Turtles and Tortoises

Turtle vs. tortoise.  Quick, what’s the difference?

Turtles spend most of their time in the water; tortoises on land.

There is a relatively long list of two things that seem the same, so much so that many of us use the words interchangeably, but have some meaningful differences.

Alligators and crocodiles

Cement and concrete

Champagne and sparkling wine

Ethnicity and nationality

Mugs and cups

It would make for a great casual dinner conversation.  Give a pair of words and note the thing that makes them different.  Or a drinking game if you live in a fraternity where everything is a drinking game.

My favorite couplet:  Great Britain vs the United Kingdom.  The latter contains Northern Ireland while the former does not.

Understanding the nuances between words that look like synonyms, but aren’t quite the same, will come in handy as the discussion around universal healthcare heats up with the coming political season.  It might not matter much if you know whether your road is solid (cement) or includes stone, rock and sand as well (concrete), but it may matter a lot what someone actually has in mind when they advocate for a ‘single payer system.’

The Medicare for All Act of 2019 (HR 1384) making its way through the House – not going anywhere in this Senate – is one such animal.  It is a single payer proposal, but a specific form of such.  And the details matter.  This proposal is radical, even by global standards, for a single payer model.

It is funded at a fixed amount allocated by Congress, has no role for private insurance nor any regional governance.  Further, it has no patient cost sharing – no participation in the premium, no co-pay, no deductible, no co-insurance.  It also has a very broad scope of coverage, including dental, vision and long-term care benefits.

It probably should be renamed ‘Medicaid for All’ because, but for everything being controlled at the federal level, it functions more like Medicaid than Medicare.  But that label doesn’t play as well in the marketing campaign, does it?

I’ll call my sparkling wine ‘champagne’ even if it was not made in that specific region of France because it just sounds better.

Canada, the idea that comes to mind for most people when you say, ‘single payer’ – maybe because it is the one other country most people can find on a map – does not have a single national insurance system.  Provincial governments receive per capita grants that they administer within the federal rules.

The Commonwealth Fund did an analysis of the ‘single payer system’ in 12 high-income countries.  There is variation across several dimensions – policy setting, administration, benefits coverage, and patient cost sharing.

Yes, they are all far more government driven than we are currently, but as with ‘ethnicity’ vs. ‘nationality,’ at times the subtle differences matter a lot.  Just a little tip in case you want to press in a little deeper in coming days as this idea gets tossed around.

The Easy (Blue) Answer

Imagine I want to buy your house.  And pretend you want to sell it to me.  We sit down and discuss the price, but you just want more than I want to pay.  We can’t reach a deal. 

So, I go over to your next-door neighbors.  We sit down over an iced tea and talk turkey.  Maybe they are more motivated than you, maybe they are ready to move, but regardless of why, they agree to a much lower price.

Fine, you say, buy their house.

But I want your house; I just want it at their price.  Their house is in the same neighborhood and pretty similar to yours. Since you are being unreasonable, I should be able to just negotiate terms with them and then get your house for that price, right?

That is effectively how the Blue Cross Blue Shield plans would like to solve the thorny surprise billing issue. 

Their association, which represents 36 independent BCBS companies covering almost one in three Americans, recently sent a letter to Congress asking them to establish a benchmark for what out-of-network provides would be paid.  The answer, they pose, is simple – if someone is OON, they get paid Medicare or the in-network rate, whichever is higher.

How thoughtful that they threw in that last part.

They want the government to develop this ‘methodology’ so it is fair and standard (again, how nice), but that sort of glosses over the most salient input to the fair and unbiased methodology – which is the in-network rates THEY happen to have negotiated. 

Like a wolf wearing a wool coat, this is price-fixing dressed up in a thin disguise.  Take out the 117 million people covered by Medicare and Medicaid and the Blues have about half of everyone who remains…and a far greater percentage in many markets.  When you have that big a share, you set the market price.  The Feds, in this model, are just running the spreadsheet.

As we’ve discussed many times, this issue needs to be solved, is gaining political traction, and is complex and messy.  Which is why simplistic, one-sided solutions aren’t the answer.

How about an employer association propose that if they don’t like the premium increases offered to them by their carrier, they can just force the carrier to agree to pricing some other insurer offered them? 

Or that I can buy your house at the price I negotiated with your neighbor?

Same idea.