It feels to me that like the proverbial lobster in the pot, we may be failing to notice a rapid approach of a single-payer system because it is happening in a very subtle manner.
We have had many articles discussing how the price transparency regulation requires hospitals to list all their reimbursements for every code. But there haven’t been as many discussing the fact that the price transparency rules also require insurance companies to post every reimbursement they provide for every code.
Anyone with any material ability to sort through a machine-readable file can now determine what every healthcare organization is paid for every single service by every different payer. I assume that this additional information is going to result in moving a lot of reimbursement toward the mean.
If you are a clinic that gets worse reimbursement than everyone else in town, and you know it, you will insist on better contracts. If you, the insurer, are paying the highest reimbursement in town, you now have more knowledge, and the ability to lower your reimbursement while staying just above the median.
I’m certain that historically several organizations suffered from what my late friend Mike Reiling referred to as terminal uniqueness: the belief that they had negotiated particularly good contracts. An organization that believes it has better reimbursement than everyone else will be very hesitant to give up that superior position.
They assume that their negotiation skill means that single payer will disadvantage them. However, that seems to occur only in the imaginary Lake Wobegon where everyone can be above average. I suspect many of the organizations that think they are particularly skilled negotiators are now learning that they are at, or maybe even below the median.
For the organizations that rightly believed they were well above the norm, their competitors can now see and seek to equal the reimbursement rates.
I expect reimbursement to start to cluster near a central point. There’s certainly no guarantee that happens, but if it does, the system is much, much closer to having a single payer.
If contracting with the different payers essentially yields the same level of reimbursement, there isn’t that much value in having a variety of different payers. In fact, it can help you avoid the crazy policies that some insurers implement disregarding the Two-Midnight Rule, or downcoding inpatient stays in a payer specific manner. So, I believe that one of the impacts of price transparency could very well be that we will see a single-payer model sometime in my lifetime.
I’ll concede that there are no guarantees this will happen. In most industries, there’s a fair amount of information about pricing, and yet there is still price competition.
But healthcare is different in many respects that make me suspect that it plausible that both healthcare organizations and patients might become more receptive to the notion of a single payer.
As Yogi Berri said, it is difficult to make predictions, especially about the future, but that is my best guess at the moment.
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