Monday, October 29, 2007

What Is and What Isn't Single-Payer

John Torinus took his fifth swing at Healthy Wisconsin in his column yesterday, and the theme of the day was "single-payer."

In his previous four columns (see here, here, here, and here), Torinus used the phrase "single-payer" a total of twice. In his column yesterday, it's used seven times.

The fact is, Healthy Wisconsin isn't single-payer legislation. If the situation is right, there's much to like about single-payer models, as evidenced by the successful state farmer's cooperative, which operates under a single payer. But Healthy Wisconsin just doesn't fall into that category.

The key policy difference between a single-payer model and the consolidated payer model of Healthy Wisconsin and the Wisconsin Health Plan is that the latter allows for payer competition.

In a consolidated payer model, based on the ideas of economist Alain Enthoven, consumers are given a direct choice of health plans. If they opt for the most cost effective plan -- which would need to contract with the most cost effective providers to gain that status -- they pay nothing per month aside from what they pay into the system as a whole through some form of taxes or assessments. If consumers opt for a higher cost plan, on the other hand, they pay the difference between that plan and the lowest cost plan.

This type of competition can't exist in a single-payer model since, obviously, the one payer isn't going to be competing with itself in any meaningful sort of way.

There's no question that Torinus understands all of this -- to be sure, David Riemer explained it to him in a debate the two had back in August -- which makes it both odd and eye-rolling that he would push Healthy Wisconsin as a single-payer system.

But why let the nuances and complexity of health care models get in the way of good ol' rhetoric?

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6 Comments:

Blogger ΕΡΜΕΣ said...

"There's no question that Torinus understands all of this"

then perhaps he's a corrupt man?

October 29, 2007  
Blogger Dad29 said...

Umnnnnhhh...

Giving the benefit of the doubt, I suspect that Torinus elided a bit. It's clear that there is a "single COLLECTOR" in the HW plan, that being the State.

I may be mistaken, but I think the State also designs the palette of offerings.

And, of course, the State will be the single remitter for the vast majority of dollars expended (well over 70%.)

Technically you are correct--insurers will be RE-'remitting' the State's remittances.

But that's a bit, ah, wonky.

October 30, 2007  
Blogger Seth Zlotocha said...

Sorry, Dad29. I'll try to be a little more superficial next time. We wouldn't want to be too wonky when discussing complex public policy. As I asked in the post, why let the nuances and complexity of health care models get in the way of good ol' rhetoric?

But, if you'll bear with me for a little more wonkiness, I can respond directly to your points.

The purpose of the single collector is to distribute risk and avoid adverse selection -- the state's payments to the health plans would be risk-adjusted based upon the plan's participant make-up -- though I'm amenable to a plan like Ron Wyden's that would have premium payments go directly from the individual to the health plans (risk-adjusting is just a little more tricky).

And the state does mandate a minimum amount of coverage, which is necessary to ensure that people aren't under-insured. After all, the under-insured can cost the rest of the system (i.e., the rest of the people in the system) money if the under-insured need care that goes beyond their coverage levels, just like the uninsured. Mandating minimum coverage also allows for community rating; if you don't have it, plans will target bare bones coverage options at the healthy, leaving the less healthy in expensive, non-risk adjusted pools.

And the state wouldn't be remitting on a per-incident basis. It would be providing monthly, risk-adjusted premium payments to health plans that would contract directly with providers on their own.

October 30, 2007  
Blogger Dad29 said...

In other words, the State will be 'capitating' to health plans--that is, the State is the "single payer."

But thanks for indirectly proving my point. Torinus has only XX words allowed to make his point, and your clarification of the post would have chewed up quite a few of them, eh?

October 30, 2007  
Blogger Seth Zlotocha said...

Healthy WI and the WHP both involve multiple payers in direct competition with each other for participants; the difference between that set-up and single payer systems in places like Canada and the UK is significant, as I explained in the post, not to mention pretty obvious to most observers.

But if you, Torinus, and others on the right want to re-define "single payer" to mean any centralized system -- regardless of the actual number of payers it involves and the significance of multiple payer vs. single payer structures -- I suppose you're free to do that.

And I'm pretty doubtful that Torinus just didn't have enough room to fully explain his point; I'd say it's pretty clear all he was after was creating a link in the minds of readers between Healthy WI and the popularized and largely demonized single payer systems in Canada and the UK.

Once again, as I asked in the post, why let the nuances and complexity of health care models get in the way of good ol' rhetoric?

October 30, 2007  
Blogger Jack Lohman said...

What Torinus does not say (and never says) is that many companies already pay 15% of wages and that will decrease to 10.5% under HW. He complains that it "could" go to 18% in 10 years, but has failed to say that it is going to even more than that if we do nothing.

John is a board member of WMC, and WMC sells health insurance and has many members who represent the insurance industry. He also pushes HSAs, which have been shown to increase price awareness but NOT decrease health care costs. HSAs do, however, offload employer costs to employees and over time employers will have had to increase wages as a result.

And for what? A system that deters care until the disease is more costly to treat or becomes untreatable? This cannot be good for a stable workforce.

October 31, 2007  

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