An anticipated Congressional Budget Office report on the impact of a "Medicare for All" plan may have left more questions than answers — but gave some ammunition to opponents of the sweeping policy idea.
Single-payer healthcare reform has moved from the fringes of Democratic politics to the main stream, with legislation that would expand Medicare to achieve universal coverage gaining steam among Democratic members of Congress and 2020 hopefuls.
CBO on Wednesday weighed into debate with a 34-page report assessing potential paths toward single-payer reform.
Providers seized on the report to cement their opposition to Medicare for All.
"What needs to be asked, is it worth the risk of upending health care for every American when the law on the books already contains a roadmap to universal coverage?," Chip Kahn, CEO of the investor-funded Federation of American Hospitals, said in a statement. "Instead of such a high stakes gamble, lawmakers should build upon the current foundation so we can continue to improve quality and affordability for families across the country."
The report follows Tuesday's House Rules Committee hearing on Rep. Pamila Jayapala's, D-Wash., Medicare for All bill, which will be soon followed by a hearing at the powerful House Ways and Means Committee.
As anticipated, CBO's overview does not consider any particular piece of legislation. Stephanie Kennan, a federal policy executive at McGuireWoods Consulting, told Healthcare Dive the report is a "sophisticated primer" that will provide lawmakers with a neutral framework for approaching single-payer proposals.
So far, the discourse has been dominated by concerns over how such a system would be financed. CBO touches on that, too, though doesn't provide new details on what such a system would cost.
While the current system is financed by a mix of premiums, taxes and out-of-pocket payments, CBO notes that government spending would "increase substantially under a single-payer system," especially if rates were federally administered.
A controversial Mercatus Center report cited by conservative opponents of such a plan contends national healthcare spending for Medicare for All would cost $32 trillion over 10 years. Democrats and other backers of single-payer say it would yield big savings in the form of vastly reduced administration costs and lower overhead.
CBO notes that just under half of the $3.5 trillion spent on healthcare nationally in 2017 came from private sources. Shifting the rest of those expenditures to public sources would also reduce or eliminate employers' and employee contributions for employment-based insurance.
Payers, unsurprisingly, are firmly opposed to any plan that disrupts or eliminates their business. Chiefs of some of the biggest insurers, most notably UnitedHealthcare CEO David Wichmann, have blasted single-payer policies on recent calls with investors. The talk sent healthcare stocks tanking.
CBO's assessment explicitly refrains from specifics, but America's Health Insurance Plans contends the report proves care would be worse under Medicare for All. "Let's focus on proven solutions that help deliver affordable coverage and high-quality care for every American," the group said in a statement to Healthcare Dive.
Single-payer could also produce savings. The primary savings feature would be lower administrative costs, though many have argued it would not be enough to offset increased costs entirely and would also wipe out entire provider departments dedicated to sorting out the administrative burdens of the current system.
Higher utilization would follow single-payer reform, placing greater demand on the system and a need for increased supply.
"If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care," according to CBO. The agency said policies that increase provider supply could help mitigate the imbalance.
"People do demand more health services when their insurance covers more," the Mercatus study's author, Charles Blahous, told lawmakers Tuesday. "Clearly something would have to give."
That "give" could come in the form of provider cuts.
Hospitals oppose single-payer and public option plans, fearing lower payments than commercial insurers offer. CBO analysts note that commercial rates can be "substantially higher" than Medicare fee-for-service rates, and cited recent research from the agency that found commercial rates among three major insurers were 89% higher than Medicare rates for the same types of hospital admissions in 2013.
Setting payment rates equal to Medicare FFS rates would reduce average payments for most providers, CBO noted, "often substantially." The agency warned that drastically reducing payment rates could not only reduce the amount of care supplied, but also lower the quality of care.
CBO offered up a few ideas that it says would ease a potential transition for providers. Setting higher provider payments and gradually reducing them to Medicare FFS rates, for example, would mitigate negative impacts on provider income — but it would also create higher costs for government.
Allowing providers to give private care at higher prices could help offset payment losses, but may also lead to longer wait times for people in the single-payer system. Payment rates could also be adjusted to reflect lowered administrative costs and savings produced by eliminating uncompensated care and charity care.
In terms of setting rates, CBO offered a number of options besides federally-administered rates. One idea is to have organizations such as the American Medical Association negotiate rates with the system. Another is to create a tiered system where teaching hospitals and providers in low-income areas would receive higher payments.
A single-payer system could create more incentive for providers to invest in population health measures and preventative medicine. Former National Medical Association president Doris Browne told lawmakers Tuesday that preventative medicine offers additional opportunities for savings by keeping patients out of emergency rooms.
"If you put prevention into practice, you're not going to have many of those hospitalization visits that will end up in the intensive care units," Browne said. "If you can provide (patients) with preventive care and education, they will become healthier and not need the bag of pills, not need to go to the emergency room."
The House Ways and Means Committee has not set a date for its upcoming hearing on Medicare for All. CBO's assessment will give both opponents and advocates a number of issues to bring up that haven't been widely discussed, such as how long-term care would be approached and the need for an interoperable IT system under a single-payer system.
CBO touches on another potential result that hasn't yet seen wide debate: Workers at private insurance companies.
"Many workers in the health insurance industry would be displaced," CBO said. "However, that reduction in private-sector employment would probably be partially offset by an increase in government workers needed to administer the new system."
Those workers could receive "job training assistance or financial benefits, and shareholders of for-profit insurers could receive compensation," though that would further increase government spending.
"Any change like this is likely to put somebody out of work somewhere," Kennan said. "There are going to be losers when it comes to jobs."