Dr. Michael Kitchell: Abandoning Obamacare?

As the Democratic presidential candidates debate more about whether to improve Obamacare or to abandon it and switch to "Medicare for All" (MFA), there have been some statements that warrant further explanation.

Both Bernie Sanders and Elizabeth Warren want to end Obamacare and ban all private insurance, going to a government single-payer, while most of the other candidates want to keep Obamacare (and coverage with private insurance) while giving Americans a "public option" that didn't get included in the original Obamacare law.

Both Sanders and Warren decry profit-based private insurers, who Warren says make $23 billion in profit yearly. They also believe our country's high costs of health care would be much lower if we didn't have private insurers.

Sanders makes the point there are many administrative costs of private insurers, such as paperwork and hassles of prior authorizations to get permission to do expensive procedures or prescribe expensive drugs or medical equipment. Sanders also wants to do away with all co-pays, deductibles and out-of-pocket payments for Americans, except for a $200 total deductible amount of payment per year for medications.

The candidates who prefer to keep Obamacare, such as Joe Biden and Pete Buttigieg, would not ban private insurers, but let Americans obtain insurance through Obamacare with less out-of-pocket costs and also offer an optional "public" plan if someone preferred government-run plans.

Amy Klobuchar also wants to improve Obamacare, and her public option would be a nonprofit insurance (non-government-run) plan. Many of Obamacare's nonprofit plans, including one in Iowa called "Cooportunity," went bankrupt after the first year when Congressional Republicans blocked funding for them.

The claim total health care costs would go down if all insurance companies were banned with a MFA single-payer plan doesn't have much support from health care economists.

A recent study by the independent Rand Corporation showed that some costs would go down, such as drug costs by $39 billion, and administrative costs by $158 billion, but overall costs would go up with MFA -- not down.

The reason costs would go up under Sanders' and Warren's proposals would be greater spending on home care and higher rates of utilization of healthcare.

Let's look at some other information about health care costs, too. The $23 billion profit by private insurers in health care is small (0.66 percent) compared to the total cost of health care administered by both public and private entities at $3.5 trillion per year.

The other issue that private insurers are criticized by patients -- and given credit by economists -- is for their role in holding down waste or low-value healthcare. Traditional Medicare does very little care management or verification of the legitimacy of Medicare payments, and most health care economists agree that in the U.S., about 20 percent to 30 percent of our health care costs are wasted on ineffective or unnecessary care.

For example, when a patient with low back pain, but no abnormal signs on physical exam, wants that $800 to $1,000 MRI scan, the insurance company will get criticized for denying it. Medical research has shown there is little or no value to doing lower-back scans without abnormal findings.

Not every patient with a headache needs a brain scan, either, and the insurance company will want the doctor to go through prior authorization screening process to be sure the scan is indicated.

Even Bernie Sanders' proposal for the government to pay for eyeglasses in his MFA plan would be a problem. Does everyone get "designer" glasses, and how many pairs does each person get per year?

A motorized scooter is a common request, even from many people who need to walk, not ride, to improve their health. What about people who don't want a generic drug, and demand the more expensive brand name drug -- will the MFA plan have regulations, rules and pre-authorizations? (Yes)

There are many more examples of how Americans over-utilize health care even when it is detrimental to their health, and this why health economists recommend having some "skin-in-the-game."

There was a recent study of patients who were being treated with $80,000 multiple sclerosis drugs, and one-third of the patients were not taking the drugs as prescribed, even when they were paid for. We now have a new drug that costs $2 million, and many examples of $300,000 per year drugs.

Other countries have ways to reduce costs, including denials (rationing) and delays, and although the U.S. has some unethical insurance companies, to think that a government-run health plan would not have many rules and regulations is simply dreaming.

Most of the candidates (John Delaney and Klobuchar are exceptions) have a conspicuous lack of input from healthcare providers in their MFA plans. In 2009-10, President Obama fostered extensive involvement and input from not only health care providers and economists, he invited Republicans to write many of the parts of Obamacare which remain law today -- even though Republicans generally don't support it.

Both the American Hospital Association and the American Medical Association are part of a large coalition of health care-related organizations (called the Partnership for America's Healthcare Future) that support Obamacare, but are opposed to a single-payer plan.

They also warn that even with a Medicare public option there could be significant disruptions to America's healthcare. A study by Navigant Consulting found that 55 percent of rural hospitals (more than 1,000 across the country) would be at risk of closure with MFA and a public option, unless Medicare payment rates were increased by 40 percent to 60 percent over the current rates.

Medicare simply doesn't pay enough for most hospitals to stay open with the same services. Private insurers pay much more, often double what Medicare pays for services.

A nonprofit addition and improvement in Obamacare would be far less costly and disruptive than a Medicare for All plan, which may not be accepted by moderate and independent voters -- especially after they see how much more expensive MFA plans would be.

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