PNHP

Patients lack enough assets to pay insurance cost sharing

Patients lack enough assets to pay insurance cost sharing

Consumer Assets and Patient Cost Sharing

By Gary Claxton, Matthew Rae, and Nirmita Panchal
Kaiser Family Foundation,  March 11, 2015

While concerns about cost sharing are not new, the recent coverage expansions under the ACA put a new focus on what it means for coverage to be affordable. The goal of the law was to cover more of the uninsured, many of whom have limited means. The law requires most people to have health insurance, if they can afford to pay the premium, or to pay a penalty. The issue for some families, however, is that the policies with affordable premiums may have cost sharing requirements that would be difficult for them to meet when they access services. Many of the policies in the state and federal marketplaces have significant cost sharing, as do many policies provided to people at work. The ACA provides cost-sharing assistance to some, primarily to those with incomes below 200 percent of poverty purchasing through a state or the federal marketplace. Others potentially face much higher out-of-pocket expenses.

Deductibles

Overall, three in five (63%) households have enough liquid financial assets to meet the lower deductible amounts ($1,200 single/$2,400 family) while one-half (51%) can meet the higher deductible amounts ($2,500 single/$5,000 family). These percentages are similar for single-member and multi-member households, but vary significantly by family income. Only 32% of households with incomes between 100% and 250% of poverty can meet the lower deductible amounts, while one-in-five can meet the higher deductible amounts. In contrast, 88% of households with incomes over 400% of poverty can meet the lower deductible amounts and three-in-four (79%) can meet the higher amounts.

Out-of-Pocket Limits

Out-of-pocket limits are higher than deductibles and meeting them is more difficult for many families. Forty-eight percent of households have enough liquid financial assets to meet the lower out-of-pocket limits ($3,000 single/$6,000 family) and 37% can meet the higher limits ($6,000 single/$12,000 family). The percentages are quite low for households with incomes between 100% and 250% of poverty, with 18% having enough liquid financial assets to meet the lower out-of-pocket limits and 11% being able to meet the higher limits. Among households with incomes over 400% of poverty, 75% have enough liquid financial assets to meet the lower out-of-pocket limits while just 62% can meet the higher limits.

Discussion

Many non-elderly, non-poor households lack the resources to meet the deductibles and out-of-pocket limits that they may encounter in the private insurance market. Many households have insufficient liquid financial assets to meet the specified cost sharing measures, and the situation for net financial assets is no better. Not surprisingly, the difficulties are greater in households with lower incomes and with someone who lacked health insurance.

While the ACA provides for reduced cost sharing for some people with incomes below 250% of poverty that purchase coverage in a state or the federal marketplace, there is no assistance with cost sharing for those with higher incomes or for those obtaining coverage through a job. Substantial shares of households with incomes between 250% and 400% of poverty would be unable to meet even the lower out-of-pocket limits with their current resources, and meaningful shares of households with incomes over 400% of poverty would have problems as well.

http://kff.org/health-costs/issue-brief/consumer-assets-and-patient-cost-sharing/

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Comment:

By Don McCanne, M.D.

This important study demonstrates one of the most serious deficiencies in our dysfunctional system of health care financing: the mismatch between the personal financial assets that most Americans have and the cost sharing in the form of deductibles and out-of-pocket limits required by their insurance plans. Far too many individuals, should they have significant medical needs, do not have adequate liquid assets to cover the level of cost sharing required by most plans today.

Look at the most favorable example above: 25% of higher-income families (families with incomes over 400% of poverty) do not have enough liquid financial assets to pay lower out-of-pocket limits of $3,000 single/$6,000 family. Worse, 38% of these higher-income families do not have enough liquid assets to pay higher out-of-pocket limits of $6,000 single/$12,000 family (the 2015 out-of-pocket limits for plans in the ACA exchanges are even higher: $6,600 individual/$13,200 family). Further, net financial assets are usually lower than liquid financial assets because of family debt; families are even more broke than their cash on hand would indicate.

Except for those with the very highest incomes, our current flawed system of financing health care through private plans creates financial hardship for far too many of us who require significant amounts of health care. Today’s private insurance products are inadequate.

What is the source of support for this deficient coverage? Private insurers want to maintain access to markets by keeping their premiums competitive. They do this partly by shifting costs to patients’ pockets. Neoliberal and conservative politicians want to keep spending on government premium subsidies to a minimum, so they support cost sharing policies that reduce premiums. Libertarian and conservative ideologues want to place health care consumers in charge of spending their own money. If they don’t have enough funds, well, that’s too bad. They should have had enough personal responsibility to establish their own health savings accounts and fully fund them before medical needs arose. Sure.

Private insurers we can certainly do without. But what about the ideologues? Is there no place in this country for egalitarianism and social solidarity? I cringe when I think about current trends advancing income and wealth inequality as the social fiber continues to shred.

We desperately need a single-payer, improved Medicare for all, with first dollar coverage. Let’s harness the forces of social solidarity so we can achieve that goal.

Report: State-Funded Health Care Would Save New York $45 Billion

By Derek Hawkins
Public News Service (New York), March 12, 2015

NEW YORK – New York could save $45 billion a year in health care costs if it adopted a so-called “single-payer” insurance program.

That’s according to a new report from the University of Massachusetts at Amherst, which looked at the economic impact of a bill in the state assembly that would cut out private insurance in favor of state-funded health care.

The bottom line is a prediction of lower health care costs for nearly all New York households. Assemblyman Richard Gottfried (D-Manhattan) introduced the bill, dubbed the New York Health Act.

“The numbers are terrific,” says Gottfried. “The net savings of $45 billion a year, $2,200 savings per capita in New York. I think having these numbers really changes the debate.”

Republican leaders and private groups like the Business Council of New York State are fighting the New York Health Act, saying market-based insurance is more reliable and Gottfried’s bill would result in unaffordable tax hikes.

Eliminating private health insurance would cause the state to shed some jobs in the industry, but according to the study, a state-funded system would make up for it, creating some 200,000 new positions. New York households that earn less than $75,000 a year would benefit most, the study found. Marva Wade, second vice president of New York State Nurses Association, supports the bill.

“The study reinforces that there are real reasons that are based in the science of economics that there should be health care for everyone,” she says.

Last year, Vermont came close to adopting a statewide single-payer system, but the governor scrapped the plan in December, saying it would cost too much to implement.

http://www.publicnewsservice.org/2015-03-12/health-issues/report-state-funded-health-care-would-save-new-york-45-billion/a45075-1

ACA has not reduced insurers’ administrative waste

The Affordable Care Act and Medical Loss Ratios: No Impact in First Three Years

By Benjamin Day, David U. Himmelstein, Michael Broder, and Steffie Woolhandler
International Journal of Health Services, Volume 45, Number 1

The Patient Protection and Affordable Care Act (ACA) set limits on insurers’ overhead, mandating a medical loss ratio (MLR) of at least 80 percent in the individual and small-group markets and 85 percent in the large-group market starting in 2011. In implementing the law, the Obama administration introduced new rules that changed (and inflated) how insurers calculate MLRs, distorting time trends. We used insurers’ filings with the U.S. Securities and Exchange Commission to calculate the largest insurers’ MLRs before and after the ACA regulations took effect, using a constant definition of MLR. MLRs averaged 83.04 percent in the three years before reform and 83.05 percent in the three years after reform. We conclude that the ACA had no impact on insurance industry overhead spending.

In sum, the ACA has not decreased private insurers’ overhead, which remains six-fold higher than traditional Medicare’s.

“The Affordable Care Act and Medical Loss Ratios: No Impact in First Three Years” http://org.salsalabs.com/o/307/images/JOH45_1_DayArticle(1).pdf

PNHP press release: “Health law hasn’t cut insurers’ rate of overhead spending: study” https://www.pnhp.org/news/2015/march/health-law-hasn’t-cut-insurers’-rate-of-overhead-spending-study

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Comment:

By Don McCanne, MD

All policy experts agree that the profound administrative waste that is unique to the U.S. health care system needs to be reduced. The architects of the Affordable Care Act (ACA) rejected the solution that would have worked – a single payer national health program – and instead included in their legislation a requirement that private insurers are allowed to keep, for their own administrative costs and profits, no more than 80 percent (individual and small group insurance markets) or 85 percent (large group markets) of the premiums collected. Insurers refer to this percentage that they have to spend on patient care as the medical loss ratio, i.e., paying for health care is a loss to them. We complained that this meager requirement would be ineffective in reducing administrative waste. This study confirms that the medical loss ratio has not changed after three years of implementation of ACA.

Of course, much of the administrative waste in our system is due to the additional administrative burden that the insurers have placed on the health care professionals and institutions. ACA reduced none of this yet added another layer by establishing the health insurance exchanges, or Health Insurance Marketplaces as the Obama administration calls them. Waste, waste, waste.

The percentage of administrative costs for our traditional Medicare program are only one-sixth that of the private insurers. Further, if Medicare were our only payer, the administrative burden placed on our health care delivery system would be only a fraction of what it now is. Obviously, a single-payer, improved Medicare that covers everyone is precisely what we need. Then we could spend that money on patients instead of paperwork.

Health law hasn’t cut insurers’ rate of overhead spending: study

Study finds Affordable Care Act’s requirement that health insurers spend at least 80-85 percent of premiums on actual medical care had no impact in the law’s first three years

FOR IMMEDIATE RELEASE
March 12, 2015

Contact:
Mark Almberg, PNHP communications director, 312-782-6006, mark@pnhp.org

Despite claims by the Obama administration that the Affordable Care Act will reduce health insurance companies’ spending on overhead, thereby channeling a greater share of consumers’ premium dollars into actual patient care, insurers’ financial filings show the law had no impact on the percentage of insurer expenditures on such things as administration, marketing and profits.

That’s the chief finding of a team of researchers, including two prominent physicians on the faculties of the City University of New York’s School of Public Health and Harvard Medical School, in an article published Wednesday in the peer-reviewed International Journal of Health Services.

Examining U.S. Securities and Exchange Commission filings of nine large insurers, and using a constant definition of what constitutes an insurer’s “medical loss ratio” or MLR – i.e. actual spending on payments to doctors, hospitals, pharmacies, etc. – the researchers found that the weighted average MLR in the three years after the new ACA regulations took effect (2011-2013) was 83.05 percent, compared to 83.04 percent in the three years prior to the reform.

The ACA sets limits on insurers’ overhead, mandating an MLR of at least 80 percent in small-group markets and 85 percent in the large group market. However, the Obama administration changed the traditional yardstick by which the MLR is measured.

The new way of calculating the MLR allows insurers to classify most expenditures on “quality improvement” initiatives and the updating of coding systems as medical expenditures, and allows them to subtract most taxes, regulatory fees and “community benefit” spending.

“Rather than go along with the administration’s moving of the goal posts to the apparent advantage of the insurers, we stuck with the traditional way financial analysts and insurance firms calculate MLR, namely, by dividing total medical payments by total premium income,” said Benjamin Day, the study’s lead author.

“What we found is that there’s been no significant change in the insurers’ MLR since the implementation of the new regulations.”

MLRs fell at four firms – UnitedHealth, Humana, Aetna and WellCare – and increased slightly at four others and markedly at one (Centene, a major managed Medicaid contractor).

Day continued: “Although the MLR requirements forced insurers to pay rebates of $1.1 billion in 2011 and $504 million in 2012 – payments that were touted by the Department of Health and Human Services as a major boon to consumers – these rebates constituted less than 0.1 percent of private insurance company revenues and appear to have had no overall impact on MLRs.”

Day, whose published research includes articles on labor history and health care reform, currently serves as executive director at Healthcare-NOW, a national coalition of groups advocating for a single-payer health care system.

Senior author Dr. Steffie Woolhandler, professor at the City University of New York’s School of Public Health at Hunter College and co-founder of Physicians for a National Health Program, said a number of factors might explain why the ACA hasn’t raised MLRs.

“Most plans already met the MLR requirement from 2007-2009, even without the MLR redefinition in the ACA,” Woolhandler said. “Moreover, self-insured employer plans, which accounted for 60 percent of all covered workers in 2011, were entirely exempt from the MLR requirement. In addition, a number of exemptions and adjustments were granted to a wide spectrum of plans and to several states, temporarily nullifying the new mandate.”

Woolhandler observed that traditional Medicare’s overhead is about 2 percent, i.e. 98 percent of Medicare’s spending goes toward medical care. “The ACA is too lenient on private insurers, sets too low a bar for their payments for actual care, and provides them with too many loopholes.

“The lesson is clear,” she said. “We need to adopt a publicly financed, improved Medicare for All.”

“The Affordable Care Act and Medical Loss Ratios: No Impact in First Three Years,” Benjamin Day, M.A., David U. Himmelstein, M.D., Michael Broder, B.A., Steffie Woolhandler, M.D., M.P.H. International Journal of Health Services, Vol. 45, No. 1 (January 2015).

The full text of the article is available at the links above or from Mark Almberg at mark@pnhp.org.

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The International Journal of Health Services (joh.sagepub.com) contains articles on health and social policy, political economy and sociology, history and philosophy, ethics and law in the areas of health and health care.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 19,000 doctors who support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

Doctor points to insurance for woes

Chicago’s Orris speaks to area health consortium

By Rick Miller
Olean (N.Y.) Times Herald, March 6, 2015

OLEAN — The U.S. health care system is more costly and less effective than many other developed nations, a Chicago physician told members of the Cattaraugus County Healthy Liveable Communities Consortium on Thursday.

Dr. Peter Orris, a professor at Rush University and Northwestern University’s School of Medicine specializing in occupational and environmental medicine, told the audience at Bethany Lutheran Church that many health care shortcomings in the U.S. are the result of insurance companies.

Believing that a quasi-market approach to health care was the best way to go, the Affordable Care Act, or Obamacare, relies on for-profit insurance companies.

“Many of us have been critical of that for some time,” Orris told about 50 members of the Health Liveable Communities Consortium. “There is a disconnect between the cost of disease and the profits of providers and hospitals.”

A lack of controls and a lack of balance drives up costs. Health costs in the United States are about $9,160 per person per year, Orris said. That’s $3,000 above the cost of other developed countries, and often the results are not as good, he claimed.

Health insurance adds 30 percent to the costs of health care, Orris said.

Today’s market-defined health care is a far cry from the black bag and home visits by a doctor up until the early 1900s, Orris said.

“Most decisions are being made 500 or 1,000 miles away” nowadays, he added.

Insurance companies, he said, “make their money by holding on to your money.

“Every day they don’t have to pay a reimbursement to a hospital is money in their pockets,” he explained. “They get to hold the money for another couple of weeks.”

Hospitals have learned to increase their revenue by accurate billing and maximizing revenues, according to Orris. Money is being put aside instead of going into health care.

“There is a built-in overhead in the system,” he said. Orris expressed concern that despite higher health care spending, the United States had higher infant and maternal mortality than many countries.

The availability of medical health insurance under the Affordable Care Act should help the formerly uninsured and underinsured who might otherwise delay medical diagnosis and treatment.

However, Orris warned of high‑deductible health plans that could have the same effect on beneficiaries, who could delay treatment due to costs. With high-deductible policies, “most everything” comes out patients’ pockets, Orris said. People can delay treatment if they can’t afford it, he added.

The Affordable Care Act is providing health coverage for millions of families who did not have health insurance previously.

“It left the fox sitting at the henhouse,” Orris said.

In Canada, where there is national health insurance and a single-payer system, health care costs are 11 percent of the economy, while in the U.S. the amount is 18 percent.

Because of the quasi‑market approach of the Affordable Care Act, leaders “are unable to move ahead with logical changes in the health care system,” Orris said. What is needed to change the health care system locally is for patient organizations and organizations representing doctors and hospitals to get together and demand changes from insurance companies, according to Orris. One of the ways the Affordable Care Act is seeking change is by tying hospital reimbursement to scores from patient discharge surveys.

“Those answers, for the first time, will be affecting rates of reimbursement,” Orris said.

Orris was introduced to the group by Dr. Kevin Watkins, Cattaraugus County public health director, who knew him when he still lived and worked in Chicago.

The Cattaraugus County Healthy Liveable Communities Consortium, which meets four times year, was created to help county residents lead healthier lives by making good life choices.

In another development, John Eberth of Southern Tier Health Care Systems said the group is offering training for first responders and friends and family members of heroin addicts in the use of Narcan, which blocks opiate receptors in the brain and is used to help someone recover from a heroin overdose.

“Narcan saves lives,” Eberth told the group. The heroin antidote was recently used to save a local 13‑year‑old, he said.

Police officers, firefighters and family members of heroin users who want training in administering the drug can contact Southern Tier Health Care Services in Olean.

Contact reporter Rick Miller at rmiller@oleantimesherald.com. 

http://www.oleantimesherald.com/

The ‘Un’-Affordable Care Act is a weak start

By David E. Drake, D.O.
The Des Moines Register, March 10, 2015

Potential 2016 presidential candidate Sen. Bernie Sanders has stated: “There is one major country on Earth that does not guarantee health care as a right for all. There is one major country on Earth that spends twice as much per capita on health care as almost any other. There is one major country on Earth where private insurance companies and drug companies earn huge profits. Guess which country.”

As a physician in private practice I abhor each coming new year. This is the time when health care practices have to deal with patients with new insurance policies and former policies with stringent regulations. This year, more than any previous time, I’m noticing more and more folks who have high deductibles — allowed up to $6,600 with the Affordable Care Act (Obamacare). And for some folks that means they can’t see me or they have to greatly limit the number of times they can receive services from me.

In some cases I have to refer middle-class folks with these high deductibles to places with sliding scales, places I used to refer indigent folks with no insurance. Not seeking or delaying care can lead to delayed diagnoses and possible tragic consequences. And as Michael Moore has pointed out, now it’s the middle class who are hit with being under- or poorly-insured while more indigent folks now have an expansion of Medicaid. The confusing mix of deductibles, co-pays, co-insurance and limitations on what services can be provided are now daily frustrations with our lack of guaranteed health care for all.

A single-payer system of reimbursement for health care services has never seemed more in need, with 38 percent of Americans citing health care costs they pay out of pocket as a somewhat or significant level of stress, according to the physician website Doximity. 

Health care bills could go to one payer — an expansion and enhancement of Medicare — with a great reduction in administrative costs for paying the bills and for providers of health care and their offices. Single payer does not imply a system like the Veterans Administration, where all the providers are employees, but one that allows for private as well as employed practices.

Other Iowans join me in their support for moving the ACA past the private insurance companies as the regulating and paying source.

Maureen McCue, adjunct clinical professor at the University of Iowa, medical director of the Women’s Clinic, and Coordinator of the Iowa Chapter of Physicians for Social Responsibility, wrote me:

“Tinkering at the edges doing little to rein in the excesses of the profit-driven insurance system, pharmaceutical and biotech industries, and others. While allowing more citizens access to health insurance, the complexity of the new insurance mechanisms means accessing the health system itself has become ever more confusing and obtuse.”

Dr. McCue offers hope for a change. “It doesn’t have to be this way. There are tried and true solutions. The world’s healthiest populations pay far less for medical services.”

Douglas Steenblock is a physician from Marshalltown with extensive experience working in both the private and public sectors in his field of psychiatry. “It is unfortunate that Americans are so polarized when it comes to our medical system. Many people seem to think that any departure from our current profit-driven system represents ‘socialized medicine’ and that there is nothing in between the two extremes. I find it interesting that the ACA has been described as ‘government-run healthcare,’ when it is actually appears to be private healthcare run amok. The healthcare industry stands to profit handsomely from Obamacare, which explains why it was allowed to pass in the first place.”

Former state Rep. Ed Fallon wrote me: “While some aspects of the ACA move us forward toward a more fair and just health care system, the insurance industry remains the entrenched powerhouse that pulls the purse strings and calls the shots.”

Middle-class Iowans and Americans in general have much to gain from moving beyond the ACA. We will get to equitable health care for all in the U.S. It is simply the right thing to do.

Dr. David E. Drake is an adjunct clinical professor at Des Moines University and a relationship psychiatrist in private practice. Contact: drakeoffice@gmail.com

http://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2015/03/11/un-affordable-care-act-weak-start/24745551/

Economic Analysis of the New York Health Act

Economic Analysis of the New York Health Act

By Gerald Friedman, PhD
March 6, 2015

This report analyzes the economic effects of the New York Health Act (the “Act”), which would establish a comprehensive, universal health insurance program for all New Yorkers.  The Act would replace the current multi-payer system of employer-based insurance, individually acquired insurance, and federally sponsored programs (e.g., Medicare and Medicaid) with a single billing pipeline funded by broad-based progressively graduated assessments collected by the State and based on income and ability to pay, thereby reducing administrative bloat and monopolistic pricing and dramatically reducing the cost of health care to New Yorkers even while extending and improving the provision of care.

The New York Health Act would finance medical care with substantial savings compared with the existing multi-payer system of public and private insurers.  By reducing administrative and other waste and eliminating health insurance company profits and excessive prices for drugs and medical devices, the New York Health Act would increase real disposable income for the vast majority of residents.  It would simultaneously increase employment by reducing the burden of health insurance on business.  Some of these savings would be used to extend coverage to the 7% of New York residents still without insurance under the Affordable Care Act; other savings would be reinvested in the health-care system to improve coverage for the growing number with inadequate coverage.  In addition to improving New Yorkers’ health by reducing barriers to access to health care, the Plan would eliminate the financial penalty associated with health problems.  It would also reduce economic inequality by replacing the current regressive system of health insurance finance with contributions proportional to income and ability to pay.

Conclusion: Better Health Care, Found Money, and Fairness

The New York Health Act would produce substantial health and economic gains for New York. The new system would create such large economies in the administration of health care that all of those currently uninsured could be given access to health care with money left over.  Furthermore, by financing health care with assessments based on ability to pay, the New York Health Act would produce large savings for the great majority of New York residents.  Finally, by reducing business costs, it would also lead to expansion in employment.

Professor Friedman is Chair of the University of Massachusetts at Amherst Economics Department. 

Economic Analysis – Gerald Friedman, PhD: http://www.dickgottfried.org/wp-content/uploads/2015/03/Friedman-Fiscal-Study-New-York-Health-Act-FINAL-3-10-15-925-AM.pdf

Bill A5062-2015,Gottfried/S5062-2015,Perkins – Provides for establishment of the New York Health plan
Sponsor – Richard Gottfried, Assembly/Bill Perkins, Senate: http://open.nysenate.gov/legislation/bill/A5062-2015

Press Release – Economic Study Shows Benefits of Universal Healthcare Bill – 3/10/15: http://www.dickgottfried.org/press-release-economic-study-shows-benefits-of-universal-healthcare-bill/

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Comment:

By Don McCanne, MD

The New York Health Act, introduced by New York Assembly Health Chair Richard Gottfried and in the Senate by Sen. Bill Perkins, and supported by the economic analysis of Prof. Gerald Friedman, is important because it demonstrates how much health care reform can be accomplished on a state level, especially when we have a Congress that is dominated by obstructionists.

Is this a single payer bill? The study refers to a “single billing pipeline.” Rather than being limited by labels, states wishing to go ahead with reform now and not wait for a receptive Congress should support any and all beneficial policy measures possible, including whatever can be accomplished with existing waivers and through negotiations with the U.S. Department of Health and Human Services.

In this analysis, Prof. Friedman estimates that through this legislation, New York can achieve the goals of universality, comprehensiveness, equity, free choice of providers, and removal of cost-sharing barriers to care, while achieving a net savings of $45 billion in the first year alone – funds that could be used for much better purposes than administrative waste.

For any given state, the economic advantage would depend on the specifics of the state legislation and might vary based on the economic assumptions used in the analysis. The important point is not the specific details of this particular analysis but rather that introducing as many single payer policies as possible does result in major improvements of the functioning of the financing infrastructure while significantly reducing the profound waste inherent in our current dysfunctional system.

Our primary goal remains to bring health care justice to everyone in the nation by enactment of a federal single payer system – an improved Medicare for all. In our state efforts we cannot set aside this goal since it is our prime goal. But Richard Gottfried and his colleagues have demonstrated the types of policies that we can apply on a state level as a transition until we can enact reform for the entire nation.

A Visit with our Neighbor to the North

By Richard Dillihunt, M.D.
Maine Medicine, July 2014

For decades, I have admired the Canadian health care system, first while at a remote Northern Quebec fishing camp. There, impromptu sick call was held for the Cree, local aboriginal people with rights to this remote land. Members of this tribe had various complaints that we treated with our medical chest. Despite the difference in language in the elderly, the shyness barriers were easily overcome. They seemed completely confident in our medical abilities.

We felt privileged as caregivers to be given such confidence and warm doctor-patient relationships came forth. Over the years we saw burns from campfire mishaps, an acute gallbladder, and a mangled hand injured beyond our medical capabilities. We made radio calls to regional flying services, and patients were fetched and flown to various medical centers. There were no lawyers or insurance companies involved. The only physical evidence of health care coverage was a small card that each patient guarded carefully. This card admitted them to their national health care system. It provided quality medical care covering all 35 million Canadians scattered across the second largest nation on earth.

The patient with the injured hand was emblematic of this system. A radio call summoned a floatplane, and the patient was loaded and lugged across and down the 150 km of the Peribonka River to the medical center in Chicoutimi. After treatment, he was returned by air. That little card had covered all medical care and transportation. Imagine what such a journey would cost us!

This system of universal health care came into being in 1946. It is attributed to a Canadian native son, Tommy Douglas. As premier of Saskatchewan, he established a universal single-payer health care for all of Canada. After his death he was voted “Greatest Canadian” by the Canadian Broadcast Corporation viewers.

Although medical service for the Cree and Inuit have been difficult for the Canadian government to perfect, they have enjoyed great success. Given the vast territory, the nation does well to spread its resources over ten million square km, much of it being a harsh environment.

The Canadian system deserves careful scrutiny by every American who has concerns regarding our badly broken health care system. Inspection of how the Canadians have successfully developed their universal single-payer form of health care uncovers features that the U.S. needs to seriously consider.

Just recently Danielle Martin, a brilliant young Canadian physician, called attention to the superior provisions of Canada’s public system in her testimony before Sen. Bernie Sanders’ committee in Washington. She showed that the Canadian system is based on need, not on the ability to pay. Her interaction with Sen. Burr (R-N.C.) went viral, generating over 700,000 views on YouTube across North America. Many major media outlets focused on her evidence-based, intelligent, and energetic defense of Canadian Medicare.

Canadians take great pride in their medicare-for-all system. They know that Canada’s life expectancy rates and maternal and infant mortality figures are superior to America’s, and their quality of care is equal to ours. They are aware that, traditionally, wait times have been a source of intense criticism of their system. They understand that this is largely overblown by stateside special interest groups whose propaganda has brainwashed America about horrendous waiting times for referrals and elective surgery. The facts show differently. Canada has addressed wait time issues with a Wait Time Alliance. Through this alliance there has been much improvement, and changes have been uncovered to correct this problem.

Two nations have developed, through different pathways, health care systems which are clinically similar and among the world’s best. When compared, Canada has taken the high ground, selecting a route featuring social justice and equality with a strong nationalism. Canadians are caring for one another. America’s profit-driven hard-nosed traditions and business practices have permeated the ways and means of the USA’s health care.

Lacking checks and balances, our system costs nearly twice that of Canada’s per capita, $8,233 vs $4,445 yearly. This accounts for 17.6 percent of America’s GDP while Canada’s health care expenditure is 11.4 percent of her GDP according to 2012 statistics. The most stunning statistic of all is this. Even with the ACA finally deployed, there are over 30 million uninsured American citizens, approximately equal to the entire population of Canada where everyone is covered by medicare, and a simple little card replaces by comparison a vast array of paperwork that chokes our system.

The Canadian system is remarkably popular in America. Maine must pay attention to this surge. Because of our unique geographical location, we are surrounded by Canadian relatives, friends, and neighbors. Canada can provide us with more than frigid winds. We need to lead the way in acknowledging a very attractive Canadian health care system.

Richard C. Dillihunt, M.D., of Portland is a retired surgeon.

Editor’s Note: The opinions expressed above are the opinion of MMA member and retired surgeon Dr. Dillihunt. MMA members with concurring or opposing opinions are welcome to share them with MMA for possible publication in future issues of Maine Medicine. Comments and articles (please keep your articles under 600 words) may be shared with Shirley Goggin at sgoggin@mainemed.com.

http://www.mainemed.com/sites/default/files/content/JulAugSep2014_FINAL.pdf

Rep. Jim McDermott introduces The American Health Security Act of 2015

THE AMERICAN HEALTH SECURITY ACT OF 2015

By Rep. Jim McDermott
House of Representatives, March 2, 2015

Mr. MCDERMOTT. Mr. Speaker, I rise today to introduce the American Health Security Act of 2015, legislation to provide comprehensive health coverage to every American and recognize that health care is a human right.

The Affordable Care Act was a dramatic step forward in improving the health security of the American people. This landmark law has expanded access to coverage, improved the solvency of our public programs, and made numerous reforms that have saved consumers billions of dollars. As we look for ways to build upon and strengthen the law, we must recognize that millions of Americans continue to fall through the cracks in the private health insurance market. The only way to truly en- sure that access to quality health care is a right enjoyed by every American is through a single-payer system.

The American Health Security Act builds upon the success of the Affordable Care Act by providing universal health coverage to all Americans. It creates a framework that allows states to administer their own universal health insurance systems, subject to rigorous federal standards. Benefits would be comprehensive, costs would be contained, and patients would have full choice of doctor and hospital. This universal model would put an end to the inequities that continue to plague our system and jeopardize the health security of American families.

https://www.congress.gov/crec/2015/03/02/CREC-2015-03-02-pt1-PgE286-2.pdf

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H.R.1200 – To provide for health care for every American and to control the cost and enhance the quality of the health care system.

All Bill Information (Except Text): https://www.congress.gov/bill/114th-congress/house-bill/1200

Although the text of the bill has not yet been posted, I contacted Daniel Foster, Jim McDermott’s legislative aide for health, asking him if the text is the same as when it was introduced in the 113th Congress. His response: “Yes, the bill is largely the same as last time except for a few tweaks and some minor technical corrections.”

The line for the text of the version introduced in the 113th Congress can be used as a temporary resource until the current text is posted: https://www.congress.gov/bill/113th-congress/house-bill/1200/text

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Comment:

By Don McCanne, MD

Rep. Jim McDemott has introduced, in the 114th Congress, H.R. 1200, The American Health Security Act of 2015, a slightly updated version of his legislation that would permit states to enact comprehensive, universal systems, such as single payer. In the 113th Congress, Sen. Bernie Sanders introduced S. 1782, The American Health Security Act of 2013, based on Rep. McDermott’s H.R.1200.

GovTrack.us gives a 0% chance of this bill being enacted. Any objective assessment of the current Congress would certainly lead us to the same conclusion. But that does not mean that we should simply give up and walk away. We will not have a bona fide single payer system in the United States, on either a state or federal level, without Congressional action.

Those of us at Physicians for a National Health Program support John Conyers’ H.R.676, which would establish a national single payer program (after all, “national” is in our name). Those who believe that we should follow the lead of Saskatchewan and first establish single payer on a state level may prefer H.R.1200/S.1782. Regardless, since these bills will not receive a vote in the current Congress, they should be used as advocacy pieces as we explain to the public why single payer is an imperative.

The ultimate goal is health care justice for everyone in the nation whether we move directly to a national program or we transition through state models of single payer. We certainly should continue to advocate for a national program, but, if an opportunity on the state level opens up, that should be pursued while simultaneously continuing to advocate for a national program.

State versus federal is a secondary issue. We’ll have neither unless the people understand and start demanding single payer. Let’s work on that.

Expanding Medicare for all would be wise

By Johnathon Ross, M.D.
The Blade (Toledo, Ohio), Letters, March 8, 2015

The U.S. Supreme Court is hearing another case attacking Obamacare (“Bad case against Obamacare,” editorial, March 4). This will not be the last.

The complexity of the Affordable Care Act makes it easy to attack. The 19,000 members of Physicians for a National Health Program, of which I am past president, agree it would be tragic, possibly fatal, for those with Obamacare subsidies to lose coverage.

But these attacks confirm that more durable and effective reform is needed. We would prescribe a constitutional remedy that is known to work — improved and expanded Medicare for all.

That would have many advantages over private insurance marketplaces. Medicare’s financing is fair — all contribute and all benefit, versus a marketplace of private insurance that will ration care by ability to pay. Medicare’s benefits are inclusive and generous, versus private insurance, which seems to be exclusionary, greedy, mean-spirited, and arbitrary.

Medicare for all would allow complete choice of providers, with access to services we prefer, versus private insurance with restricted provider networks and other barriers to care.

Medicare for all would focus on long-term improvements in the health of the nation with public accountability based on professional values, versus private insurance, which must focus on short-term profits, trade secrets, and commercial — and sometimes near-criminal — values. Multiple studies confirm that the simplicity of Medicare for all would save $400 billion a year — enough to cover all the uninsured and improve benefits for the rest of us.

We need to move on quickly from Obamacare. Improved and expanded Medicare for all will save money and save lives. It is the right thing to do.

Dr. Johnathon Ross resides in Ottawa Hills, Ohio.

http://www.toledoblade.com/Opinion/2015/03/08/Expanding-Medicare-for-all-would-be-wise.html

Hawaii Health Authority could reduce health costs, if empowered to do so

By Stephen B. Kemble, M.D.
Honolulu Star-Advertiser, March 8, 2015

In 2009, the Hawaii Legislature passed a bill to create the Hawaii Health Authority, charged with designing a universal health care system covering all residents of Hawaii. 

In 2011, then-Gov. Neil Abercrombie appointed the HHA members, who have submitted two reports outlining a roadmap to a cost-effective, universal health care system, building on models proven in practice elsewhere in the U.S. and from around the world. 

Our Prepaid Health Care Act, passed in 1974, includes an employer mandate, bans pre-existing condition exclusions, and requires a rich benefit package and 80-90 percent actuarial value with no deductible. 

We have had the best coverage package and the broadest risk pooling in the country, along with the least competitive market, and yet until about five years ago, we had among the lowest premiums in the country. Hawaii has also had the lowest per-capita Medicare spending in the country. 

The HHA has sought to expand on the lessons from Prepaid to develop a simplified universal system that would reduce total health care cost through administrative savings, not restrictions on care. 

Based on the experience of other countries and economic analyses of similar proposals, the fully implemented HHA proposal would likely save around 30 percent of our total health care costs. 

Current federal law would prevent full implementation, but by focusing on opportunities for administrative simplification and maximizing risk pooling, substantial savings would still be possible. 

However, the Abercrombie administration chose to ignore the HHA’s recommendations and pursue the reforms promoted by the Affordable Care Act. All the administrative complexity and obstructions to care in our current fragmented health care “system” have been left in place, while adding a new layer of “Accountable Care Organizations” (ACOs) that propose to push insurance risk onto doctors and hospitals via bundled payments and capitation. To counter the resulting incentive to deny and restrict care, another administrative layer of pay-for-performance (P4P) is being added, relying on complex computerized data controlled by insurance companies and government agencies, to supposedly measure and reward “quality.” 

None of this works in practice. ACOs are costing more to administer than they can save by reducing unnecessary care. 

Transferring insurance risk to providers gives them incentives to game documentation and avoid sicker, more complex patients. 

P4P measures have poor validity, don’t improve health outcomes and add administrative costs. 

Administrative burdens and reduced payments are driving smaller and rural hospitals out of business, driving older doctors out of practice prematurely, and deterring younger doctors from entering primary care, psychiatry and other non-procedural specialties. 

We no longer have enough physicians to assure the access to outpatient care required to keep patients out of the ERs and hospitals. 

The result is a dramatic increase in health insurance premiums in the past five to six years, since Hawaii’s health plans began gearing up for the “transformation” envisioned in the ACA. 

My own gross psychiatric practice receipts have been completely flat for the past 10 years, while my health insurance premiums have more than doubled. 

Most of the increase is due to markedly higher administrative costs for hospitals and health insurance plans, plus a recent surge in drug prices by a pharmaceutical industry run amok. 

There is no possibility in Hawaii of finding enough savings from reducing “unnecessary” care to offset the cost of these “reforms.” Abercrombie’s health transformation task force spent federal grants to generate plans that are disconnected from reality. 

The Hawaii Health Authority has not yet been consulted by Gov. David Ige’s administration concerning health policy, but Hawaii could see improving access to care and large health care savings if the HHA were empowered to fulfill its mission, as stated in Hawaii law. 

Stephen B. Kemble, M.D., is a member of the Hawaii Health Authority. 

Copyright (c) Honolulu Star-Advertiser 

http://www.staradvertiser.com/editorialspremium/20150308_Hawaii_Health_Authority_could_reduce_health_costs_if_empowered_to_do_so.html?id=295474101

Let’s do something; let’s innovate!

Innovating Care for Medicare Beneficiaries: Time for Riskier Bets and Embracing Failure

By Ashish K. Jha
JAMA Forum, March 4, 2015

Of all the pressing challenges in the US health care system, lack of innovation in delivery may be the most important.

This lack of innovation in how we do things is a major reason why health care productivity has been so low and high spending has had insufficient benefits for patients.

A major premise of the Affordable Care Act (ACA) was that it would spur new models of care delivery. The architects of the ACA understood that old models of care delivery impeded gains in productivity, made it difficult to improve patient outcomes, and made the health care delivery system inefficient. In response, the ACA established the Center for Medicare and Medicaid Innovation (CMMI), which is responsible for changing how we deliver health care. The ACA provides CMMI with $1 billion per year for 10 years, much larger than the budgets of the Agency for Healthcare Research and Quality and the Patient-Centered Outcomes Research Institute, 2 entities that have gotten far more attention. Will CMMI achieve the meaningful new models of care delivery that our health care system needs? It is unclear, but there is reason for concern.

A Mixed Picture

Four and a half years after launch, CMMI appears to have funded 36 new programs, of which we have evaluations for 9. Nearly all the evaluations are positive, although careful examination of the reports paints a far more mixed picture. Most programs are having minimal effects, on the margins.

For example, the Comprehensive Primary Care Initiative, across 6 states, seems to have a monthly savings of $14 dollars (2% of total Parts A and B spending) per patient, compared with controls, a savings that actually turns negative when the costs of the program are included. The effects on quality are minimal, as well.

Betting on Nontraditional Players

Foremost, CMMI needs to make meaningful bets on nontraditional players—such as startups and small delivery organizations—that are trying to fundamentally upend health care delivery. Next, focusing on organizations that are using technology in radically different ways, employing nontraditional personnel to facilitate care, and targeting new locations for care delivery would also be helpful. Focusing on nonincumbents and taking risks with nontraditional care models would pay much bigger dividends than the marginal savings that current programs are likely to generate.

But they would come at a cost: a high failure rate. Advocates of the current CMMI approach would argue that such failures are unpalatable, given the current political environment. Although that is surely true, the broader health care community must give CMMI the space to fail. Even the talented, highly capable people running CMMI can’t have success rates much higher than those seen in Silicon Valley, where comparably smart investors are using their own money to make bets. But, if they are willing to be risky—and willing to fail—they can have a profound effect on the way health care is delivered. And that will be an investment worth making.

http://newsatjama.jama.com/2015/03/04/jama-forum-innovating-care-for-medicare-beneficiaries-time-for-riskier-bets-and-embracing-failure/

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Market-Based Solutions to Antitrust Threats — The Rejection of the Partners Settlement

By Regina E. Herzlinger, D.B.A., Barak D. Richman, J.D., Ph.D., and Kevin A. Schulman, M.D.
The New England Journal of Medicine, March 4, 2015

Health care consumers won a significant victory when Massachusetts Suffolk County Superior Court Judge Janet Sanders blocked a settlement that would have allowed Partners HealthCare, the system that dominates the Boston area, to acquire three additional health care providers in eastern Massachusetts. Sanders concluded that the acquisitions “would cement Partners’ already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices from insurers for the services its providers render.”

If this decision is not overturned on appeal, consumers will now be spared those projected price increases. But there is an even bigger reason for New Englanders to celebrate the judge’s ruling. The danger lay not only in Partners’ expanded dominance but also in the degree to which the settlement would have shut out other innovative competitors.

Health care delivery does not rely on fixed assets whose returns should be guaranteed. Rather, it relies on services and interactions between caring clinicians and patients in need. This concept is lost when public policy focuses on regulating returns on invested capital rather than on promoting the provision of high-quality, innovative, efficient clinical services. Innovative, low-cost competitors to most hospital services could abound — for example, telemedicine providers and community-based urgent care centers. Such innovations may represent the public’s best hope for sustainable health care. But the proposed settlement could have squashed opportunities for innovation, since it conceded Partners’ dominance and tried only to contain it.

We need policies that challenge expansions and preserve competition, not those that assist the dominant player. We have our own list: encouraging payment reform that rewards quality and cost-effectiveness; liberalizing scope-of-practice regulations, licensing rules, and other prohibitions to allow more efficient use of human resources; ensuring that professional regulations, state boundaries, and FDA rules do not impede telemedicine and digital products that enable mobile health management; and refining antikickback rules and reimbursement restrictions to enable providers to pursue creative, integrated ventures that could revolutionize the delivery of care. And there is much that attorneys general can do to promote such innovation-oriented policies.

Instead of focusing solely on regulating dominant hospital systems, policymakers should also pursue strategies that can foster real competition and innovation in the price, accessibility, and quality of care.

http://www.nejm.org/doi/full/10.1056/NEJMp1501782?query=TOC

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Comment:

By Don McCanne, MD

Where would this world be without the sage advice of some of the great thinkers of the past and present?

  • “Don’t just stand there. Do something!”
  • “Don’t accept the status quo. Innovate!”
  • “Don’t regulate. Allow markets freedom to compete!”

Thank goodness that these have been our guiding principles in health care for the past century so that now we have the highest quality health care system and the lowest costs, that is except for all of the other nations that have placed a priority on public policies over private innovation.

We still haven’t learned. We are spending billions of taxpayer dollars on just doing something… anything. The CMMI innovations that we have funded have had, at best, only minimal benefits at the margin. In fact, the savings have turned negative when the costs of the programs are included. Worse, the effects on quality have been negligible as well. In these efforts, we’re spending more and buying nothing.

Yet we continue to allow the clarion call for innovation and competition to drown out the message of reform that would finally include absolutely all of us in a high-performance health care delivery system that finally would be truly affordable. Of course, that reform would be a single payer national health program. Our immediate task is to make our clarion call drown out theirs. As it is now, our is hardly a peep. (Think not? Google innovation in health care – 377 million results – and single payer health care – 2 million results.)