Time for single payer? ColdironCare

At a New Year’s Eve party a few years back, I noticed a man sitting nearby clutching his left upper arm. He was ashen and obviously uncomfortable. Acute coronary insufficiency, I thought, and I asked him if I could call the life squad for him. “Oh no,” he said, “I have these spells several times a day, the nitro will kick in after a minute, and this will ease off.” I listened as he explained he had a “widow maker,” a 90% plus left main occlusion, but “I am Canadian, and my government is going to pay for my bypass,” he said. “I just have to wait 6 more weeks.” The irony? He was the son of our host, and we were sitting in his mothers’ multimillion dollar home in the Florida Keys. He could be in a Miami hospital’s operating room in an hour or 2.

Wow. Click. Got it.

Fast forward to a lobbying discussion on Capitol Hill: A sympathetic U.S. senator tossed me this softball: ‘What do you think about Medicare reimbursement?” I expect he thought I was going to complain about how bad Medicare is, about its failure to keep current with inflation (currently about 30% behind), and the obtuse quality metrics it now requires. Instead, I found myself saying, “Medicare is my most reliable payer, paying on time – in 2 weeks for clean claims – and the private insurers have beaten me up badly. Medicare is one of my best payers.”

Wrong answer, but true statement.

There is much talk these days about Medicare for all, single-payer, and universal health care. American physicians and patients are disgusted with the current system, particularly considering all the barriers to care. (See my recent column, “Produce and Promises.”) Physicians and patients endure a mutual misery inflicted by private insurance companies.

What to do about health care in America?

First, let’s deal with the extraordinary costs of health care in the United States – 19% of our gross domestic product. About 3%-4 % of this figure is an accounting gimmick, since it includes nursing home care, which is considered “domiciliary” care rather than health care in Europe. In addition, drug costs are higher in the U.S., largely to cover the development of new drugs that cost less in the rest of the world. Wait lists are largely unheard of in the United States, and if you have such ready capacity, that means you incur the costs of idle capacity. Also, rarely is a new miracle drug flatly denied for coverage in the United States. If you persist, you will usually get your drug.

We are a commodity-driven society, and that is the real reason that health care costs so much in this country. Hence, we come to the real debate, the “R” word. How do we ration access to care? (See my 2017 column, “Why the Affordable Care Act will be Greatly Modified.”)

There are a plethora of proposals to fund single payer out there, none of which address rationing. And while single payer affords free universal coverage, it does not assure better care. As health economist Devon Herrick, Ph.D., wrote in his health care blog in 2016: “A single payer is not some magical entity that rains down savings from Heaven by being unconcerned about profit. Rather, an efficient single payer operates more like a predatory HMO with no competition. It is currently in vogue for hipsters to matter-of-factly announce the simple solution to health reform is single payer. Be careful what you wish for; you may end up with Medicaid for All.”

In fact, if you try to ferret out how physician income will be affected by universal health care, there would be an estimated pay cut of 11%-40%, depending on how the numbers are manipulated.

Some single-payer proposals use the term “exchange rates,” which for the uninformed means Medicaid rates. In addition, payment is usually given to the local hospital system, or “authority” to dole out. I have a very bad feeling that any small practitioner in an office-based practice would be severely shortchanged in such a system. In fact, if you cut pay for office-based physicians at all, you may begin to see them disappear.

Policy wonks argue for pay cuts for American physicians because European physicians “make less money.” Those numbers are all wrong. U.S. physicians are paid for their work, and for their practice expense. That is, how much it costs to provide the service in their office, which is around 40%-50% of published income. In Europe, almost all procedures are performed in the hospital setting, and the hospital absorbs the practice expense, which is ignored in this current health care reform debate. (See my 2015 column, “Doctor, Why DO you get paid so much?”)

The big selling point of single payer for physicians is that they might have less paperwork and get paid more for seeing Medicaid patients. Yet the paperwork will persist to avoid lawsuits, electronic medical records are now ingrained into the system, and most Medicaid patients are currently seen in the federal or hospital outpatient clinic where higher rates or other subsidies are available. The comically low Medicaid rates paid to physician offices are largely evaded or not even filed for.

Single-payer advocates are basically saying, “Yes, you will be seeing patients at a loss but you will make it up in volume.” This ignores the reality that most physicians don’t need or want more volume.

Here is my plan for single-payer health care. Call it ColdironCare.

• Set payment rates for physicians at 130% of current Medicare, about where we were 30 years ago, considering inflation. Tie the reimbursement rate to the cost of living index, same as social security. If you cut physician pay 11%-40%, you will see mass retirement and the elimination of the most efficient care, office-based practice.
• Remove the practice expense payment from government-reported physician income since this is overhead spent to provide the care.
• Let all physicians participate, and don’t pay site-of-service differentials.
• Enact national tort reform, which would decrease the paperwork, overhead, and much useless defensive medicine.
• Press the generic drug manufacturers (but not the innovators) regarding drug costs. Bite the bullet, and set national coverage standards (ration care) to be revisited every 5 years, which will eliminate step therapy and prior authorizations. Allow individuals to pay out of pocket for additional treatments they want, including that questionable additional 90 days of life they may get from the $250,000 drug for the off-label indication.
• Press the hospitals, and don’t complain when many of them close, especially rural ones.
• Allow individuals, hospitals, and physicians to contract outside of the government plan (in contrast to Canada).
• Downsize the health insurance companies, and have them sell private supplemental insurance to whomever wants it.

Finally, make all of this a constitutional amendment. If not put out of reach, in 15 years we will have the same system we have today. The politicians simply will not be able to resist degrading (reforming, improving, refunding, defunding) the original plan. Or, you could simply increase Medicaid rates to Medicare rates and call it a day.

Oh, by the way, I saw that man from the New Year’s Eve party at the airport the following Christmas. He survived to get his government bypass and is doing well.

The health care system we have is miserable, except compared with all the others.
 

Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@mdedge.com.

At a New Year’s Eve party a few years back, I noticed a man sitting nearby clutching his left upper arm. He was ashen and obviously uncomfortable. Acute coronary insufficiency, I thought, and I asked him if I could call the life squad for him. “Oh no,” he said, “I have these spells several times a day, the nitro will kick in after a minute, and this will ease off.” I listened as he explained he had a “widow maker,” a 90% plus left main occlusion, but “I am Canadian, and my government is going to pay for my bypass,” he said. “I just have to wait 6 more weeks.” The irony? He was the son of our host, and we were sitting in his mothers’ multimillion dollar home in the Florida Keys. He could be in a Miami hospital’s operating room in an hour or 2.

Wow. Click. Got it.

Fast forward to a lobbying discussion on Capitol Hill: A sympathetic U.S. senator tossed me this softball: ‘What do you think about Medicare reimbursement?” I expect he thought I was going to complain about how bad Medicare is, about its failure to keep current with inflation (currently about 30% behind), and the obtuse quality metrics it now requires. Instead, I found myself saying, “Medicare is my most reliable payer, paying on time – in 2 weeks for clean claims – and the private insurers have beaten me up badly. Medicare is one of my best payers.”

Wrong answer, but true statement.

There is much talk these days about Medicare for all, single-payer, and universal health care. American physicians and patients are disgusted with the current system, particularly considering all the barriers to care. (See my recent column, “Produce and Promises.”) Physicians and patients endure a mutual misery inflicted by private insurance companies.

What to do about health care in America?

First, let’s deal with the extraordinary costs of health care in the United States – 19% of our gross domestic product. About 3%-4 % of this figure is an accounting gimmick, since it includes nursing home care, which is considered “domiciliary” care rather than health care in Europe. In addition, drug costs are higher in the U.S., largely to cover the development of new drugs that cost less in the rest of the world. Wait lists are largely unheard of in the United States, and if you have such ready capacity, that means you incur the costs of idle capacity. Also, rarely is a new miracle drug flatly denied for coverage in the United States. If you persist, you will usually get your drug.

We are a commodity-driven society, and that is the real reason that health care costs so much in this country. Hence, we come to the real debate, the “R” word. How do we ration access to care? (See my 2017 column, “Why the Affordable Care Act will be Greatly Modified.”)

There are a plethora of proposals to fund single payer out there, none of which address rationing. And while single payer affords free universal coverage, it does not assure better care. As health economist Devon Herrick, Ph.D., wrote in his health care blog in 2016: “A single payer is not some magical entity that rains down savings from Heaven by being unconcerned about profit. Rather, an efficient single payer operates more like a predatory HMO with no competition. It is currently in vogue for hipsters to matter-of-factly announce the simple solution to health reform is single payer. Be careful what you wish for; you may end up with Medicaid for All.”

In fact, if you try to ferret out how physician income will be affected by universal health care, there would be an estimated pay cut of 11%-40%, depending on how the numbers are manipulated.

Some single-payer proposals use the term “exchange rates,” which for the uninformed means Medicaid rates. In addition, payment is usually given to the local hospital system, or “authority” to dole out. I have a very bad feeling that any small practitioner in an office-based practice would be severely shortchanged in such a system. In fact, if you cut pay for office-based physicians at all, you may begin to see them disappear.

Policy wonks argue for pay cuts for American physicians because European physicians “make less money.” Those numbers are all wrong. U.S. physicians are paid for their work, and for their practice expense. That is, how much it costs to provide the service in their office, which is around 40%-50% of published income. In Europe, almost all procedures are performed in the hospital setting, and the hospital absorbs the practice expense, which is ignored in this current health care reform debate. (See my 2015 column, “Doctor, Why DO you get paid so much?”)

The big selling point of single payer for physicians is that they might have less paperwork and get paid more for seeing Medicaid patients. Yet the paperwork will persist to avoid lawsuits, electronic medical records are now ingrained into the system, and most Medicaid patients are currently seen in the federal or hospital outpatient clinic where higher rates or other subsidies are available. The comically low Medicaid rates paid to physician offices are largely evaded or not even filed for.

Single-payer advocates are basically saying, “Yes, you will be seeing patients at a loss but you will make it up in volume.” This ignores the reality that most physicians don’t need or want more volume.

Here is my plan for single-payer health care. Call it ColdironCare.

• Set payment rates for physicians at 130% of current Medicare, about where we were 30 years ago, considering inflation. Tie the reimbursement rate to the cost of living index, same as social security. If you cut physician pay 11%-40%, you will see mass retirement and the elimination of the most efficient care, office-based practice.
• Remove the practice expense payment from government-reported physician income since this is overhead spent to provide the care.
• Let all physicians participate, and don’t pay site-of-service differentials.
• Enact national tort reform, which would decrease the paperwork, overhead, and much useless defensive medicine.
• Press the generic drug manufacturers (but not the innovators) regarding drug costs. Bite the bullet, and set national coverage standards (ration care) to be revisited every 5 years, which will eliminate step therapy and prior authorizations. Allow individuals to pay out of pocket for additional treatments they want, including that questionable additional 90 days of life they may get from the $250,000 drug for the off-label indication.
• Press the hospitals, and don’t complain when many of them close, especially rural ones.
• Allow individuals, hospitals, and physicians to contract outside of the government plan (in contrast to Canada).
• Downsize the health insurance companies, and have them sell private supplemental insurance to whomever wants it.

Finally, make all of this a constitutional amendment. If not put out of reach, in 15 years we will have the same system we have today. The politicians simply will not be able to resist degrading (reforming, improving, refunding, defunding) the original plan. Or, you could simply increase Medicaid rates to Medicare rates and call it a day.

Oh, by the way, I saw that man from the New Year’s Eve party at the airport the following Christmas. He survived to get his government bypass and is doing well.

The health care system we have is miserable, except compared with all the others.
 

Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@mdedge.com.

At a New Year’s Eve party a few years back, I noticed a man sitting nearby clutching his left upper arm. He was ashen and obviously uncomfortable. Acute coronary insufficiency, I thought, and I asked him if I could call the life squad for him. “Oh no,” he said, “I have these spells several times a day, the nitro will kick in after a minute, and this will ease off.” I listened as he explained he had a “widow maker,” a 90% plus left main occlusion, but “I am Canadian, and my government is going to pay for my bypass,” he said. “I just have to wait 6 more weeks.” The irony? He was the son of our host, and we were sitting in his mothers’ multimillion dollar home in the Florida Keys. He could be in a Miami hospital’s operating room in an hour or 2.

Wow. Click. Got it.

Fast forward to a lobbying discussion on Capitol Hill: A sympathetic U.S. senator tossed me this softball: ‘What do you think about Medicare reimbursement?” I expect he thought I was going to complain about how bad Medicare is, about its failure to keep current with inflation (currently about 30% behind), and the obtuse quality metrics it now requires. Instead, I found myself saying, “Medicare is my most reliable payer, paying on time – in 2 weeks for clean claims – and the private insurers have beaten me up badly. Medicare is one of my best payers.”

Wrong answer, but true statement.

There is much talk these days about Medicare for all, single-payer, and universal health care. American physicians and patients are disgusted with the current system, particularly considering all the barriers to care. (See my recent column, “Produce and Promises.”) Physicians and patients endure a mutual misery inflicted by private insurance companies.

What to do about health care in America?

First, let’s deal with the extraordinary costs of health care in the United States – 19% of our gross domestic product. About 3%-4 % of this figure is an accounting gimmick, since it includes nursing home care, which is considered “domiciliary” care rather than health care in Europe. In addition, drug costs are higher in the U.S., largely to cover the development of new drugs that cost less in the rest of the world. Wait lists are largely unheard of in the United States, and if you have such ready capacity, that means you incur the costs of idle capacity. Also, rarely is a new miracle drug flatly denied for coverage in the United States. If you persist, you will usually get your drug.

We are a commodity-driven society, and that is the real reason that health care costs so much in this country. Hence, we come to the real debate, the “R” word. How do we ration access to care? (See my 2017 column, “Why the Affordable Care Act will be Greatly Modified.”)

There are a plethora of proposals to fund single payer out there, none of which address rationing. And while single payer affords free universal coverage, it does not assure better care. As health economist Devon Herrick, Ph.D., wrote in his health care blog in 2016: “A single payer is not some magical entity that rains down savings from Heaven by being unconcerned about profit. Rather, an efficient single payer operates more like a predatory HMO with no competition. It is currently in vogue for hipsters to matter-of-factly announce the simple solution to health reform is single payer. Be careful what you wish for; you may end up with Medicaid for All.”

In fact, if you try to ferret out how physician income will be affected by universal health care, there would be an estimated pay cut of 11%-40%, depending on how the numbers are manipulated.

Some single-payer proposals use the term “exchange rates,” which for the uninformed means Medicaid rates. In addition, payment is usually given to the local hospital system, or “authority” to dole out. I have a very bad feeling that any small practitioner in an office-based practice would be severely shortchanged in such a system. In fact, if you cut pay for office-based physicians at all, you may begin to see them disappear.

Policy wonks argue for pay cuts for American physicians because European physicians “make less money.” Those numbers are all wrong. U.S. physicians are paid for their work, and for their practice expense. That is, how much it costs to provide the service in their office, which is around 40%-50% of published income. In Europe, almost all procedures are performed in the hospital setting, and the hospital absorbs the practice expense, which is ignored in this current health care reform debate. (See my 2015 column, “Doctor, Why DO you get paid so much?”)

The big selling point of single payer for physicians is that they might have less paperwork and get paid more for seeing Medicaid patients. Yet the paperwork will persist to avoid lawsuits, electronic medical records are now ingrained into the system, and most Medicaid patients are currently seen in the federal or hospital outpatient clinic where higher rates or other subsidies are available. The comically low Medicaid rates paid to physician offices are largely evaded or not even filed for.

Single-payer advocates are basically saying, “Yes, you will be seeing patients at a loss but you will make it up in volume.” This ignores the reality that most physicians don’t need or want more volume.

Here is my plan for single-payer health care. Call it ColdironCare.

• Set payment rates for physicians at 130% of current Medicare, about where we were 30 years ago, considering inflation. Tie the reimbursement rate to the cost of living index, same as social security. If you cut physician pay 11%-40%, you will see mass retirement and the elimination of the most efficient care, office-based practice.
• Remove the practice expense payment from government-reported physician income since this is overhead spent to provide the care.
• Let all physicians participate, and don’t pay site-of-service differentials.
• Enact national tort reform, which would decrease the paperwork, overhead, and much useless defensive medicine.
• Press the generic drug manufacturers (but not the innovators) regarding drug costs. Bite the bullet, and set national coverage standards (ration care) to be revisited every 5 years, which will eliminate step therapy and prior authorizations. Allow individuals to pay out of pocket for additional treatments they want, including that questionable additional 90 days of life they may get from the $250,000 drug for the off-label indication.
• Press the hospitals, and don’t complain when many of them close, especially rural ones.
• Allow individuals, hospitals, and physicians to contract outside of the government plan (in contrast to Canada).
• Downsize the health insurance companies, and have them sell private supplemental insurance to whomever wants it.

Finally, make all of this a constitutional amendment. If not put out of reach, in 15 years we will have the same system we have today. The politicians simply will not be able to resist degrading (reforming, improving, refunding, defunding) the original plan. Or, you could simply increase Medicaid rates to Medicare rates and call it a day.

Oh, by the way, I saw that man from the New Year’s Eve party at the airport the following Christmas. He survived to get his government bypass and is doing well.

The health care system we have is miserable, except compared with all the others.
 

Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@mdedge.com.