By Hannah Holzer
The Sacramento Bee, August 15, 2018

Changes at California’s pension giant will force more than 14,000 CalPERS members and their dependents in the Sacramento region and Bay Area to find a new health plan over the coming year.

The California Public Employees’ Retirement System recently negotiated its lowest premium increases in the past 21 years, which will mean lowered health premiums for 800,000 members in 2019.

As a result of the changes, CalPERS will part ways with two major providers — Health Net and Blue Shield — in some areas.

“The medical groups and hospitals members will have access to could change depending on their choice of health plan,” (CalPERS spokeswoman Stephanie) Buck said. “Members can call the doctor’s office and ask if they are affiliated with the health plan and the hospital they prefer to use. They may also contact the health plans directly.”

“The primary differences between most of the HMO (health maintenance organization) plans offered through CalPERS is a plan’s network of providers.”

“Blue Shield was not the only plan that struggled with the cost of care reflecting the price within the Bay Area region,” Buck said. “UnitedHealthcare also exited the region for contracting agencies and schools, and some other plans in the region had premium increases.” Contracting agencies are the employers that go through CalPERS for their health plans.

“We want to keep our insurance and our doctors. …We have not received any explanations of any reasons for this harsh decision which endangers our health,” said David Lerman, who currently has insurance coverage with Blue Shield through CalPERS.

“CalPERS health plans contract with a network of providers, and each year CalPERS and its contracted health plans re-evaluate these networks,” Buck said. “Depending on a variety of factors, not least of which is cost, providers ask that their coverage areas change for certain plans.”

https://www.sacbee.com…

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Comment:

By Don McCanne, M.D.

Think back twenty years ago and try to remember what health insurance coverage you had then. Unless you are over 85 and on Medicare the chances are very great that you do not have the same coverage now. For many reasons the market for private health plans, whether employer-sponsored or individual, continually changes.

The California Public Employees’ Retirement System (CalPERS), as the second largest system in the nation (next to the Federal Employees Health Benefit Program), has one of the most stable health care coverage programs in the U.S., but not even CalPERS can guarantee that you can keep your same coverage from one year to the next. Since most plans today use provider networks, and the composition of the networks varies from one plan to the next, that means that you may have to change your physicians and other health care professionals, and maybe even your hospitals, whenever your insurance changes.

(It should be mentioned that California has a “continuity of care” provision in which, in certain specific situations, a patient may continue with the same doctor or hospital for a limited period of time, making the transition less disruptive.)

Median employment tenure is now about four years (BLS), so, for that reason alone, change in insurance coverage is frequent. Besides changing jobs, other reasons for changing or losing coverage can include your employer changing plans offered, loss of employment, inability to afford coverage, retirement, income above the threshold for public coverage through Medicaid, loss of eligibility for COBRA, and the like.

The point is that since coverage is not stable, insurer designated networks are not stable either, and thus choice of physicians and other providers may be sacrificed merely because we insist on perpetuating our highly fragmented system of financing health care.

If we had a single health program that included everyone permanently, such as an improved version of our traditional Medicare program (without the private Medicare Advantage plans and their networks) then each of us would have our choice of physicians and hospitals – for life.

It seems foolish that we give up lifetime freedom of choice of our physicians and hospitals just to keep the insurance that we have only temporarily (changing an average of every four years) when virtually all of us look forward to going on Medicare permanently at age 65. Why should only our seniors and those with long term disabilities and chronic renal disease be treated so well? Why not all of us?

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By Jonathan Chait
New York Magazine, Daily Intelligencer, August 16, 2018

The American health care system developed, like a deformed tree, around employer-sponsored insurance as its core feature. This has made it extremely hard to build a single, simple universal system, because it would require moving people out of health care they have into something new, and require turning their premium contributions into taxes.

If you could sit down face to face with every American and calmly talk them through the numbers step by step, you could probably convince them to feeling comfortable giving up employer-sponsored insurance. Since you can’t do that, the only option is passing a bill in a hysterical atmosphere where the insurance industry and conservatives bombard the public with warnings of massive middle-class tax hikes and tens of millions of Americans losing their current insurance to get moved onto a government plan.

If we didn’t have an employer-based system already, it might be politically feasible to build a single-payer system. But the politics of uprooting that deformed tree are extremely imposing. You can read a history of the struggle for universal health care, like Jonathan Cohn’s Sick, or Paul Starr’s Remedy and Reaction, to understand why most liberals (and Democratic elites) believe the growth of the employer system has tragically blocked the political path to single payer.

Those conclusions, built up over decades of experience and polling data, inform the mainstream liberal view of health care. Since it’s just too hard to convince people they’ll be better off paying taxes instead of premiums, and exchanging their current insurance for a government health care plan, the path to universal coverages lies in working around the existing system. Paul Krugman made this case last year, and so did I.

To quote the column of mine… “Yes, in an imaginary, rational world, people could be reassured that Medicare will be as good as what they have, and the taxes will merely replace the premiums they’re already paying. In reality, people are deeply loss-averse and distrustful of politicians.” Krugman doesn’t deny that either. “You’d have to convince most of these people both that they would save more in premiums than they pay in additional taxes, and that their new coverage would be just as good as the old,” he writes… “This might in fact be true, but it would be one heck of a hard sell.”

It’s possible, of course, that this political analysis is wrong, or that it will change one day.

If single-payer advocates can come up with a way to get around the political obstacles in the way of single payer, they should say what they are. (I have seen many such efforts, though none have struck me as persuasive.) More to the point, you’re never going to enact single payer unless you can address the political obstacles.

http://nymag.com…

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Comment:

By Don McCanne, M.D.

Jonathan Chait is correct. The benefits of a well designed, single payer, improved Medicare for all are not in dispute. It is not the policies that are a problem, but rather it is the political obstacles that have prevented us from enacting and implementing such a system.

We are moving again into a debate on the left – the progressives supporting a bona fide single payer Medicare for all system, and the centrists expropriating the Medicare for all rhetoric to support a public option with a Medicare label. The ideologues on the right don’t have to do anything. The left will self-destruct thereby confirming that Chait’s point is correct – the political obstacles are great.

An important point here is that the policy message must remain intact. You do not discard essential policy positions as you sit down to negotiate a compromise, such as supporting the incremental step of enacting a public option with a Medicare label. We did that before.

Although the single payer purists were ejected from the process, the center-left supported a public option, but then in negotiations allowed it to be transformed from a strong public model, as described by Jacob Hacker, into a very weak model even stripped of some of the beneficial features of private commercial insurance just to be sure that it would not be a competitive threat in the private market. Even that was too much, and so the emasculated public option was abandoned. That’s what happens when you compromise on policy.

Incremental steps merely tweak our dysfunctional, inequitable, unaffordable, administratively overburdened system – perpetuating most of the defects that cry out for reform. We basically have the single payer policy right. We do not want to negotiate that away as the center-left did last time.

Although the barriers are political, it is a mistake to make them partisan. That’s obvious when you look at the obstructionism of the Republicans who for years demanded that we replace the Affordable Care Act with their own model that it turns out never really existed. It definitely would be a mistake, as mentioned above, for the Democrats to move forward now with this intra-party divide on single payer Medicare for all versus a Medicare public option for some.

The right understands the well designed single payer model. The recent Mercatus report is an example, even if the single payer concept was modified to try to discredit the concept. They still showed that everyone would be covered with a $2 trillion savings over a decade (though the results would be much more impressive had they accurately analyzed a model such as PNHP’s). Also, in a recent Quote of the Day, two libertarians in separate reports indicated that they too understand the benefits of the single payer model. So we don’t want to change policy, and, on the politics, we want to end partisanship and start communicating better.

But to the really important point in Chait’s article, he says that we are not persuasive in our suggestions on how to get around the political obstacles in the way of single payer. He has a point since we currently do not have a single payer system in spite of a quarter of a century of trying. But what we don’t want to do is to walk away because the political barriers are too great, thereby making that a self-fulfilling prophecy (Chait and Krugman, take note). So how do we get around those barriers?

First, as Chait indicates, is eduction. We must be unrelenting in getting out the word on just what an improved Medicare is all about. As the understanding of the concept increases, coalition and grassroots organizing must be utilized to help spread the word. Polling indicates that these efforts have been effective, but the process is very slow and laborious.

Chait, Krugman and others have acknowledged the clear benefits of the single payer model while they have become somewhat dismissive because of the political challenges. Rather than an expression of pessimism on their part, it seems to me that they are expressing realism with their understanding of how difficult the process is. We certainly understand that as well, as we have lived with this all these years.

Education. Coalitions. Activism. Grassroots organizing. These activities in all of their permutations. Be there and do it. Maybe Chait doesn’t think this is persuasive, but it is what we have, and it can work as those in the civil rights movement have shown us (and Social Security, and Medicare, and the end of the Vietnam war, and so on). We must keep on. As FDR said, “make me do it.”

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By Aparna Higgins, Mark McClellan
Health Affairs Blog. August 15, 2018

The secretary of the Department of Health and Human Services (HHS) recently highlighted value-based transformation as one of the department’s top four priorities, with an emphasis on “putting the consumer in charge, letting them determine value.” While definitions of value may vary based on beneficiary preferences, objective, reliable, and meaningful quality and cost measures are important components of individuals’ and health care providers’ assessment of value. However, obtaining such measures of value in practice has proven challenging. To address concerns with the usefulness of and burden of implementing the quality measures currently in use, the Centers for Medicare and Medicaid Services (CMS) launched its Meaningful Measures initiative. Its first task is to review the extent to which existing quality measures are fulfilling the needs of consumers and providers and identifying priority gaps.

The success of APMs and patient engagement in care more generally is inextricably linked to the quality of the measures that are used in these APMs, and the burden versus benefit of collecting these measures. As CMS seeks to further evolve payment models, it is important for policy makers to consider what kinds of measures we would want to invent that can then be tied to a set of alternative payments. The approach presented in this blog post can serve as a starting point for a dialogue on this topic. Many of the concepts presented here need further discussion, refinement, and development. The Meaningful Measures initiative can provide a platform for such discussion and help launch a re-engineering of measures and measurement.

https://www.healthaffairs.org…

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Assessing the Medicare Advantage Star Ratings

By Dan Jamieson, Monisha Machado-Pereira, Stephanie Carlton, and Cara Repasky
McKinsey & Company, July 2018

Every October since 2009, the Centers for Medicare and Medicaid Services (CMS) has released comprehensive data on Medicare Advantage (MA) health plan performance through its Star Ratings program. The program’s goals are to incentivize health insurers to improve their MA plans and encourage consumers to enroll in high-quality plans. To investigate whether these goals are being met, we analyzed CMS’s data for 2018 and previous years.

On average, the plans’ scores have risen substantially, both overall and on the 22 individual quality measures that have been used consistently since the program’s inception.

The overall scores are based on the scores assigned to specific measures, many of which have been modified since the program’s inception. However, 22 of the measures have been used consistently since 2009. (We call this set the consistent measures.) After calculating the enrollment-weighted average scores for each of the consistent measures, we found that all but two have risen over time.

From the table of measures included in all Star Ratings years:

Improving or maintaining physical health

3.4 – Weighted-average Star Rating, 2009

2.8 – Weighted-average Star Rating, 2018

https://www.mckinsey.com…

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Comment:

By Don McCanne, M.D.

These days it seems that the policy community is deeply involved in issues related to quality, accountability, incentives, and the such, through value-based alternative payment models such as accountable care organizations or systems such as Medicare Advantage plans. Is optimal care of the patient being lost in all of this?

Recently there has been some celebration of the success of the Star Ratings used for the private Medicare Advantage plans, supposedly showing that quality is improving. If you look at the McKinsey report, you will find the scores for 22 quality measures used during the last decade. The plan providers have been told repeatedly what will be measured; the measurements were taken, and the Star Ratings were assigned. It should be no surprise that the scores improved. It’s not even an open-book test; it’s a one-page cheat sheet with all the answers.

What is alarming is that the most important score – the one for “improving or maintaining physical health” – deteriorated! While the providers have been busy making sure that they scored well, the patients have been neglected (as anyone who has watched their health care professional spend their contact time staring at the computer can attest to).

Yet the governmental and private members of the policy community plow on with nebulous goals of imposing accountability and quality through alternative payment models such as accountable care organizations. But look at the hope for the future as described by Aparna Higgins and Mark McClellan:

“It is important for policy makers to consider what kinds of measures we would want to invent that can then be tied to a set of alternative payments”… though “Many of the concepts presented here need further discussion, refinement, and development.”

We’re moving forward with policies that we haven’t even invented yet?

My twin and I started in private practice the same month that Medicare and Medicaid were implemented, joining our father and older brother. To them it was almost like a miraculous change. We could just take care of the patients and not worry about other issues such as how payment would be made.

Alas, it didn’t last. Insurers were granted the right to contract with physicians. Managed care moved in with a vengeance. Medicare began its march to privatization with the opening of the Medicare Advantage market. And now we face MIPS, APMs, ACOs, and, according to Higgins and McClellan, whatever else the policy makers “would want to invent” even if lacking in “further discussion, refinement, and development.”

Let’s get back to the original precepts of Medicare: removing financial barriers to essential health care services; place the patients first. Medicare does have some problems that we can easily fix, so let’s do that, include everyone, and then move forward with health care that actually will maintain and improve physical health. The McKinsey report shows that we’re not doing that now. But we don’t need to reinvent the traditional Medicare program, we just need to fix it.

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By Billy Wynne
Health Affairs Blog, August 15, 2018

Now that a report funded by the Koch Brothers™ (do they have a logo?) accidentally fueled the single payer movement by demonstrating a national coverage system would be cheaper than the irrational hodgepodge we have now, it’s important to continue to weigh the evidence regarding which approach to universal coverage would be optimal.

The focal point of the single payer cause is Senator Bernie Sanders’ “Medicare for All” proposal. (Spoiler alert: it’s not actually Medicare. More on that in a minute). While I happen to believe the single payer crowd’s intentions are in the right place, I have to wonder, for starters, whether the arguably most conservative developed nation will adopt one of the most liberal, socialized approaches to health care coverage.

Instead, I continue to believe that a regime that truly leverages the existing Medicare program in a way that minimizes disruption and maximizes market forces will produce the cheapest, highest quality, most sustainable, and – to use a loaded term – American result.

Sanders Plan 101

Perhaps the most interesting thing about the Sanders Medicare for All plan, scooped above, is that it would not actually extend Medicare to everyone. To the contrary, section 901 of his bill would halt all Medicare benefits, effectively repealing the program in its entirety.

Instead, his proposal would institute a wholly new program, with different benefit design and brand new administrative infrastructure. For example, a new list of essential benefits is outlined in the legislation, the elaborate Medicare cost-sharing scheme would be replaced with first dollar coverage, and the prescription drug program would be replaced with a national formulary.

Medicare Advantage 101

Instead, what if we actually did just expand the stable, beloved Medicare program to include everyone, with emphasis on competition between the traditional benefit and increasingly popular Medicare Advantage plans? In a prior post, I took a closer look at the basic Medicare benefit design. Here, I’d like to explain how the Medicare Advantage (MA), or Part C, program works and what it could offer to a national coverage regime.

MA carriers are required to cover all traditional Medicare benefits (Parts A and B) and offer at least one plan that includes an accompanying prescription drug (Part D) component.

A key strategy that these plans use to reduce costs, which is not deployed in the traditional Medicare program, is limited provider networks. As explained in a prior post, this function lies at the core of why health plans can continue to play an important role in our system.

In 2017, MA plan payments were, on average, equal to the costs of delivering the traditional Medicare benefit.

Unlike traditional Medicare, MA plans are required to cap annual enrollee out of pocket spending on outpatient services at $6700. Using those rebates described above, 50 percent of plans offered coverage that caps that liability at below $5000 in 2017. Also, about half of plans were able to eliminate the Part D deductible altogether.

In Other Words…

I don’t think we need a wholly new coverage regime that upends 20 percent of our economy and, with its centralization of decision-making within the federal government, will never earn the broad support necessary to pass, much less make it sustainable.

After the ACA, I think we’re weary of conjuring new coverage regimes from whole cloth. We have plenty in this country already. Let’s pick the one that has proven itself for decades and increasingly leverages competition between commercial carriers and a government administered option to deliver high-value choices to its consumers. In other words: Medicare.

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Health Affairs Comment:

By Don McCanne, M.D.

Which proposal is actual Medicare, or, for that matter, which is an “American” result? An improved version of the traditional Medicare program expanded to include everyone, or an expanded market of private Medicare Advantage health plans? Instead of diverting this into a rhetorical debate, we should look at which policies applied to nearly one-fifth of our economy would serve us all best.

Although the traditional Medicare program grants the individual the right to choose their health care professionals and institutions – a right that private Medicare Advantage plans restrict by use of provider networks – out-of-pocket expenses are still too high, especially considering the lack of a cap on those expenses.

Private Medicare Advantage plans pay physicians at the same rates as traditional Medicare – much lower than private commercial insurance rates – but they did not achieve this through competition in the marketplace; it was through government fiat – government administered pricing in the private sector. Not only are payment rates lower, but the cap was enacted only for private plans and not for the traditional Medicare program.

Since the out-of-pocket costs are too high, those in the traditional Medicare program require supplemental coverage through retiree plans, dual Medicaid coverage, or they must turn to overpriced Medigap plans which are the main competition for the Medicare Advantage plans. It is the lower premiums plus lower out-of-pocket costs plus a few expanded benefits that the Medicare Advantage plans can offer that has resulted in their popularity. In spite of this advantage, two-thirds still enroll in the traditional Medicare even though it may cost them more (unfairly so since the government gives this advantage to the private plans while denying it to the traditional Medicare program – as part of an ongoing effort to privatize Medicare).

Suppose Congress made the premiums and cost sharing equivalent in the two programs, which of them would be in a better position to manage our health care financing? It is well known that the traditional program has much lower administrative costs (under 3%) thus more of the funds go to health care. But what is not commonly realized is that “Medicare Advantage insurer revenues are 30 percent higher than their healthcare spending” (NBER No. 23090). 30 percent! The taxpayers are getting a terrible deal from the private Medicare Advantage insurers.

There are, of course, many other advantages to a single payer, improved Medicare for all such as true universality, savings from administrative efficiency, improved resource allocation, and an equitable method of progressive financing that removes financial barriers to care while making health care affordable for all.

That rhetoric about an American result? Improving the traditional Medicare program that is still revered by a majority of Americans, or disrupting the system by turning our public funds over to the private insurance industry profiteers? Which America do we really want?

https://www.healthaffairs.org…

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By Larisa Antonisse and Rachel Garfield
Kaiser Family Foundation, August 7, 2018

Summary

A central question in the current debate over work requirements in Medicaid is whether such policies promote health and are therefore within the goals of the Medicaid program. Work requirements in welfare programs in the past have had different goals of strengthening self-esteem and providing a ladder to economic progress, versus improving health. This brief examines literature on the relationship between work and health and analyzes the implications of this research in the context of Medicaid work requirements. We review literature cited in policy documents, as well as additional studies identified through a search of academic papers and policy evaluation reports, focusing primarily on systematic reviews and meta-analyses. Key findings include the following:

Being in poor health is associated with increased risk of job loss, while access to affordable health insurance has a positive effect on people’s ability to obtain and maintain employment.

There is limited evidence on the effect of employment on health, with some studies showing a positive effect of work on health yet others showing no relationship or isolated effects. There is strong evidence of an association between unemployment and poorer health outcomes, but authors caution against using these findings to infer that the opposite relationship (work causing improved health) exists. While unemployment is almost universally a negative experience and thus linked to poor outcomes, especially poor mental health outcomes, employment may be positive or negative, depending on the nature of the job (e.g., stability, stress, hours, pay, etc.). Further, most studies note major limitations in our ability to draw broad conclusions on health and work, including:

• Job availability and quality are important modifiers in how work affects health; transition from unemployment to poor quality or unstable employment options can be detrimental to health.
• Selection bias in the research (e.g., healthy people being more likely to work) and other methodological limitations restrict the ability to determine a causal work-health relationship.

Studies note several caveats to and implications of the research on work and health that are particularly relevant to work requirements in Medicaid. For example:

• The work-health relationship may differ for the Medicaid population compared to the broader populations studied in the literature, as Medicaid enrollees report worse health than the general population and face significant challenges related to social determinants of health.
• Limited job availability or poor job quality may moderate or reverse any positive effects of work.
• Work or volunteering to fulfill a requirement may produce different health effects than work or volunteer activities studied in existing literature.
• Loss of Medicaid coverage under work requirements could negatively impact health care access and outcomes, as well as exacerbate health disparities.

https://www.kff.org…

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NBER Working Paper No. 24899: The Effect of Disenrollment from Medicaid on Employment, Insurance Coverage, Health and Health Care Utilization

By Thomas DeLeire
National Bureau of Economic Research, August 2018

This study examines the effect of a Medicaid disenrollment on employment, sources of health insurance coverage, health, and health care utilization of childless adults using longitudinal data from the 2004 Panel of the Survey of Income and Program Participation. From July through September 2005, TennCare, the Tennessee Medicaid program, disenrolled approximately 170,000 adults following a change in eligibility rules. Following this eligibility change, the fraction of adults in Tennessee covered by Medicaid fell by over 5 percentage points while uninsured rates increased by almost 5 percentage points relative to adults in other Southern states. There is no evidence of an increase in employment rates in Tennessee following the disenrollment. Self-reported health and access to medical care worsened as hospitalization rates, doctor visits, and dentist visits all declined while the use of free or public clinics increased. The Tennessee experience suggests that undoing the expansion of Medicaid eligibility to adults that occurred under the Affordable Care Act likely would reduce health insurance coverage, reduce health care access, and worsen health but would not lead to increases in employment.

http://www.nber.org…

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New in GOP logic: Antipoverty programs worked so well, we must get rid of them

By Sasha Abramsky
Los Angeles Times, August 10, 2018

For many decades now the GOP has sought to undo the New Deal and the Great Society. But a report released last month from the White House’s Council of Economic Advisors, lost in a sea of grabbier news items, applies a new logic to the goal of shredding the safety net.

According to “Expanding work requirements in non-cash welfare programs,” comprehensive antipoverty programs are no longer necessary because 50 years of antipoverty programs — yes, those same interventions long hated, and their effectiveness belittled, by the GOP — have succeeded so spectacularly that poverty is largely a thing of the past.

The report claims that the War on Poverty led to “the success of the United States in reducing material hardship,” but “that it also came at the cost of discouraging self-sufficiency.” It proceeds to lay out a case for limiting access to benefits and setting in place work requirements in exchange for basic nutritional and medical benefits.

This is beyond disingenuous. Yes, in the years after 1964, when President Lyndon Johnson launched the War on Poverty, the percentage of poor Americans did significantly decline; by some measures it was cut in half from about 22% of the population down to about 11%. But over the last 40 years it has rebounded with a vengeance.

http://www.latimes.com…

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Expanding Work Requirements in Non-Cash Welfare Programs

The Council of Economic Advisers, July 2018

Aiming to transition more non-disabled working-age Americans into the workforce, President Trump signed an executive order in April 2018 instructing agencies to reform their welfare programs by encouraging work and reducing dependence, in part by strengthening and expanding work requirements.

https://www.whitehouse.gov…

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Comment:

By Don McCanne, M.D.

Heath care financing programs should be designed to enable individuals to have affordable access to the health care that they need. Medicaid is specifically designed to assist low-income individuals in obtaining that care who otherwise do not have the resources to pay for it. How does having a work requirement to qualify for Medicaid help with this goal of improving access? Well, it doesn’t.

The Kaiser Foundation report shows that a Medicaid work requirement can have many deleterious effects. In fact, penalizing unemployed individuals by disqualifying them from Medicaid coverage can “negatively impact health care access and outcomes, as well as exacerbate health disparities.” Isn’t that the opposite of what we should be doing? So why should we have a policy in place that does that?

The NBER paper shows that disenrolling individuals from the Tennessee Medicaid program reduced health care coverage, reduced health care access, worsened health outcomes, but did not lead to increases in employment. There is a disconnect between Trump’s executive order to expand work requirements to qualify for non-cash welfare programs and achieving the goals of those programs, including health care under Medicaid.

What is this, tying health care to work? A well designed health care financing program should ensure affordable access to health care for everyone, regardless of any other considerations. A work program should be designed to ensure that all capable individuals can get the work that is most appropriate for them. But one program should not be dependent on the other.

Again, health care for low-income individuals should not be dependent on their work status. Everyone who needs health care should have it. Instead of a separate program for those with lower incomes – Medicaid – we should have one program that is equitable, affordable, efficient, and accessible for everyone – a well designed, single payer, improved Medicare for all. We can also go to work on ensuring that decent jobs with decent wages are available to individuals based on their capabilities, but that should be a separate project.

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By Steffie Woolhandler, M.D., M.P.H., David U. Himmelstein, M.D., and Adam Gaffney, M.D.
The Nation, August 10, 2018

Last week, Charles Blahous at the Koch-funded Mercatus Center at George Mason University published a study suggesting that Bernie Sanders’s single-payer health-care plan would break the bank. But almost immediately, various observers—including Sanders himself—noted that according to Blahous’s own estimates, single payer would actually save Americans more than $2 trillion over a decade. Blahous doubled down on his argument in The Wall Street Journal, and on Tuesday, The Washington Post’s fact-checker accused Democrats of seizing “on one cherry-picked fact” in Blahous’s report to make it seem like a bargain.

The Post is wrong to call this a “cherry-picked fact”—it’s a central finding of the analysis—but it is probably right that single-payer supporters shouldn’t make too much of Blahous’s findings. After all, his analysis is riddled with errors that actually inflate the cost of single payer for taxpayers.

First, Blahous grossly underestimates the main source of savings from single payer: administrative efficiency. Health economist Austin Frakt aptly demonstrated the “bewildering complexity of health care financing in the United States” in The New York Times last month, citing evidence that billing costs primary-care doctors $100,000 apiece and consumes 25 percent of emergency-room revenues; that billing and administration accounts for one-quarter of US hospital expenditures, twice the level in single-payer nations; and that nearly one-third of all US health spending is eaten up by bureaucracy.

Overall, as two of us documented recently in the Annals of Internal Medicine, a single-payer system could cut administration by $500 billion annually, and redirect that money to care. Blahous, in contrast, credits single payer with a measly fraction of that—or $70 billion—in administrative savings.

Our profit-driven multi-payer system is the source for this outlandish administrative sprawl. Doctors and hospitals have to negotiate contracts and fight over bills with hundreds of insurance plans with differing payment rates, rules, and requirements. Simplifying the payment system would free up far more money than Blahous estimates to expand and improve coverage.

Next, Blahous lowballs the potential for savings on prescription drugs. He assumes that a single-payer system couldn’t use its negotiating clout to push down drug prices, ignoring the fact that European nations and the US Veterans Affairs system achieve roughly 50 percent discounts relative to the US private sector. (Single payer’s only drug savings, he argues, will come from shifting 15 percent of brand-name prescriptions to generics.) Hence Blahous foresees only $61 billion in drug savings in 2022, even though tough price negotiations would likely achieve threefold higher savings.

Third, Blahous underestimates how much the government is already spending on health care. For instance, he omits the $724 billion that federal agencies are expected to pay for employees’ health benefits over the 10 years covered by his analysis, which would simply be redirected to Medicare for All. He also leaves out the massive savings to state and local governments, which would save nearly $3.6 trillion on employee benefits and another $5.3 trillion on Medicaid and other health programs. Hence, much of the “new money” needed to fund Sanders’s reform is already being collected as taxes.

Yes, there will need to be some new taxes—albeit much less than Blahous estimates. But those new taxes would just replace—not add to—current spending on premiums, co-pays, and deductibles. Additionally, at least some of the new taxes would be virtually invisible. For instance, the $10 trillion that employers would otherwise pay for premiums could instead be collected as payroll taxes. Similarly, Medicare for All would relieve households of the $7.7 trillion they’d pay for premiums and $6.3 trillion in out-of-pocket costs under the current system.

It’s easy to get lost in the weeds here. But at the end of the day, even according to Blahous’s errant projections, Medicare for All would save the average American about $6,000 over a decade. Single payer, in other words, shifts how we pay for health care, but it doesn’t actually increase overall costs—even while providing first-dollar comprehensive coverage to everyone in the nation. The Post’s fact-checker is wrong: Single-payer supporters can and should trumpet this important fact.

Of course, the most important benefits of single payer are altogether invisible in economic analyses like the one performed by Blahous. No matter what injury or illness we faced, we would be forever freed from one great worry: the cost of our care. It’s hard to put a price tag on that kind of freedom. Yet, paradoxically, even the slanted analysis of a libertarian economist provides evidence that it would be fiscally responsible.

Steffie Woolhandler is a Distinguished Professor of Public Health at the City University of New York at Hunter College.

David U. Himmelstein is a Distinguished Professor of Public Health at the City University of New York at Hunter College.

Adam Gaffney is a pulmonary and critical care specialist at the Cambridge Health Alliance and Harvard Medical School, and President-elect of Physicians for a National Health Program.

https://www.thenation.com…

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Fact-Checking the Fact-Checkers on Medicare-for-All

By Matt Bruenig
People’s Policy Project, August 13, 2018

Two weeks ago, the libertarian Mercatus Center released a report estimating the cost of Bernie Sanders’ Medicare-for-All (M4A) proposal. Like most think tank products, the author and communications team behind the Koch-funded Mercatus report carefully cultivated a certain kind of media coverage in pursuit of their political agenda. In this case, the political goal was to undermine M4A by getting journalists to write that it was impossibly expensive.

This careful bit of framing and deception by Mercatus initially worked out as planned. They got the Associated Press to write a story with the lede “Sen. Bernie Sanders’ ‘Medicare for all’ plan would boost government health spending by $32.6 trillion over 10 years.” Because of the way the AP wire service works, that means the story showed up on just about every news website in the country: ABC News, Bloomberg, Washington Post, and so on.

But this initial success slipped away from Mercatus because folks like myself quickly noticed that, buried in the report’s tables, the author had actually found that Sanders’ plan would save $2 trillion. That’s right: the same estimate with the scary $32.6 trillion figure they were promoting to all the journalists in the country also said that the US could insure 30 million more Americans, virtually eliminate out-of-pocket expenses, and cover dental, vision, and hearing care for everyone all while spending $2 trillion less over the next 10 years. After this was pointed out, the coverage of the report changed dramatically and Bernie Sanders put out a video thanking the Koch brothers for their positive study.

Needless to say, Mercatus was not thrilled that its attempt to torpedo M4A had become one of the leading talking points in its favor and so it badly wanted a do-over. The preferred theater for their do-over was gullible and biased fact-checkers who they successfully coached into declaring that Bernie Sanders is lying using their inane truth-o-meter and Pinocchio-based measures.

Politifact pointed to the alternative scenario to declare the claim that the Mercatus study says M4A will save $2 trillion “Half True.” The AP, which I didn’t even realize did fact-checking, called the claim “spin.” And the Washington Post gave the claim 3 Pinocchios out of a possible 4 Pinocchios, which apparently means it is a “significant factual error” or contains “obvious contradictions.”

Think for a second about how completely absurd these three suspiciously identical fact-check pieces are. They acknowledge that Sanders and others are right that the Mercatus estimate does say there will be $2 trillion in savings. But then they say Sanders is mostly lying because he does not also talk about alternative scores of totally different plans that are not his plan.

As noted by Vox’s Dylan Scott, the really important takeaway of the Mercatus report is not whether Sanders’ plan saves precisely $2 trillion, but rather that the report confirms that the general Medicare-for-All idea is clearly doable. If you play around with the utilization rates, the provider rates, the coverage areas, and the actuarial value variables, you can generate estimates that range from modest savings to modest spending increases, meaning that a national health insurer that covers everyone in the country is clearly in reach, if we want it.

https://www.peoplespolicyproject.org…

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Comment:

By Don McCanne, M.D.

It is an unequivocal fact that a well designed, single payer, Medicare for All system, as proposed by Physicians for a National Health Program, would provide first-dollar, comprehensive coverage to everyone in the nation while making health care forever affordable for each one of us. The Mercatus study and the reaction to it is a distraction that does not change this indisputable fact.

Charles Blahous’ Mercatus analysis of Bernie Sanders’ single payer plan was seriously flawed by omissions, incorrect assumptions, and inclusion of alternative policies that were not a part of Sanders’ legislation. In spite of this, Blahous included in his report, though buried, the conclusion that the proposal would cover everyone while saving Americans $2 trillion over a decade.

The fact-checkers then jumped in to criticize those who reported this favorable finding from Blahous’ analysis. The fact-checkers were wrong to report that other findings in the Mercatus report more or less invalidated this contention. More importantly, there were other highly credible reports describing the deficiencies and errors in the Blahous analysis. The fact-checkers ignored these reports and assumed that Blahous’ statements were complete and factual, which they were not. That resulted in the fact-checkers assigning their demerits to the wrong party when it should have been Blahous who was challenged on his facts.

This is not a petty dispute over spin. It is a much more serious matter. The single payer Medicare for All model is now widely supported, to the chagrin of opponents, but this dispute threatens that support.

On the one side, the medical-industrial sector is joining forces to mount an intensive campaign to counter the Medicare for All movement. They have formed “Partnership for America’s Health Care Future” (PAHCF) with a mission of improving what’s working in health care and fixing what’s not, specifically “building on the strength of employer-provided health coverage and preserving Medicare, Medicaid, and other programs that so many Americans depend on.” Members of this coalition include, amongst others, AHIP, AMA, PhRMA, Federation of American Hospitals, and the BlueCross BlueShield Association. Watch their spin. We are going to have to preempt it.

On the other side, progressive politicians are running on a platform that includes Medicare for All. But when you listen carefully to them or check their websites, some are saying that a good place to start would be with allowing the purchase of Medicare as a public option (which would be disastrous since it would create inertia, perpetuating and compounding virtually all of the problems with our highly dysfunctional, fragmented system of financing health care).

Further, a new Medicare for All caucus has formed in the House of Representatives. It is rumored that they intend to rewrite HR 676, the Expanded & Improved Medicare for All Act. In the name of compromise it is likely that there will be pressure to move incrementally towards Medicare for All by leaving employer-sponsored plans in place and by offering a Medicare public option that will likely be under the private Medicare Advantage program. After all, at this time we can’t afford the $32 trillion program that Blahous is warning us about, so the fact-checkers tell us.

I’m much more worried about our friends than our enemies. A decade ago our friends kicked us out of the negotiations and brought us Obamacare. By now we could have had everyone covered at a cost we could afford, but instead we have tens of millions of uninsured and underinsured who are losing their choices in health care while our national health care expenditures increase at twice the rate of inflation, all the while perpetuating suffering, hardship, and premature death.

Be sure that the Medicare for All Congressional Caucus continuously hears our voices loud and clear.

Partnership for America’s Health Care Future:
https://americashealthcarefuture.org…

Medicare for All Congressional Caucus:
https://jayapal.house.gov…

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

By Meagan Day and Bhaskar Sunkara
The New York Times, Opinion Today, August 10, 2018

A growing majority of Americans agree: Health care shouldn’t be a business. They’re finally coming around to the idea that it can and should be a public good instead — something we can all turn to when the need arises.

The favorite right-wing argument against Medicare for All — the most popular approach to universal, publicly financed heath care — is that it’s too expensive. More on those costs in a moment. But first, we should note that our current health care system is actually the most expensive in the world by a long shot, even though we have millions of uninsured and underinsured people and lackluster health outcomes.

This is partly because a lot of that money doesn’t go directly toward keeping people healthy. Instead it goes to the overhead costs required to keep businesses running. These include exorbitant executive salaries, marketing to beat out the competition, the labor-intensive work of assessing and denying claims and so on. None of these would be a factor in a single-payer, Medicare for All system. Taiwan and Canada both have single-payer systems, and both spend less than 2 percent of total expenditures on administrative costs — and so does the United States’s current Medicare program. By contrast, private insurers in the United States spend as much as 25 percent on overheads.

But the most important way Medicare for All would save money isn’t by slashing administrative costs. It’s by using the power and size of the government, like other countries around the world currently do, to negotiate favorable terms with drug companies and service providers. There’s a reason a CT scan costs $896 in the United States, but only $97 in Canada.

And what about the sticker shock factor — the dramatic rise in government spending to accommodate such a program? Medicare for All would transfer all payment responsibility to one public agency (as opposed to a bunch of private companies), and that act of combination produces the big price tag that conservatives use as a cudgel. But while this would be more expensive for the government, it wouldn’t be for ordinary Americans. The money would be raised through progressive income and corporate taxes and end up costing most people less than their current health care. And coverage would be comprehensive and universal, meaning nobody would ever be unable to afford the care they need.

Pursuing Medicare for All would come with its own set of dilemmas: Eliminating an entire industry won’t be easy, and we’ll face plenty of political resistance and calls for half-measures. But if we want actual universal coverage, and we want it to be affordable and high-quality, Medicare for All is the only way forward.

This is our fifth and last newsletter; next week Quinta Jurecic of Lawfare will substitute for David Leonhardt. We’ll leave you with a few suggestions for further reading:

How Medicare Was Won by Natalie Shure, The Nation

Single-Payer or Bust by Adam Gaffney, Dissent

“Medicare-for-all” Means Something. Don’t Let Moderates Water It Down by Tim Higginbotham and Chris Middleman, Vox

Even Libertarians Admit Medicare for All Would Save Trillions by Matt Bruenig, Jacobin

“It Was About the Insurance Fix” by Meagan Day, Jacobin

The full Opinion report from The Times follows (at the link).

David Leonhardt is on a break from writing this newsletter until Aug. 27. While he’s gone, several outside writers are taking his place. This week’s authors are Meagan Day and Bhaskar Sunkara of Jacobin, the socialist magazine. You can sign up here to receive the newsletter each weekday.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Today’s Opinion Newsletter distributed by the New York Times provides a nice, concise statement on why America needs Medicare for All, along with links to references. It should be useful to share with friends, associates and others who still have questions about how we can afford to spend that much on health care (when we are already doing so).

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