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Iowa Employer Benefits Study© – An Annual Tradition to take a 1-year Sabbatical

All of us have established traditions in our lives, whether it be family or friend-related holiday plans, vacation travels to a favorite destination, attending or watching sporting events, and so on. Yet, due to circumstances beyond our control, such as time constraints, finances, death and adverse health problems, traditions are made to be altered, or possibly discontinued. After performing the annual Iowa Employer Benefits Study© for the past 18 years, I have decided to give the survey a ‘rest’ for one year. Believe me, this was not an easy decision. But after a great deal of personal and professional reflection, it is the right decision. My ‘tradition’ has now officially been altered.

In today’s world of perpetual political turmoil, healthcare – more specifically – health insurance, has become a political football. Hasty decisions are being made to benefit political promises, usually at the expense of pursuing sound policy practices. What has occurred in our nation’s capital in 2017 is akin to watching a surgeon perform knee surgery with a butter knife. The process has been extremely agonizing to witness and I find myself wincing as this grotesque process evolves.

Now more than ever, it is important to monitor employer-sponsored health insurance costs and components. After all, health insurance costs continue to outpace the Consumer Price Index (CPI) every year. Rising insurance costs have triggered a host of other health plan changes – forcing employers to offer the most competitive health insurance package that they can. I certainly don’t take this fact lightly.

But another fact is very important to me – the ‘value’ of care received. I firmly believe it should ALSO be on the radar screen for employers, their employees and the general public. Similar to how politician’s view our healthcare ‘system,’ employers appear to be mesmerized, rightfully so, by the insurance cost problems. Recently, Warren Buffett described medical costs as “the tapeworm of American economic competitiveness.”

This cost concern, however, tends to suck the necessary oxygen out of the room, crowding out badly-needed, laser-like attention and focus on key cost drivers that impact costs in the first place. This is ‘downstream’ thinking, the actions we take about fixing the symptoms of problems rather than concentrating on the issues that actually CAUSE the cost ‘pollution’ we find so objectionable. Being distracted with downstream symptoms has lulled us into believing that we simply need to fix the “insurance problem” and the ‘upstream’ pollution will miraculously go away. Inflated health costs are actually more harmful to us because we refuse to look beyond the insurance component to help address the cost conundrum.

This serves as the backdrop on why I decided to place the Iowa Employer Benefits Study© on a one-year sabbatical. It’s time to move ‘upstream‘ and disregard the naysayers who believe the status quo is much too difficult to confront. It is just too easy and expedient to continue the work downstream – making the appearance that something is being done to confront the cost issue. But if ‘optics’ matter, I’m in the wrong business.

In the next few weeks, I will reveal research I’ve wanted to conduct for the last number of years, but did not have the opportunity to pursue – until now. This work will be found under my companion organization, Heartland Health Research Institute. If you haven’t signed up to receive my HHRI posts, you may do so here.

Poet Robert Frost famously wrote, “Two roads diverged in a wood, and I – I took the one less traveled by, and that has made all the difference.”

This road may be lonely, but well worth the effort.

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Single-Payer Debate: Gaining Traction?

What do the terms ‘Single-Payer’ and ‘potato’ have in common?

The English language can be confusing at times. For example, the words, ‘either’ and ‘neither’ can be pronounced two different ways. What about ‘tomato’ and ‘potato?’ Yep, even song lyrics from ‘Let’s Call the Whole Thing Off’ described the pronunciation conundrum of potato, potahto, tomato and tomahto.

But there’s another problem with words. We sometimes use different words or phrases interchangeably. This is certainly the case in healthcare. Many times, politicians and the media will use ‘health,’ ‘healthcare,’ and ‘health insurance’ as if they mean the same thing. Although they’re inter-related, they have different meanings.

Another healthcare issue that appears to be gaining some traction is the ‘Single-Payer’ debate. But what does ‘Single-Payer’ actually mean? Is it synonymous with ‘Universal Healthcare’ or ‘Medicare for All?’ These terms are thrown around quite loosely as we debate our country’s future on how to deliver and pay for the healthcare we consume. Do all three represent a ‘government takeover’ of our healthcare delivery and payment system?

Here is a primer of the three aforementioned terms:

Single-Payer

This plan creates a single source of payment to healthcare providers, typically through a state or federal program. Financed by taxes, a single-payer approach would cover basic healthcare costs for all residents regardless of income, occupation, or health status. It is important to note that single-payer systems may contract for healthcare services from private organizations (similar to Canada) or may own and employ healthcare resources and personnel (as found in the United Kingdom). ‘Single-Payer’ describes the mechanism by which healthcare is paid for by a single public authority, but not the type of delivery for whom physicians and providers work. The U.S., by contrast, uses a multi-payer approach that includes a mixed public-private system.

Universal Healthcare

This plan is often used interchangeably with ‘Universal Health’ and ‘Universal Care.’ This is a broad term for a program that makes some level of basic coverage available to everyone (most likely through a government program), but can also allow for private insurance. Universal Healthcare will typically refer to a healthcare system that provides healthcare and coverage (health insurance) to all citizens of a particular country. Such coverage provides a specific package of benefits to all members of a society with the goal of providing financial risk protection, improved access to health services and improved health outcomes. Contrary to detractors of Universal Healthcare, it is not one-size-fits-all and does not imply total coverage. In short, Universal Healthcare can be determined by three dimensions:

  1. Who is covered
  2. What services are covered
  3. How much of the cost is covered.

Usually some costs are borne by the patient at the time of consumption, but the bulk of costs come from a combination of compulsory insurance and tax revenues. In some cases, government involvement includes directly managing the healthcare system. However, many countries with Universal Healthcare use mixed public-private approaches to deliver this care.

Medicare for All

This is a universal system in which the basic coverage would be provided by an expansion of the federal Medicare program, but would still allow citizens to purchase private insurance (supplemental plans). It is a single-public or quasi-public agency that organizes healthcare financing, but the delivery of care remains largely in private hands. As we know, Medicare is a federal health insurance program (administered by privately-contracted organizations) for people who are age 65 or older and certain younger people with disabilities, including those with End-Stage Renal Disease. According to the Kaiser Family Foundation and other sources, the administrative costs under Medicare are lower compared to private plans. Bernie Sanders famously argued that correcting the inefficiencies within our current system would actually pay to expand coverage for all Americans. In lieu of designing a whole new healthcare system in the U.S., Medicare-for-All proponents suggest that disruption would be minimal to stakeholders and citizens by merely embracing a program that we already use for a segment of our population.

The nuances of all three approaches can vary immensely, even within each of the above healthcare categories. No two countries with single-payer systems are alike. As we all know, the devil will be in the details on who pays for the program, how will payments be determined (taxes vs. premiums), who will administer the health plan(s), and how will health providers be allowed to practice – either privately or government-employed.

As Senate Republicans attempt to cobble together 50 votes to “repeal and replace” Obamacare, a handful of legislators in Democratic states have proposed some variation of single-payer bills – California, Massachusetts, New York, New Jersey and Rhode Island. The likelihood of these states passing such measures are quite remote at this time, primarily due to divided political ideologies and funding estimates that wreak havoc on fragile state budgets. Not to be outdone, 112 of the 193 U.S. House Democrats are positioning themselves for the 2020 national elections by supporting a broader version of public health coverage – endorsing the “Expanded and Improved Medicare for All Act.

Given the inability of Congress to come to a consensus on replacing Obamacare, will a single-payer or some hybrid-approach ultimately emerge as an alternative? A January study published by the Pew Research Center indicated that a sizeable majority – about three in five Americans – said the government had a responsibility to ensure everyone had healthcare (compared to 38 percent who said it is not the government’s responsibility). A few influential business leaders, such as Warren Buffett and Charles Munger, appear to have some interest in the idea of a single-payer approach, primarily because health costs continue to be a drag on the economy.

As I write this blog about single-payer nuances, the three approaches appear to be synonymous with one another. Any future state and national proposals will no doubt be a hodge-podge of all three approaches.

When that time comes, it will most likely become one hot potato!

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