassment’)

Griswold noted that former Aetna CEO, Mark Bertolini, also weighed in recently, saying “As a nation, I think we should have a debate about single-payer.”

“As I was growing up,” Griswold said, “the bulwark against the idea of socialized medicine was always the doctors. So most concerning of all to me is the fact that 56 percent of doctors now either strongly support or somewhat support single payer health care.”

So what does that mean for benefits advisors? Yes, a growing number of advisors have made a conscious decision to become consultants rather than insurance brokers, which would give them an advantage if a major shift should occur. “But this is a fight we don’t want to lose,” Griswold warned. “Once a country has moved to government-controlled health care, it has never gone back. My prediction is that we’ll have single payer in five years.”

As attendees let those words sink in, Griswold examined the factors contributing to this potential sea change.

“What’s driving people’s frustration and willingness to embrace a new system?” he asked. “The numbers, of course.”

(Related: 7 Urgent New Questions About Health Insurance in 2019)

American health care has increased in cost every year since 1960, Griswold said. “In the last 17 years alone, we’ve seen 261 percent growth in the cost of health care. Why does it go up every year? We’re in a period of almost no inflation elsewhere, and yet we’ve had massive inflation in health care year over year.”

Griswold pointed to the root cause of the problems with American health care identified by John Torinus in his book, “The Company That Solved Health Care.” Torinus wrote, “CEOs should be embarrassed at how they have allowed health costs to run wild. They would not allow that to happen in any other part of their businesses.”

Companies manage and negotiate other aspects of their business down to the penny or even a tenth of a penny, Griswold said. “Why wouldn’t they do the same with the cost of a heart transplant?”

Some executives are starting to get it, but it’s been a very slow awakening. “Why is the C-suite ignoring their second or third largest cost set?” he asked. “Why do these otherwise brilliant and business-savvy people refuse to look at health care?”

“I believe it’s due to something I call health care’s big lie. This lie has been told over and over to CEOs and CFOs until they believe it.”

What’s the big lie? “Mr. and Mrs. CEO/CFO, you have no control over the cost of your health care. There’s nothing you can do to influence it and it will increase every year. So will your health care premiums. You must learn to live with it. We’ll do our best to manage it, but there’s nothing we can really do either.”

Griswold said this idea creates a wall that separate two groups that should be talking: the payer (employers or individual patients who are paying) and the providers (doctors, hospitals and drug companies). The wall means there’s no communication, other than providers throwing claims statements over the wall and the payers throwing cash back the other way, Griswold said.

The buyers aren’t watching the sellers and no one is managing health care as a purchase. Hospitals manage their supply very closely, but their customers—the employers—don’t. And neither do their employees, Griswold said.

But what is the wall? According to Griswold, it’s “carriers and status quo brokers” who maintain the lie that nothing can be done.

Despite the upheaval in health care post-ACA, the carriers continue to do very well, as evidenced by their revenue numbers, he said.

“When an insurance company’s revenue goes up, what drives their revenue?” Griswold asked. “Premium. When health care drives up the cost of premium, revenue goes up for insurance companies.They have no incentive to lower the cost of health care and every incentive to prevent employers from doing so.”

Griswold added that their partners in crime, often unaware of their role, are status quo brokers. If a client’s premium goes up, they get a raise.

The current cycle of massive increases every year is unsustainable, he said. “The system will collapse. Single-payer is looming and companies and their employee are paying more and more all the time.”

The only hope, according to Griswold, is a “benefits revolution” that is already underway. It is gaining momentum due to the frustration that’s spreading throughout the health care and employee benefits worlds. “As an advisor, when it becomes a victory to deliver the least bad news, it sucks the life and joy of your business.”

The goal of the revolution is to address the misaligned incentives that exist in the current system. So what’s the strategy? “To reinvent U.S. health care from the inside out in order to lower and control the cost of health care and make single-payer health care unnecessary.”  

To be successful going forward, he said, advisors need to change what they sell, who they sell it to, and how they sell.

Instead of selling insurance, they need to sell strategy, solutions, results and the supply chain management of health care. In other words, controlling and managing the quality and cost of the health care employees purchase under their employer sponsored health care.

Why does what advisors sell have to change? Because what they’ve sold before doesn’t address the top cost drivers: prescription drugs, hospital, outpatient surgery and physician visits.

The strategies, tactics and solutions providers that will help drive these costs down are already out there, Griswold noted. They include medical management, reference-based pricing, direct primary care, and direct contracting, among others.

And while brokers used to sell to HR because they manage benefits, they now need to work directly with the C-suite. Why? “Because they own the profit and loss statement and give a damn whether costs are cut. That’s not in HR’s job description.”

Members of the C-suite are the ones who are willing to make big changes because they care about big results and how it could impact the bottom line, Griswold said.

Why do benefits advisors need to change? Because consultative questions allow you to identify pain points. You have to probe and be precise. Consultants solve problems; salespeople sell products and services. And those who make these changes will have a tremendous competitive edge, Griswold said.

“Single-payer and Medicare for All aren’t going away,” he concluded. “The idea has been chipping away at the body politic for decades. This should scare you, but we have an opportunity to stop single-payer in its tracks with strategies that do to health care costs what government control presumes to do.

“If you don’t help your clients manage the cost of their health care over the next five years,” Griswold said, “send me a note letting me know about your new career. What do you want to do next? You have an opportunity to have a dramatic impact.”

(Related: 7 Urgent New Questions About Health Insurance in 2019)