How would Marcus Welby, M.D. fare in an ACO?

Posted by on Tuesday, Apr 26, 2011

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.

Family Physician Can’t Give Away Solo Practice

By Gardiner Harris
The New York Times
April 22, 2011

Handsome, silver-haired and likable, Dr. (Ronald) Sroka is indeed a modern-day Marcus Welby, his idol. He holds ailing patients’ hands, pats their thickening bellies, and has a talent for diagnosing and explaining complex health problems.

A former president of the Maryland State Medical Society, Dr. Sroka has practiced family medicine for 32 years in a small, red-brick building just six miles from his childhood home, treating fishing buddies, neighbors and even his elementary school principal much the way doctors have practiced medicine for centuries. He likes to chat, but with costs going up and reimbursements down, that extra time has hurt his income. So Dr. Sroka, 62, thought about retiring.

He tried to sell his once highly profitable practice. No luck. He tried giving it away. No luck.

Dr. Sroka’s fate is emblematic of a transformation in American medicine. He once provided for nearly all of his patients’ medical needs — stitching up the injured, directing care for the hospitalized and keeping vigil for the dying. But doctors like him are increasingly being replaced by teams of rotating doctors and nurses who do not know their patients nearly as well. A centuries-old intimacy between doctor and patient is being lost, and patients who visit the doctor are often kept guessing about who will appear in the white coat.

The share of solo practices among members of the American Academy of Family Physicians fell to 18 percent by 2008 from 44 percent in 1986. And census figures show that in 2007, just 28 percent of doctors described themselves as self-employed, compared with 58 percent in 1970. Many of the provisions of the new health care law are likely to accelerate these trends.

“There’s not going to be any of us left,” Dr. Sroka said.

Indeed, younger doctors — half of whom are now women — are refusing to take over these small practices. They want better lifestyles, shorter work days, and weekends free of the beepers, cellphones and patient emergencies that have long defined doctors’ lives. Weighed down with debt, they want regular paychecks instead of shopkeeper risks.

Having been a general practitioner (as family physicians were called in those days) even before Marcus Welby ventured onto our television screens, I identify closely with the model of the traditional, altruistic physician as exemplified by the fictional Marcus Welby and the real-life Ronald Sroka. In this day of a push toward integrated health care systems, as exemplified by accountable care organizations (ACOs), what role would us relics of Hippocratic medicine rightfully assume?

We don’t have to speculate on this since that question is already being answered. Although we are in a transitional phase, there is widespread recognition that we need to reinforce our primary care infrastructure. Patient-centered medical homes, community health centers, primary care divisions of multi-specialty centers, and non-profit health maintenance organizations organized as fully integrated health systems are some of the models that have established primary care as a central coordinating element in health care delivery.

Even Medicare has recognized this need and has moved funds from over-priced technology to under-priced primary care. We are beginning to see additional funds being directed to pay for care coordination under primary care.

But it isn’t just about money. When I was in practice, I simply accepted the fact that we were so busy that we had to extend office hours into evenings and weekends, and we had to renounce the luxury of sleep because of delivering babies in the middle of the night and assisting in emergency surgeries at all hours of the day and night. My sanity was preserved by rotating call with my brother, so that I had every other night and every other Sunday off call.

More than money, younger physicians are especially concerned about life-style issues. They don’t accept the grindstone that we were on, and I don’t blame them. But they don’t have to. The integrated delivery systems of today and the future offer not only much more freedom for lifestyle choices, they also offer practice environments that allow greater access to specialized and supportive services that improve both the quality of the practice experience and the quality of the care that patients receive.

So where do ACOs fit into all of this? Likely time will show that this was a fairly nebulous concept – a wish that by working together physicians and hospitals could reduce spending while improving quality – but the concept lacks a defining structure. But isn’t that what these integrated systems are already doing, and were doing before the term “accountable care organization” was even coined? So we already have the promise of ACOs without the bureaucratic boondoggle required in the Patient Protection and Affordable Care Act. We should expand these systems whether or not we label them ACOs.

So what would Dr. Welby do today? We can answer that because Dr. Welby is alive and well and replicated throughout today’s medical school graduates, and those graduates are turning once again to primary care. The future of health care is in the good hands of these dedicated women and men who still cherish our Hippocratic values.


In the article, David J. Rothman, president of the Institute on Medicine as a Profession at Columbia College of Physicians and Surgeons, was quoted as follows: “Those of us who think about medical errors and cost have no nostalgia — in fact, we have outright disdain — for the single practitioner like Marcus Welby.” His followup statement released in response to the article is reassuring, defusing somewhat his unfortunate rhetoric:

“The quotation attributed to me in the April 24th New York Times story on primary care does not reflect the opinion, views or policy of the Institute on Medicine as a Profession. Nor does it accurately reflect my views. I have far too much respect for the medical profession, including solo practitioners, to make such offensive and derogatory statements. Rather, what I was trying to convey in a lengthy interview with the reporter (Gardner Harris) was my observations on what was being said and thought among a subset of health policy experts. However controversial or even misguided these views may be, they are seen as an aspect of the movement away from solo practitioners. It was not my intention to support or endorse this position but to call attention to it.

“To understand the principles that IMAP stands for, please read our agenda and mission. They contain descriptions of our programs promoting professionalism, including physician education and advocacy well as managing conflict of interest and strengthening evidence based medical practice.

“All of us concerned with medicine as a profession recognize that the decline of solo practice and the rise of group practice represent a crucial development that must be closely analyzed. We must consider how professionalism can best be maintained and strengthened under new types of delivery systems. Disparaging comments, whether wrongly attributed to me or to others, only serve to undercut constructive thinking and innovative policies.”

Obama, Berwick, Krugman and others on IPAB

Posted by on Monday, Apr 25, 2011

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 Independent Payment Advisory Board: A New Approach to Controlling Medicare Spending

By Jack Ebeler, Tricia Neuman and Juliette Cubanski
Kaiser Family Foundation
April 2011

Targets on Medicare Spending Growth Rate

The statute sets target growth rates for Medicare spending. The target is not a “hard cap” on Medicare spending growth, but if spending exceeds these targets, IPAB is required to submit recommendations to reduce Medicare spending by a specified percentage. For 2015 through 2019, the target for Medicare spending per capita is the average of general and medical inflation: specifically, the average of the projected percentage increase in the consumer price index for all Urban Consumers (CPI-U) and the medical care expenditure category of the CPI-U. For 2020 and later years, the target for Medicare spending per capita is the increase in the gross domestic product (GDP) plus one percentage point, which historically has increased at a higher rate than the CPI-based measures.

If projected growth for the implementation year exceeds the target, and the medical care component of the CPI-U exceeds the CPI-U, then IPAB is required to develop and submit a proposal to bring Medicare per capita growth within the target in the implementation year, subject to the applicable limits (maximum savings).

Provisions Affecting Beneficiaries

More broadly, to the extent changes in payments to providers affect beneficiaries’ access to care, such policies have an impact on beneficiaries. This issue is raised by the current physician payment limits and in evidence in Medicaid, where the state provider payment constraints are often severe, and is a potential consequence of any enforced target for Medicare growth, whether through IPAB or other means. If IPAB recommends policies that squeeze Medicare payment rates without equal pressure being placed on private payment rates, there is some concern that Medicare beneficiaries would be at greater risk of having access problems, as providers become more inclined to serve other patients.


Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility

The White House
April 13, 2011

The President’s framework will strengthen IPAB to act as a backstop to the other Medicare reforms by ensuring that Medicare spending growth does not outpace our ability to pay for it over the long run, while improving the program and keeping Medicare beneficiaries’ premium growth under control. Specifically, it would:

Set a new target of Medicare growth per beneficiary growing with GDP per capita plus 0.5 percent. This is consistent both with the reductions in projected Medicare spending since the Affordable Care Act was passed and the additional reforms the President is proposing.


Berwick Says Obama’s Plan To Trigger Medicare Cuts Won’t Be Necessary

By Susan Jaffe
Kaiser Health News
April 15, 2011

A day after President Barack Obama proposed strengthening an independent commission to control Medicare’s costs, the program’s administrator said such oversight won’t be necessary because new efforts to reduce waste should slow down spending and even improve the quality of care.

“We don’t have to get to that point,” Medicare chief Donald Berwick told Kaiser Health News Thursday.


Patients Are Not Consumers

By Paul Krugman
The New York Times
April 21, 2011

About that advisory board (IPAB): We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.

And the point is that choices must be made; one way or another, government spending on health care must be limited.


The Other Medicare Cutters

The Wall Street Journal
April 20, 2011

Starting in 2014, the board (IPAB) is charged with holding Medicare spending to certain limits, which at first is a measure of inflation. After 2018, the threshold is the nominal per capita growth of the economy plus one percentage point. Last week Mr. Obama said he wants to lower that to GDP plus half a percentage point.

Post-ObamaCare, Medicare’s administered fee schedule is set eventually to dip below Medicaid payments in many states, which are themselves already far lower than the rates of private insurers that reflect the true costs of health care.

As a practical matter, the more likely outcome is the political rationing of care for the elderly, as now occurs in Britain, or else the board will drive prices so low that many doctors and hospitals drop out of Medicare. Either alternative would create the kind of two-tier system dividing the poor and affluent that Democrats claim is Mr. Ryan’s mortal sin.


Obama Panel to Curb Medicare Finds Foes in Both Parties

By Robert Pear
The New York Times
April 19, 2011

“But, in its effort to limit the growth of Medicare spending, the board is likely to set inadequate payment rates for health care providers, which could endanger patient care,” (said Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health.)


Health Reform Assumes its Role as a Punching Bag

By Merrill Goozner
The Fiscal Times
April 20, 2011

The IPAB “can’t order the system transformations that we need like care coordination and a focus on chronic conditions,” said Kenneth Thorpe, a professor of public health at Emory University. “So the only thing they can really do is cut payment rates.”

In other words, the problem isn’t that IPAB has too much power. It’s that it doesn’t have enough.

Today’s quotes provide tastes of the broad spectrum of political flavors inspired by the establishment of the Independent Payment Advisory Board (IPAB). The fervor of the debate risks obscuring an important point that we have made before and must make again: Applying a cap on Medicare payments alone at GDP plus one-half or one percent, without placing the same caps on the rest of health care spending, risks devolving Medicare into an underfunded, lower tier welfare program, with impaired access for Medicare beneficiaries because of a lack of willing providers.

As other nations have demonstrated, global budgeting works as long as it is applied to the entire health care delivery system. Instead of merely taking a cleaver to payment rates, as IPAB would, attention in a single payer system is directed to improving productivity, expanding efficiencies, and reducing administrative and clinical waste, all within the constraints of a universal global budget. For those who would dismiss this because it is rationing, keep in mind that this form of rationing actually improves value in our health care purchasing. Maybe “beneficial rationing” should become a byword for reform.

If you wish to learn more about IPAB, the 24 page Kaiser Family Foundation report (first link above) is an excellent resource. The following quote from this report reemphasizes the primary lesson of today’s message: “If IPAB recommends policies that squeeze Medicare payment rates without equal pressure being placed on private payment rates, there is some concern that Medicare beneficiaries would be at greater risk of having access problems, as providers become more inclined to serve other patients.”

S&P’s David Blitzer on single payer

Posted by on Saturday, Apr 23, 2011

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.

Check-Up on U.S. Healthcare

Squawk on the Street, CNBC
April 21, 2011

Mark Haines: S&P’s latest health care costs report from February 2010 through February of this year shows health care costs rose 6.2%. That’s good in a sense that it’s down slightly from 6.3% in the previous 12-month period, but obviously way above the rate of inflation for everything else. Here first on CNBC, David Blitzer, chairman of the S&P 500 index committee. David, good morning. Thanks for being with us.

David Blitzer: Good morning, Mark. How are you?

Haines: Pretty good. What do you have for us?

Blitzer: Health care costs continue to rise, however the rate of increase continues to creep down a little bit. So the news isn’t good, but it’s not getting worse. It’s getting maybe a touch better.

Haines: Why are these costs escalating at – I don’t know – three or four times the rate of overall inflation? What’s going on here?

Blitzer: Health care – despite all the excitement about technology and drugs – health care is a very labor intensive activity, and people – labor – costs a lot of money, which seems to be the key factor driving it up.

Haines: So, if I may, logically then you would find the worst or the most inflation occurring in hospitals.

Blitzer: You would, and, indeed, on the commercial side you do. On the Medicare side, you don’t, and I think that brings up a different aspect. Over the last few years we have heard a lot of arguments about single payer plans versus other kinds of plans. Single payer means Uncle Sam pays for all the health care. We pay him.

Haines: Right.

Blitzer: Medicare for people over 65 is a single payer plan, and, indeed, we consistently see smaller rates of increase in Medicare items than we do in commercial insurance, the kind of insurance that employers provide for their employees.

Haines: Okay. I’m going to leave that lying there because some of our viewers right now are going apoplectic thinking you have just endorsed single payer health care.

Blitzer: I haven’t. I’ve only reported the numbers. I’m not endorsing anything.

Haines: Believe me, I understand. You’re quoting the facts. Some people think facts are partisan. I don’t know how they get there, but they do. David, thank you very much. Appreciate your input.

Blitzer: Thank you. Have a good day.


Facts are not partisan. Standard and Poor’s David Blitzer reports only the facts on single payer – and Wall Street needs to hear them.

CBO: Medicare privatization would increase costs

Posted by on Friday, Apr 8, 2011

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.

Long-Term Analysis of a Budget Proposal by Chairman Ryan

Congressional Budget Office
April 5, 2011

A private health insurance plan covering the standardized benefit would, CBO estimates, be more expensive currently than traditional Medicare. Both administrative costs (including profits) and payment rates to providers are higher for private plans than for Medicare. Those higher costs would be offset partly but not fully by savings from lower utilization stemming from two sources. First, private health insurers would probably impose greater utilization management than occurs in Medicare. Second, private plans might restrict enrollees’ ability to purchase supplemental insurance plans; enrollees would thus face higher out-of-pocket costs than they do in Medicare, and that increased cost sharing would encourage lower utilization. On net, for a typical 65-year-old in 2011, CBO estimates that average spending in traditional Medicare will be 89 percent of (that is, 11 percent less than) the spending that would occur if that same package of benefits was purchased from a private insurer.

House Budget Chair Paul Ryan’s proposal for Medicare has two primary goals. It would end Medicare as a government program and shift it to private insurers, and it would reduce the government’s payments to the program, shifting more of the costs to the Medicare beneficiaries.

This analysis by the Congressional Budget Office demonstrates that not only would the Medicare beneficiaries receive less care and have to pay more for it, but in the first year alone, the total costs would be significantly higher using private plans than it would be using the traditional Medicare program. Medicare is able to provide health care for 11 percent less than the total costs through private insurers.

In a way we can thank Congressman Ryan for showing us once again why we should abandon the private insurers and adopt an improved Medicare program that covers everyone.

PNHP on Vermont’s “single payer” legislation

Posted by on Thursday, Apr 7, 2011

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.

Vermont health bill mislabeled ‘single payer’: doctors’ group

Physicians for a National Health Program says draft legislation gives wide berth to private insurers, falls far short of single-payer reform

Physicians for a National Health Program
April 7, 2011

The following statement was released today by the national board of Physicians for a National Health Program.

Health reform legislation initiated by Vermont Governor Peter Shumlin was recently passed by that state’s House of Representatives and awaits action in the Senate.

Many journalists and commentators have portrayed this bill as fully embracing the single-payer approach to reform. We write to clarify the views of Physicians for a National Health Program on the Vermont legislation.

We appreciate the enthusiasm for progressive health reform shown by Gov. Shumlin and the many dedicated single-payer supporters in Vermont. However, it is important to note that the bill passed by the Vermont House falls well short of the single-payer reform needed to resolve the health care crisis in that state and the nation. Indeed, as the bill moved through the House the term “single payer” was entirely removed, and restrictions on the role of private insurers were loosened.

In its present form, the legislation lays out in considerable detail a structure to implement Vermont’s version of the federal reform passed in March of 2010, which would expand coverage by private insurers and Medicaid. However, it offers only a vague outline of the additional reform promised by the governor and Legislature at such time when states will be allowed to experiment with alternatives to the federal program in 2017 (or 2014, if the effort to move up the date succeeds).

The Vermont plan promises a public program open to all residents of the state in 2017, but even then it would allow a continuing role for private insurance. This would negate many of the administrative savings that could be attained by a true single-payer program, and opens the way for the continuation of multi-tiered care.

Within the public program, the plan would continue to lump together payments for operating and capital costs, allowing hospitals and the newly established Accountable Care Organizations (ACOs) to use funds not spent on care for institutional expansion. Meanwhile, those with operating losses would shrink or close even if they were meeting vital health needs. This would perpetuate incentives for hospitals and ACOs to cherry-pick profitable patients and services, and hobble the health planning needed to assure rational investments in new facilities and high-technology care.

Under the legislation, many patients would continue to face co-payments that obstruct access to care, and the bill makes no mention of expanding coverage of long-term care. The legislation fails to proscribe the participation of for-profit hospitals and other providers (e.g. ACOs and dialysis clinics), which research has shown deliver inferior care at inflated prices.

Finally, the bill offers no concrete funding plan or structure for the public program that it promises.

We applaud the sentiments expressed by the governor and legislative leaders and remain hopeful that the legislation’s rhetorical commitment to further reform will become a reality. We urge the Vermont Senate to address the shortcomings in the House bill.

Much work, including efforts to enact federal enabling legislation – and continued advocacy by single-payer supporters – will be needed in the years ahead to achieve Vermont’s goal of universal access to high quality, affordable care.


Physicians for a National Health Program ( is an organization of 18,000 doctors who support single-payer national health insurance, an improved Medicare for all. A March 26 rally at the Vermont Statehouse organized by medical and other health-professional students from PNHP and the American Medical Student Association drew over 200 attendees in support of single-payer health reform.

Vermont is experiencing some of the problems that all state-level single payer efforts face. They are hindered by a complex quagmire of federal and state programs, laws and regulations, plus pressure from vested interests who would prefer other options, if not the status quo.

There is an understandable tendency to want to adopt simplistic strategies that hopefully eventually would lead to single payer. If we only included a public option in the insurance exchanges authorized by the Affordable Care Act (ACA), then we could expand that to become the single payer. If we only moved up the date for ACA waivers which would authorize state innovations in reform, then we could enact single payer systems on a state-by-state basis.

As much as we wish they would work, these simplistic measures don’t. Vermont is finding that out now. To comply especially with federal laws and regulations, Vermont has had to make so many changes in their bill that it is no longer a single payer model. Recognizing that, they even removed “Single Payer” from the title of the bill.

Health policy is now a relatively advanced science. You can predict with a great degree of certainty what the results of various policy decisions would be. In fact at PNHP we have done just that and have a batting average of 1000. We also have predicted the results of enacting a national single payer program. For those who complain that PNHP is too negative, look at our predictions for a bona fide single payer system. You could not find a more positive expression anywhere else.

We support Vermont’s effort to bring relief from physical and financial suffering for its residents. We encourage Vermont to move forward with policies that would bring them as close as possible to a single payer system. We encourage the people of Vermont and of the entire nation to elect individuals who will enact the federal legislation that would ensure health care justice for all – a single payer national health program.

Why did the PNHP board believe that we had to make a statement on the deficiencies of the Vermont effort? It is simply because the citizens of our nation are not keeping their eyes on the ball. Supporters of reform have been distracted by efforts to try to made ACA work, and by state-level efforts to try to get us closer to single payer. The ball we need to watch is comprehensive affordable care for everyone through true single payer reform. All of us must direct our attention and efforts to that above all else, even though we should continue to support state efforts in the interim that would provide some temporary relief before we can get to the national health program that we need.

Knowledgeable misinformation on reform

Posted by on Wednesday, Apr 6, 2011

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.

National Partisan Debate Elbows in on California

By David Gorn
California Healthline
April 5, 2011

A Field Poll on attitudes toward health care reform in California had some interesting results — including a much more positive feeling about reform among Californians than is found in national polls.

One of the main results this year and last, according to Field pollster Mark DiCamillo, is that opinions on health care are highly partisan.

“The data were very partisan last year, and the reality of the data is, we haven’t had that much of a change since then. The amount of knowledge people have about reform is not greater than last year, but there’s so much heat on this issue, so much of a partisan divide — it’s here, it has been here and I don’t expect it to go away anytime soon.”

That partisan element has not only influenced opinions, he said, but has reinforced factual misconceptions, as well. “The dissonance that’s going on is just amazing to me,” DiCamillo said. “The predispositions people have about health care are coloring what’s going on in reality.”

For instance, he said, 36% of Californians believe that undocumented residents will be better off from the health care reform law, despite the fact that the law specifically excludes undocumented residents from participating.

“We actually see the highest degree of confusion among people who say they have more knowledge [about health care reform issues],” DiCamillo said. “That’s consistent with Tea Party voters and Republicans,” he said, “and they’re also more likely to believe that illegal immigrants will benefit. So that self-reported knowledge, you have to take it with a grain of salt.”


California Voters Remain Supportive of Health Care Law

By Mark DiCamillo and Mervin Field
The Field Poll
April 4, 2011

Table 2b
Opinions of the health care law by stated level of knowledge about the law

57% – Very knowledgeable
39% – Somewhat knowledgeable
29% – Not too/not at all knowledgeable

41% – Very Knowledgeable
56% – Somewhat knowledgeable
50% – Not too/not at all knowledgeable

Table 3b
Opinions of the health care law by media source
TV news source

35% – CNN
73% – Fox News
37% – NBC
33% – ABC
31% – MSNBC
36% – CBS
14% – Univision/Telemundo
34% – Other TV/Local news

56% – CNN
22% – Fox News
52% – NBC
55% – ABC
63% – MSNBC
51% – CBS
66% – Univision/Telemundo
52% – Other TV/Local News

Those of us who are quite knowledgeable about health policy are often astounded by not only the amount of misinformation about health reform, but also by the self-confidence of those who are often the least well informed. This new California Field Poll provides some interesting observations in this regard.

As Field pollster Mark DiCamillo explains, 36% of Californians believe that undocumented residents will be better off from the health care reform law even though that is untrue and is spelled out in the law, and yet, “We actually see the highest degree of confusion among people who say they have more knowledge [about health care reform issues],” and “That’s consistent with Tea Party voters and Republicans.” The poll numbers confirm that those who oppose the Affordable Care Act claim to be more knowledgeable about the law whereas those who support it do not have the same level of confidence in their knowledge.

Look at the sources of their information. For those who oppose the law, many more rely on Fox News and not on the other television news sources. In contrast, those who support the law do not rely on Fox News but are fairly evenly distributed amongst the networks and CNN, with greater dependency on MSNBC and Univision/Telemundo. Considering the large Hispanic population in California, the last observation is particularly relevant.

In a land that values free speech so highly and has an abundance of information resources, how did we end up with such a large sector of our population so heavily reliant on a source so lacking in credibility? Even more perplexing, why do they rigidly insist that they are highly knowledgeable and that our very credible, well documented facts are wrong even when all of the objective data is presented to them? Is it just that these people are incapable of critical thinking, or is it that Fox News has discovered the secret of mass mesmerization? Either way, it’s scary.

Congressman Ryan drags “premium support” out of the health policy trash heap

Posted by on Tuesday, Apr 5, 2011

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 Path to Prosperity

Fiscal Year 2012 Budget Resolution
Chairman Paul Ryan of Wisconsin
House Committee on the Budget

Premium support – a better way to deliver secure benefits

Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health care program that members of Congress enjoy. Future Medicare recipients will be able to choose from a list of guaranteed coverage options, and they will be given the ability to choose a plan that works best for them. This is not a voucher program, but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.

The premium-support model would operate similar to the way the Medicare prescription-drug benefit program works today. The Medicare premium-support payment would be adjusted so that wealthier beneficiaries would receive a lower subsidy, the sick would receive a higher payment if their conditions worsened, and lower-income seniors would receive additional assistance to cover out-of-pocket costs.

This approach to strengthen the Medicare program ensures security and affordability for seniors now and into the future. First, it ensures security by setting up a tightly regulated exchange for Medicare plans. Health plans that choose to participate in the Medicare exchange must agree to offer insurance to all Medicare beneficiaries, to avoid cherry-picking and ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.

While there would be no disruptions in the current Medicare fee-for-service program for those currently enrolled or becoming eligible in the next ten years, all seniors would have the choice to opt into the new Medicare program once it begins in 2022. No senior would be forced to stay in the old program. This budget gives seniors the freedom to choose a plan that works best for them and guarantees health security throughout their retirement years.

Under Republican control, the House Budget Committee proposes phasing out the traditional Medicare program and replacing it with an insurance exchange offering a variety of private plans with the government’s role limited to offering a premium support (same mechanism as a voucher) to apply toward the purchase of a plan. This converts Medicare from a defined benefit (specified benefits are covered) to a defined contribution (the premium support being a specified dollar amount contributed toward the purchase of a private plan).

This proposal treats the budget as the patient, curing the budget problems with the trade off of further burdening the Medicare beneficiaries who are already paying too much out of pocket. It shifts future increases in health care costs from the government to the beneficiaries. It is much easier for Congress to control federal spending by limiting the value of the premium support rather than trying to reduce the benefit package.

The proposal would adjust the premium support for those with greater health care needs, but that is very difficult to do in a timely manner in that an adjustment next year doesn’t help to relieve this year’s increased costs. Also risk adjusting is very difficult in that it requires having a precise assessment of each individual’s health status and anticipated needs. It is a profound change from the current Medicare program in which equitable funding through the tax system is divorced from the uniform benefit package which everyone shares.

The proposal also would reduce premium support for wealthier Medicare beneficiaries, requiring them to pay more for exchange plans. Actually this principle of progressive financing already exists. Although the current standard premium for Medicare Part B is $96.40 for most individuals ($115.40 for new beneficiaries), it is indexed to income. Those with an income of $214,000 pay $438.20 (including an added Part D premium only for higher-income individuals).

Although progressive financing is an equitable concept, it belongs over on the tax revenue side for funding of the entire Medicare risk pool. By having it as a progressive premium on the benefit side, it fractures solidarity by creating a desire for the wealthy to obtain their own coverage and care independently of Medicare, since they are paying higher premiums anyway. Once they are on their own, they would look upon Medicare as a welfare program, not unlike Medicaid except with much fewer benefits, and chronic underfunding would be inevitable.

The debate that we should be having is over an improved Medicare for everyone. The sad state of politics today is certainly exemplified by the fact that those supporting the transfer of wealth from the masses to our plutocracy have been able to reframe the debate as a need to save our federal budget by cutting back on our social programs, especially Medicare and Medicaid (while reducing the tax rate on the wealthy from 35% down to 25%). What ever happened to common decency?

Business leaders and single payer

Posted by on Tuesday, Apr 5, 2011

By Jonathan Starr

If public opinion polls alone determined political outcomes, we would have single-payer public health insurance already, or at least some “robust public option.” But, unfortunately, some political actors have more influence on policy decisions than others.

Experience has shown that business leaders have exceptionally strong influence on legislative decision making. As such, pursuing the support of business leaders for single-payer health insurance could greatly advance its chances for implementation.

Fortunately, there are good reasons why businesses could benefit from single payer. Providing health insurance to employees is a substantial financial and administrative burden, especially for companies with large numbers of employees. In contrast, competitor companies from countries that already have single-payer health insurance are free of this disadvantage. Meanwhile, startups and small businesses find it particularly difficult to obtain health insurance at reasonable rates, especially upon annual renewal if an employee has begun drawing substantial amounts of benefits.

Consequently, having health insurance publicly and universally provided could be a huge boon to business viability, competitiveness, and profitability.

There is evidence of increasing recognition of this in the business community. For example, the new president of Health Care for All Pennsylvania is a Republican business owner named David Steil. He commented, “My commitment to a single-payer health care system has its roots in my 35 years of experience at the senior management level in several manufacturing companies. We must solve the health care dilemma if our businesses are going to compete in the international marketplace.”

The rising cost to employers of providing employee health insurance is an increasingly frequent topic of the business-related press, from the Wall Street Journal to online blog entries. Here in Silicon Valley, I am in communication with policy staff of a large and influential business-membership organization that is initiating preliminary evaluations of the business advantages/disadvantages of single payer.

The appeal of single payer to businesses will depend heavily on how such a program is financed. As I have argued here, supporting single payer through progressive corporate and individual income taxes, scaled by ability to pay, should be much more appealing to businesses (as well as to individuals) than using payroll taxes. And, bills that attempt to apply special financial burdens to particular areas of commerce (e.g. H.R. 1068, which would impose an excise tax on securities and commodities transactions) have been politically stillborn. A fair, reasonable, and viable financing mechanism will be critical to gaining business community support.

Gaining the support of some significant portion of the business community for single-payer public health insurance could make the political difference towards getting such a program enacted. Interest in the potential financial and competitive advantages of single payer for businesses seems to be increasing. As such, advocates for single payer could advance the cause by pursuing new, effectively designed outreach to the business community.

Jonathan Starr resides in Santa Clara, Calif.

The following is a selection of the speeches delivered to a rally of medical and other health-professional students who support single-payer health reform that was held in the Vermont Statehouse in Montpelier, Vt., on March 26. Some of the remarks have been shortened for space considerations. A video about the rally, which was attended by more than 200 people and which also heard speeches from Sen. Bernie Sanders (I-Vt.) and Vermont Gov. Peter Shumlin, is available here. To get more involved with student activism for single payer, write to

Rishi Rattan

Surgery resident, Tufts Medical Center

Despite what is portrayed on “Grey’s Anatomy,” as a training surgeon in an academic medical center in Boston, I spend much of my day filling out paperwork.

Recently, our oncology team fought to obtain approval for a 35-year-old mother of two to receive an operation that would quadruple her life expectancy. On the day of surgery, dressed in her gown, she was denied. When we finally received approval some months later, her aggressive tumor had spread. Her life expectancy dropped to months.

When we broke the news to her and her family, she asked us, gaze averted as if she knew the answer, whispering quietly so we had to lean in to hear her, “Doctor, would it have been different if you operated sooner?”

I have seen the cost in dollars and in life that a fractured health care system wreaks upon us. I have felt the power to heal wrested away from me by an incomplete infrastructure hampered by inequality and ever-expanding expenses.

Most of us follow the rhetorical battles on health care reform with fervor and interest. But I am rudely reminded daily of the tangible effects of our hopelessly inadequate, costly health care system. Health care spending here has doubled in less than a decade. Do you suppose this will get better without intervention from Vermont’s citizens?

As physicians sworn to advocate for patients, we are obligated to find a solution to this unsustainable and unjust status quo. This bureaucratic structure prevents me from being bedside in my patients’ time of need. Instead of spending more time with our patients under a simplified health system with a single payer, we rush out of the clinic rooms, knowing that our true battle will not be against the parasitic disease eroding away at life inside our patients, but against the parasitic insurance companies eroding away at our ability to fight disease.

Vermont is on the cusp of living up to its motto: freedom and unity. Freedom to choose a comprehensive system that provides all Vermonters the highest level of health. To obtain this, we need unity. All under one single-payer system. Unity here. Now.

You, me, doctor, patient, we must unite and rise up from under foot. We must throw off our bloated, wasteful system and cry out in one voice that thunders through these halls of power. We must unite against a system that forces us to struggle out of arm’s reach of a cure. We must unite against a system that siphons our hard-earned money to for-profit coffers. We must unite against a system that forces physicians to tell our patients that they cannot receive the same treatment as their next door neighbor because of their insurance! We, united, must fight for a single-payer system that treats all of us equally.

Just as I have a duty as a physician to fight for the best possible health for all my patients, you, Vermonters, have a duty to fight for freedom and unity, under one plan that covers all!

Connie Yip

Columbia University School of Nursing

I am honored to be with such a committed group of medical students, nursing students, health care professionals, and supporters of single payer. The fact that we have people who traveled across state lines, to stand up for single payer, in the cold, freezing, is a testament to our determination to change the current U.S. health care system. This is where you cheer. Whooo!

Okay, so why am I here? My parents owned a Chinese restaurant while I was growing up. We didn’t have health insurance. Team sports were discouraged because my parents didn’t want my siblings and me to get hurt. When I was 5, I dropped a 5 lb. can of bamboo shoots on my thumb. The gash across my thumb reached my bone and instead of getting stitches, my parents used rubbing alcohol and a Q-tip to clean my wound and I healed “naturally.”

So yes, I believe that health care is a human right. As a nursing student and future nurse and nurse practitioner, it would be tremendously gratifying for me to take part in changing the health care system and providing families like mine with health care.

Currently, U.S. health care is for-profit and focuses on the bottom line. We are the only industrialized nation to have a health care system that has a for-profit business model. Why don’t other countries follow our example? Hmmm, let me think about that. Well, for starters, patient care is compromised when you have a system that answers to stockholders instead of the public. For instance, insurance companies avoid the sick, expensive people, cover the healthy, and deny paying for expensive procedures, etc. When health care is run like a business, profits come first and patients come later. A for-profit health care system discriminates and is only accountable to stockholders, not to anyone else.

So what’s the answer? You all know the answer; let’s say it together at the count of three: 1-2-3, single payer!

Thank you Vermont!

George ‘Bud’ Vana

University of Vermont College of Medicine

Welcome to Vermont. On behalf of all of my fellow Vermont Med students here, I want to say thank you for caring about what is happening in Vermont as much as we do. It is great to know that this small state can attract this much attention once again!

We have had a lot of firsts in the history of Vermont to be proud of. Along with being an independent Republic for a few years before becoming the first new state to join the United States, we also have many firsts related to social justice: we were the first state to outlaw slavery, the first state to allow civil unions, and now Vermont is the first state to truly take on health care reform, moving toward making access to affordable health care a civil right.

These ready-to-be-first-kind-of-Vermonters are the ones who hired Dr. William Hsiao to analyze our health care system and propose a single-payer option, and they are the ones who elected Governor Shumlin on the platform of enacting a single-payer system.

Forty to fifty years ago, young Americans from all over the East Coast trickled into Vermont to escape the negative social values which they saw developing in their respective cities and states, to come back-to-the-land here in Vermont, where they saw the potential to live alongside people who shared this independent and socially conscious mindset.

When Vermont passes a single-payer system, I believe we will see energetic young physicians and nurses like you come back-to-the-patient as they move to our small state. This back-to-the-patient generation of health care professionals will replace the retiring baby-boomers and take care of them, and bring with them the same kind of exciting new ideas which helped energize Vermont in the 1970s.

I predict that in 10 years’ time, our back-to-the-patient movement will show the rest of the country that when you take the administrative and payment mess out of health care and enable better coordination of care among health providers — people will be healthier and it will cost you much less money.

I’m putting on this hard-hat in order to say that right now this single-payer bill is under construction. It’s not perfect and probably won’t take effect for a few years. But it does represent one of the many exciting changes to health care in this state.

This hard-hat also symbolizes the fact that there will be obstacles — falling objects, ladders, bricks — in our way. Albert Schweitzer once said: “Those who do good should not expect people to clear the stones from their path on this account. They must expect the contrary: that others will roll great boulders down upon them. Such obstacles can be overcome only by the kind of strength gained in the very struggle. Those who merely resent obstacles will waste whatever force they have.”

There will be boulders in our path to change, but we are the ones who will inherit what is now a broken even more-boulder-filled system. We must applaud and support what these Vermont citizen-legislators are doing right now and remember that when you, who have made the pledge to practice here, come back to Vermont, you are not coming back to Vermont because of a single-payer system – you have come to get back-to-the-patient.

Desiree Otenti

Boston University School of Public Health

Hello, my name is Desiree Otenti. I am a nurse practitioner and a student of public health in Boston.

I am here today to talk about health care as a right, not as a commodity. When we realize that health care is a right, we also realize that health insurance is a business — a business that maximizes profits by denying you health care, a business with a track record of calling pregnancy a pre-existing condition, of paying their CEOs multimillion-dollar salaries, and of bankrupting people when they are at their sickest.

My patient Bob learned this lesson firsthand.

Bob is a hard working man who joined a union right out of high school and once went seven years without taking a single week of vacation. But Bob also contracted hepatitis C. Now, 20 years later, he is dying of cirrhosis and was told that he has two more months to live. He was also told by his insurance company that he has no place to die.

Because of his illness, Bob hasn’t been able to work for the past few years. Because he’s not working, he no longer has private health insurance. Because he’s only 42, he isn’t old enough for Medicare — the system he paid into all his life through his taxes. And instead he only has basic Medicaid which does not pay for end-of-life care.

Clearly Bob does not benefit from this situation, so who does?

Bob’s old insurance company. While Bob was young and healthy he paid thousands of dollars for years to this insurance company through his union. They have made a substantial profit on Bob because once he lost his job his insurance company relinquished all responsibility. It could not have worked out better for them.

I am here today to talk about health care as a right, not as a consumer product. When we realize that health care is a right, we also realize that lives matter more than profit margins.

Right now the market controls what care we receive. Does the market care about bankrupting elders? Does the market care that only large corporations can afford to buy health insurance for their employees? Does the market care if Bob dies homeless on the street? No. The market only cares about making money — as the insurance industry has proven decade after decade.

But we the people care. We care about our communities, our elders, those struggling to make ends meet. And because we care about lives instead of profit margins, we should be in control, not market forces.

Single payer gives us that control. Single payer acknowledges that the market cannot meet the needs of the people, that human lives are not the same as flat screen TVs or cars or any other consumer product. When insurance companies control the money for health care, that money can end up in someone else’s pocket, like we saw in Bob’s situation. When single payer controls the money for health care, that money will continue to work for you, even if you lose your job. That money will never turn into million-dollar salaries, wasteful marketing or departments with the sole purpose of issuing denials.

Let’s take back control of our health care through single-payer reform!

Stanton Shek

Dartmouth Medical School

Hello my fellow, future, health care professionals,

I am in awe of this amazing demonstration of support for Vermont’s initiative to pass single payer. We’ve come from all over the country, traveled hundreds of miles, and missed out on precious studying time to send a message to Vermonters and their government representatives. Lead the country in establishing health care for all and choose to enact single payer!

Show us how health care is done right! Show us a health care system that is equal! Show us an uncomplicated health care system.

End the confusion of which procedure or medication is covered or not covered under which plan. End the headaches that providers get when they are navigating their patients through the labyrinths of their health insurance plans. End the concern that people feel that they might not make it through with their health, financial security and sanity.

When we all graduate from our respective schools within the next few years, we will inherit this health care system. We will inherit all the patients of America. We will inherit their problems whether that is sicknesses or their inability to pay for medical care. I support single payer now as medical student, and I’m sure everyone else in this room too, because we’re taking ownership of our future responsibility now. We are giving the signal that this is how we want to practice our medicine!

So Vermont: Set the example and raise the bar on health care in America by passing single payer. You have our support and also the support of the hundreds of other future health care providers back at our homes.

Make Vermont the best state to practice medicine! Thank you!

HHS/CMS proposed rule for accountable care organizations

Posted by on Monday, Apr 4, 2011

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.

Department of Health and Human Services
Centers for Medicare and Medicaid Services

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR Chapter IV by adding part 425 to read as follows:



Subpart A–General Provisions

§425.2 Basis and scope.

(a) Basis. This part implements section 1899 of the Act by establishing a shared savings program that promotes accountability for a patient population, coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient services. Under this program, groups of providers of services and suppliers meeting criteria specified by the Secretary may work to together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization (ACO). ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings. During years in which the ACO is participating in a two-sided model, the ACO may be required to share losses.

(b) Scope. This part sets forth the following:
(1) The eligibility requirements for an ACO to participate in the Medicare Shared Savings Program (Shared Savings Program).
(2) Program requirements, including quality and other reporting requirements.
(3) The method for assigning Medicare fee-for-service beneficiaries to ACOs.
(4) Payment criteria and methodologies (one-sided model and two-sided model).
(5) Compliance monitoring and sanctions for noncompliance.
(6) Reconsideration of adverse determinations.

Proposed rule (429 pages):

Accountable care organization (ACO) is a concept that grew out of concerns over excessive levels of spending for health care that is often only mediocre. It was thought that health care professionals and facilities could organize themselves into integrated organizations through which they would become accountable for both the cost and the quality of health care.

The Affordable Care Act established the Medicare Shared Savings Program which would use ACOs to achieve savings in the Medicare fee-for-service program, and the savings would be split between the ACOs and the government. The proposed rule for ACOs has now been released. I’ll try to reduce the 429 pages down into a few salient comments.

* The ACO would be composed of professionals arranged in networks or in group practices, and may partner with or be employed by hospitals.

* The ACO is accountable for the quality, cost, and overall care of the Medicare fee-for-service (FFS) beneficiaries assigned to it.

* The ACO shall include primary care ACO professionals that are sufficient for the Medicare FFS beneficiaries assigned to the ACO (minimum 5000 beneficiaries).

* The ACO shall have in place a leadership and management structure that includes clinical and administrative systems.

* The ACO shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.

* A benchmark will be established based on recent spending in the fee-for-service Medicare program.

* If spending for patients assigned to the ACO falls below the benchmark, the ACO will be rewarded with a portion of the amount saved, and the government keeps the rest.

* If spending for patients assigned to the ACO is more than the benchmark, then the ACO must pay a penalty of a portion of the excess (with a maximum two-year exemption for ACOs participating as a “one-sided” model with lower rewards but no penalty).

* The ACO must meet detailed quality requirements to qualify for the shared savings, but also may be terminated for failure to meet minimum standards.

* Patients will have free choice of any physician at all times, but will be assigned to an ACO based on plurality use of primary care services, for the purpose of assigning accountability for savings and quality. The ACO, which theoretically controls cost and quality for the patient assigned to it and will be rewarded or punished for the results, will have no control of the cost and quality of care delivered outside of the ACO.

* And over 400 pages of etc., etc.

Under the proposed rules, ACOs are not simple organizations formed on just a handshake. They require a formal legal structure with management, a specified governance board, a medical director, a quality assurance program, and more. They must implement evidence-based clinical guidelines.  The required documentation of quality is particularly onerous. They must have an infrastructure, such as information technology, to collect and evaluate data, and provide feedback. They must comply with extensive legal, business, and clinical documentation requirements. Since ACOs often involve consolidation within the health care delivery system, they must coordinate with antitrust agencies.

Obviously, considerable time, effort and expense is involved, so the reward must be worthwhile. And what is that reward? If they can improve their productivity while meeting quality standards, the financial benefit accrues to the government, but the reward is that the government lets them have a fraction of their productivity gains, providing that they are compliant with the complex set of rules. Since it’s almost impossible to continue to improve productivity in health care year after year, the reward would dry up soon.

With the trend of increasing frequency and intensity of services, there is a risk that the ACO may exceed the benchmark and have to pay back to the government a portion of the higher spending as a penalty.

What would happen if a group of professionals who were considering forming an ACO decided not to? First, they wouldn’t have all of the extra expenses and effort that establishing an ACO would require. They certainly would not have an incentive to reduce Medicare’s spending (i.e., reduce their income) since they would keep all revenues and not have to share them with the government. And if their spending for Medicare exceeded the benchmark? They would still keep it all, and wouldn’t have to pay a penalty.

Since most people with any business sense would never participate in such a scheme, why is it that there seems to be such a rush to form ACOs? In my opinion, they are not looking for the Medicare fee-for-service business. They are forming commercial ACOs in the private sector, looking for the private insurance business that will expand greatly in the new insurance exchanges. They are taking advantage of the prevailing attitude that we must back off on enforcing antitrust regulations in order to provide flexibility for the ACOs. They are consolidating to gain greater market control. Many are using “accountable care organization” as a deceptive label for expanded managed care oligopolies and monopolies.

The notion of accountable care organization was originated as a well meaning, altruistic, aspirational concept by individuals who really care about the health care that all of us receive. To be successful in improving quality and reducing costs the concept would have to be dependent on patients and health care professionals and administrators who were determined to do the right thing regardless of pecuniary or other self-interests. Yet health care, as the business that it is – like it or not – cannot afford to embrace altruism, for it would fail in its business responsibilities to maximize market opportunities.

Does it have to be this way? Do we really need to depend upon private stewards devoted to the amoral business ethic to administer the financing of health care? Well, when you think about it, a single payer system is an automated system of financing health care that does not depend on the altruism of its players. That’s because the single payer model is structured as an altruistic, aspirational system that, quite automatically, actually does, in itself, improve quality and control costs. It just works.

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