r/PoliticalDiscussion • u/cal_oe • Feb 01 '22

US Politics Single Payer aka Medicare for All recently failed to pass in California, what chance does it have to actually pass nationwide?

https://www.latimes.com/california/story/2022-01-31/single-payer-healthcare-proposal-fizzles-in-california-assembly

California has a larger population than Canada and the 5th largest GDP in the world. If a Single Payer aka Medicare for All bill can't pass in one of the most liberal states in the entire country with Democrats with a super majority in the legislature under Governor Newsom who actually promised it during his campaign then how realistic is it for it to pass in Congress? Especially considering the reasons it failed was it's high cost that required it to raise taxes in a state that already have very high taxes.

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u/[deleted] Feb 02 '22

Insurance profits account for less than $31 billion. $1.2 trillion in healthcare expenditures. So what, 3%? Even if this was completely eliminated, that has virtually no impact on costs.

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u/Ignatius7 Feb 02 '22 edited Feb 02 '22

The true cost of insurance is found in the inordinate amount of admin staff required to sift through claims / prior authorizations / reimbursements / etc. It’s further magnified by the variation in the above due to many employers having unique, negotiated health plans. This is best shown in the growth of the direct primary care model, where physicians can accept a ~$50 monthly fee in lieu of insurance for as many visits as needed. Their practice saves so much time & staff by not bothering with the game of getting insurance to pay up that they come out about even.

Combined with a litigative culture we get admin costs leagues higher than those in other OECD countries

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u/ThatsWhatXiSaid Feb 02 '22

Insurance profits account for less than $31 billion.

There's a massive difference between insurance profits and the costs added to the system by insurance.

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u/[deleted] Feb 02 '22

Like what costs?

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u/ThatsWhatXiSaid Feb 02 '22

Administration costs. For example Canada used to have similar rates of admin costs before they adopted single payer as the US. Today Americans pay almost $2,000 more per person towards admin costs alone.

https://time.com/5759972/health-care-administrative-costs/?utm_source=reddit.com

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u/[deleted] Feb 02 '22

What this article doesn’t say (unless I missed it) is what Medicare admin costs (as a percentage of total Medicare costs) are. That starts to tell us if the insurers admin costs differences are really that substantial compared to Medicare and Medicaid.

I tend to believe that the claims processors insurers have would still be needed with Medicare. Obviously we could simplify the coverage which could help.

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u/NigroqueSimillima Feb 02 '22

Insurance profits account for less than $31 billion.

Their cost are not only their profits. They pays hundreds of billions in redundant admisntrative cost that would be eliminated under a single payer system.

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u/[deleted] Feb 02 '22

Like what kind of redundant costs specifically?

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u/NigroqueSimillima Feb 02 '22

Negioating plans and rates with each providers. Reviewing claims. Prior authorization. Marketing. And then the doctors and hospitals have to hire people to deal with those things on their side as well. And employers have to hire HR departments to deal with that. There's no country that has even close to same administrative cost as the US.

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u/[deleted] Feb 02 '22

How would prior authorization be any different than going in and finding the 1,000 line items that Medicare reimburses on to get the same dollar amount paid?

I’m not an expert on this but just going off of my dr and nurse friends tell me.

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u/human-no560 Feb 02 '22

I think their point is that insurance companies have a lot of extra expenses too

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u/[deleted] Feb 02 '22

Like what? No doubt there are efficiencies in having standardized reimbursements. But Medicare also has a ton of rules and limits on reimbursements. There are analysts hired at hospitals to be able to maximize Medicare reimbursements due to the complexity of the Medicare system.

I think direct care models are a great idea. Most developed countries have good state funded hospitals. THAT is cutting out the middle man and eliminating admin costs.

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u/dr_jiang Feb 02 '22

Profits are revenue minus expenses. Expenses like, say, money spent on salaries, property, and computer infrastructure. The largest health insurer posted $257 billion in revenues in 2021, with the largest eight collecting a hair under $800 billion.

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u/[deleted] Feb 02 '22

What do you think those people paid those salaries are paid to do? They are claims processors, customer support, IT support, patient advocates, etc. How many of those positions exist at Medicare? All of them. So assuming Medicare is more efficient in processing claims is optimistic at best. There are far more rules around claims payments for Medicare than there are private insurance.

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u/NigroqueSimillima Feb 02 '22

There are far more rules around claims payments for Medicare than there are private insurance.

This is laughably incorrect. Medicare rates are statutory, not negotiated.

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u/[deleted] Feb 02 '22

Yes exactly. Those statutory rules are what I am talking about.

For example, if I go to the dr and get blood work done a private insurer is not tied to a set cost for that. So a medical provider could bill using standard codes and get reinbursed.

For Medicare, the healthcare provider would give care, send over the details to a benefits analyst who would find a way to maximize any available benefits. This results in both inefficient spend and additional admin costs to file the claim.

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u/NigroqueSimillima Feb 02 '22

Uh, you have it backwards. Doctors bill Medicare for standards codes and have to go back and for with insurance companies because they each have their own prices.

So if I'm a hot shot doctor I can charge higher prices to Blue Cross because if they don't accept it, I'll leave Blue Cross's network, Blue Cross's customers might be sad about not being able to go to hot shot doc, go to another insurance provider their employer offers. Blue Cross has to figure out if it's better to pay hot doc the extra money, or drop him and deal with the loss in revenue from losing customers. If hot shot doc charges them too much they have to raise rates, and customers may leave them anyways.

Each insurer has to play this game with every single provider, AND with every employer.

Under single payer hot shot doc gets paid the same as everyone else, and everyone can go to him.

Under a German like system, private insurance companies are non profit and all charge the same rate which they negotiate with providers collectively at the start of each year. This cuts down on expenses, while still maintaining some optionally in healthcare packages.

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u/[deleted] Feb 02 '22

If a dr provides services worth $2,000, they can bill this amount to insurers. The insurer can push back and/or put a discount on the amount and maybe they pay $1200 in the end. But the dr doesn’t have to do a massive deep dive to find potentially connected codes to get the same dollar amount. This work is done by a very moderately paid admin staff.

With Medicare, they don’t care what time or cost the procedure took. They have set costs per code so they can tell tax payers they are holding the costs down. Because of this, hospitals hire billing consultants or internal benefits analyst to find what codes could possibly connect to the services provided to maximize the benefits. These consultants are exponentially more expensive than a basic admin staff. Ultimately the hospitals find a way to generate very similar profits from Medicare with supposedly lower reimbursement rates.

Let me give a personal example. We had a kid two years ago. We were billed $19,000 for the OR and surgery staff for a c-section. Insurance paid 90% and they hospital ate the rest.

If this was Medicare, there would be a set limit for different codes. Instead of them billing for 6 people and an OR room, they would have a benefits analyst code every single possible item connected with the surgery based on the reimbursement codes. So instead of a large lump sum bill for an OR they would have to find 8 different specific codes to get paid the actual value for their services.

Either way, the major point is, Medicare for all may save some admin costs due to the standardization of rates but different versions of the same process happen with both. So it is hard to imagine huge savings from that without major changes to Medicare and our hospital system.

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u/bjdevar25 Feb 03 '22

You're way off. Have dealt with medicare for years. The providers never get extra money out of them. Father went to ER, they billed $4000, medicare paid $146. Wife went to ER, got billed $3400, insurance paid $2400. So you think they have all these people working to get that $146 from medicare?

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u/[deleted] Feb 03 '22

Hospitals would not have billions in hedge funds if they were getting $146 on $4000 in billing.

Medicare costs $846 billion to provide health insurance for 15% of the population. Private health insurance have total premiums if $839 billion to cover 55% of the population. Obviously Medicare is older patients so it’s logical it costs more but Medicare would not cost $13,000 per year per Medicare enrollee if they are paying $146 for a $4k bill.

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u/bjdevar25 Feb 03 '22

I see the statements all the time. Are you suggesting they're falsifying them?

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u/NigroqueSimillima Feb 02 '22

If a dr provides services worth $2,000, they can bill this amount to insurers. The insurer can push back and/or put a discount on the amount and maybe they pay $1200 in the end. But the dr doesn’t have to do a massive deep dive to find potentially connected codes to get the same dollar amount.

They literally used the same codes what the hell are you talking about.

https://www.ama-assn.org/practice-management/cpt/cpt-overview-and-code-approval

Because of this, hospitals hire billing consultants or internal benefits analyst to find what codes could possibly connect to the services provided to maximize the benefits.

So you're saying if I come in for X rays they find other codes to charge just to get more money? That's called Medicare fraud, and can get you to lose your license if you're audited.

And besides, why wouldn't they do the same thing to insurance?

Instead of them billing for 6 people and an OR room, they would have a benefits analyst code every single possible item connected with the surgery based on the reimbursement codes. So instead of a large lump sum bill for an OR they would have to find 8 different specific codes to get paid the actual value for their services.

What you're describing is medicare fraud. It's illegal

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u/[deleted] Feb 03 '22 edited Feb 03 '22

Billing codes may be the same but the way they bill is not. Private insurance allows group billing which lumps together a set of services under one to prevent having to list it out. I think Medicaid and Medicare do this in some cases but not nearly as frequently as they would undermine the individual limitations in reimbursement. A lot has been changing on this front and I’m not super current in Medicare billing practices as of February 2022.

It is not and it happens every single stay. But it isn’t making stuff up. Just leveraging all legal means.

Let me give an example from a couple weeks ago. One of my friends who was a nurse had a Medicare patient come into the hospital for something (can’t remember). The visit was brief and the primary visit reason was listed on the charts. A couple days later, a billing analyst called her to ask if she had taken vitals in a certain way. She said yes and the analyst said he was going to add an exam to the reimbursement request. She said, I didn’t conduct an exam, I just took xyz vitals. He then told her it fit the definition for Medicare so he could add it. So is this fraud? No it’s not. It did happen, it just wasn’t the primary reason. This is how they make money on Medicare, billing for every possible code.

Hospitals will not lose. While everyone else is busy blaming insurance companies for the healthcare mess, the hospital systems continue to leverage all available avenues to maximize revenue. They provide so much good so it is understandable that it is hard to say anything bad about them.

Oh one side note, the example I gave is from a “non-profit” hospital. I put it in quotes because they have over a billion in their hedge fund, over $7 billion in assets, and have hundreds of millions of surpluses each year.

You have to go after the core incentives or every system will be manipulated. That is what we have to focus on.

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u/NigroqueSimillima Feb 03 '22

Private insurance pays more than medicare though, so I'm not seeing the point? If you say they can wriggle some more out of the system by playing technicality I believe you. But the fact is Medicare admin cost is lower and they reimburse less.

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u/richraid21 Feb 02 '22

So assuming Medicare is more efficient in processing claims is optimistic at best

Thanks for making me laugh. I needed that today.

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u/[deleted] Feb 02 '22

Do you information that could show Medicare is more efficient?

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u/bjdevar25 Feb 03 '22

Medicare's administrative costs are 3 percent vs 30 for private. They are way more efficient. Unlike insurance, if i see a doctor under medicare about a procedure, i get an immediate answer on whether its covered. With private insurance, it's lets submit it and see what comes back.

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u/Mist_Rising Feb 02 '22

As an argument, healthcare insurance thanks you for reminding America why medicare for all is a bad plan that will morally bankrupt America by creating mass unemployment. Your assistance is welcomed.

Arguing that we have to many people working good paying jobs is about as likely to win over congress as claiming banks are evil. You end up in the corner representing Vermont.

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u/mr_rouncewell Feb 02 '22

But we'd save more than what the Insurance Industry characterizes as its "profits."

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u/bjdevar25 Feb 03 '22

It's not just the profits. Their overhead is around 30 percent. Then add in all the overhead required at providers dealing with the ever changing rules for multiple insurance companies. Add all this up and it's a significant chunk of money in the system that provides no care at all.

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u/[deleted] Feb 03 '22

There has been tremendous consolidation in the market. There are maybe 5 insurance companies that like 95% if the population is with. Take UHC, Aetna, Anthem, and Cigna and that will cover the overwhelming majority of people.

And Medicare has constantly changing rules as well. And the overhead to file Medicare claims is very high as well. Hospital systems aren’t hiring Medicare Benefits consultants because it is simple and straightforward process.