Employer-sponsored plans have not controlled price inflation

Posted by on Wednesday, Jan 24, 2018

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.

2016 Health Care Cost and Utilization Report

Health Care Cost Institute, January 2018

The Health Care Cost Institute’s (HCCI) 2016 annual report on U.S. health care cost and utilization trends finds that Americans under the age of 65 who were insured through their employer spent more than ever on health care, and spending grew faster in 2016 than in recent years.

The report covers the period 2012 through 2016 and includes claims data from four national insurance companies: Aetna, Humana, Kaiser Permanente, and UnitedHealthcare.

Health Care Spending Trends

Health care spending per person for the commercially insured reached a new high of $5,407 in 2016. Total spending per person in 2016 was 4.6% higher than 2015. This was the highest annual total spending growth observed during the 2012-2016 study period; much greater than the 2.8% growth from 2012 to 2013.

Increasing Prices Drive Health Care Spending Growth

Health care spending is the product of two components: price and utilization. From 2012 to 2016, increases in spending were almost entirely attributable to increases in price. In 2016, high growth in prices was partially offset by a net decrease in utilization.

From 2012 to 2016, we observed increases in prices each year and across nearly all service categories. The greatest cumulative price increase was seen in prescription drugs, with 24.9% price growth. Inpatient services also experienced very high price growth, with prices increasing 24.3% between 2012 and 2016.

In contrast, utilization of most services declined over the 2012-2016 period, with the exception of prescription drugs, which increased 1.8%. The utilization of inpatient services had the largest decline, with admissions rates decreasing 12.9% between 2012 and 2016. This decline in use resulted in relatively low inpatient spending growth despite the high price growth. Conversely, the small increase in use of prescription drugs, coupled with high price growth, led to very high spending growth.

Inpatient Spending Trends

Between 2012 and 2016, spending on inpatient admissions grew 8%.

The biggest driver of the higher inpatient spending in 2016 was surgical admissions.

Inpatient Use Continued to Decline but Prices Rose Substantially

Within the inpatient category, declines in the use of both medical admissions and surgical admissions drove the overall decline in utilization. Every sub-category of inpatient admissions experienced double-digit price increases, with cumulative growth ranging from 18% to 30%. The increase in prices more than made up for the decline in use, causing inpatient spending to increase between 2012 and 2016.

Outpatient Spending Trends

In 2016, outpatient services had the highest annual spending growth of any service category, at 6%.

Within the outpatient services category, emergency room (ER) visits and outpatient surgeries accounted for the largest share of spending.

Outpatient Prices Drove Spending Growth

From 2012 to 2016, utilization of most outpatient services declined, but we did observe modestly higher utilization of ancillary services and emergency room visits towards the end of the study period.

Emergency room visits. Between 2012 and 2016, the price of an outpatient ER visit increased by 31%. The price increase, in combination with the slight increase in use, drove 40% of the increase in total outpatient spending between 2012 and 2016.

Outpatient surgery. Prices rose 19% from 2012 to 2016. Despite the decline in use, surgery continued to account for the largest share of outpatient spending and was responsible for 28% of the cumulative increase in spending on outpatient services.

Professional Services Spending Trends

Professional services—including visits to physicians, administered drugs, anesthesia, radiology, pathology, and related services–made up the largest share of health care spending in 2016, but had relatively low spending growth between 2012 and 2016, rising a cumulative 11%.

Utilization of PCP and Specialist Visits is Shifting

We rarely observe a decline in spending on health services. Within the professional services category, however, two types of services had net declines from 2012 and 2016. Spending on professional radiology services fell by 3%, but more striking was the 6% decrease in spending on office visits to PCPs.

The decline in spending on PCP office visits over the study period was driven by the 18% decline in use of these visits. In contrast, the increased utilization of specialist visits contributed to a 31% spending increase for those visits.

Prescription Drug Spending Trends

Prescription drugs had the highest cumulative spending growth (27%) of any service category during the study period.

Out-Of-Pocket Spending Trends

From 2012 to 2016, total OOP spending per person increased slightly each year. In dollars, the average increase was relatively small – a total of $88. It is important to note that our OOP data does not include consumer spending on premiums, which studies suggest are rising considerably and adding to the overall health care spending burden for consumers. In addition, our per person OOP metrics do not reflect the OOP costs of using a certain service, but consider OOP spending as an average across the population – including those who used no services at all.

The cumulative growth in OOP spending (12%) was outpaced by total spending (15%). However, like total spending, OOP spending growth appears to be on the rise after a few years of relatively low growth. In 2016, we observed a modest increase of 3.6% in OOP spending per person, up from a 2.9% increase in 2015.


This study is important because it shows what impact private commercial health plans offered by employers are having on prices and utilization.

The Patient Protection and Affordable Care Act was supposed to protect health care benefits and control excessive price increases. Prices are way up, and utilization is down in spite of the need, indicating that current policies have not achieved either goal.

Another goal was to expand primary care to improve access, efficiency, and value, yet one of the more alarming findings in this report is that primary care office visits declined by 18%, whereas the increase in specialist visits resulted in 31% greater spending for those visits.

The architects of the Affordable Care Act wanted to protect employer-sponsored plans because, they said, these plans were the part of the health care financing system that was already working well. Yet these private commercial insurers have brought us even higher prices, reduced access but with higher net spending, and a shift from efficient primary care to more expensive specialized services.

These private commercial insurers are selling us an awful lot of very wasteful and intrusive administrative services, and yet they are not doing their job of improving efficiency and value in our health care system. They gotta go.

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Lower out-of-pocket spending after ACA, but much more needed

Posted by on Tuesday, Jan 23, 2018

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.

Out-of-pocket Spending and Premium Contributions After Implementation of the Affordable Care Act

By Anna L. Goldman, MD, MPA; Steffie Woolhandler, MD, MPH; David U. Himmelstein, MD; David H. Bor, MD; Danny McCormick, MD, MPH
JAMA Internal Medicine, January 22, 2018

Key Points

Question: Was implementation of the Affordable Care Act associated with reduced spending on out-of-pocket medical expenses and household premium contributions among nonelderly adults?

Findings: In this nationally representative survey of validated spending data from 83 431 US adults, mean out-of-pocket spending decreased by 11.9% in the first 2 years after the insurance expansions, driven by reductions among persons eligible for the Medicaid expansion and those eligible for cost-sharing and premium subsidies on health insurance exchanges. Premium contributions increased by 12.1%, mainly owing to large increases in the higher-income group, whereas total health spending by households decreased in the Medicaid-eligible (lowest-income) group by 16.0%.

Meaning: Implementation of the Affordable Care Act was associated with reduced out-of-pocket spending for US medical care, particularly among those with lower incomes, but not with reduced premiums.

From the Discussion

In the first 2 years of implementation, the ACA was associated with a decrease in mean out-of-pocket spending for the overall population, driven by decreases among the lowest- and low-income groups and a reduction in high-burden out-of-pocket spending overall and among the lowest-income group. Mean premium payments increased moderately, whereas the prevalence of high-burden combined health spending and income-based inequalities in high-burden spending did not change.

The ACA’s Medicaid expansion, which generally required enrollees to pay neither premiums nor co-payments, likely accounts for our finding that out-of-pocket spending decreased among the lowest-income group after the law’s implementation. This consequence might have been greater if all states had accepted the ACA’s Medicaid expansion. In the analysis of high-burden spending in this group, controlling for use of health care services slightly attenuated the decrease but did not substantially alter our findings. The differences noted for the lowest-income group in our placebo test in the pre-ACA period suggests that our results for this group may also have been influenced by secular trends or early expansions of Medicaid in some states. Because only 17.8% of adults in the lowest-income group paid insurance premiums before the ACA, we are not surprised that the legislation had little effect on premiums in this group.

The reduction in out-of-pocket spending for low-income individuals (139%-250% of FPL) that we observed suggests that the ACA’s exchange plans and cost-sharing subsidies were associated with a decreased burden of health care costs for this population. Our finding from models controlling for use of health care services suggests that decreased use of medical services and drugs did not drive this decrease.

The decrease in mean out-of-pocket expenditures by the middle-income group may reflect the modest 5.1% increase in coverage gained in this group under the ACA. Although individuals in this income group were not eligible for subsidized cost-sharing on the exchange, the ACA’s provision that eliminated cost-sharing for preventive services may have decreased out-of-pocket spending. Although many individuals in this group were eligible for premium assistance through the ACA exchanges, the subsidies were apparently insufficient to prevent growth of premium contributions for this group or to reduce their total health spending.

Previous studies have highlighted the ACA’s successes. About half of the previously uninsured population gained coverage. Several other indicators also improved, such as the likelihood of having access to affordable care and self-reported health status.

The ACA did not have a greater effect on out-of-pocket spending for several reasons. First, only a small proportion of Americans—6.5% according to our data—became newly insured after the ACA. Second, about 28 million Americans remain uninsured. Third, many of those with coverage continued to incur high costs; in 2016, individual deductibles were a mean of $3064 in exchange Silver plans (the metal tier chosen by most exchange enrollees) compared with $1478 in employer-sponsored plans.


Repeal of the ACA was under consideration in Congress several times in the past year, and the future of the ACA remains uncertain. Our findings carry several implications for the health reform debate. First, the ACA was associated with moderate reductions in the cost burden for lowest-, low-, and middle-income households, which represents incremental but important progress. Repealing or otherwise dismantling the legislation without a suitable replacement could cause financial harm to many lower-income families. As of this writing, the Senate tax bill includes a repeal of the individual mandate. If enacted, the numbers of uninsured persons will increase, along with their out-of-pocket costs. Premiums will likely increase because healthier people will exit the insurance pool.

Second, medical expenses currently consume a large share of many families’ incomes and compound income inequalities. Reforms to the ACA that could improve household spending burdens include expanding Medicaid in all states, increasing the generosity of cost-sharing and premium subsidies, and increasing the actuarial values of standard exchange plans. International experience suggests that a universal, comprehensive national health insurance program would most effectively reduce household spending and ameliorate disparities.


This well documented analysis confirms that “implementation of the Affordable Care Act was associated with reduced out-of-pocket spending for US medical care, particularly among those with lower incomes, but not with reduced premiums.”

But ACA still falls far short of the reform that we need. The bottom line, as stated in their conclusion: “International experience suggests that a universal, comprehensive national health insurance program would most effectively reduce household spending and ameliorate disparities.” ACA isn’t that.

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Is Seema Verma violating her ethics pledge?

Posted by on Monday, Jan 22, 2018

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.

Excerpts of letter to the Honorable Robert Charrow, General Counsel, U.S. Department of Health and Human Services

From: Senator Ron Wyden, Ranking Member, U.S. Senate Committee on Finance

United States Senate, January 19, 2018

I am writing concerning possible violations by Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma of her ethics agreements. Recent statements by governors representing multiple states indicate that Administrator Verma has personally and substantially participated in waivers submitted to CMS by states that were clients of her previous consulting business. Such participation appears to violate Administrator Verma’s ethics agreement, absent the issuance of written waivers for each of her interactions on a case-by-case basis. Administrator Verma’s actions also appear to violate self-imposed ethics pledge that the Trump Administration requires its appointees to sign pursuant to Executive Order 13770.

I request that you immediately investigate whether Administrator Verma’s actions comply with her agreements as well as applicable federal laws and regulations.

Prior to being confirmed to her current position, Administrator Verma headed a consulting firm, SVC, Inc., a role in which she provided services to the states of Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina and Virginia. Federal ethics officials deemed her consulting work with these seven states as significant, and included a provision in her Ethics Agreement requiring special review of future matters involving those seven States. Specifically, pursuant to 5C.F.R.2635.502(d), Administrator Verma agreed to “seek a written authorization to participate personally and substantially in particular matters involving specific parties” in which those states would be “a party or represents a party.” Furthermore, the Trump Administration’s self-imposed ethics pledge provides that a nominee “will not for a period of 2 years from the date of [their] appointment participate in any particular manner involving specific parties that is directly and substantially related to [their] former employer or former clients, including regulations and contracts.”

Recent statements by the governors of three states specifically designated in Administrator Verma’s ethics agreement – Arkansas, Kentucky, and Iowa – strongly suggest she was personally and substantially involved in matters those states brought before CMS. Two of the governors represent states that have submitted Section 1115 waivers seeking to impose work requirements on Medicaid recipients – Arkansas and Kentucky. The third relates to a separate Section 1332 waiver submitted by the State of Iowa.

Administrator Verma’s commitment to recuse herself from work with former clients appears to have fallen short of the mark thus far, which is extremely concerning given that many of her former clients have sought – or plan to seek – waivers to impose unprecedented work requirements in state Medicaid programs.



Kentucky’s new obstacles to Medicaid coverage are crueler than you could imagine

By Michael Hiltzik
Los Angeles Times, January 16, 2018

One can say this about the hoops Kentucky will require low-income residents to jump through to become eligible for Medicaid: If you were deliberately trying to come up with ways to throw people off the program, you couldn’t do better.

It’s been widely reported that the “waiver” of Medicaid rules approved for the state by federal officials last week includes a first-in-the-nation work requirement. But there’s much more to it, none of it good if you are a Medicaid enrollee or someone who believes that the purpose of government healthcare programs is to provide people with healthcare.

“Coverage is at risk for large numbers of low-income adults and families,” says Judith Solomon, a health policy expert at the Center on Budget and Policy Priorities.

Kentucky’s program bristles with paperwork requirements and Catch-22s that could easily lead even those who meet the work requirements to “trip up and become uncovered,” Solomon says. That’s because the program includes a “lockout” if enrollees fail to revalidate their eligibility every year or miss one or another deadline for paperwork: In those cases, they could be denied benefits for as long as six months.

As we reported earlier, Kentucky’s tea-party Gov. Matt Bevin, who took over from Democrat Steve Beshear in 2015, is inordinately proud of this outcome. He calls the changes “transformational.”

Another person who should be ashamed, not proud, of the program is Seema Verma, who oversees Medicaid as administrator of the Centers for Medicare and Medicaid Services. Verma’s department issued the guidelines last week under which Kentucky’s work and other requirements were approved the very next day. More to the point, as a private consultant prior to becoming head of the centers, she helped Kentucky draft the waiver application that her underlings approved. (Verma said she recused herself from ruling on the Kentucky application, which deserves a response of: Pu-leeze.)



Medicaid recipients to get work requirements

By Ricardo Alonso-Zaldivar
ABC News, January 12, 2018

Rewriting the rules on health care for the poor, the Trump administration said Thursday it will allow states to require “able-bodied” Medicaid recipients to work, a hotly debated first in the program’s half-century history.

Seema Verma, head of the Centers for Medicare and Medicaid Services, said requiring work or community involvement can make a positive difference in people’s lives and in their health. The goal is to help people move from public assistance into jobs that provide health insurance. “We see people moving off of Medicaid as a good outcome,” she said.


CMS Administrator Seema Verma is ideologically driven to make health care an individual responsibility rather than a collective good in which we can all be ensured of health care access and affordability. She made her reputation by recommending to states policies that impair access to health care for the poorest amongst us by erecting barriers to care for their Medicaid populations.

As CMS Administrator she has expanded and accelerated policies that further impair access for the poor, policies that are now being adopted by states for which she served as a consultant. Many of these waiver requests were rejected by the Obama administration, but when Verma first took office, she encouraged her (former) clients and all other states to submit Section 1115 Medicaid waiver applications and assured them that they would be favorably considered.

Whether or not Verma has technically violated her ethics pledge by this conflict of interest is a relatively moot point compared to her efforts to sabotage a program that was designed to help poor people get the health care that they need. That she has orchestrated the process is enough to confirm her ethical lapses. As she says, “We see people moving off of Medicaid as a good outcome.”

As Michael Hiltzik says about her recusing herself, “Pu-leeze.”

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Massachusetts lesson on instability of coverage

Posted by on Friday, Jan 19, 2018

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.

Major Mass. Insurers Dropped From State Employee Health System

By Martha Bebinger
WBUR, January 18, 2018

A decision about health coverage for state employees and retirees is shaking the Massachusetts health insurance industry. Harvard Pilgrim Health Care, Tufts Health Plan and Fallon Health, which are the second-, third- and fourth-largest insurers in the state, have been dropped by the state Group Insurance Commission (GIC), which manages coverage for 442,000 members.

The GIC says it’s been talking to insurers about the need to simplify, streamline and save money for more than a year, so Thursday’s 8-5 commission vote should not be a surprise. But dropping three prominent, nonprofit Massachusetts insurers is a major blow.

“Time and again, the Group Insurance Commission has voted to make workers bear the brunt of out of control health care costs, instead of tackling the crisis with providers,” said Peter MacKinnon, president of SEIU Local 509. “It is evident that the GIC has taken a bad situation and made it far worse with this anti-consumer vote.”


We keep hearing that most people are pleased with their current health care coverage so we should reject the disruption that would be caused by changing to a single payer system. What better coverage could there be than that of public employees in Massachusetts whose options include three of the largest nonprofit carriers in the state? Until now that is.

This is the best there is and yet it results in instability, especially in the choice of their health care professionals and institutions. And the reason given for the disruption is that the costs are too high.

This would not occur under a well designed single payer system. Individuals would have permanent free choice of their health care and costs would be contained through patient-friendly policies.

Think of the health care coverage you had twenty years ago. Ten years ago. Even perhaps five years ago. And they say that single payer would be disruptive? It is single payer that finally would bring us stability of coverage – for life!

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Household medical expenditures worsen income inequality

Posted by on Thursday, Jan 18, 2018

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 Effects of Household Medical Expenditures on Income Inequality in the United States

By Andrea S. Christopher, MD, MPH, David U. Himmelstein, MD, Steffie Woolhandler, MD, MPH, and Danny McCormick, MD, MPH
American Journal of Public Health, January 18, 2018 (online ahead of print)

Objectives. To assess the effect of households’ outlays for medical expenditures on income inequality and changes since the implementation of the Affordable Care Act (ACA).

Methods. We analyzed data from the US Current Population Surveys for calendar years 2010 through 2014. We calculated the Gini index of income inequality before and after subtracting households’ medical outlays (including insurance premiums and out-of- pocket costs) from income, the financial burden of medical outlays for each income decile, and the number of individuals pushed below poverty by medical outlays.

Results. In 2014, the Gini index was 47.84, which rose to 49.21 after medical outlays were subtracted, indicating that medical outlays effectively redistributed about 1.37% of total income from poorer to richer individuals, a slightly smaller redistribution compared with the years before the ACA. Medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty.

Conclusions. The way we finance medical care exacerbates income inequality and impoverishes millions of Americans. This regressive financing pattern improved minimally in the wake of the ACA.

From the Results

In 2013, medical outlays lowered the median income (calculated after subtracting medical expenditures) for the poorest decile by 49.2% and by 10.7% for the next poorest group versus 2.5% for the wealthiest decile, a markedly regressive pat- tern. This unequal pattern improved only slightly in 2014. In that year, medical outlays lowered median income in the lowest income decile by 47.6% versus 2.7% in the top decile. For those in the top 1.0% of income, medical outlays decreased income by only 1.3%.

In 2014, 9.28 million Americans whose incomes before their medical outlays were above poverty were pushed into near poverty (150% of FPL) when medical outlays were subtracted from their family incomes. Similarly, 7.013 million were lowered into poverty (below 100% of the FPL), and for 3.946 million, medical outlays reduced their incomes into the extreme poverty range (below 50% of the FPL). These numbers were little changed from 2013 (before the main provisions of the ACA took effect), when medical outlays pushed 7.263 million people below the poverty line, 3.809 million into extreme poverty, and 9.576 million below the near-poverty threshold.

From the Discussion

In the United States, most insured families pay premiums, deductibles, and copayments that are not scaled to income. As a result, medical care expenses exacerbate poverty and income inequality, which are key social determinants of health. Although access to high-quality care might narrow the health disparities caused by social inequality, the ways we pay for care—notably, the failure of most insurance programs to scale premiums and deductibles to income—may widen them.

Out-of-pocket health care expenditures are likely to continue increasing under the ACA, as well as under Republicans’ proposed alternatives. The proportion of privately insured employees whose individual coverage carries an annual deductible of $2000 or more has increased 6-fold since 2006. Most of the new private coverage offered on the ACA exchanges carries high deductibles. These could drive many families into poverty despite cost-sharing subsidies that reduce copayments and deductibles for those with incomes below 250% of the FPL.

Equally worrisome, Centers for Medicare & Medicaid Services has allowed several states to impose cost sharing on Medicaid recipients, reversing a long-standing rule against such policies.

In some nations the wealthy pay a larger share of their incomes toward health care than do the poor. In others, health expenditures account for a similar share of incomes for the poor and rich. In the United States, health expenses exact a higher toll from the poor, whereas the wealthy pay relatively little. This regressive financing pattern—which redistributes as much as 1.7% of total income from poorer to richer Americans—lies largely hidden in a complex web of private and public insurance arrangements. We suspect that the opacity of US funding streams helps shield the wealthy from demands for a fairer health-financing pattern.


The way we pay for health care in the United States is egregiously regressive. In spite of ACA, “medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty.”

Income inequality has reached intolerable levels in the United States bringing ever more riches to the wealthy (how much wine and cheese do they need?) while leaving workers with relatively stagnant wages and leaving the poor without much hope for ever moving up to at least a minimally acceptable standard of living. This astonishing study shows that medical expenditures have worsened this inequity and have shoved another 7 million people into poverty (4 million into extreme poverty!). What a penalty to pay for having the misfortune of needing health care.

Considering the recent tax bill signed into law by President Trump, the nation is moving in the wrong direction in addressing the problem of income inequality. We need new policies, and one of the easiest and most beneficial would be to enact a well designed single payer national health program, funded equitably through the tax system. That way we would ensure that everyone would have health care while shifting from a regressive to a progressive pattern of financing. It would be good for our health and good for our personal finances.

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Is Maryland’s all-payer/global budget program an incremental step toward single payer?

Posted by on Wednesday, Jan 17, 2018

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.

Changes in Health Care Use Associated With the Introduction of Hospital Global Budgets in Maryland

By Eric T. Roberts, PhD; J. Michael McWilliams, MD, PhD; Laura A. Hatfield, PhD; Sule Gerovich, PhD; Michael E. Chernew, PhD; Lauren G. Gilstrap, MD; Ateev Mehrotra, MD, MPH
JAMA Internal Medicine, January 16, 2018



In 2014, the State of Maryland placed the majority of its hospitals under all-payer global budgets for inpatient, hospital outpatient, and emergency department care. Goals of the program included reducing unnecessary hospital utilization and encouraging greater use of primary care.


To compare changes in hospital and primary care use through the first 2 years of Maryland’s hospital global budget program among fee-for-service Medicare beneficiaries in Maryland vs matched control areas.

Design, Setting, and Participants 

We matched 8 Maryland counties (94 967 beneficiaries) with hospitals in the program to 27 non-Maryland control counties (206 389 beneficiaries). Using difference-in-differences analysis, we compared changes in hospital and primary care use in Maryland vs the control counties from before (2009-2013) to after (2014-2015) the payment change, using 2 different assumptions. First, we assumed that preintervention differences between Maryland and the control counties would have remained constant past 2014 had Maryland not implemented global budgets (parallel trend assumption). Second, we assumed that differences in preintervention trends would have continued without the payment change (differential trend assumption).

Main Outcomes and Measures 

Hospital stays (defined as admissions and observation stays); return hospital stays within 30 days of a prior hospital stay; emergency department visits that did not result in admission; price-standardized hospital outpatient department (HOPD) utilization; and visits with primary care physicians (overall and within 7 days of a hospital stay).


We matched 8 Maryland counties with hospitals in the program (94 967 beneficiaries; 41.8% male; mean [SD] age, 72.3 [12.2] years) to 27 non-Maryland control counties (206 389 beneficiaries; 42.8% male; mean [SD] age, 71.7 [12.5] years). Assuming parallel trends, we estimated a differential change in Maryland of −0.47 annual hospital stays per 100 beneficiaries (95% CI, −1.65 to 0.72; P = .43) from the preintervention period (2009-2013) to 2015, but assuming differential trends, we estimated a differential change in Maryland of −1.24 stays per 100 beneficiaries (95% CI, −2.46 to −0.02; P = .047). Assuming parallel trends, we found a significant increase in primary care visits (+10.6 annual visits/100 beneficiaries; 95% CI, 4.6 to 16.6 annual visits/100 beneficiaries; P = .001), but assuming differential trends, we found no change (−0.8 visits/100 beneficiaries; 95% CI, −10.6 to 9.0 visits/100 beneficiaries; P = .87). Comparing estimates with both trend assumptions, we found no consistent changes in emergency department visits, return hospital stays, HOPD use, or posthospitalization primary care visits associated with Maryland’s program.

Conclusions and Relevance 

We did not find consistent evidence that Maryland’s hospital global budget program was associated with reductions in hospital use or increases in primary care visits among fee-for-service Medicare beneficiaries after 2 years. Evaluations over longer periods should be pursued.


Making health care payment rates the same for all payers, public and private, and establishing global budgets for hospitals seem like reasonable steps toward establishing a single payer system. So how has Maryland done so far with this program?

The stated goals were to reduce unnecessary hospital utilization and to encourage greater use of primary care. But they “did not find consistent evidence that Maryland’s hospital global budget program was associated with reductions in hospital use or increases in primary care visits among fee-for-service Medicare beneficiaries after 2 years.” As is typical of unsuccessful policy studies, an accompanying editorial suggests that we should give the study five or ten years before we expect to see any transformation of the delivery system. Sure.

This has in common with other health policy studies the major defect that an isolated policy is studied within the background of our highly dysfunctional, fragmented, multipayer system. You cannot study a universal single payer system unless you have a universal single payer system to study (and they do exist elsewhere).

Right now we are seeing proposals such as a public option, a Medicare or Medicaid buy-in, or a change in the age of Medicare eligibility, all of which some hope eventually would lead to single payer. But when added to our current dysfunctional system, little benefit will be evident because the fundamental defects will remain extant. Each such step will reinforce the views of those who profess that single payer can’t work because our system will still be overpriced, too many will still be uninsured or underinsured, and patients will still be deprived of choices of their health care professionals and institutions.

Currently in California there is a proposal for a Medi-Cal Public Option as an incremental step to single payer. That seems to be so far off track that it constitutes a derailment of the Single Payer Express.

We need to end this nonsense of spoon-fed policy and move forward with comprehensive policy that we know works – a single payer national health program. Now. Full steam ahead.

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Medicaid was enacted in 1965 under the Lyndon Johnson administration as a social insurance program to provide lower-income Americans with the health care they need. Since then it has been solidly supported by all subsequent administrations as a social contract within our society, as a matter of fairness and necessity. As poverty and inequality have increased in more recent years, it has become a mainstay assuring necessary medical care for some 74 million Americans, covering more than one in five Americans, almost one half of births, 39 percent of children, and about two-thirds of nursing home and long-term care, and more than one-quarter of mental health services. It has been described as “the backstop for America’s scattershot health care system.” (Galewitz, P. Medicaid covers all that? It’s the backstop of America’s ailing health care system. Kaiser Health News, September 25, 2017.)

Not anymore. The Trump administration is out to shrink the program by whatever means, now including administrative actions by the Centers for Medicare & Medicaid Services (CMS) that bypass action by Congress. Seema Verma, Trump’s appointed head of CMS, did just that in Indiana during Michael Pence’s governorship. She has recently released a 10-page memo detailing how states can apply for waivers that can rein in their Medicaid programs, even in states that expanded Medicaid since 2010 under the Affordable Care Act. Through these waivers, states can exclude able-bodied adults from coverage unless they are working at least 20 hours per week. Children and disabled people are excluded from the work requirement. Ongoing reports will be required documenting that Medicaid recipients are working. If they fail to comply with these requirements, they can be locked out of coverage entirely. (Galewitz, P. Trump administration clears way to force some Medicaid enrollees to work. Kaiser Health News, January 11, 2018.) These new reporting requirements will greatly increase the bureaucracy involving Medicaid.

Kentucky is the first state to receive this federal waiver. It had expanded Medicaid under the ACA and now covers more than two million people. Its waiver allows it to require Medicaid recipients to work at least 20 hours per week, and to impose monthly premiums. Some people may be locked out of coverage if they fail to pay these premiums. Nine other states are lining up to request similar waivers. (Armour, S. Kentucky to impose Medicaid work provisos. Wall Street Journal, January 13-14, 2018: A4.) Waivers can also allow states to require additional eligibility redeterminations, to eliminate retroactive eligibility, and to establish lifetime limits for coverage, such as three to five years.

Government assistance to help lower income people access medical care has been a national goal for more than 50 years under an ongoing societal contract. Supporters of these new regressive policies subscribe to the unfounded belief that people needing Medicaid are lazy or otherwise undeserving of needed medical care. But such an attitude is at once unfair, uncaring, and uninformed. Most Medicaid recipients are already struggling to put food on the table and to have a place to live, so that many cannot afford to see a doctor even for urgent medical problems. Moreover, many Medicaid recipients are working or have major reasons for not being able to work. A recent report from the Kaiser Family Foundation has found that:

  • almost 8 in 10 of nonelderly adults with Medicaid coverage live in working families, with a majority working themselves;
  • many Medicaid enrollees work part-time and cannot find full-time work;
  • almost one-half of working adult Medicaid enrollees are employed by small firms that have low rates offering full-time work;
  • Most non-working adult Medicaid enrollees have major impediments to their ability to work; and
  • some research has actually shown that Medicaid coverage supports work.

(Garfield, R, Rudowitz, R, Damico, A. Understanding the intersection of Medicaid and work. Kaiser Family Foundation, January 5, 2018.)

On the other side of the coin, a study of Medicaid expansion in Kentucky and Arkansas has documented significant gains in access to care, financial security and health. Reduction of Medicaid eligibility through CMS’s new policies will reverse these gains and make a mockery of Trump’s supposed claims to help people with such needs. Despite the ill-intended policies of the Trump administration, Medicaid is working, as are most of its beneficiaries, to the benefit of their communities and country. (Bernstein, J, Katch, H. Trump’s Medicaid work requirement will backfire. New York Times, January 11, 2018.)

John Geyman, M.D. is the author of Common Sense about Health Care Reform in America (2017), and Crisis in U.S. Health Care: Corporate Power vs. The Common Good, and The Human Face of ObamaCare: Promises vs. Reality and What Comes Next

Visit John at: http://www.johngeymanmd.org/

3.2 million Americans entered the ranks of the uninsured in 2017

Posted by on Tuesday, Jan 16, 2018

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.

U.S. Uninsured Rate Steady at 12.2% in Fourth Quarter of 2017

By Zac Auter
Gallup, January 16, 2018

The percentage of U.S. adults without health insurance was essentially unchanged in the fourth quarter of 2017, at 12.2%, but it is up 1.3 percentage points from the record low of 10.9% found in the last quarter of 2016. The 1.3-point increase in the uninsured rate during 2017 is the largest single-year increase Gallup and Sharecare have measured since beginning to track the rate in 2008, including the period before the Affordable Care Act (ACA) went into effect. That 1.3 point increase represents an estimated 3.2 million Americans who entered the ranks of the uninsured in 2017.

Several factors likely contributed to the increase in the uninsured rate in 2017. Some insurance companies stopped offering insurance through the exchanges, and the resulting lack of competition drove up the cost of plans for consumers. This may have caused some Americans, especially those who failed to qualify for federal subsidies, to forgo insurance.

Further, media coverage of the policies to repeal and replace the healthcare law may have caused some consumers to question whether the government would enforce the penalty for not having insurance. Congressional Republicans made several attempts to repeal or replace the healthcare law during 2017, ultimately passing a tax bill in December that repealed the individual mandate.

The uninsured rate rose for all demographic groups in 2017, with the exception of those aged 65 and older, all of whom qualify for Medicare coverage. It increased most among young adults, blacks, Hispanics and low-income Americans.

By far, the biggest change in 2017 was the decline in the percentage of Americans purchasing their own plans, likely through ACA healthcare exchanges.

Having passed their tax bill, congressional Republicans’ 2018 legislative goals include reforming funding mechanisms for Medicaid and Medicare — programs that subsidize healthcare coverage for low-income, disabled and elderly Americans. With less federal assistance from these programs to help offset the rising cost of health insurance, fewer Americans may be able to afford health insurance.


According to this Gallup/Sharecare survey, in the past year the number of uninsured Americans increased from 10.9% to 12.2%, an increase of 3.2 million individuals.

Although supporters of the Affordable Care Act can cite reasons for this reversal of the prior increase in the numbers who are insured, doesn’t that merely confirm that our current system is not working if we agree that truly universal coverage – absolutely everyone – is an essential goal of reform? Yet supposedly progressive reform advocates are coming out of the woodwork to dismiss the single payer concept as they propose mere additions to our highly dysfunctional financing system, leaving all of the flaws in place.

What we can say is that the current system is falling miserably short. Too many remain uninsured; many more remain underinsured; administrative excesses continue to ramp up; lack of affordability and financial hardship have been perpetuated; choice in health care professionals and institutions is diminishing, and burnout is rampant. A well designed single payer system would fix these problems. This decline in the numbers who are insured proves that the current system, even with tweaks, is not up to it.

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Claudia Fegan’s message in the spirit of Martin Luther King Jr.

Posted by on Monday, Jan 15, 2018

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.

Beyond the flawed Obama health care reform. ‘The time is always right to do what’s right’: Dr. King

By Claudia Fegan, M.D.
January 15, 2011

It is indeed an honor and a privilege for me to stand here today celebrating the life and work of Dr. Martin Luther King Jr.

We learned much from Dr. King, even though he was taken from us too soon. He taught us that “the time is always right to do what’s right.”

As we stand here today, there are 50 million Americans who are uninsured. African Americans are represented disproportionately among the uninsured. We represent only 12 percent of the population, yet we are 20 percent of the uninsured. This is our issue.

As a result of not having insurance, we have decreased access to the preventive services that would allow us to live longer, healthier, richer lives. We pay a tremendous price for this.

Our infant mortality rate is about 2.5 times that of whites, our rates of death from heart disease and cancer are 1.5 times that of whites, our rate of death from diabetes is almost 2.5 times that of whites and our rate of death from HIV is 5 times that of whites. African American patients on dialysis are less likely to be referred for evaluation for kidney transplant and therefore, not surprisingly, we are far less likely to get a kidney transplant. This is our issue.

The Institute of Medicine in its 2004 study on “The Consequences of Uninsurance” estimated over 18,000 people a year die as a result of not having access to health insurance. Uninsured adults receive fewer and less timely preventive and screening services; uninsured cancer patients die sooner due to delayed diagnosis; the uninsured receive less chronic illness care, poorer hospital care and are more likely to die in the hospital; and the risk of premature death among uninsured Americans is 25 percent higher than among Americans with health insurance.

This is our reality, the reality of health care for African Americans in this country. We will never get more until we demand more. This is our issue.

The fierce urgency of now

Since 1986, Physicians for a National Health Program has been trying to convince physicians, patients and politicians that if we tossed out the private insurance industry and made the government the single payer for health care in this country, we could provide coverage for everyone with same money we are using now to cover only two-thirds of the country poorly.

I have a patient who is 63 years old. Ms. Lenoir has worked all her life, she is active in her church, she cares for her elderly mother and together she and her husband have raised their children to be self-sufficient members of society. Ms. Lenoir does not have health insurance because her employer has never provided that benefit.

The problem is Ms. Lenoir needs a new hip. After more than 20 years of arthritis in her hip, the joint is destroyed. She has bone grinding on bone. No amount of anti-inflammatory medication will relieve her pain.

I sent Ms. Lenoir to a pain specialist who injected the joint to provide her with temporary relief and who then called me and said, “this woman needs a new hip.” I told her, I know that, but have you got one you can give her? No one will pay for a hip for her until she turns 65 and Medicare will provide her with coverage.

I wish you could look into this woman’s eyes each time she comes to see me and feel her pain. Will the legislation passed last year provide her with a new hip before she turns 65 in 2013? No, probably not. This is our issue.

In the book “The Heart of Power,” David Blumenthal chronicles the efforts of presidents from Franklin Roosevelt through George W. Bush to achieve access to health care for the American public. “Major health reform is virtually impossible: difficult to understand, swarming with interests, powered by money, and resonating with popular anxiety,” he writes.

The congressional veteran and co-chair of the 9/11 Commission, Lee Hamilton, said, “Health care is so difficult because Congress is an incremental body and health care is a non-incremental issue.”

What Barack Obama did with the passage of the Patient Protection and Affordable Care Act (ACA) was nothing short of miraculous, but it was not enough and it will not solve our problems.

Going forward there will not be a fair, open or honest discourse about this legislation. It is a fact that ACA will do nothing to control costs. That is the major flaw of the legislation. Why are we still talking about single payer? Because single payer will address the issues of cost, access and quality.

Being right is not enough

Dr. King taught us being right is not enough. We have to win the hearts of the American public. We didn’t lose the war to gain access to health care for all Americans. We got battered in an ugly skirmish, but we’re not done.

It is time to change our tactics. The opportunity for change is still ahead of us. More recent studies have taught us that actually 45,000 people die each year as a result of not having health insurance, which means 180,000 more people will die before the full implementation the ACA. If everything goes exactly as planned, there will still be at least 23 million uninsured once all the changes have taken effect. This is our issue.

Camille Rucks was a security guard for a small company on the South Side of Chicago. In the spring of 2008 she developed breast cancer. She received outstanding care at the University of Chicago and did well. However, in November 2008, which we now know was the beginning of the recession, when her company began to struggle, she was laid off. She thought she was targeted because she had been out sick so much when she was receiving chemo, but it doesn’t matter.

In January 2009, when she had some blood-streaked sputum, her primary care physician (PCP) ordered a chest X-ray that showed a spot that raised the question of maybe her cancer had returned. Her oncologist told her she couldn’t see her because she was no longer insured. Her surgeon never returned her phone calls.

Her PCP called me because she was not able to get the necessary tests done for Camille because she was no longer insured. I told her PCP to have Camille come see me the next day.

I said, sure, of course, this is what we do; we’re the County Hospital. In less than a week she had a CT of her chest, and within two weeks she had been seen by pulmonary and oncology. She did have metastatic cancer and we took care of her.

I wish I could tell you this story had a happy ending, but it doesn’t. Camille died last year, but she told me she had no regrets. We treated her with dignity and respect.

My question is this: Who doesn’t deserve dignity and respect? Why should you have to pass a wallet biopsy before a health care provider determines she can talk to you, order a test, figure out what is wrong or decide how to treat you? This is our issue.

Affordable Care Act will not work

The Affordable Care Act has not made health care a right. Access to care is a profit center controlled by the insurance industry. We pay them to limit access to care. We spend more per capita on health care than any country in the world — more than $8,000 per person — and yet we are ranked only 36th in the world by the World Health Organization for the care we provide.

Under the ACA, everyone will be required to carry or purchase private insurance. For those who can’t afford it, we’re requiring states to either cover them under Medicaid or to provide supplements so they can purchase private insurance. This is an industry that has a history of profiteering by retroactively denying coverage to people with illnesses. So now we’re requiring everyone to buy coverage, and yes, we have told the insurance companies they can’t deny coverage to those with illnesses.

My question is why can’t we just pay for the care without having to go through the insurance industry? They are not to be trusted. Ask the state of Massachusetts how it has worked out for them with mandating insurance coverage and paying for those who can’t afford it. The cost of premiums has gone up so high so fast in the first year the governor met with the major companies to request they hold off on their premium increases because the costs had exceeded three times the original projections. The state now teeters on insolvency. This is our issue.

We spend enough money on health care in this country. We just let too many people who aren’t involved in providing care take profit from it.

This is about justice. Health care should be a right to which everyone is entitled. Remember we live in the wealthiest country in the world. We spend more on health care than any other country. It is time we got our money’s worth. It is time we got the health care we deserve, not the care the insurance industry is willing to let us have. It is time we made health care a right and not a privilege.

We have to speak up. We have to speak loudly. We have to make our voices heard.

The Affordable Care Act is an opportunity: It is not going to work!

A simpler and just solution

We have to remind the people — there is still a simpler, easier solution. People want to know, they have questions. They will ask, is this the answer? Will this work? Will this solve the problem?

Multinational Big Pharma charges the American public the highest pharmaceutical prices in the world, while it sells the very same drugs all over the world at prices one-half, one-third or even one-tenth of the price they charge in the United States. They do this because in the rest of the industrialized world, there is legislation that limits profits for medications, while the U.S. allows these companies to charge whatever the market will bear. The Affordable Care Act does not address this issue. This is our issue.

Dr. King said, “When people get caught up with that which is right and they are willing to sacrifice for it, there is no stopping point short of victory.” The Affordable Care Act was not victory. We now have a House of Representatives that thinks the American public will be appeased by political theater instead of substance.

What the American public wants is not so different from what African Americans want and deserve. We want guaranteed access to care, freedom of choice of provider, quality health care and two words you don’t hear in association with health care very much anymore: trust and respect.

We know it can be done because every other industrialized country in the world has figured how to do this. Most of them spend less than half what we do and they have better outcomes with more satisfaction.

It is not so complicated what we want: we want a health care system that takes everybody in and leaves nobody out. It is only the phony solutions they are attempting to confuse us with, that are complicated, just so we don’t notice they fail to expand coverage to those who need it and deserve it. That’s why this will be the civil rights struggle of the 21st century, and this is our issue.

I understand people are reluctant to criticize the ACA because our president is under assault from the right and he needs our support. I think Dr. King would tell us it is important to tell the truth: “The time is always right to do what’s right.”

When I think about this struggle I think about a poem my father taught me as a child. It was written by Langston Hughes and is called “Mother to Son.”

Well, son, I’ll tell you: Life for me ain’t been no crystal stair.
It’s had tacks in it, And splinters, And boards torn up,
And places with no carpet on the floor — Bare.
But all the time I’se been a-climbin’ on, And reachin’ landin’s,
And turnin’ corners, And sometimes goin’ in the dark
Where there ain’t been no light.
So, boy, don’t you turn back. Don’t you set down on the steps.
’Cause you finds it’s kinder hard. Don’t you fall now —
For I’se still goin’, honey, I’se still climbin’,
And life for me ain’t been no crystal stair.

The issue of guaranteeing access to care for everyone is an issue of social justice. Battles for social justice are never over, because there will always be reactionary forces waiting in the wings to turn back the clock. There are no easy solutions. We have to be willing to fight for what we believe in and keep fighting.

The night before he was assassinated Martin Luther King said: “Let us stand with greater determination. And let us move in these powerful days, these days of challenge to make America what it ought to be. We have an opportunity to make America a better nation.”

I hope you will join me in saying what we expect from any health care program any politician will offer us: Everybody in, Nobody out! Everybody in, Nobody out!

Thank you.

Claudia Fegan, M.D., is chief medical officer at the Cook County Health and Hospitals System and past president of Physicians for a National Health Program.


Seven years ago today, on the birthday of Martin Luther King Jr., Dr. Claudia Fegan delivered the following remarks to the Louisville (Ky.) Urban League. This was after President Obama signed the Affordable Care Act but before most of it was implemented. Today we still see blatant racism, voter suppression, intolerable inequities in income and wealth, and many other social injustices including the denial of affordable health care for far too many of our people. Thus it is appropriate that we take another timely look at Martin Luther King’s message delivered through Claudia Fegan’s heartfelt remarks.

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Health care is now the largest employment sector

Posted by on Friday, Jan 12, 2018

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.

Health Care Just Became the U.S.’s Largest Employer

By Derek Thompson
The Atlantic, January 9, 2018

In the last quarter, for the first time in history, health care has surpassed manufacturing and retail, the most significant job engines of the 20th century, to become the largest source of jobs in the U.S.

In 2000, there were 7 million more workers in manufacturing than in health care. At the beginning of the Great Recession, there were 2.4 million more workers in retail than health care. In 2017, health care surpassed both.

The U.S. spends hundreds of billions of dollars each year on Medicare, Medicaid, and health-care benefits for government employees and veterans. More subtly, the U.S. subsidizes private insurance in several ways, including through a tax break for employers that sponsor health care. This public support makes health-care employment practically invincible, even during the worst downturns. Incredibly, health-care employment increased every month during the Great Recession.

Recently, the growth in health-care employment is stemming more from administrative jobs than physician jobs. The number of non-doctor workers in the health industry has exploded in the last two decades. The majority of these jobs aren’t clinical roles, like registered nurses. They are mostly administrative and management jobs, including receptionists and office clerks. It’s not always clear that these workers improve health outcomes for patients.

This isn’t the end of health care’s run. It’s just the beginning. Of the 10 jobs that the Bureau of Labor Statistics projects will see the fastest percent growth in the next decade, five are in health care and elderly assistance. The entire health-care sector is projected to account for a third of all new employment.

The work that seemed to define the 20th century in the American imagination included union jobs held by white men who made things. But manufacturing employment peaked in the late 1970s. Forty years later, the fastest-growing occupations—like personal care and home-health aides—are quite the opposite: poorly paid, lacking a strong union, often female, and disproportionately filled by immigrants (who account for one-third of the in-home health care workforce). Services are the new steel.


So now the U.S. health care system has passed manufacturing and retail as the largest employment sector. And the majority of the newer jobs are administrative and management, according to Derek Thompson (senior editor at The Atlantic).

When we have the most expensive health care system in the world and we have so many deficiencies that result in mediocrity, is this really the best way we could be spending these additional health care dollars, especially since we already have an egregious excess of administrative services? It seems like we should be restructuring our system to make it more efficient, like maybe establishing a single payer, improved Medicare for all. Cut the waste and improve the health care product to make it work well for all of us. It will still be an important part of the job sector, but under single payer the services will provide greater health care value.

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