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What happens when not-for-profit insurers convert to for-profit?

What happens when not-for-profit insurers convert to for-profit?

Does It Matter If Your Health Insurer Is For-Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending

By Leemore S. Dafny
Harvard Business School, American Economic Journal: Economic Policy, February 2019

Abstract

There is limited empirical evidence about the impact of for-profit health insurers on various outcomes. I study the effects of conversions to for-profit status by Blue Cross and Blue Shield (BCBS) affiliates in 11 states, spanning 28 geographic markets. I find both the BCBS affiliate and its rivals increased premiums following conversions in markets where the converting affiliate had substantial market share. Medicaid enrollment rates also increased in these markets, a pattern consistent with “crowd in” of families who were formerly privately insured. The results suggest for-profit insurers are likelier than not-for-profit insurers to exercise market power when they possess it.

From the Discussion and Conclusions

Looping back to the theoretical models of NFP (not-for-profit) and FP (for-profit) health care organizations, the findings are consistent with models in which NFPs prioritize enrollment over profits (equivalently, models in which FPs prioritize profits over enrollment). While theoretically this difference in emphasis might not manifest in higher premiums or lower quality because FPs could be more efficient and find it optimal to maintain substantially the same premiums and quality as NFPs (and still reap higher profits via lower operating costs and/or medical expenses), empirically we do find there is a tradeoff: consumers face higher premiums when large NFPs convert to FP status. Although we do not directly study quality, we find no indirect evidence of quality improvements, as inferred from a model of employee health plan choice. Moreover, we do find evidence that rivals of converting plans experienced sizeable increases in medical spending following conversion, a result that suggests FPs are likelier than NPs to engage in risk selection practices (e.g., denying or deterring enrollment of individuals with poor health or high health risk, a practice that was legal during the study period).

Our findings have several implications for regulatory and competition policy vis-à-vis insurers. First, it appears that sizeable FP insurers are more likely to exercise market power via price increases than are comparable NFP insurers. Second, pricing actions by large insurers have a ripple effect on rivals’ prices, further solidifying the evidence of oligopolistic conduct in many local insurance markets. Third, there is no evidence that NFP and FP insurers charge different prices in the large group market when both are relatively small.

https://www.hbs.edu…

For the full 70 page paper:
https://www.hbs.edu…

Comment:

By Don McCanne, M.D.

This is a study of conversions of not-for-profit Blue Cross and Blue Shield (BCBS) affiliates to for-profit status. So what are the findings?

  • BCBS premiums increased in markets where the converting affiliate had substantial market share.
  • When BCBS affiliates increased their premiums the competing rivals also increased their premiums.
  • Medicaid enrollment rates also increased in these markets, a pattern consistent with “crowd in” of families who were formerly privately insured.
  • The results suggest for-profit insurers are likelier than not-for-profit insurers to exercise market power when they possess it.
  • The findings are consistent with models in which not-for-profits prioritize enrollment over profits whereas for-profits prioritize profits over enrollment.
  • There was no indirect evidence of quality improvement (though quality was not specifically studied).
  • Rivals of converting plans experienced sizable increases in medical spending following conversion, a result that suggests for-profits are likelier than not-for-profits to engage in risk selection practices (e.g., denying or deterring enrollment of individuals with poor health or high health risk).

Thus when not-for-profit private insurers change to for-profit status, not only do their prices go up, it creates a culture of greed in the community since their competitors increase their prices as well.

Although this study was about insurers, the findings are similar for the for-profit health care delivery system. Costs go up, and quality does not improve. In our profit-oriented health care system, the patient-consumer loses.

The policy solutions are easy. Get rid of the private insurers and establish a single universal risk pool that covers everyone – a Single Payer Medicare for All. For the health care delivery system, convert the for-profit sector into not-for-profit entities.

In the second week of February, Rep. Pramila Jayapal will be introducing new Medicare for All legislation. We should make sure that it includes provisions for conversion of the for-profit sector into not-for-profit entities. If such a provision is not in the legislation then we need to encourage our legislators to amend the bill so that it is included.

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Democratic politicians want to keep private insurance in play

By Alex Rogers, Manu Raju and Elizabeth Landers
CNN, January 30, 2013

The emerging 2020 presidential campaign has deepened the Democratic party’s divide over how the government should cover all Americans, further exposing the differences between those who want a total overhaul of the health care system and those who prefer a more incremental approach to fix it.

Sen. Kamala Harris of California renewed the party’s debate over single-payer health care in a CNN town hall Monday, saying she’s willing to end private insurance, which more than 170 million Americans use.

“It would take a mighty transition to move from where we are to that,” said Sen. Dick Durbin, the chamber’s No. 2 Democratic senator in leadership.

“What most of us said we would support is a Medicare type plan — a not-for-profit public plan that is available for everyone,” said Durbin of Illinois. “I think that’s a good first step.”

Sen. Tim Kaine, the 2016 Democratic vice presidential nominee, claimed that “about 80%” of those who get insurance through their employers like their private insurance plan.

“I’m not going to say you have to give it up,” Kaine said. “I think the idea is to offer a nonprofit insurance plan as an option.”

Of eliminating private health insurance, Sen. Dianne Feinstein, Harris’ senior Democratic colleague from California, said, “Well I’m not there.”

Sen. Gary Peters, Democrat of Michigan, said he believes lawmakers should expand the ability for people to buy into a version of Medicare, adding he’s a co-sponsor to a bill by Kaine and Sen. Michael Bennet of Colorado that would do just that. Sen. Chris Murphy, Democrat of Connecticut, plugged another bill that would expand access to Medicare, calling it “a lot more politically palatable and ultimately more popular than statutory prohibition of private plans.”

https://www.cnn.com…

Comment:

By Don McCanne, M.D.

Now that Medicare for All has become such a popular concept, many seem to believe that all we need to do is elect more Democratic senators and a Democratic president and we’re in. But if you listen carefully, most Democratic politicians give lip service to Medicare for All, but when you pin them down on policy they actually support a Medicare buy-in – a public option – and most of them support the continuation of offering the private Medicare Advantage plans. They also support allowing employers to offer their own private health plans. We are not even close to enactment of a bona fide Single Payer Medicare for All program.

Everyone needs to get busy perfecting their elevator speeches so we can explain why we must not allow private insurance plans to be options in our health care financing. If we were to allow them under Medicare for All, the entire single payer financing infrastructure crumbles, perpetuating an inefficient, fragmented financing system that impairs health care access, and often results in personal financial hardship. In contrast, a Single Payer Medicare for All program would ensure access and affordability for everyone. The secret? Saving hundreds of billions of dollars by reducing the profound administrative excesses of our fragmented, dysfunctional financing system, along with exercising the monopsonistic purchasing power of our own single public payer. See if you can convert that into elevator language.

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Testimony in support of H.B. 604 and H.B. 697

By Ahmed CK Kutty, M.D.
Committee on Commerce and Consumer Affairs, General Court of New Hampshire, Jan. 30, 2019

Honorable Representatives on the Committee:

Thank you for giving me the opportunity to speak in this august forum. As aspects of the proposed solutions to the healthcare crisis facing a substantial portion of Granite State population have been presented here already this afternoon, I will confine my remarks to the moral imperative for acting to remedy the widely -prevalent extant gross injustice whose provenance is LACK of affordable and adequate availability of healthcare access to ALL citizens and legal residents of our State.

Our country is unique among the nations of the Earth, for being the most powerful nation economically, militarily and politically, while steadfastly remaining a democracy, resulting in the generation of the largest middle class the world has EVER seen, manifested in our time during the three decades after WWII, and also NOT evident in all of recorded history going as far back as the Roman Empire era.

Given this fact, it is unconscionable and unacceptable that our healthcare system ranks 27th, behind Saudi Arabia per the World Health Organization listing for 2018, using population-based measures of overall health status of nations. Yet our university -based teaching hospitals, leading clinics, doctors and biomedical-clinical science researchers and facilities are the envy of the global community. In contrast we rank first by far, on healthcare spending assessed as per capita (about $10,000 a year) or by total spending (currently at $3.4 $trillion annually), and as a percentage of our Gross Domestic Product (now at around 18% yearly). Corresponding figures for the advanced- economy nations are: $5000/year per capita, and 10% of the GDP on the average.

At the core of this paradox lies the intolerable inequity, prohibitively high cost and resultant unaffordability to access the world class care- providers, composed of institutions and clinical professionals that we have created and trained, within our borders. This shameful outcome, I believe sprang(and continues to originate), from the inexcusable lack of political WILL on the part of our elected policy makers and the democratically elected leadership, for NOT getting several progressive Bills on healthcare introduced over the years, into Acts that would supply the necessary funding for establishing a well-crafted public system, replacing our prevailing fragmented, needlessly wasteful, inefficient and for-profit NON-SYSTEM, that has stubbornly persisted for over a century since the end of WWI.

A few quotes I hope will speak to the moral dimensions of the unacceptable and dismal failure of our current healthcare system, causing avoidable misery, preventable death and catastrophic economic ruin among about 100 million of our fellow citizens who are uninsured and under-insured for NO fault, and estimated to be about 70 million nationally and approximately 200,000 in NH.

  1. For when I was hungry you fed me…when I was naked you clothed me, when I was sick and you visited me: Matthew 25:35-40
  2. Health is NOT a consumer good but a universal right: His Holiness Pope Francis – 2016
  3. US healthcare system is immoral: Ban Ki-moon, former Secretary General of the UN.
  4. International law has recognized healthcare as a human right for over 70 years.
  5. Putting healthcare access at risk for tax-relief to the rich is immoral. No one should face sickness without healthcare access, so someone can take a tax deduction for a yacht: Rev Jason Carson Wilson of United Church of Christ.
  6. Of all forms of inequality, injustice in healthcare is most shocking and inhuman: Martin Luther King.
  7. US healthcare system is the tapeworm of American competitiveness: Warren Buffet.
  8. We the People…provide for the common defense, promote general Welfare…do ordain and establish this Constitution for the United States: the Preamble.

An ethical, broad and faith-based reading of the above clause…”provide for general Welfare” lends strong support to the position that providing for a publicly-financed healthcare system is necessary for fulfillment of the Constitutional mandate contained therein.

Therefore esteemed law makers, as you deliberate on the bills before you, I urge you to ask “your inner voice-conscience,” which modern neurobiology conceptualizes as an organ system consisting of the gut, heart and brain composite, functioning as an integrated neural network-axis, just ONE simple question: Will my actions bring succor to the sick among the 99% of the population in my district that I am elected to represent and serve?

Thank you for your attention.

Here’s what single-payer advocates want to hear from 2020 Democratic primary contenders

No co-pays, no deductibles, no need for supplemental policies, no private insurance.

By Addy Baird
Think Progress, Jan. 30, 2019

In the fall of 2017, with more than three years to go before the next presidential election, Sen. Bernie Sanders (I-VT) introduced Medicare for All legislation in the Senate. The bill racked up a long list of high-profile co-sponsors, many of whom were already being talked about as 2020 contenders.

Since then, Sens. Elizabeth Warren (D-MA), Kamala Harris (D-CA), and Kirsten Gillibrand (D-NY) — all co-sponsors of Sanders bill — have jumped into the Democratic fray. So, too, have former Housing and Urban Development Secretary Julian Castro, Rep. Tulsi Gabbard (D-HI), and South Bend, Indiana Mayor Pete Buttigieg, among a few other lesser-known candidates.

Along with their senatorial rivals, Castro, Gabbard, and Buttigieg have all expressed support — or at least an openness to — single-payer health care as well. Sanders himself is reportedly preparing to announce his own candidacy in the coming days.

It’s a field that would have been unrecognizable in 2016, when former Secretary of State Hillary Clinton, the face and onetime future of the Democratic Party, railed against Sanders’ proposed single-payer system during a debate.

“I do think when you make proposals and you’re running for president, you should be held accountable for whether or not the numbers add up and whether or not the plans are actually going to work. If someone promises you something for free, read the fine print,” Clinton said in April 2016.

Interestingly, a study from the conservative think tank Mercatus found last July that Medicare for All would save the United State trillions, and 70 percent of all Americans — including 85 percent of Democrats and 52 percent of Republicans — support Medicare for all, according to a Reuters poll from last August. Just 20 percent of Americans said they oppose the idea outright.

“Even candidates with very focused campaigns that run based on focus groups, that are more calculating than ‘This is my ideology,’ they have decided that they have to run in a calculated way on Medicare for All,” Ben Day, the executive director of Health Care Now, a single-payer advocacy group, said in an interview with ThinkProgress.

But, he cautioned, advocates are going to keep a close eye on politicians who have gotten on board simply because they feel they have to. “Those folks have a different relationship to the issue than the folks who have gotten on because they believe it in their hearts and it’s part of their moral fiber,” Day said. “There are forces trying to keep the for-profit middle men in the [single-payer] system that you switch to.”

Single-payer activists across the country, in conversations with ThinkProgress, echoed Day. As the Democratic primary gets underway, advocates want clear answers from contenders about what they really mean when they talk about Medicare for All and confirmation that their vision for single-payer in the United States includes the complete elimination of private health insurance, coverage for all residents including undocumented immigrants, reproductive health coverage, and, in some areas, goes beyond Sanders’ Senate bill.

“There’s going to be a lot of attempts to politically compromise the system,” Day said. “But almost all those changes make the system more expensive, and you create opposition to the system within the system.”

In other words: If a Democratic presidential contender offers you Medicare for All, read the fine print.

Many advocates pointed to simple human rights principles — universality, equity, transparency, accountability, and participation — for assessing health care proposals. Optional Medicaid buy-ins, for example, mean coverage is determined by your wallet and immigration status. Getting health care through your job can be similarly dicey.

In the coming weeks, Rep. Pramila Jayapal (D-WA) plans to introduce Medicare for All legislation in the House, a bill that advocates told ThinkProgress they expect will address some more specific concerns they’ve had about Sanders’ single-payer vision, including long-term care coverage.

In Sanders’ bill, long-term care, which is vital for seniors and many with disabilities, is left in the hands of state Medicaid programs, which are mandated only to maintain their “current level” of spending. Activist Tim Faust told ThinkProgress that’s simply not enough.

“By keeping long-term-care standards and payment at the state level, Sanders’s bill offers no protections against the worst abuses of state-funded long-term-care,” Faust said in an email. Those abuses include liens being placed on the homes of people who need long-term care, people with disabilities being forced out of their homes and into nursing homes, and couples being forced to get divorced in order to allow one partner to qualify for Medicaid.

Additionally, advocates want to hear a clear plan from primary contenders for the elimination of private insurance for-profit health care institutions.

“We…feel strongly that [for-profit institutions] would need to be bought out so that they would continue to operate as health care institutions but in a not-for-profit way,” Carol Paris, the immediate past president of Physicians for a National Health Program, said in a recent interview. “If we don’t buy them out but somehow or another tell them, ‘Well you’re not allowed to make a profit off of Medicare and all the care is Medicare,’ they’re going to end up selling [or] they’re going to convert their hospital into a hotel or a convention center, and then we’re not going to have enough hospital beds.”

But more than anything, Paris said, before getting to the details, she wants to hear from candidates that they have a clear understanding that Medicare for All means exactly that: Coverage for all medically necessary care and no barriers to that care at the point of service. No co-pays, no deductibles, no need for supplemental policies, no private insurance.

“I want to know that candidates are using that term to mean improving traditional Medicare and expanding it to everyone from birth to death residing in the United States,” she said.

At a town hall Monday night, CNN’s Jake Tapper asked Harris whether, under her vision of Medicare for All, people are going to lose the insurance they have right now.

“The idea is that everybody gets access to medical care. You don’t have to go through the process of going through an insurance company, having them give you approval, going through the paperwork, all of the delay that may require,” Harris said. “Who of us has not had that situation, where you’ve got to wait for approval and the doctor says, ‘Well, I’m not sure whether your insurance company is going to cover this.’ Let’s eliminate all of that. Let’s move on.”

That sort of clear, straightforward answer about how single-payer would look in the United States is exciting for advocates. But their worst fears were realized Tuesday evening, after a day of furor from Republicans and centrists, when CNN reported that an advisor to Harris had told the network Harris would be open to other health care plans, including plans that would compromise with private insurance.

In a statement to CNN, Ian Sams, a spokesperson for Harris said, “Medicare-for-all is the plan that she believes will solve the problem and get all Americans covered. Period. She has co-sponsored other pieces of legislation that she sees as a path to getting us there, but this is the plan she is running on.”

Responses like this are precisely why advocates worry 2020 contenders will emphatically push for single payer in their messaging — but will come up short or reverse course when probed for details.

“I’m encouraged but I’m still not persuaded that any of these candidates is going to be the thing that makes Medicare for All happen,” Paris said. “That is going to require a continued popular movement.”

https://thinkprogress.org…

ACA has reduced the uninsured population by less than two-fifths

The Uninsured and the ACA: A Primer - Key Facts about Health Insurance and the Uninsured amidst Changes to the Affordable Care Act

By Rachel Garfield, Kendal Orgera, and Anthony Damico
Kaiser Family Foundation, January 25, 2019

By 2013, the year before the major coverage provisions of the Affordable Care Act (ACA) went into effect, more than 44 million nonelderly individuals lacked coverage.

Despite large gains in health coverage, some people continued to lack coverage, and the ACA remained the subject of political debate. Attempts to repeal and replace the ACA stalled in summer 2017, but there have been several changes to implementation of the ACA under the Trump Administration that affect coverage. In 2017, the number of uninsured rose for the first time since implementation of the ACA to 27.4 million. Those most at risk of being uninsured include low-income individuals, adults, and people of color. The cost of coverage continues to be the most commonly cited barrier to coverage.

Under current law, nearly half (45%) of the remaining uninsured are outside the reach of the ACA either because their state did not expand Medicaid, they are subject to immigrant eligibility restrictions, or their income makes them ineligible for financial assistance. The remainder are eligible for assistance under the law but may still struggle with affordability and knowledge of options. Ongoing efforts to further alter the ACA or to make receipt of Medicaid more restrictive may further erode coverage gains seen under the ACA. On the other hand, state action to take up the ACA Medicaid expansion could make more people eligible for affordable coverage. The outcome of current debate over health coverage policy in the nation and the states has substantial implications for people’s coverage, access, and overall health and well-being.

http://files.kff.org…

Comment:

By Don McCanne, M.D.

Just before the Affordable Care Act was enacted, more than 44 million individuals were uninsured. Now about 27 million are uninsured. Thus we have reduced the uninsured population by less than two-fifths. What a crummy result considering that we could have insured everyone through a Single Payer Medicare for All system.

Many of the politicians want to continue to work with ACA to try to increase the number covered. However, under the current law, almost half of the uninsured are outside of the reach of ACA and would remain uninsured even if outreach programs brought most of the rest of those eligible under the ACA umbrella. Perhaps new laws expanding ACA might tweak these numbers, but they would still leave many millions without coverage and tens of millions with inadequate coverage. Besides, such tweaks would never be approved by President Trump nor the Republican-controlled Senate.

What about 2020? Many politicians who campaigned in support of Medicare for All are now signaling that they would prefer to build on ACA instead. Yet the policies supported by their consultants would leave in place our outrageously expensive system with all of its profound administrative excesses, not to mention that it would leave tens of millions exposed to financial hardship.

We have to hold the politicians to their promises of Medicare for All. That means supporting the real thing – the genuine single payer model that would include absolutely everyone, not some cheesy Medicare for Some model. But we also have to bring many more politicians on board. That means being sure that their constituents understand the difference, which. of course, also means that we still have a lot of work to do.

Addendum: An interesting finding in this report is that three-fourths of the uninsured are citizens. According to DHS, two-thirds of the noncitizens are legal residents. That means that only about one-twelfth of the uninsured are undocumented immigrants. That is hardly a reason to continue with policies that keep the other eleven-twelfths uninsured, though most of us in the movement believe that anyone who needs health care should have it, regardless.

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Republicans seem to think blindly attacking Kamala Harris on single payer is a good idea

By Jon Healey
Los Angeles Times, Jan. 29, 2019

Sen. Kamala Harris (D-Calif.) sent ripples through the media when she declared during a town hall Monday that she wants to end private health insurance plans. Her comments on CNN shouldn’t have surprised anyone — Harris had previously made clear that she supports shifting to a single-payer healthcare system, specifically extending Medicare to all Americans. And a common feature of Medicare-for-All proposals is that they wipe out private insurance.

Nevertheless, the Republican National Committee pounced on the remark, and you have to admit this is clever:

But that’s a lash without a barb.

I imagine there are plenty of people out there who like their health insurance plans, especially if they have super-generous employee benefits that minimize their out-of-pocket costs. But the public in general isn’t so keen on the current system. J.D. Power surveys show that customer satisfaction with commercial health plans runs lower than for almost all other industries that it rates. Even Medicare, which many older Americans would defend with every fiber of their being, evokes as much dissatisfaction as satisfaction in Gallup polls.

There is, however, a real policy question at issue. Single-payer systems don’t have to eliminate private insurance plans; according to Larry Levitt of the Kaiser Family Foundation, private insurers play a role in many foreign single-payer systems. “A role for private insurers is more the rule rather than the exception in other high-income countries,” Levitt said in an email.

For example, the system in Switzerland has nonprofit insurers sell coverage for the standard benefits package that everyone must buy, with their for-profit affiliates selling coverage for optional benefits. Germany’s system is similar. France and the United Kingdom allow private insurers to sell supplemental coverage to reduce out-of-pocket costs or obtain some types of treatment faster.

But the trade-off for allowing a role for private insurers is significantly higher administrative costs for doctors, hospitals and other healthcare providers, said Dr. David Himmelstein, a primary care doctor in New York who co-founded the Physicians for a National Health Program, which advocates for single payer.

“As soon as you have multiple different payers,” Himmelstein said, “you have to have that entire hospital bureaucracy” devoted to billing and paperwork. “That’s a huge increase in the bureaucratic cost.” Himmelstein also argued that private insurers would add a “middleman cost” that’s higher than Medicare’s.

That defeats one of the main purposes of shifting to single payer, namely, lowering healthcare costs by lifting the heavy administrative burdens the current system imposes on healthcare providers. As Himmelstein noted, there’s a whole workforce and tech infrastructure within the healthcare industry that was created to deal with multiple insurers, each with its own reimbursement rate, exclusions and paperwork demands.

The doctor said he’s probably asked 100 different audiences whether they care who their doctor is, or which hospital they go to, or which prescription drugs they have access to, and the invariable answer is that almost everyone does. But when he asks whether anyone in the audience is concerned about which insurer pays their healthcare bill, Himmelstein said, “almost no one who doesn’t work for an insurance company cares about that.”

Obviously, supporters of single payer also see it as a way to extend affordable coverage to every American, albeit at the expense of taxpayers. Beyond that, pulling everyone into a single risk pool would also make it easier to make system-wide changes — for example, in the way healthcare is delivered — to try to rein in costs.

Nevertheless, some opponents of single payer warn that eliminating private insurers would eliminate some of the choices consumers have. For example, private insurers in Medicare Advantage offer a variety of supplemental benefits, and those in Medicare Part D offer different lists of covered prescription drugs. Critics like Himmelstein argue that the choices don’t make consumers better off, so there’s a debate to be had over whether private insurers make the system better or just more costly.

That’s a more nuanced argument than the one the RNC wants to have with Harris.

https://www.latimes.com…

CVS uses its own pharmacy benefit manager to pad its revenues

CVS paid itself far more than some major competitors, report says

By Marty Schladen and Cathy Candisky
The Columbus Dispatch, January 20, 2019

CVS used its role as a pharmacy middleman for the Ohio Medicaid program to pay some of its biggest retail competitors far less than it pays its own stores, according to a section in a state report that CVS is fighting in court to keep secret.

Critics say the state report is strong evidence that CVS was, in essence, using taxpayer money to give its own retail stores an unfair advantage in the marketplace.

At the same time this issue is being scrutinized in Ohio, CVS is attempting to convince a federal judge that its $70 billion proposed merger with insurance giant Aetna doesn’t pose a threat to competition in the pharmacy marketplace.

“This is startling information, the degree of difference” between what CVS was paying some large competitors and what it paid itself, said Thomas Greaney, former assistant chief of the U.S. Justice Department’s Antitrust Division.

Greaney, now a professor at the University of California Hastings College of Law, helped plan the American Medical Association’s opposition to the CVS-Aetna merger, which is now being reviewed by U.S. District Court Judge Richard Leon in Washington, D.C.

“I think this will certainly get his attention, that there is conduct consistent with the theory the Justice Department chose not to pursue,” Greaney said, referring to the fact that the Justice Department didn’t raise objections to the possibility that a merged company could use its clout as both an insurer and pharmacy middleman to stifle competition among retailers.

Indeed, Medicaid’s own report casts doubt on the notion that CVS reimbursements were sustainable for pharmacies that were its retail competitors.

And though CVS pharmacies were among those the report referred to, the same analysis found that CVS’ middleman arm charged taxpayers $197 million more for drugs than it paid pharmacies.

Walmart raised concerns about CVS’ practices by announcing last week that it was suspending most of its business with the pharmacy benefit manager, CVS Caremark.

The state then obtained all data from the $2.5 billion spent on drugs by Medicaid managed-care plans, and its analysis determined that CVS Caremark — which represents four of the five plans — and the other, OptumRx, were billing taxpayers 8.8 percent more for drugs than they were paying the pharmacists who dispensed them. That amounted to a $224 million differential. The state report said that the PBMs were charging Ohio taxpayers three to six times the standard industry rate.

As Ciaccia of the pharmacists’ association put it, “Caremark knows what they contracted to pay Kroger. Caremark knows what they contracted to pay Walmart. They have to know that when they slide an offer across the table to CVS, it’s a lot more.”

http://gatehousenews.com…

The FDA’s Drug Pricing Strategy: What’s New?

By Henry Waxman, Bill Corr, Kristi Martin, Jeremy Sharp, and Sophia Duong
The Commonwealth Fund, January 27, 2019

Since the release of President Trump’s blueprint for lowering high prescription drug prices, U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb, M.D., has continued to implement the administration’s agenda for increasing market competition and transparency.

(The word “competition” or a derivative appears 26 times in this article and its accompanying timeline.)

https://www.commonwealthfund.org…

Comment:

By Don McCanne, M.D.

I received a personal communication from a friend this week in which he informed me that the life-saving medication his teenage son is on costs $15,000 per week, and he may be on it forever. We can be thankful that the medication has been effective in returning him to a state of homeostasis with a normal lifestyle, but at that price?

It is no secret that the costs of pharmaceuticals and biologics are outrageous today. Polls confirm that the public is very concerned and wants something done about it.

The Columbus Dispatch article about CVS and its own pharmacy benefit manager middleman – Caremark – is only one example of how our reliance on competition in the marketplace to control drug prices has been a miserable failure. Yet as part of President Trump’s blueprint for lowering prescription drug prices, FDA Commissioner Scott Gottlieb wants to increase market competition – a concept supported in the article by former Democratic Congressman Henry Waxman and his colleagues (“competition” or a derivative appears 26 times in their article and illustration, 27 times if you count the references).

Competition is what we have now, and yet that exposes us to abuses like the CVS/Caremark conspiracy, and, worse, to $15,000 a week drug prices. When the private sector is failing us, that is when we need to turn to our own government for solutions. A great start would be to enact and implement a Single Payer Medicare for All program, with bulk purchasing and negotiated drug prices. If that still doesn’t work, maybe the industry needs to be threatened with nationalization.

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Dr. Margaret Flowers on ‘Rising Up With Sonali’

PNHP national board adviser Dr. Margaret Flowers appeared on “Rising Up With Sonali” on Free Speech TV and Pacifica radio stations on January 28, 2019. She discussed the status of “Medicare for All” in the 2020 presidential campaign, the strengths and weaknesses of House and Senate legislation, and the insidious nature of incremental proposals that would only deliver “Medicare for some.”

Cambridge Doctor Pushes For Single-Payer Health System

Interview with Dr. Adam Gaffney

By Deborah Becker and Walter Wuthmann
WBUR, January 25, 2019

Universal health care is an idea no longer relegated to policy journals, or Scandinavia.

It’s now a central pillar in the conversation about health care in this country — and a progressive bona fide if you’re a Democrat running for president.

Physicians for a National Health Program is a group of doctors and health professionals that advocates for moving to a single-payer health care system.

Dr. Adam Gaffney, a pulmonary specialist at the Cambridge Health Alliance and Harvard Medical School, is the newly elected president of that group.

He joined us to talk about his push for expanding Medicare for All.

Adam Gaffney, M.D., M.P.H. is president of Physicians for a National Health Program. He tweets @awgaffney.

https://www.wbur.org…

Close to half haven’t heard of ‘Medicare for All’

AmeriSpeak Spotlight on Health

NORC, University of Chicago, Poll conducted December 13-16, 2018

How much have people heard about Medicare-for-All?

46% – Not at all
40% – Some
13% – A lot
1% – Other

Who would be eligible?

51% – All Americans
23% – Age 50+
23% – No other insurance option

Would participation be mandatory or optional?

41% – Mandatory
55% – Optional

Who would be eligible to participate in Medicare-for-All?

23% – Only Americans without access to insurance
23% – Only Americans 50+
51% – All Americans

Expected impact of Medicare-for-All on various health care issues

Patient out-of-pocket costs

26% – Increase
49% – Reduce

Coverage for health care services

29% – Limit
44% – Expand

Number of people with health insurance coverage

8% – Decrease
69% – Increase

Amount U.S. spends on health care

47% – Increase
29% – Reduce

Quality of care

30% – Reduce
28% – Increase

Access to doctors and hospitals

24% – Reduce
42% – Increase

http://www.norc.org…

NORC press release:
http://www.norc.org…

Comment:

By Don McCanne, M.D.

We cannot assume that the obvious advantages of a single payer Medicare for All program will automatically sell itself. Why? In spite of considerable public discussion about Medicare for All, close to half say they haven’t heard of the concept, and many who have are confused on the specifics of the proposal.

The confusion may partly be due to the fact that several politicians have used “Medicare for All” as a label for their own proposals that are mostly merely expansions of the Affordable Care Act and are not single payer proposals. Also conservative opponents, in their attacks on single payer, frequently assign policy features that are not part of the model (e.g., the government takes away your choice of doctors and hospitals).

But that one number: 46% say they haven’t heard at all about Medicare for All. We’ve got to turn up the volume.

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Uninsured rate at four-year high

U.S. Uninsured Rate Rises to Four-Year High

By Dan Witters
GALLUP, January 23, 2019

The U.S. adult uninsured rate stood at 13.7% in the fourth quarter of 2018, according to Americans’ reports of their own health insurance coverage, its highest level since the first quarter of 2014. While still below the 18% high point recorded before implementation of the Affordable Care Act’s individual health insurance mandate in 2014, today’s level is the highest in more than four years, and well above the low point of 10.9% reached in 2016. The 2.8-percentage-point increase since that low represents a net increase of about seven million adults without health insurance.

https://news.gallup.com…

Comment:

By Don McCanne, M.D.

According to this GALLUP survey, the uninsured rate declined from 18 percent just before implementation of the Affordable Care Act down to 10.9 percent in 2016. It has since increased to the current level of 13.7 percent, a net increase of about seven million adults now without health insurance since its 2016 low.

This is the program that was enacted after an intensive political effort that began with rejection of the single payer model that would have reduced the uninsured rate to zero percent.

A majority of the nation now understands that we need to enact and implement Single Payer Medicare for All – a program in which everyone is automatically enrolled for life. Yet where are our politicians headed? The Republicans support only guaranteeing access to coverage for individuals with preexisting disorders, yet they offer no practical plan for making that happen. The Democrats campaigned on Medicare for All, yet they want to take us back down the same ACA pathway, leaving tens of millions uninsured and many millions more underinsured.

The original goal supposedly was to make health care affordable and accessible for everyone. The Affordable Care Act, even with the various proposed tweaks, cannot possibly ever get us there because of its unrectifiable design defects. In contrast, the Single Payer Medicare for All model is specifically designed to accomplish that goal, and it would actually work.

So the numbers of uninsured have recently again increased by seven million, and the politicians want more of that system? Shall we ask those seven million uninsured people what they think of it? Or do we even care? (How could anyone ask that last question? But…)

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More nuanced views of health care reform

KFF Health Tracking Poll – January 2019: The Public On Next Steps For The ACA And Proposals To Expand Coverage

By Ashley Kirzinger, Cailey Muñana, and Mollyann Brodie
Kaiser Family Foundation, January 23, 2019

This month’s KFF Health Tracking Poll continues to find majority support (driven by Democrats and independents) for the federal government doing more to help provide health insurance for more Americans. One way for lawmakers to expand coverage is by broadening the role of public programs. Nearly six in ten (56 percent) favor a national Medicare-for-all plan, but overall net favorability towards such a plan ranges as high as +45 and as low as -44 after people hear common arguments about this proposal.

Larger majorities of the public favor more incremental changes to the health care system such as a Medicare buy-in plan for adults between the ages of 50 and 64 (77 percent), a Medicaid buy-in plan for individuals who don’t receive health coverage through their employer (75 percent), and an optional program similar to Medicare for those who want it (74 percent). Both the Medicare buy-in plan and Medicaid buy-in plan also garner majority support from Republicans (69 percent and 64 percent­).

Moving forward, half of Democrats would rather see the new Democratic majority in the U.S. House of Representatives focus their efforts on improving and protecting the ACA (51 percent), while about four in ten want them to focus on passing a national Medicare-for-all plan (38 percent).

Malleability in attitudes towards national health plan and lingering confusion about possible impacts

This month’s KFF Health Tracking Poll finds the net favorability of attitudes towards a national Medicare-for-all plan can swing significantly, depending on what arguments the public hears.

Net favorability towards a national Medicare-for-all plan (measured as the share in favor minus the share opposed) starts at +14 percentage points and ranges as high as +45 percentage points when people hear the argument that this type of plan would guarantee health insurance as a right for all Americans. Net favorability is also high (+37 percentage points) when people hear that this type of plan would eliminate all premiums and reduce out-of-pocket costs. Yet, on the other side of the debate, net favorability drops as low as -44 percentage points when people hear the argument that this would lead to delays in some people getting some medical tests and treatments. Net favorability is also negative if people hear it would threaten the current Medicare program (-28 percentage points), require most Americans to pay more in taxes (-23 percentage points), or eliminate private health insurance companies (-21 percentage points).

While most Americans (77 percent) are aware they would have to pay more in taxes to cover the cost of health insurance if a national Medicare-for-all plan was put into place, there is some confusion about whether people would be able to keep their current health insurance. Most people under the age of 65 and who currently have employer-sponsored insurance say that if a national health plan was put into place, they would be able to keep their current coverage (55 percent) while about four in ten (37 percent) are aware they would not be able to keep their current coverage.

And while majorities say low-income people and people who currently don’t have health insurance would be “better off” if a national Medicare-for-all plan was put into place, there is less certainty among the public about how much it would impact them, personally. Across demographic groups, about four in ten say that if a national Medicare-for-all plan was put into place it “would not have much impact” on them.

Medicare-for-All and seniors

Overall, a larger share of the public say a Medicare-for-all plan will “not have much impact” on seniors (39 percent) or say that they would be “better off” (33 percent) than say seniors would be “worse off” (21 percent).

Democrats want Democratic lawmakers to focus on ACA rather than Medicare-for-All

Despite the recent attention on proposals to expand Medicare or Medicaid, when asked to choose Democrats would rather the new Democratic majority in the U.S. House of Representatives focus their efforts on “improving and protecting the ACA” rather than “passing a national Medicare-for-all plan.” Half (51 percent) of Democrats say House Democrats should focus on the ACA while four in ten (38 percent) say they should focus on passing a national Medicare-for-all plan. The share of Democrats who want Congress to focus on passing a national Medicare-for-all plan is down 10 percentage points from March 2018.

Partisans have different health priorities for Congress

When forced to choose the top Congressional health care priorities, the public chooses continuing the ACA’s pre-existing condition protections (21 percent) and lowering prescription drug cost (20 percent) as the most important priorities for Congress to work on. Smaller shares choose implementing a national Medicare-for-all plan (11 percent), repealing and replacing the ACA (11 percent), or protecting people from surprise medical bills (9 percent) as a top priority. One-fourth said none of these health care issues was their top priority for Congress to work on.

Continuing the ACA’s pre-existing condition protections is the top priority for Democrats (31 percent) and ranks among the top priorities for independents (24 percent) along with lowering prescription drug costs, but ranks lower among Republicans (11 percent). Similar to previous KFF Tracking Polls, repealing and replacing the ACA remains one of the top priority for Republicans (27 percent) along with prescription drug costs (20 percent).

The Role of independents in the Democratic health care debate

One of the major narratives coming out of the 2018 midterm elections was the role that health care was playing in giving Democratic candidates the advantage in close Congressional races. Consistently throughout the election cycle, KFF polling found health care as the top campaign issue for both Democratic and independent voters. While a majority of Democrats want the new Democratic majority in the U.S. House of Representatives to focus on improving and protecting the ACA, Democratic-leaning independents have more divided opinions of the future of 2010 health care law. These individuals – who tend to be younger and male – would rather Democrats in Congress focus efforts on passing a national Medicare-for-all plan (54 percent) than improving the ACA (39 percent) – which is counter to what Democrats overall report. In addition, when asked whether House Democrats owe it to their voters to begin debating proposals aimed at passing a national health plan or work on health care legislation that can be passed with a divided Congress and a Republican President, Democrats are divided (49 percent v. 44 percent) while Democratic-leaning independents prioritize House Democrats working on bipartisan health care legislation (53 percent) over debating national health plan proposals (39 percent).

https://www.kff.org…

Comment:

By Don McCanne, M.D.

Medicare for All now has more public support than ever before, but this highly credible poll reminds us that some are still confused on the policy issues, and many are swayed by rhetoric and framing of those who are supporting alternative visions of reform, especially from the neoliberal and conservative ranks.

When poll results like this are released, there is a tendency to criticize the pollsters for failing to ask the right questions and then to dismiss the results. On the contrary, we should use the perceptions of those polled to refine our own messages. The lesson is that we still have a long way to go on educating the public at large on health policies that would benefit us all – those of the Single Payer Medicare for All model.

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