PNHP

Labor should not bargain against itself on Medicare for All

Labor should not bargain against itself on Medicare for All

By Dr. Martin Luther King, Jr.
Illinois AFL-CIO Convention, October 1965

“At the turn of the century women earned approximately ten cents an hour, and men were fortunate to receive twenty cents an hour. The average work week was sixty to seventy hours. During the thirties, wages were a secondary issue; to have a job at all was the difference between the agony of starvation and a flicker of life. The nation, now so vigorous, reeled and tottered almost to total collapse. The labor movement was the principal force that transformed misery and despair into hope and progress. Out of its bold struggles, economic and social reform gave birth to unemployment insurance, old age pensions, government relief for the destitute, and above all new wage levels that meant not mere survival, but a tolerable life. The captains of industry did not lead this transformation; they resisted it until they were overcome. When in the thirties the wave of union organization crested over our nation, it carried to secure shores not only itself but the whole society.”

https://www.afscme.org…

The Labor Movement Must Fight for Medicare for All — Not Employer-Based Plans

By Mark Dudzic
Jacobin, January 17, 2020

Unions have been at the forefront of almost every progressive policy advance for a century. So why are AFL-CIO president Richard Trumka and American Federation of Teachers president Randi Weingarten denouncing Medicare for All by parroting talking points crafted by health care industry lobbyists?

The spectacle of national labor leaders defending a system that is the biggest cause of strikes, lockouts, and concession bargaining is mind-boggling. For an entire generation now, unions in the United States have traded wages and other benefits for shrinking coverage by employer-provided health insurance (or for the ever-increasing employer contributions required to maintain similarly shrinking benefits from union-sponsored health and welfare funds).

Like it or not, employment-based health care is simply unsustainable. The Milliman Medical Index reports that the 2018 total health care costs for a family of four with decent employment-based coverage exceed $28,000 per year. That is $14 per hour worked for a full-time employee — almost twice the federal minimum wage. The employer pays $15,000 of that, and $13,000 is paid by the worker through co-insurance, out-of-pocket charges, co-pays, deductibles, and all the other myriad ways that the medical-industrial complex extracts money from our pockets. These amounts already exceed the average hourly wage in food services and retail occupations and are increasing two times faster than the rate of wage increases for all workers, putting them on track to exceed average wages in manufacturing and other core industries within the next decade. The percentage of total health care costs paid by the worker has gone up nearly every year since it was first tracked in the 1990s.

Employment-based health care is also a major driver of wage stagnation. Every worker trades wages for health care.

And even the best employment-based health care is not there when we need it the most: when we lose our jobs, change jobs, go on strike, or struggle with long-term illness.

Medicare for All would take health care off the bargaining table and increase union bargaining leverage in nearly every negotiation. It would allow union-sponsored health and welfare funds the opportunity to reallocate revenues currently sunk into the world’s most expensive and inefficient health care system. Savings could be applied to new “union advantage” programs such as enhanced disability benefits, supplemental unemployment benefits, tuition and training programs, legal services, child- and eldercare, and others. Some revenues could also potentially be reallocated to shore up endangered pension plans.

Medicare for All would also provide better coverage than any employment-based plan in existence today. Opponents of Medicare for All often conflate the constricted benefits offered under today’s Medicare program after more than fifty years of underfunding and privatization attempts with the greatly expanded and improved benefits proposed under Medicare for All – HR 1384 — Rep. Pramila Jayapal’s Medicare for All Bill.

I challenge any advocate of employment-based coverage to show me a plan that matches the level of comprehensive services, freedom of choice, and absence of out-of-pocket costs proposed by HR 1384.

Union members should be justly proud of the long battle that unions have waged to protect their right to access affordable, quality health care, and the Labor Campaign for Single Payer stands in solidarity with all workers everywhere who fight to protect these hard-won gains. But our movement is at an historic juncture. Now is not the time to muddy the waters or bargain against ourselves. We need labor to lead as we work to make this a key issue in the 2020 elections and to hold politicians accountable in 2021 and beyond. And we have the right to expect that the union leaders who represent us and the politicians that we support will do more than just parrot the talking points crafted by health care industry lobbyists.

Mark Dudzic is coordinator of the Labor Campaign for Single Payer.

https://jacobinmag.com…

Comment:

By Don McCanne, M.D.

On this day we should consider what Martin Luther King, Jr. would have to say about the fact that workers’ health care benefits are not universal, and, for those who have them, that they have displaced wages that otherwise could help many more achieve the American Dream that King believed should be freely available to all.

Our brothers and sisters in the unions should join with the rest of us in the campaign to see that they and all others can be assured that health care will always be there when needed without having to sacrifice other elements of the American Dream. We can have it all.

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

Major Doctors’ Group Calls for US to Assure Coverage for All

By The Associated Press

WASHINGTON — With health care an election-year priority, a major doctors’ organization on Monday called for sweeping government action to guarantee coverage for all, reduce costs and improve the basic well-being of Americans.

Declaring that the U.S. health care system “is ill and needs a bold new prescription,” the American College of Physicians endorsed either of the two general approaches being debated by Democratic presidential candidates: a government-run “single-payer” system that would cover everyone, or a new “public option” government plan that would offer comprehensive coverage to compete with private insurance.

But the group’s president, Dr. Robert McLean, said his organization is not signing on to specific proposals, such as Vermont Sen. Bernie Sanders’ “Medicare for All” bill or former Vice President Joe Biden’s combination of a public option, improvements to “Obamacare” and deputizing Medicare to negotiate prescription drug prices.

Instead, he said, the group arrived at its recommendations by analyzing available evidence on what might best address the nation’s problems with high costs, gaps in insurance coverage, uneven quality, and mind-boggling complexity.

“We think there is a realistic chance that either of these two approaches could get us to a much, much better place,” said McLean. “It is not looking to be partisan, but I would say it is unavoidably political because policy is political.”

One problem Sanders’ plan poses for McLean’s group is its reliance on Medicare rates, which are well below what private insurance pays.

Although less well known than the American Medical Association, the group represents doctors who are critical in the health care system. Its 141,000 members in the U.S. are internal medicine specialists, focusing on adults from Medicare recipients to people in their working years covered by employer plans.

Doctors have traditionally been central in the nation’s health care debates. The AMA’s approval helped President Barack Obama pass the Affordable Care Act, and physicians’ groups were a core element of the coalition that blocked President Donald Trump’s efforts to repeal it.

About half of U.S. adults support a national Medicare for All plan, according to recent polling by the nonpartisan Kaiser Family Foundation. A public option garners more support, with about two-thirds backing it. Both ideas face strong opposition from health insurance companies and other industry players.

McLean said his group is seeking comprehensive solutions that address coverage, cost, quality and complexity. Tackling one area and not the others won’t suffice, he said. He said Republican proposals to encourage patients to be better consumers of health care fall short because they don’t address coverage gaps or guarantee comprehensive benefits.

His organization’s framework was outlined in a series of papers published in its journal, Annals of Internal Medicine.

https://www.nytimes.com…

The Labor Movement Must Fight for Medicare for All — Not Employer-Based Plans

Unions have been at the forefront of almost every progressive policy advance for a century. So why are AFL-CIO president Richard Trumka and American Federation of Teachers president Randi Weingarten denouncing Medicare for All by parroting talking points crafted by health care industry lobbyists?

By Mark Dudzic
Jacobin, January 17, 2020

At the June 2019 House Ways and Means Committee Hearing on Medicare for All, Texas Republican Kevin Murphy lamented, “That great health care plan that your union negotiated for you? It’s gone. Banned under Medicare for All.”A right-wing congressman with a 7 percent lifetime voting score from the AFL-CIO crying crocodile tears for great union health care plans can be easily dismissed as just another absurdity of the increasingly dysfunctional American political system. But when Joe “the workingman’s friend” Biden repeats the charge almost word for word and when AFL-CIO president Rich Trumka insists — on Fox News no less! — that “if there isn’t some way to have our plans integrated into the system, then we would not support [Medicare for All],” something is certainly happening out there. Talking points, after all, don’t just come out of thin air. They are carefully crafted and disseminated by a coterie of lobbyists and publicists often working on behalf of shadowy corporate and political interests.

Trumka was shortly joined by American Federation of Teachers (AFT) president Randi Weingarten, who just six months earlier had delivered a full-throated endorsement of the Medicare for All Act at a rally celebrating its introduction. In her September 23, 2019, Politico article, Weingarten walked back that support in favor of a fictitious system in which “employer-based insurance would be allowed to exist to the extent that plans met or exceeded the standards set by the Medicare plan.” Such a system “would allow people who like their current employer-based plan — which seven in ten Americans claim to (although it’s likely they like their doctor, not the plan itself) — to keep it, allow for a gradual transition from one plan to another when necessary, and effectively improve on the model originally created by the Affordable Care Act.”

The spectacle of national labor leaders defending a system that is the biggest cause of strikes, lockouts, and concession bargaining is mind-boggling. For an entire generation now, unions in the United States have traded wages and other benefits for shrinking coverage by employer-provided health insurance (or for the ever-increasing employer contributions required to maintain similarly shrinking benefits from union-sponsored health and welfare funds).

An Accident of History

The US health care system’s linkage to employment is unique among industrialized countries. It emerged as an accident of history in the years just following World War II when Roosevelt’s promise to enact a “Second Bill of Rights” in the postwar period was stopped dead in its tracks by resurgent capital. In 1946, the American Medical Association led the fight to defeat the Wagner-Murray-Dingell Bill that would have created a publicly funded national health insurance program. The following year saw the passage of the Taft-Hartley Act, which, combined with an orgy of anticommunism and race-baiting, set the powerful postwar labor movement into a long retreat.

Unable to expand the social wage by treating public goods such as health care as a basic right available to all, labor helped craft a “second-best solution” of making access to health care a benefit linked to employment. Corporate America piled on and offered elaborate benefits to recruit and retain employees and to keep unions out. This system was flawed from the beginning. It created tiers of coverage that reinforced employment-based racial and gender disparities and massive amounts of “churn” that disrupted continuity of care for even the best insured. Particularly after the expansion of for-profit health insurance and health care providers beginning in the 1970s, more and more administrative inefficiency was built into the system to facilitate profit-taking, until, by the early twenty-first century, the US health care system was twice as expensive as the OECD average.

Nonetheless, in the post-World War II period of high union density and employment stability, many unions were able to negotiate a robust “private welfare state” that provided health care security for tens of millions of working-class Americans. These benefits were almost never handed to workers. Unions had to wage long and unremitting fights to expand and defend employer-based health care. By the 1980s, almost every contract negotiation was faced with employer demands for reductions in coverage and transfer of costs from the employer to the worker. Nonunion workers fared even worse as they were forced to accept whatever the employer offered. And, unlike attempts to cut social insurance benefits like Social Security or Medicare that almost always fail due to massive popular opposition, cuts to employment-based health care benefits take place company by company under cover of night and arouse little or no popular opposition. Today, even those few union members who have been able to preserve good benefits find themselves as islands in a sea of inadequate and precarious health care coverage.

A System in Crisis

Like it or not, employment-based health care is simply unsustainable. The Milliman Medical Index reports that the 2018 total health care costs for a family of four with decent employment-based coverage exceed $28,000 per year. That is $14 per hour worked for a full-time employee — almost twice the federal minimum wage. The employer pays $15,000 of that, and $13,000 is paid by the worker through co-insurance, out-of-pocket charges, co-pays, deductibles, and all the other myriad ways that the medical-industrial complex extracts money from our pockets. These amounts already exceed the average hourly wage in food services and retail occupations and are increasing two times faster than the rate of wage increases for all workers, putting them on track to exceed average wages in manufacturing and other core industries within the next decade. The percentage of total health care costs paid by the worker has gone up nearly every year since it was first tracked in the 1990s. Employment-based health care is coming up upon the limits of Stein’s Law, formulated by economist Herbert Stein in 1985: “If something can’t go on forever, it will stop.”

Employment-based health care is also a major driver of wage stagnation. Every worker trades wages for health care. A recent Gallup poll found that 61 percent of Americans would be willing to trade 10 percent of future wage increases for a guarantee that their health care costs would not go up for five years. This puts workers and their unions at a huge bargaining disadvantage and goes a long way toward explaining why wages continue to stagnate at a time of low unemployment and growing corporate profits.

And even the best employment-based health care is not there when we need it the most: when we lose our jobs, change jobs, go on strike, or struggle with long-term illness.

What was once a source of pride in the “union advantage” has become an anchor around the necks of the US working class. No union leader in their right mind can conjure a scenario where the system of employment-based health care could be stabilized in ways that could provide sustainable health care security for workers and their families. That is why unions representing a majority of organized workers now support HR 1384 — The Medicare for All Act of 2019 and why the AFL-CIO at its 2017 convention unanimously voted to support policies to “move expeditiously to a single-payer Medicare for All system.”

The Medicare for All Solution

Medicare for All would take health care off the bargaining table and increase union bargaining leverage in nearly every negotiation. It would allow union-sponsored health and welfare funds the opportunity to reallocate revenues currently sunk into the world’s most expensive and inefficient health care system. Savings could be applied to new “union advantage” programs such as enhanced disability benefits, supplemental unemployment benefits, tuition and training programs, legal services, child- and eldercare, and others. Some revenues could also potentially be reallocated to shore up endangered pension plans.

Medicare for All would also provide better coverage than any employment-based plan in existence today. Opponents of Medicare for All often conflate the constricted benefits offered under today’s Medicare program after more than fifty years of underfunding and privatization attempts with the greatly expanded and improved benefits proposed under Medicare for All. HR 1384 — Rep. Pramila Jayapal’s Medicare for All Bill with 119 cosponsors — proposes to cover the following benefits without a single co-pay, deductible, or other out-of-pocket cost:

Hospital services, including inpatient and outpatient hospital care, including twenty-four-hour-a-day emergency services and inpatient prescription drugs. (2) Ambulatory patient services. (3) Primary and preventive services, including chronic disease management. (4) Prescription drugs and medical devices, including outpatient prescription drugs, medical devices, and biological products. (5) Mental health and substance abuse treatment services, including inpatient care. (6) Laboratory and diagnostic services. (7) Comprehensive reproductive, maternity, and newborn care. (8) Pediatrics. (9) Oral health, audiology, and vision services. (10) Rehabilitative and habilitative services and devices. (11) Emergency services and transportation. (12) Early and periodic screening, diagnostic, and treatment services, as described in sections 1902(a)(10)(A), 1902(a)(43), 1905(a)(4)(B), and 1905(r) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A); 1396a(a)(43); 1396d(a)(4)(B); 1396d(r)). (13) Necessary transportation to receive health care services for persons with disabilities or low-income individuals (as determined by the Secretary). (14) Long-term care services and support (as described in section 204).

By comparison, the highly touted federal employees’ health benefit plan merely offers the choice of a number of fairly comprehensive private insurance products with the typical array of co-pays, deductibles, and narrow networks. For all of this, federal employees must kick in 28 percent of the weighted average premium for all plans.

Arguably, union employees working for the City of New York might have some of the bestv coverage of any working-class American. They can get fully employer-paid coverage in the default Emblem Health/HIP plan which has almost no co-pays or deductibles (workers may also choose other private insurance plans that do require employee contributions). They also receive generous dental, optical, and prescription coverage. But even here, workers must use a narrow provider network or face substantial co-pays, and the plan falls far short of HR 1384 in its coverage of long-term care, disability services, and community and home-based care. Moreover, every contract negotiation is held hostage to the imperative to hold on to these extraordinary benefits at almost any cost. I challenge any advocate of employment-based coverage to show me a plan that matches the level of comprehensive services, freedom of choice, and absence of out-of-pocket costs proposed by HR 1384. 

Like global warming, the case for replacing our dysfunctional, multi-payer, for-profit health care system with a publicly funded, universal system with a single standard of care for all is so compelling that it has reached the level of scientific fact. Nonetheless, too many national labor leaders continue to sing the praises of employment-based health care benefits, while too many others give merely rhetorical support for Medicare for All — passing resolutions at conferences and conventions to please union activists while continuing to devote the bulk of their union’s mobilizing and legislative efforts to support for incremental and defensive policy fixes. Only a few national unions have begun to commit the kind of resources and organizing capacity that will be needed to defeat the concentrated political and economic power of the medical-industrial complex.

Union Backpedaling

As momentum for Medicare for All builds, we are witnessing more backpedaling within the labor movement. And not all of it is confined to national labor leaders (though it certainly is more pronounced at that level). In New York, a single-payer-style state bill — NY Health — has twice passed the State Assembly and is edging toward passage in the State Senate backed by a growing popular movement. While the bill does have considerable labor support, including from the state’s powerful hospital workers and nurses’ unions, a significant section of the labor movement has gone into open opposition. In June of 2018, James Cahill, the president of the New York State Building and Construction Trades Council, joined the CEO of the Business Council pf New York State in co-authoring an op-ed in Crain’s New York Business opposing the bill and “government-run health care.”

Taken by itself, this expression might be dismissed as another sign of the class collaborationism and conservatism than infects significant sections of the building trades. But they were joined by a number of other unions, including the 380,000-member Municipal Labor Council — whose affiliates include a number of “progressive unions” — which told Politico that they “dread the impact of the single-payer proposal in Albany.” It is true that, unlike national proposals, state-level single-payer-style plans are notoriously complex to design and difficult to fund. But this hostility goes beyond having legitimate questions about implementation. The fact that major sectors of the labor movement refuse to engage in an effort to make health care a birthright in a state with near-Canadian levels of union density is profoundly unsettling for those of us who believe that, in order to succeed, labor must be in the forefront of the fight to win Medicare for All.

So what is driving this opposition? Perversely, in New York some of it derives from precisely these high levels of union density. Unions still think they have a seat at the table and may sincerely believe that they can bargain better and more secure benefits that would not be subject to the precariousness of annual state budget debates. This parochial perspective ignores the reality that New York unions are only one election or economic downturn away from catastrophe. They only need to look across the Hudson to see what anti-union Governor Chris Christie did to New Jersey public sector workers’ ability to bargain for health care during his administration (aided and abetted, I would add, by Democratic political elements associated with some of the most politically influential building trades locals).

Putting aside the idiosyncrasies of New York labor politics, many union leaders may also believe that “the members aren’t ready” to support Medicare for All. Loss aversion plays a central part in shaping that belief. Behavioral scientists have observed that people are much more likely to be motivated by the fear of losing something they have than by the prospect of gaining something they want. Fear of loss of health insurance is a major driver of working-class insecurity in the United States. It is no surprise, then, that the lobbyists and publicists working on behalf of the medical-industrial complex would focus on this theme in their effort to scare the American people away from a just health care system. Some of that fear has infected union members. The failure to confront such fears, of course, is a classic mistake that anyone who’s ever been through an organizing campaign would know to avoid. The real problem here is union leaders who fail to articulate a vision of working-class politics that will inspire and unify union members.

These concerns are compounded in the wake of the Janus decision, which has made public sector union membership completely voluntary. Many public sector union leaders are convinced that the best way to persuade workers to maintain their union membership is to show how the union adds value in their workplace. Negotiating health insurance benefits that are much better than those enjoyed by most other working-class Americans is one way to do that without necessarily having to engage in risky internal organizing and mobilizing activities that may end up undermining existing union leadership.

Some unions have raised the specter of job loss as a reason to oppose Medicare for All. This is a legitimate concern. Studies have shown that close to two million workers will be displaced due to the administrative efficiencies of Medicare for All. While both the House and Senate bills provide funding for transition benefits for these workers, decades of working-class experience with bearing the cost of environmental-, trade-, and automation-related job losses have made workers rightly skeptical of any promises of economic security. The Labor Campaign for Single Payer has called for centering these worker concerns in the political and legislative battles to come and has warned that a failure to do so will give our opponents the opportunity to divide workers against each other.

Unions have also expressed concern that employers would reap the benefit of all the sunken wages that unions have agreed to divert to maintain decent private insurance coverage. This would assume that, in the transition to Medicare for All, unions would be so weak and/or incompetent that they would be unable to recapture those already bargained monies. Even assuming a worst-case scenario, this objection is tantamount to someone opposing student loan forgiveness because they’ve already paid off a chunk of their loan.

There are also several institutional factors that can work to discourage union support for Medicare for All. Union health and welfare funds often have substantial brick-and-mortar investments in union facilities and provide a range of member services that often strengthen members’ union identification. A vast web of relationships also exists between union officials and health care vendors, brokers, intermediaries, attorneys, and various hangers-on. Some are outright corrupt. Others are more benign, such as the insurance company that subsidizes their stewards training or the broker that they can call to get a member rapid placement in a substance abuse treatment program. Nonetheless, all these relationships are ultimately corrupting because of the entailments of obligation that they engender with players who have a vested interest in maintaining the status quo.

However, the biggest factor by far that drives union opposition to Medicare for All is many union leaders’ fear of disrupting their political relationships. Unions are multi-issue organizations, and many of their bargaining and organizing goals are impacted by local and national political concerns. The ascendancy of a right-wing, anti-labor political regime is an existential threat to the institutional labor movement as well as to a wide range of working-class concerns. Unions routinely pull their punches in the interest of maintaining these relationships. For example, with a few notable exceptions, unions were nowhere to be seen in the 2016 Democratic Party platform fight around Medicare for All and other issues of central concern to the working class led by Bernie Sanders supporters. Enmeshed in the two-party system and with diminishing leverage, unions often see no alternative. Every election cycle is the most important one in the history of the nation, and, whatever the outcome, unions nearly always emerge weaker from each round.

This political practice engenders cynicism and apathy among union members and provides the space for right-wing populism to take root within some sections of the working class. The past decade has seen the reemergence of a refreshing political independence in some of the most dynamic sections of the labor movement. By challenging the status quo, they have inspired their members to take risks and have forced important concessions from the political establishment. Medicare for All, because it seeks to reclaim a public good on behalf of the entire working class, can be an important wedge issue in building out an independent working-class politics.

The Path Forward

Our experience in the Labor Campaign for Single Payer has shown that support for our cause is greatest at the front lines of the labor movement, where leaders and staffers have to deal on a daily basis with the consequences of private, for-profit health care. Our goal has been to work with those activists as they find ways to constructively engage with national labor leadership. After AFL-CIO president Trumka’s Labor Day appearance on Fox News, for example, we asked unionists to write him to remind him that support for Medicare for All is the official policy of America’s largest labor federation. Over 2,500 people answered the call. These are the leaders who will drive change in our movement and ultimately bring the formidable political and mobilization resources of institutional labor into the battle to make health care a right for everyone in America. When that happens, we will win.

As Washington State Labor Council president Larry Brown stated, “Unions do not serve their members well by trying to circle the wagons around an unsustainable model of employment-based health care.” Our labor movement will thrive when we express the aspirations of all workers and speak on behalf of the entire working class.

Union members should be justly proud of the long battle that unions have waged to protect their right to access affordable, quality health care, and the Labor Campaign for Single Payer stands in solidarity with all workers everywhere who fight to protect these hard-won gains. But our movement is at an historic juncture. Now is not the time to muddy the waters or bargain against ourselves. We need labor to lead as we work to make this a key issue in the 2020 elections and to hold politicians accountable in 2021 and beyond. And we have the right to expect that the union leaders who represent us and the politicians that we support will do more than just parrot the talking points crafted by health care industry lobbyists.

Mark Dudzic is coordinator of the Labor Campaign for Single Payer.

https://jacobinmag.com…

Health care inflation? It’s the insurer administrative costs, stupid.

Energy and Health Insurance Drive Inflation Higher in October

By Dean Baker
Center for Economic and Policy Research, November 13, 2019

Over the year, the overall CPI is up 1.8 percent, while the core index is up 2.3 percent. There is some modest evidence of accelerating inflation in the core CPI.

The major item driving the core inflation rate higher is medical care, with the index rising by 4.3 percent over the last year and at an annualized rate of 6.6 percent, comparing the last three months with the prior three months. This index accounts for more than 11.0 percent of the core CPI.

Within the medical care index, by far the biggest problem is health insurance. This index has risen 20.1 percent over the last year and at a 22.9 percent rate, comparing the last three months with the prior three. It is important to remember that this is just the administrative costs and profits of insurers, this index is not measuring premiums.

The index for hospital and related services is also rising rapidly, increasing by 3.4 percent over the last year and rising at a 7.8 percent annual rate, comparing the last three months with the prior three months. The rapid inflation in this sector likely reflects increased consolidation in the industry. By contrast, the index for professional medical services rose by just 0.1 percent in October and is up 1.6 percent over the last year.

Inflation in most other sectors is well contained.

Overall, this report shows that inflation remains well-contained almost everywhere, with the major exception of the health care sector.

http://cepr.net…

Comment:

By Don McCanne, M.D.

Everyone is concerned about health care costs, except maybe the insurers. We continue to debate what to do about it. This report should give us some guidance.

Currently inflation is well contained, except in medical care. Professional medical services are not contributing to health care inflation. But because of consolidation in the industry, hospital and related services are contributing somewhat to the increase in the medical care index.

But by far the biggest problem is health insurance. This index has risen over 20 percent in the past year, and that is just for the administrative costs and profits of the insurers, not for premiums.

So what solutions are we debating? Conservatives want market solutions, but they have been unable to come up with any proposals that would not make the situation worse. Moderates want to add to the current system a public option Medicare for Some that would preserve the role of the private insurers who are largely responsible for these inflationary administrative costs and profits. Only those advocating for the single payer model of an improved Medicare for All are supporting a proposal that would eliminate most of these administrative excesses and their unmerited profits.

The perpetual delay in enacting and implementing single payer Medicare for All has wasted trillions of dollars that we could have recovered over the past couple of decades. Are we going to continue with inaction while we have these silly debates over Medicare for All, Medicare for Some, or Medicare for None? Too many are experiencing preventable financial hardship, physical suffering, and even death. Shame on us!

For those who need a reminder of what we could have:

Landmark administrative waste study updated:
https://pnhp.org…

Projected costs of single payer in the United States:
https://pnhp.org…

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

Use polls as a tool, not as a deterrent

Should Medicare for All be Democrats’ top priority?

By Alvin Powell
The Harvard Gazette, January 14, 2020

Health care, climate change, and political reality collided this week, when experts discussing national single-payer health insurance clashed over the question of whether Democrats should make it their top priority if the party manages to retake both the White House and Congress this year.

John McDonough, a professor of the practice of public health who played a role in the design and passage of the Affordable Care Act, shook his head, arguing that recent history suggests health-care overhaul debates tend to crowd out all other issues and to exact a high political price.

“Health care is vitally important, but so is climate change, so is voting rights, so is gun control,” he said. “When health reform is on the agenda, it sucks up all the political oxygen in the room, and there’s very little room or space for anything.”

Adam Gaffney, an instructor in medicine at Harvard Medical School and president of Physicians for a National Health Program, disagreed, citing Franklin D. Roosevelt’s New Deal and Lyndon B. Johnson’s Great Society as examples of packages of progressive initiatives that passed despite multiple controversial parts.

“If you look at American history, many times many important reforms can be sought and achieved at the same time and that’s what we’re hoping for,” Gaffney said.

The exchange came during The Forum at Harvard T.H. Chan School of Public Health. The webcast, “The Future of National Health Insurance: Debates During a U.S. Presidential Election Year,” also featured Robert Blendon, professor of health policy and political analysis at the Chan School; Sara Collins, vice president of health care coverage and access for The Commonwealth Fund; and Phil Ellis, president of Ellis Health Policy Inc. and former analyst, adviser, and deputy assistant director at the Congressional Budget Office.

McDonough reminded the panel what happened to Democrats the last two times they took on health care. The party has won the coveted “trifecta” of the House, Senate, and White House just twice in the last 40 years. The first was during the first two years of the Clinton presidency and the second was during the first two years of the Obama presidency. Both times, he said, health-care restructuring topped the agenda — unsuccessfully for Clinton and successfully for Obama. And both times Democrats lost control of Congress in the midterm election.

“Each of them made heath reform their signal, main issue, and very little else happened,” McDonough said. “I think we have to be pragmatic … because the consequences are severe, not just for health but for everything else we care about.”

He also said that even under Democrats’ most favorable election scenario, mustering the votes for Medicare for All or another single-payer national health plan is unlikely, because a Democratic Senate majority, if achieved, is unlikely to approach the 60 votes needed to forestall a Republican filibuster.

National polls show that voters care deeply about health care and Democratic presidential candidates have made the issue central to their campaigns. But Blendon cautioned that a closer look at polling responses shows that Democrats and the general public aren’t necessarily talking about the same thing. While Democrats are dedicated to making the health-care system more efficient overall, the public is more narrowly focused on personal costs, such as co-pays and other out-of-pocket expenses. They’re skeptical that they’ll see savings from any plan aimed at system-wide efficiencies.

Polls show Americans clearly split between keeping and tweaking the Affordable Care Act, scrapping the current system in favor of Medicare for All or other similar national health insurance, or Republican-sponsored changes that would reduce federal mandates and devolve more power to the states.

That split, Blendon said, shows that despite years of debate so far, the discussion about health care isn’t close to finished.

“This is what polarized looks like,” Blendon said.

Demographically, Blendon said, some changes are likely over the next 10 years. The wing of the Democratic Party that is most disaffected with today’s institutions and most willing to scrap the current health-care system is also its youngest, which means that support for fundamental change is likely to grow over the next decade.

Despite differing outlooks, panelists agreed that further action on health care is needed. Currently 27 million to 30 million Americans are uninsured, and another 44 million are underinsured, with high co-pays and out-of-pocket expenses. Though the ACA brought the nation’s uninsured below 9 percent for the first time, other developed countries have rates between 0 and 1 percent.

“That’s not nearly good enough. That’s important to keep in mind,” McDonough said of U. S. progress.

Recent studies show that Medicare for All may save money, Gaffney said. The U.S. spends $812 billion annually just for administration of its health-care system, twice what Canada pays. That indicates that even if the cost of care itself doesn’t change under Medicare for All, there may be administrative savings.

Panelists said it is difficult to predict the impact of a Trump reelection on health care, but the general trend of Republican action has been to make health insurance cheaper by reducing coverage and relaxing mandates that insurers cover preexisting conditions. If insurers are again allowed to refuse those with preexisting conditions, Ellis said it’s likely that markets would be split between healthy people paying lower premiums and the sick, who may be forced into high-risk pools with higher premiums. McDonough said it’s also likely we’d see a continued rise in the number of uninsured, whose ranks have risen by 2 million in recent years.

https://news.harvard.edu…

Forum – Harvard T.H. Chan School of Public Health, “The Future of National Health Insurance” – 1 hour video:
https://theforum.sph.harvard.edu…

Comment:

By Don McCanne, M.D.

Clearly the single payer model of Medicare for All is vastly superior to other models of reform under consideration. It would provide all essential health care services to everyone at a cost close to that of our current highly dysfunctional financing system, while ensuring affordability for each individual by implementing equitable tax policies.

But the public is more concerned about their individual costs. They are concerned about the high cost of drugs, about high deductibles, about surprise medical bills, and about high insurance premiums if they are not covered by employer-sponsored plans. They want to see these issues addressed directly, though they are divided between whether the best way would be through expansion of the Affordable Care Act perhaps with a Medicare for All public option added, or if they would prefer more flexibility in private insurance products and in the health care marketplace.

Polls currently show that the nation is fairly evenly split in support of these three options. The neoliberals have apparently decided that we should improve ACA by adding a public option, and then try to bring the single payer supporters into their camp. The conservatives are still floundering with their efforts to patch together market solutions that simply won’t work for most individuals.

The polls are partly responsible for this effort to perpetuate ACA with a public option added. Opponents of single payer have been trying to convince the public that they should have the right to keep their private plans. Since most of those plans are employer-sponsored, beneficiaries believe that their personal costs will be less since they generally do not see the portion of the premium paid by the employer and they are quite unaware of tax expenditures for the deductibility of the plans for which we taxpayers are responsible. They contrast that with the prospect of paying for Medicare for everyone through a massive increase in their Medicare payroll taxes, or the equivalent in income taxes, or whatever, not considering that they would be equitable, progressive taxes

Since we really can’t improve on the single payer Medicare for All model, we should not use the poll results to compromise the single payer policies just to preserve choice of private plans. Instead we should use the poll results to show how single payer much more effectively addresses the individual concerns that the public actually has – controlling drug costs, eliminating surprise bills, eliminating insurance premiums and deductibles, eliminating provider networks that take away their choices of physicians and hospitals, and ensuring that they would be covered for life. Right now the opponents of single payer Medicare for All are using the polls as a deterrence by threatening loss of choice of private health plans.

Polling expert Robert Blendon: “For the average voter, they want to vote for someone who will deal with medical bills… This is a meat and potatoes issue for the average person not voting in the Democratic primary – ‘I want to see something done about these insulin costs, etc., etc.’.. And that’s what scares them about Medicare for All. If you could just talk about – ‘I’ll pay less next year’… But when you get into the trillions, people can’t deal with it – People say ‘I don’t know what a trillion is, but at the end of the day I’m going to be paying more.’ In reality if you can say your fees will go down, your delivery costs will go down, your drug costs will go down, that would be a debate the others would like to have, but that is lost in the aggregate numbers.”

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

This is why I prescribe Medicare for All

By Joan A. MacEachen, M.D., M.P.H.
The Journal (Cortez, Colo.), January 16

Health insurance is supposed to protect us from debilitating medical bills. But many of my patients find that when they need care, commercial insurance does not provide adequate protection. Even though they paid thousands of dollars in premiums and deductibles, patients still get stuck with huge surprise bills after a hospital visit.

This is real money for working families: The average surprise bill for emergency care is $628, and more than $2,000 for hospital admission. The vast majority of households filing for medical bankruptcy had commercial insurance at the time of treatment.

It doesn’t have to be this way. Single-payer Medicare for All would eliminate both networks and bills by giving patients free choice of virtually any doctor or hospital, and by paying providers directly for the full cost of care. It really is that simple.

Some politicians think we should settle for a Band-aid plan like a public option, which would only preserve the waste and complexity of our health system, not to mention the scourge of surprise bills and medical bankruptcy.

My patients deserve better. As a doctor, I prescribe Medicare for All.

https://the-journal.com…

Projected costs of single payer in the United States

Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses

By Christopher Cai, Jackson Runte, Isabel Ostrer, Kacey Berry, Ninez Ponce, Michael Rodriguez, Stefano Bertozzi, Justin S. White, James G. Kahn
PLOS Medicine, January 15, 2020

Abstract

Background: The United States is the only high-income nation without universal, government-funded or -mandated health insurance employing a unified payment system. The US multi-payer system leaves residents uninsured or underinsured, despite overall healthcare costs far above other nations. Single-payer (often referred to as Medicare for All), a proposed policy solution since 1990, is receiving renewed press attention and popular support. Our review seeks to assess the projected cost impact of a single-payer approach.

Methods and findings: We conducted our literature search between June 1 and December 31, 2018, without start date restriction for included studies. We surveyed an expert panel and searched PubMed, Google, Google Scholar, and preexisting lists for formal economic studies of the projected costs of single-payer plans for the US or for individual states. Reviewer pairs extracted data on methods and findings using a template. We quantified changes in total costs standardized to percentage of contemporaneous healthcare spending. Additionally, we quantified cost changes by subtype, such as costs due to increased healthcare utilization and savings due to simplified payment administration, lower drug costs, and other factors. We further examined how modeling assumptions affected results. Our search yielded economic analyses of the cost of 22 single-payer plans over the past 30 years. Exclusions were due to inadequate technical data or assuming a substantial ongoing role for private insurers. We found that 19 (86%) of the analyses predicted net savings (median net result was a savings of 3.46% of total costs) in the first year of program operation and 20 (91%) predicted savings over several years; anticipated growth rates would result in long-term net savings for all plans. The largest source of savings was simplified payment administration (median 8.8%), and the best predictors of net savings were the magnitude of utilization increase, and savings on administration and drug costs (R2 of 0.035, 0.43, and 0.62, respectively). Only drug cost savings remained significant in multivariate analysis. Included studies were heterogeneous in methods, which precluded us from conducting a formal meta-analysis.

Conclusions: In this systematic review, we found a high degree of analytic consensus for the fiscal feasibility of a single-payer approach in the US. Actual costs will depend on plan features and implementation. Future research should refine estimates of the effects of coverage expansion on utilization, evaluate provider administrative costs in varied existing single-payer systems, analyze implementation options, and evaluate US-based single-payer programs, as available.

What do these findings mean?

  • There is near-consensus in these analyses that single-payer would reduce health expenditures while providing high-quality insurance to all US residents.
  • To achieve net savings, single-payer plans rely on simplified billing and negotiated drug price reductions, as well as global budgets to control spending growth over time.

https://doi.org… OR https://journals.plos.org…

Single Payer Systems Likely to Save Money in U.S., Analysis Finds; Lower administrative and drug costs would be main drivers of cost savings

The University of California, San Francisco (UCSF), January 15, 2020

A single payer healthcare system would save money over time, likely even during the first year of operation, according to nearly two dozen analyses of national and statewide single payer proposals made over the past 30 years.

The study, published Wednesday, Jan. 15, 2020, in PLOS Medicine, comes as California Gov. Gavin Newsom has created a state commission to find ways to achieve universal coverage, possibly through a single payer system, and as the Democratic presidential candidates are debating “Medicare for All” proposals on the national stage.

The US spends more on healthcare than any other country, yet is one of only a few developed nations that does not provide universal coverage. Under proposed single payer bills, such as “Medicare for All”, a unified public financing system would replace private insurance, similar to the healthcare system in Canada and many other wealthy nations.

To estimate what would happen if the United States adopted a single payer system, researchers from UCSF, UCLA and UC Berkeley examined 22 economic analyses by government, business and academic organizations of national and state-level single payer plans, including proposals made in Massachusetts, California, Maryland, Vermont, Minnesota, Pennsylvania, New York and Oregon.

These analyses were used by policy makers to evaluate the proposals, estimating savings the plans would create through simplified billing and lower drug costs while also taking into account increases in health spending that would arise as newly insured people sought healthcare.

The researchers found that 19 of the 22 models predicted net savings in the first year after implementation, averaging 3.5 percent of total healthcare spending.

The researchers were able to estimate longer-term savings by using cost projections made in 10 of the models, which looked as far as 11 years into the future. These studies assumed that savings would grow over time, as the increases in healthcare utilization by the newly insured leveled off, and the global budgets adopted by single payer systems helped to constrain costs. By the tenth year, all modeled single payer systems would save money, even those that projected costs would initially increase.

“Even though they start with different single designs and modeling assumptions, the vast majority of these studies all come to the same conclusion,” said James G. Kahn, MD, MPH, a professor in the UCSF Department of Epidemiology and Biostatistics, and a member of the Philip R. Lee Health Policy Institute. “This suggests that fears that a single-payer system would increase costs are likely misplaced.”

Savings from simplified payment administration and reductions in drug prices and other efficiencies ranged from 3 to 27 percent, with the largest savings found in plans that lowered drug costs.

Higher initial costs were associated with plans that had low co-pays or none at all, offered rich benefits, or that did not expect savings from lower drug and medical equipment costs.

The models were created by analysts from different political perspectives, and they provided a range of cost estimates in the first year of operation, from 7 percent higher to 15 percent lower.

The researchers found that the economic models that were supported by left-leaning funders or that were done by academics found slightly larger net savings. But analyses supported by more conservative funders or performed outside of academia still predicted single payer systems would yield savings.

“This means that across the political spectrum, there is near consensus among these economists that a single-payer system would save money,” said Christopher Cai, a third-year medical student at UCSF and the study’s first author. “Replacing private insurance with a public system is essential to achieving these savings.”

Authors: Christopher Cai, Jackson Runte, Isabel Ostrer, Kacey Berry, Justin White, PhD, and James G. Kahn, MD, MPH, of the UCSF School of Medicine; Ninez Ponce, PhD, MPP, of the UCLA Fielding School of Public Health; Michael Rodriguez, MD, MPH, of the David Geffen School of Medicine at UCLA; Stefano Bertozzi, MD, PhD, of the UC Berkley School of Public Health.

https://www.ucsf.edu…

Comment:

By Don McCanne, M.D.

What does the literature on modeling of single payer financing of health care tell us? As this systematic review confirms, “There is near-consensus in these analyses that single-payer would reduce health expenditures while providing high-quality insurance to all US residents.”

All models that qualified for the study would reduce health care spending after the transitional startup, and most of them would reduce spending even during the startup interval. Clearly the single payer model would work for all of us, and it would be more affordable than if we maintained the deficient status quo.

PLOS Medicine is an Open Access publication and thus there is no paywall for downloading this 18 page report. You should do so and share it widely so that other academics and activists can use it to refute the false claim that we cannot afford single payer Medicare for All. We can, and we must.

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

Single-Payer Systems Likely to Save Money in US, Analysis Finds

Lower Administrative and Drug Costs Would Be Main Drivers of Cost Savings

By Laura Kurtzman
University of California San Francisco, January 15, 2020

A single-payer healthcare system would save money over time, likely even during the first year of operation, according to nearly two dozen analyses of national and statewide single payer proposals made over the past 30 years.

The study, published Wednesday, Jan. 15, 2020, in PLOS Medicine, comes as California Gov. Gavin Newsom has named a state commission to find ways to achieve universal coverage, possibly through a single-payer system, and as the Democratic presidential candidates are debating “Medicare for All” proposals on the national stage.

The U.S. spends more on healthcare than any other country, yet is one of only a few developed nations that does not provide universal coverage. Under proposed single payer bills, such as “Medicare for All,” a unified public financing system would replace private insurance, similar to the healthcare system in Canada and many other wealthy nations.

To estimate what would happen if the United States adopted a single-payer system, researchers from UCSF, UCLA and UC Berkeley examined 22 economic analyses by government, business and academic organizations of national and state-level single payer plans, including proposals made in Massachusetts, California, Maryland, Vermont, Minnesota, Pennsylvania, New York and Oregon.

These analyses were used by policymakers to evaluate the proposals, estimating savings the plans would create through simplified billing and lower drug costs while also taking into account increases in health spending that would arise as newly insured people sought healthcare.

The researchers found that 19 of the 22 models predicted net savings in the first year after implementation, averaging 3.5 percent of total healthcare spending.

The researchers were able to estimate longer-term savings by using cost projections made in 10 of the models, which looked as far as 11 years into the future. These studies assumed that savings would grow over time, as the increases in healthcare utilization by the newly insured leveled off, and the global budgets adopted by single-payer systems helped to constrain costs. By the 10th year, all modeled single payer systems would save money, even those that projected costs would initially increase.

“Even though they start with different single designs and modeling assumptions, the vast majority of these studies all come to the same conclusion,” said James G. Kahn, MD, MPH, a professor in the UCSF Department of Epidemiology and Biostatistics, and a member of the Philip R. Lee Health Policy Institute. “This suggests that fears that a single-payer system would increase costs are likely misplaced.”

Savings from simplified payment administration and reductions in drug prices and other efficiencies ranged from 3 to 27 percent, with the largest savings found in plans that lowered drug costs.

Higher initial costs were associated with plans that had low co-pays or none at all, offered rich benefits, or that did not expect savings from lower drug and medical equipment costs.

The models were created by analysts from different political perspectives, and they provided a range of cost estimates in the first year of operation, from 7 percent higher to 15 percent lower.

The researchers found that the economic models that were supported by left-leaning funders or that were done by academics found slightly larger net savings. But analyses supported by more conservative funders or performed outside of academia still predicted single-payer systems would yield savings.

“This means that across the political spectrum, there is near consensus among these economists that a single-payer system would save money,” said Christopher Cai, a third-year medical student at UCSF and the study’s first author. “Replacing private insurance with a public system is essential to achieving these savings.”

Authors: Christopher Cai, Jackson Runte, Isabel Ostrer, Kacey Berry, Justin White, PhD, and James G. Kahn, MD, MPH, of the UCSF School of Medicine; Ninez Ponce, PhD, MPP, of the UCLA Fielding School of Public Health; Michael Rodriguez, MD, MPH, of the David Geffen School of Medicine at UCLA; Stefano Bertozzi, MD, PhD, of the UC Berkley School of Public Health.

Funding: None except as noted in disclosures.

Disclosures: Christopher Cai is an executive board member of Students for a National Health Program. Christopher Cai, Jackson Runte, Isabel Ostrer, Kacey Berry each received a student summer research grant of $750 from Physicians for a National Health Program (PNHP) to support this study. PNHP had no role in study design, data collection, analysis, decision to publish or manuscript preparation.

The University of California, San Francisco (UCSF) is exclusively focused on the health sciences and is dedicated to promoting health worldwide through advanced biomedical research, graduate-level education in the life sciences and health professions, and excellence in patient care. UCSF Health, which serves as UCSF’s primary academic medical center, includes top-ranked specialty hospitals and other clinical programs, and has affiliations throughout the Bay Area.

https://www.ucsf.edu…