Wednesday, January 8, 2020

Healthcare and Medicare For All

Healthcare and Medicare For All

There is much talk and many proposals to replace private health insurance with Medicare for All (M4A). Although the idea of everyone
having healthcare coverage without having to purchase a insurance policy sounds extremely attractive, there are several issues people should understand. The Government take over of large programs (i.e. the Affordable Healthcare Act) often results in a program that is 10% as effective as it was intended.
 

The current proposals appear to eliminate private insurance companies in favor of a government operated program. There are several problems which need to be considered - such as availability of care, quality of care and cost. 

Availability of Care: Insurance reimbursements are the primary source of revenue for healthcare facilities. Typically, reimbursements are driven by insurance premiums which are adjusted from time to time to reflect the ever rising costs for healthcare. Insurance company reimbursements are higher than government reimbursements by about 40%. Eliminating health insurance companies reduces the level of reimbursements thereby reducing revenue for facilities, equipment, supplies, staff, etc. The only way to overcome reductions in revenue is to reduce costs by reducing care. Less physicians, less facilities, longer periods between equipment replacements, etc. These reductions would lead to longer wait periods to meet with a physician, longer wait times for procedures and/or testing and fewer facilities. Although some would argue that nothing would change, the proof is with countries that have government operated healthcare systems such as England, Canada, Denmark, etc. Most patients in these countries experience substantial wait periods for consultations, tests and treatments. It is not unusual to wait six months for a MRI study or weeks for a consultation or months for surgery or rehab. Often, those that can afford to, will travel to the US for high quality and expedient care. Small facilities and poorly funded facilities would close, large well funded facilities would need to cut back significantly. 

Quality of Care: Facilities like the Cleveland Clinic or the Mayo Clinic and many others highly regarded organizations are known worldwide for the quality of care they provide. These organizations employ the top physicians from all over the world. These facilities have the latest and most advanced healthcare systems available anywhere. It would be ridiculous to think that these organizations could maintain the quality of staff or facilities solely on reimbursements that government M4A would provide - which currently estimate Medicare reimbursements to be 40% less than private healthcare insurance reimbursements. The result would be reduced quality of care, less quality physicians/staff and less healthcare facilities. There is no question that quality of care would fall dramatically.

Many would argue that currently Medicare provides not only adequate but quality care coverage. My argument would be that the medicare program combined with a private insurance supplement policy can provide excellent care coverage - however by eliminating private insurance you also eliminate the opportunity to have supplemental coverage. Basic Medicare is substandard without supplemental coverage.

Cost of M4A Care: It has been estimated that the cost of M4A over ten years would be $32-$39 trillion dollars. We assume this estimate is based upon Medicare cost being 40% less than private insurance providers costs currently. Eliminating 40% of revenues in excess of $54+ trillion (54+t x 40% = $32+t) would create a shortfall to healthcare providers of $22+ trillion. This would mean that not only would there not be enough tax revenue without significant tax increases to cover the cost of the $32+ trillion M4A but there would be a shortfall to healthcare providers of more than $22+ trillion.

Today, the federal government spends about $1.1 trillion for healthcare annually. This includes 22 million Americans on Medicare. If we increase this number of people covered to the entire population of 330 million people, the cost would increase by 15 times with revenues still 40% less than those being purchase from private insurance organizations today. Yes, other countries do have government sponsored insurance today - with much higher taxes on the middle class and lower quality of care. 

Conclusion: Healthcare would have a significant reduction in availability and quality for most US citizens. Those with health insurance provided by their employers would loose their policies. Those with coverage guaranteed by labor unions would also be eliminated. All those with Medicare supplemental coverage would no longer be able to have this coverage. 

Those who currently are unable to afford health insurance would benefit by having coverage. Also, those younger Americans who have opted out of purchasing insurance because they believe their age does not justify the expense of purchasing insurance will benefit because they would now have coverage that they didn't have previously. 

However, once we look at cost verses availability and quality, the only answer is that Medicare for All is a very bad idea and Healthcare would suffer dramatically. And you also don't want to believe pitches that politicians were using when the Affordable Care Act was presented like: "if you like your doctor, you can keep your same doctor" - "you can keep your insurance policy" - "it won't cost a dime more"
You may want to disregard this type of rhetoric.

Contact us for more information:

Med Imaging System Sales http://www.missales.com

NCD Medical Company http://www.ncdmedical.com


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