"Improved Medicare for All" HR 3421 - Summary
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Happy Friday Advocates
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Next week there will be an article about healthcare provider burnout. It seems this is way worse than so many other professions. I spoke to a doctor friend of mine recently and he recognized the problem and felt that if doctors were paid and incentivized differently they may behave differently. More next week.
In the meantime, I was asked to prepare a summary of Representative Jayapal’s “Improved Medicare for All” bill, HR 3421, with an eye towards how rural and underserved populations might fare. It is below. Have a great weekend.
Improved Medicare for All
HR 3421 Improved Medicare for All Overview
Before we address the rural aspects of HR3421 Improved Medicare for All I want to highlight some of the problems in rural healthcare.
Between 2005 and 2020 166 hospitals closed in rural America.
Insurance premiums are about 10% higher in rural areas, than urban.
Life expectancy is about three years less in rural areas than in urban areas.
Insufficient medical providers - actually this is becoming a problem nationwide.
Here are some of the main features of HR 3421.
The implementation timeframe is two years. While there is a lot of work to do to implement the program, the shorter timeline helps to keep it from being rescinded or made ineffective, like the ACA, in Congress, and gives it a chance to succeed.
Overview
The bill establishes a trust fund from which to pay claims. The program will be funded by premiums paid to the trust, these are a tax and are determined by income level with significant subsidies for those with lower incomes.
The program will absorb other federal programs such as Medicare, Medicaid, CHIP, Tricare, Tribal healthcare, and state marketplace programs (ACA). It identifies waivers for the poor and minimal payments for those at or near the poverty level and covers those who would have had Medicaid in states that did not expand Medicaid.
Waste in Today’s Systems
There is a tremendous amount of waste in the healthcare system. The CBO estimates that in just overhead it is at least $400B/year. That overhead includes staff at insurance companies and providers who submit claims under multiple changing coding systems, submit and respond to preauthorizations, and deny and manage denials of claims. Keep in mind that a full 17% of claims are denied and that at least 80% of those are overturned on appeal. I was in a meeting recently with Senator Sanders and he identified one hospital that required 200 full time staff to just to manage that paperwork.
That $400B does not include about $200B that would be gained through negotiation of prescription prices. Right now the federal government only negotiates for the VA and the 10 drugs identified for Medicare last year. Even Medicaid programs do not negotiate prices.
What is Covered
The plan will cover services and items medically necessary or appropriate for the maintenance of health or for the diagnosis, treatment, or rehabilitation of a health condition including:
Hospital services, including inpatient and outpatient hospital care, including 24-hour-a-day emergency services and inpatient prescription drugs.
Ambulatory patient services.
Primary and preventive services, including chronic disease management.
Prescription drugs and medical devices, including outpatient prescription drugs, medical devices, and biological products, and all contraceptive items approved by the Food and Drug Administration.
Mental health and substance use treatment services, including inpatient care.
Laboratory and diagnostic services.
Comprehensive reproductive care, including abortion, contraception, and assistive reproductive technology.
Maternity and newborn care.
Comprehensive gender affirming health care.
Oral health, audiology, and vision services.
Rehabilitative and habilitative services and devices.
Emergency services and transportation.
Early and periodic screening, diagnostic, and treatment services,
Necessary transportation to receive health care services for persons with disabilities, older individuals with functional limitations, or low-income individuals
Long-term care services and support
Hospice care.
Services provided by a licensed marriage and family therapist or a licensed mental health counselor.
Any service described in a preceding paragraph that is furnished via telehealth, to the extent practical.
Ok, it is a pretty comprehensive list.
Non Duplication
Insurance companies may not duplicate the plan but can offer complimentary plans. This is a common feature in most countries that have universal health care.
Implementation Design
The program will be administered via regional directors who are guided by a team of local physicians and health care experts to make sure that there are sufficient health care professionals and facilities with needed expertise to support and care for the local communities in the region. They are also responsible for ensuring that reimbursements are sufficient and fair.
Doctors and facilities will sign up with HHS to participate, but participation is not mandatory. Arrangements are made for both bulk or global infrastructure payments to networks and facilities that cover buildings, employees, devices etc. as well as support for fee for service for doctor offices as needed. Electronic billing and payments are baked into the system to simplify insurance documentation and revenue receipts.
There will be significant quality monitoring of the system. That’s good and it will include collection of data that measures outcomes for a wide variety of communities. This is really important because there will be targets set for things like infant mortality. We do poorly on that and other metrics as a population and worse if you’re not white.
What’s in the Budget?
Let me quote from the bill for just a moment
Here are the mandatory budget line items
An operating budget.
A capital expenditures budget.
A special projects budget
Quality assessment activities under title V.
Health professional education expenditures.
Administrative costs, including costs related to the operation of regional offices.
A reserve fund.
Prevention and public health activities (important to have before the next pandemic hits)
These are important because “the operating budget allows for every participating provider in the Medicare for All Program to meet the needs of their respective patient populations; and that the special projects budget is sufficient to meet the healthcare needs within the regional areas through construction, renovation, and staffing of health care facilities in a reasonable timeframe.”
No copays or deductibles or maximum benefit. This is particularly important because an experiment (not a study) was done by the Rand Corporation and they found that a 2% increase in out of pocket cost was responsible for a 10% reduction in services. That is, in the US, if it costs more people don’t go to the doctor.
Help for Rural Areas and Medical Deserts
Since everyone is covered, rural hospitals would no longer absorb the costs of treating uninsured patients which has had a very negative effect on their continued operation.
Making sure everyone has access to preventive care and regular care as needed will help reduce the life span disparity between urban and rural communities.
Medical Staff and Facilities
Public funding protects all rural communities with equitable coverage, regardless of geography by employing regional administration with the authority to build and staff to meet community needs.
The budgeting, mentioned above, includes specific funding for education to ensure a sufficient workforce of healthcare professionals by region. The team of regional advisors to the regional administrator will identify what skills and how many of each are needed to support their region. This will bolster and improve healthcare in underserved areas. Some of the tools to implement this are help with tuition debt and scholarships.
Capital improvement projects are also called out in the budget to build and reinforce facilities. This applies to rural and underserved communities in particular.
Workers
In many rural areas the hospital is one of the largest employers. By using a global budgeting framework, each facility will have sufficient funds to operate and support their community, and the people they employ.
Displaced Workers
It is also important to note that for 5 years 1% of the healthcare system budget will be allocated to assist displaced workers.
Premium Disparity
The premiums will be set by income and so the inequity we see today of higher rural premiums will disappear.
Additional Notes:
Remember that this legislation will also drop malpractice premiums dramatically since most of those claims are for future medical payments and this will help medical staff pay the best attention they can to patients instead of running thorough as many patients as possible as in today’s fee for service model.
Terrific writing, as usual. This outline of services and budget for Universal Healthcare is so important.