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Transitional job loss is an essential feature of single payer Medicare for All

May 17, 2019

Topics: Quote of the Day

Reform has a cost. But the point of a health care system is to treat patients, not to buttress the economy.

By Elisabeth Rosenthal
The New York Times, May 16, 2019

As calls for radical health reform grow louder, many on the right, in the center and in the health care industry are arguing that proposals like “Medicare for all” would cause economic ruin, decimating a sector that represents nearly 20 percent of our economy.

It’s true: Any significant reform would require major realignment of the health care sector, which is now the biggest employer in at least a dozen states. Most hospitals and specialists would probably lose money. Some, like the middlemen who negotiate drug prices, could be eliminated. That would mean job losses in the millions.

Though it will be economically painful, the point is to streamline for patients a Kafka-esque health care system that makes money for industry through irrational practices. After all, shouldn’t the primary goal of a health care system be delivering efficient care at a reasonable price, not rewarding shareholders or buttressing the economy?

It’s not surprising that those involved in the business of medicine have joined forces in a lobbying and media campaign, the Partnership for America’s Health Care Future, to ward off transformational reform, particularly Medicare for all. But fed-up voters seem ready to upend an industry that saps their finances, wastes their time and doesn’t deliver particularly good care. Few people would mourn the end of $35 million annual compensation packages for insurance executives or the downsizing of companies that have raised insulin prices to 10 times what they are in Canada.

The first casualties of a Medicare for all plan, said Kevin Schulman, a physician-economist at Stanford, would be the “intermediaries that add to cost, not quality.” For example, the armies of administrators, coders, billers and claims negotiators who make good middle-class salaries and have often spent years in school learning these skills. There would be far less need for drug and device sales representatives who ply their trade office to office and hospital to hospital in a single-payer system, or one in which prices are set at a national level.

“Yes, these are painful transitions,” said Dr. (Katherine) Baicker, who is now the dean of the University of Chicago’s Harris School of Public Policy. “But the answer is not to freeze the sectors where we are for all time. When agriculture improved and became more productive, no one said everyone had to stay farmers.”



By Don McCanne, M.D.

Jobs. Jobs for the sake of jobs.

Why don’t we assign a tally taker to each household throughout the nation. You know, tallying things like number of showers taken, washing machine loads, toilet flushes, or number of electronic devices with average hours of usage or duration lights are left on, or hours that natural gas is used for the furnaces or the water heaters. You could create an industry that does that and relieve the utility companies of the need to maintain the automated devices that currently record usage of utilities. Think of all the jobs that could be created, along with the for-profit service corporations that manage them. Furthermore, that industry, through merger and acquisition, could create great opportunities on Wall Street to enrich passive investors and enhance the income and wealth of the corporate executives and the hedge fund managers. Of course creating a trillion dollar plus industry like that would have to be paid for, and, no matter how you do that, it would ultimately come out of the budgets of the households. But talk about creating a job market.

Of course, this is utterly ridiculous. This would be a middleman industry that provides none of the utilities being measured and would be providing virtually no value for whatever services it would be performing. But isn’t this much like the health insurance industry that is breaking down the health care “utility” into discrete services and products that they tally while providing no health care services and no value. In fact both concepts – middlemen utility tally takers and middlemen insurance tally takers are or would be providing a negative value because of their very high costs while delivering neither utilities nor health care.

Yet those opposed to health care reform that would greatly reduce this profound administrative waste plead that we cannot make that transformation because we need to preserve these jobs. Sorry. As the title of Elisabeth Rosenthal’s article states, “Medicare for All could kill two million jobs, and that’s O.K.” Single payer proposals do include the costs of job transitions, but that is only a one-time expense. From that point on, the cost curve is reduced to a lower trajectory, making health care affordable for all of us forevermore. We can’t afford not to do it.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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