Medicare for All

Under Warren's Medicare for All Plan, Many Hospitals Would Be Forced to Close—Especially in Poor, Rural Areas

By paying dramatically lower rates, the single-payer plan would lead to a contraction in health care services.

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Sen. Elizabeth Warren (D–Mass.) said during the first Democratic Party debate last night that the reason we don't already have a Medicare for All plan in place is that politicians "just won't fight for it."

More often than not, when a politician declares that the only thing preventing some particular plan from going into place is political will, it's a sign that there are uncomfortable practical questions they would like to paper over. So it was when Warren explained her support for a single-payer health care in which the government takes over nearly all of the country's health care financing. 

The discussion began when the entire stage was asked who, by a show of hands, would eliminate private insurance. Warren was one of just two candidates, along with New York Mayor Bill de Blasio, to raise her hand.

She then went on to defend her position, saying "I'm with Bernie on Medicare for All." One of the top reasons for bankruptcy, she said, was medical bills. And insurers, she argued, have an incentive to keep as much money as possible rather than pay for better care. 

"That leaves families with rising premiums, rising copays, and fighting with insurance companies to try to get the health care that their doctors say that they and their children need. Medicare for All solves that problem. And I understand. There are a lot of politicians who say, oh, it's just not possible, we just can't do it, have a lot of political reasons for this. What they're really telling you is they just won't fight for it."

The core problem, in Warren's view, is politicians who won't fight for ordinary people. Everything else is just politics. That's a convenient and politically easy response, but it's not a particularly good one. Warren's blithe dismissal of the challenges of uprooting the nation's health care system and starting over with an entirely new system of government financing allows her to portray herself as a populist champion while ignoring the practical problems that single-payer poses. 

Like, for example, how hospitals will be paid in a one-size-fits-all system that pays Medicare rates for every service. 

As former Maryland Rep. John Delaney pointed out just a few moments later, Warren's plan—which is to say Bernie Sanders' plan—would probably result in a sharp contraction in the number of hospitals.

"If you go to every hospital in this country and you ask them one question," Delaney said, "which is how would it have been for you last year if every one of your bills were paid at the Medicare rate? Every single hospital administrator said they would close. And the Medicare for All bill requires payments to stay at current Medicare rates. So to some extent, we're supporting a bill that will have every hospital closing." 

It's probably an overstatement to say that every single hospital would close. But Delaney is right that under a single-payer plan paying current Medicare rates, some, and perhaps lots, almost certainly would. And many of the hospitals that stayed open would likely shed staff and services.

Medicare pays far, far less than private rates, and the higher rates from private payers is part of what keeps hospitals afloat financially. One estimate found that providers would take something like a 40 percent pay cut under the Sanders plan. And that cut would take place very quickly, as the Sanders plan calls for the elimination of most private insurance in just four years. 

You can believe that American health care costs too much (it does) and that the country spends far too much on health care overall (probably) and still recognize that, in addition to the sheer bureaucratic disruption of switching to a new, government-run system of financing, reducing provider payments so sharply in such a short period of time would place a huge financial strain on the system, resulting in hospitals shutting their doors and jettisoning staff. 

The nation's hospitals would lose somewhere on the order of $150 billion a year, according to an article in The Journal of the American Medical Association. Which would mean that someone would have to be paid less, and it wouldn't just be insurance companies: It would be nurses and doctors, therapists and billing specialists, the entire universe of middle-class jobs that America's health care industry supports. Even some physicians who support single-payer have suggested they are worried about the possibility that hospitals would lose money. "The line here can't be and shouldn't be soak the hospitals," the president of Physicians for a National Health Program recently told The New York Times

Cuts to hospital payments, meanwhile, would be hardest to bear for rural hospitals that serve poorer populations. Many of these hospitals are, for obvious reasons, already struggling financially, and under a system of all Medicare rates, they would likely be first to close, leaving local residents with fewer health care options. Warren styles herself a populist champion of the working class, but it is not much of a stretch to say she supports a plan that would make health care worse and less accessible for the nation's rural poor. 

One response to this problem might be to have Medicare for All pay providers more than today's Medicare does. That is roughly what the state of Maryland has done with its all-payer rate setting program, a system of price controls that equalizes the differential between Medicare rates and private rates. As a result, the state's Medicare rates are far higher than is typical, and the state's hospitals end up with about $2 billion extra in Medicare funds each year. But doing so would eliminate the "savings" in terms of total national health spending that single-payer supporters like to tout. 

You can avoid these issues on the campaign trail, insisting that they can be solved with political courage alone. But once in office, these are the challenges and trade-offs that any single-payer plan will have to account for. Elizabeth Warren has plans for a lot of things, but by insisting that these are all fake problems that can be solved by more political fight, what she is inadvertently revealing is that so far, at least, she doesn't have a plan for this. 

NEXT: Post-Debate Shade Showcases Serious Policy Rifts Among 2020 Democratic Candidates

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  1. “”the reason we don’t already have a Medicare for All plan in place is that politicians “just won’t fight for it.” “”

    Ok Warren, tell us how much our taxes will increase to pay for it.
    That’s why politicians just won’t fight for it. The popularity of it drops a lot when you throw in tax increases.

  2. But wouldn’t the businesses gain new clients who now are not seeking medical care because of financial restraints? It’s too expensive and it would bankrupt the medical businesses by giving them more business. I don’t believe it.

    1. So they’ll lose money on every patient but make it up on volume?

      1. Not only that. Older providers will retire opposed to take pay cuts. So more people wanting service with less people to provider the service. Hello wait times and death panels.

        1. Also note female doctor’s tend to work fewer hours and drop out of the workforce earlier due to lifestyle choices, but we need to make sure there are more of them taking up an extremely limited number of slots on med school. #equality #believeher

          1. A lot of docs are working less because it is just not worth it. With lower reimbursement why kill yourself?

            Better to take employment or something with better hours, more time off, and fewer headaches. Sure less income but it doesn’t buy happiness. Most docs just want to practice medicine. They don’t care about all the business stuff.

            Maybe at one time there were quotas for women but not any more. There are just more women going into it. Women outnumber men in colleges and are fully capable of learning what you need to score on the MCAT and get into med school.

            And don’t let the pony tail fool you. They compete and work just fine.

      2. I don’t know. People should take better care of themselves. Hopefully innovation reduces the costs. The business of insurance is basically superfluous under a system where coverage is guaranteed.

        1. “” a system where coverage is guaranteed.”‘

          Coverage is never guaranteed. With commercial insurance you may need to get an authorization from them to get the procedure paid. Government based health care often requires you to get permission before the procedure is covered by them.

          People that hate corporations but love government prefer the latter.

          “”Hopefully innovation reduces the costs.”‘

          Very mixed bag. Innovation often requires more cost. EMRs for example. My EMR budget would pay for two MDs. A paper chart did not come with that expense. That’s innovation.

          1. Innovation in this case tends to increase cost.
            It either extends lives, out adds complexity, or is used to drive closer to six sigma.
            True story, taken to a doc about tendinitis, he explained 6 expensive surgical procedures, then mentioned one older method was injecting sugar water, which promoted healing and had similar efficacy but was not patentable so no one uses it cause no one makes money on it. Innovation is a double edged sword.

          2. Agree. In medical particularly, innovation often dramatically increases prices.

            eg in pharma – here every ‘innovation’ in insulin drives up the price of NON-innovated insulin in lockstep with the innovated insulin. In every other country on Earth, non-innovated (generic) insulin restrains the price of innovated insulin and thus sends a price signal as to whether innovation is worth pursuing. The result – insulin that costs $400 here costs $60 in Canada and $10 in the Third World.

            in medical tech – a hospital system that spends $150 million or so for the latest proton therapy synchtrons doesn’t find that it suddenly has more spinal/brain/pediatric cancers to treat. Rather it finds it now has to pay a ton of fixed cost money for underutilized equipment so it markets that tech as a more expensive option for treating banal prostate cancer.

            1. I have a joke. If you want cheap health care, get a bucket of leeches.

              Didn’t say it was a funny joke.

            2. “…The result – insulin that costs $400 here costs $60 in Canada…”

              That’s because Canada, being a 3rd world country, fixes the price of insulin, leaving the rest of us to make up the profit for the maker.

          3. EMR shifts the work to the docs that used to be done by transcription and file clerks. Still it is a good thing.

            Think of radiology. Average turn around to produce a radiology report was 24 hours. It is now more like 24 minutes. And with the new technology the radiologist can be sitting in his or her office or at home a thousand miles away.

        2. Coverage doesn’t equate to actual healthcare.

      3. “So they’ll lose money on every patient but make it up on volume?”

        But they’ll only lose a little bit per patient and the volume will be much greater! 😉

    2. OG
      June.27.2019 at 10:28 am
      “But wouldn’t the businesses gain new clients who now are not seeking medical care because of financial restraints? It’s too expensive and it would bankrupt the medical businesses by giving them more business. I don’t believe it.”

      You’re either an OBL in training or truly an ignoramus.

  3. “That leaves families with rising premiums, rising copays, and fighting with insurance companies to try to get the health care that their doctors say that they and their children need. Medicare for All solves that problem.”

    Yeah, I suppose it does. Because instead of trying to fight the insurance company, you’ll be fighting the federal government. It’s not hard to guess how that will come out.

    1. You know who else set up the people to fight the government?

  4. “One of the top reasons for bankruptcy, she said, was medical bills.”

    If you’re going to go bankrupt, it should’ve for stupid shit, like cars, boats, and houses. If you go bankrupt over medical bills, how will you get the boat loan?

    “And insurers, she argued, have an incentive to keep as much money as possible rather than pay for better care.”

    As opposed to the government, which has no problems throwing money hand over fist at any problem on the order of trillions. What, they don’t get to keep it, and there’s always more where that came from. That’s what we call “efficiency.”

    1. Insurers have an incentive to keep clients and attract new clients. They don’t do that if they only pay out a pittance. Single clients, group clients, giant corporate clients, they all want insurance that pays out. And they’ll know if you don’t. The bigger clients even have the means to check your financials to see if actually do. But the little clients still find out via reputation.

      The only way shyster insurers can survive is if there’s a mandatory insurance law. Bad insurers drive out the good. Which was apparently the key feature behind ObamaCare that Trump demanded the Republicans keep.

      1. Thank you. Competition is the mother of invention and innovation, but it also is the guarantor (in the long run) of customer satisfaction. Abuse and/or disappoint the payor, then see what happens in (a) the private sector and (b) the government monopoly administrative sector. I’ll take door (a) where I can walk away and look for “better”, however I define that.

  5. …instead of trying to fight the insurance company, you’ll shut up and take it you ungrateful wreckers and kulaks.

  6. Does not her plan involve putting the RICH into medical welfare? She wants to tax the poor to pay for healthcare for the rich!!!

    I’ve got no problem with helping the poor, but the Warren/Bernie/Dumbocrat plan is Race-to-the-Bottom Socialism.

    1. If you’ve got no problem helping the poor then you should help them.

      Or, were you really saying “I have no problem using the government to compel everyone else to help the poor” instead?

      1. I would love a truly private healthcare system. But that option simply is not on the table. The choices before us are Socialist Medicine or Welfare Medicine. Of the two I will take the letter as a stop gap measure.

        It’s not about what I want, or what you want, it’s about what the voters want. And even the dyed red Trumpistas demand Medicare for Grandma. There ain’t enough actual free market types on the planet to vote in a city dog catcher, let alone vote in a free market in medicine President. It’s a sad truth but it’s the truth.

        1. well, then you do have a problem, you just have given up any hope of addressing it.

  7. Warren makes the classic Marxist assertion that she knows better than these businesses what they do and don’t need. Unsurprising that only she and De Blasio raised their hands.

    What she, and every central planner, fails to understand is that insurance companies operate the way they do for a reason. It isn’t greed; that’s what their work is worth. That’s what they need to justify what they’re already doing. That’s what they need to be financially solvent and to mitigate risk. She can go fuck herself. Total know it all.

  8. “”The discussion began when the entire stage was asked who, by a show of hands, would eliminate private insurance. Warren was one of just two candidates, along with New York Mayor Bill de Blasio, to raise her hand.””

    So now other candidates can hammer Warren for her desire to put thousands of people out of work.

  9. I don’t think you’re getting it. Closing hospitals in the poorer rural communities is a feature. Because fuck those people in flyover country, that’s why.

    1. They only go to the hospitals to get opiates anyway.

  10. she’s awful. truth will out.

    1. Chicks dig her. And they’re not known for being good with truth.

      1. can’t see it Marcus. in general chicks hate chicks. her fans love cats and are small in number.

        1. No self respecting man will ever vote for her.
          She’s reliant on the chemjeff, eunuch, Kirkland, buttplug, escher types

          1. exactly.

  11. These discussions should always start with the following: The US spends $10,739 per person on healthcare, that comes to about $27,800 per non-government worker. That’s about half the median household income. Now, how are we going to pay for it?

    1. MMT

  12. The line here is to soak someone or multiple groups of someones. There is no acknowledgment that much of what is wrong with the healthcare costs are the pressures the government has already placed on the system through mandates and such. There is also no admission of understanding that the government simply cannot set prices where it wants without any bad effects.

  13. A. All student debt will be canceled, so doctors, nurses, and all other expensive staff can get by on a lot less pay.

    B. Billing specialists? What bills? Everything is free!

    Damn you guys have no imagination.

    1. Most (non-BS) RNs, and all LPNs have relatively little educational expense.

      Even if the schooling is free the opportunity cost of a medical license is large.

      Neither group is going to accept a pay cut.

      But yes, the specialist ‘problem’ will be solved as most of them get out of that particular line of business. The few that remain will have waiting lists so long as to be infinite.

      1. It would just be so much easier to declare progressives enemies of the republic and gather them all up and be rid of them.

  14. Medicare pays far, far less than private rates, and the higher rates from private payers is part of what keeps hospitals afloat financially

    Which would mean that someone would have to be paid less, and it wouldn’t just be insurance companies: It would be nurses and doctors, therapists and billing specialists, the entire universe of middle-class jobs that America’s health care industry supports.

    Gawdallfuckingmighty. ‘Libertarian authors’ are the STUPIDEST economic thinkers in the world. It is not the responsibility of Medicare (the taxpayer) to ensure that specialists and others in the healthcare industry are the highest-paid in the world. It is not the responsibility of Medicare (the taxpayer) to ensure that hospital revenues and expenses can keep rising by 5% or so per year forever.

    Is there excess capacity in rural hospitals? Yeah. Cuz hospitals everywhere have spent decades using their profit margins to keep increasing capacity and growing new services. Not generally as a rational decision based on the ROI of that marginal capacity – but because ‘non-profits’ have to plow those profits back into their business or get taxed on them and they all seemed to prefer buying expensive new tech that would be underutilized (but still have to paid for via increased charges for everything in future years) rather than keep an endowment/reserve so that they didn’t need to raise prices so much every fucking year. And now hospitals aren’t well-positioned as outpatient and clinic and lower tech choices are proving to be substitutable for inpatient.

    Hospitals are not in a precarious financial position anyway. Whatever issues they are gonna have realigning a squeeze on their income statement to an excessive/inefficient balance sheet has almost NOTHING to do with Medicare. It has everything to do with 40+ years of squeezing customers WAY beyond customers financial ability to keep being squeezed.

    The problem is not some stupid pol talking about Medicare for All. The problem is the LACK of a pol saying We are responsible to taxpayers and beneficiaries and it’s about time we use our group leverage on their behalf. This perpetually excessive medical inflation is OVER. It’s the same thing re higher education – except that the solution in higher education is far easier.

    1. No, the problem is idiots like you who hope, against all evidence, that the government will manage medical care for everybody better than it does VA care, or, say, the DMV.
      There is a surefire way of screwing something up, and making it far more expensive: Have the government take over.
      Oh, and fuck off, slaver.

      1. You’ll have to excuse Sevo. He was dropped on his head as he came out of the womb.

        JFree’s post is so good I am not even gonna do my own.

        1. Tony
          June.27.2019 at 1:43 pm
          “You’ll have to excuse Sevo. He was dropped on his head as he came out of the womb.”
          I’m truly sorry your mom didn’t have an abortion; the world would be a better and measurably more intelligent place.

          “JFree’s post is so good I am not even gonna do my own.”
          C’mon shitbag. You can out-stupid JFree any day!

          1. Yep, they’re like two nuts in a sack.

        2. Damn – that is savage!
          Sick burn, Tony.

        3. J free is just calling for more government control over what he imagines as a bunch of illegitimate profits.

          I propose doing the same thing for the phone industry. Communication is essential to the well being of any society. As much or more than medicine.

          When I was a young man for around ten bucks a month I could get the latest in communications lines. I could invest another $15 dollars and get a wireless phone and for not much more one of those tape things to record messages.

          Look at what you spend now and the billions of actual profits from Verizon, Apple, Samsung, Google and all of them.

          Wait a minute you can’t compare those to what my Galaxy does and what it brings me. It costs much more yet it delivers much more and the cost keeps going up.

          Yet medicine is somehow artificial and government needs to squeeze and control. Technical advances are far beyond what they were 40 years ago.

          I do not know of any hospital medical system with a trillion dollars in net worth like Apple.

          It is a specious argument. When you trust politicians for your choices in medicine you are trusting your florist to pick out your shoes.

          1. Doctors own pretty much all the vacation homes, and pharma execs own ones that are 10 times the size.

            It’s not like anyone’s bread is gonna stop being buttered by a transition to universal healthcare, but we do need politicians to determine how we prioritize our resource distribution, as that is the point of having politicians.

    2. You make good points, I thought the same thing when I read that. Why should we support a universe of unproductive, overpaid, “middle class jobs”? Why can’t we have service for the sake of that service, for the price it’s worth?

      Because we don’t have a real market in healthcare, the government(s) broke it. So, now we wonder if we should support a universe of unproductive, overpaid, monopolistic government insurance worker jobs instead. See how that works? (for the jobs, I mean, not for the service)

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  16. Just back from a lunch at bar and grill; golf was on the TV.
    Somebody bought the time and produced the commercial pointing out that “Medicare for All” guarantees you……………………….
    A chance to get on a waiting list.

    1. Who are all these Americans who don’t have to wait when they go to the doctor?

      1. Tony
        June.27.2019 at 8:11 pm
        “Who are all these Americans who don’t have to wait when they go to the doctor?”

        Shitbag immediately tries (absent evidence) to claim false equivalence.
        I’m truly sorry your mom didn’t have an abortion; the world would be a better and measurably more intelligent place.
        Fuck off.

      2. Of course you do. I see an ophthalmologist. I can’t just call and get in to see her whenever I feel like it. She is a big deal specialist. If it were an urgent thing she would certainly find a way to deal with it. Why? Because she is a good doc. Do not take that for granted.

        Medical care, truly urgent stuff is still available or should be depending on the issue.

        Where it becomes a problem, which tends to happen when the government allocates resources, is when you get a shortage. We need three Orthos or Urologists and only have one. We need two MRIs, and our old one needs replacing. Then you need all of the support staff for that.

        1. “Medical care, truly urgent stuff is still available or should be depending on the issue.”

          In socialized care, the waiting list is available.

        2. Then surely the British, say, are practically climbing the walls of Buckingham Palace demanding an end to the NIH,

          Oh no they’re not. They love being able to go to the doctor and get anything treated for free and having better health outcomes than Americans despite any alleged socialist waiting lists.

  17. Feature not a bug. Make those in rural areas relocate to urban areas (paid for by government). Makes more and more rely on the government to survive.

  18. “One of the top reasons for bankruptcy, she said, was medical bills.” Elizabeth Warren

    Medicare for all is bankruptcy for all. Churchill was right, socialism is the equal spreading of the misery.

  19. […] in demand for medical services across the population. Still, many of Delaney’s opponents remain unwilling to address the potential negative effects of this […]

  20. […] in demand for medical services across the population. Still, many of Delaney’s opponents remain unwilling to address the potential negative effects of this […]

  21. […] in demand for medical services across the population. Still, many of Delaney’s opponents remain unwilling to address the potential negative effects of this […]

  22. […] in demand for medical services across the population. Still, many of Delaney’s opponents remain unwilling to address the potential negative effects of this […]

  23. […] Suderman writes for Reason about the impact for rural health care of the proposed “Medicare for […]

  24. […] Warren’s Medicare for All Plan, many hospitals would be forced to close, especially in poor, rural […]

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