PNHP

A birthday all should celebrate: Medicare is turning 50

A birthday all should celebrate: Medicare is turning 50

By Anita Page
Daily Hampshire Gazette (Amherst, Mass.), Letters, July 9, 2015

July has always been my favorite month, not just because of July 4th, strawberries and corn, but because it is my birthday month. Now, it is even more special because it is the 50th anniversary of Medicare on July 30.

Medicare is a landmark federal insurance program signed into law July 30, l965, and now covers 55 million people over the age of 65 and younger persons with permanent disabilities.

My husband and I take Medicare for granted and forget what it was like for older generations. But now we know we have to protect and improve it and expand it to include all ages and become “Medicare for All,” a single-payer system. Urge your legislators to support House 1026 and Senate 579, which do just that.

Now let’s celebrate this momentous anniversary. The League of Women Voters with other health care groups is organizing events in Springfield, Holyoke, Amherst, Northampton and Greenfield on July 30. Watch for specifics in the local media and attend. You’ll make my birthday month even more special.

Anita Page resides in Amherst.

http://www.gazettenet.com/home/17641615-95/anita-page-a-birthday-all-should-celebrate-medicare-is-turning-50

Seidman and Pollack: ACA versus Medicare for All

Point-Counterpoint

Journal of Health Politics, Policy and Law, August 2015

The Affordable Care Act versus Medicare for All

By Laurence Seidman

Abstract

Many problems facing the Affordable Care Act would disappear if the nation were instead implementing Medicare for All — the extension of Medicare to every age-group. Every American would be automatically covered for life. Premiums would be replaced with a set of Medicare taxes. There would be no patient cost sharing. Individuals would have free choice of doctors. Medicare’s single-payer bargaining power would slow price increases and reduce medical cost as a percentage of gross domestic product (GDP). Taxes as a percentage of GDP would rise from below average to average for economically advanced nations. Medicare for All would be phased in by age.

http://jhppl.dukejournals.org/content/early/2015/06/09/03616878-3150160.full.pdf

Medicare for All — If It Were Politically Possible — Would Necessarily Replicate the Defects of Our Current System

By Harold Pollack

Abstract

Medicare for All, ideally implemented, could offer powerful advantages over our current health care financial system. Unfortunately, the political obstacles to such a system are formidable and are likely to remain so for decades. More to the point, a politically viable single-payer system would not replace our currently dysfunctional health care politics. It would be a product of that same legislative process and political economy and thus be disfigured by the same interest group politics, path dependence, and fragmentation that Laurence Seidman rightly laments.

From the text

Laurence Seidman’s brief for single payer will be congenial to many JHPPL readers, and for good reasons. As someone who has spent the past seven years advocating for the Affordable Care Act (ACA), I must concede that a well-conceived, well-implemented Medicare for All system would offer powerful advantages over our current health care financing system.

Medicare for All would be fundamentally more disruptive for tens of millions of people. As a matter of basic accounting, a huge reform that creates millions of winners creates millions of losers, too: affluent workers receiving generous tax expenditures, too many constituencies to count across the supply side of the medical economy who are likely to be squeezed in a new system, individuals subject to small or large tax increases, to name a few. This list includes some of the most powerful and organized constituencies in American politics. They would have to be accommodated in complex, sometimes unappetizing, ways.

Medicare for All cannot offer itself as the replacement of our depressing health politics. It would have to arise as another product of that very same process, passing through the very same legislative choke points, constrained by the very same path dependencies that bedevil the ACA.

For the foreseeable future, the main health policy challenge is to make the ACA work.

I hope that the public option returns in some form as a viable choice within the new marketplaces. One possibility would be to allow individuals over the age of sixty the option of purchasing public insurance coverage. Many Americans would welcome this option, which would also provide needed competition and market discipline of providers.

Policies like this may someday pave the way to a Medicare for All system. More likely, these would allow the possibility of public insurance carving out a complicated coexistence with private coverage. This may be the best outcome. If we keep our shoulder to the wheel in pursuing the messy, frustratingly incremental process of health reform, we can create a more humane and disciplined health system. That’s no small accomplishment. I’m not sure what else we can do either.

http://jhppl.dukejournals.org/content/early/2015/06/09/03616878-3150172.full.pdf

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Will Doctors Be An Impediment To Reform?

By Harold Pollack
The New Republic, August 2009

On the left, there are Physicians for a National Health Care Program. (I happen to dislike PNHP leaders’ unhelpful stance in the current debate, but that is another story.) 

http://www.drsforamerica.org/blog/-will-doctors-be-an-impediment-to-reform-hat-tip-h-pollack–260

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How not to argue about health policy

By Harold Pollack
The Incidental Economist, December 3, 2011

One can make a principled decision to withdraw from the incremental politics of American health policy. I understand why single-payer advocates are tempted to take this course. Most do so with greater awareness of the attendant tensions and costs. PNHP was a sideline, not always very civil participant in the political fight to enact and preserve health care reform. Indeed its leaders denigrate important provisions of ACA that expand access for 32 million people and protect millions against catastrophic financial risks. I wish the group would talk and act rather differently in this debate.

Weekend edition: How not to argue about health policy

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Comment:

By Don McCanne, MD

This pair of Point-Counterpoint articles from the Journal of Health Politics, Policy and Law renew the debate over the Affordable Care Act versus Medicare for All. Laurence Seidman presents the solid case for the policy superiority of the single payer Medicare for All model while Harold Pollack also acknowledges the superior policies of single payer, yet rejects it based on our dysfunctional health care politics.

Policy is not the issue in this particular debate; it is the politics. You do not compromise clearly superior policy to conform with the dysfunctional politics, but rather you change the politics in order to support optimal policy.

PNHP’s mission is to educate the public on the single payer model – an essential step in changing the politics. Harold Pollack instead supports incremental changes, such as those of ACA, as a means of negotiating the politics. Both approaches are reasonable and neither should be completely rejected in deference to the other one. The ultimate goal should always be the utopian version of single payer, and every effort must be made to achieve that goal. In the interim, incremental measures that improve health care should be supported. But it is important to continue to inform the public on the inadequacies of these interim measures that perpetuate hardship and suffering, lest inertia set in.

Harold Pollack writes about “pursuing the messy, frustratingly incremental process of health reform,” and says, “I’m not sure what else we can do.” Yet he concedes that “a well-conceived, well-implemented Medicare for All system would offer powerful advantages over our current health care financing system.” He says that he wishes PNHP “would talk and act rather differently in this debate.” This defies any interpretation other than that PNHP should abandon their mission of single payer and join him in supporting his incremental pathway to reform. Yet he suggests that “the best outcome” may be “the possibility of public insurance carving out a complicated coexistence with private coverage.” PNHP emphatically disagrees that this would be the best outcome.

Recognizing that policy goals must not be compromised and that the politics must change, we wish the incrementalists “would talk and act rather differently in this debate.” After all, we do share the ultimate goal of health care justice for all.

State lawmaker reacts to Obamacare editorial

By Richard Gottfried
Lake Placid (N.Y.) News, Letters, July 9, 2015

Your June 18 editorial is right that the Affordable Care Act leaves a lot of problems unsolved, and calls for national single-payer health coverage.

But we can’t wait for Washington. States have long been the “laboratories of democracy,” and New York can be a leader by enacting the New York Health Act state single-payer plan.

It would save New Yorkers $45 billion by eliminating insurance company administration and profit; reducing health care provider administrative costs; and bulk purchasing of drugs and medical devices, while eliminating rising deductibles, co-pays, restricted networks, and out-of-network charges. It would eliminate the local share of Medicaid and drastically reduce property taxes. The savings mean that instead of rising premiums, we’ll spend less through broad-based assessments based on ability to pay.

For years, people have said that single-payer is the only sensible way to finance health care, “but it could never happen.” Now that the State Assembly has passed the New York Health Act, it’s becoming truly achievable.

Assemblyman Richard Gottfried chairs the New York State Assembly Health Committee. He resides in Albany.

http://www.lakeplacidnews.com/page/content.detail/id/523701/State-lawmaker-reacts-to-Obamacare-editorial.html?nav=5003#sthash.qU77ABjk.dpuf

Baicker and Chandra on cost sharing

The Veiled Economics of Employee Cost Sharing

By Katherine Baicker, PhD; Amitabh Chandra, PhD
JAMA Internal Medicine, July 2015

This year, once again, millions of people in the United States who get health insurance through their employers received the unwelcome news that cost sharing would increase. 

At first blush, it might seem that cost sharing is just a way of dividing up whether employers or employees pay the bills, but decades of evidence show that lower cost sharing leads patients to consume more care of limited health value—such as unnecessary tests—and that this consumption leads to higher health insurance premiums. Cost sharing can thus mitigate the premium increases that would be needed to expand coverage to new services—many of which may particularly benefit patients with serious illnesses.

The potential usefulness of cost sharing does not, however, mean that we would all be better off with across-the-board increases in cost sharing. First, insurance provides crucial financial protection against potentially catastrophically high health expenditures. Patient cost sharing erodes the value of the risk protection that health insurance provides. The benefit of reducing the overuse of medical services that is inherent in subsidizing health care must be balanced against the cost of losing financial protection when it really matters. A disproportionate share of health spending is for a relatively small number of people requiring very expensive care. Any insurance plan with adequate protection against catastrophic out-of-pocket spending (such as an annual out-of-pocket maximum of $10 000) will leave a substantial share of health care expenditures in excess of that maximum, and thus not subject to cost sharing. Second, as we have discussed, a given dollar amount of cost sharing has different implications for people with different incomes, suggesting that optimal cost sharing might increase with income. At present, this feature is seen more in cost-sharing subsidies for low-income enrollees in some public plans than in employer-sponsored health insurance. Third, patients facing higher deductibles and copays may reduce care of high value (such as adherence to effective medications) along with the care of low value (such as tests that are not recommended). The evidence suggests that more sophisticated cost sharing, such as higher copays for care of questionable health benefit, might encourage higher-value health care spending and stem the growth of health insurance premiums. Examples are “carve-outs” that protect preventive care from copayments and “value-based” insurance plans that subsidize medications that help keep patients out of the hospital.

These caveats do not mean that cost sharing should be eschewed as a tool to improve value—but rather that cost sharing should be deployed in a more nuanced way than it is now. If enabled by regulatory changes and health care system reforms, cost sharing based on the value of care and scaled by income could improve health, slow increases in health insurance premiums, and increase take-home pay.

http://archinte.jamanetwork.com/article.aspx?articleID=2289129

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Tracking Trends In Provider Reimbursements And Patient Obligations

By Katherine Hempstead, Iyue Sung, Joshua Gray and Stewart Richardson
Health Affairs, July 2015

ACAView attempts to capture how health reform affects the day-to-day practice of community-based medicine. The project has collected data on more than seventeen million visits to nearly 15,000 providers in 2013 and 2014.

Patients’ payment obligations rose for all specialties, and deductibles were the largest category of increased patient spending.

From the Conclusion

Coverage expansion in the United States has benefited millions of people. However, the high out-of-pocket expenses that many people are facing may cause some to forgo nonurgent care. The overall implications for providers are unclear. Increased bad debt is one potential outcome.

It will be important to monitor changes in patient obligation and provider reimbursement as the effects of coverage expansion, risk contracting, and narrow networks continue to unfold. The degree to which these changes may affect access to care for low-income insured patients and debt levels for providers in particular deserves close scrutiny.

http://content.healthaffairs.org/content/34/7/1220.abstract

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Comment:

By Don McCanne, MD

Can we balance the benefit of spending reductions associated with high deductibles and other cost sharing with the potential reduction in beneficial health care services that can result from patient exposure to out-of-pocket expenses as a prerequisite for health care access? Perhaps a better question is, should we?

Although Katherine Baicker and Amitabh Chandra support high deductibles and other cost sharing as a means to slow the increase in health care spending, they do recognize the problems with this approach to cost containment, for example: 1) the erosion of protection against the financial risk of essential health care services, 2) the ineffectiveness of cost sharing for most of health care spending – the catastrophic costs of the minority who have major health care problems, 3) the negative impact of cost sharing on those with lower incomes, and 4) the decrease in the use of high value care because of the financial barriers of cost sharing.

Rather than abandoning their support of the consumer-directed approach of increasing patient sensitivity to health care costs through out-of-pocket cost sharing, Baicker and Chandra recommend improving cost sharing by taking into consideration income levels, chronic disease status, and the relative value of the health care services provided. As if applying cost sharing was not already administratively burdensome, imagine applying these three adjustments to each patent’s cost sharing. Even then, the benefits of these adjustments would be only relative since you cannot eliminate 100 percent of the financial hardships, nor ensure that patients would receive 100 percent of the essential health care services that they need.

When you consider that most health care spending (about 80 percent) is not subject to cost sharing, you really have to give more thought as to whether this decades-long experiment in cost sharing is worth continuing.

It is not as if we don’t have a far better option. With a single payer system, monopsonistic price setting would obviate the need for patient price shopping. So then the only purpose for cost sharing would be to reduce the use of “low value” services. Beneficial services that some may consider to be of low value, but not of no value, are commonplace today, and who is to say that we should establish policies that impair access to that care?  On the other hand, services that clearly have absolutely no diagnostic nor therapeutic benefit would simply be excluded from coverage.

The system would be 100 percent effective in preventing financial hardship due to medical bills and 100 percent effective in removing financial access barriers, while slowing the rate of increases in health care spending down to that of other industrialized nations. You would have the cost containment that we need without the injustices and profound administrative waste of our fragmented, multi-payer system.

Perhaps Harvard’s Baicker and Chandra, with their PhDs, should sit down with Himmelstein and Woolhandler, with their MDs, and have a frank discussion of priorities in reform – like placing the patient first, as a single payer system would.

Oregon needs to get a better attitude

By Samuel Metz, M.D.
Portland (Ore.) Tribune, July 7, 2015

The Federal Aviation Agency reports that not all airline accidents are caused by bad weather. Some pilots, in a crisis, succumb to “hazardous attitudes,” making a bad situation worse. By teaching pilots to overcome these attitudes, flying becomes safer.

And so it is with health care. Oregonian voters have our own “hazardous attitudes” that worsen the impending health care crisis. Overcoming these attitudes means health care becomes less expensive, more accessible, and, like aviation, safer. But before correcting these attitudes, we must identify them.

The FAA’s hazardous attitudes are simple: Antiauthority, impulsivity, invulnerability, “machoness,” and resignation. Voter attitudes toward health care are far more complex.

First hazardous attitude: “Other people should only get the health care they can pay for.” This is certainly true today. And without action, it will be true indefinitely. Other industrialized nations, all of which provide better care to more people for less money, adopt a different attitude: Everyone needs health care, so let’s find the best method to achieve it.

Second attitude: “Restricting access to health care reduces costs.” Gov. Nathan Deal of Georgia advocates closing emergency rooms to people who can’t pay, thus saving money for taxpayers. This radical proposition certainly benefits wealthy taxpayers without emergent needs. But for the rest of us, helping wealthy taxpayers by denying emergency care to our families could mean dying on the doorsteps of an emergency room.

Third: “Taxes are bad.” Who would disagree? Lower taxes liberate money for other things. Unfortunately, lower taxes sometimes increase the costs of other things, and dramatically so with health care. The amount currently paid by Oregonians for insurance policies and out-of-pocket medical expenses exceeds the additional taxes needed to fund a universal care plan. If Oregonian implements universal care, higher taxes reduce costs.

Fourth: “Smart consumers make good choices.” When buying a used car, a flat screen television, or a new house, informed consumers make better choices. Unhappily, this is not true in health care. Most private buyers on insurance exchanges fail to pick the best policy. Almost all seniors picking Medicare drug plans select a bad one. These people are not stupid — health care is simply much more complex than retail shopping.

Last attitude: “We should tend to our own families and let others fend for themselves.” That may have been appropriate for the frontiers of 19th-century Oregon. But in 21st-century Oregon, community efforts generate extraordinary results unobtainable by families working alone. Successful health care systems around the world all depend upon entire nations working in unison, not upon rugged individuals stalking affordable health care alone in the wilderness.

One final point: Costs do not stand between Oregon and a better health care system. Every other industrialized country spends less than we do, yet they provide better care to more people. What enables these countries to succeed where we fail is abandoning the attitudes that currently paralyze us.

A pilot’s hazardous attitudes can produce catastrophic results. Our own hazardous attitudes can prevent us from getting the health care reform we need.

Samuel Metz is an anesthesiologist who lives and works in Portland. He has written about health care reform and community health issues for the Tribune and other publications. Contact him at RTT@samuelmetz.com. 

http://portlandtribune.com/pt/10-opinion/265875-138050-my-view-oregon-needs-to-get-a-better-attitude

Pioneer nun expanded health care in New Mexico

By William Ulwelling, M.D.
Albuquerque Journal, July 8, 2015

The New Mexico chapter of Physicians for a National Health Program has adopted Sister Blandina Segale as our patron saint for universal health care.

A year ago, on June 29, 2014, Sr. Blandina Segale, a Sister of Charity who lived from 1850-1941, was formally put forward as a candidate for sainthood by the Archbishop of Santa Fe, the position now held by Archbishop John C. Wester. If her cause is eventually approved by Pope Francis, she would be the first New Mexico Saint.

Sister Blandina and the Sisters of Charity essentially founded the New Mexico health care system in the 19th century frontier (St. Vincent’s in Santa Fe, St. Joseph’s in Albuquerque, and other New Mexico health care facilities.)

By adopting Sister Blandina as patron saint of universal health care, the New Mexico chapter of Physicians for a National Health Program celebrates New Mexico’s long-standing commitment to universal health care.

Among her many projects, Sister Blandina’s efforts to provide health care to anyone in need took up a large portion of her time and energy. Her dedication to universal care for the sick often was controversial, and sometimes got her in trouble.

On one occasion she took vegetables from Archbishop Lamy’s garden to feed her poor patients. On another occasion she provided medical care for a member of Billy the Kid’s gang who had been refused care by the four local MD’s – an early case of an ostracized uninsured.

One of Sister Blandina’s still-surviving institutions, St. Joseph’s Child Care Center in Albuquerque, is a member of Catholic Health Initiative. True to its traditions, CHI lists universal health care as priority No. 1 in its statement of goals.

Achievement of universal health care through a national health plan is the goal of Physicians for a National Health Program, an organization of over 19,000 American physicians.

Although our state and our nation are now vastly more wealthy than in the frontier days of Sister Blandina, our still-primitive health care system leaves over 30 million without medical insurance. This exceeds the entire population of America at the time Sister Blandina arrived in New Mexico.

Health care experts agree that an improved-Medicare-for-all system would not only provide universal care, but also reduce our national health care expenditures and provide us with a rational health care system – like all the other industrialized nations of the world.

However, powerful parties with a vested interest in maintaining the current system have been able to suppress this reform in America. Compassion and common sense have been overcome by the political power of the vested interests.

Sister Blandina represents the triumph of compassion. Some say that universal health care in America or New Mexico would be a miracle – perhaps it could be the first miracle attributed to the intercession of Sister Blandina.

By adopting Sister Blandina as our patron saint of universal health care, the New Mexico chapter of Physicians for a National Health Program hopes she can inspire us all in our continued efforts towards health care for everyone.

Dr. William Ulwelling is co-chair of the New Mexico Chapter of Physicians for a National Health Program.

http://www.abqjournal.com/609285/opinion/pioneer-nun-expanded-health-care-in-nm.html

Dembrow Resurrects Healthcare Study Bill after Failed Vote on Friday

With “two broken arms,” Sen. Alan Bates changes his mind again about studying the financing of universal healthcare in Oregon, even as he complained the state would be studying something — a single-payer system — that he did not believe would ever happen. Sen. Michael Dembrow said studying the issue could still strengthen the CCO system.

By Chris Gray
The Lund Report (Portland, Ore.), July 7, 2015

Sen. Michael Dembrow’s bill to study healthcare financing in Oregon died on Friday, but it rose again on Sine Die Monday, as Sen. Alan Bates, D-Ashland, reaffirmed his support in a 16-14 vote on the final day of the 2015 legislative session.

Near the start of the Monday morning Senate floor session, Bates said he was changing his vote “with two broken arms,” and while he’d offer his begrudging support, he highlighted the single-payer aspect of the study and described it as a lost cause.

“I think we’re going to spend $300,000 in this state on something that’s not going to happen,” said Bates, an osteopathic family physician. “I don’t want to spend money on this [study] ever again. Our present healthcare system is barely sustainable and I don’t want to put any more load on it.”

Bates had been a sponsor of House Bill 2828, but in a moment of fatigue and frustration on Friday, his nay vote sank the bill, as its supporters looked on, stunned. His opposition led a Republican supporter, Sen. Jackie Winters of Salem, to switch her vote, and Democratic Sens. Mark Hass of Beaverton and Chuck Riley of Hillsboro also voted it down.

The senator from Ashland was clearly frustrated that Senate President Peter Courtney, D-Salem, had kept the Senate in session at 6 p.m. on a holiday, while Bates had to drive five hours back to Southern Oregon. He complained aloud on the floor about having to make the long return trip, pleading with Courtney to not require an early-morning session Monday.

Bates is equally passionate about shaping public policy and practicing medicine. Since February, he has kept a grueling weekly schedule of four days of lawmaking in Salem, followed by three days at his clinic in Jackson County.

Dembrow never regained the support of Hass or Winters, both of whom supported an unfunded study in 2013, along with Sen. Betsy Johnson, D-Scappoose and three other Republicans, including Sen. Jeff Kruse of Roseburg. All Democrats and one Republican — Rep. Andy Olson of Albany — supported HB 2828 in an earlier House vote.

Now that the study looked to actually be going forward, Johnson suddenly had concerns that it might be tainted by a small amount of private funding from the Northwest Health Foundation that will supplement state resources.

House Bill 2828 authorizes $300,000 for the Oregon Health Authority to oversee a comprehensive study of healthcare financing in Oregon, one that will look at a number of possible situations, including single payer, a public option on the insurance exchange, and a full rollout of the Affordable Care Act, possibly with a Basic Health Plan for working-class residents.

Dembrow highlighted the support of Oregon Health & Science University President Dr. Joe Robertson, the Oregon Public Health Association and the Oregon Medical Association. Aside from examining the expansion of a Medicare-like system — the single-payer option — Dembrow hinted that HB 2828 could give the state insights into less revolutionary reform efforts.

“The results of this study could strengthen the existing CCO system,” he said, referring to the coordinated care organizations that manage the Oregon Health Plan for low-income residents.

Single-payer advocates have also said they will use the results of the study to serve as the backbone for a ballot measure charging the Oregon Legislature with implementing a universal healthcare system. Measure 91, legalizing recreational marijuana sales, was approved by the voters but carried out by the Legislature, and had a similar implementation structure.

Although Dr. John Kitzhaber, the former Oregon governor, has always taken an ambivalent stance towards single payer, Kruse tied Kitzhaber to HB 2828 like an albatross, now that he no longer supports the study: “Our former governor, who resigned in disgrace, was always a supporter of single payer. … Friends, a move to have the government take control of healthcare is one of the worst things we can do for our citizens.”

Another Republican, Sen. Brian Boquist of McMinnville, was more judicious. He said he did not actually oppose the study, he just thought the Oregon Health Authority was wasting well more than $300,000 in its existing $19.5 billion budget through duplicative programming. “We just need to tell them to go study it,” he said.

https://www.thelundreport.org/content/dembrow-resurrects-healthcare-study-bill-after-failed-vote-friday

New drugs fail to align benefits, risks and costs

Serious Risks And Few New Benefits From FDA-Approved Drugs

By Donald W. Light
Health Affairs Blog, July 6, 2015

Over the past year, the U.S. Senate and The New York Times have been investigating the failure of the nation’s auto safety regulators to protect citizens from cars with occasionally dangerous faulty devices.

But neither august institution has paid attention to the Food and Drug Administration’s (FDA) failure to protect the 170 million Americans who take prescription drugs from adverse reactions that are killing more than 2,400 people every week. Annually, prescription drugs cause over 81 million adverse reactions and result in 2.7 million hospitalizations.

This epidemic of harm from medications makes our prescription drugs the fourth leading cause of death in the United States. Including hospitalizations and deaths from prescribing errors, overdosing, and self-medication, drugs move up to third place.

Below I describe the biases that appear throughout the drug development process, from initial research to FDA review and approval. I conclude with recommendations that would reduce drug development costs and ensure that drugs are only approved if they are safe and significantly more effective than already existing medications.

Figure 1. Few Clinical Advances in a Decade and Hundreds of Other Drugs Approved for Promotion
Number of New Drugs, 2002-2011
2 – Breakthrough
13 – Real Advance
61 – Some Advantage
918 – Little or No Improvement

(The exhibit focuses on France, a country whose consumer-oriented drug market features an array of products similar to the U.S.)

Flooding the market with hundreds of minor variations on existing drugs and technically innovative but clinically inconsequential new drugs, appears to be the de facto hidden business model of drug companies. In spite of its primary charge to protect the public, the FDA criteria for approval encourage that business model. The main products of pharmaceutical research are scores of clinically minor drugs that win patent protection for high prices, with only a few clinically important advances like Sovaldi or Gleevec.

This business model works. Despite producing drugs with few clinical advantages and significant health risks, industry sales and profits have grown substantially, at public expense. Companies spend 2-3 times less on research than on marketing to convince physicians to prescribe these minor variations.

The Center for Drug Evaluation and Research (CDER) is the FDA division responsible for determining whether new drugs should be approved. Its funding, however, now largely comes not from taxpayers but from the companies submitting their drugs to CDER for review.

This clear conflict of interest and approving so many new drugs with few clinical benefits serve corporate interests more than public interests, especially given the large risks of serious harm. Direct and indirect costs to society far exceed the cost of funding the FDA as a public, independent review body.

Peer-reviewed studies already demonstrate how pharmaceutical companies manipulate FDA rules to generate evidence that their new drugs are more effective and less harmful than unbiased studies would show. The industry then recruits teams of medical writers, editors, and statisticians to select and repackage trial results into peer-reviewed articles that become accepted as reliable medical knowledge.

Based on his investigations, Marc Rodwin concludes, “Scholarly studies have revealed that drug firms design trials that skew the results and that they distort the evidence by selective reporting or biased interpretation.”

New FDA policies to get more drugs reviewed faster so that they can reach patients sooner result ironically in even more drugs being approved with less evidence that they are either safer or more effective. Faster reviews mean the chance that a drug will generate an FDA warning of serious harm jumps from one in five to one in three.

To protect the public from unsafe and ineffective drugs and earn public trust, the FDA and Congress must acknowledge the biases described here that result from pharmaceutical corporations financing the public regulator. They should also require two changes: that new drugs demonstrate patient-based clinical advantages through comparative trials, and that these trials be based on the population that will actually take a drug.

These changes would reduce the flood of minor variations shown in Exhibit 1 and the subsequent billions spent on them.

http://healthaffairs.org/blog/2015/07/06/serious-risks-and-few-new-benefits-from-fda-approved-drugs/

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Comment:

By Don McCanne, MD

Outrageously high pricing is not the only problem we face with new pharmaceutical products. We are inundated with new drugs that provide little or no improvement over existing products. This exposes us not only to the higher prices driven by new patents, but also to the potential of serious adverse effects that may not be recognized until the new drugs have been on the market for a period of time.

Under a single payer system, drug formularies should include only those products are reasonably effective, comparatively safe, and cost effective. Since the industry does not provide us with those assurances, it is the responsibility for the government to step in and do so.

What do the projected health insurance premium increases mean to us?

Health Insurance Companies Seek Big Rate Increases for 2016

By Robert Pear
The New York Times, July 3, 2015

Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

The rate requests, from some of the more popular health plans, suggest that insurance markets are still adjusting to shock waves set off by the Affordable Care Act.

It is far from certain how many of the rate increases will hold up on review, or how much they might change. But already the proposals, buttressed with reams of actuarial data, are fueling fierce debate about the effectiveness of the health law.

A study of 11 cities in different states by the Kaiser Family Foundation found that consumers would see relatively modest increases in premiums if they were willing to switch plans. But if they switch plans, consumers would have no guarantee that they can keep their doctors. And to get low premiums, they sometimes need to accept a more limited choice of doctors and hospitals.

Marinan R. Williams, chief executive of the Scott & White Health Plan in Texas, which is seeking a 32 percent rate increase, said the requests showed that “there was a real need for the Affordable Care Act.”

“People are getting services they needed for a very long time,” Ms. Williams said. “There was a pent-up demand. Over the next three years, I hope, rates will start to stabilize.”

Sylvia Mathews Burwell, the secretary of health and human services, said that federal subsidies would soften the impact of any rate increases. Of the 10.2 million people who obtained coverage through federal and state marketplaces this year, 85 percent receive subsidies in the form of tax credits to help pay premiums.

In an interview, Ms. Burwell said consumers could also try to find less expensive plans in the open enrollment period that begins in November. “You have a marketplace where there is competition,” she said, “and people can shop for the plan that best meets their needs in terms of quality and price.”

In their submissions to federal and state regulators, insurers cite several reasons for big rate increases. These include the needs of consumers, some of whom were previously uninsured; the high cost of specialty drugs; and a policy adopted by the Obama administration in late 2013 that allowed some people to keep insurance that did not meet new federal standards.

“Healthier people chose to keep their plans,” said Amy L. Bowen, a spokeswoman for the Geisinger Health Plan in Pennsylvania, and people buying insurance on the exchange were therefore sicker than expected. Geisinger, often praised as a national model of coordinated care, has requested an increase of 40 percent in rates for its health maintenance organization.

Federal officials have often highlighted a provision of the Affordable Care Act that caps insurers’ profits and requires them to spend at least 80 percent of premiums on medical care and related activities. “Because of the Affordable Care Act,” Mr. Obama told supporters in 2013, “insurance companies have to spend at least 80 percent of every dollar that you pay in premiums on your health care — not on overhead, not on profits, but on you.”

In financial statements filed with the government in the last two months, some insurers said that their claims payments totaled not just 80 percent, but more than 100 percent of premiums. And that, they said, is unsustainable.

****

Comment:

By Don McCanne, MD

Although it will be about three months before we have the final health insurance premiums for 2016, the information we have already can warrant a few preliminary observations.

  • The Affordable Care Act appears to have failed on delivering its promise of controlling global health care costs. The primary reason given by the insurers when submitting requests for much higher premiums for 2016 is that health care costs were much higher than their actuaries anticipated.
  • Some complain that new enrollees were less healthy and thus drove spending up, but under the individual mandate, increases in enrollment were across the board and not concentrated amongst the less healthy.
  • There may have been some pent up demand amongst new enrollees (e.g., joint replacement) but that is only a transient surge which does not warrant long term premium increases. Much of the pent up demand will have been ventilated as most of the remaining uninsured are ineligible by immigration status or by personal hardship. The numbers who are eligible but decline coverage will only trickle in as health care needs develop.
  • It appears that the increases in the benchmark silver plans will not be as great as the increases currently receiving considerable publicity. Requests over a ten percent increase were required to be made public whereas increases under ten percent will not be known until plans are marketed prior to the November 1 beginning of open enrollment.
  • Because rate increases vary considerably amongst the plans, many individuals will be forced to choose between paying higher rates by staying in their current plans or changing to plans with lower rates but with different narrow provider networks thereby potentially sacrificing continuity of care.
  • Respected institutions such as Geisinger in Pennsylvania and Scott and White in Texas are asking staggering premium increases, indicating that the supposed cost containment features of ACA are having a negligible impact on legitimate spending.
  • Little is being said about the insurance underwriting cycle. Large, well capitalized insurers are able to price their products more competitively, decreasing the market presence of less competitive insurers. Once market dominance is established, insurers are free to drive up premiums as much as 20 to 40 percent, as reported in this New York Times article. The regulated medical loss ratios are generous enough to allow market performance (profits) to excel, as confirmed by current Wall Street activity in health insurance equities.

So are we going to wait until October when the premium rates are announced, and then do nothing other than continue to stand back and observe because the insurers will reassure us that silver benchmark plans didn’t go up that much – maybe 4.4 percent – even if it means that the enrollees have to switch plans and find new providers in a different narrow network? Is this the good that’s coming out of all of this? What about those who want to continue with their current providers, but face a 20 to 40 percent premium increase? Will the death spiral bleed over from insurers to patients?

Enough. Single payer.

Health Insurance Companies Seek Big Rate Increases for 2016

By Robert Pear
The New York Times, July 3, 2015

WASHINGTON — Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

The Oregon insurance commissioner, Laura N. Cali, has just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.

Jesse Ellis O’Brien, a health advocate at the Oregon State Public Interest Research Group, said: “Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here. Some may start wondering if insurance is affordable or if it’s worth the money.”

President Obama, on a trip to Tennessee this week, said that consumers should put pressure on state insurance regulators to scrutinize the proposed rate increases. If commissioners do their job and actively review rates, he said, “my expectation is that they’ll come in significantly lower than what’s being requested.”

The rate requests, from some of the more popular health plans, suggest that insurance markets are still adjusting to shock waves set off by the Affordable Care Act.

It is far from certain how many of the rate increases will hold up on review, or how much they might change. But already the proposals, buttressed with reams of actuarial data, are fueling fierce debate about the effectiveness of the health law.

A study of 11 cities in different states by the Kaiser Family Foundation found that consumers would see relatively modest increases in premiums if they were willing to switch plans. But if they switch plans, consumers would have no guarantee that they can keep their doctors. And to get low premiums, they sometimes need to accept a more limited choice of doctors and hospitals.

Some say the marketplaces have not attracted enough healthy young people. “As a result, millions of people will face Obamacare sticker shock,” said Senator John Barrasso, Republican of Wyoming.

By contrast, Marinan R. Williams, chief executive of the Scott & White Health Plan in Texas, which is seeking a 32 percent rate increase, said the requests showed that “there was a real need for the Affordable Care Act.”

“People are getting services they needed for a very long time,” Ms. Williams said. “There was a pent-up demand. Over the next three years, I hope, rates will start to stabilize.”

Sylvia Mathews Burwell, the secretary of health and human services, said that federal subsidies would soften the impact of any rate increases. Of the 10.2 million people who obtained coverage through federal and state marketplaces this year, 85 percent receive subsidies in the form of tax credits to help pay premiums.

In an interview, Ms. Burwell said consumers could also try to find less expensive plans in the open enrollment period that begins in November. “You have a marketplace where there is competition,” she said, “and people can shop for the plan that best meets their needs in terms of quality and price.”

Blue Cross and Blue Shield of New Mexico has requested rate increases averaging 51 percent for its 33,000 members. The proposal elicited tart online comments from consumers.

“This rate increase is ridiculous,” one subscriber wrote on the website of the New Mexico insurance superintendent.

In their submissions to federal and state regulators, insurers cite several reasons for big rate increases. These include the needs of consumers, some of whom were previously uninsured; the high cost of specialty drugs; and a policy adopted by the Obama administration in late 2013 that allowed some people to keep insurance that did not meet new federal standards.

“Healthier people chose to keep their plans,” said Amy L. Bowen, a spokeswoman for the Geisinger Health Plan in Pennsylvania, and people buying insurance on the exchange were therefore sicker than expected. Geisinger, often praised as a national model of coordinated care, has requested an increase of 40 percent in rates for its health maintenance organization.

Insurers with decades of experience and brand-new plans underestimated claims costs.

“Our enrollees generated 24 percent more claims than we thought they would when we set our 2014 rates,” said Nathan T. Johns, the chief financial officer of Arches Health Plan, which covers about one-fourth of the people who bought insurance through the federal exchange in Utah. As a result, the company said, it collected premiums of $39.7 million and had claims of $56.3 million in 2014. It has requested rate increases averaging 45 percent for 2016.

The rate requests are the first to reflect a full year of experience with the new insurance exchanges and federal standards that require insurers to accept all applicants, without charging higher prices because of a person’s illness or disability. The 2010 health law established the rate review process, requiring insurance companies to disclose and justify large proposed increases. Under federal rules, increases of 10 percent or more are subject to review.

Federal officials have often highlighted a provision of the Affordable Care Act that caps insurers’ profits and requires them to spend at least 80 percent of premiums on medical care and related activities. “Because of the Affordable Care Act,” Mr. Obama told supporters in 2013, “insurance companies have to spend at least 80 percent of every dollar that you pay in premiums on your health care — not on overhead, not on profits, but on you.”

In financial statements filed with the government in the last two months, some insurers said that their claims payments totaled not just 80 percent, but more than 100 percent of premiums. And that, they said, is unsustainable.

At Blue Cross and Blue Shield of Minnesota, for example, the ratio of claims paid to premium revenues was more than 115 percent, and the company said it lost more than $135 million on its individual insurance business in 2014. “Based on first-quarter results,” it said, “the year-end deficit for 2015 individual business is expected to be significantly higher.”

BlueCross BlueShield of Tennessee, the largest insurer in the state’s individual market, said its proposed increase of 36 percent could affect more than 209,000 consumers.

“There’s not a lot of mystery to it,” said Roy Vaughn, a vice president of the Tennessee Blue Cross plan. “We lost a significant amount of money in the marketplace, $141 million, because we were not very accurate in predicting the utilization of health care.”

Julie Mix McPeak, the Tennessee insurance commissioner, said she would ask “hard questions of the companies we regulate, to protect consumers.”

After public hearings and a rigorous review, Ms. Cali, the Oregon insurance commissioner, found that the cost of providing coverage to individuals and families in 2014 was $830 million, while premiums were only $703 million. She directed some carriers to raise rates in 2016 even more than they had proposed.

Health Net, for example, requested rate increases averaging 9 percent in Oregon. The state approved increases averaging 34.8 percent. Oregon’s Health Co-op requested a 5.3 percent increase. The state called for a 19.9 percent increase.

“We share the concerns expressed through public comment about the affordability of health insurance in Oregon,” said Ms. Cali, an actuary. But, she added, “inadequate rates could result in companies going out of business in the middle of the plan year, or being unable to pay claims.”

Coventry Health Care, now owned by Aetna, is seeking rate increases that average 22 percent for 70,000 consumers in Missouri. “The claims experience for these plans has been worse than anticipated,” Coventry reported.

In its proposal to increase rates by an average of 25 percent for more than 397,000 consumers, Blue Cross and Blue Shield of North Carolina cited “inpatient costs, particularly in treatment of cancer and heart conditions, emergency room utilization, and cost for specialty drug medications” to treat hepatitis C, breast cancer and cystic fibrosis.

Blue Cross and Blue Shield of Kansas sought increases averaging 37 percent for 2016 and said the increase could affect 28,600 consumers.

“Kansans who purchased these individual plans since 2014 were older, in general, than expected and required more medical services than anticipated,” the company told federal health officials.

The Choice Ahead: A Private Health-Insurance Monopoly Or A Single Payer

By Robert Reich
The Huffington Post, July 6, 2015

The Supreme Court’s recent blessing of Obamacare has precipitated a rush among the nation’s biggest health insurers to consolidate into two or three behemoths.

The result will be good for their shareholders and executives, but bad for the rest of us – who will pay through the nose for the health insurance we need.

We have another choice, but before I get to it let me give you some background.

Last week, Aetna announced it would spend $35 billion to buy rival Humana in a deal that will create the second-largest health insurer in the nation, with 33 million members.

The combination will claim a large share of the insurance market in many states – 88 percent in Kansas and 58 percent in Iowa, for example.

A week before Aetna’s announcement, Anthem disclosed its $47 billion offer for giant insurer Cigna. If the deal goes through, the combined firm will become the largest health insurer in America.

Meanwhile, middle-sized and small insurers are being gobbled up. Centene just announced a $6.3 billion deal to acquire Health Net. Earlier this year Anthem bought Simply Healthcare Holdings for $800 million.

Executives say these combinations will make their companies more efficient, allowing them to gain economies of scale and squeeze waste out of the system.

This is what big companies always say when they acquire rivals.

Their real purpose is to give the giant health insurers more bargaining leverage over employees, consumers, state regulators, and healthcare providers (which have also been consolidating).

The big health insurers have money to make these acquisitions because their Medicare businesses have been growing and Obamacare is bringing in hundreds of thousands of new customers. They’ve also been cutting payrolls and squeezing more work out of their employees.

This is also why their stock values have skyrocketed. A few months ago the Standard & Poor’s (S&P) 500 Managed Health Care Index hit its highest level in more than twenty years. Since 2010, the biggest for-profit insurers have outperformed the entire S&P 500.

Insurers are seeking rate hikes of 20 to 40 percent for next year because they think they already have enough economic and political clout to get them.

That’s not what they’re telling federal and state regulators, of course. They say rate increases are necessary because people enrolling in Obamacare are sicker than they expected, and they’re losing money.

Remember, this an industry with rising share values and wads of cash for mergers and acquisitions.

It also has enough dough to bestow huge pay packages on its top executives. The CEOs of the five largest for-profit health insurance companies each raked in $10 to $15 million last year.

After the mergers, the biggest insurers will have even larger profits, higher share values, and fatter pay packages for their top brass.

There’s abundant evidence that when health insurers merge, premiums rise. For example, Leemore Dafny, a professor at the Kellogg School of Management at Northwestern University, and his two co-authors, found that after Aetna merged with Prudential HealthCare in 1999, premiums rose 7 percent higher than had the merger not occurred.

The problem isn’t Obamacare. The real problem is the current patchwork of state insurance regulations, insurance commissioners, and federal regulators can’t stop the tidal wave of mergers, or limit the economic and political power of the emerging giants.

Which is why, ultimately, American will have to make a choice.

If we continue in the direction we’re headed we’ll soon have a health insurance system dominated by two or three mammoth for-profit corporations capable of squeezing employees and consumers for all they’re worth – and handing over the profits to their shareholders and executives.

The alternative is a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care.

Which do you prefer?

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including “The Work of Nations”, “Locked in the Cabinet,” “Supercapitalism,” and his most recent book, “Aftershock.” His “Marketplace” commentaries can be found on publicradio.com and iTunes. He is also Common Cause’s board chairman. His website is: http://robertreich.org

http://www.huffingtonpost.com/robert-reich/private-health-insurance-monopoly-or-single-payer_b_7734742.html

Medicare for All would end fighting over ACA

By Pamella Gronemeyer, M.D.
St. Louis Post-Dispatch, Letters, July 2, 2015

As a physician, I felt compelled to write a letter concerning the King v. Burwell case decision announced last week. The Supreme Court upheld the right for citizens of all states to benefit from the federal subsidies.

While Chief Justice John Roberts did not state that health care is a human right, he did state that the purpose of the Affordable Care Act was “passed to strengthen insurance markets, not destroy them.”

This decision magnifies the poor decision made by many states, including Missouri, to not accept the Medicaid option. By refusing to take the federal subsidy, the states leave a large number of people who earn salaries around the poverty level not eligible for either subsidies or Medicaid. The first thing that should happen is these states should reconsider the health and welfare of their citizens rather than the gamesmanship of politics and accept the Medicaid expansion.

The King v. Burwell decision does not mean that many physicians, nurses, health care workers, labor unions and average Americans will stop working for Medicare for All, a single-payer health care system, which would insure that all Americans would receive health care (not just insurance coverage) from birth until death.

The ACA is incredibly complex and still relies on a multitude of third-party payers providing a variety of plans with a mélange of different, unequal benefits. There will still be 24 million uninsured people in the United States if every state accepted the Medicaid option. Single-payer would slash the administrative bloat in our private-insurance-based system and would allow us to pay for health care, not insurance. It is the only way that we can curb the still rising costs of health care.

The legality of the Medicare system has already been tested. It will be 50 years old this year. Currently Medicare covers the 20 percent of the population who require 80 percent of the cost of health care in the United States. Medicare for All would put an end to the efforts that will still be ongoing by some politicians to destroy or repeal the ACA legislatively.

Dr. Pamella Gronemeyer resides in Glen Carbon, Ill.

http://www.stltoday.com/news/opinion/mailbag/medicare-for-all-would-end-fighting-over-aca/article_1864faab-a0d9-5718-b42d-0a34d3b01209.html