Tag Archives: Medicare

So What Exactly is Wrong With “Single-Payer” Healthcare?



About a month ago, I posted a blog (click here to read) making the case that Obamacare has failed to achieve its primary objective of providing affordable healthcare for all Americans. While 17 million more Americans now have health coverage under Obamacare, it is far from affordable and there are still almost 30 million Americans who lack any form of healthcare. My suggestion was to repeal Obamacare and replace it by expanding Medicare and Medicaid, so that all Americans would be guaranteed access to basic healthcare.

The reaction to the blog was swift and sometime acerbic. Comments split pretty much along party lines, but by far most of those who opposed my proposal did so by criticizing it as a “single-payer” system. I was not surprised by that, but that argument is an old dog that just won’t hunt any longer.

You see, “single-payer” is a dog-whistle phrase the insurance industry – and their lobbyist friends – created and have used for decades to protect their turf in the healthcare business. The “single-payer” concept has become a code-word derisively repeated ad nauseam by the insurance industry and its supporters, arguing that “single-payer” is a dark conspiracy of the part of the government to usurp the freedom and right of Americans to select a personal healthcare provider and manage their own healthcare.   

The strategy employed by the insurance industry in this deceitful, greed-driven approach has been to shift the focus away from the need and right of individuals to access affordable healthcare and instead, make it a debate about individual freedom. That’s a nice trick if you can pull it off, but the insurance companies along their well-funded friends have done it.

For decades, the idea of a single-payer healthcare system has been metaphorically the “third-rail” of politics that was so charged with controversy that politicians were afraid to touch it. We see how terrified politicians are to take on the NRA and responsible gun control; well it has been the same with politicians taking on the insurance industry with a single-payer system of healthcare. The chief reason President Obama was willing to accept the insurance industry centered cumbersome system of “insurance exchanges” that are at the core of Obamacare was because he feared taking on the myths of “single-payer” head on. The result is that the insurance companies get their way and their profits and the rest of us are stuck with a muddled, inefficient and high-cost healthcare system. And millions more Americans still lack access to basic healthcare.

So What Really is a Single-Payer System?

A single-payer healthcare system is simple. Under such a plan the government would collect the taxes and premiums needed to fund universal healthcare. The government would then contract with and reimburse private doctors and hospitals for the healthcare services they provide.

What would such a plan look like and how would it work?   

Well, many may not realize it, but Medicare is an example of this dreaded single-payer system. Medicare has proven to work well and covers millions of Americans – including me — without a loss of freedom or choice. Anyone covered under Medicare has the right to choose any doctor or healthcare provider they desire; so long as that doctor or hospital accepts Medicare. The most recent survey determined that over 90 percent of all doctors and virtually every hospital accepted Medicare payments.

It should be noted that Medicare gives those covered the freedom to not only select their personal provider, but virtually any type of medically necessary service. For example, Medicare covers the reasonable costs of doctor, hospital, preventative care, long-term care, mental health, reproductive health, dental, vision, prescription drug and medical supply costs. Contrary to what critics of the single-payer system claim, Medicare actually expands the freedom of individuals to manage their healthcare, because it lowers the financial barriers to selecting the doctor or hospital they choose.  

Those fearful of a single-payer system might suggest that such an all-encompassing government program would be inefficient and costly. Based on the history of other government programs, that might seem logical, but the reality is that the administrative costs for Medicare are at about 2 percent of total services. At the same time, the overall embedded administrative costs in the private healthcare system amount to over 30 percent of the services provided.

The insurance industry and its supporters argue that expanding the single-payer concept of Medicare and Medicaid to all Americans would bankrupt the system, but the truth is it would secure the financial viability of both programs. The system could be funded with premiums paid (based upon ability) by those covered and employer health taxes (employers would actually save money by not being required to provide coverage), but the most significant funding would come from savings obtained by replacing the current system of patchwork coverage. America now has the most inefficient and highest cost system of any industrialized nation; while failing to provide coverage for all citizens. Redirecting the expenditures from this failed private system would provide more than adequate funding for the single-payer Medicare and Medicaid systems. Furthermore, with everyone covered under the same plan, the government would have the clout to monitor and control the costs of services and medication.

The bottom line is that it is all well and good to discuss and debate whether all Americans should have a right to basic healthcare and if expanding Medicare and Medicaid is the way to provide it. However, to base opposition to these questions solely on the “evils” of a single-payer system is to fall prey to the self-serving, greedy and disingenuous arguments of the health insurance industry.  


Repeal Obamacare!

(AP Photo/Alex Brandon)


There is no doubt that The Patient Protection and Affordable Care Act — AKA Obamacare – has failed to achieve its most fundamental objectives. The primary goal of the legislation was to make health insurance available to all Americans, with the parallel promise that this health care would be affordable. Obamacare has failed on both points and is so flawed it should be repealed.  

While 17 million Americans have been added to the rolls of those insured, there are still over 25 million who remain uninsured. Furthermore, those who have been able to obtain medical insurance are finding that the coverage is anything but affordable. Once the newly insured are signed-on, the insurance companies (unencumbered by regulation) are systematically raising the cost of coverage by as much as 30 to 50 percent annually.

There are (at least) three reasons for the failure of Obamacare: 1) Obama was willing to give up on principles in order to get any law passed. 2) To gain their support, insurance companies were allowed to participate in the design of the plan in a way that would benefit them financially. 3) The Republicans were unwilling to support any plan that would guarantee insurance coverage for all Americans.

The problems with Obamacare remain unresolved because it has become no more than a ball in a political rugby scrum. The plan’s supporters – mostly Democrats — are struggling to find ways to fix the unfixable, while Republicans remain fixated on blanket repeal. Both of these approaches to Obamacare talk at the problems but fail to offer real solutions. Have you noticed that one group is not complaining about Obamacare? That would be the insurance companies, because they are too busy piling up huge profits from Obamacare.  

As a general proposition, the Republican Party believes that medical care is a privilege not a right. They believe all Americans should have all the healthcare they need and want, just so long as they have the resources to pay for it. As a result, every single GOP presidential candidate’s position on healthcare starts with repeal of Obamacare, but none of them offer even a hint of an alternative. Can you just imagine the chaos and confusion that would ensue in the health-care arena if Obamacare was simply repealed and no viable alternative was available?  

The Democrats, on the other hand, act as though the “right” to have healthcare coverage means that it should be free; as if there was no real cost involved. Can you just imagine how costly and confusing healthcare will be if Obamacare is allowed to continue down its current path?      

The good intentions and objectives of Obamacare were admirable, but for reasons outlined above, the design and implementation of the plan were both botched and it is beyond repair. The longer Obamacare is allowed to stumble down its current path, the more costly and inefficient it will become.  The goal of insuring all Americans at affordable cost will never be met. The Republicans are right – Obamacare should be repealed. But the Republicans are callous and dead wrong to suggest that the healthcare – or lack thereof – for millions of Americans should be left to the caprices of the insurance companies, driven by profit alone. Does it seem fair to you that an individual’s access to reasonable healthcare should not be determined by the weight of their wallet?

There is a Better Path to Healthcare for all Americans

Already in place, time-tested and working effectively (as any government program can) are the Medicare and Medicaid programs. Medicare provides effective and efficient medical care to millions of Americans 65 and over. Medicaid – a combination of state programs funded by the Federal government – provides medical care to millions of low income individuals.

The point is that these two programs have processes and procedures in place and are in point of fact administering healthcare (from private hospitals and physicians) for millions of Americans, but not for all. So the question is: Why not repeal Obamacare and replace it with the two national healthcare programs already in existence and functioning effectively? The simplest and most direct way to offer all Americans basic healthcare at affordable costs is to expand and enroll everyone – at any age – into Medicare or Medicaid.

This can’t be done with a flip of the switch, but an organized expansion phase-in over time could make it happen. For example, in the first year those age 60 to 65 would be eligible for Medicare, then the next phase would include those 55 to 60 and so on until everyone was covered.

Of course, adjustments and changes would have to be made to both systems, but these would be more administrative and cost-control measures. For example, premiums and deductibles for coverage could be adjusted based upon income or wealth. There is no reason why someone making $1 million a year should pay the same premium or deductible as another making $50,000.

There is not space in this blog to delineate all the adjustments that would be required in order to make Medicare and Medicaid work for all Americans, but they are more administrative in nature and don’t go to the core of the programs. Ultimately the Medicare and Medicaid programs could be merged. The point is that we have two time-tested and functioning programs providing healthcare for millions of Americans, so why not just do the right thing and expand them to include all Americans?

Can Everyone be Happy?

Of course not everyone will be happy with these changes, but when is everyone ever happy with any action?

The Republicans are going to have to disabuse themselves of the belief that health care is a privilege and not a right. They accept basic education as a right, why not basic health care? Aren’t both of those part of the Constitutional right to “life, liberty and the pursuit of happiness”? The reality is that of the 47 largest industrial nations in the world, the United States is the only country that does not consider basic health care as a fundamental right of its citizens. But Republicans can be happy too. They can take credit for repealing Obamacare and swallow the expansion of Medicare and Medicaid. After all, every Republican president since Nixon has accepted and expanded Medicare and Medicaid. 

The insurance industry will certainly not be happy. So what?! The insurance companies have had a free-hand to provide health insurance for Americans for over 50 years. They have done a miserable job. If you had lots of money and were in good health, you could buy all the health insurance you wanted. But woe betide the individual who was poor or had a preexisting condition. Besides, the insurance companies could make a ton of money selling supplemental policies (as they do today) that pay the deductibles for Medicare, or for extra care not covered by Medicare.

The hospitals and doctors will not be happy. Don’t be so sure. I have hear many hospital administrators and doctors complain about Obamacare, but I have never heard any complaints about Medicare. Sure, they will complain about Medicare’s attempt to control costs and for not reimbursing the hospital or doctor for what they want to charge for their services. But have you ever heard of a hospital or doctor going bankrupt because Medicare or Medicaid didn’t pay enough for the services they provided?

And the Moral of the Story …

If we (as we should) want to provide effective, affordable healthcare for all Americans – despite age or resources – we have to recognize that, for all its good intentions, Obamacare is not the answer and it should be repealed. Doing nothing or “letting the market determine” who gets coverage is not the answer, either.

But the answer in right in front of us. Medicare and Medicaid has worked for millions of Americans and with just a little effort we can repeal Obamacare and replace it with these systems that have proven to work. So?

Being Too Smart May be Hazardous to Your Success

The more one knows, the more difficult it is to find a simple solution to a complex problem

If you have been following the posturing and negotiations (a term used loosely) between President Obama and the leaders of Congress seeking a solution to the budget-busting costs of Social Security, Medicare and Medicaid, you can stop following right now and start getting a life: It ain’t gonna happen. And yet, your time and effort won’t be totally wasted since there is a lesson to learn from these shenanigans that can give you a clear advantage over most others in the business world.

Finding a way to maintain the benefits provided to those who depend on these programs for their very life and survival, while, at the same time, EntitlementProtestreforming the programs in a way that reduces cost and keeps them economically viable is, most assuredly, a complex challenge. So what is the congressional methodology being used to solve to this conundrum? Well, you take those who know the most about these programs – the policy wonks – and lock them in a room with instructions to find a solution, or else.

That sounds fine, but there’s a sticker here and it’s this: Because the experts charged with resolving the problems with these benefit programs are so immersed in the byzantine and excruciating minutia of the plans, they are inclined to dance around the edges of these issues with tweaks, tinkers and minor modifications, rather than take a blank-slate, zero-sum approach that would make it infinitely easier to find a clear and simple solution.

We shouldn’t be surprised, then, when the solutions that waft from their smoke-filled rooms are as predictable as they are lame. The political leaders are now engaged in a heated debate over the value of combining Medicare Part A and B, increasing Medicare co-payments and deductibles, while putting a fixed cap on the total lifetime expenses the participants will pay. When it comes to Social Security, the recommendation so far is to reduce the amount of cost-of-living increases by changing how the cost of living is calculated. None of us may understand all the technical jargon these proposals are wrapped in, but we can understand that none of these actions will solve the fundamental problem of entitlements. Left to their own devices, these politicos will, if anything, make the plans even more complex. But that is what happens when those who know too much don’t know enough to make the complicated simple. If you filed your 1040 with attachments this week, you’ll have a small taste of what I mean.

A Widespread Problem that Creeps and Grows

It is not just the political process that allows politicos and bureaucrats to make a living by taking simple issues and making them complex. Nor are politicians the only ones who believe that the answer to a complex problem is an even more complex solution. This same idiotic philosophy permeates the business world, too.

As much as companies and organizations may talk about the virtue of innovation and change, the reality is that most are hostile to real change. This attitude encourages taking the path of least resistance to change by implementing incremental actions to “fix” the past, rather than seeking simple solutions that converts change into opportunity. The result is increasing complexity in the operations of an organization, when it is simplicity that is most needed.

As frustrating as this may be, it does have a positive side. Anyone can take a simple problem and make it complicated, but those who develop the ability to respond to a complicated problem with a simple solution will have a clear advantage over those mired in complexity. When you come right down to it, success is as simple as that.

If success in business is what you seek, the path will be easier when you focus on knowing more about the solution, than you know about the problem. The reason that Medicare seems like such an intractable problem is because those trying to fix it know more about the problem than they do the solution.

Problem-solving should start with the recognition that complexity is the coward’s way to solve a problem. It takes courage, competency and confidence to be simple. Complexity is the refuge of a weak and insecure mind. There is a culturally embedded philosophy in business – supported by the business schools and hordes of consultants – that welcomes complexity. The convoluted thinking is that making the problem more confusing is a way for the powers to be to seem smarter and better than all the rest. It is an attitude that screams out, “If I understand the problem and you don’t, then I have power over you.” Among the obvious problems that this attitude creates is that when plans, tasks and objectives are perceived as too complicated, paralysis of action sets in; people have a difficult time getting their minds around the problem, identifying a solution and putting it into place.

If you want to be successful as a manager or a leader, you first have to understand that knowing too much about a problem can actually inhibit your ability to find a solution. The key to avoiding complexity and concentrate on simplicity is to start with the solution, not the problem. This may sound too simple to work, but let me give you an example.

Problem-Solving the LifeUSA Way

When my company – LifeUSA – was just starting out, we knew that the only way to compete against the entrenched giants of the insurance industry was to clearly differentiate what we offered. It was difficult to create a distinction from a product standpoint (which we ultimately did), so the focus was on the more obvious – service.

The insurance industry has always had a very complicated administrative and processing system and companies have used this as an excuse for poor service–especially for agents selling the product. At the time LifeUSA was launched, the average time it took for a company to issue a new policy was 48 days. This was frustrating for both the agent and the new policyholder, to say the least. In an effort to differentiate the service of LifeUSA from the other companies, we promised that once the agent had submitted all the application paperwork, the new policy would be issued in 48 hours and if not, we would pay the agent $100. We called this the “48-hour challenge.” This was a simple solution . . . . a simple definition and standard for service that both those in the home office and the field could understand, if not believe was possible. Of course this promised solution drew howls of protest from systems and administrative people and scoffs of disbelief from the field.

Was the legal and administrative task of issuing a new policy complicated? Yes. But LifeUSA did not approach the challenge by attempting to make Simpleincremental changes to the existing system, but by focusing on the solution and creating a new system to achieve it. (Something that would also work to solve the problems with Social Security, Medicare and Medicaid.) Starting with the solution and working back, rather than with the problem and trying to work forward, LifeUSA broke each part of the process down to simple steps, but steps that were simple to do. And then we did them.

The result was a level of service provided by LifeUSA that was unmatched in the industry. And this played a key role in helping LifeUSA achieve unmatched growth as well. The payment of the $100 for failure to meet the 48-hour challenge was a rare occurrence, because home office personnel took pride in meeting the challenge and would go to great effort to avoid missing the benchmark of service.

The LifeUSA 48-hour challenge was an example of how a complicated problem can be made simple. The home office people knew exactly what the standards of good service were and the customers (the agents) knew what to expect. From a management perspective, the results of the 48-hour challenge were a simple way to measure the quality of service being provided.

Some would suggest that it was easy for a new company, with not much business, to offer this service, but very difficult for larger established companies. Not true. LifeUSA was still promising the 48-hour service 15 years later when receiving 5,000 applications a week, just as it had when receiving 50 a week.

The point here is that simple is better. When you focus on the problem, rather than the solution, the whole process becomes complex. The more you know about the problem – as with Social Security, Medicare and Medicaid – the more difficult it is to focus on and achieve a solution.

And the Moral of the Story …

The world is awash with complexity. For some, complexity is a defense against decisiveness or a disguise for insecurity and incompetence. Others are paralyzed by complexity forced upon them. Anyone has the ability to make simple things complicated, but it takes talent and confidence to make complicated things simple.

The irony is that the more one understands and focuses on the problem, the more difficult it is to find the solution. When it comes to problems, those with the deepest knowledge are inclined to tinker rather than transform. While those who focus on the simplicity of a solution are inclined to change the system to eliminate the problem. Those who succumb to or create complexity may manage the world, but those who neuter complexity with simplicity change the world.

There is a lot of competition on the road to success. The best way to pass by the traffic and achieve success is to differentiate what you offer that others do not. In today’s world, the best way for an individual to differentiate their ability is to take what others see as complicated and make it simple.