A new approach to Medicare for all [PODCAST]

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Why should we reform the health care system to a physician-led approach? How will that look like? Would a Medicare for all system cure what ails the system? What are some obstacles to implementation?

Ken Terry is a journalist.

He shares his story and discusses his book, Physician-Led Health Care Reform: A New Approach to Medicare for All.

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Today on the show, we have Ken Terry. He’s a journalist and the author of Physician-Led Health Care Reform: A New Approach to Medicare for All. Ken, welcome to the show.

Ken Terry: Well, thank you for having me.

Kevin Pho: So we’ll get into your book in a little bit, but first off, can you share your story and tell me your journey to where you got today?

Ken Terry: Well, I’ve been writing about health care for more than 25 years. I used to be a senior editor at Medical Economics magazine for about 15 years, covering areas like managed care and health information technology. Since 2008, I’ve been freelancing for a variety of publications, including Medical Economics, Medscape Medical News, and CIO.com. I also wrote for InformationWeek and BNET Healthcare, which was a CBS blog. I have written two books under my own name. The earlier one came out in 2007 and was also about health care reform. It contained some of the early ideas that gradually took shape in this book.

I think that over the past 14 or 15 years, I’ve seen the adverse or the negative trends in health care that I described in my first book getting worse, including increasing consolidation of the industry, the decline of primary care, rising drug prices, and so on. At the same time, I saw an increasing acceptance in the political sphere for the idea of Medicare for all. So I realized a year or two ago that it was probably time to do a follow-up to my first book.

Kevin Pho: Fantastic. So let’s get into your new book, Physician-Led Health Care Reform: A New Approach to Medicare for All. Now, for those who aren’t familiar with the book, can you walk my audience through the highlights of it?

Ken Terry: Well, the basic concept is that we probably will have Medicare for all sooner or later. The problem with it, as currently conceived by proponents like Bernie Sanders, is that it doesn’t really have a realistic cost-control component. After you reduce administrative costs, the underlying health costs keep on rising, and they would probably rise even faster because of the richer benefits in the Medicare for all plan.

So in order to make this work and avoid the government having to decrease benefits or slash payments, you would have to find a way to reduce the waste in the system, which is estimated to be around a third of all health care spending. The only players in health care who could really reduce that waste are physicians, because they’re the ones who understand where it is and how to cut it without harming patients. So essentially, I believed that the health care system would have to be restructured in a really major way in order to place physicians in charge of the health care system and give them the incentives they need to reduce that waste.

Kevin Pho: Now, how do you propose that we do that? Because in any single-payer system like Medicare for all, physicians are going to have to take pay cuts, because what Medicare pays physicians is significantly less than that of private payers. Now, if we’re talking about a system that cuts physician pay, how do you propose that physicians lead the charge to adopt Medicare for all?

Ken Terry: I see there being about a 10-year transition period to Medicare for all, probably growing out of a public option like the one that Joe Biden favors, and during that period, we would reorganize the system to make that possible. Congress would have to pass two essential laws. First, an all-payer law similar to the one in Maryland, but this one only for private payers, so that hospitals would lose their market power and they would be paid the same by all payers. And secondly, hospitals would be required to divest their physician practices.

Now, when that happened, doctors would have the freedom to reorganize in ways that would produce real value-based care. Doctors would be incentivized to form groups of a certain size. And actually, I should go back and say that I’m really talking about primary care doctors here, because specialists, according to studies, don’t necessarily improve outcomes when there are more of them, whereas when there are more primary care doctors, outcomes do improve. So we do need primary care doctors to run the system and to prevent a cascade of more expensive interventions when people don’t receive the proper care.

So the primary care doctors would form groups of a certain size that were capable of taking financial risk. They would be receiving primary care capitation and would also receive shared savings, but at a higher level than they’re doing now in the Medicare Shared Savings Program, basically taking risk for a percentage of the total cost of care. And they would choose the specialists they wanted to work with, and those specialists would be expected to cooperate with the primary care doctors to deliver high-quality care at the lowest cost.

In addition, these groups would compete with one another in regional systems similar to the one that was tried out in Minneapolis maybe 20 years ago, and this would prevent them from cutting corners on quality. They would be measured for quality and cost, and patients would decide which group they wanted to join. They would choose a doctor in a particular group, and depending on how well that group did, they would have a different cost in their health taxes.

All the doctors would get paid at Medicare rates, as you suggested, but doctors who joined in these primary care groups would have the opportunity to earn more money, and probably at least as much as they’re earning today, and possibly more, by doing population health management and trying to make sure that low-value services were not provided. Specialists would participate in the savings. The primary care groups would be required to give the specialists who worked with them part of their savings.

Under the divestment, the national corporate practice of medicine law that I alluded to earlier, all these groups would be independent. No hospital or insurance company or private equity firm could own any physician group, and physician groups could only be sold to other physicians. So essentially, the doctors would be in charge of the system. They would have the necessary incentives to deliver care more efficiently than it’s delivered today, and I believe that this could reduce costs or bend the cost curve enough so that a single-payer system would be economically feasible.

Kevin Pho: So any transition to a single-payer system is going to introduce tremendous disruption into the status quo, and what you’re talking about is going to generate a significant amount of opposition from the insurance companies, potentially from the hospitals, and even from the specialists whose pay is likely going to be cut. Now, how do you anticipate overcoming these obstacles?

Ken Terry: Well, I believe that because health care is already in crisis, and so many people can’t afford care even if they have insurance, I think that public support for single-payer will increase even further than it has. And even today, according to Kaiser Family Foundation surveys, a majority of the population supports a single-payer system. I also believe that this can’t be done all of a sudden. We can’t just say, “All right, tomorrow we’re going to move to Medicare for all.” It has to be done over a period of time. And I think that if we had a robust public option, it would prove to be less expensive than private insurance, and employers would start to give their workers money to buy into that in order to save money themselves.

As far as hospitals are concerned, hospitals need a margin large enough to operate on, and that’s why they would negotiate with the government rather than just have the government present them with an amount. And in terms of their ownership of physician practices, hospitals are losing money on practices on the whole, and the extra amount they make from the care that doctors order would still be mostly there if they divested their practices. The biggest reason, according to experts, for hospitals to employ physicians is so that their competitors can’t control them. If nobody could employ doctors, that wouldn’t be a reason for them to continue owning practices.

Kevin Pho: Now, in single-payer systems across the world, compared to other countries, for instance, they also have significantly less expensive cost of medical education. They have less expensive costs of malpractice premiums. I think one of the reasons why American physicians go into specialty care is because of that pay disparity. They graduate with hundreds of thousands of dollars of medical school debt. Now, do you see medical education cost reform and medical liability cost reform as part of a single-payer package?

Ken Terry: Malpractice liability actually drives up costs by a very small amount, according to studies. I’m not sure exactly how you would reduce those costs for doctors. Obviously, it would have to be part of the overall plan. But I do think that if primary care doctors were in charge of the system and they had the ability to make significantly more money than they do today, I think more doctors would go into that, and they would be able to pay off their medical debt.

Kevin Pho: Sure. We’re talking to Ken Terry. He’s a journalist and the author of Physician-Led Health Care Reform: A New Approach to Medicare for All. Ken, you mentioned that Kaiser survey about the support for primary care, but also, in that survey, when increased taxes were a part of that, support for single-payer drops precipitously. So I guess, can you comment on that? And do you anticipate the public to continue to support primary care when they start to realize that there are going to be significant tax increases?

Ken Terry: I agree that people don’t like the idea of tax increases, but I think a fairly significant public education program could show people that they would actually be paying less overall for health care if they paid a dedicated health care tax. I think if you talked about overall taxes rising, that’s one thing. But I think a health care tax could be compared to the insurance premiums that people are paying right now. So when people saw that the amount of money that they were paying in health taxes was actually going down, because it would be a progressive tax.

Right now, people who work for a company all pay the same amount as their share of the insurance premium, regardless of how much they make. But under a progressive health tax scheme, it would be tied into their income, and the only other determining factor would be which primary care group they chose and how expensive it was.

Kevin Pho: Now, other countries in the world with nationalized health care systems and universal care don’t necessarily have single-payer. For instance, in Germany, they have more regulated private insurers. Now, could that be an option in the United States, or is single-payer really the only option?

Ken Terry: I think in the United States, because of our experience, a really bad experience with health insurers, I think we just have to replace that system. I think the insurance companies have figured out how to extract as much money as possible from the American public, and they’re also widely distrusted in terms of their management of care. I don’t think that a third-party entity should be managing care. I think the physicians should be managing care. So I think that because of our history, we really do need a single-payer system here.

Kevin Pho: And my final question, Ken: Do you have a take-home message that you want to share with the KevinMD audience?

Ken Terry: What I’d like you to think about is the fact that our system is being burdened more and more by a number of bad trends, including, as I said, the increasing employment of doctors. Many doctors are extremely unhappy with their loss of autonomy. We’re also seeing, gradually, that primary care is being lost, as more and more of it’s being provided by mid-level practitioners, urgent care centers, retail clinics, and so forth. And the cost trends are so onerous that we can expect some kind of a systemic collapse maybe in the next 10 years, unless we do something to control those costs. And on the way to that, doctors are going to lose a lot of income, because people aren’t going to be able to afford their services.

So essentially, if doctors want to continue to provide good care to patients and to maintain their incomes, they’re going to have to come to grips with the need to restructure the system and to take some kind of financial risk, and this is just the way things are. I hope that physician leaders will try to convince their colleagues that by being wise stewards of health care resources, they can provide better care to patients and help sustain the system.

Kevin Pho: Ken, thank you so much for your time and insight. Thanks again for being on the show.

Ken Terry: Thank you.

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