El-Sayed, former executive director of the Detroit Health Department, said the plan, outlined in his campaign platform, would increase business and payroll taxes to pay for health insurance for all residents of the state. El-Sayed claims the plan would slow the growth of health care costs in the state, such as an expected 27.6 percent cost increase for insurance purchased through the Affordable Care Act Obamacare exchanges in 2018, according to the Michigan Department of Insurance and Financial Services.
Reducing Access, Incentives
Charlie Katebi, a state government relations manager at The Heartland Institute, which publishes Health Care News, says doctors avoid government insurance programs like the one El-Sayed is proposing.
“Medicaid pays a quarter or half of what private insurers pay,” Katebi said. “Only one-third of the doctors in Michigan accept Medicaid. If you try to get a lot of people into a single-payer system, doctors would be forced to take a massive pay cut. In response, doctors will start to refuse those patients.”
El-Sayed’s plan would distort health care incentives by eliminating out-of-pocket costs, premiums, and deductibles paid to private insurers, Katebi says.
“People talk frequently about how much deductibles cost, and a lot of times they are very expensive,” Katebi said. “But the reason they exist is so that people will be incentivized to look for a better deal, such as procedures offered at surgery centers rather hospitals. If you take that away, people will have no incentive to look for lower health care prices.”
‘Slower Service, Limited Access’
Michigan state Rep. Henry Vaupel (R–Fowlerville) says even if single-payer health care could slow increases in the cost of health care services, Michigan residents would end up with lower quality of service and sparse access under the government system.
“Any place that single-payer health care has been tried suffers from slower service and limited access,” Vaupel said. “I believe when you eliminate incentives, you’re always going to have diminishing services. If we have a much slower single-payer system, it would reduce innovation and reduce the quality of medical personnel.”
Vaupel says state-mandated health care prices could also discourage people from entering the medical profession because of a poorer payoff for the great expense they face during their long years of education and training.
“The cost of health care is going to be expensive,” Vaupel said. “We certainly don’t want to eliminate the incentive for the brightest and best to go into the health care field.”
Economic Dangers Cited
Katebi says Michigan is already economically distressed and would not be able to survive the economic damage the increased business and payroll taxes would inflict.
“Michigan is already a net loser of residents,” he said. “If you want to tack extra taxes onto individuals and businesses, people will simply leave the system that El-Sayed is trying to establish,” Katebi said. “They’ll probably have to raise taxes on the people who remain or slash reimbursements.”
Katebi said health care reforms in Michigan should focus on access, licensing, and easing restrictions on association health plans.
“One reform that would really help lower the cost of, for example, dental care, is to allow dental therapists to practice basic primary care,” he said. “They can deliver primary care far cheaper than physicians can. Unfortunately, because of physician interest groups, the law prohibits them from doing that.
“Another reform Michigan could try would be to make it easier for a group of small businesses to band together, spread the risk around, and lower the costs of premiums and deductibles through association health plans,” Katebi said.
Prevention, Not Price Controls
Vaupel says El-Sayed’s proposal would require Michigan to force down prices of drugs and hospital stays when it’s much cheaper and more effective for a state to spend money trying to reduce the need for expensive drugs and hospitalizations.
“Michigan needs to focus on preventative health care to reduce costs, rather than create a massive new bureaucratic program,” Vaupel said.
“It’s going to be very difficult to lower individual costs as it is, but I think we have a shot at reducing costs through preventative medicine, even as early as prenatal care,” Vaupel said. “Through the promotion of good nutrition and better exercise, we could attack problems before they begin, which would lower costs later and make it much more affordable for everybody. Attacking the initial problem is a lot more effective than attacking the cost of providing health care services once the diseases are there.”