Northfield Hospital and Clinics officials estimate adopting a 2019 federal Medicare for All proposal would have cost the organization more than $50 million last year and nearly eliminate reserve funds based on current program reimbursement rates.
In presenting the estimate to the hospital’s Board of Directors on Thursday, NH+C President/CEO Steve Underdahl said though he supports the concept of universal health care, he doesn’t believe there is enough political support to ensure the proposal will pass — especially with the partisanship surrounding what he deems to be an easy choice to wear masks to combat the spread of COVID-19.
Underdahl acknowledged that although Medicare for All advocates would say the reimbursement rate would change if such a plan is passed, the Minnesota Hospital Association doesn’t support the bill’s methodology.
Health Care for All Minnesota Northfield Chapter member Joan Janusz in February requested the City Council pass a resolution of support for the proposal. At the time, Northfield city councilors suggested the hospital provide feedback on the impact Medicare for All would have. However, Underdahl expressed uncertainty over whether it is the role of the Board of Directors to make such recommendations to the council.
Despite his concern for taking a position that could align the board with a political lobbying group advocating for a proposal with little chance of passing, Underdahl said he doesn’t believe the current U.S. health care system will be sustainable forever because of its social and financial inequities.
In response to Underdahl’s comment, Joan’s husband, fellow Medicare for All support Steve Janusz, said politicians who support the initiative must be elected to prevent unnecessary politicization of the health care system.He told the board he has spoken with representatives from the Health Care for All Northfield chapter a couple times over the phone and plans to continue the dialogue.
Hospital Board member Sarah Carlsen said she appreciated Underdahl being open to the conversation with the advocacy group, adding she believes it is important for the hospital to weigh into the proposal because of the organization’s related expertise.
Fellow Board member Lynn Clayton also said he supported Underdahl’s position.
A complicated issue
The crux of the argument Medicare For All advocates make involves the significant number of bankruptcies caused by the high cost of health care in the U.S. They hope, despite the admittedly high cost to implement the initiative, that it will lead to long-term cost savings due to the elimination of premiums, copays and deductibles. To Janusz, a greater concern is what she said is the 34% waste “in our profit-driven health care system.”
The Medicare for All Act of 2019 was intended to provide comprehensive health care coverage including all primary care, hospital and outpatient services, prescription drugs, dental, vision and other care.
Such proposed legislation has been introduced and championed by the progressive wing of the Democratic party but currently has little chance of passing due to opposition from the GOP-controlled Senate and more moderate Democrats.
Medicare for All has proven to be a delicate issue nationally as advocates grapple with concerns that a new government-run system won’t provide the same quality of coverage as private insurance — and would be prohibitively expensive. It has been estimated to cost $40 trillion.
Janusz, however, questioned whether Medicare for All would cost that much, citing a Lancet study from Yale that determined hospitals would save $59 billion in the U.S. To her, the savings would come because each hospital would receive funds based on their previous year’s outlay of money, meaning there would no longer by reimbursement for services. The budget would be review quarterly. If circumstances changed, more funding would be allocated. She added everyone would have a payment source and there would be “greatly reduced overhead” costs due to a streamlining of administration.
“Medicare for All will provide improved quality,” Janusz said. “This is government funded and privately delivered.”
She added the current reimbursement system would not exist under universal health care. Instead, each hospital would have a budget based on need.
“There is a new approach with the bill to stabilize the system and contain costs,” Janusz said.
According to the American Hospital Association — an organization that includes 5,000 member hospitals, health systems and other health care organizations — the plan “would upend a system that is working for the vast majority of Americans, and throw into chaos one of the largest sectors of the U.S. economy,” due to the historically low reimbursement rate Medicare offers. According to the AHA, a recent study found that a government-run, Medicare-like health plan on the individual exchange could cut nearly $800 billion to hospitals.
Janusz, however, disagreed.
“Our current system is not working for the vast majority of Americans,” she said. “Increased premiums, copays, deductibles and the COVID-19 pandemic shows the employer-based health care insurance model is no longer the answer.”
Instead, the AHA recommended states expand Medicaid in non-expansion states, provide federal subsidies for more lower- and middle-income individuals and families, reinstitute funding for cost-sharing subsidies and reinsurance mechanism and engage in robust enrollment efforts to connect people to health care coverage.
To Medicare for All supporter Steve Janusz, a lot of the pushback for the proposal is from large hospitals that are making substantial profits. To him, those groups see that the employer-based system will be done away with in favor of a flat percentage cost, meaning those large groups won’t make as much of a profit.
Steve said the nation’s health care system has become a money-making entity over the last 40-50 years, resulting in health care organizations forming chains, paying high salaries and being more complex than needed.