Proposed legislation on the federal and New York State levels has noble intent but takes the wrong approach. How can we reform health care without straining taxpayers and providers?
By Joseph Moschitto, President, JDM Benefits
Working in the insurance and benefits space is a unique experience. Yes, it has the hallmarks of other professional jobs — the meetings, the spreadsheets, the email inbox, the commute to and from the office.
But there’s an added dimension — a deep responsibility for the wellbeing of our clients and their families — that is absent in many other industries. When we’re helping clients choose benefit plans or understand new regulations, we’re not just analyzing words and numbers. We’re impacting their teams’ very health and happiness. That’s something to take very seriously.
As a result, we at JDM examine changes in the healthcare landscape with a meticulous eye. We don’t only ask, “How will this impact our clients’ bottom line?” We also ask, “How will it impact their wellbeing?” This is the approach with which we’re currently examining the federal and New York State single payer / Medicare-for-all bills being proposed.
The wrong way forward
JDM supports the concept of universal healthcare — ensuring that all Americans have access to quality, affordable insurance. But the aforementioned proposals are the wrong way forward. After a close look, it’s clear they’re neither good for business’ and individuals’ pocketbooks, nor their wellbeing.
Firstly: Shifting the funding and payment of health insurance from the private sector to the public sector doesn’t address the underlying problem — today’s high cost of delivering health care. The often-unmanageable costs of health care — from pricey doctor visits and procedures to medication — would essentially remain the same. And the same people would be paying, only now as taxpayers and not through the private market.
Indeed, taxpayers would encounter a startling hike if faced with a single payer or Medicare for All system. In the state of New York alone, it’s been estimated that the sum of public and private health care expenditures will reach more than $250 billion per year by 2019. (That’s greater than the GDP of some small European countries.) A government-run system would put severe financial pressure on taxpayers across the state, and across the country. We need only to look north, to Vermont: The state passed a single payer bill in 2014, and it was subsequently abandoned by the governor after the required tax increase became clear. Similarly, California shelved their plans for a single-payer system when the estimated price tag came in at $400 billion annually.
Another issue with the proposed federal and state bills: The provider community — hospitals, nursing homes, your neighborhood physician — likely won’t respond well to the government’s fee schedule for reimbursement of services. These providers currently charge a set number for care — a number that the government would seek to slash in order to control costs. As a result, providers would need to rethink everything from quality and quantity of care to compensation — a tough pill to swallow.
A better approach
So, what’s the answer? If proposed legislation can’t amend an ailing health care system, what can?
One prudent reform would be shifting toward a value-based insurance design. Rather than focusing on volume — more doctor visits, more prescriptions — we should focus on value and the quality of care being delivered. By providing thorough preventative and educational care — say, coaching individuals to eat better, exercise properly, and expertly manage chronic conditions — larger urgent costs down the line can be avoided. It makes for healthier individuals, and also a less expensive industry.
This is an idea that came about in the 1990s and has won much praise. Further, it can be adopted by both the private and public sectors. Companies and government programs alike can invest in value-based initiatives.
There’s no simple solution to health care — it’s a complex industry. No one policy or idea can cure all of its ailments. But by implementing common-sense approaches like value-based care, we can make a positive impact on multiple levels: healthier businesses, and healthier individuals.
Joseph D. Moschitto