Most of the legacy health organizations—both payer and provider—would stand to lose substantially under a "Medicare for All" system, but a select few could thrive, according to a new analysis.
Analysts at Hammond Hanlon Camp (H2C), a healthcare investment firm, said most payers and providers would struggle in a single-payer system, with some of the former set to vanish entirely, but a small group of innovators could adapt more effectively to the changes.
UnitedHealth Group, for example, has diversified its business and has a strong focus on managing services for providers and other insurers, which could leave it positioned to adapt more effectively to the changes, the researchers said.
“Health plans still make money underwriting risk, but an awful lot of health plans have diversified away from that,” Richard Rollo, managing director for H2C and one of the report’s authors, told FierceHealthcare. “There would still be a need for an awful lot of what health plans do.”
That could include continued use of Medicare Advantage plans or services similar to Medicaid managed care organizations, though the Medicaid program would not exist in its current form under a Medicare-for-All system, according to the report.
Depending on the design of such a transition, Medicare for All could be a boon to larger insurers and investors in such companies. However, smaller payers would be less prepared to adapt, and any insurer that’s not prepared to pivot to other services could go under, the study said.
For providers, the transition will be far harder, according to the analysis.
Hospitals that treat large volumes of people with employer coverage or have high operating costs—which often occur in tandem, the analysts said—would feel the financial pain the most, as private plans frequently pay out far higher rates for care than government payers do.
“While the organizations most affected also tend to have substantial cash resources and thus the means to make the attempt at operational transformation, the magnitude of the challenge would be significant and may exceed the capacities of management used to the status quo,” they wrote.
For physicians, those in private practice are most likely to feel the squeeze, while those employed by hospitals may see more “blunted” impacts, according to the report.
However, much like in the insurance sector, there are providers who are more on the cutting edge that could adapt effectively to a payment overhaul of this magnitude, the researchers said.
Providers that are prepared to be more proactive in addressing costs through investing effectively in interventions aimed at the social determinants of health and in preventive medicine will be better positioned to deal with the payment changes, because they could prevent costs before they occur, the researchers said.
“For most healthcare providers, Medicare for All would be a really, really tough thing,” Rollo said. “It would be devastating to many of them.”