AnAlternativeApproachtoProvidingUniversalCare

CarolynMcClanahan,M.D.,CFP

We are on the cusp of significant change in health care policy. Although the ACA was a workable
solution to reduce the number of uninsured in this country, the lack of bipartisan support and the
complexity of the legislation led to inefficient implementation and made the ACA an easy target in
electioncycles.Additionally,thecostreductionmeasuresincludedinthelegislationweresecondaryto
the goal of expanding coverage, resulting in continuing rise in the cost of care and complexity in
obtainingcoverage.

Proposals in providing health care coverage focus primarily on insurance schemes. What is often
forgotten in these proposals is that for insurance to work efficiently, it must follow the law of large
numbers. The purpose of insurance is to cover catastrophic or rare events. Health insurance in this
country is basically a reimbursement program and we pay an inordinately high cost to insurance
middlemenfortheprivilegeofthissystemwhenitcomestoprimarycareservices.

Mostillnessiscommonandchronic,isnotinsurableandcanbeeasilyhandledbyagoodprimarycare
workforce.Primarycareisallthatisneededbythemajorityofourpopulation.Byprovidingearlyand
easilyaccessiblecare,populationhealthcanbegreatlyimprovedandcostsreduceddownthelinefor
moreseriousillness.Astrongprimarycaresystemprovidesbettercareatsignificantlylowercostthan
systemswhicharenotprimarycarefocused.

In general, the Democratic Party prefers universal coverage through a single payer system. The
RepublicanPartywantsasystembasedonfreemarketprinciples.Thepoliticaldivisionsinthiscountry
arewidewhichcreatesdifficultiesinimplementationofapuresystembasedononesetofprinciples.
The Republicans in power would benefit from a bridge that guarantees a base of care acceptable to
membersoftheDemocraticPartywhenimplementingtheirpreferredinsurancescheme.

Community Health Centers (CHCs) have long had bipartisan support although their funding has been
haphazard and they are experiencing increased bureaucratic burdens that reduce efficiency. By
expanding and fully funding CHCs and allowing any citizen to receive their primary care free through
CHCs, the Republican Party can create a relatively inexpensive safety net that will allow them to
implementtheirfreemarketproposalsandprovidethemajorityofAmericanswiththecaretheyneed.
Likewise,theDemocraticPartycanusethissystemasabasetoprovidetheuniversalcaretheydesire.

ImportantBigPicturePoints
TheU.S.currentlyspends$9,990perpersonperyearonhealthcareinthiscountry.
o According to the OECD, 49.4% is paid for with public dollars $4,935 per person per
year.
o TheaverageOECDcountryspends$3,814perpersonperyearonhealthcareTOTAL
includingallpublicandprivatedollars.
 o Taxpayersalonepaymoreinthiscountryforhealthcarethanmostcountriespaytotal
forhealthcare.Showingtaxpayersasystemthatwillreducetaxpayercostandprovidea
baseofcareforeveryonewillincreasethechanceofbroadsupport.
Given our spending, we do not have the health to show for it. Overhead, waste, focus on
treating illness late instead of providing early care and prevention, and the lack of a strong
primarycaresystemarethereasonsforthisdisparity.
o TheUnitedStateshasagreatsystemifyouhavearareorseriousillnessortrauma,but
notifyouhavecommonchronicillnesssuchasdiabetes,hypertension,orasthma.
o Our fee for service system has disproportionately rewarded procedurally based
specialtycare.Theresultisthedecimationofprimarycareoverthepastfiftyyears.
o Spain introduced a strong primary care measure in the 1980s a community health
center within a 15 minute radius of everyone. This dramatically improved health care
measures.NowSpainscostofcareisabout$3,153perpersonperyeartotal.
o Bykeepingpeoplehealthywitheasyaccesstoprimaryandacutecare,wecanimprove
healthandproductivityofourworkforce.
o Astrongcommunityhealthsystemwillimproveourcountrysabilitytoquicklyrespond
toepidemicsandbioterroristevents.
o Community healthcentersareuniquelypositionedtohandlepublichealthissuessuch
astheopioidepidemic.
Primarycareisnotaninsurableevent,aseveryoneneedsbasichealthcare.Unlinkingprimary
carefromtheinsurancesystemcanimprovecareatareducedcostandsimultaneouslyreduce
thecostofinsuringcatastrophicillness.
Peopleinthiscountrywantchoice,andtheyfearasinglepayersystemwilltakeawaychoice.An
idealsystemfortheU.S.wouldprovideatleastbasiccareforeveryone,whileatthesametime
preservingchoicethiswillincreaseproductivity,reducefuturehealthcarespending,andallow
innovationinhealthcareforwhichtheU.S.isknown.
Theoverheadforhealthcaresystemsinothercountriesis5to15%oftotalhealthcarecosts.In
theUnitedStates,overheadis25%to30%.Ofthe$3.2trillionthatwespendonhealthcarein
thiscountry,$800to$960billionwenttooverhead.Ifwecouldcutouroverheadto15%,we
would save approximately $320 billion per year. By simplifying primary care access, overhead
canbereducedsignificantly.Thiswouldeasilypayforacomprehensiveprimarycareprogram.

Howwillcarebedelivered?
Inthisproposal,everyonecanreceivetheircarefreeataCHC,regardlessofincomeorotherinsurance
status.Therewillbenoeligibilitydeterminationspeoplecanjustwalkinthedoor.Althoughanyone
couldreceivecareataCHC,peoplecouldchoosetogettheircareelsewhereandpayforitdirectly.

CHCswillbepaiddirectlybythegovernmentbasedonpatientpopulation,notfeeforservice.
CHCswillberequiredtoprovideabroadyetwelldefinedrangeofservicesinapatientcentered
approach. This includes evening and weekend hours, urgent care, telemedicine, group visits,
mentalhealthcareandpharmacyservices.Centerswillbeclean,modern,andcomfortable.
Theelectronicmedicalrecordwillmovefromafocusonbillingtoafocusontellingthepatients
story, so the records will be easier to use and truly useful for patient care and research.
Physicianswillspendmoretimeonpatientcareandlessonchartingandadministrativework.
 Basic specialty care will be available at CHCs, but specialists within the system will be salary
based.Theywillserveasconsultantstoprimarycareprovidersandmaynotalwaysprovidecare
directly. One consultant can theoretically serve many patients through multiple community
healthcenters.
Patientswillstillberequiredtohavecatastrophichealthinsurancecoveragepurchasedprivately
or through Medicaid or Medicare eligibility. The policies will be guaranteed issue, but costs
shouldbesignificantlylowerbecausetheywillonlycovercarethatisnotavailablethroughthe
CHC.
Ifapatientdevelopsaseriousillnessandrequiresextensivespecialtycare,expensivetreatment,
orhospitalization,theywillaccesstheircatastrophicpolicy.
Catastrophicpolicieswillnotbemedicallyunderwritten,willbepricedbasedonareautilization
chargesonly,andwillprovideessentialbenefitsnotconsideredprimarycare.
Peoplecanbuymoreextensiveprivatecoveragethatmaybepricedbasedonmultiplefactors
such as age, benefits, and area utilization charges. These policies will not be medically
underwritten but will require a continuous coverage provision to be issued and only offered
duringanopenenrollmentperiod.

ByprovidingabaseofhealthcarethroughCHCs,manychoicesofcarewillbeavailable:

ReceivebasecarethroughaCHCandbuyprivatecatastrophicinsurance.
ThosewhodonotwishtoreceivecarethroughaCHCcanpayforprimarycareoutofpocket
and buy private catastrophic insurance. Individuals can also choose to have some services
providedbytheCHCandpayforcareoutofpocketwhentheydesiretoseeaprivateprovider.
HealthsavingsaccountscanbeusedtopayforprimarycarenotaccessedthroughCHCs.
LowincomeindividualscanreceivecarethroughaCHCandMedicaidforcatastrophiccare.
The elderly would receive care through CHCs or pay for primary care out of pocket. Seniors
would no longer be required to pay for part B, part D, or Medigap policies. If they are
dissatisfiedwithCHCservices,theycanusemoneypreviouslydedicatedtopremiumstopayfor
primarycaredirectly.CatastrophiccoveragewillbeprovidedbyMedicare.Iftheyareunhappy
withthecoverageprovidedbyMedicare,theycanbuyadditionalcoverageontheopenmarket.
Whetherinsuranceissoldthroughemployersoralargeindividualmarketisapoliticaldecision.
However,taxtreatmentofpoliciesshouldbecongruent.Planswillhaveaflooronwhatistobe
provided. Deductibles can vary which would factor into policy prices. Richer plans with more
benefitsandlowerdeductiblescanbepurchasedatahighercost.Costsharingofthedeductible
canbeofferedforlowerincomeindividuals.

CosttoProvideBasicPrimaryCaretoEveryone
Therearecurrently323millionpeopleintheUnitedStatesspreadacross124.6millionhouseholds.

Community Health Centers provide primary health care at a cost of $516 per patient per year for
medical service and $439 per patient per year for dental services. They currently serve 25 million
patientsbuthavethestructuralcapacitytoserve50millionpatients.Manycentersalsoprovidedental,
mental health care, vision and pharmacy services. The average cost of care including these other
servicesis$763perpatientperyear.However,thisnumberdoesnottakeintoaccountthatonlytwo
thirds of centers provide comprehensive care including mental health and dental, so the cost will
actuallybehighertoprovidealltheseservices.

CHCsaremanagedmorelikeprivatepractices,andbecausetheytakeMedicaid,Medicare,andprivate
insurance, they also have the headache of increased costs due to inefficient billing practices. By
removingCHCsfromtraditionalpayermodels,costscouldfurtherbereduced.Inprivatepractice,billing
isresponsibleforapproximately14%ofoverhead.

Forpurposesofthisillustration,wewilluseayearlycostof$955perpatientperyear.Thisisatotalof
medicalanddentalcostwhichwillmitigatetheeffectoftheaveragetotalcostduetocentersthatdo
notprovidetheadditionalservices.

Costsifall323millionpeopleinthiscountryfullyutilizeCHCsforhealthanddentalcare:$308.5
billionperyear.
Costs if only 50% of the population utilize CHCs for health and dental care: $154.2 billion per
year.
Coststoprovideonlymedicalcaretotheentirepopulation:$166.7billionperyear.
Coststoprovidemedicalcareonlyto50%ofthepopulation:$83.3billionperyear.

Therewillbeexpensesinbuildinginfrastructureandrebuildingtheprimarycareworkforce.However,
thisisafractionofthecostofthe$1.5trilliontaxpayersputintothehealthcaresystemtoday.

RevenueSources
Theneedforpremiumtaxcreditswillgoaway.Itisestimatedthefederalgovernmentwillpay
$27billionincreditsand$7billioninsubsidiesfor2016.Costsharingsubsidiesareexpectedto
remainapproximatelythesameforlowincomeindividualsbutthepremiumtaxcreditswillno
longerbeapplicablesecondarytosignificantreductionsinpolicypricing.
$250billionperyearintaxrevenueislostbytaxcreditsforemployerbasedcoverage.Because
insurance costs will decrease significantly, the revenue lost by this tax credit will decrease
proportionately.Alternatively,thegovernmentcouldtotallyremovehealthinsurancepremiums
asataxfavoreditemorremovemedicalexpensesasa1040Adeduction.
Approximately11%ofMedicarepaymentsareforphysicianservicesandanother27%arefor
MedicareAdvantagepaymentstotaling$240billionperyear.Partofthispaymentisforprimary
careservicesandcanbedivertedtoCHCservices.Thesenumbersarefactoredafteroffsetting
receiptstoMedicare.
Thefederalgovernmentcovers62.8%ofMedicaidcostswhichequatesto$334billionperyear.
Therewillbesignificantreductionofthe$98billionpaidforacutecareservicesand$142billion
paidformanagedcareplanssincethesewillnolongercoverprimarycare.
Because the cost of insurance will be significantly decreased, fewer people will object to the
individual mandate which will support guaranteed issued policies. Currently, Medicaid pays
$18.5 billion to cover DSH payments to safety net hospitals to cover uncompensated care.
Thesepaymentswillnolongerberequired.

SampleCaseStudies
A 33 year old develops a sore throat. Because she has easy and early access to a community health
center, it is quickly identified as strep throat and treated. She avoids the potential complications of a
peritonsillarabscesswhichwouldrequirehospitalizationfordrainage.

A 53 year old develops chest pain and goes to the emergency department. He is admitted and it is
discovered his chest pain is gastrointestinal in origin. This admission is covered by his catastrophic
policy.Hisprimarycarephysicianatthecommunityhealthcenterisnotifiedoftheadmissionandkept
in the loop of his patients status. The patient is referred back to his community health center for
continuedtreatmentofhisgastrointestinaldisorder.

A 68 year old has multiple medical problems including chronic renal failure requiring dialysis, heart
disease and diabetes that is difficult to control. He receives the majority of his care through a
communityhealthcenter.Withouttheneedforreferral,heregularlyreceivesdialysissupervisedbya
nephrologist. His nephrology care is paid through Medicare. The community health center doctor
regularlyconsultswiththecardiologistandendocrinologisttomanagethepatientscomorbidproblems.

A 52 year with multiple chronic medical problems old does not want to receive care from the
community health center. She attends a minute clinic for minor acute illnesses but prefers to see a
cardiologist directly for management of her hypertension and heart disease, an endocrinologist for
managementofherdiabetes,andapodiatristforherdiabeticneuropathy.Becausetheseservicesare
consideredprimarycare,theycanbeexcludedfromcatastrophicpolicies.However,shecouldstillhave
theoptiontobuyaninsurancepolicyontheopenmarketthatcoverstheseitemsalthoughitwilllikely
beveryexpensive.

BarrierstoChange
This proposal will likely be opposed by providers of specialty care and require significant change in
operationofinsuranceproviders,hospitals,andadministrativeservices.

Thiswillalsorequiresignificantchangeincaredeliveryforcommunityhealthcentersandprimarycare
providers.Theywillneedtoprovidetopnotchserviceandcaretoregaintrustintheircare.Theywould
alsoneedtoofferbroadservicestoimprovepopulationhealth.

There will be an increased need for primary care providers. Incentives for entering primary care,
reduction of pay discrepancies between primary care and specialty providers, use of technology,
community health workers, and telemedicine, and requirements for training in community health
centerscanalleviatethehumanresourceshortfall.

This proposal has many political barriers as the majority of people are cemented in Democratic or
Republicanideologywhichfocusesalmostexclusivelyonpayermodels.Eisenhowerbuiltthehighways
andKennedygotustothemoon.Apoliticianwithavisiontolookoutsidetheusualdiscussionisneeded
tomovethisforward.