Guest Blog: A Constructive Contrarian’s Thoughts on Medicare for All

Jeff Bauer is a Medical Economist  and Healthcare Futurist. We have been friends since we met several years ago on a transatlantic voyage, and Jeff is a previous contributor to RINOcracy.com. He submitted this essay at my invitation and I hope you will find it as interesting as I did. 

A Constructive Contrarian’s Thoughts on Medicare for All

Copyright 2019, Jeffrey C. Bauer, PhD.

As a disaffected Democrat, I appreciate the opportunity to share my perspectives on Medicare for All (MfA) with Rinocracy’s disaffected Republicans. However, I can only address MfA in general; there’s no specific definition in proposals being discussed by presidential candidates, and nobody knows how the concept will evolve if a pro-MfA candidate occupies the White House and Democrats control Congress after the 2020 elections. All I can say is that the general concept is deeply flawed—and add that health reform proposals from the Party of Trump are at least as ill-conceived. Essential transformation of the way we deliver health care could be set back many years if either camp prevails in 2020 and subsequently delivers on its campaign promises. (For what it’s worth, the last four presidents have pursued health policies quite different from what they promised as candidates. Recent history would suggest that MfA is more likely to be implemented if Trump is re-elected, a bizarre possibility enhanced by his unpredictability.) 

MfA will most likely fade away as a campaign issue if Democratic leaders conclude it would help Trump get reelected. (However, as Doug Parker reminds us, they are perfectly capable of snatching defeat from the jaws of victory. Liberals seem hell bent on winning a battle to lose a war.) Medicare for All should be rejected in any case because Medicare for seniors is deeply flawed. It’s a great economic deal—I speak from personal experience, being in my eighth year as a Medicare beneficiary—but Medicare is responsible for many of the most glaring deficiencies of our health care delivery system. (My two latest books examine these problems in depth and propose solutions that incorporate many traditional Republican principles, particularly competition and private enterprise. I believe that basic health care is a right, but I have been unsuccessful in getting Democrats to rethink how to accomplish this goal.)  

Giving health insurance to more Americans doesn’t solve the medical marketplace’s most serious structural problem: unnecessarily high costs, largely generated by Medicare. The program lacks political or economic mechanisms to constrain prices for health care within reasonable limits. It is legally prevented from negotiating with suppliers. The administrative burdens it imposes on providers constantly increase the cost of care. MfA’s proponents like to tout Medicare’s low administrative costs, but this is an illusion accomplished by making providers pay for compliance with Medicare’s excessive and frequently misdirected regulations.   

Medicare’s proponents like to claim the program is reducing expenditures on health care, but it is basically spending less because Congress is appropriating less. Medicare is managing several large demonstration programs that save money and/or improve quality in theory, but these “experiments” consistently fail to deliver desired improvements in practice. A massive, Medicare-linked program to transform health care delivery with electronic health records (EHR) has produced particularly poor results since its creation in 2008. It is driving physicians and nurses out of their professions in record numbers. Many doctors who stay in practice are refusing to accept Medicare patients. Hospital closures are also on the rise, particularly among facilities that are most dependent on revenues from Medicare.

Given this track record, you do not need a PhD in medical economics to envision the cumulative disaster that will occur if Medicare is given a monopoly in the medical marketplace. More money chasing fewer goods and services is a classic cause of inflation, black markets, social maldistribution, political upheaval, and even the downfall of nations. MfA’s staggering monetary and non-monetary costs have rightly been decried by many commentators, including Democratic presidential candidates who oppose it. Experts disagree on exactly how much the program would cost, but all agree that it would dramatically increase health care spending as a percent of gross domestic product. 

The US already spends excessively on health care—nearly twice the per capita average of comparable Western countries—yet we are at the bottom of the OECD ranking for population health. Medicare and Medicaid provide more than half the money that has brought us this shameful international distinction, so it hard for me to imagine how MfA could be a step forward for Americans. Medicare has been generally incapable of changing health care for the better; I cannot think of a single major improvement in our medical marketplace that was initiated by Medicare in the five decades of its existence. Paradoxically, I have enormous respect for many highly-skilled professionals who have worked for Medicare over the years, but bureaucracy and politics have consistently gotten in their well-intentioned ways. MfA would almost surely continue to prevent a long-overdue reinvention of American health care.  

Fortunately, my role as a constructive contrarian includes proposing viable solutions, not just exposing serious problems. Eliminating the enormous waste in health care delivery must be the major focus of health reform; at least one-third of our medical dollars could be spent more efficiently and effectively. For example, we need to quit reimbursing goods and services that do not demonstrably improve health (including those that cause harm) and use the savings to pay for care that yields benefits in excess of costs. In many circumstances, the cost-effective alternatives will include spending on social determinants of health (e.g., patient education, behavior modification, nutrition, physical activity, housing, improvements in personal relationships). We need to eliminate reimbursement and regulatory barriers to telemedicine, home care, and other cost-effective alternatives to traditional “hands on” care in doctors’ offices and hospitals. Medicare imposes many impediments to making these essential changes.  

We need to rethink health insurance itself because having a generous health plan, including Medicare, does not guarantee getting health care. (As noted above, more and more physicians are refusing to see Medicare patients.) It’s time to eliminate physicians’ monopoly power and give all Americans the right to choose equally qualified advanced practitioners who cost a lot less—a competitive reform discussed in depth in Not What the Doctor Ordered, 3rd edition. It’s also time to start developing creative alternatives to traditional care delivery models, such as treating chronic conditions (e.g., diabetes, obesity, mental/behavioral problems) in pre-paid multidisciplinary clinics instead of doctors’ offices that send out complicated fee-for-service bills after providing care. Ironically, some of today’s private insurance companies would be ideally suited to lead these innovations. MfA wouldn’t lead to any of them, but neither would anything being proposed by the Party of Trump. I’d like to think that Rinocracy Republicans would join me in promoting innovative, private sector solutions to public problems—something that neither political party is capable of accomplishing in its current state.  

About the author

Jeff Bauer, PhD, is an internationally recognized futurist and economist who forecasts evolution of the medical marketplace and develops practical strategies for creating efficient, effective health care through multi-stakeholder partnerships and other initiatives focused in the private sector.  As an industry thought leader, he speaks frequently to meetings across the country and has published has more than 275 articles, books, and videos on health care delivery. Dr. Bauer is based in Madison WI and can be contacted at jeffreycbauer@gmail.com.