Universal health care: Comparing what looks nice on paper to reality

The phrases "health care for all" or "universal health care" might be two of the trendiest phrases in the health care space, the political space, and the Friday-night-cocktail-party space. Lord knows, you can't go to a football tailgate or a friend's wine tasting without this topic coming up.

But what do these phrases really mean in the hearts and minds of the American public? And what do these phrases mean for the economy and the health care space in general? Let's dig in.

The wisdom of the interwebs

In the interest of a completely scientific investigation, so that I might better understand what the American consumer is reading when he/she does some research, I chose to use the most reliable resource at my disposal: Google. When doing a Google search of "health care for all," the first two results happened to be from insurance carriers, advertising a group product; naturally these were promoted ads. From there, it got interesting. The third result was for Bernie Sanders "Health Care for All" website,

My Spidey-sense tingled. Upon clicking the link for the website, I was greeted by the following quote, credited to Bernie Sanders: "We say to the private health insurance companies: whether you like it or not, the Untied States will join every other major country on earth and guarantee health care to all people as a right. All Americans are entitled to go to the doctor when they're sick and not go bankrupt after staying in the hospital."

What does this even mean? To the casual reader, the internet-browsing American, this quote might say, "Health insurance is bad and it stands in the way of your right to go to the doctor!" Or maybe it says, "health care in America is super expensive and inaccessible and we're not going to stand for it anymore! Oh, yeah, and health insurance companies are jerks!"

Most troubling in this quote is the failure to explicitly mention anything about excessive billing and/or the lack of transparent pricing in medicine. Further, it fails to recognize the value of current solutions and cost-containment methods in play for many employer-sponsored health plans all across the country. One might think these would be useful nuggets for the American consumer to ponder.

Economic and health care Industry implications: A short laundry list

I remember taking a course on Communism in college. Naturally, as a 19-year-old student studying history and political science at a small, liberal arts college, I was enthralled by the ideas espoused in the various texts we read during the course. It seemed wonderful that there was a political system "out there" that might allow all people to earn a living, have a home, go to college and want for nothing… sort of. But, as days went by and I experienced more of life, the realities of what sounds nice on paper versus what actually works in practical application became readily apparent to me.

Now, to be clear, I have no interest in discussing whether "Health care for all" is a communist idea and/or whether Donald Trump should lay off of Twitter. I truly cannot stand politics, and my undergrad days of being interested in political theory are absolutely dead and gone. However, I am interested in discussing the practical application of universal health care in the United States of America and what that might look like. Please consider the following very, very brief thoughts:

My first concern: the death of innovation. I often wonder whether universal health care would stymie medical innovation. It goes without saying that a universal health care system would come at the cost of a financially robust health care platform. I'm not agreeing, nor am I disagreeing, with the fact that there is a wealth of money to be made in American medicine; I'm simply pointing out a fact. There are billions and billions of dollars to be had in health care.

As much as we decry the predatory billing practices of Big Pharma, is there something to be said for the idea that a very smart little kid, somewhere in South Dakota, might see the opportunity to make a very good living as an adult, trying to cure some horrid disease? Does her motivation to pursue that career go away if she no longer sees financial gain to be had?

Perhaps. Perhaps not.

What about the teenager who wants to be a doctor and he also happens to be financially motivated? If the medical system is not a system where doctors make a hefty living, do we lose the interest of this young man and possibly lose him to a different field?

Lastly, what about the genius 20-something who just graduated from MIT and has an idea for the next best imaging machine, which will far surpass the capabilities of an MRI or CT Scan? Perhaps her student loans are simply too large and she is unwilling to take the entrepreneurial risk associated with her idea, unless the potential, financial returns are significant!

My second concern: missing the target – failing to accomplish the goal.

Whenever a politician or health care advocate talks about universal health care, I ask myself what their goal might be. Looking to the Bernie Sanders quote, meant to support the "Medicare for all" movement, it seems to me that the goal of his particular movement is: (1) increased access to health care (2) at a reasonable cost.

Although I love ice hockey and I think moose might be the most amazing creatures on the planet, I am not Canadian. However, I do have many friends from Canada and I have spent a great deal of time there in my travels. I am probably incorrect to some degree here, and I will gladly acknowledge that fact and stand for correction, however, I will be so bold as to outline my understanding of a small piece of the Canadian health care system, as an example of "health care for all."

Specifically, this universal system is a system that seemingly fails to accomplish goal (1) above, "increased access to health care." I understand that in the Canadian health care system, when a patient seeks care and is not choosing to present as a cash or "private pay" patient, the severity of his/her medical issue is taken into account when the course of treatment and availability of treatment is determined. In other words, if a patient has a non-emergent issue related to his knee, he may be "in line" to see an orthopedic specialist for months. From there, if it turns out that the patient needs surgical intervention, and since the issue is non-emergent, it may be months again before he moves on to phase two of his treatment plan, the actual surgery.

Compare this experience to the current, American experience. Yes, the current American experience is costly and very confusing in terms of the patient's understanding of what might be covered or excluded under his health care plan. But, is it likely that the American patient receives care for his non-emergent knee issue quicker than the patient in the universal system outlined above? Yes.

Strictly discussing whether a universal system might increase access to health care, at least in this example, it starts to become clear that the universal system might actually decrease access to health care. Maybe.

Regarding the goal that health care should be accessed at a reasonable cost, perhaps a universal system does present care at a reasonable cost. Much of this depends on how you define "reasonable cost." If it means that I am able to access care with no co-pay and no deductible, then maybe the cost to me is reasonable. But, if I'm able to avoid a co-pay, avoid a deductible, and avoid provider balance billing, is because I've paid much more in taxes over the my working life – then maybe I have simply experienced a cost shift and the definition of "reasonable cost" has not been met. Maybe.

Don't just pop balloons, Tim! What are your ideas?

How do we increase access to health care at a reasonable cost?

Reference-based pricing on out-of-network claims instead of paying billed charges
Health plans walking away from network arrangements and using reference-based pricing across their benefit structure
Direct primary care as a pre-paid solution, at a set rate, with high access
Direct contracting/regional networks with competitive rates built in and skin in the game for all parties
Robust subrogation programs to seek out 3rd party dollars and place those dollars back into an employer-sponsored health plan's pocket to be reinvested / utilized for growth etc.
Educated plan design using responsible pre-certification requirements
Promote member consumerism through financial incentives built into your health plan – waive patient responsibility for select facilities; give patients a percentage of savings when they discover billing errors; provide medical tourism options
Explore innovative solutions through employer sponsored, self-funded health plans

In short, the solutions are already before us and the solutions for increased access at a reasonable cost sit in the hands of innovative employers willing to explore unique plan structures within their self-funded health plan environment.

Tim Callender, Esq., serves as the vice president of sales and marketing for The Phia Group. Before joining The Phia Group, Tim spent years functioning as in-house legal counsel for a third party administrator. Tim is well-versed in complex appeals, direct provider negotiations, plan document interpretation, stop-loss conflict resolution; keeping abreast of regulatory demands, vendor contract disputes, and many other issues unique to the self-funded industry.

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