Many people responded to the rollout of Senate liberals’ ambitious single-payer health care plan with the question of how they intend to pay for it. That’s an issue, obviously, but the question turns out to be impossible to answer because the bill’s architects don’t have a clear sense of what it would cost.
And that, in turn, as Adrianna McIntyre points out on Twitter, is in large part because the significant financial decisions involved in running the health care system are all punted over to the executive branch.
First, the secretary of Health and Human Services is supposed to set an annual nationwide spending target:
Second, HHS is also supposed to draw up a list of prices that providers can be paid for services rendered — presumably striking a balance between the desire to keep the system affordable and the desire to keep hospitals open and doctors working.
It’s normal in the United States (though not in some foreign countries) for important acts of Congress to be vague. Critical pieces of legislation like the Clean Air Act and the Sherman Anti-Trust Act are essentially sweeping directives telling the executive branch to achieve certain policy aims (prevent harmful air pollution, avoid anticompetitive business behavior) without saying much about how exactly things are supposed to work.
But given that this legislation is largely being sponsored by a group of people prominently pondering a 2020 presidential campaign, it would be useful to hear from them over the next few years on how they would want to use the kind of executive discretion that the Sanders bill would allow.
These two decisions determine what things will cost
The selection of reimbursement rates is an important decision, but it substantially mimics a process that already exists for Medicare. Setting a global health care budget, by contrast, would be a huge conceptual change in how American health care works — though it’s a system used in many foreign countries.
Right now the way Medicare works is that only certain people are eligible for coverage and only certain treatments are eligible for coverage and only certain payment rates are provided and thus only certain providers accept it. But given those restrictions, Medicare will pay the going rate for however many services the eligible population happens to pile up in any given year. Internationally, a more typical approach is to do something like what Sanders is proposing — set a budget and don’t spend more than was budgeted for.
The payment rates then need to be set low enough to meet the population’s anticipated health needs for the year within the constraints of the global budget.
But if the payment rates are too low, then providers will close, retire, or opt-out of the public system entirely, leading to shortages and waiting lists. The specific Sanders mechanism for making these decisions — punting it all to the HHS Secretary rather than, as in John Conyers’s single-payer bill, establishing some kind of new board to do it — is a little bit at odds with international practice, but in its fundamental dynamics this is similar to how Canada’s single-payer system works.
There are some big philosophical questions to answer
So what should those payment rates look like, and how large should the global budget be? It would obviously be unrealistic to expect an individual senator to be able to work out the appropriate answers to these questions in full detail. The executive branch legitimately has dramatically more technical capacity to ask the relevant questions and consider the relevant options.
But as Cory Booker, Elizabeth Warren, Kamala Harris, Kristen Gillibrand, and Sanders himself ponder their potential presidential campaigns — and as, hopefully, Democratic-aligned think tanks begin to engage with grassroots single-payer enthusiasm — it’s worth trying to think in at least a few broad strokes about how this discretion should be used. Or at least broadly speaking about what the goal should be.
Is the hope to force reimbursement rates across the board down to Medicare levels? Even lower, more in line with what the Canadian government pays? To increase the total volume of health care services received by the American people, or keep it similar and redistribute it somehow?
Punting hard questions over to the executive branch is a time-honored legislative tradition in the United States and there’s nothing wrong with it. But the people who want to run the executive branch — and especially Sanders who wrote the bill — should, at some point in the near future, start thinking about how they want to answer these questions if they get the chance.