AHIP seeks reversal of “any willing provider” clauses

Posted by on Tuesday, Aug 20, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Insurers seek limited insurance exchange plan networks

By Jennifer Lubell
American Medical News, August 19, 2013

Health plans are focused on being ready “and doing what we need to do” as states set up their respective marketplaces, said Karen Ignagni, president and CEO of America’s Health Insurance Plans.

But some policy concerns remain. Many states, for example, “still have restrictions on our ability to actually provide high-performing networks for individuals to be able to access high-performing doctors and hospitals to make sure again we’re stretching those dollars. That will have to be looked at,” she said.

Ignagni was referring to the “any willing provider” clause, a mandate in some states that requires health plans to allow health care professionals to participate in a health plan’s network if the professional agrees to a plan’s contract terms, limits and conditions.

She also encouraged giving nurses a broader role, joining them with other professionals as part of health care teams, “so that we can try to customize health care and make it very patient-centered, and again stretch those dollars.”


Insurer opposition to “any willing provider” clauses is yet one more example of why we should question leaving coverage decisions in the hands of the private insurance industry.

Any willing provider clauses allow care provided by any qualified physician to be covered even if that physician is not contracted by the insurer but is still willing to accept payment based on contracted rates. The advantage of such clauses is that patients may choose to continue to see their own physician as long as the physician agrees to the insurer’s rates.

Why would insurers want to prohibit patients from having that right? It has to do with their current strategy of switching to narrow network plans – plans that have fewer choices of health care professionals. They say that they can extract even greater discounts from physicians who believe that they will have more patients referred to them by the insurer. Although it is questionable as to just how much further the insurers can ratchet down rates, these limited network plans have the advantage for the insurer of further impairing accessibility, thereby resulting in savings from forgone care, no matter how important that care might be.

Besides reducing the number of physicians in their networks, they also want to increase the number of nurse practitioners, presumably because they can negotiate even lower rates with them than they can with primary care physicians. That assumes that the current movement by nurse practitioners to gain equal pay for equal work will fizzle when the insurers offer the bait.

When they say this isn’t about the money, but it’s about quality… No, wait, they do say that this is about “stretching those dollars.” But how should those dollars be stretched? Should we take away choices of physicians and substitute nurses unwillingly, or should we consider eliminating this egregiously wasteful industry with its unwelcome intrusions? The latter would not only produce immensely more savings, it would also be much more beneficial for patients.

The fallacy of balancing cooperation and competition

Posted by on Monday, Aug 19, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Coordination versus Competition in Health Care Reform

By Katherine Baicker, Ph.D., and Helen Levy, Ph.D.
The New England Journal of Medicine, August 14, 2013

Many current proposals to increase the value of care delivered in the U.S. health care system focus on improved coordination — and with good reason. Badly coordinated care, duplicated efforts, bungled handoffs, and failures to follow up result in too much care for some patients, too little care for others, and the wrong care for many. A host of current reform efforts aim to reduce these inefficiencies in both public and private markets. These efforts range from penalizing hospitals with higher-than-expected readmission rates, to rewarding primary care providers when patients receive higher-value care, to providing incentives for the adoption of electronic health records. Accountable care organizations (ACOs) and bundled payments are designed to create monetary incentives for coordinated care. The hope is that coordination will improve value by ensuring that the right care is provided in the right place at the right time.

These laudable efforts, however, may unintentionally be at odds with another strategy for improving value: promoting competition in health care markets. In general, less competition means higher prices; one well-publicized symptom of the lack of competition in U.S. health care is providers’ ability to charge different prices for the same service. Competition may drive higher quality, particularly when prices are constrained. The benefits of competition in private markets may even spill over to higher quality in Medicare, for which the Centers for Medicare and Medicaid Services (CMS) sets prices. A number of policy interventions, such as quality-reporting and price-transparency initiatives, are based on the idea that better information can promote competition and lead to greater value, and these initiatives have the potential to be very effective when patients have a choice of providers.

Well-integrated provider networks may promote coordinated care that improves the allocation of health care resources, but they are likely to undermine competitive pressures to keep prices down while maintaining high quality. Coordinated systems may thus deliver the right care to the right patient at the right time, but at the wrong price. Competitive markets may do a better job of keeping prices low, but with the well-documented drawbacks of fragmentation.

The current suite of policies for addressing the ills of the health care system does not embody a unified approach to the roles of coordination and competition. In part, this lack of coherence reflects the fact that our insurance “system” is really several different systems, including moderately competitive private insurance markets for the nonelderly, nondisabled population and a single government payer, Medicare, for the elderly and disabled that largely pays providers set prices on a fee-for-service basis. These two payers currently pursue different approaches to reform. The most recent round of Medicare reform initiatives focuses on coordination, with ACOs as the prime example. In fact, the FTC has signaled that it will weigh the benefits of integration in improving quality against the potential harms of reduced competition. For the privately insured sector, the current focus is on enhancing competition through price transparency and “skin in the game” for consumers.

So what should policymakers do? We offer three broad prescriptions that may help strike the right balance between coordination and competition. First, we can look for the win–win opportunities to enhance both competition and coordination. As noted, health IT may be an example of such an opportunity if it is implemented well. There may also be win–draw opportunities in which either coordination or competition may be enhanced without harming the other. For example, the contracting processes that CMS uses for Medicare Advantage plans, Medicare Part D, and durable medical equipment have some competitive aspects but do not fully leverage the forces of competition to promote quality without sacrificing coordination. These processes could be improved.

Second, the courts and regulatory agencies that are tasked with enforcing antitrust law could focus explicitly on this trade-off when they examine health care and health insurance markets. After decades of relatively unsuccessful attempts to prevent hospital mergers, the FTC has recently had a string of successes in that arena. Similar vigilance is needed in other areas, particularly in the new realm of ACOs. As we gain insight into the reasons for the price dispersion in health care markets that transparency initiatives are bringing to light, we should explore whether this dispersion results not just from variation in quality and efficiency but potentially from anticompetitive behavior.

Third, policymakers could systematically look across silos to consider the effects that an initiative in one sector will have on consumers in another — and on providers overall. To do so, they must have a clear understanding of the trade-offs at hand and the interaction of multiple policies and regulations aimed at improving quality and value. Coordination may foster delivery of the right quantity of care to each patient, while competition may help keep the prices for that care as low as possible. It is not obvious a priori what point on the competition–coordination spectrum provides the highest value in terms of quality of care and health benefit per dollar of spending. But total spending depends on both quantity and price. We need to evaluate the net effect of the suite of new public and private insurance-market policies on both price and quantity as we consider which policies might restore federal health care spending to a fiscally sustainable path.


Competitive bidding is no Medicare fix

By John Teevan
Milwaukee Journal Sentinel, August 12, 2013

Recently, the Centers for Medicare and Medicaid Services (CMS) substituted its current pricing methodology with an unfair new process for setting prices known as “competitive bidding.” The idea behind this policy is to lower costs and reduce fraud in the system, and these are commendable goals. But what resulted was bad public policy that not only fails to fix the problems it was meant to solve but also creates a host of new problems.

When round 1 of this program was put into place, it was limited to just a few test markets. But in July, it expanded to about 100 more, including one in southeastern Wisconsin. The effects will be devastating for health care providers, health care systems and the patients we serve. If round 1 was any predictor of the future under round 2, numerous providers will go out of business.

Even more troubling, this “competitive bidding” program will lead to less freedom of choice and access for our patients, and, I believe, a possible decrease in the quality of care for them. Many Medicare beneficiaries — seniors over 65 and disabled Americans — have come to rely on their local health care provider to be there for them when they are at their most vulnerable. Local providers are there for their patients during power outages, equipment malfunctions and other potentially life-threatening moments. When many of these local providers are put out of business by “competitive bidding,” it will be the patients who suffer the most.

As smaller, local providers disappear, patients will potentially be forced to rely on providers many miles away. This may mean a delay in Medicare approval of regular services, as well as longer wait times in the case of emergency or equipment failure that could leave the patient stranded, waiting for critical equipment like a wheelchair or oxygen tank.

Not only will this unfair pricing scheme be harmful to health care providers, health care systems and patients, it also will be more expensive for taxpayers. Reducing access to in-home medical care will result in more emergency room visits, delayed discharges and unnecessary hospital stays. Keeping patients in their homes means significant savings to the Medicare trust fund; “competitive bidding” does just the opposite.


Many policies today are aimed at providing cooperation/integration/coordination as a means of improving quality while obtaining greater value in health care. Although some of the models are inappropriately directed more to business aspects and less to patient care quality, nevertheless, everyone working together seems like a good idea. Free market ideologues may also agree that these efforts are laudable, but they remain emphatic that, above all, marketplace competition must be relied upon to drive higher quality and lower prices.

This is not an idle, intellectual exercise. Pro-market enthusiasts are driving much of our health care system today with the result that health care is outrageously priced, is of mediocre quality, and has impaired access for tens of millions due to financial barriers that the market model has erected. Let’s look a little bit closer at the call of ideologues Katherine Baicker and Helen Levy to “fully leverage the forces of competition” by injecting more competition into coordinated systems.

They mention Medicare Advantage, Medicare Part D, and the purchase of durable medical equipment as CMS programs that have introduced supposedly beneficial competition, although not enough in their opinion. We already know that Medicare Advantage costs more than the traditional Medicare program, while taking away patients’ choices of their health care providers. The Medicare Part D drug program was designed to promote competition between drug plans, yet we are paying much more than we would be with government purchasing programs such as we have with Medicaid and the VA system.

Now CMS is expanding its competitive bidding program for durable medical equipment. The suppliers who win the bids will likely do well when measured by business standards. But many of the losing firms will be forced out of business simply because CMS will take away the largest sector of their clientele – the Medicare beneficiaries. Many patients will lose the services of their own medical suppliers and have to rely on other suppliers who may not be readily accessible because of distances that must be traveled, or who may provide inferior services simply because they cut back too much in order to win the bid based strictly on lower prices.

The government is in a unique position to administer pricing on a take-it-or-leave-it basis. The process is based on an analysis of actual costs plus fair margins. Health care providers would be foolish to reject fair prices. If pricing proved to be too low, threatening sustainability of the providers, it would be the responsibility of government to adjust prices to make sure that services and products were there when patients needed them. For those who say that this process results in $1000 toilet seats, all you need to do is compare costs in the traditional Medicare program with the higher costs through private insurance plans, including Medicare Advantage, or compare VA drug pricing with pricing through Part D plans or even higher pricing through the open competitive market.

Baicker and Levy offer three policy prescriptions that have a goal of being sure that competition remains the driving force, yet they seem to muddle through delivery system reform in order to protect competition. To no surprise, they remain totally silent on a far more effective solution – dump price competition and establish a universal program of government administered fair pricing. It works in all other wealthy nations; it should certainly work here.

Are nurse practitioners a solution for the cognitive/procedural pay gap?

Posted by on Friday, Aug 16, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Medicare Payment for Cognitive vs Procedural Care

By Christine A. Sinsky, MD and David C. Dugdale, MD
JAMA Internal Medicine, August 12, 2013

Conclusions and Relevance

Our analysis indicates that Medicare reimburses physicians 3 to 5 times more for common procedural care than for cognitive care and illustrates the financial pressures that may contribute to the US health care system’s emphasis on procedural care. We demonstrate that 2 common specialty procedures can generate more revenue in 1 to 2 hours of total time than a primary care physician receives for an entire day’s work.

The medical literature has highlighted the decline in the number of physicians entering cognitive specialties, with accompanying warnings about the impending collapse of primary care. The number of physicians in training who choose the primary care field of internal medicine dropped by 50% from 1998 to 2003, and primary care physicians (PCPs) in practice are leaving at a faster rate than other specialties. Increased workloads, administrative hassles, demanding time commitments, and low compensation relative to other specialties are major contributing factors.

Fewer physicians are choosing primary care fields while the needs of an aging population with multiple chronic diseases are projected to require an increase in the supply of primary care by at least one-third. This mismatch between supply and demand for PCPs has serious implications for the future of US health care. Health care costs in the United States are among the highest in the world and continue to rise. The quality of health care that Americans receive has been questioned. Worldwide and within the United States, health care costs are lower and quality is higher in regions with more PCPs. In addition, the quality of care is higher and costs are lower for patients whose first contact with the medical system is with a PCP.

The US health care reimbursement system rewards procedural services while providing financial disincentives for physicians to spend time on cognitive care, the main professional activity of PCPs and other nonprocedural specialists. In a comparison of international health payment systems, Wilson concluded that “the current system in the United States offers little incentive for PCPs to provide the kind of care coordination that is known to improve health quality.”

Several proposed or implemented changes, including an increase in the relative value of evaluation and management (E&M) codes, pay-for-performance programs, and primary care adjustment, may modestly address this issue, but each of these policy changes is projected to increase PCP compensation by only 1% to 10%. Herein we identify the magnitude of the payment gap for physician time spent on common procedures vs cognitive tasks.


Wonkbook: Doctors for higher health-care costs!

By Ezra Klein and Evan Soltas
The Washington Post, August 15, 2013

Everyone knows American health care costs too much.

Identifying the problem is easy. Doing anything about it is hard. But there’s one thing states can do that isn’t particularly hard: Allow more nurse practitioners — who charge much less than doctors — to treat patients directly, without a physician’s oversight.

Doctor’s groups oppose this strenuously. They say patient safety is at risk. What’s really at risk is their incomes.

This is a protection racket. Any state legislature that extends it is choosing higher health-care prices — and health-care costs — for no good reason.


Perspectives of Physicians and Nurse Practitioners on Primary Care Practice

By Karen Donelan, Sc.D., Catherine M. DesRoches, Dr.P.H., Robert S. Dittus, M.D., M.P.H., and Peter Buerhaus, R.N., Ph.D.
The New England Journal of Medicine, May 16, 2013

Proposals that focus on the potential for nurse practitioners to help meet current and expected future gaps in the supply of primary care providers have met with wide interest and considerable controversy. At the core of the controversy is whether nurse practitioners have the education and experience to provide high-quality services and lead clinical practices without supervision by a physician.

Respondents in the two groups were far apart in their views on equal pay for providing the same services. Physicians’ opposition to equal pay is consistent with their perception, expressed in these data, that for any given service, they provide a higher quality of care than do nurse practitioners. Nurse practitioners’ support for equal pay is consistent with their majority view that physicians do not provide a higher quality of care for any given service. These survey data cannot provide evidence of the relative value of the training and expertise of these professionals. Nevertheless, the data suggest that physicians do not think that increasing the supply of nurse practitioners would have a positive effect on either the cost or the effectiveness of care, whereas more than 80% of nurse practitioners believe that increasing their numbers would improve the cost savings and quality of health care. From a societal perspective, we might consider whether expanding the supply of nurse practitioners and paying them equally for the same services that physicians provide would negate current savings from the disproportionately lower payments nurse practitioners now receive. More information is needed on the economic implications of the division of work between physicians and nurse practitioners before policymakers can definitively answer the question of whether employing a greater number of nurse practitioners and expanding their role would result in overall cost savings.

Our data provide evidence to inform ongoing public debates among physicians and nurse practitioners about their roles, responsibilities, and scope of practice. Both physicians and nurse practitioners will be needed to address the many challenges of developing a workforce that is adequate to meet the need for primary care services. It is our hope that the stark contrasts in attitudes that this survey reveals will not further inflame the rhetoric that has been offered by some leaders of the two professions but rather will contribute to thoughtful solutions for health care workforce planning and policy.


With concerns about our very high health care costs, we have to ask if procedure-oriented specialists are overpaid, or if the cognitive services of primary care physicians are underpaid? Further, are nurse practitioners underpaid when they are providing many of the same services as primary care physicians?

It seems that the consensus in the popular literature is that specialists are overpaid for procedures, whereas, listening to cynics like Klein and Soltas, primary care physicians are also overpaid when you consider that they can be replaced by nurse practitioners “who charge much less than doctors.” They contend that limiting the independence of nurse practitioners is a “protection racket.”

Yet nurse practitioners want their pay to be comparable to that of primary care physicians, “equal pay for equal work.” They do not want pay for cognitive services to be decreased; they want their own pay for these services to be increased.

What about the fundamental issue of filling the void in primary care with independent nurse practitioners? Even if medical schools increased the numbers of graduating physicians who would want want to become primary care physicians, there is a lack of residency programs and clinical training sites to train the numbers that we need. So does that mean that there is a plethora of comparable clinical training programs for nurse practitioners that would fill the void? Where are those programs that will produce an adequate number of nurse practitioners through training that will provide them with the same level of competence as primary care physicians? It is specious to assume that there is a paucity of clinical training programs for primary care physicians in a country that supposedly has a great abundance of comparable comprehensive training opportunities that are limited to nurse practitioners, while excluding physicians.

Try this mind game. Define primary care physician. Define nurse practitioner. Except for the duration and intensity of their training programs, are they exactly the same? If not, what are their differences? Should these differences be reflected in either their clinical independence or in their pay?

There is absolutely no dispute that nurse practitioners are an important addition to the clinical team that includes primary care physicians, specialists, and other health care professionals. It should not be difficult to integrate all clinical health services into a well oiled machine, as long as we can set aside turf issues. But we need to chastise the Ezra Klein’s of the nation who would throw a monkey wrench into the machine by characterizing this as a “protection racket.” It’s the patients who need protection through improved integration of our health care system.

Massachusetts shows us that we can have higher premiums with fewer benefits

Posted by on Thursday, Aug 15, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Annual Report on the Massachusetts Health Care Market

Commonwealth of Massachusetts
Center for Health Information and Analysis, August 2013

In a continuing trend, the health coverage available through Massachusetts employers in 2011 cost more and had lower benefit value. Between 2009 and 2011 premiums rose by 9.7% to pay for benefits that decreased by 5%. Consistent with this trend, employees are paying increasingly more out-of-pocket for their health care. Deductibles have grown in Massachusetts by more than 40% between 2009 and 2011.

This dual trend – increasing premiums and decreasing benefit levels – was consistent across market sectors, but the effect was not the same for all sectors. The effect of increased premiums coupled with benefit declines was most pronounced in the small group market sector, where the benefit value started out lower and decreased faster (-7.5%) than in other market sectors. Although the small group market sector accounted for just 16% of the Massachusetts commercial insurance market, it included the greatest number of businesses. This sector is one of the most vulnerable to cost increases and has been the focus of policy interventions at both the state and federal levels.


Many Health Insurers to Limit Choices of Doctors, Hospitals

By Anna Wilde Mathews
The Wall Street Journal, August 14, 2013

The new consumer marketplaces created by the federal health law… Many of the plans will include relatively few choices of doctors and hospitals.

Insurers are betting that consumers who buy plans on the exchanges will be willing to trade some choice and flexibility in order to get cheaper premiums. Smaller networks of providers generally translate to lower premiums.

A spokeswoman for the federal Department of Health and Human Services said that in the new marketplaces, “plans will compete side by side, and consumers can compare based on the factors that are important to them to find the plan that best fits their needs and budget.”


Under Massachusetts health care reform, the largest sector of health insurance – employer-sponsored plans – continues to cost more while benefits decrease in value. Just in the two years from 2009 to 2011, the average increase in premiums along with the decrease in benefits resulted in a decline in value of 14.7 percent!

Nationally, the same process is underway, and it is fully predictable that it will increase under Obamacare – a model of reform very similar to that in Massachusetts. We will all be paying more to get less.

Worse yet, we will have even fewer choices of our physicians and hospitals as insurers shift more to narrow-network plans.

Don’t worry though. HHS assures us that with competitive plans we will be able to “to find the plan that best fits (our) needs and budget.” We will have our choice of a selection of plans with higher premiums, lower benefits, and less choice of our health care providers.

Of course we could have had, and still can have, an improved Medicare for everyone that would replace premiums with equitable taxes, provide comprehensive benefits, and give us free choice of our health care professionals and institutions. Too bad that we believe our politicians when they tell us that single payer isn’t politically feasible. Come to think of it, whose politics is that anyway?

Complexity of catastrophic cap on losses causes delay in full implementation

Posted by on Tuesday, Aug 13, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

A Limit on Consumer Costs Is Delayed in Health Care Law

By Robert Pear
The New York Times, August 12, 2013

In another setback for President Obama’s health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.

The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.

Under the policy, many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors’ services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.

Some consumers may have to pay even more, as some group health plans will not be required to impose any limit on a patient’s out-of-pocket costs for drugs next year. If a drug plan does not currently have a limit on out-of-pocket costs, it will not have to impose one for 2014, federal officials said Monday.

The health law, signed more than three years ago by Mr. Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family. But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs.

In many cases, the companies have separate computer systems that cannot communicate with one another.


FAQs about Affordable Care Act Implementation Part XII

United States Department of Labor, February 20, 2013

Q2: Who must comply with the annual limitation on out-of-pocket maximums under PHS Act section 2707(b)?

The Departments have determined that, only for the first plan year beginning on or after January 1, 2014, where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums under section 2707(a) or 2707(b), the Departments will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:

a. The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and

b. To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).


One of the most important benefits of Obamacare is the establishment of maximum out-of-pocket spending that any individual or family would have to face in any given year. Although the amounts will still be unduly burdensome for far too many, nevertheless, it does provide some protection against catastrophic loss.

For the first year, 2014, the administration is allowing maximums to apply separately to both major medical coverage and prescription drug coverage, so patients could face twice the maximum in out-of-pocket spending. This transitional relaxation of the rules is to allow insurers to coordinate their computers that currently administer medical benefits and drug coverage separately.

We’ve discussed before the fact that losses in excess of the maximums may still occur because of limitations in benefits covered or from services provided outside of health plan networks. This one year transition not only will add to that exposure, but it also provides yet another example of the excessive administrative complexity of Obamacare. Wasting resources on excessive administrative services while exposing patients to potential financial hardship would be greatly diminished by changing to a single payer national health program.

Harry Reid: Congress someday will end insurance-based system

Posted by on Monday, Aug 12, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Reid says Obamacare just a step toward eventual single-payer system

By Karoun Demirjian
Las Vegas Sun, August 10, 2013

In just about seven weeks, people will be able to start buying Obamacare-approved insurance plans through the new health care exchanges.

But already, Senate Majority Leader Harry Reid is predicting those plans, and the whole system of distributing them, will eventually be moot.

Reid said he thinks the country has to “work our way past” insurance-based health care during a Friday night appearance on Vegas PBS’ program “Nevada Week in Review.”

“What we’ve done with Obamacare is have a step in the right direction, but we’re far from having something that’s going to work forever,” Reid said.

When then asked by panelist Steve Sebelius whether he meant ultimately the country would have to have a health care system that abandoned insurance as the means of accessing it, Reid said: “Yes, yes. Absolutely, yes.”

The idea of introducing a single-payer national health care system to the United States, or even just a public option, sent lawmakers into a tizzy back in 2009, when Reid was negotiating the health care bill.

“We had a real good run at the public option … don’t think we didn’t have a tremendous number of people who wanted a single-payer system,” Reid said on the PBS program, recalling how then-Sen. Joe Lieberman’s opposition to the idea of a public option made them abandon the notion and start from scratch.

Eventually, Reid decided the public option was unworkable.

“We had to get a majority of votes,” Reid said. “In fact, we had to get a little extra in the Senate, we have to get 60.”

Reid cited the post-WWII auto industry labor negotiations that made employer-backed health insurance the norm, remarking that “we’ve never been able to work our way out of that” before predicting that Congress would someday end the insurance-based health care system.


Wow! Senate Majority Leader Harry Reid predicts that Congress will eventually end the private insurance-based financing system, acknowledging that “a tremendous number of people wanted a single-payer system.” What can we make of this?

We can only guess at the politics behind his statements, but the policy implications are monumental. He not only expresses the view, held by both liberals and conservatives, that employer-sponsored plans must be replaced, he also departs from some conservatives by implying that the private insurance-based system should be eliminated, replacing it with a single payer system.

Is this just a sop to single payer advocates? He and the other Democrats have continued to advocate vigorously for Obamacare. They have enough problems with the intense campaign mounted by the Republicans to repeal it. The efforts by single payer activists to educate the nation on the severe policy deficiencies of Obamacare certainly are a thorn in their side as they try to implement the program. If they could get single payer supporters to believe that Obamacare is an incremental step toward single payer, then maybe they could enlist our cooperation, or at least silence us for the time being.

Well, Obamacare departed in an entirely different direction from single payer, expanding the fragmentation and administrative complexity which are the opposite of the efficiencies that a single payer system would bring us. Obamacare is not an incremental step towards single payer.

In the meantime, conservatives will jump on Reid’s comments as proof of the conspiracy theory that all along Obamacare was a ruse to get us to single payer. Some ruse! It sets up a system that requires only a simple bill to remove tax expenditure incentives from employer-sponsored plans, freeing up individuals to rely on their own shopping skills to purchase the “highest quality and lowest cost” plans in the marketplace. We already know from decades of experience with private insurance markets what a terrible idea that is – much higher costs for poorer quality plans. Yet this “ruse” feeds right into the agenda of some conservatives who would keep government out of health care financing as much as possible.

The lesson here is that we cannot sit back and simply allow the “inevitable” transformation from employer-sponsored plans to single payer take place on its own. We still have to overcome the inertia of, “Yes, single pager would be the ideal system, but it’s not politically feasible at this time.” Thus this is not a time to relax because we won the contest of ideas. This is a time to greatly intensify our advocacy efforts so the nation understands why single payer is the reform that really will work.

Many do not understand their insurance

Posted by on Friday, Aug 9, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Consumers’ misunderstanding of health insurance

By George Loewenstein et al
Journal of Health Economics, September 2013


We report results from two surveys of representative samples of Americans with private health insurance. The first examines how well Americans understand, and believe they understand, traditional health insurance coverage. The second examines whether those insured under a simplified all-copay insurance plan will be more likely to engage in cost-reducing behaviors relative to those insured under a traditional plan with deductibles and coinsurance, and measures consumer preferences between the two plans. The surveys provide strong evidence that consumers do not understand traditional plans and would better understand a simplified plan, but weaker evidence that a simplified plan would have strong appeal to consumers or change their healthcare choices.


Do you understand health insurance? Most people don’t.

By Sarah Kliff
The Washington Post, August 8, 2013

Most people who George Loewenstein, the health-care economist, studied could get one or so questions right – and thought they had pretty decent comprehension of how health coverage works. But only 14 percent could identify what each of the four terms mean.

Actual and self-perceived comprehension of insurance concept
(Percent who think they understand concept, followed by percent who correctly answered question testing understanding of concept)

97% / 78% – Deductible
100% / 72% – Copay
57% / 34% – Coinsurance
93% / 55% – Maximum out-of-pocket

“It’s difficult for people to understand it because it’s inherently complicated,” Loewenstein says. “Even if you understand each concept individually, it’s still difficult to figure out the cost.”

Still, Loewenstein is skeptical. His worry isn’t so much about people having access to information, but rather that insurance is too complex to understand in the first place.

In his ideal world, health insurers would only charge co-payments and eliminate deductibles, co-insurance and every other form of cost sharing. While this could cause some sticker shock – co-pays would presumably increase if they’re the only way of paying for care – it would significantly simplify the system. Health costs would suddenly become predictable.


This survey of Americans who already have private insurance shows that they believe that they understand their insurance coverage, yet only 14 percent of them actually did understand all four of the basic insurance payment concepts. When individuals or their employers select insurance, what they really look at is the premium.

Of great concern is that those who remain relatively healthy and simply pay their premium are largely unaware that they have been part of the trend to greatly expand the prevalence of underinsurance products that place excessive financial burdens on those who actually need health care. They are underinsured and don’t know it.

For middle-income workers, perhaps the most important of the four concepts is maximum out-of-pocket costs. Yet only about half of them understand that the correct choice of the definitions offered was, “After meeting the out-of-pocket maximum, all medical expenses are covered 100%.” Though the other choices that the authors offered were clearly wrong, this one can be questioned as well. Medical expenses for services not provided as a plan benefit or for services obtained out-of-network are not covered 100%, and usually are not covered at all.

It is unfortunate that the insured often do not understand the extent of their potential financial exposure. Lead author George Loewenstein suggests that the problem is not so much the extent of their exposure but rather that the system needs to be simplified so people would understand what their exposure is. He suggests eliminating deductibles and coinsurance and replacing them exclusively with transparent copays, even if at exorbitantly high dollar amounts – at least they would know how much they may have to pay. Yet there is only “weaker evidence that a simplified plan would have strong appeal to consumers or change their healthcare choices.”

We continue to see the policy community struggle with this concept that patients need to be made better shoppers by making their out-of-pocket spending more transparent. Other nations spend far less on health care and often with first dollar coverage. There is no need to create financial barriers to care. We can have far more efficient and equitable health care financing by adopting single payer policies.

Flow of physicians is into Medicare, not out

Posted by on Thursday, Aug 8, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

More Doctors Are Quitting Medicare. Is Obamacare Really To Blame?

By Dan Diamond
California Healthline, August 7, 2013

The Wall Street Journal last month portrayed physician unhappiness with Medicare as a burning issue, with a cover story that detailed why many more doctors are opting out of the program.

And yes, the number of doctors saying no to Medicare has proportionately risen quite a bit — from 3,700 doctors in 2009 to 9,539 in 2012. (And in some cases, Obamacare has been a convenient scapegoat.)

But that’s only part of the story.

What the Journal didn’t report is that, per CMS, the number of physicians who agreed to accept Medicare patients continues to grow year-over-year, from 705,568 in 2012 to 735,041 in 2013.

There’s more than finances at stake, too. In an informal survey of a half-dozen doctors, most told California Healthline that they felt ethically obligated to stick with the program.


Since the beginning of Medicare, we have heard stories that doctors weren’t going to take it anymore; they were going to drop out of Medicare. Some have, but it’s a negligible number. Those who say that Obamacare is forcing more doctors to drop out of Medicare will have to explain to us how that computes with the fact that the numbers of physicians agreeing to accept Medicare has increased by almost 30,000 this year alone, for an all-time high of over 735,000.

What is more reassuring is the result of California Healthline’s very small informal survey of physicians. They found out what most of us who have been in the profession for a few decades already knew – physicians feel ethically obligated to stick with Medicare. What do you think their ethical sense would be under an improved Medicare program that covered everyone?

Health Affairs promotes “regulatory neutrality” for AHIP

Posted by on Wednesday, Aug 7, 2013

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Regulatory Neutrality Is Essential To Establishing A Level Playing Field For Accountable Care Organizations

By Gary E. Bacher, Michael E. Chernew, Daniel P. Kessler and Stephen M. Wiener
Health Affairs, August 2013

A recent drive for payment reform in both the public and private sectors is creating powerful incentives for integration in health care finance and delivery. One of the best-publicized models for encouraging a movement away from the fee-for-service payment arrangements that dominate the nation’s current health care delivery system is the accountable care organization (ACO).

Regulating accountable care organizations poses unique challenges. In particular, regulation should strive to create a level playing field both among the various providers and organizations seeking to form an ACO and between ACOs and health plans. This level playing field is known as regulatory neutrality. Regulatory neutrality refers to the concept that similar products or models for financing or delivering care should be regulated in similar ways to try to prevent regulation from favoring any particular approach or product.

Our analysis recognizes that policy interventions that might be viewed as “nonneutral” in the short term may be necessary to promote policy goals, such as maintaining a competitive marketplace, that facilitate regulatory neutrality over the longer term.

Policy Issues

Accountable care organizations are affected by a number of different regulatory regimes—including antitrust, solvency regulation, Medicare’s Shared Savings Program governance regulations, and Medicare payment rules. An uncoordinated approach to policy among these regimes creates a heightened risk that ACOs will be inadvertently favored or disfavored relative to other entities that accept financial responsibility and arrange for the delivery of care, such as Medicare Advantage plans (private managed care plans operated under the auspices of Medicare).

For example, seemingly small, technical differences—such as reserve requirements—for ACOs versus Medicare Advantage plans can place ACOs at an advantage (or disadvantage) relative to organizations participating in the Medicare Advantage program. Even if each regulatory regime were functioning perfectly in terms of its own objectives, the interaction among regimes can have unintended consequences that affect the neutrality of the system as a whole.

Although it has received little attention from health policy researchers, the concept of regulatory neutrality has been studied extensively in other contexts. This literature offers three key lessons also applicable in the health care setting.

First, in general, neutrality favors less over more prescriptive regulation. Simply put, more-prescriptive regimes affect a greater number of decisions, and thus they entail a greater risk of inadvertently favoring one organizational form over another.

Second, neutrality favors “functional” over traditional “institutional” regulation. That is, when different types of institutions are serving the same function, they should be supervised by the same regulator according to the same set of rules, regardless of the labels that may have been applied to them in the past.

Third, the first two rules are not absolute. As we show in our discussion of antitrust policy, the pursuit of neutrality can support a more activist approach and special rules directed at the health care sector, even if that might be viewed as nonneutral in the short term.

Medicare Payment Rules:

Accountable care organizations operating under the Medicare Shared Savings Program compete with Medicare Advantage plans for both beneficiaries and providers. A beneficiary enrolled in Medicare Advantage cannot be enrolled in an accountable care organization, and vice versa. Providers participating in an accountable care organization are also potential members of provider networks for Medicare Advantage plans.

As a result, neutrality between Medicare Advantage and accountable care organizations is important. Although the Medicare Shared Savings Program regulations attempt to address this point, they also show how even small, technical differences can have an effect on the attractiveness of the different models to beneficiaries and providers.

The effect of these differences could be to favor one model over another in different parts of the country and, in so doing, encourage unwanted behavior among providers and Medicare Advantage sponsors that is aimed at handicapping one of the models in comparison to the other.


Regulating accountable care organizations poses unique challenges. Because of their nature, they are affected by at least four different regulatory regimes. The complexity inherent in this situation requires that policy makers pay special attention to coordination to avoid unintended consequences. To address this concern, the government should seek to maintain a level playing field (what we call regulatory neutrality), so that different models of care and those seeking to offer them are permitted to stand or fall on the cost and quality of care each provides. We conclude that neutrality generally favors less, rather than more, prescriptive regulation. Nonetheless there are exceptions to this rule, with antitrust policy as the most prominent example.

More broadly, the pursuit of neutrality may need to be tempered by a recognition of competing goals. Like so many areas in health care policy, accountable care organizations present both potential opportunities and new challenges. Considerations of regulatory neutrality can add depth and clarity to considerations of how to strike the balance in determining how to regulate these new entities.

(Gary E. Bacher is the director of the Institute for Health Systems Solutions at the AHIP Foundation, in Washington, D.C. Michael E. Chernew is a professor of health care policy in the Department of Health Care Policy at Harvard Medical School. Stephen M. Weiner is the national chair of the health care practice at the law firm Mintz Levin Cohn Ferris Glovksy and Popeo. Daniel P. Kessler is a professor in the business and law schools and a senior fellow at the Hoover Institution at Stanford University. Daniel Kessler acknowledges and thanks the Institute for Health Systems Solutions at the AHIP Foundation for support in conjunction with this article.)


AHIP Foundation Launches Health Systems Change

AHIP Foundation
Institute for Health Systems Solutions, June 11, 2013

The AHIP Foundation (“Foundation”), a 501(c)(3) organization,  today announced the launch of the Institute for Health Systems Solutions (IHSS), which has been established to create a hub for new research, new analysis, and a new opportunity for the exchange of views around changes in the organization and structure of the health care system.

IHSS builds on the Foundation’s focus on exploring ways to better contribute to the health care research and policy enterprise and to advance forward-looking ideas for improving the quality and availability of care.

“Collaboration among stakeholders involved in the health care sector is critical to the country’s ability to address the complex challenges in front of us,” said AHIP Foundation President Karen Ignagni. “That’s why IHSS is launching new partnerships, engaging researchers, and hosting forums to bring together individuals with different points of view to expand the dialogue and educate the public.”

“By working together, we will be better able to recognize the connection points between access, innovation, and smart regulation, and begin to find structural solutions to improve quality and access and reduce costs while addressing the substantial challenges facing our health care system,” said IHSS Director Gary Bacher.


This one is pretty ugly.

The new issue of Health Affairs released this week includes an article on “regulatory neutrality” as a means of “establishing a level playing field for accountable care organizations” (ACOs). What? What level playing field, and what is this about making regulations neutral?

Reading quickly through the article, something didn’t smell right. Studying the article in more detail caused me to come to the conclusion that there was only one reason for the article. It was to introduce the concept of regulatory neutrality as a way of ensuring that private Medicare Advantage plans did not lose footing to the new ACOs established by Obamacare.

The authors conclude that regulatory neutrality “favors less, rather than more, prescriptive regulation,” except “the pursuit of neutrality can support a more activist approach and special rules directed at the health care sector, even if that might be viewed as nonneutral.” That’s it! Medicare Advantage plans should be able to compete with ACOs in relatively unregulated markets, except when they need the government to provide them with “special nonneutral rules.”

Who is behind this? The lead author, Gary Bacher, is director of the Institute for Health Systems Solutions (IHSS) at the AHIP Foundation, and co-author, Stanford Professor Daniel Kessler, “acknowledges and thanks the Institute for Health Systems Solutions at the AHIP Foundation for support in conjunction with this article.”

So what is IHSS? It is a new “research and analysis” entity established by AHIP Foundation, a 501(c)(3) organization, headed by Karen Ignagni… yes, the same Karen Ignagni who heads the insurance lobby organization AHIP – perhaps the most influential lobby organization in the nation. Obamacare was created under the guidance of AHIP.

Health Affairs is one of the most prestigious health policy journals in the world. What is their role in this? It was only June 11 that AHIP Foundation announced the launch of IHSS, and yet less than two months later – much shorter than the usual lead time for a journal article –  Health Affairs has published this article that informs politicians and the policy community that we have a new double standard for regulating private Medicare Advantage plans and their ACO competitors – “regulatory neutrality.”

It is shameful that leaders in our public and private institutions should be conspiring in this blatant abuse of the processes through which legitimate policy science is advanced. I mean, IHSS/AHIP actually purchased Daniel Kessler’s opinion! But Health Affairs? As I said, this one is pretty ugly.

By Katie Robbins, Organizer, New York Metro chapter

On July 30th, the 48th Anniversary of Medicare, PNHP and Healthcare-NOW! NYC members hit the streets in Brooklyn to bring the message to Congress that it’s time to improve and expand our most beloved social insurance program to all.

PNHP-NY Metro Board member, Dr. Sandy Turner, SNaHP (Students for a National Health Program) member Abbey Masonbrink, MD, MPH Candidate, Beth Oram, NP, joined by constituents and activists dropped in on the offices of Members of Congress who had not yet endorsed HR 676 in this Congressional session.

Staffers greeted them with smiles as they arrived unannounced with a cake decorated with the words “Happy Birthday, Medicare!”

In addition to the home-district visits to Representatives Jeffries, Lowey, Maloney, and Velazquez, allies were calling and meeting Members of Congress in their offices in Washington D.C. in preparation for the Congressional Briefing on HR 676. Representatives Rangel and Clarke were thanked for their endorsement of HR 676, and asked to show more leadership to protect and expand Medicare.

As a result of this activity, two new Congressional cosponsors from New York City signed on July 30th, Representatives Maloney and Serrano, bringing the number of Congressional cosponsors of HR 676 to 48.

In conversations with the staff in the Brooklyn offices, a wide range of issues were discussed including the huge number of uninsured people expected even after the ACA is fully implemented, the Brooklyn hospital crisis, and the recovery from Hurricane Sandy, all of which point to the need for improved Medicare for All.

The economic impact study presented on July 31st detailing the significant cost savings of Medicare for All, combined with the urgent health care needs in New York, shows that we cannot wait.

We must build on what works to solve the health and fiscal crisis: Medicare.

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