Gerald
Friedman, Opinion contributor Published 3:15 a.m. ET April
8, 2019
I've spent decades studying US health care.
Time to get real: Medicare for All is the only reasonable path to controlling
costs and covering everyone.
There is an instinct among political
pundits to confuse caution for practicality — an assumption that those who
advocate for incremental change are being reasonable, while those pushing for
bold reforms aren’t. This is seen most starkly in the debate around health care
reform, despite the fact that the “practical” pushers of limited reform fail to
address the real problems in our health care system.
We all recognize that the status quo isn’t
working. We spend more per person than any other country on
health care, but we aren’t getting any bang for our buck. We have lower life expectancy, higher infant mortality rates and more preventable deaths, and too many personal
bankruptcies are due at least in part to medical bills.
Where we disagree is the solution. The
favorite new “reasonable” plan is “Medicare for America,” a bill from Reps.
Jan Schakowsky and Rosa DeLauro that has won the support of big names like
Texas presidential hopeful Beto O’Rourke and the Center for American
Progress, the left-of-center think tank where the plan originated as “Medicare Extra for All.” It has been
extolled in opinion pieces for some of America’s largest newspapers
as a “realistic” plan to fix what’s broken in our health care system.
On the other side, if punditry is to be
believed, there are the Medicare for All “hard-liners” who believe in expanding
a significantly improved Medicare system to every American, with coverage that
includes dental, vision and long-term care. This is portrayed as radical
or even unreasonable.
Time to get real. As an economist who
has spent decades studying our health care system, I can tell you that
Medicare for All advocates are the only ones who are being reasonable, because
theirs is the only plan that will control health care costs while finally
achieving universal coverage.
Insurance companies
are middle men
The problem with incremental plans, whether
they are public options, buy-ins to Medicare or Medicaid, or pumping more
money into subsidies in the Affordable Care Act's individual marketplace,
is that they preserve the private health insurance system weighing down our
health care.
This may be why pundits and centrist
politicians view those plans as “reasonable,” but it means that they are
leaving the main reason for our system’s dysfunction in place: the multipayer,
for-profit financing model.
Commercial insurance companies are nothing
more than middle men. They add no value to our system, but they do drive
up costs with their bloated claims departments, marketing and advertising
budgets and executive salaries. We pay for all of these things before a
single dollar is spent on the delivery of care.
They also create extra costs for providers who
need large administrative staffs to deal with billing systems, accounting for
as much as $100,000 per physician.
Any plans short of Medicare for All
leaves these costs in place. In other words, they leave hundreds of billions of
dollars a year in savings on the table.
Medicare for All
attacks costs
The waste goes beyond administrative savings.
While pharmaceutical companies and hospital groups are consolidating and
forming regional monopolies, our fragmented, multipayer system leaves no one
insurance plan with a large enough share of the market to negotiate
effectively. That allows these companies to essentially set their own inflated
prices and bilk the public for hundreds of billions of dollars.
Is it any wonder that they oppose Medicare for All?
If we’re talking about which health care
reform plans are serious about attacking cost, providing universal coverage and
making sure everyone has access to health care, Medicare for All is the only
reasonable answer. No other plan does this effectively, which is why I suspect
that the Center for American Progress has not come out with spending estimates.
Basic economic tenets tell us that their plan will not reduce health care
spending as effectively.
Is Medicare for All bold? Absolutely. Is it
reasonable? You bet. It is time to accept that Medicare for All is the
practical alternative.
Gerald Friedman, a health care and labor
economist, is an economics professor at University of Massachusetts Amherst and
the director of The Hopbrook Institute. Follow him on
Twitter: @gfriedma
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