An Unfortunate System of Reimbursable Events


Leading lights of the health insurance industry are crying that Medicare For All or any kind of universal health reform would “crash the system” and “destroy healthcare as we know it.”

They say that like it’s a bad thing.

They say we should trust them and their cost-cutting efforts to bring all Americans more affordable health care.

We should not trust them, because the system as it is currently structured economically is incapable of reducing costs.

Why? Let’s do a quick structural analysis. This is how health care actually works.

Health care, in the neatly packaged phrase of Nick Soman, CEO of, is a “system designed to create reimbursable events.” For all that we talk of being “patient-centered” and “accountable,” the fee-for-service, incident-oriented system is simply not designed to march toward those lofty goals.

A machine for creating reimbursable events

The health care system is a machine for creating reimbursable events. This means that its systemic business aim is to maximize reimbursable events and to increase their price, that is, to maximize the energy the system can draw in from its customers.

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Rep Jayapal and Sen Sanders Have Introduced Medicare For All Bills: One Is a Lot Better Than the Other


Two bills that are called “Medicare for all” bills by their supporters have just been introduced in Congress. On February 27, Representative Pramila Jayapal introduced the Medicare For All Act of 2019, HR 1384 , in the House of Representatives. On April 10, Senator Bernie Sanders introduced a bill bearing the same name in the Senate, S 1129. The cost-containment section in Representative Jayapal’s bill will cut health care costs substantially without slashing the incomes of doctors and hospitals. Senator Sanders’ bill cannot do that. 

In this article, I explain the differences in the cost containment sections of the two bills and call upon Senator Sanders to correct two defects in his bill that minimize its ability to reduce costs. Defect number one: S 1129 authorizes a new form of insurance company called the “accountable care organization” (ACO). Defect number two: S 1129 fails to authorize budgets for hospitals. Representative Jayapal’s bill, on the other hand, explicitly repeals the federal law authorizing ACOs, and it authorizes budgets for individual hospitals. 

I write this essay as both a long-time organizer, writer and speaker for a single-payer (the older name for “Medicare for all” system) and a strong supporter of Senator Sanders. Bernie’s enthusiastic support for a “single payer” solution to the American health care crisis has added millions of new supporters to the single-payer movement. But precisely because he is now the most recognizable face of the single-payer movement, it is extremely important that all of us, whether we’re already in the single-payer movement or we just long for a sane and humane health care system, encourage Bernie to fix the defects in his bill. 

To explain the two defects in S 1129, I must first explain why a single-payer bill like Representative Jayapal’s will be effective at cutting the high cost of American health care. I begin by explaining the origin and meaning of the “single payer” label. I will then describe the two defects in S 1129 in more detail.

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Medicare For All
is Completely Impossible, a Crazy Idea.
Unless You Do These Things …


Medicare For All — or any other way of covering everybody in the U.S. — is impossible. Unless we could do it for less, way less, than healthcare costs us today.

But that we can do. That’s the good news.

People assume that covering everyone will cost vastly more. Billionaire Michael Bloomberg said the other day that it would bankrupt America for a long time. Like Venezuela, he said. You want that?

No, they do more than assume it will cost vastly more. People insist. They get really mad about it. There are lots of ways to get called names online, this is one. One person actually told me recently that even talking about the possibility that we can do healthcare for much less is immoral; they call it lying, that it’s some part of a bait-and-switch chicanery to even talk about the possibility.

It’s apparently easy to go nuts on a subject like this.

The Red Pill moment

But imagine what if for a moment with me. Imagine covering everyone, taking care of everyone—and it costing less than what we pay today. Less for the government, less for employers, less for you. Way less. Half or less.

How could that be possible? This is really kind of a red pill moment. Because once I lay this out for you, you really can’t un-see it. You won’t be able to go back to the usual way we see this debate.

Some of this will be familiar to regular readers, but hold with me for a moment while I lay it out for the people in the back there, the ones who just came in.

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