By Lee Fang and Nick Surgey
The Intercept, November 20, 2018

Now that the midterms are finally over, the battle against “Medicare for All” that has been quietly waged throughout the year is poised to take center stage.

Internal strategy documents obtained by The Intercept and Documented reveal the strategy that private health care interests plan to use to influence Democratic Party messaging and stymie the momentum toward achieving universal health care coverage.

Over the summer, leading pharmaceutical, insurance, and hospital lobbyists formed the Partnership for America’s Health Care Future, an ad hoc alliance of private health interests, to curb support for expanding Medicare.

The campaign, according to one planning document, is designed to “change the conversation around Medicare for All,” then “minimize the potential for this option in health care from becoming part of a national political party’s platform in 2020.”

Behind the scenes, the group attempted to sway candidates during the midterms, encouraging several of them to focus on shoring up the Affordable Care Act instead of supporting single-payer health care.

In several competitive races, the Partnership pressed candidates to use industry-crafted talking points when speaking about health care.

Several of the candidates who agreed to embrace the Partnership’s messaging and policy ideas came up short on Election Day. But soon after Election Day results came in, the Partnership went on the offensive, informing reporters that candidates who embraced “Medicare for All” had also lost, pointing to the defeat of progressives such as Kara Eastman in Nebraska. The group also relied on research from the business-friendly Democratic think tank Third Way to argue that victorious pro-“Medicare for All” candidates couldn’t attribute their success to having supported “Medicare for All” because few Democrats explicitly mentioned the policy in their campaign advertisements.

The growing momentum for “Medicare for All” could raise expectations for the next time Democrats are in full control of power in Washington, industry groups worry. They are already pressuring conservative-leaning caucuses in the House of Representatives, such as the Blue Dogs and New Democrats Coalition, to push back against insurgent progressives’ demands.

The campaign has worked with advertising agencies to draw up a series of messages to convince select audiences. Several of the messages, categorized as “positive,” are dedicated to educating the public on more minimal reforms that do not include expanding Medicare. Other messages, categorized as “persuasion” and “aggressive,” are designed to instill fear about what could happen if “Medicare for All” passes.

In the coming weeks, the Partnership plans to ramp up a campaign designed to derail support for “Medicare for All.” The group, working with leading Democratic political consultants, will place issue advertisements to target audiences, partner with Beltway think tanks to release studies to raise concerns with the plan, and work to shape the public discourse through targeted advocacy in key congressional districts.

In one planning document circulated over the summer, the Partnership suggested a series of messages to wean Americans away from supporting single payer. The talking points emphasize that the current system provides “world-class care,” and that any move away from the Affordable Care Act would be “ripping apart our current system.”

The strategy exploits familiar themes that have long been used by business groups against new government health care programs, calling for allies to say lines such as “bureaucrats in DC have no understanding of a person’s medical situation and will be making decisions about your health care instead of doctors.”

The Partnership plans to form a speakers bureau of former Democratic elected officials who can leverage the media to make the case that expanding Medicare is bad politics and policy. The memo names former Democratic Majority Leader Tom Daschle, now a health insurance lobbyist at the law firm Baker Donelson, as one such potential surrogate.

The memo points to early success in shaping media coverage, citing several “earned media” columns such as one published in August by former Rep. Jill Long Thompson, D-Ind., which argues that Democrats should only focus on small reforms to the Affordable Care Act, and warns against wasting political capital on pursuing a “government-controlled health insurance system.”

Adam Gaffney, president-elect of Physicians for a National Health Program, a national coalition that advocates in favor of “Medicare for All,” said he is not surprised by the messaging.

“What we’re seeing is the wages of success: With single payer on the rise, it was only a matter of time before the insurance companies, big pharma, and other big-money groups came out swinging,” said Gaffney, who also serves as an instructor at Harvard Medical School.

“The smear of ‘socialized medicine’ has been used a thousand times and has lost its bite,” he added.

Influencing the 2020 Democratic Field

“We’re all focused on 2020,” Lauren Crawford Shaver, a partner at Forbes-Tate who is helping to manage the Partnership campaign, recently told the National Association of Health Underwriters in a podcast produced by the group.

Shaver, a former top staffer for the Hillary Clinton presidential campaign, explained to the group that she is working to peel support away from the “Medicare for All” bill sponsored by Sen. Bernie Sanders, I-Vt. The Sanders bill is currently sponsored by several rumored 2020 Democratic presidential candidates, including Sens. Elizabeth Warren, D-Mass.; Kamala Harris, D-Calif.; and Kirsten Gillibrand, D-N.Y.

“The No. 1 thing we need to focus on is that there are a lot of likely candidates that currently support the Senate bill,” said Shaver. “We need to make sure we educate the public, we educate both parties, and we educate all the campaigns about both the policy and political challenges.”

Shaver encouraged health care companies concerned about the growing popularity of “Medicare for All” to mobilize opposition among clients, customers, and employees. Industry groups will likely have workers or customers residing in key districts who can be tapped to influence wavering lawmakers on Capitol Hill.

The Partnership plans to “take stories of how these proposals would directly impact your clients and the constituents of the policymakers who are voting for or against these proposals,” Shaver said.

AHIP, the insurance trade group behind the 2008 plan, is also a sponsor of the Partnership’s 2020 campaign, along with the Federation of American Hospitals, Pharmaceutical Research and Manufacturers of America, the Blue Cross Blue Shield Association, the Biotechnology Innovation Organization, and the American Medical Association.

Despite a pledge by many Democratic candidates to eschew corporate PAC donations, health care lobbyists have funneled cash to many incoming lawmakers through the New Democrats PAC, the Blue Dog PAC, and other centrist committees. Unsurprisingly, the centrist New Democrats Coalition, the caucus of business-friendly centrist Democrats, has worked to depress momentum for “Medicare for All,” reprising the role centrist Democrats played in killing the public option during the Obama administration.

Immediately following the midterm elections this month, the Washington Post published a column by Third Way warning that “Medicare for All” “failed the Hippocratic Oath” because opposition to the plan helped Republican candidates, thus causing “harm” to the long-term health interests of voters.

But advocates for “Medicare for All” are feeling optimistic.

“In terms of tactics, it sounds like they will just be updating the same lines they used in the 1990s to sideline reform efforts and in the ACA fight to keep single-payer health care off the table,” said Eagan Kemp, a health care policy advocate with Public Citizen. “The Partnership for America’s Health Care Future would be more accurately titled the ‘Partnership for Profiting Off America’s Health Care.’”

Private health care interests will certainly have much more money, media attention, and political resources with which to campaign. Advocates, however, are hoping Americans see past the public relations smokescreen and support health care as a human right.

“There is no brand loyalty to insurance companies, which are rightly seen as parasitic,” Gaffney, the PNHP leader, said.

“Once single payer is widely understood as a program that covers everyone, that doesn’t impose copays and deductibles, that has more comprehensive benefits than existing plans, and that doesn’t employ restrictive insurance ‘networks,’ support will only grow,” he added.

https://theintercept.com…

Comment:

By Don McCanne, M.D.

Man your battle stations. The messaging war has begun. It’s our message of “lifetime affordable health care for everyone” versus their message of “don’t take my private insurance away.” Let me keep my high premiums, high deductibles, restrictive provider networks, and uncertainty of coverage related to my employment or lack thereof.

It seems like the battle should be no contest. The policies behind our message should clearly prevail: health care for everyone versus perpetuation of the perversities of the private insurance industry. But the hundreds of millions of dollars the opponents of Medicare for All will spend can purchase some very slick government-can’t-do-anything-right messages, ignoring the fact that health care delivery would be predominantly in the private sector.

Winning the message war means that our message must be out there. We have work to do.

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

By Louise Marie Roth
The Hill, November 16, 2018

I was in Canada this past June when I broke my wrist and had to go to the ER. They were fast and professional and the bill was much lower than what American ERs charge you just for walking in the door.

Under single-payer health care, you can see the savings on administrative costs with your own eyes. When you walk into physicians’ offices in Canada, they have a small administrative staff, often consisting of one person behind the counter.

They don’t need to employ extra people to fill out dozens of different forms for various insurers with multiple plans, all with different copays, deductibles and coverage. There are no copays or deductibles and everyone knows the rules for what is covered and how to bill the provincial insurance plan. They don’t need staff to spend hours fighting with insurers about which services or medications they will cover or how much they will pay.

Meanwhile, the U.S. pays more than twice as much per capita for health care ($10,348 in 2016) than Canada ($4,752), Australia ($4,708), or the UK ($4,192), but has lower life expectancy and higher infant and maternal mortality rates even compared to some less developed countries.

As someone who grew up in Canada and moved to the United States more than two decades ago, I have seen firsthand that American health care is expensive, unequal and inhumane – and that there is a better way that costs less, is more equitable and covers all pre-existing conditions. It’s time to solve this problem with single-payer health insurance, so that everyone gets care regardless of their ability to pay.

In this year’s midterm elections, health care was a top issue for American voters and nearly 60 percent favored Medicare-for-all. Now that the Democratic Party is poised to take over the House, it’s time to move forward. The most likely next speaker, Nancy Pelosi, said that all health-care options are “on the table,” and 123 Democratic representatives in the House are co-sponsors of Medicare for All legislation.

Even though the ACA was an inferior solution compared to single-payer, the result is that a growing number of Americans once again lack adequate health insurance.

Of course, Republicans, including President Trump in a recent USA TODAY oped found to have many fact errors, are fighting Medicare for All by calling it “socialism.” But when I ask my students if they would prefer a capitalist fire department, where firefighters only put out a fire if you have up-to-date private insurance or can pay the bill, they think that a taxpayer-funded socialized fire department is a much better idea. They do, however, worry that single-payer health care would not work in the U.S. because of its larger population. They usually don’t know that the U.S. already has socialized medicine in the form of Medicare and Medicaid, which covers more than 30 percent of the population. If federal and state governments can cover more than 30 percent, then why can’t they simplify the whole system and cover everyone?

Single-payer is simply the most efficient and most humane way to cover everyone, including those with pre-existing conditions, which many people have through no fault of their own.

My oldest son had a vascular malformation in his brain and needed brain surgery when he was six. Fortunately he is doing fine now but, as the federal government removes more and more of the protections under the ACA, I wonder if he will be insurable when he is no longer covered under my insurance. Why should he be unable to get insurance or have to pay exorbitant premiums when he did nothing to cause his medical history? Luckily he has an anchor mom – he can always move to Canada. Not everyone has that option.

Dr. Louise Marie Roth is an associate professor of sociology at the University of Arizona and a Public Voices Fellow with The OpEd Project. She teaches medical sociology and is writing a book about maternity care in the United States.

https://thehill.com…

Comment:

By Don McCanne, M.D.

The author is an academic sociologist from Canada who lives and teaches in the United States. Her lightly edited op-ed is reproduced here since it represents a highly credible, expert view on why the United States should enact and implement a Single Payer Medicare for All system much like Canada’s rather than perpetuate our overpriced and underperforming health care financing system based on ACA.

Would it be that we were all as intelligent and discerning as her, we would make the change now.

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

By Steffie Woolhandler and David Himmelstein
Health Affairs Blog, November 19, 2018

Single-payer reform is in the news — and in the U.S. House and Senate. One hundred twenty-three Congresspeople have signed on as co-sponsors of H.R. 676, the single-payer legislation in House of Representatives, and 16 Senators have formally endorsed S.1804, the Senate version. (Disclosure: H.R. 676 was closely modeled on the Physicians for a National Health Program reform proposal published in JAMA, for which we served as lead authors).

While both bills would cover all Americans under a single, tax-funded insurance program, they prescribe different provider payment strategies. The Senate version largely adopts Medicare’s current payment mechanisms; the House bill’s is modeled on Canada’s single-payer program, also called “Medicare,” which pays hospitals global budgets (much as a fire department is paid in the U.S.) and sharply constrains opportunities for investor-owned care.

These differences haven’t attracted much attention from politicians or the press, and few patients are aware of, or deeply concerned about them. That’s not surprising, since both bills address the lay public’s most pressing payment-related concern: they would drastically shrink (S.1804) or completely eliminate (H.R. 676) out-of-pocket payments for needed care.

But these divergent payment strategies would create very different financial incentives for providers, shaping the culture of medicine and the financial viability of a single-payer reform. The Senate version would, like Medicare, pay hospitals and other institutional providers on a per-patient basis, intermixing payments for current operating expenses with funding for future capital investments and profits. As at present, hospitals’ success, and even survival, would depend on generating profits (“surpluses” in non-profit facilities). Hospitals with a favorable bottom line could invest and add new buildings and programs, while unprofitable ones couldn’t modernize or expand, risking a downward spiral toward takeover or closure.

It’s this profit imperative that drives hospitals’ financial gaming, e.g. upcoding, and concentration on the most lucrative services, such as elective cardiac and orthopedic services, rather than money losers like mental health. This payment mechanism (and S.1804 as a whole) also leaves the door open to investor-owned providers.

In contrast, the House bill would abolish per-patient billing by hospitals and other institutions, and its global budget payments would cover only operating costs; hospitals would be prohibited from retaining surpluses, and capital investments would be funded through separate government grants. The bill would also explicitly proscribe payments to investor-owned facilities, and it calls for their conversion to non-profit status financed by issuing bonds.

Implications For The Financial Viability Of Reform

Expanding and improving coverage, as both S.1804 and H.R. 676 would do, is expected to increase care utilization and hence clinical costs. Yet most analysts foresee savings on billing and administration (as well as on prescription drugs prices) that would offset these increases. Both bills would replace the current welter of private plans—with average overhead of about 12 percent of premiums—with a single public insurer whose overhead would likely be similar to the traditional Medicare program’s 2 percent, or the 1.6 percent in Canadian Medicare (National Health Expenditure Trends, 1975 to 2017: Data Tables — Series A).

But insurance overhead accounts for only 44 percent of the administrative savings that could be realized under a single-payer program; the rest comes from streamlining providers’ administrative work. For instance, U.S. hospitals’ administrative costs average 25.3 percent of their total revenues, versus only 12 percent in single-payer systems like Canada’s and Scotland’s that pay global operating budgets and minimize rewards for financial gaming.

Medicare’s payment approach requires hospitals to bill for and justify each hospitalization, a requirement that persists in value-based payment schemes like ACOs and would continue under S.1804. Hence, hospitals would have to maintain much of their current wasteful billing, documentation, and internal cost-tracking systems. Retaining the profit imperative would also continue to reward hospitals for financial gaming and tailoring services to profitability, driving up both administrative costs and wasteful spending on low-value care.

Instead of bundled payment arrangements tied to individual patients, the House version would substitute an institution-wide bundled payment, i.e., a global budget covering all operating costs. As noted above, that approach has streamlined hospital administration in other nations, which have been more effective than the United States at restraining overall costs. In contrast, ACOs have increased providers’ administrative costs by about $200 per patient annually, and have generated trivial or no savings after accounting for Medicare’s “shared savings” bonus payments. Similarly, Medicare’s (and other payers’) pay-for-performance initiatives impose substantial administrative costs on providers, with no evidence that they’ve improved patients’ outcomes in any setting.

In sum, the financial viability of a single-payer reform turns on cutting administrative costs and minimizing incentives for financial gaming. Maintaining Medicare’s current payment strategies, as under S.1804, would be substantially costlier than adopting the non-profit global-budgeting strategy used in several other nations.

Implications For Medical Culture

Differences in payment strategies also have implications for the work lives of doctors and other clinical personnel. Medicare’s turn to ACOs effectively forces providers to become insurers who bear the risk of their patients’ medical expenses, even those incurred in other venues. This strategy virtually banished small independent providers, triggering a wave of mergers and acquisitions. Community hospitals have been gobbled up, and a rapidly growing share of doctors have become employees.

The profit imperative imposed on hospitals and physician practices by Medicare’s payment incentives filters down to doctors. It manifests as morale-sapping productivity pressures; redundant documentation requirements; time wasted on mandatory upcoding classes; and the sense that clinical priorities have become subservient to financial ones. The length of doctors’ notes in EPIC’s electronic health record—larded with clinically useless templated and copied material, and four times as long in the U.S. as in other nations—gives one indication of how payment rules translate into burnout.

The Senate’s version risks maintaining these ACO-driven incentives, and even risks the reemergence of private insurance under the guise of vertically integrated, risk-bearing corporate ACOs.

The Future Of Investor-Owned Care

The House single-payer bill envisions a buyout of the investor-owned facilities needed to provide care under the single-payer system, while the Senate version would leave them in current hands.

Proponents of the House approach acknowledge that many non-profit health care organizations have drifted far from their charitable roots. However, they cite evidence that for-profit providers (including hospitals, dialysis centers, nursing homes, home care agencies, and hospices) provide inferior care at inflated prices (see, for instance here, here, here, here and here – use URL below to access live hyperlinks) and are more likely to bend care to profitability (see here, here, here and here). For-profit hospitals spend less on nurses and other clinical aspects of care, but more on administration and financial management; for-profit chains have often been cited for questionable business practices and have been repeatedly implicated in large scale fraud (see here, here, here and here).

According to CMS, for-profit nursing homes are cited for quality deficiencies 28 percent more often than non-profits, and for deficiencies that place residents in immediate jeopardy 53 percent more frequently. Investor-owned home care agencies cost Medicare $752 more per patient than non-profit agencies, while providing worse care.

Yet even some who would prefer to exclude investor-owned facilities from a single-payer system worry about the cost of a buyout. In conversations with Congressional aides, some have suggested that these costs could amount to $1 trillion or more, although none could cite a source for that figure. While it’s not clear exactly how to value the assets of investor-owned medical facilities, estimates of their current capital assets and of their stock market valuations provide some guidance.

In the detailed cost reports filed with Medicare covering fiscal year 2016 (the most recent year for which virtually all reports are available), all for-profit hospitals taken together reported total capital assets of $97.845 billion at the start of the year, and additional purchases totaling $7.453 billion (Himmelstein & Woolhandler, unpublished analysis of hospital cost reports). So the total capital stock of all for-profit hospitals – including not just acute care hospitals, but most other inpatient facilities besides stand-alone nursing homes – totaled $105.298 billion. (The comparable figure for non-profits is $718.628 billion).

Since most investor-owned providers also carry debt, it’s not surprising that the capital asset figures are considerably higher than the stock market value of the firms that own the facilities. As indicated in Exhibit 1 (use URL below to access exhibit), the market valuation of the five publicly-traded firms that account for the vast majority of for-profit hospitals totals $50.071 billion. While data on the market value of the (smaller) privately held for-profit hospital chains is not available, the value of the larger chains, and past sale prices for three of the privately-held firms, suggests that they’d add only several billion to the total.

Similarly, as Exhibit 1 shows, the total value of shares in publicly traded nursing home firms, rehab, dialysis, and home care and hospice providers is relatively modest: less than $50 billion. And these valuations (which fluctuate from day-to-day) include aspects of the businesses that would not be included in a buyout, e.g. the value of real estate devoted to senior living communities, or the roughly 15 percent of DaVita’s business that’s unrelated to dialysis and the 20 percent of Fresenius’ revenues attributable to sales of products such as dialysis supplies.

Overall, the fair market value of investor-owned facilities covered by a buyout, whether assessed by capital stock or stock prices, seems unlikely to exceed $150 billion. Purchasing these assets using Treasury Bill financing over 15 years at the current interest rate of 3 percent would cost about $12.75 billion annually, equivalent to about 1 percent of annual hospital costs. Moreover, even in the short term, some or all of these costs would be offset by savings on profits, which totaled more than $6 billion in 2017 for just three of these firms (HCA, DaVita and Fresenius).

Bottom line: A buyout of investor-owned facilities is affordable. Indeed, it might well lower costs.

Looking Forward

In the short run, the divergence between the House and Senate versions of single-payer reform is of little consequence. No bill will be enacted under the current administration. Yet with support for single payer blossoming among Democratic leaders and the public, the prospect of legislative action is increasing, and with it the push for convergence. Indeed, Pramila Jayapal, the leader of the House Single-Payer Caucus, has indicated her intent to move the two bills closer together.

In aligning the bills, House members should, in our view, adopt some aspects of the Senate’s bill, notably its repeal of the Hyde Amendment that forbids using federal funds for abortion, as well as its greater specificity. But Senators should adopt the House bill’s payment strategies and commitment to non-profit ownership of health care providers.

https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

This Health Affairs Blog post by PNHP cofounders Steffie Woolhandler and David Himmelstein explains the differences between the House and Senate versions of Single-Payer Medicare for All legislation, and why it is important that they be aligned in a manner that gets the policy right.

Because of the importance of the topic, the article is presented in its entirety, but the electronic version accessible at the Health Affairs website also provides important hyperlinks plus an exhibit itemizing market value of investor-owned health care providers. You may want to read the article as posted on the Health Affairs website (URL above).

Besides covering some important single-payer principles, this article is particularly helpful in that it explains how a buyout of investor-owned facilities is affordable and, in the long run, would actually lower costs. This should alleviate the concerns of those who say that we cannot afford to convert to a non-profit health delivery system that eliminates passive investors.

The process of aligning the bills and converting them into legislative language is already underway and is expected to continue into the next session of Congress, which is almost upon us. So today’s message could not be more timely.

Those members of Congress who were elected after campaigning in support of Medicare for All need to understand that voters were supporting Single-Payer Medicare for All and not simply supporting the addition of a public option to our existing fragmented, dysfunctional, overpriced, and underperforming system, even if the public option carried a Medicare label.

But it is absolutely imperative that we communicate in a dignified and respectful style; the passion for our cause must be used to fuel a very positive message of truly attainable health care for all. The principles presented in this blog will provide the message that we need to convey.

This article should be shared widely to be used in our advocacy work.

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