How the Primary Candidates Would Reform Healthcare

Neil Chesanow

Disclosures

May 25, 2016

In This Article

Bernie Sanders's Healthcare Proposals

Bernie Sanders's proposals for reforming healthcare are presented in broader brushstrokes than Clinton's are, and they are lighter on details.[7] On Sanders's website, more space is devoted to how he intends to fund his single-payer plan than on the plan itself, although these details, too, are sketchy.

To be fair, Clinton's proposals, as a continuation and tweaking of existing, complex policies under the ACA, intrinsically lend themselves to more detail, whereas the appeal of a single-payer plan is its sweeping simplicity.

"Healthcare must be recognized as a right, not a privilege," Sanders has declared.[7] "Every man, woman and child in our country should be able to access the healthcare they need regardless of their income. The only long-term solution to America's healthcare crisis is a single-payer national healthcare program."

How would Sanders achieve this vision?

Affordable Care Act

The Medicare-for-all system that Sanders envisions would replace the ACA. It would provide all Americans with comprehensive health services, including "inpatient to outpatient care; preventive to emergency care; primary care to specialty care, including long-term and palliative care; vision, hearing, and oral health care; mental health and substance abuse services; as well as prescription medications, medical equipment, supplies, diagnostics and treatments."[7]

In addition, "patients will be able to choose a healthcare provider without worrying about whether that provider is in-network and will be able to get the care they need without having to read any fine print or trying to figure out how they can afford the out-of-pocket costs."[7]

Private insurance would only be available to provide supplemental coverage.

Healthcare Costs

The federal government would set a fee schedule for all providers and hospitals, as the Centers for Medicare & Medicaid Services currently does for Medicare beneficiaries.[7] This would mean "no more copays, no more deductibles and no more fighting with insurance companies when [patients] fail to pay for charges."

Drug Prices

Sanders, like Clinton and Trump, would require the federal government to negotiate drug prices for Medicare.[6,7,8]

In the Sanders plan, generic drug makers would pay a rebate to Medicaid if their prices increase more than the rate of inflation.[7]

Medicare prescription discounts for low-income seniors would be restored.[7]

Brand-name drug makers would be prohibited from paying generic drug makers from delaying generic drugs from coming to market.[7]

Consumers, pharmacies, and wholesalers would be allowed to import drugs from licensed Canadian pharmacies.[7] A version of this proposal is also embraced by Clinton and Trump.[6,8]

As part of price transparency, Sanders would require pharmaceutical manufacturers to disclose the prices they charge for drugs overseas.[7]

Medicare

Sanders would expand the Medicare program to cover every American under a single-payer system.[7]

He would close the Medicare prescription drug coverage gap—the "donut hole"—by 2017, 3 years earlier than is scheduled under current law.[7]

Medicaid

Until a universal health plan is passed, Sanders would expand and improve the program for low-income families.[7]

Women's Health

Sanders would increase funding for Planned Parenthood; the Title X program, the only federal grant program providing low-income families and uninsured people with comprehensive family planning and related preventive health services at reduced or no cost; and access to birth control.[7,22,23]

Sanders, like Clinton, would ensure the availability of safe and legal abortions.[6,7]

How Would Doctors Be Affected?

Many doctors feel that Medicare reimbursements are already insufficient. How would their earnings be affected if all of their reimbursements came from Medicare?

They wouldn't be affected much at all, contends Dr Himmelstein, who has coauthored studies on the high administrative costs of the US healthcare system. It is the administrative costs of running a medical practice—in particular, dealing with insurers—that eat into doctors' earnings, he says. Reduce or eliminate them, and Medicare reimbursements would be much less of a cause for complaint.

"Doctors' fees might go down a little bit," Dr Himmelstein concedes, "but you'd be paying much less for your office overhead. The average doctor is paying something like 30% of his or her gross income for billing and administrative costs. If you cut that very substantially, you don't take an income cut if you have slightly lower fees. The Sanders program will actually get rid of a lot of those overhead costs, as Canadian doctors have experienced, and their take-home pay will remain roughly where it is today."

But many critics of Sanders' plan—liberal as well as conservative—assert that the savings from billing and administrative costs under a single-payer plan have been grossly overestimated.

"The cost question is particularly knotty, as Sanders assumes a 20 percent cut in [healthcare] spending averaged over 10 years, even as roughly 30 million currently uninsured people would gain coverage," Henry J. Aaron, a senior fellow in economic studies at the liberal-leaning Brookings Institution, points out in Newsweek.[24] "Those savings, even if actually realized, would start slowly, which means cuts of 30 percent or more by Year 10. Where would they come from? Savings from reduced red-tape associated with individual insurance would cover a small fraction of this target. The major source would have to be fewer services or reduced prices."

"Who would determine which of the services physicians regard as desirable—and patients have come to expect—are no longer needed?" Aaron wonders.[24] "How would those be achieved without massive bankruptcies among hospitals, which would follow such spending cuts? What would be the reaction to the prospect of drastic cuts in salaries of healthcare personnel—would we have a shortage of doctors and nurses? Would patients tolerate a reduction in services?"

Is Cutting Administrative Costs Enough?

Progressive columnist Ezra Klein, editor-in-chief of the political website Vox, has reached the same conclusion.

"The real way single-payer systems save money isn't through cutting administrative costs," Klein observes.[25] "It's through cutting reimbursements to doctors, hospitals, drug companies, and device companies. And Sanders gestures toward this truth in his plan, saying that 'the government will finally have the ability to stand up to drug companies and negotiate fair prices for the American people collectively.'

"But to get those savings, the government needs to be willing to say no when doctors, hospitals, drug companies, and device companies refuse to meet their prices, and that means the government needs to be willing to say no to people who want those treatments," Klein continues.[25] "If the government can't do that—if Sanders is going to stick to the spirit of 'no more fighting with insurance companies when they fail to pay for charges'—then he won't be able to control costs."

Health economics expert Kenneth Thorpe of Emory University, who was hired by the legislature of Sanders's home state, Vermont, to develop a single-payer proposal, and which the legislature subsequently decided that the state couldn't afford, has run Sanders's numbers and concluded that his campaign has underestimated the cost of his Medicare-for-all plan by about $1 trillion annually.[26] Covering that extra spending would require an income-based tax of a whopping 20%, not the already steep 8.4% proposed by Sanders, in addition to the taxes Americans already pay.

"Of course," notes Washington Post economics columnist Paul Samuelson, a conservative critic of the single-payer plan, "Sanders could control costs with cuts in reimbursement rates to doctors, hospitals and other providers.[27] (If government pays for most health care, it presumably would—as with Medicare—set reimbursements.) But this might trigger protests that patients would suffer. With time, stingy reimbursement might also lead to longer wait times as shortages of doctors, nurses and hospitals emerged."

On May 9, the nonpartisan Tax Policy Center issued a detailed analysis of Sanders's healthcare proposals, including his single-payer system, and found them profoundly flawed.[28,29] Sanders's assurance that he has "a plan to pay for every spending program he introduced to date"—not just single-payer but free college tuition and a range of new benefits for the poor—is extravagantly wrong, the center's analysts concluded. Even with the large tax increases that Sanders has proposed, his collective plans would add $21 trillion to the national debt over a decade, more than the roughly $19 trillion already owed.

Sanders's single-payer plan alone would cost $32 trillion over 10 years, more than twice the revenues that Sanders's taxes would raise, the analysts determined.[28] In response, Sanders countered that other countries have functioning single-payer systems.[29] True—but they are not as generous as Sanders's plan, in which virtually everything is covered. Making his system less expensive, the analysts concluded, would require deep cuts to physician and hospital reimbursements, which in turn would cause "supply constraints"; a shortage of providers willing to meet the demand for health services would make it harder to access care.

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