A more accessible video on the BUSPH symposium on Trump and public health

Posted by on Thursday, May 10, 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.

Yesterday’s message was on the symposium presented at the Boston University School of Public Health on “The Trump Administration and the Health of the Public.”

A more accessible version of the archived video is now available on the PNHP website along with a program listing the speakers and their topics.

The three videos total 6 hours (if you skip the first 28 minutes of background music before the program started):


A BU Today article on the symposium (the article emphasizes the racial injustices covered during the session):


If you are curious as to why this symposium was worth sending out a second notice, click the first link above and skim the program again. These topics must be a part of our national dialogue on the health of the public.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

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Symposium on public policy and health in the Trump era

Posted by on Wednesday, May 9, 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.

Dean’s Symposium: The Trump Administration and the Health of the Public

Cosponsored with The Lancet Commission on Public Policy and Health in the Trump Era
Boston University School of Public Health, May 8, 2018

The day brought together public health scholars, journalists, thought leaders, and the wider public health community to discuss how we can view Trump-era policies and their impact on health more than a year into the new administration.



Sandro Galea, Dean and Robert A. Knox Professor, Boston University School of Public Health

David U. Himmelstein, Distinguished Professor, School of Urban Public Health, Hunter College, City University of New York; Lecturer in Medicine, Harvard Medical School

Steffie Woolhandler, Distinguished Professor, Hunter College, City University of New York; Lecturer in Medicine, Harvard Medical School


Mary Travis Bassett, Commissioner, New York City Department of Health and Mental Hygiene


The Health of Immigrants
Altaf Saadi, Fellow, National Clinical Scholars Program, University of California, Los Angeles

The Health of Minority Populations
Zinzi Bailey, Assistant Scientist, Jay Weiss Institute for Health Equity, Sylvester Comprehensive Cancer Center, Miller School of Medicine, University of Miami

The Health of Children
Davida Schiff, Medical Director, HOPE Clinic, Massachusetts General Hospital

Charles Kravetz, General Manager, WBUR


The Economy, and Its Impact on Health
Atheendar S. Venkataramani, Assistant Professor, Medical Ethics and Health Policy, Perelman School of Medicine, University of Pennsylvania

Trump Policies on Food and Nutrition
Marion Nestle, Paulette Goddard Professor and Professor Emerita, Steinhardt School of Culture, Education, and Human Development, New York University

Health Care
Adam Gaffney, Instructor of Medicine, Harvard Medical School; Pulmonary and Critical Care Physician, Cambridge Health Alliance

Richard L. Berke, Founding Executive Editor, STAT


Global Health
Joia Mukherjee, Associate Professor of Medicine, Harvard Medical School; Chief Medical Officer, Partners In Health

The Environment
Martin McKee, Professor, European Public Health, London School of Hygiene and Tropical Medicine

Racism and Mental Health
Jacob Bor, Assistant Professor, Global Health, Boston University School of Public Health

Carol Hills, Senior Producer, Reporter, and Host, PRI’s The World


Native American Health
Michael E. Bird, National Consultant on Native American/Alaska Native Communities, AARP

The Health Crisis in Puerto Rico
Olveen Carrasquillo, Professor of Medicine and Public Health Sciences, Miller School of Medicine, University of Miami

Criminal Justice and Incarceration
Lello Tesema, Director of Population Health, Los Angeles County Correctional Health Services, Department of Health Services; Assistant Professor, Division of General Internal Medicine, University of Southern California; Gehr Fellow, Gehr Family Center for Implementation Science

Jenifer McKim, Senior Investigative Reporter and Senior Trainer, New England Center for Investigative Reporting, Boston University College of Communication


David U. Himmelstein, Distinguished Professor, School of Urban Public Health, Hunter College, City University of New York; Lecturer in Medicine, Harvard Medical School

Steffie Woolhandler, Distinguished Professor, Hunter College, City University of New York; Lecturer in Medicine, Harvard Medical School



Archived Video

The next time you are in a mood to spend six hours or so on reading a book or whatever, use the time to view this symposium instead. This is as fine of a symposium on issues of health care justice as you’ll ever witness. And considering the challenges that our nation faces, this could not be more timely.

In his closing comments, David Himmelstein explains why we should be updating ourselves on these issues:

“Health professionals have a duty to play a role in the changes our country needs, not just coming from the top to change the politicians who lead us, but to change the sea that those politicians swim in, the data that they understand, and understand not just as dry facts that we feed them, but as things that motivate our citizens and that condition the lives of our nation. So we have a charge as public health and medical professionals to participate in the changes that our country needs.”

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Michael Marmot: Childhood poverty and health inequity

Posted by on Tuesday, May 8, 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.

Achieving health equity in the Americas

By Michael Marmot
Harvard Chan School of Public Health, May 3, 2018

But poverty – what are health people doing talking about poverty? Can we do anything about poverty? Well, you can, actually.

These OECD countries – there’s the United States. It’s looking at child poverty defined as less than 60% median income. In the US, 29% of children are in poverty. In Mexico, 31.6% in poverty.

David (Satcher) will remember, four years ago I addressed the American Public Health Association meeting, 8,000 people. And I showed something similar to this, that the US has such high child poverty levels. And I said– this was four years ago. You had a different person in the White House.

And I said, you live in a democracy. This must be the level of child poverty that you want. Otherwise, you’d elect a government that did something different. But can you change that? Well, yes you can.

This is reducing child poverty by social transfers– taxes and benefits, welfare. Finland reduces its pretax child poverty by 2/3 by taxes and transfers, Iceland similarly, Norway, Denmark Ireland, Sweden, even poor old UK. Oh, you’d rather not use the tax and benefits system.

I was teaching a global health class. And we had a student from Sweden. And when I talked about child poverty and the effect of government policy, this student from Sweden was really confused. She said, you mean some countries just operate their tax and benefit system to have high levels of child poverty? She couldn’t understand why any country would do that.

It is difficult to understand, isn’t it? Why would any country do that? Why would your country only reduce poverty by 18% by taxes and transfers? Pretty rich place.

And my country has decided to make inequality worse. This is the long run impact of tax and benefit reforms in the United Kingdom between 2015 and 2019. Look at families, working age families with children by deciles of income.

If you’re in the bottom decile, the bottom 10%, the Minister of Finance has decreed changes to the tax and benefits system that will lead to your income dropping by 9.5% by 2019. If you’re in the second bottom decile, your income will drop by more than 12%. And then the higher your income, the less the drop. It’s quite possible for the Minister of Finance to redistribute income. Our minister of finance is doing it, just redistributing it upwards and making families with children worse off.

I had a senior politician in London say to me, I’ve been listening to the evidence you gave to the Scottish Parliament. And I thought, what? You’ve been doing what? You should get out more.

And he said, you’re anti-government. And I said, no, I’m not. I’m pro-health equity.

Any policy that’s likely to have an adverse effect on child poverty will have an adverse effect on health inequalities. And that’s what I’m against. And in the US, a less progressive tax code from the 1960s, this is the top 0.1%. From the 1960s to 2013, the top 0.1% had a reduction in their tax by 2.1 percentage points and the bottom 50% an increase by 4.3 percentage points. You’re doing what we’re doing, making the tax system more regressive.

And the much vaulted recent tax bill, by 2027, the top 0.1% will get a 3% reduction. And the bottom 50% will get a 2% reduction. This is what the evidence shows.

Michael Marmot is Professor of Epidemiology and Public Health at University College London and one of the world’s foremost researchers on health inequalities.

Transcript, audio and video available through this link:

The United States of America – the land with very high childhood poverty and associated health inequity. How would that placard look at our Fourth of July celebrations?

We can do something about it. As Michael Marmot says, we live in a democracy and thus we can have the level of child poverty that we want. Assuming that we would want it to be much lower than it is, why haven’t we done something already?

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Merging insurers with the health care delivery system

Posted by on Monday, May 7, 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.

Partners HealthCare, Harvard Pilgrim discussing possible merger

By Priyanka Dayal McCluskey
The Boston Globe, May 4, 2018

Hospital giant Partners HealthCare, looking to fortify its position in the rapidly changing health care market, is in potential merger negotiations with Harvard Pilgrim Health Care, one of the state’s largest medical insurers.

Executives from Partners, Massachusetts’ largest network of doctors and hospitals, and Harvard Pilgrim have been talking for several months, officials from both companies confirmed Friday in response to inquiries from the Globe. They are discussing a range of options, including an acquisition of Harvard Pilgrim by Partners.

The talks are taking place at a time of heightened deal-making in health care across the country, as hospitals, physician groups, insurers, and other companies pursue new strategies to manage costs and patient care. In Massachusetts, Beth Israel Deaconess Medical Center and Lahey Health are planning a big hospital merger to more aggressively compete with Partners.

Boston-based Partners is the parent company of Massachusetts General, Brigham and Women’s, and several other hospitals. Its expansion plans have been scrutinized in the past because the company is the most dominant health care provider in Massachusetts, and among the most expensive. Partners acquired specialty hospital Massachusetts Eye and Ear this year, and it’s negotiating a takeover of Care New England Health System in Rhode Island.

“Partners HealthCare is constantly exploring new partnerships and relationships with other providers and insurers with the goal of improving the delivery of health care to patients both locally and around the world,” Partners spokesman Rich Copp said. “Harvard Pilgrim is certainly among those organizations.”

“We’re looking at what we could do differently that brings value to our marketplace,” Harvard Pilgrim’s chief executive, Eric H. Schultz, said in an interview.

The US health care industry is in a time of rapid deal-making, with companies trying to cut costs by owning more pieces of the health care pie. CVS Health and the insurer Aetna have been working on a deal, for example.

In recent years, the lines between health care providers and health insurers have blurred.

Among the uncertainties around the combination of Partners and Harvard Pilgrim is what would happen to Partners’ existing insurance business, Neighborhood Health Plan.

Partners acquired Neighborhood in 2012. But instead of boosting Partners’ bottom line, Neighborhood — which traditionally focused on low-income individuals on Medicaid — contributed to historic financial losses at Partners.

Neighborhood shed many of its low-income members and worked aggressively to sell insurance to employers. But with about 142,000 members, it remains a small player compared with the state’s big three insurers: Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim, and Tufts Health Plan.


The potential merger between Partners HealthCare and Harvard Pilgrim Health Care is not just another routine merger and acquisition activity, but it is one occurring at the heart of the U.S. health care system – Massachusetts General Hospital being one of the oldest and most prestigious hospitals in the nation.

It is distressing to see multiple hospitals and physicians merge to gain market advantage, but it is even more disturbing when an integrated health care delivery system is merging with one of the state’s largest insurers. The implication that this is to serve the patients better is belied by the fact that Partners’ previous acquisition of a smaller insurer – Neighborhood – was followed by the shedding of its low-income members as it aggressively marketed itself to the more lucrative employer-sponsored insurance market.

Under a well designed single payer national health program, supposedly we would eliminate the private insurers and switch to a publicly-administered pre-paid health program. But what happens when the private insurers become an integral part of the actual health care delivery system? As is there weren’t enough problems already, obviously that would make implementation of a single payer system that much more difficult.

We’ve spent eight years talking about improving Obamacare by the feeble act of adding a public option, perhaps as a Medicare buy-in, when right under our noses this M&A activity has been taking place. They are building a health care delivery system that will be unassailable by social insurance programs. Are we going to wait until the only solution to bringing health care justice to all will be to nationalize our health care delivery system? How feasible is that?

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Beware the disruptors and their wellness-industrial complex!

Posted by on Friday, May 4, 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 New Health Economy in the age of disruption: Novel combinations attempt to remake the health system

PwC Health Research Institute, April 2018

The last six months have seen an explosion in unusual deals with the potential to reshape the US health ecosystem. CVS Health announced its intention to purchase Aetna for $69 billion. Cigna Corp. has announced an agreement to buy Express Scripts Holding Co. for $67 billion. UnitedHealth Group’s Optum purchased DaVita Medical Group for $4.9 billion. Albertsons Cos. has agreed to merge with Rite Aid Corp. Other high-profile and novel healthcare deals have been floated in the press. Several unusual partnerships also have been announced, including one among Amazon, JPMorgan Chase & Co. and Berkshire Hathaway Inc.

And these are just the largest and most recent deals and partnerships. In 2017, 967 deals occurred in the US health services market, including healthcare payers and providers. Deal value increased 146 percent over 2016. The US health industry is undergoing seismic change generated by a collision of forces, including the shift from volume to value, rising consumerism and the decentralization of care. This shifting terrain is creating uneven opportunities in the New Health Economy and will likely drive players new and established to reconsider their business models and strike the sorts of deals announced in the past six months. Some will be driven to seek returns in new markets as their core revenues shrink. Others will find success creating value for other players, including consumers. Still others will thrive by building infrastructure for the emerging virtual health system.

The US health system is starting to reorganize to obtain more favorable pricing and reimbursements. Companies are building capabilities to cut costs and meet customer needs in more convenient and transparent ways. Companies with capabilities across vast swaths of the health ecosystem are emerging, offering consumers one-stop shops for care, treatments, financing and risk management, wellness products and services—and in the case of retailers, toys, milk and wireless speakers.

The New Archetypes:

* Vertical Integrators

Companies such as CVS Health and Aetna, UnitedHealth Group’s Optum and DaVita Medical Group, and Cigna Corp. and Express Scripts Holding Co. have announced mergers or acquisitions to offer millions of consumers access to a broad array of cost-efficient, integrated, transparent services and products. They are doing this, in part, by absorbing some of the industry’s middlemen and vertically integrating parts of the US health ecosystem. “In a value-based environment, the more pieces of the supply chain that you can influence, the more you can impact utilization and cost, driving a win-win across providers, payers and patients,” said Jane Sarasohn-Kahn, a healthcare economist and founder of the group THINK-Health.

Companies also need a wider, data-driven view to develop new ways to cut waste and improve outcomes at lower costs. Vertical Integrators can, in theory, pull together many sources of key consumer data, allowing that broader vision to come into focus. “Data is really key to integration efforts,” said Eric Topol, founder and director of the Scripps Translational Science Institute.

* Employer Activists

Employer Activists are banding together to find ways to cut their employees’ healthcare costs. In February 2016, 20 US companies formed the Health Transformation Alliance (HTA), which has since worked on developing tools for its members to cut employee healthcare costs. In January 2018, Amazon, JPMorgan Chase & Co. and Berkshire Hathaway Inc. announced they would partner to form an independent company to lower healthcare costs and improve satisfaction for their employees by addressing healthcare quality and transparency.

Employers have, of course, long worked to reduce the amount they spend on health benefits. They have shifted premium costs to employees, raised deductibles and other cost-sharing, narrowed choices of in-network providers, experimented with reference pricing, launched pricing transparency tools to help employees and their families make price-conscious choices, and used formulary decisions and pre-authorizations to curb use of higher-priced therapeutics.

These strategies have had an impact. Utilization has been mostly flat for the last decade. Medical price, however, has risen 3-6 percent each year and remains an important medical cost trend driver.

* Technology Invaders

Technology Invaders have been trying to disrupt the US health industry for almost a decade. In 2013, HRI found, 76 percent of the Fortune 50 were engaged in the healthcare industry; several were technology companies aiming to use their digital prowess, pragmatism and consumer savvy to develop better ways to deliver, pay for and access care. In 2018, a slightly higher percentage of the Fortune 50 is involved with health, with about the same number of tech companies.

These Technology Invaders are gaining traction. Besides being an Employer Activist, Amazon has quietly started selling private-label over-the-counter medical products, from hair growth formula to allergy medicine. It also started offering Medicaid recipients discounted access to its Prime subscription service.

Apple’s newest operating system allows users to access parts of their EHRs on their phones; the company has partnered with more than three dozen hospitals for its Apple Health Records platform.

While Technology Invaders have the capability to disrupt, they likely will need partnerships with existing healthcare companies to actually do so.

* Health retailers

Health Retailers such as CVS Health, Walgreens Boots Alliance, Walmart, Albertsons Cos. and others use their vast network of store locations, troves of consumer insights, national and global supply chains and national (and sometimes global) branding to attract consumers looking for affordable, convenient care and goods in a system known for its lack of affordability and convenience. Over the past five years, consumers have consistently told HRI that they are open to receiving a wide range of services in retail settings, from wound care to MRIs.

Health Retailers are expanding in size and adding to their health offerings. The Albertsons-Rite Aid deal would give the chain 4,350 pharmacy counters in 4,900 stores and an additional 320 medical clinics, according to the companies. They said they expected the combination of its retail locations and healthcare offerings to drive financial growth. “This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers’ evolving food, health, and wellness needs,” said John Standley, Rite Aid chairman and CEO.

Health Retailers have an opportunity to use their consumer financial savvy to bring patients into the fold and keep them coming back, using reward programs and other strategies. For example, companies can offer consumers incentives to obtain care at a clinic, or offer subscription-type services to keep consumers coming back on a regular basis.

What comes next?

Dramatic change has been predicted for the US health system for many years. Finally, the industry is seeing the emergence of fundamentally new models: Vertical Integrators, Employer Activists, Technology Invaders and Health Retailers. Whether they will succeed in disrupting the health system, which has stubbornly resisted significant change, remains unknown. But they may find the environment more amenable to change than ever before, as healthcare costs are increasingly borne by consumers and pressure to pay for value instead of volume increases.

Companies may find success in these models, but they are unlikely to be bound by them. In fact, companies that are able to blend various archetypes may be positioned best to win in an evolving environment. At a minimum, companies should consider how they fit in this new environment and how they can succeed in their particular space. Consolidation and integration may put new pressures on existing healthcare organizations like pharmaceutical manufacturers, but they also might open up new opportunities, such as partnerships between providers and Health Retailers.

Players new and traditional come at the shifting landscape from very different directions, but there are resilient moves all healthcare companies should consider making:

* Invest in customer experience.

Consumers’ views on health can change rapidly. Many consumers are ready for healthcare to mirror other parts of their lives in terms of convenience, choice and the presence of affordable options with predictable pricing. Vertical Integrators, Technology Invaders and Health Retailers all have a leg up on many established health players in understanding consumers and tailoring experiences for them.

* Plan for a broader workforce.

These new business models possess capabilities that are minimally present in established health players. The new models may have armies of workers coding, working on AI, analyzing data, prototyping new services and products, and focusing on customer experiences. These new companies also may have staff from traditional players with deep knowledge of the health industry. Health companies competing in this new world should plan for a much broader workforce. And they should be prepared to pay for them—the rest of the global economy is seeking these capabilities too.

* Focus on price.

Employers, the government and other players largely have focused on utilization over the past decade. Price is the next frontier. Vertical Integrators, Employer Activists, Technology Invaders and Health Retailers are positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain. Consumers, employers and the federal government are seeking relief on price and likely will reward companies able to significantly cut them without downgrading quality.


Arnold Relman warned us about the medical-industrial complex, but it is likely that even he did not realize how intense would be the disruptive innovation in health care that is beginning to take place.

What we are about to see is a takeover by the disruptors who “have a leg up on many established health players in understanding consumers and tailoring experiences for them.”

“This new world should plan for a much broader workforce (of disruptors), and they should be prepared to pay for them.”

The disruptors “are positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain.”

It is almost as if the physicians, nurses and other health care professionals and the hospitals and clinics in which they provide their services have become a peripheral, albeit necessary, appendage to their wellness-industrial complex that is displacing our traditional health care delivery system and its more recent iteration of the medical-industrial complex – all for power and profit.

I remember when California enacted legislation that allowed the insurers to contract directly with the health care providers. I warned my friends about what this meant. “That can’t happen,” they said, and they hardly turned around when the managed care revolution was upon us.

Well, you say, this is different. It can’t happen. But it has already begun, and before you can turn around… well, you know.

Once the transformation is well along, imagine trying to implement a single payer, improved Medicare for all. It is likely that traditional Medicare will have been displaced by future iterations of Medicare Advantage plans, and so it would no longer serve as a model for reform. Once the silos of the health care delivery system are flattened, how will health care services be financed? Will there still be networks? Cost sharing barriers such as high deductibles? Will it be possible to fund this expansive model of the wellness-industrial complex through anything remotely resembling an insurance product, especially when the insurers are being amalgamated into what was formerly the health care delivery system? And now that the plutocracy is in control, how could we ever remove the passive investors that extract humongous rents through the wellness-industrial complex? And what about the patients? Did we forget about them?

The acutely ill, the injured, and those with chronic diseases will always be with us. The demand for decent health care will always be there. But the longer we wait to enact a truly universal, accessible, equitable and affordable health care system, the more difficult it will be. As an example, just think of how difficult it is to inform the public that they are getting a very bad deal when they support private Medicare Advantage plans. Compound that difficulty with the massive disruptions that are about to be foisted upon us by the New Health Economy that PwC describes in this report. The disruptors really understand marketing.

And, by the way, a Medicare buy-in public option won’t do it. It will only give the disruptors more time to fortify their New Health Economy. We must change our course today (yesterday, except that we can’t recover time already lost).

A single-payer national health program, aka an improved Medicare for all. Nothing less. Pull all stops today!

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ACOs are likely to leave the Medicare Shared Savings Program

Posted by on Thursday, May 3, 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.

National Association of ACOs, Press Release, May 2, 2018

Today, the National Association of ACOs (NAACOS) released results from a survey about assuming risk and future participation plans for Medicare Shared Savings Program (MSSP) Track 1 ACOs. The web-based survey was conducted in April 2018 and survey links were emailed to Track 1 ACOs entering their third agreement periods in 2019. NAACOS specifically reached out to the 82 ACOs that began the MSSP in 2012 or 2013 and remain in Track 1 in 2018, thus they are required to move to a two-sided ACO model in their third agreement period beginning in 2019. The goal of the survey was to better understand what ACOs are planning in the face of these requirements and how they feel about risk. While we are pleased that 43 percent of these Track 1 ACOs responded to the survey, we are troubled by the results which illustrate NAACOS’s long-standing concerns about forcing ACOs into risk-based contracts.

Results from a key survey question show that 71 percent of ACO respondents indicated they are likely to leave the MSSP as a result of having to assume risk.

NAACOS encourages ACOs to prepare to move to risk and strongly supports ACOs that are ready to do so, but we do not support forcing ACOs to assume risk if they are not ready. Clif Gaus, President and CEO of NAACOS, comments on the survey results, “These results paint a bleak future of what will happen if the government keeps its mandate to push ACOs into risk. It’s naïve to think ACOs that aren’t ready will be forced into risk in what is ultimately a voluntary program. The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value. This would be a real setback for Medicare payment reform efforts.”


Accountable care organizations (ACOs) are the mainstay of CMS’s strategy to move health care financing away from paying for volume to paying for value instead. ACOs enter the Medicare Shared Savings Program (MSSP) through Track 1 in which they have the upside of being rewarded with a portion of any savings they can generate. But ACOs are required to move into a two-sided model in which they must also bear the downside risk of losses. In this survey, 71 percent of the ACO respondents indicated that they are likely to leave the MSSP if they are required to assume that downside risk.

Although the concept is that ACOs must demonstrate accountability for improving quality and reducing costs, the actual application of the concept demonstrates that it is really primarily about the latter – reducing costs. That is why CMS requires transition to the two-sided model with downside risk. They want to reduce federal spending. Yet the ACOs recognize that the model is so flawed because of their potential exposure to losses that they would rather abandon the program than to risk those losses.

This really should make the policy community and bureaucrats think about whether the ACO experiment should even be continued. If policy changes are made to give greater assurance to the ACOs that they will be profitable, then the whole idea of cost accountability tanks.

In fact, the concept that you can assign value to care while ignoring volume is fundamentally flawed. The delivery of health care requires a certain volume of services that have overhead costs. Paying based on a paucity of quality measurements and on patient satisfaction surveys ignores the cost of the resources that are required to deliver care.

It would be far better to design a system that improves allocation of those resources. Of course, that is what a well designed single payer national health program does. Let’s quit wasting our efforts and funds on the failed ACO model and move on with providing what we really need – an improved Medicare for all. That’s where the real value is.

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Making Medicare prices universal as an isolated policy for reform

Posted by on Wednesday, May 2, 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 Case for Single-Price Health Care

By Paul S. Hewitt and Phillip Longman
Washington Monthly, April/May/June 2018


Obamacare has taken a licking but keeps on ticking. But while progress has been made on expanding access, another problem keeps getting worse: the soaring cost of health care for those who get their insurance through their employers. For these folks—who make up the majority of middle-class, working-age Americans—the ever-rising costs of premiums, deductibles, and co-pays has turned into a full-blown crisis.

Take a median-income family of four whose members are covered by a standard employer-sponsored plan. Last year, the amount that hospitals, doctors, and other providers charged to treat such a family reached an average of $26,944, according to the Milliman Medical Index—nearly $9,000 higher than in 2010, when the ACA was enacted. Families typically paid about a fifth of that difference directly in the form of increased premiums, deductibles, and co-pays. Who exactly paid how much of the rest is not certain, but it’s axiomatic among economists that employees bear most if not all of the cost of employer-sponsored health care. To employers, health insurance is just a form of employee compensation. When the cost goes up, they typically respond by cutting back on raises and other benefits.

Fortunately, there’s a straightforward way to attack this middle-class affordability problem. The Affordable Care Act dramatically tightened existing price controls on health care purchased by the federal government. It did so by setting fee schedules for how much doctors and hospitals can charge Medicare, Medicaid, and other federal health care programs for performing specific services or, in some cases, treating specific conditions. Similar price controls apply to Medicare Advantage Plans, under which private insurers are allowed to contract with providers at Medicare prices.

The answer to the most pressing aspect of our health care crisis is simply to apply these cost controls to commercial plans as well. For a typical middle-class family, such a move, if enacted today, would drop the total price of health care by about a third in the first year, without having to pass any new taxes and without forcing anyone to change their health care plan. Proof of concept comes from the fact that we already do this for everyone covered by Medicare and Medicaid. You’ve heard of single-payer. This is the case for single-price.

For people with commercial insurance, it keeps getting worse.

How did this happen?

A major, underappreciated reason is that in most markets, medical providers have merged with each other to the point that they effectively operate as local monopolies.

Where health care consolidation is strongest, hospital prices run roughly 20 percent higher than in markets where some real competition remains. Since we first wrote about the phenomenon in these pages (“After Obamacare,” January/February 2014), a vast literature has grown up confirming that monopoly in health care is a major factor pushing up prices for Americans not covered by Medicare or Medicaid.

What would happen if we just took the single measure of applying Medicare prices to all commercial health insurance—and did nothing else? According to a study by the Congressional Budget Office, the price for a one-day hospital stay is 89 percent higher when charged to commercial insurance plans and their customers than when a Medicare patient stays in the same bed for the same amount of time. Overall, the discounts Medicare and Medicaid receive are in the 20 to 40 percent range. Thus, if done at a stroke, the first-order effect of imposing Medicare prices universally would be to reduce the price of the health care received by a typical family by about one-third. That would translate into annual savings of about $9,000 today, and much more over time. The savings would still be substantial even if we implemented the plan in phases to ease the transition.

Wouldn’t “Medicare prices for all” cause massive disruption across the health care sector? Yes, but in a good way. Importantly, hospitals that disproportionately serve low-income and elderly patients—typically found in rural or poor, urban locations—would be the least affected. That’s because they already know how to break even or even earn a surplus at Medicare and Medicaid prices. Unable to pass inflated costs along to patients with commercial insurance, they’ve had to learn to be more efficient.

The same is true more generally of hospitals that lack monopoly power. Studies show that hospitals with real competition in their local markets have found ways to lower costs to the point that they can get by on Medicare prices. These hospitals might even welcome a move to universal Medicare prices because it would help level the playing field with monopolistic competitors when it comes to recruiting and retaining doctors.

It would be a different story, though, for hospital systems that have been living high off their ability to extract monopoly prices from commercially insured patients. These hospitals will scream that they are already losing money on every Medicare and Medicaid patient, and that unless they are able to inflate the prices they charge commercial payers, they will go broke. But the reason they lose money on Medicare and Medicaid patients is that their costs are too high. And the reason their costs are too high is that they don’t need to cut them so long as they can gouge commercial payers—which, as monopolies or near monopolies, they can. The majority of these hospitals are classified as nonprofits, so the revenue from their high prices doesn’t even have to go back to shareholders. Instead, it turns into inflated salaries for administrators, lucrative contracts for specialists, and, often, giant building projects. In order to survive on Medicare prices, they would have to become much more efficient and cost conscious.

In normal markets, price controls are seldom a good idea. But health care is not a normal market. Purchasers, whether consumers, insurers, or employers, have a hard time evaluating the quality of medical services, for example. There are also all kinds of agency problems involved with so much care being purchased with other people’s money, and a moral problem involved with the fact that a large and increasing share of the population can’t afford to pay the price of their own health care. And that’s all before you get to the problem of industry consolidation. In highly concentrated, opaque health care markets, administered prices are the only real alternative to prices dictated by the fiat of monopolists.

These are the reasons why literally every other developed country in the world uses administered prices in health care, including countries that rely on privately owned hospitals and entrepreneurial doctors. And it’s why their use in the Medicare and Medicaid programs has been successful in containing cost inflation while predatory pricing prevails everywhere else in the increasingly cartelized U.S. health care sector.

The idea of applying Medicare and Medicaid prices across the board is so compelling that it has started getting serious attention from influential policy wonks. On the conservative side, the Council for Affordable Health Coverage recently issued a white paper that calls for the expansion of Medicare prices to commercial plans. On the liberal side, Princeton’s Paul Starr broached the idea in an article in the American Prospect in January. More recently, the Center of American Progress has included the idea in a policy paper.

But there are very strong reasons to believe that starting with price controls alone is a better idea than trying to achieve them and universal coverage in one shot.

Medicare for All advocates make the case that, despite the sticker price, the plan will actually bring down overall health care spending by imposing lower prices on providers and saving on administration. But here’s the problem: almost all of those savings will come from money that voters don’t know they’re currently spending. More than 150 million Americans have employer-sponsored group health care plans. They can see what they are forking out directly for premiums, deductibles, and co-pays, and they don’t like it. But they are largely innocent of the far greater amounts they pay in lost wages. In a typical employer-sponsored family plan, two-thirds of the premiums are nominally paid by the employer, who in turn shifts much if not all of that cost to employees by reducing other forms of compensation. Yet few employees are aware of this reality. So selling a single-payer system involves promising to save people money on costs they don’t know they pay, while at the same time telling them that they’ll have to share more of their paycheck with Uncle Sam. Not easy.

So why not just keep it simple, at least to start? A “Medicare prices for all” plan doesn’t require tax increases or involve transfers paid for by the middle class. It doesn’t require Americans to give up their current health care plans. And it doesn’t repeal or replace the popular features of the Affordable Care Act. But it does directly attack the middle-class affordability crisis using a proven approach that the great majority of Americans might actually support.

Paul Hewitt is an economic adviser to the Council for Affordable Health Coverage. Phillip Longman is senior editor at the Washington Monthly and policy director at the Open Markets Institute and author of “Best Care Anywhere – Why VA Health Care Is Better Than Yours.”



California Legislative Information; AB-3087 California Health Care Cost, Quality, and Equity Commission

This bill would create the California Health Care Cost, Quality, and Equity Commission, an independent state agency, to control in-state health care costs and set the amounts accepted as payment by health plans, hospitals, physicians, physician groups, and other health care providers, among other things.

The bill would require the commission, beginning July 1, 2019, to annually determine the base amounts that health care entities, as defined, are required to accept as full payment for health care services, and would specify that the base amount for a health care provider shall be a percentage of Medicare rates not lower than 100% of Medicare rates.

The bill would require the commission to obtain the information necessary to determine total health care expenditures and to set a global growth cap for total health care expenditures, as specified.



Physicians converge on Sacramento to oppose dangerous rate setting proposal

California Medical Association, April 30, 2018

Over 500 physicians, medical students and stakeholders gathered in Sacramento on April 18 to bring the voice of medicine to legislators for the 44th annual California Medical Association (CMA) Legislative Advocacy Day.

Wearing white coats, physicians converged on the Capitol to educate legislators about critical health care issues, including a radical physician rate setting proposal (AB 3087) that would increase patient out-of-pocket costs, create state-sanctioned rationing of health care for all Californians and force physicians out of state or into early retirement. Informing legislators about the negative effect this dangerous rate setting proposal would have on access to care in California was the top priority for attendees.


There is broad agreement that the two most important factors that lead to our egregiously high health care costs are our high prices and the profound administrative waste in our fragmented health care financing system. Paul Hewitt and Phillip Longman, in their long Washington Monthly article (long, but worth the read), make the case for rigid price regulation.

Although they and others contend that price simplification would address the administrative waste as well, the impact would be very small since the highly inefficient, dysfunctional financing infrastructure would remain in place.

Since affordability is the number one health care concern according to many polls, would establishing a unified pricing scheme (all-payer or single-price health care) be welcome as an incremental step since it would be much less disruptive than converting to a single-payer improved Medicare for all? Hewitt and Longman seem to think so.

But we should look at California’s current effort to enact a universal pricing system: AB-3087 California Health Care Cost, Quality, and Equity Commission. Use the link above to access the bill, and then click on the “Bill Analysis” tab. Though you likely don’t have time now to read the 28-page analysis, just glance at the last three pages for support and opposition. Support includes the cosponsors: California Labor Federation, Health Access California, SEIU California, and UNITE HERE along with about two dozen other organizations. Opposition fills most of the three pages and includes much of the medical-industrial complex in California. The release from the California Medical Association (above) gives you an idea of the fervor of the opposition. These organizations are not convinced, to say the least, that this legislation would not be disruptive. AB-3087 is doomed.

So why don’t we move forward with reform that would address both our high prices and the administrative waste, not to mention all of the other measures of a well designed single payer system – an improved Medicare for all – that would correct the deficiencies in our financing system while improving the allocation of resources within the health care delivery system?

Hewitt and Longman present an interesting twist on the argument that it is not politically feasible. Read the paragraph near the end of their excerpts above that begins, “Medicare for All advocates make the case that…”  They make the case that most individuals do not realize how much they are already spending on health care since much of it is hidden from them, whether it’s the employer’s contribution to their health plan or the massive amount we are already paying through the tax system – almost two-thirds of all health care spending if the purchase of plans for government employees and the huge amount of tax expenditures for employer-sponsored plans are included. Hewitt and Longman say, “So selling a single-payer system involves promising to save people money on costs they don’t know they pay, while at the same time telling them that they’ll have to share more of their paycheck with Uncle Sam. Not easy.”

Now would it be that difficult to let people know about the hidden costs of health care that they are already paying? Do people really prefer being kept in the dark by an opaque financing system rather than being enlightened by the transparency of financing through an equitable tax system, especially if the amount being spent is somewhat less for all but the wealthiest of us?

Can you imagine the typical American saying, “Okay, so we’re spending more now and getting less than we would be with an improved Medicare that covered everyone, but just don’t tell me about it. Let me suffer in silence.” Are we a bunch of masochists?

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Four million working-age people have lost insurance coverage since 2016

Posted by on Tuesday, May 1, 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.

First Look at Health Insurance Coverage in 2018 Finds ACA Gains Beginning to Reverse

By Sara R. Collins, Munira Z. Gunja, Michelle M. Doty and Herman K. Bhupal
The Commonwealth Fund, May 1, 2018

The marked gains in health insurance coverage made since the passage of the Affordable Care Act (ACA) in 2010 are beginning to reverse, according to new findings from the latest Commonwealth Fund ACA Tracking Survey. The coverage declines are likely the result of two major factors: 1) lack of federal legislative actions to improve specific weaknesses in the ACA and 2) actions by the current administration that have exacerbated those weaknesses. These include the administration’s deep cuts in advertising and outreach during the marketplace open-enrollment periods, a shorter open enrollment period, and other actions that collectively may have left people with a general sense of confusion about the status of the law. Signs point to further erosion of insurance coverage in 2019: the repeal of the individual mandate penalty included in the 2017 tax law, recent actions to increase the availability of insurance policies that don’t comply with ACA minimum benefit standards, and support for Medicaid work requirements.


* About 4 million working-age people have lost insurance coverage since 2016

* The uninsured rates among lower-income adults rose from 20.9 percent in 2016 to 25.7 percent in March 2018

* The uninsured rate among working-age adults increased to 15.5 percent

* The uninsured rate among adults in states that did not expand Medicaid rose to 21.9 percent

* The uninsured rate increased among adults age 35 and older

* The uninsured rate among adults who identify as Republicans is higher compared to 2016

* The uninsured rate remains highest in southern states

* Five percent of insured adults plan to drop insurance because of the individual mandate repeal

From the Policy Implications

In the absence of bipartisan support for federal action, legislative activity has shifted to the states.

More broadly, leaving policy innovation to states will ultimately lead to a patchwork quilt of coverage and access to health care across the country, a dynamic that will fuel inequity in overall health, productivity, and well-being. At some point, Congress will likely face pressure to step in to level the playing field.


Although building on our current fragmented health care financing system is the most expensive model of reform, it was understood from the beginning that the Affordable Care Act would fall far short of our goals of universality, comprehensiveness, and affordability. If there is any surprise here, it is how quickly some of the gains could be reversed without the formality of enacting repeal and replace legislation. Not only is ACA a fundamentally flawed model, it is subject to damage through the political whims of ideologues.

Some of the proposed policy options to improve coverage include more advertising of exchange plans, reinsurance to reduce risk of insurer losses, more premium and cost sharing subsidies, and even a public option such as a Medicare buy-in. The problem is that these leave in place the high costs and administrative waste and other deficiencies that characterize our system while failing to protect against political chicanery.

If we had in place a well designed single payer national health program – an improved Medicare for all – everyone would have access to their choice of health care professionals and institutions, and care would be prepaid automatically  through progressive taxes and thus affordable for everyone. It would be the privilege once granted that became an irrevocable right, if there were any doubts before.

The Commonwealth Fund would have plenty of other features of our health care system to study, but no longer would they have to keep count of how many go without any health care coverage at all, or how many face financial hardship because they are underinsured. Everyone would be included and nobody would be deprived of care because it was not affordable. So the question is, why do we continue to tolerate the injustices of our highly dysfunctional financing system when we don’t have to?

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We all need health care for royalty, though not necessarily with the posh suite

Posted by on Monday, Apr 30, 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 Royal Baby Is Lucky He Wasn’t Born in America

By Laurie Garrett
FP, April 24, 2018

On April 23, the Duchess of Cambridge gave birth to her third child in a posh London maternity center called the Lindo Wing inside St. Mary’s Hospital, where a small army of attendants looked after her and Prince William for 24 hours in a secluded, luxurious room at a cost of $8,900, according to the Economist.

Most Western Europeans and Canadians, of course, don’t deliver babies in the Lindo Wing. Otherwise, however, their treatment and outcomes are pretty much consistent with the royal couple’s. Parents pay nothing for their maternity care and delivery, with low risks of maternal and infant mortality.

The average American woman gives birth in a noisy hospital with few frills or amenities and for an average cost of $12,290. Everything is quite average, in terms of quality and aesthetics in the birthing environment, except, on a worldwide scale, the costs. Should she require a cesarean section (an average of $16,907) or any emergency services, her bill could swiftly soar above $30,000. Have premature triplets and costs top $870,000.

According to the National Academy of Medicine, the United States lags far behind the rest of the OECD for a long list of health problems, including maternal and infant mortality. In the OECD, only Turkey and Mexico had higher infant mortality rates than Mississippi, and the state with the best infant mortality in the United States — New Hampshire — would still rank way down at 28 in OECD stature.

One study found that Americans used health care services at about the same rate as Europeans — perhaps even less — yet paid nearly twice as much for just about everything.

Today, tens of thousands of Americans are crowdfunding their health care, searching for help to offset the costs that their insurance companies refuse to cover. It has come to this. America is a nation of beggars, forced to seek the pity of strangers who may, in turn, choose who shall live based on charity and who shall die for lack of financial support. A blonde 2-year-old girl in a ballerina tutu may garner more such kindness than a black 10-year-old boy in a Black Panther suit, who in turn gleans greater compassion from the online masses than a 50-year-old gunshot victim or an elderly Latina dying from diabetes. It’s like a macabre version of the 1950s TV show Queen for a Day, in which needy women pleaded for a fridge, dishwasher, new flatware, or a smart set of work clothes and an “applause-o-meter” was used to measure studio audience choices.

In a sensible health care system, there are no applause-o-meters; insurance actually covers patients’ costs; drugs and medicines are purchased in volume to bring down those prices; and life expectancy is independent of personal income.


Fortunately most Americans are not dependent on crowdfunding or on Queen for a Day applause-o-meters to pay for health care, but in some ways these are symbolic of the humiliating dysfunctions inherent in our health care financing system. We should be ashamed that we spend twice the average of other nations on health care and yet leave tens of millions to suffer from financial hardship when they need health care, while not getting the results that we should be.

We already are spending enough money to provide health care for everyone, but we need to spend it more wisely. Through a well designed single-payer, improved Medicare for all, cost-sharing financial barriers could be essentially eliminated for everyone as they are in many other nations that spend much less.

Should we reprise the applause-o-meter to award that cute 2-year-old blond in a ballerina tutu the title of Princess for a Day in order to help pay at least some of the costs of her cancer care? Then what about the elderly Latina with late stage diabetes whose applause meter score did not qualify her as Queen for a Day, and who also failed to gain sympathy on a crowdfunding webpage?

This is America. We can do far better than that.

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Angus Deaton: Self-assessment of well-being and policy ethics

Posted by on Friday, Apr 27, 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.

NBER Working Paper No. 24369; What do Self-Reports of Wellbeing Say about Life-Cycle Theory and Policy?

By Angus Deaton
National Bureau of Economic Research, March 2018


I respond to Atkinson’s plea to revive welfare economics, and to considering alternative ethical frameworks when making policy recommendations. I examine a measure of self-reported evaluative wellbeing, the Cantril Ladder (a tool for self-assessment of wellbeing with ladder steps numbered 0 to 10), and use data from Gallup to examine wellbeing over the life-cycle. I assess the validity of the measure, and show that it is hard to reconcile with familiar theories of intertemporal choice. I find a worldwide optimism about the future; in spite of repeated evidence to the contrary, people consistently but irrationally predict they will be better off five years from now. The gap between future and current wellbeing diminishes with age, and in rich countries, is negative among the elderly. I also use the measure to think about income transfers by age and sex. Policies that give priority those with low incomes favor the young and the old, while utilitarian policies favor the middle aged, and men over women.


This paper takes up Atkinson’s challenge to bring back welfare into economics, and to do so in a way that does not have to deny the findings of modern behavioral economics. It also thinks about how policy varies with different ethical assumptions. It uses Gallup’s data on the Cantril Ladder measure of life evaluation as a measure of (period) utility, and examines the implications for welfare variations by age. I find a midlife dip in wellbeing in rich countries, but less or no evidence of it elsewhere.

Overall, only some features of the ladder are consistent with life cycle theory if it is interpreted as a period, or age-specific wellbeing measure; it is much harder to interpret it as a lifetime measure. People’s expectations of the ladder five years ahead are grossly inconsistent with those reports being the mathematical expectations of future period utility; throughout the world, people are generally over-optimistic about the future, except for the elderly in rich countries, who are generally over-pessimistic about the future. These findings are of considerable interest, but cast doubt on the idea that people arrange their consumption and labor supply to maximize the expected integral of age-specific utilities, at least if utilities are well measured by the Cantril Ladder as recorded in Gallup’s surveys. This does not, by itself, invalidate the ladder itself as a measure of period age-specific wellbeing.

Finally, I illustrate what the ladder measure would imply for distributing income by age, and how the choice of the ladder versus income interacts with different ethical frameworks. In the United States, income prioritarians will tend to favor redistribution towards elderly or young adults, whose incomes or per capita incomes are lowest. By contrast, utilitarians will favor those for whom marginal utility is highest, which turns out to be those in midlife, and especially men over women, a prescription that would be enhanced by giving additional priority to those whose wellbeing is lowest, also those in midlife. Both approaches would favor men over women. I make no prescriptions here, but am concerned only to show the possibilities that arise from having a direct measure of wellbeing. I also am responding to Atkinson’s challenge by emphasizing and illustrating that policy prescriptions depend, not just on measurement, but on ethics, a point that is not always given the weight that it should be when economists discuss policy.

As in the happiness literature in general, my findings are mixed; the Cantril Ladder is clearly useful, is not obviously inconsistent with standard notions of period utility, and allows us to say things about welfare and distribution that we could not say using standard revealed preference methods. It does not assume that people do not make mistakes. Reported expectations of future wellbeing are consistent with the widespread finding of optimism bias in psychology, but inconsistent with the rational expectations formulation that is standard in much of economics. Whether this is an advantage or a disadvantage will surely differ according to preference and disciplinary background.


Although this NBER working paper by Nobel laureate Angus Deaton is quite wonkish it is an interesting analysis of self-assessment of current and anticipated future well-being under variables of age, sex, wealth, and nationality. For a blog on single payer reform, this paper does have some application since perception of well-being might be an important attribute related to a nation’s health care system.

But that is not why this paper was selected for a Quote of the Day, rather one sentence extracted from the paper expresses a truth that is too often neglected in the policy community:

“I also am responding to Atkinson’s challenge by emphasizing and illustrating that policy prescriptions depend, not just on measurement, but on ethics, a point that is not always given the weight that it should be when economists discuss policy.”

We hear a lot of policy recommendations, but all too often it is difficult if not impossible to identify the ethical imperative. In contrast, the ethical imperative permeates the single payer model of reform.

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