News | Healthcare Reform

Four key takeaways from Congress’s latest single-payer hearing

News | Healthcare Reform

Four key takeaways from Congress’s latest single-payer hearing

Although the first hearing by a healthcare committee on recent coverage expansion proposals was supposed to encompass a range of Democratic bills, national single-payer proposals garnered almost all the attention.

Here are four takeaways from the June 12 House Ways and Means Committee hearing that indicate where the push for single-payer and other coverage expansion proposals stand in Congress.

Single-payer sucks all the oxygen out of the room

The hearing was supposed to address various legislative proposals that would expand coverage by allowing buy-ins to Medicare or Medicaid, lowering the eligibility age for Medicare or creating publicly funded health plan alternatives to be sold in existing markets. But the debate centered almost entirely on the Medicare for All Act sponsored in the House by Rep. Pramila Jayapal (D-Wash.) and in the Senate by Sen. Bernie Sanders (I-Vt.).

“Since doctors and hospitals lose money on nearly every single treatment they provide in Medicare, experts predict Medicare for All will result in a chronic shortage of doctors and hospitals,” said Rep. Kevin Brady (R-Texas).

That echoed concerns raised by hospitals advocates. In a letter submitted for the hearing, the American Hospital Association (AHA) extensively criticized the single-payer approach.

“Hospitals and health systems have invested billions of dollars in technology and delivery system reforms to improve care, enhance quality and reduce costs,” AHA wrote. “Moving to a single-payer model could stymie these efforts by, at best, diverting attention and, at worst, being deemed irrelevant if the government can simply ratchet down provider rates to achieve spending objectives.”

The fate of the ACA remains unknown

Don Berwick, MD, former acting administrator of the Centers for Medicare & Medicaid Services, echoed the sentiments of many Democrats on the committee when he said he saw “no tension” between simultaneously seeking to strengthen Affordable Care Act (ACA) coverage provisions and to replace them with a single-payer system.

Berwick’s position was sharply challenged by hospital advocates.

“We should build on the ACA to make it truly universal so that all Americans can have coverage now,” Chip Kahn, president and CEO of the Federation of American Hospitals, said in a written statement. “We urge the House Ways and Means Committee not to waver from the ACA and instead focus on how to make it all it can be for all Americans.”

Potential for adverse effects on provider rates draws concerns

Several Republicans raised the possibility that a single-payer system would require slashing provider rates to fund the vastly more generous benefits and elimination of cost-sharing.

Rep. Jason Smith (R-Mo.) highlighted one estimate that concluded a “Medicare for All” single-payer proposal would cut rural hospital payments by 40%. That cut would be implemented by giving a new type of regional federal administrators with unprecedentedly broad authority under the bill to determine provider rates. Capital expenditures would not be funded by the payment rates.

Such a cut would result in an acceleration of rural hospital closures well beyond the more than 100 that have closed since passage of the ACA, said Grace-Marie Turner, president of the right-leaning Galen Institute.

“The biggest concern that seniors should have is the dramatic cuts that ‘Medicare for All’ would mean to hospitals and physician practices,” Turner said.

Although Berwick said such provider payment cuts would not be necessary under a single-payer approach, he also criticized hospital rates for being as high as 400% of Medicare rates. He said that “there really is no justification for these rates, and one strong argument for ‘Medicare for All’ would be its capacity to insist on fairer pricing that will force attention toward greater efficiencies and reforms at the delivery system level.”

Cost of a single-payer system remains unknown

Although no official estimates have been produced by the Congressional Budget Office for the single-payer proposals, outside groups have conservatively estimated that such a law would cost $32 trillion over 10 years.

Rep. Vern Buchanan (R-Fla.) noted that amount approaches total 10-year federal spending now. Turner said federal taxes on businesses would need to be doubled, and new taxes added in multiple categories, to cover the cost.

But Berwick said the estimated single-payer budget would not be an increase in spending but just a shift in business and public expenditures from private insurance to the federal government. And that overall spending should include new services and supports not currently offered because it could wring inefficiencies from the existing system, in which employer-sponsored insurance is offered to more than 150 million Americans.

“Most people will tell you that the Medicare system is far more efficient than the commercial payment system,” Berwick said.

In contrast, AHA warned, “Our members’ experience suggests that the government does not always act as a reliable business partner.” The association cited delays in payment and retroactive changes to payment policies that leave providers at risk of receiving inadequate payment, among other problems with existing government insurance programs.

About the Authors

Rich Daly, HFMA senior writer/editor

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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