Speaker – Page 118

Private insurers offload financial risk to the providers

Variation in Health Care Prices Across Public and Private Payers; NBER Working Paper No. 27490

By Toren L. Fronsdal, Jay Bhattacharya, Suzanne Tamang
National Bureau of Economic Research, July 2020

Abstract

We study a unique all-payer data set spanning 38 states to examine the differences in inpatient reimbursement rates paid by traditional Medicare (TM), Medicare Advantage (MA), Medicaid, and private (under-65) insurers, and the differences in negotiated rates across the 60 largest private insurers. After controlling for enrollee and hospital mix, we find that private insurers pay 37 percent more than TM, and MA pays 10 percent more than TM for the five most common inpatient diagnoses. The correlation in risk-adjusted payments by private insurers and by TM at the same hospital for the same diagnosis is only 0.10. There is significant variation in negotiated prices within and across private payers. Among the five largest US insurers, the most expensive insurer negotiates prices that are 5-26 percent higher than the mean price for the 20 most common inpatient diagnoses. Additionally, we find a 10 percent increase in insurer market share corresponds to a 7 percent decrease in inpatient negotiated prices and a 10 percent decrease in the standard deviation of prices. This finding suggests that increased insurer market power allows payers to negotiate prospective payment contracts – rather than the more common fee-for-service payments – thereby offloading financial risk to providers.

From the Conclusion

We find an inverse relationship between insurer market share and negotiated prices. A 10 percent increase in insurer market share is associated with a 7 percent decrease in negotiated prices. Additionally, a 10 percent increase in insurer market share is associated with a 10 percent decrease in the standard deviation of negotiated prices at a provider. This suggests that insurers with greater market share are able to negotiate favorable payment structures that offload financial risk to the providers.

https://www.nber.org…

Comment:

By Don McCanne, M.D.

Health care providers are paid to provide health care. Insurers are paid to accept and manage risk of health care costs. This study indicates that insurers with greater market share are able to offload financial risk to the providers. Then why do we need private insurers? About $600 billion of administrative costs could be recovered if we got rid of the private insurers – funds which could be used to expand comprehensive health care to everyone. The government should be the logical agent to accept and manage risk and would be under single payer Medicare for All.

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

Medicare for All Explained Podcast: Episode 39

Interview with Barbara Berney

July 30, 2020

Public health expert and documentary producer Barbara Berney, M.P.H., Ph.D. discusses the documentary she produced, “Power to Heal: Medicare and the Civil Rights Revolution.” The film tells the story of how the creation of Medicare was used to desegregate thousands of hospitals within a matter of months in the late 1960s.

Additional episodes will be uploaded twice monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Video: Racism and COVID, and the Case for Single Payer

Racism and COVID, and the Case for Single Payer

Tweaking value-based health care delays real reform

Lawmakers Propose Changes to MACRA to Boost ACO, APM Participation

The Value in Health Care Act aims to increase APM participation by extending incentives and correcting arbitrary qualification standards under MACRA and the Medicare Shared Savings Program.

By Jacqueline LaPointe
REVCYCLE INTELLIGENCE, July 28, 2020

A bipartisan bill introduced late last week aims to increase alternative payment model (APM) participation by making “commonsense changes” to the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.

Specifically, the Value in Health Care Act seeks amendments to many program parameters of Medicare’s APMs, including MACRA’s Advanced APM pathway and the Medicare Shared Savings Program (MSSP). Among the changes would be a six-year extension of the 5 percent incentive payment for Advanced APM participants and lower thresholds for Advanced APM participation from 75 percent to 50 percent of Medicare patients in performance year 2021.

HHS would also be able to increase the threshold by no more than 5 percent each performance year under the bill.

The bill also intends to increase accountable care organization (ACO) participation in the MSSP by increasing shared savings rates for shared savings-only ACOs. The levels would be at least 50 percent for ACOs in Levels A and B of the BASIC track and 55 percent for those in Levels C and D.

The shared savings rate would be at least 60 percent for ACOs in Level E.

Also, the bill would modify risk adjustment to allow for a greater score increase and adjust benchmarking to remove ACO beneficiaries from the regional reference population under regional benchmarking.

Additionally, the bill would eliminate the high-low revenue distinction implemented during an overhaul of the MSSP in 2018. If passed, all ACOs in the program would be subject to low revenue policies, according to the legislation.

The changes would incent participation in the models, while accelerating the transition to value-based care, Representatives Suzan DelBene (D-WA), Peter Welch (D-VT), and Darin LaHood (R-IL) said.

Signed into law in 2015, MACRA established a value-based reimbursement system for Medicare providers. The law created the Quality Payment Program, which includes the Merit-Based Incentive Payment System (MIPS) and the Advanced APM pathway.

While most Medicare providers participate in the Quality Payment Program via MIPS, policymakers intend for the program to ramp up participation in APMs through the Advanced APM pathway.

https://revcycleintelligence.com…

“Value in Health Care Act of 2020”:
https://delbene.house.gov…

Association between specialist compensation and Accountable Care Organization performance

By Ishani Ganguli, MD, MPH; Claire Lupo, BBA; et al
HSR Health Services Research, July 27, 2020

Objective

To determine if Medicare Shared Savings Program Accountable Care Organizations (ACOs) using cost reduction measures in specialist compensation demonstrated better performance.

Conclusion

Incentivizing specialists on cost reduction was not associated with ACO savings in the short term. Further work is needed to determine the most effective approach to engage specialists in ACO efforts.

https://onlinelibrary.wiley.com…

Comment:

By Don McCanne, M.D.

The policy community, with the support of the politicians, has been fixated on MACRA, ACO, MSSP, MIPS, APM, P4P, etc., etc. as a means of achieving value-based health care. So far the results have been very unimpressive, though some reports claim that the approach is about to show some benefit, so they wish.

As an example of how inadequate this approach is, the HSR study shows that incentivizing specialists has not been associated with ACO savings. If it is not working for specialized services, then it is not working, period.

Now the “Value in Health Care Act of 2020” is being introduced to provide some tweaks to the system in an effort to increase participation in these payment models. If you read the proposed legislation you will see that it will likely have very little net impact, but it will have been effective in further delaying truly beneficial reform such as the single payer model of Medicare for All. Sometimes it seems as if that is their primary goal after all.

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

Forming a relationship with your representative

Is Now the Time for Single-Payer?

The "American Model" is failing

By Toby Terwilliger, M.D.
MedPage Today, July 28, 2020

With the news that nearly 6 million Americans have lost their employer-sponsored health coverage due to COVID-19, it is finally time to ask ourselves: is the “American Model” of healthcare working?

The “American Model” is a system of fragmentation: one in which changing jobs can mean lapses in insurance, moving to a new state can mean losing Medicaid eligibility, and getting a raise can mean financial ruin when you no longer qualify for subsidies. It is a system of waste: waste in administrative costs, waste in doctors’ time spent battling with insurers, and waste in the inability and unwillingness of insurers and hospitals to negotiate fair prices for their patients. And finally, it is a system that creates insecurity: insecurity in that a sudden illness or a surprise bill or a global pandemic has the potential to sideline a loved one, a family, or even the entire economy of a nation.

Even prior to the pandemic, the average American family spent nearly one-sixth of their income on healthcare, and medical debt was involved in most bankruptcies. This is not the prescription for a healthy economy; it is a risk factor for total collapse. And now we are seeing how vulnerable our economy is in the face of COVID; at a time when we must rely on our healthcare system to conquer a global health threat, that same system is becoming our biggest economic liability.

How can we ensure that our healthcare system endures the pandemic? And how do we guarantee that we emerge from this pandemic stronger and healthier than before? The answer is quite simple: through universal, publicly-funded healthcare for all. We need a system that administers healthcare equitably and cost-effectively to every citizen who needs it. And the private insurance industry is incapable of rising to the task.

The most obvious shortcoming of the private insurance industry is that it leaves millions of Americans uninsured. And too often, those who are insured are left with high deductibles and exorbitant costs in drug prices, co-pays, and other out-of-pocket expenses. And when COVID hits, individuals who are under- and uninsured delay seeking care, have higher rates of transmission, worse outcomes, and, of course, more expensive medical bills.

Furthermore, cost-sharing between private insurers, employers, and employees is unsustainable at a time when the economy is maximally strained. When purse strings are tight, many businesses choose to stop offering health benefits to their employees, while others are forced to let employees go. And in the aftermath, private insurers can inflate premiums in an effort to make up for loss of revenue, creating additional barriers to economic recovery.

Eventually, if and when the economy begins to recover, there will be huge swathes of people competing for a relatively small number of jobs. Prospective employees will have less bargaining power over health benefits, creating an even larger pool of individuals left out of the employer-based healthcare system.

Single-payer is the solution. And the time for it is now.

A single-payer system would guarantee healthcare coverage immediately to every American. So whether a loved one gets sick from COVID, has a heart attack, or gets in a car accident, she will receive the care she needs without it causing financial hardship.

A single-payer system will eliminate employer health insurance contributions. This will provide huge relief to hundreds of thousands of struggling small businesses across the country. The money saved can go towards paying their employees a living wage or hiring new workers, which will help get our economy back on track.

A single-payer system will relieve the burden of finding health insurance from individuals. Freelancers and gig, self-employed, and per diem workers can pursue employment without having to worry about providing health coverage for their families. And with families relieved of the insecurities created by surprise medical bills and massive out-of-pocket costs, they will be more likely to contribute to our consumer-driven economy.

COVID has absolutely quelled consumerism; single-payer can help to bring it back.

Dr. Toby Terwilliger is an internal medicine-pediatric resident. This post originally appeared on KevinMD.

https://www.medpagetoday.com…

Democratic platform challenge on Medicare for All

Bernie Sanders delegates mount convention rebellion over 'Medicare for All'

At least 360 Democratic delegates, mostly his supporters, have signed a pledge to oppose the Democratic platform unless it endorses single-payer.

By Holly Otterbein
POLITICO, July 27, 2020

More than 360 delegates, most of whom back Sanders, have signed on to a pledge to vote against the Democratic Party’s platform if it does not include support for “Medicare for All,” the petition’s organizers told POLITICO. They argue that single-payer health care is an urgent priority amid a worldwide pandemic and the biggest unemployment crisis since the Great Depression.

The warning is all but certain to set up a clash between Sanders’ most dedicated supporters and presumptive Democratic nominee Joe Biden, who opposes Medicare for All, at a time when the party is seeking to demonstrate unity ahead of its August convention. Though the petition signers have little chance of revising the platform to include Medicare for All support, they do have the numbers to draw attention to their protest and cause.

The left-wing groups Progressive Democrats of America and RootsAction.org are announcing Monday that they support the vow to vote against the platform if it doesn’t include Medicare for All. The Bernie Delegates Network, a coalition made up of hundreds of Sanders delegates, said it will also publicize the petition. Organizers expect those efforts will net hundreds more signatures, including from Biden delegates.

“The sea change that’s underway could swell as a result of this initiative,” said Norman Solomon, national director of RootsAction.org and a Sanders delegate. “It’s a reasonable hope that historians will look back at the next couple of weeks as a time when hundreds of delegates stepped forward and said, ‘This is a red line for a humane society and we’re not going to stop saying so.’”

Despite their frustration with Biden, progressive leaders behind the pledge all said they are voting for Biden and working to elect him.

https://www.politico.com…

Comment:

By Don McCanne, M.D.

The majority of Democrats support Medicare for All, but the presumed candidate, Joe Biden, is opposed. The task force that was to bring the moderates and progressives together was deliberately weighted in favor of the Biden supporters, and thus they rejected a recommendation to include single payer Medicare for All in the party platform.

The progressives and many of the moderates have not given up. They are organizing to have Medicare for All included in the platform. At the same time, they agree to support Joe Biden regardless of the outcome. That should allay the fears of the moderates who are concerned that the progressives would split off, allowing Donald Trump to be reelected.

Joe Biden has made his position clear, so it really doesn’t matter whether or not single payer is included in the platform; Biden will oppose it. If the delegates do vote to include it in the platform, more progressives will stay on board. Although the progressive leadership will continue to support Biden, even without a single payer plank, the rank and file progressives may fail to vote or may cast a protest vote for a third party candidate.

Between the pandemic and the recession, Democrats really don’t need the additional hit of being told by their leadership that Medicare for All is off the agenda for the foreseeable future. We don’t need a superimposed second pandemic of clinical depression.

PNHP does not endorse any political party or candidate.

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

Please, someone destroy the insurance companies — before they destroy me

By Rebecca Levy-Gantt, D.O.
Napa Valley (Calif.) Register, July 28, 2020

You would think as a physician and owner of a small private solo medical practice I would be against a Medicare For All, Single-Payer plan since that approach would have doctors earning a salary and not allow earning more for doing additional procedures and visits.

Well, I say, bring it on.

The private insurance system is unsustainable. Without major change, I will not be in private practice much longer.

The last six years of running a private practice has been my education in private health insurance. If I contract with a particular insurance plan, we take that insurance. If a patient has a Preferred Provider Organization (PPO) plan like United Healthcare or Cigna, we can likely see them since I have contracted with those plans.

A significant drawback of health maintenance organizations (HMOs) and PPOs is both limit patient freedom to choose. I am contracted with many insurance companies, but a contract does not guarantee a particular company will pay for my services.

Each company is different. One will pay for preventive care, but another will not. The guidelines are rarely clear. If I am planning a biopsy in my office, and if we have called the patient’s insurance company for authorization, getting that authorization does not guarantee the insurance company will pay the cost of the biopsy.

This is our process: we call for authorization, get approval for a procedure, and bill the insurance company, but half the time the insurance company then decides not to pay or the patient must pay a larger portion. We often have to appeal or resubmit bills or remain on hold for hours to discuss the authorization with an insurance representative.

In what world would this be acceptable? Can you imagine telling your plumber after your pipes were fixed that you would pay nothing or only 40 percent of the cost? Then you make your plumber wait three months for payment?

We physicians have no automatic explanation of benefits that pops up when patients give us their insurance card. Contracts are confusing, vague, and contradictory. This is so even for my staff of insurance experts.

We do not know if something will be covered sometimes until after the service has been authorized and provided. We bill the insurance company, only to receive a notice: “This is not a covered service.”

This occurs even when the exact service was covered last year with the same insurance company.

I recently delivered a baby. In the sixth month of pregnancy, my office called the patient’s insurance company to ask about coverage for the delivery. She was informed that “the patient’s delivery will be covered at 80 percent of the contracted delivery rate.” We then know the patient will be responsible for 20 percent.

After the delivery, the bill went to the insurance company. We expected to receive 80 percent of the contracted fee from the company. We did not. The insurance notice said “This is not a covered service. No payment is forthcoming. The patient is responsible.”

My biller spent over two hours on the phone trying to understand what had happened. A second insurance representative recommended “resubmitting the bill.” We did so.

We are still waiting.

In what world would this be an acceptable practice? Two months have now passed. Once three months go by the insurance company can refuse to pay because of a “delay in billing.”

More time on the phone. More money uncollected.

If I want to care for their patients, I must sign the contract the insurance company presents. If I do not, I cannot care for patients with their insurance.

I cannot negotiate. I have tried. The contract is “take it or leave it.”

This is anti-small business. Our country was founded on the idea that individuals and small businesses were the backbone of our nation.

The only reliable coverage is Medicare. If a rep says ‘yes,’ they mean ‘yes.’ An approach where the government pays the bills seems to be the answer. We would be removing barriers standing between patients and health care providers.

When people say some love their insurance, it is not their insurance they love but their providers. Single-payer health care has a proven track record.

We look to Canada, Taiwan, and South Korea where the population lives longer and has a lower maternal death rate.

If the health insurance industry remains as is, I fear that small private practices such as mine will no longer be an option. The dream I worked so hard and so long for will die, and I will have to start the slow process of closing down my practice before the insurance companies help to close it down on me.

https://napavalleyregister.com…

Social Determinants of Death: Addressing Institutional Racism in American Healthcare

Structural racism calls for more than another New Deal

The New Deal allowed racial inequities to grow

Without having an honest conversation about how we got here, we will never be able to move on and heal.

By Susan Rogers, M.D.
Crain’s Chicago Business, Letters to the Editor, July 10, 2020

On reading the article “Why isn’t there a New Deal 2.0 in the mix?” (Crain’s Forum on Transportation, June 8), I found it surprising how the author lauded the New Deal as if it solved so many of the financial problems that the nation faced in recovering from the Great Depression without looking at the problems that it created.

It did solve many financial problems but at the expense of disenfranchising Blacks who lived here. Social Security, one of the major projects of this bill, intentionally excluded farmers and domestics, two of the few areas of the economy where Blacks could find employment. When it created Aid to Dependent Children, the beneficiaries were almost only white women. When it expanded several years later to include Black women, it then became known as an “entitlement.”

Other federal programs such as the GI Bill did not benefit Black GIs. They received less than 1 percent of the school loans, mortgages, job trainings, etc. Racial segregation, encouraged, allowed and condoned by federal and local government, created the fertile ground on which these inequities thrived. So the New Deal is so often looked at as a great success, but in reality it is exactly what allowed the racial inequities that already existed to continue to grow into what we see today.

Recent COVID policies continue to disenfranchise poor people and minorities. Small Black businesses were left out of the CARES Act. Low-wage workers who have no health or sick leave benefits yet are labeled as essential workers are disproportionately Black and are most impacted by the COVID pandemic. They are placed in a situation where there is no good choice. They must go to work and risk exposure to COVID or stay home and risk hunger and homelessness. Is it by accident that the essential workers of today are treated as if they live in modern-day slavery? The police brutality that has always been here has now been made so clear and finally reached a tipping point that no one can continue to deny.

We need to address the structural racial inequities that these prior and current programs created and encourage. History makes it clear that it is not by accident that poor people are disproportionately minorities and immigrants. We need to teach this history rather than continue to live in this sterile bubble that has been created. Without having an honest conversation about how we got here, we will never be able to move on and heal. Doing more of the same will continue to get us more of what we already have.

Dr. Susan Rogers is president-elect of Physicians for a National Health Program.

https://www.chicagobusiness.com…

Comment:

By Don McCanne, M.D.

For those of us who think that we’ve already addressed most of the problems in racism, we need to get real. For us single payer Medicare for All advocates, enacting and implementing an equitable, universal system of health care financing will be an important step forward, but we’ll still have so much more work to do.

PNHP members, as activist physicians and other healthcare professionals, are particularly qualified to speak up on behalf of health care justice for all, but in supporting single payer health care reform, we have been a single issue advocacy organization. We need to be part of the greater movement wherein our single issue is social justice for all – that means everyone.

But we have to guard against compromising social solidarity by acts such as paring down today’s message in the streets by saying simply, “All lives matter.” Seemingly equitable solutions cannot be allowed to gloss over the deep rooted problems that need our uncompromising attention.

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

As COVID-19 Spread in April, Work Absence due to Illness was Highest on Record: New JAMA-IM Study

More than 2 million workers missed work in mid-April — the highest absence rate since 1976 — suggesting that COVID-19 was more widespread than official illness count, with immigrant workers most affected

July 27, 2020

Contact:
Adam Gaffney, MD MPH, Harvard Medical School, agaffney@cha.harvard.edu
Steffie Woolhandler, MD MPH, City University of New York (CUNY) at Hunter College, steffie_woolhandler@hms.harvard.edu

In mid-April, as the COVID-19 epidemic roared through the nation, 2,017,105 jobholders were absent from work because they were ill. The April figure was the highest number since at least 1976, and more than double the rate from mid-April 2019, according to a new study from researchers at Harvard Medical School and CUNY’s Hunter College. The findings suggest that the official counts of COVID-19 cases greatly understate the number of people sickened by the virus.

The surge in sickness-related work absences was largest for immigrant workers, a group that includes many essential workers at high risk of coronavirus exposure; immigrant jobholders’ absence rate rose almost five-fold from 12 months earlier, when their absenteeism rate had been 37% lower than that of native-born jobholders. Workers 55 and older, and those with less education also had larger than average year-over-year increases in sickness-related absences. The research appears Monday, June 27 in the Journal of the American Medical Association (JAMA): Internal Medicine.

Researchers analyzed the Census Bureau’s monthly Current Population Survey which tracks U.S. employment. Because the survey asked only about work absence during a single week in mid-April, the figures likely understate the number of jobholders who were out sick during the course of the month.

The share of workers who were out sick was virtually identical in the first two months of 2019 and 2020. As in most years, work absences began dropping in the early spring of 2019, falling to 0.58% of the workforce by April. In contrast, in 2020 the number who were out sick began rising in March as COVID-19 illnesses began spreading, and soared in April, when 1.51% of all job holders were out sick, nearly triple the percentage from a year earlier.

“I’ve seen firsthand COVID-19’s impact on the critically ill patients in our ICU, and we’ve known that many more were also ill at home,” noted lead author Dr. Adam Gaffney, a pulmonary and critical care specialist at Harvard Medical School and the Cambridge Health Alliance, a safety-net hospital system at an epicenter of the pandemic in eastern Massachusetts. “But our study indicates that the pandemic has sickened many more people than we had realized, especially vulnerable employees like immigrants.”

“Millions of immigrants and people of color have put themselves in harm’s way to keep vital services running during the COVID-19 crisis,” said Dr. Steffie Woolhandler, a primary care doctor, Distinguished Professor of Public Health at CUNY’s Hunter College, and Lecturer in Medicine at Harvard. Many are uninsured and have no income if they miss work. The least we can do to protect them is to assure paid sick leave and universal health care, benefits that workers in every other wealthy nation already enjoy.”

“Illness-Related Work Absence in Mid-April Was Highest on Record,” by Adam W. Gaffney, MD, MPH, David U. Himmelstein, MD, and Steffie Woolhandler, MD, MPH, JAMA Internal Medicine, July 27, 2020. DOI: 10.1001/jamainternmed.2020.2926

Comment:

The Value in Health Care Act aims to increase APM participation by extending incentives and correcting arbitrary qualification standards under MACRA and the Medicare Shared Savings Program.

Association between specialist compensation and Accountable Care Organization performance

Comment:

At least 360 Democratic delegates, mostly his supporters, have signed a pledge to oppose the Democratic platform unless it endorses single-payer.

Comment:

Without having an honest conversation about how we got here, we will never be able to move on and heal.

Comment:

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