This is a 7-part series. Links here: Part 1, Part 3, Part 4, Part 5, Part 6, Part 7.
Before I get into the M4A Act, I want to update my assessment of how providers will fare with this whole coronavirus pandemic. I said they will love it because hospital beds will be full. I am aware of many more factors now that will be fighting against that increase in revenue from COVID-19 patients . . .
- Most surgeries have been canceled, so ORs are sitting empty
- Most outpatient clinics are closed
- People are generally doing fewer things that lead to hospitalizations
- Many caregivers are dependent on a continued stream of income, so hospital systems are trying to help them out by either continuing to pay them the same for less work (a personal example: as a hospitalist at a hospital where we have very few COVID-19 positive patients, I’m seeing about half the patients I usually do, but my pay per shift remains the same; we are feeling like it is the calm before the storm though, and I may make up for that by seeing many more patients than usual a few weeks from now) or are re-deploying them
- Hospital systems are organizing testing sites and doing informational campaigns, all of which cost a lot of money too without much coming back
This does not mean providers are guaranteed to suffer a profitability loss this year compared to the counterfactual no-COVID-19 world. It depends on how many extra patients they end up getting from the pandemic, and the time course of which those patients are spread. Plus, a decreased demand for services now means there will be a lot of pent-up demand that will still be serviced after things calm down a bit. My best guess is that places that get hit hard with a high prevalence of COVID-19, especially early on, will do ok. But others, especially those still waiting for the surge of COVID-19 patients, will likely end up losing money from all this. I’ll be interested to look back a year or two from now and see how profitability turns out.
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Now, back to the M4A Act. In Part 1, I said there are 11 titles, and I only looked at title 1. Let’s continue!
Title II
This title starts out by listing the benefits everyone gets under M4A. I could sum it up by saying it will cover . . . everything. Notable inclusions: psychiatric treatment, outpatient prescriptions, long-term care (home and community based), EMS, transportation for low-income or disable individuals, oral health, audiology, vision, and even alternative/complementary medicine (if it has evidence to suggest it’s useful). States can add more services if they want to cover additional things.
This does not talk about how they will decide whether a boderline more effective treatment that costs way more than the standard of care will be covered. But it does specifically talk about “experimental” treatments, which are defined as anything that is not consistent with accepted treatment guidelines. Experimental treatments may or may not be covered, it just depends on the Secretary, who will make a nationwide coverage determination for each one that is being considered.
This title also reviews cost sharing. There will be no cost sharing (no premiums, no copays, no coinsurance, no balance billing, etc.) except for a maximum of $200 out of pocket per individual per year, which would only take effect if someone is choosing a brand-name medication when there is a generic alternative available.
Finally, this title gives states the freedom to set additional standards of their own for benefits or eligibility or minimum provider standards, but it’s clear in stating that none of those state standards can result in restricted eligibility or benefits or access. I guess this is their way of allowing states to be even more generous in coverage or benefits, or to enact different provider standards as they see fit.
I’m planning an overview post at the end of this series that recaps all the key points, and I’ll talk more about cost sharing issues at that time, but this is the biggest area that will make or break a M4A system, and Sanders and Co. are getting it completely wrong. I understand they want to ensure people can afford treatment (I do, too!), and I understand they want it to be simple (I do, too!), but this kind of no-cost-sharing policy is going to prevent healthcare providers from innovating in ways that improve care quality and lower care costs. Which means it’s doing the opposite of its intended effect. I’ve described before the details of why appropriate cost-sharing policies in single-payer systems are so crucially important.
Continue to Part 3.
Clear Thinking on Healthcare 