A Critique of Senator Bernie Sanders’ Medicare for All Act of 2017, S. 1804

By Amanda Buddenbaum

June 20, 2018

“We remain the only major country on earth that allows chief executives and stockholders in the health care industry to get incredibly rich, while tens of millions of people suffer because they can’t get the health care they need. This is not what the United States should be about.”[1]

So wrote Senator Bernie Sanders in his New York Times Op Ed of September 13, 2017, to announce the introduction of his Medicare for All Act. During his presidential campaign of 2016, Sanders had called for a Medicare for all, single payer system to solve the nation’s health care crisis. The thousands who attended his rallies and joined in his social media network responded enthusiastically. Sanders escalated the demand for single payer health care as he reiterated the message across the country.

On that same date, Senator Bernie Sanders, joined by 16 senators, introduced S. 1804, his long awaited Medicare for All Act of 2017.[2] At least four of the cosponsors are among the leading contenders for the Democratic presidential nomination, Senators Cory Booker, Elizabeth Warren, Kirsten Gillibrand, and Tammy Baldwin. Gillibrand wrote the public option section of S. 1804. [3]

In 2004 in the 108th Congress [4] and again in 2005 in the 109th Congress, Bernie Sanders, as a member of the House of Representatives, signed on as a cosponsor of HR 676, Expanded and Improved Medicare for All, the national single payer legislation sponsored by Congressman John Conyers, Jr. HR 676 is the model bill [5], based on the evidence-based proposal [6] of the Physicians for a National Health Program.

But in 2017, Senator Bernie Sanders did not introduce HR 676 into the senate. Why not? Companion bills in the House and Senate could greatly strengthen the single payer movement. S. 1804, the legislation that Senator Sanders did introduce, is not a coherent single payer plan and serves neither as a model for educating the public and politicians nor for building a movement.

If Sanders’ S.1804 were to become law, it would be a dismal failure.

Here’s why:

The profits remain in S. 1804

1804 retains the investor-owned, private, for-profit hospitals, nursing homes, dialysis centers, and other providers. Unlike HR 676, S. 1804 maintains these profiteers despite consistent data that for-profit institutions have higher death rates, higher costs, and lower quality.

Long Term Care is not included in S. 1804

Unlike HR 676, S. 1804 does not include long-term care. Sanders’ bill leaves long term care to the states and to Medicaid, assuring that this crucial part of care will continue to be means tested with a spend down of assets required prior to eligibility. People must become impoverished in order to get care. Working class families will have less to pass to the next generation.

Patients will remain vulnerable to the for-profit nursing homes that deliver inferior care. The coverage will also vary greatly from state to state. The wealth gap will widen and a crucial part of health care will remain outside the Medicare for All system.

1804 includes unworkable steps–the public option and a Medicare Buy-In

1804 does not arrive at a single payer Medicare for All system until four years out—and the problem is that the public option and Medicare Buy-In are roadblocks rather than pathways to single payer.

1804 inserts these supposedly incremental steps of buy-ins to Medicare by differing age groups and a public option to be sold in some of the marketplaces. For these four years all of the wasteful administrative costs of the for-profit insurance industry will be maintained thereby continuing the US status as the nation that pays about twice as much per capita as other industrialized countries. People will see neither relief from their massive costs nor improvement in their care, jeopardizing the entire plan’s ability to finally arrive at single payer four years later.

As Drs. Steffie Woolhandler and David Himmelstein put it: “A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.” [7]

Many Medicare Buy-ins have now been introduced into the House and Senate—all of them falsely claiming to be transitional to full scale Medicare for All.

Perhaps the worst disservice that S. 1804 does to the single payer effort is to bolster this assertion of a buy-in or public option as helpful or transitional. It is not. The private insurers remain in the driver’s seat as administrative costs will escalate. A single payer movement that adopts a public option or Medicare Buy-In will lose the public trust long before arriving at single payer thereby once again losing the opportunity for real reform.

1804 maintains some co-payments on drugs

Research shows that co-payments on care and drugs are a barrier to necessary care. HR 676 removes all co-payments and deductibles. S. 1804 removes many of these but keeps co-payments on some drugs.

No global budgeting for hospitals in S. 1804

1804 does not provide for global budgeting of hospitals. Unlike HR 676, the Sanders bill avoids this crucial cost-saving step thereby forgoing much of the savings envisioned in the single payer model. Gaining administrative efficiency is key to making single payer work. Single payer is based on using the savings from administrative waste to improve and expand care.

No separation of operational from construction funds

1804, unlike HR 676, does not provide for the separation of hospital operations from construction expenditures—a necessity in making savings, planning and proper allocation of funds possible. Planning expansion where needed is crucial to assuring that all of our communities have the services they need. The savings are key to paying for single payer.

1804 maintains value-based payments and Accountable Care Organizations (ACO’s)

1804 specifically maintains the detrimental “current and planned payment reforms” instituted under MACRA (Medicare Access and Chip Reauthorizations Act of 2015) and the Affordable Care Act (ACA) for paying physicians. These experimental value-based and performance-based payment plans have already shown that they cause those physicians who serve minorities and the poorest to suffer cuts in reimbursements.

These payment plans force physicians to spend massive time and administrative work to get paid for the simplest of procedures. They escalate physician burn out. Because experts have found no accurate way to measure value, it is a very bad idea to attempt to pay physicians based on it. The social factors interfere.

One example of such a pay for performance system already in effect is the lowering of payments to hospitals in the event that a patient returns to the hospital within 30 days. This rule was based on the faulty assumption that the hospital did something wrong if the patient was readmitted. We now learn through recent studies that the policy cut down on the readmissions, but raised the death rate of the patients.[8]

Value based payment plans in MACRA and the ACA and ACO’s should not be included in any single payer plan, are not in HR 676, and should be removed from S. 1804. They are bad policy. As Kip Sullivan says it: “The research on pay for performance in health care is now conclusive: It’s time to terminate these harmful bonus-and-penalty schemes.”[9]

A recent article published in Journal of the American Medical Association confirms that such pay schemes are harmful to physicians who serve poorer patients.[10]

The single payer movement must base its work on sound research and data rather than concoct a plan based on mistaken political desires. Why start with a bill so compromised that if enacted it will not work?

The impetus towards single payer is exploding. Even Max Baucus who, in 2009, had single payer advocates arrested in his Senate Finance Hearing, now asserts that he is a single payer supporter. Certainly Senator Bernie Sanders deserves much credit for galvanizing a popular movement around Medicare for All, but S. 1804 cannot serve as a foundation for bringing that movement to victory—not without major changes that would make it coherent with good health care policy.

Endnotes