Just running through it, with comments. Before I begin, a bit of background. No, I’m not a doctor. But I’m a lawyer, and a pretty well-known one when it comes to healthcare, and particularly Medicare. You don’t need to take my word for it, either. I’ve been quoted in the Indianapolis Business Journal, Modern Healthcare, Bloomberg BNA, Becker Hospital Review, Law 360, and more. My name is on healthcare cases around the country, from trial courts to the Supreme Court. I’m not saying this to pump myself up, just to tell you I’m coming from some base of knowledge.
The text of the proposed ACT is HERE. I won’t quote the whole thing, just bits and pieces worth a comment or two.
Okay, here goes.
No institution may be a participating provider unless it is a public or not-for-profit institution. Private physicians, private clinics, and private health care providers shall continue to operate as private entities, but are prohibited from being investor owned.
This is really poor language. First, “institution” isn’t defined anywhere. Are private physicians institutions? (Yes, we’ll get there in a minute.) Are doctors required to set up their practices as non-profits? That’s quite a stretch, going from hospital to doctor’s practices, and it raises some interesting questions about whether doctors really SHOULD be set up a non-profits. Does this mean their businesses don’t pay taxes? What sort of non-profit must they be? And are we looking at a constitutional taking here? All tough questions, and likely setting up this requirement beyond what we usually think of as “institutions” will be tremendously problematic.
The proposal mixes up “institutional” with “institution.” Watch this:
The Medicare For All Program, through its regional offices, shall pay each institutional provider of care, including hospitals, nursing homes, community or migrant health centers, home care agencies, or other institutional providers or pre-paid group practices, a monthly lump sum to cover all operating expenses under a global budget.
So by this language, a doctor isn’t an “institutional provider” and doesn’t get operating expenses covered. But doctors offices, assuming there is more than one doctor in the practice, is an institution:
In the case of an institution, such as a hospital, health center, group practice, community and migrant health center, or a home care agency that elects to be paid a monthly global budget for the delivery of health care as well as for education and prevention programs, physicians and other clinicians employed by such institutions shall be reimbursed through a salary included as part of such a budget.
Yeah, that’s a mess. The doctor’s office has to be a not-for-profit, can’t get paid a budget for operating expenses, but must be reimbursed through that budget, or it can’t cover those costs at all.
Perfect.
Let’s go back to that firs quote for a minute. The last line in there says “are prohibited from being investor owned.” Does that include a non-profit investor? And exactly, or even approximately how much money is it going to cost to do this:
FUNDING.—There are authorized to be appropriated from the Treasury such sums as are necessary to compensate investor-owned providers as provided for under paragraph (3).
Ardent Health Services. owns and operates 11 acute care hospitals, two multi-specialty physician groups, a 220,000- member health plan and one national medical laboratory, and reported $1.7 billion in revenues for 2006.
Community Health Systems (CHS). One of the largest investor-owned hospital companies, CHS operates general acute care hospitals in non-urban communities, with 118 hospitals in 29 states as of Oct. 1, 2008. It had over $4 billion in 2006.
Hospital Corporation of America (HCA) is the nation’s leading provider of healthcare services, composed of 166 hospitals and 114 outpatient centers in 20 states and England. It employs approximately 180,000 people. It generated $26.9 billion in revenues and assets of more than $24 billion in 2007.
LifePoint Hospitals develops community-based hospitals in non-urban markets. In almost every case, each of the 49 LifePoint hospitals located in 18 states serves as the only acutecare facility in a community. Itt employs approximately 21,000 in nonurban markets, and reported $2.63 billion in revenues for 2007.
Tenet Healthcare Corp has 56 acute care hospitals in 12 states employing 62,000 workers and $8.7 billion in net operating revenues.
Vanguard Health Systems owns and operates 15 hospitals and complementary healthcare services in four states and its 2007 total revenues were nearly $2.8 billion.
Those are just a few of the large hospital systems. Drill down to smaller hospitals, Ambulatory Surgical Centers, Long Term Care facilities, physician offices, physical therapy suites, etc., and you’re looking at paying billions upon billions of dollars to buy these people out.
P.S. Forcing for-profit companies to sell their assets is a taking that not only must be justified, but for every single taking, there is a right to a jury trial. The Fifth Amendment can’t be undone by regulation:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
This is interesting:
No deductibles, copayments, coinsurance, or other cost-sharing shall be imposed with respect to covered benefits.
This isn’t Medicare. It’s super-Medicare. I’m not saying that’s a good thing or a bad thing, it’s just offering more than Medicare itself.
Capital Expenditures Budget.—The capital expenditures budget shall be used for funds needed for—
(1) the construction or renovation of health facilities; and
(2) for major equipment purchases.
So let me see if I understand this (because it’s not clear in the proposed legislation). The government has its own budget for construction and renovation of health facilities, and for equipment purchases? That won’t be left to the entities? Well, of course not, because they’re not allowed to mingle operating funds with capital funds:
Prohibition Against Co-Mingling Operations And Capital Improvement Funds.—It is prohibited to use funds under this Act that are earmarked—
(1) for operations for capital expenditures; or
(2) for capital expenditures for operations.
So a hospital that needs a new MRI machine, or needs to renovate the ER, has to get the government’s permission and have the money allocated to them? Terrific! I hope your state has a powerful Senator who is owed lots of favors, because if you’re represented by a freshman from the minority party, dude, you’re gonna die.
Ah, here we go, back to getting the practitioners paid:
(b) Three Payment Options For Physicians And Certain Other Health Professionals.—
(1) IN GENERAL.—The Program shall pay physicians, dentists, doctors of osteopathy, pharmacists, psychologists, chiropractors, doctors of optometry, nurse practitioners, nurse midwives, physicians’ assistants, and other advanced practice clinicians as licensed and regulated by the States by the following payment methods:
(A) Fee for service payment under paragraph (2).
(B) Salaried positions in institutions receiving global budgets under paragraph (3).
(C) Salaried positions within group practices or non-profit health maintenance organizations receiving capitation payments under paragraph (4).
So they can get fees for service (but have to be non-profit if there’s more than one doctor in the practice), or they can be salaried.
The next part of the proposal is huge. HUGE! Just freakin’ ENORMOUS! You see, right now Medicare doesn’t pay for long term care. It pays for rehabilitative care, but not long term care. That’s private pay first, then Medicaid when you can no longer afford private pay. That would change under this proposal.
SEC. 203. PAYMENT FOR LONG-TERM CARE.
(a) Allotment For Regions.—The Program shall provide for each region a single budgetary allotment to cover a full array of long-term care services under this Act.
(b) Regional Budgets.—Each region shall provide a global budget to local long-term care providers for the full range of needed services, including in-home, nursing home, and community based care.
(c) Basis For Budgets.—Budgets for long-term care services under this section shall be based on past expenditures, financial and clinical performance, utilization, and projected changes in service, wages, and other related factors.
(d) Favoring Non-Institutional Care.—All efforts shall be made under this Act to provide long-term care in a home- or community-based setting, as opposed to institutional care.
In 2010 long term care spending in the US cost about $208 BILLION, and 62% of it was covered by Medicaid. This bill would shift half of that (the half paid by the states) to the federal government. And it would shift all of the 33% paid for now by private sources. That’s about $132B in 2010, and the numbers are going up as Boomers get older.
So how do we pay for this?
(A) Existing sources of Federal Government revenues for health care.
(B) Increasing personal income taxes on the top 5 percent income earners.
(C) Instituting a modest and progressive excise tax on payroll and self-employment income.
(D) Instituting a modest tax on unearned income.
(E) Instituting a small tax on stock and bond transactions.
There is nothing modest of small about this proposal, and the costs will not be modest or small, either.
But wait, aren’t there tremendous savings?
(A) vastly reducing paperwork;
(B) requiring a rational bulk procurement of medications under section 205(a); and
(C) improved access to preventive health care.
Can we talk? Yes, there will be some reduction in costs. Providers will submit all their claims to just one system, instead of several. But are any of you healthcare providers? Just dealing with Medicare you have to keep up with changes in the law, in regulation, in Medicare’s Provider Manuals, National Coverage Determination, Local Coverage Determinations, respond to RACs and MACs, and I have yet to hear a provider say to me, “Medicare is just so easy to deal with — I wish I only had to deal with them.” Do you really think Medicare providers submit bills to “the government”? Ha! They submit bills to private companies, usually insurance companies, who are Medicares local Fiscal Intermediary.
There will be some savings, but not anything close to the money necessary to keep those tax increases “modest” or “small.”
One more word about savings. Medicare has less overhead than private insurers for several reasons. One is that they don’t take profit out of the pie. But another is that Medicare’s overhead is somewhat concealed. Its costs come out of several different budgets. Investigation can come from its own budget, through the HHS-OIG, but can also come from the FBI, or local state Medicaid Fraud Control Units. Prosecution isn’t done by Medicare lawyers, but by the DoJ or local US Attorneys. The IRS takes care of a lot of its collection costs. And that’s just the tip of the iceberg identifying the different budgets that ultimately funnel down into the Medicare program. Just something to keep in mind.
Some worry that people will lose their jobs with this bill. But it looks like the proposal has that covered:
(e) First Priority In Retraining And Job Placement; 2 Years Of Salary Parity Benefits.—The Program shall provide that clerical, administrative, and billing personnel in insurance companies, doctors offices, hospitals, nursing facilities, and other facilities whose jobs are eliminated due to reduced administration—
(1) should have first priority in retraining and job placement in the new system; and
(2) shall be eligible to receive two years of Medicare For All employment transition benefits with each year’s benefit equal to salary earned during the last 12 months of employment, but shall not exceed $100,000 per year.
Really? You think Congress will pass, and a President will sign, two years of salary to tens of thousands of unemployed people? They won’t pay for food stamps for starving children. This is a freakin’ pipe dream, and the pipe was heavily smoked first, if you know what I mean.
Medicare pays, on average, 22% less than private insurance for the same services. “GREAT!,” you say, “we’re going to save a ton of money.” Yup. You will. Go ahead and dance.
Done?
Taking 22% of the income away from rural hospitals in under served communities will close them. They are struggling now. Take 22% of the money away from healthcare and you will crush our healthcare system. And don’t tell me, “England did it!” England did it when they were able to do a total re-set after a war. We’re not in the same situation, we have an enormous healthcare system, and suddenly taking $1 our of every $5 away will make healthcare in America disappear. Poof! Gone. Buh-Bye!
Conclusion?
This bill is a ridiculous wish-list, an uninformed and utterly unserious healthcare fantasy. There are actually realistic ways to have single-payer healthcare. One is to allow people to buy into Medicare (as it exists in real life, not this ridiculous fantasy) and give them subsidies to do it. Do it gradually, over time. Or go with a system that allows people to buy their care with subsidies, but through private companies. The ACA would have brought us quite close but for the Supreme Court killing the Medicaid side and Republicans’ refusal to allow the normal tinkering. And no, before some idiot charges me with “No We Can’t! No We Can’t,” I truly believe we will, and should, end up with single payer health in this country. But with this plan? This isn’t a plan. This is a masturbatory fantasy.
Oh. One more thing. Abortion won’t be covered under a federal single-payer plan, and contraception probably won’t either.
And now, let the accusations fly!