Health care for all remains in flux

The idea of Medicare for All universal health care may gain some headway in Colorado over the next term with a Democratic-controlled House and Senate and Jared Polis’s election as governor.

But it may not be a single-payer system as touted but result in a two-tiered system with both universal coverage and private insurance for those who can pay the premiums, said Dean Sanpei, senior vice president of strategy of Centura Health in Centennial. Centura operates Longmont United Hospital and Avista in Louisville.

“There is not sufficient funding to provide the services we provide today. We would collapse services,” Sanpei said.

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Some lawmakers in Colorado are proposing a state-run health insurance plan, promising to expand access to health care and make it more affordable for all insurance holders. The structure could include automatic access or a buy-in system, compared with today where health care is linked to employment with the idea being that unemployed Americans, stay-at-home parents, new business owners and others would receive affordable care.

A Senate bill would create a public option health insurance plan for high-cost areas in fall 2019 that, through a House bill, would expand to the entire state by fall 2020. Other proposals call for more pricing transparency at hospitals and in the pricing of pharmaceuticals and provide buying groups with better rates for insurance coverage.

“We’re working on saving people costs on their health care,” said Polis, who addressed reducing health care costs in his first State of the State address. “We want to look at all of the cost drivers of health care. We want to provide savings to businesses … and to individuals who are responsible for their own care.”

Lowering costs results in more of the population being able to afford health care, Polis said in an interview with BizWest.

“When you make health care less expensive, you inherently increase access and coverage,” Polis said, adding that the U.S. spends twice as much on health care as other industrial nations but does not get a good value in return. “We’re the middle of the pack on outcomes and don’t cover everybody.”

Providing universal coverage doesn’t lower costs, but actually increases them, Sanpei said.

“For someone to say Medicare for All, the notion that Medicare for All would allow health care services today at a lower cost is a false narrative. It is not true, and it is not possible,” Sanpei said.

What Medicare and Medicaid both reimburse to medical facilities for services doesn’t cover the actual costs, which end up being subsidized, in part, by commercial or employer insurance, Sanpei said. Moving to a universal health system would cover some of those costs, but not the entirety, such as capital expenses, he said. The result would be that government would have to spend more per Medicare patient for the same level of service, or hospitals would not be able to continue offering the level of services they now provide, he said.

“We’d have to cut services in half, or the government would have to come up with billions of dollars more for the level of services,” Sanpei said. “The dollars would be mindboggling to get the services.”

Those carrying government-supported insurance, as it is now, receive the same amount of services as those with other types of insurance, Sanpei said.

“Today, we treat Medicare patients, no matter how much they pay us, we treat them as patients,” Sanpei said.

Those already on Medicare, as well as Medicaid representing roughly one in five Americans, would see their level of care and benefits dramatically decrease under a universal health system, Sanpei said. Care for everyone would become more selective, and the two-tiered system would be the result with the reintroduction of commercial insurance, he said.

“Nobody gets the care they want,” Sanpei said. “Very, very expensive commercial insurance will be available to people with lots of money who will be able to get services very quickly. … The ones who would be the most upset are the Medicare population. They had something that worked well for them.”

Hospitals and other health care providers would see decreased profit margins and find it difficult to update equipment and compensate staff with competitive wages, said Tim Cashman, chief financial officer for Estes Park Health. Rural hospitals in particular have thin profit margins and have to look at multiple areas to cut costs, particularly when Medicare and Medicaid reimbursements decrease year to year, he said.

“Medicare for All sounds like a good proposal, and I think all of us can see the value in that because of the access,” Cashman said.

Medicare carries 5 percent administrative and general costs, while insurance carriers range 18 to 24 percent including earnings and profits, Cashman said. But the reimbursement rates from Medicare and Medicaid also are lower, he said.

“Hospitals will be forced to go into pretty serious cost-cutting measures to live within the Medicare reimbursements rates,” Cashman said, adding that longer wait times for services likely would result. “What could potentially happen is the carriers would become available to those who can afford it, and those who can’t would go on the Medicare program.”

The Colorado Hospital Association in Greenwood Village supports a multi-payer system of health care and not a single-payer system, said Katherine Mulready, senior vice president and chief strategy officer for the association, which represents 110 hospitals and health systems in Colorado.

“Typically, we have supported a multi-payer system of care than a single-payer model,” Mulready said. “It’s more of a historic position we had. We value private insurance, Veterans Affairs, Medicare and Medicaid. Many payers in Colorado contract with the hospitals for the care we provide. That’s the system we have historically supported.”