2016 U.S. election results

By Associated Press
Updated Nov. 10, 2016

Amendment 69: ColoradoCare

100% reporting

Yes: 509,629 (20.6%)

No: 1,964,755 (79.4%)

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Comment:

By Don McCanne, M.D.

Amendment 69 – ColoradoCare – is a Colorado ballot measure for comprehensive health care financing reform. It was defeated by a vote of 4 to 1. It joins California’s Prop 186 which was defeated 3 to 1 and Oregon’s Measure 23, also losing 4 to 1.

Although many surveys have shown that public support for a single payer national health program is about 60 percent, these state ballot measures failed miserably.

The nation is heavily polarized politically so you might expect that only half of the voters would approve such ballot measures, but these efforts were unable to gain even a majority within their own faction much less the support of the opposing faction.

The lesson is that, to be successful, a comprehensive state health reform ballot measure requires a massive education effort over a period of years if you expect to gain support of a sufficient portion of the electorate, and that has never been accomplished. People not only have to understand it, they have to want it. If you find that you have to keep explaining what your proposal is, you haven’t done enough, and your opponents can and will destroy your efforts with a few soundbites.

Bernie Sanders demonstrated that a concerted effort can bring single payer back into the national dialogue, but his efforts to support ColoradoCare fell on deaf ears. He even had to trade single payer for a public option to gain Hillary Clinton’s support, and where did that go? His efforts were phenomenal, but he can’t do it alone.

Education, coalitions, grassroots efforts are all essential, but without education, it is all for naught. Get to work.

“Don’t Touch My Medicare!”

By Trudy Lieberman
Harper’s Magazine, November 2016

Given the monumental sums Medicare has been paying out, it’s hardly surprising that for years the annual report issued by the program’s trustees has argued that it needs more revenue. This year’s report, released in June, warns that although Medicare’s costs are low by historical standards, there is substantial uncertainty regarding the adequacy of future Medicare payment rates under current law.

Medicare is placing its bet for cost control on new ways to pay doctors, penalties for bad care, rewards for good care, and more coordinated care. Whether these practices will work and how much they will slow down the growth in costs is unknown, and most Medicare experts on both the left and the right believe that new revenue will be needed. Along with her colleagues at the American Institutes for Research, former Medicare trustee Marilyn Moon (who remains skeptical of privatization) believes that critics often overstate the program’s financial challenges.

The big question is who should bear the burden of necessary revenue increases — taxpayers or Medicare beneficiaries. So far the answer from the government, many economists, and conservative advocacy groups is, unequivocally, the beneficiaries. Moon and her colleagues note that the “potential depletion of the trust fund in the future is taken as ‘proof’ that benefits must be reduced.” But in a subsequent interview, she warns that as more of the cost burden is shifted to the beneficiaries, “the likely reaction will be that benefits become so small Medicare won’t remain viable. It would destroy the program.”

It’s ironic that when it comes to one of the government’s most popular public programs, there’s no talk of raising taxes — an option polls show much of the public is willing to support. The failure of policymakers to consider revenue increases reflects the success of the right’s thirty-year crusade to change the conversation. “Those of us at the Heritage Foundation and allied public-policy institutions like the American Enterprise Institute have effectively defined the terms of the debate on Medicare reform,” says Robert Moffit, a senior fellow at Heritage. The Democrats, he adds, “are debating our proposals. We’re not debating theirs.” Former Iowa senator Tom Harkin tells me that his fellow Democrats were poor strategists, always finding themselves in rearguard actions trying to block provisions they didn’t like. “The Democrats were talking a good game for the immediacy, not the long term. It’s like checkers,” he says. “They knew how to block the next move, but were not seeing the row lined up at the back of the board.”

http://harpers.org…

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Comment:

By Don McCanne, M.D.

House Speaker Paul Ryan indicated today that, as a result of the election, they will now have a president who will sign their proposed legislation making major changes in our health care financing system. This important article by Trudy Lieberman explains the ongoing attack on Medicare and the threat to further privatize the program while shifting more of the burden of paying for health care onto the backs of the Medicare beneficiaries.

Trudy Lieberman warns us that conservative organizations “have effectively defined the terms of the debate on Medicare reform,” according to Heritage’s Robert Moffit. The Democrats have been complicit with the partial privatization of Medicare and likely will continue to be so as further erosion of Medicare accelerates under a conservative government (all three branches).

Harper’s allows access to one free article per month. Considering the danger Medicare faces, this should be the article for you. It is a fairly long article, so you may want to wait until you have a little more time, but do it this week for sure.

MedPAC Examines How Medicare Premium Support Might Work

By Kerry Young, CQ Roll Call
The Commonwealth Fund, November 7, 2016

Congress’s advisers on Medicare are studying what steps would be needed if lawmakers eventually were to shift the giant federal health entitlement program to a so-called premium support model designed to restrain spending. House Republicans have called for making such a change.

The Medicare Payment Advisory Commission (MedPAC) intends to offer lawmakers a review of these options in its June 2017 report, said Eric Rollins, an analyst with the panel. MedPAC will not make formal suggestions to Congress on this topic next year.

“We are not going to recommend for or against premium support,” said Paul Ginsburg, a MedPAC member and healthy policy researcher with the Brookings Institution and the University of Southern California.

Ginsburg said he expects Congress at some point to take a serious look at the concept of premium support, although it’s currently unlikely to do so at this time. MedPAC’s work this year will help prepare lawmakers for eventual discussions of this approach to managing Medicare, he said.

MedPAC intends to outline possible paths and pitfalls toward a more competitive system for administering health benefits for senior citizens and people with disabilities. Traditional fee-for-service Medicare might compete with insurer-run Advantage plans under this system, Rollins said in his briefing. People enrolled in Medicare could avoid higher premiums by seeking out plans with lower costs in this new model, MedPAC’s Rollins said.

House Republicans earlier this year called for a move toward premium support as part of their policy paper on health care. In the House GOP model, people on Medicare would be given a choice of insurer-run plans and traditional Medicare starting in 2024. In the paper, House Republicans note that the idea of premium support “is based on a long history of bipartisan reform plans, including the 1999 Breaux-Thomas Commission and the 2010 Domenici-Rivlin Report.”

The prospect of more out-of-pocket costs for beneficiaries likely will prove a hurdle for lawmakers who want to shift to premium support. Willis D. Gradison Jr., a MedPAC member who represented an Ohio district in the House from 1975 through 1993, raised this political consideration.

http://www.commonwealthfund.org…

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October 2016 meeting presentation: Reforming quality measurement and implications for premium support

By Ledia Tabor and Carlos Zarabozo
MedPAC, October 7, 2016

Premium support in a local market area

* Each plan bids to provide benefits to average health beneficiary

* Medicare determines government contribution based on FFS and private plan bids

* If beneficiary selects plan with bid above government contribution they pay a premium; plan with lower bids give enrollees a cash rebate

http://www.medpac.gov…

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Comment:

By Don McCanne, M.D.

MedPAC (Medicare Payment Advisory Commission) advises Congress on Medicare. As the October 7 MedPAC presentation demonstrates, they are currently preparing for Congress a review of premium support – a voucher model designed to restrain federal spending by shifting more costs to Medicare beneficiaries.

It is unlikely that today’s election will change the political climate to where immediate enactment of premium support would be likely, but since the 1999 Breaux-Thomas (Frist, Jindal) Commission there has been bipartisan support of this proposal, though predominantly from the Republicans. Both sides in Congress do want changes, and it is quite possible that premium support could be advanced through a conservative-neoliberal coalition effort involving tradeoffs, especially since it is likely that we will have a neoliberal president who could well sign such legislation.

So pay attention or we may end up with a privatized, defined contribution Medicare program which will compound problems of affordability and access for our Medicare beneficiaries, not to mention stifling our dreams of an improved Medicare for all.

NBER Working Paper 22802
Intertemporal Substitution in Health Care Demand: Evidence from the RAND Health Insurance Experiment

By Haizhen Lin and Daniel W. Sacks
National Bureau of Economic Research, November 2016

Abstract

Nonlinear cost-sharing in health insurance encourages intertemporal substitution because patients can reduce their out-of-pocket costs by concentrating spending in years when they hit the deductible. We test for such intertemporal substitution using data from the RAND Health Insurance Experiment, where people were randomly assigned either to a free care plan or to a cost-sharing plan which had coinsurance up to a maximum dollar expenditure (MDE). Hitting the MDE — leading to an effective price of zero — has a bigger effect on monthly health care spending and utilization than does being in free care, because people who hit the MDE face high future and past prices. As a result, we estimate that sensitivity to short-lasting price changes is about twice as large as sensitivity to long-lasting changes. These findings help reconcile conflicting estimates of the price elasticity of demand for health care, and suggest that high deductible health plans may be less effective than hoped in controlling health care spending.

From the Introduction

Studying intertemporal substitution is important for at least two reasons. First, with the important exceptions of Einav et al. (2015) and Cabral (2016), most of the literature on health care demand and the effect of insurance on spending has neglected intertemporal substitution, and estimated in a wide range of price elasticities, from as small as -0.2 to as large as -1.5 (for example, Manning et al. (1987); Eichner (1998); Zweifel and Manning (2000); Cardon and Hendel (2001); Bajari et al. (2014); Dalton (2014) and Kowalski (2015, 2016))). Most papers assume that health care decisions are made statically on an annual basis, meaning that there is no scope for future prices to affect current demand. Estimated. However, if there is intertemporal substitution, then patients may respond very differently to a temporary price change than to a long-lasting one. Therefore, depending on the sources of price variation used for identification, one might draw dramatically different conclusions regarding price sensitivities. Accounting for intertemporal substitution makes it possible to separate elasticities with respect to permanent or temporary price changes, and may help reconcile the disparate elasticity estimates in the literature.

Second, intertemporal substitution affects the response to high deductible health plans, which are now common in the American health insurance landscape. Regulators, insurers, and policymakers tolerate the weak risk protection of high deductible health plans out of the hope that they will reduce health care spending. This view implicitly assumes that care foregone in one year because of the high deductible represents a permanent reduction in health care spending. But if patients are deferring needed care, then their spending may be higher in future years, either because deferrable problems become so severe that they must be addressed, regardless of the cost, or because once patients finally do hit the deductible, they stock up on care, retiming deferrable procedures to a year when their price is low. Thus a key question for the effectiveness of high deductible health plans is whether patients intertemporally substitute in their demand for health care. Evidence of intertemporal substitution would suggest that high-deductible health plans may not be as effective as hoped in controlling overall health care spending.

Reconciliation with original HIE findings

We have argued that intertemporal substitution is an important part of how patients respond to nonlinear cost-sharing, causing them to stock up on health care when it goes on “sale,” with especially large anticipatory responses. Neglecting these dynamics can lead to biased estimates of the long-run effect of cost-sharing on utilization. The original RAND investigators, however, argued that intertemporal substitution was not an important part of the response to cost-sharing, and found little evidence for anticipatory effects. Here we reconcile these different conclusions.

The key difference between our analysis and the original investigators is in the timing of when we look for intertemporal substitution and anticipatory responses. They focus on the period around hitting the MDE, before and after. We focus on the end of the coverage year. As Keeler and Rolph acknowledge, it is likely difficult to detect anticipatory effects or pent up demand by focusing on fine timing around hitting the MDE. Households may not know exactly when they hit the MDE (as has been pointed out by the original RAND investigators), and may not appreciate the link between their current and future spending (Einav et al., 2015; Dalton et al., 2015; Abaluck et al., 2015). On the other hand, by the end of the coverage year, most families who hit the MDE will have seen a bill which makes clear their financial position, and it is not hard to understand that in the future, prices will be higher. Indeed, providers may help make this clear. Thus the myopia or limited understanding of the insurance contracts may have made it difficult for the original investigators to identify intertemporal substitution; by looking at the end of the year, we avoid this difficulty.

From the Conclusion

Studying data from the RAND Health Insurance Experiment, we found striking patterns of health care spending over the insurance coverage year. In most months, spending is lower in cost-sharing plans than in the free care plan. But in the last 1-3 months of the coverage year, spending rises quickly in cost-sharing relative to free care, and by the end of the year spending in the two plans is roughly equal. On the other hand, spending in free care is roughly flat over the coverage year, but it is particularly high early in the first coverage year, and it spikes dramatically at the end of the experiment.

These patterns are inconsistent with the standard model of demand for health care, which assumes away intertemporal substitution. Instead they suggest that patients can retime their care, especially for medically deferrable procedures and dental care, to reduce their out-of-pocket expenses in the face of nonlinear cost-sharing rules. To quantify the importance of intertemporal substitution, we estimate how health care spending responds to lag and lead prices as well as current prices. The estimates suggest that short-run moral hazard — the response to a one time, unanticipated price change — is substantially larger than the long-run response.

These results have important implications for health care spending and insurance design. First, they help reconcile some of the disparate estimates of the price elasticity of health care demand, since they imply that health care spending is more responsive to temporary price changes — for example, hitting the deductible — than to permanent price changes, for example, from insurance plan changes. Second, they suggest that high deductible health plans may not be as effective as hoped in controlling health care spending. These plans can reduce health care spending as long as patients do not hit the deductible. But in years when patients do hit it — as they eventually will — the large short-run response means that spending will make up for lost time, as patients stock up on care.

http://www.nber.org…

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Comment:

By Don McCanne, M.D.

At the risk of over-simplification, we can interpret this complex study to show us that previous conclusions from the RAND Health Insurance Experiment (RAND HIE) ignored the responsiveness of year-end health care spending once hitting the deductible, and that particular increase in spending suggests that “high deductible health plans may not be as effective as hoped in controlling health care spending.”

The primary purpose of high deductibles in insurance plans is to reduce health care spending by insurers, employers and government plans. The tradeoff is that they create financial hardships and impair health care access for patients. But isn’t health care reform supposed to be about the patients?

How much are deductibles really saving? For the 20 percent of people using 80 percent of health care, the savings are negligible since the deductible is met early on for those individuals and thus has no further impact. For the four-fifths of us who use only one-fifth of the nation’s health care, many of us have deductible coverage through Medicaid, Medigap or MA plans, or health savings accounts, and thus are not affected.

So who is negatively impacted by high deductibles? It is individuals who do not qualify for Medicaid nor for ACA subsidies and who often cannot fund a health savings account. This is our workforce and their families. As a percent of our national health expenditures, the amount saved is very small, and may be even smaller than believed based on this NBER study. This seems to be too heavy of a price to pay for such a relatively small savings.

So high deductibles don’t work very well and they harm patients. In contrast, single payer tools do control spending while helping patients. Do we really have to continue contemplating making the change that would finally fix our system? Why not action now?

The U.S. Is Standing in the Way of Cheaper Drugs for the Poor

By Jason Cone and Raymond C. Offenheiser
The New York Times, October 27, 2016

In the United States, companies have raised prices on many drugs over the past five years, mostly with little public notice or scandal. Pfizer alone raised the prices of more than 100 drugs in one year. Drug prices have seen double-digit inflation over the past three years, at a time of relatively low inflation in the rest of the economy. Recent research suggests that cancer patients may be delaying use of lifesaving drugs, while there are reports that prisoners are rationed access to hepatitis C treatments — all because of high prices.

But this problem is also international. In poorer countries across the world where our organizations work, millions of people are priced out of medicines that could save lives and relieve suffering. For example, a recent World Health Organization study found that in some 30 countries, hepatitis C medicines were unaffordable for much of the population.

Pharmaceutical companies simply charge whatever they want — or can. They have big budgets to counter image problems from bad press and congressional hearings. And while they claim that high prices are necessary to develop new drugs, it’s just not true. Public funding and subsidies pay for much of today’s pharmaceutical innovation.

Many world leaders recognize that high drug prices are a public-health crisis. Earlier this year, Ban Ki-moon, the secretary general of the United Nations, commissioned a panel of industry, government, academic and civil society experts, including Oxfam International’s executive director, to recommend ways to bring drug prices down to affordable levels and to improve research and development of new medicines in order to fulfill the human right to health.

The panel’s report, released last month, found that today’s system is failing. Pharmaceutical monopolies reap huge profits from high prices, while medicines are unaffordable for too many people. The report called for more transparency and competition in the drug industry and for preserving and implementing existing policies that help reduce prices.

Shamefully, the American government sought to obstruct and oppose the panel, even denying the premise that high drug prices undermine public health.

The Obama administration’s response to the report’s release called the panel’s work “deeply flawed” and accused it of recommending “divisive policies,” which it warned ominously “could have significant unintended negative consequences.” In other words, if we want new medicines and innovations, we must continue to support a system in which the pharmaceutical industry has unlimited power to set prices. Considering alternative pathways is apparently off limits.

These scare tactics not only contradict the United States’ stated global and domestic health priorities, they are also an offense to people unable to afford critical treatment. Worse yet, the American government actively exports this approach to other countries through trade agreements like the Trans-Pacific Partnership, which, if allowed to take effect, will lock in and extend global monopoly protections and high medicine prices for years to come.

Yet to really transform how drugs are developed, governments must lead the charge. There are hopeful signs this might happen. In September, world leaders agreed to address antibiotic resistance in part, by committing to develop new drugs through such new research and development models.

The United Nations panel recommendations, which the Obama administration has tried to attack and discredit, are precisely designed to open new paths to medical innovation that benefit us all. Access to existing and new medicines and treatments should not depend on how much money you have, where you were born or whom you know.

The United States government, especially the next president, must stop defending industry profits and work to reform how we pay for medical research to ensure that all patients’ needs are addressed. High prices of medicines are not inevitable; they are a choice the American government has made. Many lives and livelihoods hang in the balance until that choice changes.

Jason Cone is the executive director of Doctors Without Borders USA. Raymond C. Offenheiser is the president of Oxfam America.

http://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Those of us who have tried so hard for so long to fix our dysfunctional health care system will understand this article. Reform efforts being celebrated today have enhanced the business successes of the medical-industrial complex and especially the insurance and pharmaceutical industries, while patients face more barriers to care through restricted networks, greater cost sharing and exorbitant pricing.

What is missing here? Jason Cone of Doctors Without Borders USA and Raymond Offenheiser of Oxfam America make it quite clear that it is our government that is failing the people while taking care of the industrial special interests.

Perhaps worse, we have a polarized nation with one side opposed to all things government in health care, and the other side celebrating the government’s gifts to the industry even though the welfare of patients is sacrificed in order to accomplish those ends.

In a democracy we are supposed to be able to fix these problems through our elections. But on my ballot for next Tuesday I don’t see any options that could realistically assure us support for the altruistic goals of Oxfam and Doctors Without Borders. It’s not like in two years of campaigning there wasn’t adequate opportunity to advance ideas that would truly make us stronger together as we make America great again. All we got instead was campaign slogans and further polarization on a scale with negative polarity at either end.

Sorry.

Progress reducing uninsured rate threatens to stall

By Ricardo Alonso-Zaldivar
Associated Press, November 3, 2016

President Barack Obama’s legacy health care law has reduced the number of Americans going without health insurance to historically low levels, but continued progress threatens to stall this year, according to a new government report.

The study released Thursday by the Centers for Disease Control and Prevention suggests the law may be reaching a limit to its effectiveness in a nation politically divided over the government’s role in guaranteeing coverage.

The CDC said the number of uninsured people dipped by only 200,000 between 2015 and the first six months of this year, which it called “a nonsignificant difference.” The findings come from the National Health Interview Survey, which has queried more than 48,000 people so far this year.

Since the health care law’s big coverage expansion in 2014, millions have gained coverage each year. Now the pattern appears to be changing.

Experts say Obama’s overhaul deserves most of the credit for 20 million Americans gaining coverage since 2014. But progress has been less and less each year, and now it’s slowed to a crawl.

“It has got to be close to tapped out,” said Dan Witters, director of a major private survey that also follows insurance trends, the Gallup-Healthways Well-Being Index.

The new survey offers a hint that the nation’s historic coverage expansion may have actually gone into reverse during part of this year. An earlier CDC report covering just the first three months of this year found that the number of uninsured had been even lower, an estimated 27.3 million people — or a million fewer than the six-month figure in the latest report.

Another notable finding from Thursday’s report is that the share of Americans in high-deductible health insurance plans keeps increasing. That may help explain widespread anxiety about affordability at a time when overall health care spending is growing at a moderate pace.

The CDC survey defines high-deductible coverage as insurance that requires patients to pay at least the first $1,300 of annual medical expenses for an individual plan, or $2,600 for a family. In the first six months of this year, 38.8 percent of persons under age 65 were in high-deductible plans, an increase from 36.7 percent in all of 2015, the survey found.

Employers started shifting workers and their families to high-deductible plans before Obama took office, and now that’s becoming the norm. Many people are unhappy with the change, and some public-opinion experts say that helps explain the continued low ratings for Obama’s health overhaul, even if it was not the cause.

http://bigstory.ap.org…

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Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, January–June 2016

By Emily P. Zammitti, M.P.H., Robin A. Cohen, Ph.D., and Michael E. Martinez, M.P.H., M.H.S.A.
National Center for Health Statistics, November 3, 2016

* In the first 6 months of 2016, 28.4 million (8.9%) persons of all ages were uninsured at the time of interview — 20.2 million fewer persons than in 2010, but only 0.2 million fewer persons than in 2015 (a nonsignificant difference).

* Among adults aged 18–64, the percentage with private coverage through the Health Insurance Marketplace or state-based exchanges has not changed significantly — from 4.8% (9.3 million) in the second quarter of 2015 to 4.8% (9.4 million) in the second quarter of 2016.

https://www.cdc.gov…

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Comment:

By Don McCanne, M.D.

It looks like the reduction in the rate of uninsured as a result of the Affordable Care Act may have plateaued. This is not a surprise since it was understood that the design limitations of building on the existing fragmented financing system could never result in truly universal coverage.

A well designed single payer system would have accomplished the goal of universality. We could still reach that goal without increasing our total national health expenditures beyond the current level, not to mention that we would gain the multitude of other benefits of a single payer system.

The Cubs fans stuck with a perpetual loser for over a century, and they finally broke through last night. With the same determination, maybe we could finally achieve the political breakthrough that we need to enact a health care system that actually does include everyone. Next Tuesday could be a start.