A condensed version of a complicated CBO diagram showing some of the questions designers of a single-payer health care finance system might have to answer. The questions include controversial ones, such as, who decides how much doctors get paid?(Image: CBO) A condensed version of a CBO diagram showing some of the questions designers of a single-payer health care finance system might have to answer. (Image: CBO)

A Democrat at a House Budget Committee hearing had a question Wednesday about proposals to create a government-run, “single-payer” health insurance system for the United States: Why not put the government in charge of the U.S. health care delivery system, too?

Rep. Joseph Morelle, D-N.Y., suggested that the government could run the hospitals, and employ the doctors, as well as providing all of the health insurance.

“If you were to design a system that was single-pay, or a public system, from the start, one of the choices you could make is … not only the insurers being public, but also the providers being public,” Morelle told Mark Hadley, the deputy director of the Congressional Budget Office (CBO), at the hearing, which was streamed live on the web.

(Related: Individual Health Shrinkage Drives Up Uninsured Rate: CBO Data)

Morelle asked Hadley to talk about “operating, essentially, public hospitals, with government employee health care providers.”

Hadley suggested that one possible approach would be to have physicians and other providers be salaried employees, but that health care delivery system designers might also want to include additional mechanisms that would encourage providers to provide more services, and to focus on patient health outcomes.

Whether the providers’ employer is private or public, system designers would have to think carefully about how to structure the providers’ financial incentives, Hadley said.

Today, when public and private payers pay physicians fees for each service provided, “the incentive is to provide more care,” Hadley said. “There are studies that show that incentive to do that goes beyond what’s optimal.”

The Hearing

The House Budget Committee organized the hearing to consider legislation, proposed by Rep. Pramila Jayapal, D-Wash., and others, that could replace the current U.S. health finance system with a single health insurance system that would be run entirely by the federal governmetn.

Rep. John Yarmuth, D-Ky., the chairman of the committee, said the current system is clearly working poorly.

“Last year, health spending accounted for 18% of our economy,” Yarmuth said at the hearing. “We spend upwards of $3.5 trillion annually as a nation on health care. More per person than any other country. And yet our outcomes are some of the worst among the developed nations.”

(Related:  Drugs Might Be the 2019 Health Cost Good Guy: CMS Actuaries)

Drug prices and consumers’ out-of-pocket costs are skyrocketing, while insurance companies, and insurance companies’ chief executive officers, “post massive profits,” Yarmuth said.

The CBO’s Diagram

CBO analysts recently released on a guide for policymakers on the elements of health care finance and delivery systems, and the kinds of questions policymakers would have to answer if they wanted to set up a Medicare for All program for the United States.

(Related: Changing U.S. Health Finance Involves, Um, Words: CBO)

Hadley brought a diagram to the hearing that included many difficult single-payer system design questions, such as:

  • How would the system pay providers and set provider payment rates?
  • Would the federal government, the states, or a third party administer the system?
  • How would people enroll?
  • Who would be eligible, and how would the system verify eligibility?
  • What role would private health insurance have?

Republicans’ Views

Rep. Tim Burchett, R-Tenn., said he believes, based on talking to people who use the government-run health care system in England, that a government-run health care system would be slow, and would likely end up leading to a new two-tier system, with affluent people buying private insurance and using private health care providers.

When people in England have immediate health care needs, “they use the private insurance,” he said.

Rep. Daniel Meuser, R-Pa., expressed similar concerns, based on his knowledge of Canada’s government-run health finance system.

“I’ve often heard the Canadian health care system described as, ‘It’s terrific until you get very sick,’” Meuser said. “People want to be able to go to the doctor of their choice and know that the care they’re receiving is excellent.”

Jan Schakowsky’s Views

Rep. Jan Schakowsky, D-Ill., argued that many people who are uninsured, or underinsured, have little ability to get any care, let alone high-quality care.

Even people “who have insurance forego medical care because they can’t afford the out-of-pocket,” Schakowsky said. “So, people are waiting five weeks, five months, or whatever you said about Canada. How about waiting your entire life?”

When the Affordable Care Act gave some people an opportunity to get health coverage, “we saw people who had stage 4 cancer, because they had avoided going to the doctor,” Schakowsky said.

Morelle’s Concerns

Morelle said that he’s concerned about the idea of eliminating private health insurance.

“I think that’s where most Americans go sideways on this,” Morelle said. “I think all of us want to provide insurance for those who don’t have it. I don’t know a single person who doesn’t want to achieve that goal. But I also know that something like 60% of Americans don’t want to lose their private insurance.”

Requiring everyone to get all care from the same system might keep a two-tier health care system from developing, Morelle said.

But Morelle said that he believes that the government would have to compel everyone to use a single health care delivery system to avoid creating a two-tier system.

“I think most Americans reject that,” Morelle said.

Resources

Links to hearing resources, including a video recording of the hearing, are available here.

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