Institutional Corruption of Pharmaceuticals

Posted by on Wednesday, Jul 24, 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.

Risky Drugs: Why The FDA Cannot Be Trusted

By Donald W. Light
Harvard University, The Lab @ Edmond J. Safra Center for Ethics

A forthcoming article for the special issue of the Journal of Law, Medicine and Ethics (JLME), edited by Marc Rodwin and supported by the Edmond J. Safra Center for Ethics, presents evidence that about 90 percent of all new drugs approved by the FDA over the past 30 years are little or no more effective for patients than existing drugs.

All of them may be better than indirect measures or placebos, but most are no better for patients than previous drugs approved as better against these measures. The few superior drugs make important contributions to the growing medicine chest of effective drugs.

The bar for “safe” is equally low, and over the past 30 years, approved drugs have caused an epidemic of harmful side effects, even when properly prescribed. Every week, about 53,000 excess hospitalizations and about 2400 excess deaths occur in the United States among people taking properly prescribed drugs to be healthier. One in every five drugs approved ends up causing serious harm, while one in ten provide substantial benefit compared to existing, established drugs. This is the opposite of what people want or expect from the FDA.

Prescription drugs are the 4th leading cause of death. Deaths and hospitalizations from over-dosing, errors, or recreational drug use would increase this total. American patients also suffer from about 80 million mild side effects a year, such as aches and pains, digestive discomforts, sleepiness or mild dizziness.

The forthcoming article in JLME also presents systematic, quantitative evidence that since the industry started making large contributions to the FDA for reviewing its drugs, as it makes large contributions to Congressmen who have promoted this substitution for publicly funded regulation, the FDA has sped up the review process with the result that drugs approved are significantly more likely to cause serious harm, hospitalizations, and deaths. New FDA policies are likely to increase the epidemic of harms.


Institutional Corruption of Pharmaceuticals and the Myth of Safe and Effective Drugs

By Donald W. Light, Joel Lexchin and Jonathan J. Darrow
Social Science Research Network (SSRN), Journal of Law, Medicine and Ethics, Vol. 14, No. 3, 2013, June 1, 2013


Over the past 35 years, patients have suffered from a largely hidden epidemic of side effects from drugs that usually have few offsetting benefits. The pharmaceutical industry has corrupted the practice of medicine through its influence over what drugs are developed, how they are tested, and how medical knowledge is created. Since 1906, heavy commercial influence has compromised Congressional legislation to protect the public from unsafe drugs. The authorization of user fees in 1992 has turned drug companies into the FDA’s prime clients, deepening the regulatory and cultural capture of the agency. Industry has demanded shorter average review times and, with less time to thoroughly review evidence, increased hospitalizations and deaths have resulted. Meeting the needs of the drug companies has taken priority over meeting the needs of patients. Unless this corruption of regulatory intent is reversed, the situation will continue to deteriorate. We offer practical suggestions including: separating the funding of clinical trials from their conduct, analysis, and publication: independent FDA leadership; full public funding for all FDA activities; measures to discourage R&D on drugs with few if any new clinical benefits; and the creation of a National Drug Safety Board.

Restoring Institutional Integrity for Safer Drugs

Many concerned experts have suggested ways to reduce conflicts of interest and improve the safety and effectiveness of drugs.

First, while research companies play important roles in discovering and developing superior drugs, they should play no role in testing them. Over the years, expert bodies and prominent scientists have called for an independent institute to test drugs because commercial trials were so poor, biased, and conflicted. Yet this bedrock reform has never been accomplished, as the industry’s lobbying of Congress and its contributions to Congressional campaigns have soared.

Second, the FDA needs new leadership to restore public trust and build a new culture focused on safety through enforcement of its existing rules. Hearings through the 1960s and 1970s documented how frequently the FDA fails to adhere to its own rules and protocols.

Third, user fees must end and the FDA must be entirely funded by taxpayers-as-consumers. The FDA should be entirely clear about whom it serves.

Fourth, while approval criteria should allow for a sufficient number of therapeutically equivalent drugs in a class to give clinicians a range of choices, they should also require patient-relevant evidence of superiority. Non-inferiority trials should be allowed only if one can ethically justify entering patients into a trial in which there can be no benefit for them. All adverse events, including those occurring among subjects who drop out, must be reported with follow-up for two years.

Fifth, Congress needs to restore trust by creating a National Drug Safety Board with adequate powers, funds, and mandates to independently investigate and report on drug safety issues. The creation of this board would support the position that all data related to how drugs and vaccines affect people are a public good and that access to this data is a human right. Both the inadequacy of pre-approval safety testing and the lack of systematic post-approval monitoring need urgent attention.

None of this is likely to happen until third-party payers, politicians, and the people decide they want to stop paying so much for so many drugs of little value and then for treating the millions harmed by those drugs. Nor is it likely until the campaign to restore institutional integrity to Congress through funding elections by the 99 percent, rather than by the one percent, is successful.

Millions of people are being harmed by drugs, many of which have only negligible therapeutic value, and tens of thousands are dying. We need much greater government oversight of pharmaceuticals, certainly more than that which currently is being provided by the FDA.

The Motley Fool on Medicare for All

Posted by on Tuesday, Jul 23, 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.

How Much Could Medicare for All Save You?

By Rich Smith
The Motley Fool, July 21, 2013

But could it be that the ACA isn’t really needed at all? Could an alternative idea — “Medicare for all” — actually do a better job of controlling medical costs, and making health care affordable for Americans?

Harvard Medical School visiting professors David Himmelstein and Steffie Woolhandler recently noted on the pages of The New York Times that a Medicare-for-all health care system — known commonly as “single-payer” — is an incredibly efficient operation, in terms of costs.

On average, only 2% of the revenues that flow through Medicare are needed to cover overhead costs. In contrast, patients who subscribe to private health insurance spend 14% of their money — seven times as much — just paying for the overhead costs doctors incur from juggling the multitude of insurance procedures required for different patients subscribing to insurance plans.

In contrast, the U.S. government itself agrees that the ACA — the system we’ve settled upon instead of offering Medicare for all — costs more than a move to a cheaper, more efficient, and better single-payer system. The U.S. Government Accountability Office calculates that a switch to single-payer would shave $400 billion a year off the national health-care bill.

Little wonder, then, that a 2008 survey published in the Annals of Internal Medicine found that 59% of physicians polled support Medicare for all.

If an individual consumers think they’re better off with a private health insurance plan from WellPoint — or from UnitedHealth Group, Aetna, or Cigna — then fine. They could still sign up for one of those, either as a supplement to Medicare-for-all or, if they prefer, as an exclusive plan, and choose not to participate in Medicare at all. For that matter, there should be no need to require anyone to buy any insurance whatsoever.

Excerpts from representative Comments:

“Well, of course! But isn’t the ACA a step in the right direction?”

“Medicare for all would be far superior to any other plan, which was why it was killed before it could get out of committee.”

“ahh, if only the Republicans had not fought the entire idea so hard, that would have been the ideal solution.”

“A big concern, that not a lot of people know about-more and more doctors are refusing to take on new Medicare patients.”

“Medicare is an existing program that could simply be expanded and fixed a bit where necessary. This seem like a much much more common sense approach than a whole new bureaucracy.”

“Authors often site Medicare’s discount rate and admin cost. Both are a mirage. The Medicare discount rate is so low that it does not pay lights on costs.”

“It’s true that Medicare is already set up very well and that a minor legislative action could make it available to all…ObamaCare puts more power into the hands of private insurance companies and BigPharma, and how do you think those will use it?”

“Of course “single payer” would be better, but was not proposed in anticipation of Republican opposition to “socialized medicine” and their insistence on the primacy of a role for the private health insurance companies. As to Medicare for all on a voluntary basis, it still does not answer what to do about the uninsured who get sick. Who pays for them?”

“DUH! How soon could America deal Rich Smith and “Medicare for All” for Ovomit and OvomitCare?”

“Of course Medicare for all makes sense.”

“Regarding hospital charges vs. what insurers pay ($24,000 vs. $4000). . .that is a HUGE problem in healthcare that in a way, single payer WOULD correct.”

“You are dreaming in theory. The Complete Lives System that withholds medical care from infants, special needs children and reduces the amount of medical care available each year by a dollar amount to anyone over 50.”

“the money saving answer is to repeal the ACA and start over with insurance pools and letting those who could afford insurance and don’t have it suffer for their sin”

“PS: don’t forget that Obamacare expands IRS and gives IRS much control over your healthcare”

“Physicians often limit total Medicare patients, and broadening the program will just further stratify medical care from those who have the money to pay and those who do not.”

“Medicare for all would work but only if the discounts were renegotiated.”

“Obamacare will be the destruction of America !! Obama wouldn’t have it any other way !!! Hail to ol RACE BAITER IN CHIEF !!!”

“More and more doctors are refusing new Medicare patients since the pay is too low and it takes too long to get reimbursed. If we moved to a Medicare-based system, what would happen? We would all have insurance, but it would be next to impossible to find a doctor that accepts the insurance. Yeah, that’s smart. Real smart.”

“You don’t have the right to infringe on someone else’s liberties and that is exactly what happens when the government taxes one person to give it to another. Freedom is the answer. God Bless America.”

“This is exactly what Dr. Ben Carson has been proposing the past two years. EACH and every American citizen would have a medicare spending plan and credits to that fund would start immediately upon birth.”

“i think eveyone knows that single-payer is the only efficient answer, but the scum in washington d.c. won’t allow it – they their souls to big pharma”

“Great article. This is so straightforward anyone could understand it. Maybe even congresspeople?”

“Of course this is a step in the right direction, and someday a single payer system will prevail.”…

About The Motley Fool

The Motley Fool is a multimedia financial-services company dedicated to building the world’s greatest investment community. Reaching millions of people each month through its website, books, newspaper column, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company’s name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king — without getting their heads lopped off.

This article is truly remarkable because of its source. The Motley Fool “champions shareholder values and advocates tirelessly for the individual investor.” Although they didn’t get everything right (they would include private insurance options and would have no requirement to even be insured), nevertheless this is a particularly strong statement for Medicare for All from a Wall Street source that is just now joining the parade.

Perhaps even more remarkable are the comments posted in response to this article. Considering that these comments are from the investment community, there is strong support for Medicare for All. Inevitably, as with most comment sections, there is a representation of ill-informed, ideologically-driven and sometimes belligerent comments, but those can be ignored.

We should take home from this the lesson that many in the investment community understand that Medicare for All really does make sense from the business perspective. We should tailor our message accordingly.

Forty Hours Is Full Time Act of 2013

Posted by on Friday, Jul 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.

S.1188 — Forty Hours Is Full Time Act of 2013

113th Congress, First Session
The Library of Congress

To amend the Internal Revenue Code of 1986 to modify the definition of full-time employee for purposes of the individual mandate in the Patient Protection and Affordable Care Act.

June 19, 2013

Ms. COLLINS (for herself and Mr. DONNELLY) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to modify the definition of full-time employee for purposes of the individual mandate in the Patient Protection and Affordable Care Act.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

This Act may be cited as the `Forty Hours Is Full Time Act of 2013′.

Section 4980H(c) of the Internal Revenue Code of 1986 is amended–
(1) in paragraph (2)(E), by striking `by 120′ and inserting `by 174′; and
(2) in paragraph (4)(A) by striking `30 hours’ and inserting `40 hours’.


ObamaCare’s Definition of a Full-Time Job Needs Revising

By Sen. Joe Donnelly (D-Indiana) and Sen. Susan Collins (R-Maine)
The Wall Street Journal, July 18, 2013

In Lafayette, Ind., a school district cut the hours of 200 support staff to no more than 29 per week. In Bangor, Maine, the school system is preparing to track and cap the number of hours worked by substitute teachers to ensure that they don’t work more than 29 hours a week. Elsewhere, in Portland, Maine, a small business reduced a part-time employee’s hours from 35 to 29.

We are hearing reports like this from across the country. Why is this happening?

It’s happening because under the Affordable Care Act a “full-time employee” is defined as anyone working an average of 30 hours a week, rather than the traditionally accepted 40-hour work week. Employers with more than 50 full-time employees or full-time equivalents will be required to provide their employees with health insurance or potentially face a financial penalty, essentially a fine.

This rule is causing a growing number of employers to cut the hours of their workers, and according to one study by the UC Berkeley Labor Center, at least 2.3 million workers are at risk. This provision of the health law is not in the best interests of the country, and it needs to change.

As the economy shows modest signs of recovery, we should be working with employers to encourage additional job growth. Yet we are hearing from small businesses, public school systems and nonprofit organizations, that they are cutting employee hours and forgoing additional hiring in an effort to ensure that they are in compliance with the law.

To address this problem, we have introduced the “Forty Hours is Full Time Act of 2013.” It defines a full-time employee for the purposes of complying with the Affordable Care Act as someone who works an average of 40 hours per week, or 174 hours per month for full-time equivalents.…?

Many employers are in the process of reducing employees’ hours to under 30 per week in order to avoid the requirement to either provide health insurance for their workers or pay a penalty. Not only do these employees end up with no health insurance, they also have their paychecks reduced by about 25 percent. Since most already have modest incomes, this reduction in pay can create severe financial hardship. What can be done?

Senators Collins and Donnelly seem to define the primary problem as the reduction in income that these employees face. By changing the definition of full time work to 40 hours per week for purposes of the Affordable Care Act (ACA), employers will be able to preserve most of their workers’ incomes by employing them for 39 hours, while being relieved of the responsibility of providing health insurance. The employees will still be able to have health insurance since they can then purchase individual plans in the state insurance exchanges. Little does it matter that these are low-actuarial value plans with high-deductibles, and inadequate subsidies to protect family budgets. Oh. Maybe that won’t work so well.

It is not simply the definition of a work week that is wrong. It is the fundamental ACA financing model that is terribly flawed. Trying to fix it with patches such as redefining the work week will never get us where we need to be. We have to change the financing model. (Yes, we need single payer.)

Union leaders: Taft-Hartley plans at risk under ACA

Posted by on Thursday, Jul 18, 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.

Union Letter: Obamacare Will ‘Destroy The Very Health and Wellbeing’ of Workers

By Tom Gara
The Wall Street Journal, July 12, 2013

The leaders of three major U.S. unions, including the highly influential Teamsters, have sent a scathing letter to Democratic leaders in Congress, warning that unless changes are made, President Obama’s health care reform plan will “destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”

The full letter, below:


Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.
Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans.

And finally, even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.

We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President

D. Taylor

The Affordable Care Act (ACA) was intended to keep insurance obtained through employment intact, while adding coverage for the uninsured through new state insurance exchanges and through an expansion of Medicaid. Among the programs to be protected were the multi-employer Taft-Hartley plans that were collectively bargained between unions and employers. Yet an unintended consequence of ACA seems to have put these plans at risk.

Why? The provision of ACA that exempts employers from a requirement of providing coverage for part-time workers – those working less than 30 hours per week – has provided an opportunity for employers to escape the burden of their health benefit programs by merely rearranging the work schedules of their employees. It is already happening even though the employer requirement does not go into effect for another one and a half years.

Employers can assuage their guilt to some extent since they know that the government will subsidize the plans when their newly part-time employees switch to the insurance exchanges. These subsidies are not available for the Taft-Hartley plans (though employers are able to deduct from taxable revenues the cost of these plans – a tax expenditure).

Another motivation for employers to attempt to reduce the Taft-Hartley plans is that ACA includes a tax to be assessed against so-called Cadillac plans. Little does it matter that these are not plans with some kind of gilded benefits. These are merely standard health plans that have not had benefits stripped out nor have they shifted excessive costs to patients through higher deductibles and other forms of cost sharing. Yet health care costs are now so high that the cost of the standard benefits offered exceed the Cadillac threshold.

Union members gave up major wage increases in order to have secure health care coverage. If they lose their Taft-Hartley plans, it is unlikely that employers would grant the wage increases that they would have received had they not had to spend so much on the health plans, even though economists consider these plans to be paid for by forgone wage increases. The reality is that the economic model we have today transfers much of the productivity of the workers to the wealthiest one percent of our society.

Taft-Hartley was designed as anti-union legislation, though allowing collectively-bargained health benefit programs. Now even those programs are at risk. The anti-union one-percenters are winning the war.

We should remove responsibility of providing health benefits from the employers, but not in a way that shafts their employees. We need to replace our current dysfunctional health care financing system with one that works for everyone, while sharing the costs equitably – a single payer national health program. The solution is so obvious. Why isn’t it catching on?

Pioneer Accountable Care Organizations disappoint

Posted by on Wednesday, Jul 17, 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.

Pioneer Accountable Care Organizations succeed in improving care, lowering costs

Centers for Medicare and Medicaid Services, July 16, 2013

Today, the Centers for Medicare & Medicaid Services (CMS) announced positive and promising results from the first performance year of the Pioneer Accountable Care Organization (ACO) Model, including both higher quality care and lower Medicare expenditures.  Made possible by the Affordable Care Act, the Pioneer ACO Model encourages providers and caregivers to deliver more coordinated care for Medicare beneficiaries. This model, launched by the CMS Innovation Center, is part of the Affordable Care Act’s efforts to realign payment incentives, promoting high quality, efficient care for Medicare beneficiaries.  ACOs, including the Pioneer ACO Model and the Medicare Shared Savings Program, are one way CMS is providing options to providers looking to better coordinate care for patients and use health care dollars more wisely.

“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” said CMS Administrator Marilyn Tavenner.  “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.”…


A Pillar of Obamacare’s Cost-Saving Effort Falls Short

By Devin Leonard
Bloomberg Businessweek, July 16, 2013

It’s no secret that the Obama administration’s effort to roll out health-insurance exchanges in every state is turning out to be more challenging than expected. Its campaign to lower health costs isn’t faring any better. On Tuesday, the Centers for Medicare and Medicare Services announced middling first-year results for the administration’s highest profile cost-control effort: the Pioneer Accountable Care Organization Model.

Obamacare supporters have long promised that Accountable Care Organizations — groups of hospitals and doctors that tend to large flocks of Medicare patients, with an eye toward keeping them out of the hospital — would be integral to bringing down the nation’s health-care costs. ACOs are supposed to come up with innovative ways of keeping patients in better shape by focusing on preventive measures while saving money in the process. Under the plan, the ACOs themselves are to be rewarded with the share of the savings they generate.

Thirty-two health care provider groups signed up for the pioneer program intended to promote the new model, but the Centers for Medicare and Medicare Services said Tuesday that only 13 of them generated enough savings to qualify for a cut. Two participants actually lost money instead.

The news wasn’t all bad. The pioneers produced better-than-average results on cholesterol control for diabetes patients. “Overall, we are very excited about the results,” Patrick Conway, chief medical officer for the Centers for Medicare and Medicare Services, told the Wall Street Journal. But a significant percentage of the pioneers weren’t so thrilled, and nine are slated to exit the program.

It’s much too soon to call the pioneer program a failure. It’s also premature to say the ACO model is one that will save vast amounts sums of money. That hasn’t stopped some of the law’s staunchest supporters, who might want to temper their rhetoric after Tuesday’s report.…


Pioneer ACOs Year One: On The Path To A Learning Health Care System

By Douglas Hastings
Health Affairs Blog, July 17, 2013

The Pioneer Model should be seen as part of a crucial phase of testing alternative payment and delivery models in an effort to achieve greater value in health care.  One year’s results should not be seen as a definitive outcome or leading to a dispositive conclusion, but rather as a valuable source for learning.

The participating providers are required to be both financially and clinically integrated.  The ACOs must, among other core attributes, have an effective governance and leadership structure, have the ability to apply evidence-based medicine and care coordination processes, meet quality measures, have a savings distribution formula, develop a robust electronic health record infrastructure, and, importantly, be able to effectively engage patients in their care and their health.

ACO skeptics clearly remain.  Among the doubts and cautions that have been raised are that ACOs will drive insufficient change in physician behavior and patient engagement, result in insufficient savings, create a specialist (and thus patient) backlash, suffer from lack of agreement over measures and metrics, and drive up prices due to consolidation.  These are legitimate concerns.  But such concerns should not mean that the testing should slow down.  Rather, in my view, it should accelerate, given some early positive results and the ongoing cost and quality challenges faced by our health care system.…

The Pioneer Accountable Care Organizations (ACOs) were already existing health care organizations that were selected as potentially exemplary models that could show the rest of the nation how well ACOs can work to achieve higher quality at lower costs. We now have a report from CMS of the initial “successes” of this model. Although the rhetoric from CMS is quite rosy, most reporters were not impressed, as the Bloomberg Businessweek response demonstrates.

Considering the added administrative hassle, the savings were negligible, with only 13 of the 32 organizations saving enough to receive “shared savings” from CMS, and 2 actually lost money.

Even the supposed quality gains were unimpressive since they represented only 15 measurements which the organizations were told in advance would be used to determine whether or not they met quality standards. These teach-to-the-test gains can hardly represent the overall quality status of each organization.

It is time for our policy makers to stop wishing that the ACO model is the nirvana of health policy and get on with endorsing a proven model of enhancing quality while controlling costs – a single payer national health program – a model that would have the additional benefit of actually covering everyone.

Tempering P4P expectations

Posted by on Tuesday, Jul 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.

An Examination of Pay-for-Performance in General Practice in Australia

By Jessica Greene Ph.D.
Health Services Research (HSR), August 2013

This study examines the impact of Australia’s pay-for-performance (P4P) program for general practitioners (GPs).

There was a short-term increase in diabetes testing and cervical cancer screens after program implementation. The increase, however, was for all GPs. Neither signing onto the program nor claiming incentive payments was associated with increased diabetes testing or cervical cancer screening.


The Effect of Pay-for-Performance in Nursing Homes: Evidence from State Medicaid Programs

By Rachel M. Werner M.D., Ph.D., R. Tamara Konetzka Ph.D., Daniel Polsky Ph.D.

Medicaid-based P4P in nursing homes did not result in consistent improvements in nursing home quality. Expectations for improvement in nursing home care under P4P should be tempered.

More evidence that pay-for-performance (P4P) does not improve quality nor reduce costs.

Single payer does.

Insurers will continue to skirt regulations

Posted by on Monday, Jul 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.

Insurers Seek Right Balance of Risk, Reward

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

In the insurance business, some customers are more desirable than others—and insurers will be seeking to woo them in preparation for the health law’s new marketplaces.

Customers not only bring revenue in the form of the premiums they pay. They also come with costs, since the insurer will be on the hook for medical expenses. Traditionally, that has made healthier people the best insurance risk. Insurers often could decline to sell plans to people with health problems, or charge them more.

Now, the health law is changing the rules of the game. Under its requirements, insurers must sell plans to all comers, and the rates can’t be tied to customers’ health. Less obviously, the law includes mechanisms that are designed to ensure that individual companies aren’t punished if they draw a mix of sicker consumers.

Young and healthy people will still be needed to help balance out the costs of sicker customers. But, in addition, some people who weren’t sought after in the past may become profitable because of the law’s payment structure. Among them: people who have chronic conditions such as diabetes, but who can keep their diseases managed and avoid big costs such as hospital visits, said Shubham Singhal, a director at consulting firm McKinsey & Co. That is because insurers can be paid more to cover consumers based on their diagnoses.

Since insurers can no longer pick and choose their customers, they will employ a range of subtler tools, including marketing campaigns and carefully designed plans aimed at the customers the insurers most want.

“They want to attract the right risk,” said Siva Namasivayam, chief executive of SCIO Health Analytics Inc. His firm helps insurers identify customer types, such as “entry-level singles” and “healthy baby boomers,” each with projections on likely costs. The firm pinpoints, by ZIP Code, where the different types tend to live, so the insurer can target its marketing geographically.

Highmark Inc., a Pittsburgh, insurer, said it has around 100 targeted campaigns aimed at particular types of consumers, including recent college graduates and retirees not yet eligible for Medicare. It sends walk-in tractor-trailers to college campuses and sets up booths at community events such as charity walks. “We have to be more one-to-one than we were historically,” said Steven Nelson, a senior vice president at Highmark.

Blue Cross & Blue Shield of Rhode Island also plans to aim at certain populations, including young men. Last year, the insurer promoted one of its low-cost plans with a campaign that included posters on the walls of men’s bathrooms in bars. “You don’t need beer goggles to fall in love with this health plan,” one slogan said.…

One of the great advantages of the Affordable Care Act was that it would finally bring an end to insurance company chicanery in which they were able to selectively insure more profitable healthy individuals while keeping the more costly sick individuals out of their plans.  At least, that’s what the new requirements for guaranteed issue (they must sell the plans to everyone, not only the healthy) and community rating (they cannot charge higher rates for the sick) were supposed to do. But insurers have a much larger bag of tricks.

Although insurers can no longer reject applicants who fail medical underwriting standards, they have learned to selectively market their plans to healthier populations, and they will continue to do so. They intensify their targeting to younger, healthier individuals while avoiding marketing to higher cost individuals. As this article indicates, an industry has arisen to help insurers select their targets for marketing, based on the health of selected groups or on the average health in geographical regions (ZIP Codes). This adds yet more administrative costs to our system already tremendously overburdened with administrative waste.

Not only do insurers market selectively to the healthier, they also are taking advantage of risk adjustment. Since insurers who take on clients with greater medical problems are paid more through these adjustments, it is to their advantage to include individuals with unfavorable diagnoses but whose health care needs are actually quite minimal. An individual might technically be diagnosed as a diabetic but require very little care, and yet the insurer can receive adjustments that are designed for a more severe diabetic with multiple complications. So it is to their advantage to enroll patients with just a touch of bad disease. They are already doing this in the private Medicare Advantage plans.

If an insurer misjudges and ends up with higher cost risk pools, they can no longer dump only those with greater needs, but they can pull their plans from the regions where they are experiencing high spending.

Insurers are masters at innovation. No matter how many laws and regulations they face, they will always find other ways to work the system. That’s just plain old good business. And that is the problem. We don’t want our health care defined by what is good for the industry; we want it defined by what is good for patients. We won’t get that until we establish our own public system dedicated to the primacy of patients.

And about that Blue Cross & Blue Shield of Rhode Island campaign that included posters on the walls of men’s bathrooms in bars with the slogan, “You don’t need beer goggles to fall in love with this health plan.” Although there are ten categories of essential health benefits, insurers are allowed flexibility within each category. Those young men would be well advised to read their plans carefully to see if they exclude sexually transmitted diseases and injuries while intoxicated. Insurers know no boundaries.

What is best health care coverage for part-time workers?

Posted by on Friday, Jul 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.

Wegmans cuts health benefits for part-time workers

By Samantha Maziarz Christmann
The Buffalo News, July 10, 2013

Et tu, Wegmans?

The Rochester-based grocer that has been continually lauded for providing health insurance to its part-time workers will no longer offer that benefit.

Until recently, the company voluntarily offered health insurance to employees who worked 20 hours per week or more. Companies are required by law to offer health insurance only to full-time employees who work 30 hours or more per week.

Wegmans employs roughly 1,433 full-time employees and 4,304 part-time employees in the Buffalo Niagara region.

Several Wegmans employees confirmed part-time health benefits had been cut and said the company said the decision was related to changes brought about by the Affordable Care Act.

However, part-time employees may actually benefit from Wegmans’ decision, according to Brian Murphy, a partner at Lawley Benefits Group, an insurance brokerage firm in Buffalo.

“If you have an employee that qualifies for subsidized coverage, they might be better off going with that than a limited part-time benefit,” Murphy said.

That’s because subsidized coverage can have a lower out-of-pocket cost for the insured employee while also providing better benefits than an employer-paid plan.

Under the Affordable Care Act, part-time employees are not eligible for health insurance subsidies if their employer offers insurance.

“It’s a win-win. The employee gets subsidized coverage, and the employer gets to lower costs,” Murphy said.

“As a private company, we don’t share specifics of our employee benefits programs. It’s a given that health care reform will result in some changes to our benefits program, but it will not change our commitment to meeting the needs of our employees,” Wegmans said in a statement.…

The best coverage for part-time workers? Well, for part-time workers and for everyone else, it would be a single payer national health program. But we don’t have that. So, before we can enact an improved Medicare for everyone, what would be the best way to cover part-time workers under the Affordable Care Act?

During the reform process, the plight of the part-time worker remained an important consideration in trying to design a near-universal system (which it didn’t turn out to be). Part-time workers tend to have very low wages making it impossible to purchase decent insurance on their own, and yet their family incomes are often just barely high enough that they do not qualify for Medicaid.

Congress decided to continue to rely heavily on employer-sponsored health plans for coverage. The problem with part-time workers is that most employers either provided them with no coverage at all, or, if they did, the coverage was often so spartan that it was almost worthless. Although it was decided to require all but the smallest employers to provide employee coverage or face financial penalties, legislators yielded to larger employers who wanted part-time employees to be exempt. The threshold qualifying as part-time was set at 30 hours.

Think of all of the occupations in which flexible, part-time positions are ideal. Large retail sellers, supermarket chains, restaurant and fast food chains, hospitality services, and so forth, serve as examples. Labor costs are a great concern for these employers, and they have struggled with the concept of trying to meet the high costs of adequate health benefit programs.

But look at the opportunity they have with the 30 hour threshold. They no longer have to feel guilty about providing only worthless plans or no plans at all. Under the Affordable Care Act, the government is going to provide part-time employees subsidies inversely related to income, supposedly allowing these people to buy more comprehensive coverage through the exchanges. Employers can walk away, and these employees will get a better deal from the government.

Although it may be a better deal, it’s still not such a hot prospect. Even with subsidies for both premiums and out-of-pocket expenses, these low income individuals will still not be able to afford their portion of the costs and will face financial hardship as a result.

So these employers will be relieved of their responsibility of paying for health care coverage for their part-time employees, and the taxpayers will pick up the tab. Although there are important reasons for bringing an end to employer-sponsored coverage, it is unfair to give these employers special breaks, especially when considering that several members of the Walton family are near the top of the billionaires list. We should pay more taxes so that they can collect more billions?

No. This “win-win,” wherein “the employee gets subsidized coverage, and the employer gets to lower costs,” is a loser for health care equity and justice. As said at the start, we need a single payer national health program.

The State of US Health: Older but Sicker

Posted by on Thursday, Jul 11, 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.

The State of US Health, 1990-2010

By US Burden of Disease Collaborators
JAMA, July 10, 2013


To measure the burden of diseases, injuries, and leading risk factors in the United States from 1990 to 2010 and to compare these measurements with those of the 34 countries in the Organisation for Economic Co-operation and Development (OECD) countries.


We used the systematic analysis of descriptive epidemiology of 291 diseases and injuries, 1160 sequelae of these diseases and injuries, and 67 risk factors or clusters of risk factors from 1990 to 2010 for 187 countries developed for the Global Burden of Disease 2010 Study to describe the health status of the United States and to compare US health outcomes with those of 34 OECD countries.


US life expectancy for both sexes combined increased from 75.2 years in 1990 to 78.2 years in 2010; during the same period, HALE (healthy life expectancy) increased from 65.8 years to 68.1 years. The diseases and injuries with the largest number of YLLs (years of life lost due to premature mortality) in 2010 were ischemic heart disease, lung cancer, stroke, chronic obstructive pulmonary disease, and road injury. Age-standardized YLL rates increased for Alzheimer disease, drug use disorders, chronic kidney disease, kidney cancer, and falls. The diseases with the largest number of YLDs (years lived with disability) in 2010 were low back pain, major depressive disorder, other musculoskeletal disorders, neck pain, and anxiety disorders. As the US population has aged, YLDs have comprised a larger share of DALYs (disability-adjusted life-years) than have YLLs. The leading risk factors related to DALYs were dietary risks, tobacco smoking, high body mass index, high blood pressure, high fasting plasma glucose, physical inactivity, and alcohol use. Among 34 OECD countries between 1990 and 2010, the US rank for the age-standardized death rate changed from 18th to 27th, for the age-standardized YLL rate from 23rd to 28th, for the age-standardized YLD rate from 5th to 6th, for life expectancy at birth from 20th to 27th, and for HALE from 14th to 26th.

Conclusions and Relevance

From 1990 to 2010, the United States made substantial progress in improving health. Life expectancy at birth and HALE increased, all-cause death rates at all ages decreased, and age-specific rates of years lived with disability remained stable. However, morbidity and chronic disability now account for nearly half of the US health burden, and improvements in population health in the United States have not kept pace with advances in population health in other wealthy nations.

According to The Washington Post (July 10), Thomas R. Frieden, director of the Centers for Disease Control and Prevention “noted that the United States is among the last of its economic peers in offering universal health care, and it is late in making societal changes to address the risks that needlessly shorten lives.” He said, “The good news is these are things we can do something about. If you look at the county-by-county charts, it shows in communities where they took improvements in health seriously, they were able to see dramatic improvements.”

With our great wealth, we can do both. We can offer universal health care, and we can expand public health programs, including fostering societal changes that address our health risks. But first we need to elect legislators and administrators who support these goals. It’s really up to us.

How States Can Get Close to a Single-Payer System

Posted by on Wednesday, Jul 10, 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.

Public Citizen Releases Road Map for States to Achieve Unified, Universal Health Care; Distributes to State Lawmakers Throughout U.S.

Public Citizen, July 10, 2013

WASHINGTON, D.C. – The steps a state would need to take to move toward creating a single-payer health care system are somewhat complicated but are doable, according to a new Public Citizen report that provides states with a road map of how to achieve unified, universal health coverage.

A state could not hope to achieve a pure single-payer system, such as exists in Canada, because of federal programs, such as Medicare and Medicaid. But many of the ambitions of a single-payer system can be realized at the state level, the report explains. A state can accomplish much that the Affordable Care Act (ACA), or Obamacare, does not: provide universal care, greatly increase administrative efficiency and control costs.

Public Citizen distributed the report to state lawmakers throughout the country through the state affiliates of Health Care NOW. The report is available (at the link below).

“The facts are simple: We pay far more for health care than any developed country, yet we cover fewer people and get worse results,” said Dave Sterrett, health care counsel for Public Citizen’s Congress Watch division. “It’s time for real change.”

Calling for a universal care system in the United States is often painted as a quixotic pursuit because of incessant fear-mongering by conservatives about the supposed evils of a “government takeover” of health care.

But the report, A Road Map to “Single-Payer”: How States Can Escape the Clutches of the Private Health Insurance System, points out that Americans polled in 2012 were nearly evenly divided when asked if they favored a single-payer system, and this was amid the relentless drumbeat of opposition to the ACA. Evidence suggesting support for the single-payer concept also can be found in Americans’ widespread approval of Medicare, the government-run program that provides nearly universal care to those over 65 at far less cost than care that is reimbursed by private insurance companies.

The first step on a state’s road to a quasi-single payer system is to obtain a waiver from the ACA. This is well within reach because the act includes language that permits a state to receive a waiver from the ACA’s strictures, beginning in 2017. A state can be granted this waiver if it demonstrates that its alternative would provide coverage at least as good, for at least as many people, as the ACA would, and not add costs to the federal budget. For states that receive waivers, the federal government must provide funds to the state that equal what it would spend pursuant to the ACA. A state promising to provide comprehensive, universal care would easily clear this hurdle.

Achieving integration between a state system and Medicare and Medicaid would be more difficult because the law does not permit a broad waiver from these programs. But the law does provide ample room for the administration of these programs within a state to be altered to align billing systems and prices. This would allow Medicare and Medicaid to appear to providers and patients to be almost seamlessly integrated with a state system, although this strategy would require a state to dedicate resources to reconcile claims with the federal government.

The other major legal hurdle for a state to overcome is posed by the 1974 Employee Retirement Income Security Act (ERISA), which forbids states from regulating employer benefits plans. But a small body of case law provides grounds for cautious optimism that the hurdles of ERISA can be overcome. A state could insulate its system from being struck down on ERISA grounds by legislating alternative funding options, such as payroll, income or sales taxes.

The final major hurdle is determining how to pay for a universal care system. Transitioning from a system largely financed by employer and employee-paid insurance premiums to one likely financed by some combination of taxes would be challenging.

But the transition should not hurt employers or residents in the long run, the report concludes. A proposed system in Vermont, for instance, would significantly expand both the quality of benefits and the number of people covered. Yet Vermont’s plan would cost slightly less than the state’s current system, according to analysis commissioned by the state.

“Single-payer in the United States has been scorned but never tested,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “We’re looking for a few pioneering states with the courage and fortitude to let common sense prevail over the insanity of our current patchwork system. Once they succeed, we expect most opposition to single-payer and our reliance on privately insured health care to become historical relics.”

Report – “A Road Map to ‘Single-Payer'” (21 pages):…

This very useful Public Citizen report on steps toward single payer at the state level serves two important functions:

1)  Although the Affordable Care Act is providing a few beneficial tweaks to the financing of our health care system, by now it is obvious that, by building on our dysfunctional, fragmented system, intolerable health care injustices will be perpetuated. Yet Congress itself is currently so dysfunctional that it is impossible to get them to consider a vastly superior alternative – a single payer Improved Medicare for All.

For those who cannot wait until we are able to elect a sane supermajority in Congress, this report provides suggestions on how some single payer principles could be applied at the state level. Although that pathway is rugged and cannot lead all the way to single payer, at least it would provide more improvement than we are seeing with the Affordable Care Act. There is plenty in this report to keep health justice activists very busy on the state level.

2)  The far more important conclusion to be drawn from this report is that states acting alone cannot establish a bona fide single payer system. There are too many major barriers that would prevent states from totally replacing their fragmented financing infrastructure. Under current federal laws, limitations imposed on states would not allow them to capture many of the more effective benefits of the single payer model.

Although states could come much closer to universal coverage, their systems would still perpetuate many of the inefficiencies and inequities that exist today. Without the power of a public, single payer monopsony (a single buyer), improving allocation of our resources would be much more difficult. Although states could improve billing functions, that captures only a very small portion of the profound administrative waste in our system. Any savings on a state level would be very modest and would not be enough to pay for the elimination of uninsurance and underinsurance. Total health care costs would increase even more, when costs are already intolerable.

The lesson? We cannot let up in the least in our efforts to educate the nation on the imperative of a single payer national health program. To be unequivocally clear, that’s NATIONAL.

We cannot use the example of Saskatchewan and pretend that a state can set up a single payer system that could serve as an example for the nation – a model that could be expanded to all states. No. Saskatchewan began with a tabula rasa. They were able to create a de novo single payer system. The Public Citizen report shows us that our existing federal laws create complexities that would prevent states from enacting a financing model that could be held up to the rest of the nation as an example of the benefits of single payer, even though that is a noble intent of the report. In fact, there is a risk that such an effort would allow opponents to claim, “See, single payer doesn’t work.”

Vermont is currently implementing legislation that originally was intended to bring it a single payer financing system. But they found that a bona fide single payer system is not possible, so they have abandoned the term, “single payer.” That might be wise advice for other state activists.

We cannot allow enthusiasm for state efforts to diminish in the least the exhaustive effort that will be required to reach the threshold of political feasibility that will be a requisite to motivate Congress to take action.

About this blog

Physicians for a National Health Program's blog serves to facilitate communication among physicians and the public. The views presented on this blog are those of the individual authors and do not necessarily represent the views of PNHP.

News from activists

PNHP Chapters and Activists are invited to post news of their recent speaking engagements, events, Congressional visits and other activities on PNHP’s blog in the “News from Activists” section.