PNHP

Medicare already improves access and affordability

Medicare already improves access and affordability

The Impact Of Medicare On Access To And Affordability Of Health Care

By Paul D. Jacobs
Health Affairs, February 2021

Abstract

Medicare pays for roughly one in four physician visits in the United States, yet a rigorous understanding of how Medicare currently affects access to and affordability of care for its enrollees is unavailable. Using data from the Medical Expenditure Panel Survey–Household Component and the National Health Interview Survey, I tested for changes in access to care and affordability around age sixty-five, when most people gain eligibility for Medicare. I found that Medicare eligibility is associated with a 1.5-percentage-point reduction in reports of being unable to get necessary care (a 50.9 percent reduction compared with the percentage at age sixty-four) and a 4.1-percentage-point (45.3 percent) reduction in not being able to get needed care because of the cost. Recently, policy makers have proposed various ways of extending Medicare coverage. These results suggest that incremental Medicare expansions could have positive access and affordability benefits for enrollees compared with the insurance options available to them before they turn sixty-five.

https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

Much of America currently advocates expanding Medicare to include everyone. Those who have studied the issue realize that Medicare is still not adequate and thus should be improved if it is to be used as the basis of a universal program.

Today’s report confirms that Medicare is nevertheless an improvement in both access and affordability over the typical coverage at age 64, just before the onset of eligibility for the existing Medicare program. Medicare is associated with a 1.5 percentage point reduction in reports of previously being unable to get necessary care (50.9 percent reduction compared to age 64). Medicare is also associated with a 4.1 percentage point reduction in not being able to get needed care because of the cost (45.3 percent reduction compared to age 64).

That’s not bad, but just think how much better those numbers would be if we replaced Medicare with a new and improved version and then expanded it to include everyone. What are we waiting for?

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Should Clinical Guidelines Incorporate Cost Pathways for Persons With Financial Hardship?

By David Goldberg, M.D.
AMA Journal of Ethics, Medicine and Society, February 2021

Abstract

The American Diabetes Association 2020 Standards of Care for the treatment of hyperglycemia in type 2 diabetes includes a treatment pathway when “cost is a major issue.” This pathway recommends use of 2 generic drug classes, thereby codifying differential treatment for those with financial hardship. This article explores 4 implications of incorporating the cost pathway into clinical recommendations: (1) the presence of a cost pathway might create the appearance of an evidence-based quality difference through activation of implicit bias; (2) screening for financial hardship to guide therapy has potential harms for patients; (3) concern that financial hardship warrants differing care might impact overall quality of care and patient-clinician relationships; and (4) applying the guidelines when caring for patients with financial hardship might demoralize clinicians.

Recommendations and Pathways

In December 2018, the American Diabetes Association (ADA) and the European Association for the Study of Diabetes (EASD) published recommendations for the treatment of hyperglycemia in type 2 diabetes for persons failing metformin monotherapy.1 These recommendations are incorporated in the ADA 2020 Standards of Care.2 This essay considers 4 ethical concerns about including patients’ financial hardship as part of a treatment pathway (algorithm),1 a component of the algorithm I call a social pathway since it relies on assessing medication affordability. The social pathway is distinct from the 4 clinical pathway components of the algorithm, which depend on assessing clinical parameters for persons with type 2 diabetes. Two of these clinical pathways involve assessment of patients for atherosclerotic cardiovascular disease (ASCVD) or for either chronic kidney disease (CKD) or heart failure (HF). When ASCVD, CKD, or HF are not present, there are 2 additional clinical pathways for a “compelling need to minimize hypoglycemia” or a “compelling need to minimize weight gain or promote weight loss.”1 The social pathway, which is indicated when “cost is a major issue,”1 represents a third choice for those without ASCVD, CKD, or HF. The 2 drug classes in common for avoidance of hypoglycemia and weight-related risks in these groups are patented sodium-glucose cotransporter (SGLT2) inhibitors and patented glucagon-like peptide 1 (GLP-1) analogues. Dipeptidyl peptidase 4 inhibitors and thiazolidinediones are also included as medication options to avoid hypoglycemia. The social pathway recommends generic sulfonylureas and thiazolidinediones.1, 3

Evidence and Representation

The 2 clinical pathways for persons with ASCVD or either CKD or HF are supported by a number of placebo-controlled trials for individual SGLT2 and GLP-1 medications.4, 5, 6 By contrast, the literature guiding treatment of persons with type 2 diabetes without ASCVD, CKD, or HF is relatively weak. Most studies comparing drug classes to one another are of short duration, rely on surrogate outcomes, and are industry funded. In a 2016 review of comparative effectiveness studies, only 4% of 177 studies had a duration of greater than 2 years and 12% of 162 studies explicitly reported receiving no industry sponsorship.7 Although outcomes such as weight gain and rates of hypoglycemia are well suited to studies of short duration, for persons without cardiovascular or renal disease, we do not have comparative effectiveness studies with microvascular, macrovascular, or mortality outcomes to guide treatment preferences.7, 8 The text of the 2020 ADA Standards of Care recognizes the weakness of the data in stating: “For patients without established ASCVD, indicators of high ASCVD risk, HF, or CKD, the choice of a second agent to add to metformin is not yet guided by empiric evidence.”3 The ADA treatment algorithm graphic, however, does not convey the poor-quality evidence and lack of certainty guiding medication choices for persons without ASCVD, HF, or CKD.

The ADA/EASD treatment algorithm is not aligned with best practices of guideline presentation.9 There are other guidelines commonly used in primary care that more rigorously evaluate and display the evidence. For example, the American Heart Association and American College of Cardiology 2018 Cholesterol Guideline categorizes each evidence statement based on the class (strength) of the recommendation and level (quality) of evidence.10 Their recommendations include value statements when treatments might be supported by high-quality outcomes evidence but do not meet thresholds for cost effectiveness. Unlike the ADA recommendations, the graphic display of the treatment algorithms includes color codes for the strength of the recommendation or value of each branch point.10

Implicit Bias

How will clinicians read the treatment algorithm graphic? Specifically, for persons without ASCVD, CKD, or HF, will the juxtaposition of the 2 clinical pathways and the social pathway encourage the perception that there is an evidence-based quality difference between the choices for the clinical and social pathways? To understand how the algorithm might be communicating a quality difference between the clinical and social pathways, we must consider the nature of implicit bias and how the ADA/EASD treatment algorithm embeds implicit bias.

Research on implicit bias has described the tendency of people to see social groups through the lens of us and them, accentuating differences and thereby distancing the 2 groups. The negative attributes of “them” and their circumstances affirm the positive attributes of “us” and our station. Implicit bias is activated when a socially held bias is anchored to a second set of preferred-less preferred dichotomous elements, such that the bias and second set of value judgments reinforce one another. Although some individuals may not believe in the bias and the differences between “us” and “them,” the strength of the anchoring of the social bias to a second set of value judgments can influence perception.11

There are long-standing biases against the poor that are reinforced by narratives that the poor are responsible for their status, are prone to dependence, and deserve less.11, 12, 13 In the ADA/EASD recommendations, the financially able (deserving) are anchored to the clinical pathways (a form of decision making preferred by clinicians) while the people with financial hardship (less deserving) are anchored to decision making that is less clinically grounded (and therefore less preferred by clinicians). The anchoring reinforces the social hierarchy. The anchoring also differentially frames perceptions of medication options: the patented medication options (SGLT2 inhibitors and GLP-1 analogues) in common for the 2 clinical pathways when ASCVD, CKD, or HF is not present are framed as more preferred, higher quality care, and the generic medication options in the social pathway are framed as less preferred, lower quality care, despite the absence of evidence regarding macrovascular and microvascular outcomes and death for this patient population. We come to perceive and value high-quality care for “us” in part by defining and segregating a socially less deserving “other.” The social pathway of the ADA/EASD recommendations functions like a fun house mirror. On one side, it makes the medication options of the clinical pathways look larger and better, because on the other side are poorer people with diminutive care options. The “mirror” can prevent us from seeing gaps and biases in the literature, deviations of the ADA/EASD from best practices in writing guidelines, overreliance on expert opinion, absence of population assessment of costs and benefits of new therapeutics, and our collective failure to provide universal access to care.

More About Ethics and Justice

Here, I discuss 3 additional implications for patient care of incorporating the ADA/EASD social pathway in clinical recommendations.

Potential harms of screening for financial hardship. The social pathway is aligned with efforts to promote cost-of-care discussions. Yet research on cost-of-care discussions is at best formative with respect to screening methods, clinician resistance, interventions, and outcomes.14, 15, 16, 17, 18 Screening for social determinants of health has shown promise,19, 20, 21, 22 but potential harms have been acknowledged.23 Some patients might find the screening questions intrusive, disrespectful, stigmatizing, or undermining of trust. However, the purpose of screening for social determinants is to mitigate their impact through structural change,21 a different intent than the ADA/EASD social pathway. Screening for financial hardship to guide diabetes therapy is untested, and absent an evidence base, it raises ethical questions: Should clinicians inform patients that they are asking about ability to afford medications in order to prescribe presumably “lesser” therapy? Will patients feel devalued by being relegated to the social pathway?24 What should clinicians do when they learn that patients’ financial hardship goes beyond paying for diabetes medications?

Patient-clinician relationship. Other quality of care factors can be affected by reinforcing tiers of care. Patient-clinician communication and trust may be impaired, eroding the foundations of just relationships. In a seminal study, Lisa Cooper and colleagues demonstrated that measures of clinicians’ implicit race bias were associated with potentially harmful communication patterns between clinicians and patients and with poor care ratings among African-American patients.25 In addition, clinicians might make assumptions about who should receive less expensive, lower-quality care based on their “poor” appearance, diction, or behavior. In making such assumptions, they might inadvertently contribute to the burden of discrimination and resultant risk of adverse health effects among those with financial hardship.26

Clinician demoralization. Finally, clinicians are torn between their professional ethics to provide quality care to all patients and real-world financial constraints on practice. A colleague in a safety net practice, reflecting on the type 2 diabetes treatment algorithm, said to me, “The longer I work here, the further I fall behind the rest of primary care practice.” Every prescription for a “bad” generic sulfonylurea (perceived by clinicians as of lesser quality based on their interpretation of the ADA/EASD treatment algorithm) and institutional formulary restrictions for expensive patented medication become demoralizing. Clinicians react negatively to their home institutions as opposed to the expert panel that recommended the generic therapies for people with financial hardship or the health system that structures care as a privilege. Clinicians know their home institutions are imperfect, so it is easy to ascribe blame to them. Given their need for guidance in navigating the complex terrain of medical care, clinicians regard experts as having principled authority. They have difficulty discerning that experts’ enthusiasm for progress and the appeal of innovation may perpetuate bias in medical practice. They may not perceive the marginalization and stigmatization of persons with financial hardship and how practice patterns might be promoted, in part, on the backs of the poor.

A Bigger Picture

Although I am critical of the function of a cost-of-care pathway in the ADA/EASD recommendation statement, financial hardship is a staggering issue. Prior to the coronavirus pandemic, nearly 41 million Americans lived below the federal poverty line, and nearly 140 million Americans (43%) were either poor or low income under the Supplemental Poverty Measure.27 Nearly 40% of Americans could not afford a $400 emergency,28 and 27.5 million Americans did not have health insurance.29 Among the insured, 43% reported that they “struggled” to meet their deductible, and 40% assumed debt from medical bills.27 Low income is part of the web of social determinants of health that also affects diabetes risk.30, 31, 32, 33 Survey data indicate that nearly 1 in 4 adults and seniors reported difficulty affording medications.34 Low income, poor health status, and being prescribed 4 or more medications were risk factors for difficulty affording medications34; each factor is associated with type 2 diabetes. Difficulty affording medications leads patients to make unpalatable decisions, such as taking medications less frequently than prescribed, buying less nutritious food to afford medication, or choosing between the needs of family members or their own needs.35

Furthermore, people with low income are subject to structural forces that suppress wages, create dangerous work environments, undermine social services, limit affordable and stable housing, create food deserts, contribute to disproportionate rates of incarceration or control by judicial systems, threaten the social fabric of early childhood, make health care less accessible, expose people to pollutants, undercut the quality of primary and secondary education, and limit access to higher education, thereby maintaining a skewed playing field.9 As described above, the poor are blamed for their poverty.11, 12, 13 Poverty is often racialized or gendered, strengthening the biases that harm persons of color, women, and the poor.12, 36, 37, 38, 39

The ethical concerns described here are predicated on understanding poverty or financial hardship as an individual characteristic warranting individual intervention. Alternatively, poverty can be understood as being rooted in the socioeconomic system—as being a feature of the economy and the degree of social cohesion.40 That the ADA/EASD recommendations created a pathway for individual patients for whom “cost is a major issue”1 is one more indicator of a broken system in need of repair.41, 42 Instead of devoting a pathway in a treatment algorithm to the poor, we should bring urgency to eliminating cost as a barrier to high-value, cost-effective care.

It could be different. Imagine more of our health professional societies demanding universal access to care and single-payer health insurance.43, 44 Imagine expert panels applying best practices to writing clinical guidelines in the context of universal access to care, without conflicts of interest with the pharmaceutical industry, and sensitive to patient-centered and population health perspectives. Imagine our medical societies becoming advocates and allies for the elimination of poverty. Engaging issues of poverty and rooting out manifestations of bias within and outside our medical societies, while no doubt challenging, will make our medical societies more relevant and stronger.

https://journalofethics.ama-assn.org…

References

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CITATION
AMA J Ethics. 2021;23(2):E175-182.

DOI
10.1001/amajethics.2021.175.

ACKNOWLEDGEMENTS
The author would like to acknowledge the thoughtful feedback of Alice O’Connor, PhD, University of California at Santa Barbara.

CONFLICT OF INTEREST DISCLOSURE
The author(s) had no conflicts of interest to disclose.

Singapore fails to meet needs of marginalized

Improve equity of S'pore healthcare by better meeting needs of the marginalised: Panellists at Yale-NUS College forum

By Tessa Oh
Today, Updated January 31, 2021

Singapore’s healthcare system can do better by taking into consideration the experiences of people from marginalised communities in order to more effectively meet their healthcare needs.

This point was raised by several speakers on Friday (Jan 29) during a panel discussion held at Yale-NUS College on how the healthcare system here can be made more equitable.

During the discussion, the panellists were asked to outline their vision for healthcare equity in Singapore.

Dr Tambyah (Dr Paul Tambyah, senior consultant at the National University of Singapore and president-elect of the International Society of Infectious Diseases) said his hope is for Singapore to switch to a single-payer universal healthcare system, where the costs of essential healthcare for all residents are covered by a single public system.

Raising the examples of the healthcare systems in Scandinavia, Taiwan and the United Kingdom, Dr Tambyah said a similar model can be explored here.

“(The Scandinavians) have a pretty good track record, and that may be something that we can look at,” he said.

https://www.todayonline.com…

Singapore

By Lee Chien Earn
The Commonwealth Fund, June 5, 2020

Singapore has achieved universal health coverage through a mixed financing system. The country’s public statutory insurance system, MediShield Life, covers large bills arising from hospital care and certain outpatient treatments. Patients pay premiums, deductibles, co-insurance, and any costs above the claim limit. MediShield Life generally does not cover primary care or outpatient specialist care and prescription drugs. MediShield Life is complemented by government subsidies, as well as a compulsory medical savings account called MediSave, which can help residents pay for inpatient care and selected outpatient services. In addition, individuals can purchase supplemental private health insurance or get it through an employer.

Patients who wish to obtain additional coverage for private hospitals or care in private wards in public hospitals can purchase private insurance. Integrated Shield Plan holders can also purchase insurance riders that provide additional complementary coverage. There are also private insurance options, offered by for-profit insurers, that are not integrated with MediShield Life.

MediFund is an endowment fund set up by the government in 1993 that serves as a safety net for Singaporeans who need further help with the remaining cash component of their health care bills at public health care institutions.

https://www.commonwealthfund.org…

Comment:

By Don McCanne, M.D.

Conservatives in the United States frequently praise Singapore’s method of financing health care. Actually it is a quite fragmented, dysfunctional system. Apparently it does not meet the needs of the medically marginalized, though they do have a safety net of sorts. You can learn further details by reviewing The Commonwealth Fund’s description of it.

What is interesting is that Dr. Paul Tambyah, a consultant at the National University of Singapore, expresses the view that Singapore would benefit by switching to a single payer, universal health care system. It appears that their current system is not so ideal after all.

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Medicare for All Explained Podcast: Episode 49

Interview with Holly Hatcher

February 1, 2021

Registered Nurse and Dane County (Wisc.) Board Supervisor Holly Hatcher discusses her effort to pass a local resolution in support of federal single-payer legislation, as well as the overall need for a national health program. “As a nurse I support Medicare for All because of the innumerable, avoidable medical crises that I find myself confronting every day.”

Additional episodes will be uploaded twice monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Exorbitant prices of brand name drugs

International Prescription Drug Price Comparisons

By Andrew W. Mulcahy, Christopher M. Whaley, Mahlet G. Tebeka, Daniel Schwam, Nathaniel Edenfield, Alejandro U. Becerra-Ornelas
RAND, Research Report, January 28, 2021

Conclusion

Although several prior studies compare drug prices in the United States with those in other countries, the most recent of these studies used data that are nearly a decade old. In our analysis using 2018 data, we found that, with the exception of unbranded generics, 2018 drug prices in the United States were substantially higher than those in other countries. The United States had lower prices for unbranded generics than most comparator countries. Unbranded generics account for 84 percent of U.S. prescription drug volume—a much larger share than the 35 percent for the OECD comparison countries—but only 12 percent of prescription drug spending at manufacturer prices. In contrast, brand-name originator drugs accounted for only 11 percent of U.S. prescription drug volume and 82 percent of U.S. prescription drug spending. Overall, the United States’ considerable unbranded generic market share and low average unbranded generic prices did not fully offset higher brand-name originator prices.

The magnitude of the difference between prices in the United States and those in other countries was substantial. For all drugs, U.S. prices were 256 percent of prices in other countries. U.S. prices for brand-name originator drugs were 344 percent of prices in other countries. U.S. prices for unbranded generics were 84 percent of prices in other countries. Although different methodological decisions did change the magnitude of results, the overall pattern of higher drug prices in the United States was generally consistent—again, with the exception of unbranded generics. All G7 comparator countries had lower prices than the United States; France, Italy, and the United Kingdom had particularly low prices across drug categories regardless of methodological decisions.

The results of our study provide evidence that prescription drug prices are higher in the United States than in comparison countries. These results are consistent with the existing literature. Although we apply an estimated adjustment to U.S. prices to approximate rebates and other discounts applied to manufacturer prices as one of our sensitivity analyses, we recognize that the resulting prices will almost certainly differ from the actual net price to payers for individual presentations. We also recognize that resulting price indices will understate differences between prices in the United States and other countries because they adjust only U.S. prices downward even though rebates and similar discounts are increasingly common in other countries.

Future analyses should examine the association between purchasing power and drug prices across countries. We also recommend studying specific active ingredients and presentations that contribute most to the differences in aggregate prices between the United States and other countries, and we recommend long-term tracking of price indices that are relevant to the nascent U.S. biosimilars market.

The full study (71 pages) can be downloaded at this link:
https://www.rand.org…

News release:
https://www.rand.org…

Comment:

By Don McCanne, M.D.

This current RAND study confirms that U.S. drug prices were 256 percent of drug prices in other countries, while brand name originator drugs were 344 percent of prices in other countries. Although these brand drugs represented 82 percent of U.S. prescription drug spending, they accounted for only 11 percent of U.S. prescription drug volume. High prices indeed.

The one positive note is that 84 percent of U.S. prescription drug volume is for unbranded generics, but it represented only 12 percent of prescription drug spending at manufacturer prices. However the large volume of low cost generics does not make up for the exorbitant prices of the brand name originator drugs. We are continuing to spend way too much on brand name drugs. Think of all of the television ads that you see for these expensive drugs.

Although the authors recommend further analyses of these relationships, it really is time to switch to government administered pricing which we could easily do by enacting and implementing a well designed, single payer, improved Medicare for All. Decades of relying on markets has just not been effective.

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President Biden dodges health care reform

Biden signs orders aimed at expanding health care access, including abortion, and opening Obamacare enrollment

By Sheryl Gay Stolberg, Abby Goodnough and Margot Sanger-Katz
The New York Times, January 28, 2021

President Biden, seeking to expand access to health care and strengthen the Affordable Care Act, used his executive authority Thursday to order the reopening of enrollment in the health law’s marketplaces and a re-examination of Trump administration policies that undermined protections for people with pre-existing medical conditions.

His aim, he said in a brief signing ceremony in the Oval Office, was to “undo the damage Trump has done.”

Mr. Biden’s first step is to reopen enrollment for health coverage offered through the federal marketplace created under the health law, also known as Obamacare. His intent is to offer coverage not only to those who lost it during the pandemic, but also to those who did not have insurance and now want it, according to a senior administration official who previewed the new policy during a conference call Thursday morning.

The so-called special enrollment period will run from Feb. 15 to May 15. The official said the reopening would be accompanied by the kind of robust patient outreach — including “paid advertising, direct outreach to consumers and partnerships” with community organizations and advocacy groups — that was abandoned by the Trump administration.

Mr. Biden’s actions take aim at a number of Mr. Trump’s policies. In 2018, citing complaints about the price of Obamacare coverage, the Trump administration issued a rule that extended the length of less expensive “short” term policies from three months to up to three years. Such policies do not have to cover pre-existing conditions and can exclude common benefits like maternity care, mental health care or prescription drugs. The former administration also made it easier for small businesses to band together and offer plans that escape some of the requirements of the Affordable Care Act. Mr. Biden has asked federal agencies to re-examine these rules, which could take months to undo.

https://www.nytimes.com…

Comment:

By Don McCanne, M.D.

Open the enrollment period. Plus undo a number of Mr. Trump’s policies. More of the same.

Tens of millions remain uninsured and tens of millions more are underinsured. We continue to waste hundreds of billions of dollars on private insurer-induced administrative excesses. Not a hint of what he might do about that. Instead, we’ll have many months to undo Trump’s policies so that we’ll be left with … what? The same old system that hasn’t been working for tens of millions of us.

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It is not hard to cut waste in health care

Why It’s So Hard to Cut Waste in Health Care

By Amy Finkelstein
The New York Times, January 22, 2021

Cutting waste while preserving critically important treatment is the holy grail of health care policy.

One of the pandemic’s startling effects is that despite the overwhelming need for Covid-19 treatments and vaccinations, health care spending in the United States has declined sharply.

This indiscriminate reduction in spending closely resembles the unfortunate effects of an array of policies over the past half-century intended to reduce unnecessary medical care. These too cut essential and inessential care alike.

Excessive administrative costs, high prices and inappropriate medical care are the three major culprits in wasteful spending, driving insurance premiums and taxes without helping patients.

For decades, the driving principle behind reducing needless medical care has been that if patients or their providers have financial “skin in the game,” they will make prudent decisions.

The economic theory is simple: If something becomes more expensive, people will buy less of it. And the empirical evidence is overwhelming: When patients have to pay more, they use less medical care.

To encourage only essential care, there has been a widespread shift to paying a fixed fee for a patient, regardless of what treatment is provided. A hospital might be paid $25,000 for a patient’s knee replacement. Or a network of health care providers might be paid $10,000 a year for all of a patient’s health care needs.

One reason it is so hard to trim waste is that physicians and regulators have already eliminated so many demonstrably harmful or useless treatments.

Low-value doesn’t mean no-value-ever.

But most medical procedures are different. They are a matter of judgment.

That doesn’t mean we should stop trying to cut waste. But a simple, miracle cure for excising most unnecessary medical care? Don’t buy it, with or without insurance coverage.

Amy Finkelstein is the John and Jennie S. MacDonald professor of economics at M.I.T.

https://www.nytimes.com…

Comment:

By Don McCanne, M.D.

The United States has the highest per capita health care costs of all nations, yet we are often receiving only mediocrity for our spending. For this reason, measures are often taken to reduce demand for care by making it more expensive, especially through high deductibles and other cost sharing. But excess demand is not the reason our costs are so high compared to other countries, rather it is due to high prices and, especially, excess administrative costs.

Using cost sharing is detrimental because it causes patients to forgo beneficial health care because of the out-of-pocket costs, especially if the cost sharing is truly unaffordable. We need to look at other methods of reducing spending – especially methods that have been successful in other countries with more reasonable levels of health care spending.

Also inappropriate medical care has been blamed for some of the excess spending, but that is not a feature specific to our nation. Much of it is low-value care, but that is not the same as no-value care. Forgoing a scan that has a low probability of detecting a serious problem for which effective intervention is available can be disastrous if diagnosis is deferred until intervention is not effective. It is for this reason that it would be difficult to reduce spending by forging low-value interventions and procedures. We cannot be expected to save money by cutting out what is considered waste only retrospectively.

High prices? Yes, we can use government administered pricing to pay legitimate costs plus fair profit margins. This should ensure that services and products would be available without spending exorbitant amounts. The primary objection to government administered prices is not based on economics, but rather it is based on politics. Other nations are effective in overriding politics; we can be too.

But the most important reason for our high spending is excessive administrative costs – a feature relatively unique to the U.S. health care system. We are heavily dependent on private commercial insurers. Not only are they responsible for tolerating the highest health care prices, they are also responsible for selling us excessive administrative services that they use to try to shift more of the costs to the patient – the exact opposite of what insurance should be doing. Not only do the patients pay more, but many of these administrative services are used to prevent patients from having the care that they should have.

This leads to the problem expressed in the title of Professor Finkelstein’s article: why it’s so hard to cut waste in health care. The fact is, it isn’t hard. The biggest waste is unneeded administrative services which we could dramatically reduce merely by getting rid of private insurers and enacting and implementing a well designed, single payer, Improved Medicare for All program. We could save literally hundreds of billions of dollars that could be used for unmet health care needs.

You don’t need to be a professor at M.I.T. to understand how simple that would be.

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The Haven debacle shows the need to adopt Medicare for All

By Donald R. Frey, M.D.
Omaha World-Herald, January 26, 2021

As America tiptoes into the unknown of 2021, an event will soon occur that will be largely unnoticed.

Just three years ago, the corporate giants Amazon, Berkshire Hathaway and JP Morgan Chase announced they would join forces to create a new health care company called Haven. Revolutionary in its scope, Haven would use market forces to create disruptive innovation that would bring down the costs of employer-based insurance.

In the minds of many, this was long overdue. Each year, rising health care costs were eating into both corporate bottom lines as well as employee take-home pay. Omaha’s Warren Buffett had already thrown down the gauntlet when he’d called health care costs the “tapeworm” inside American economic competitiveness, adding that costs “were the biggest single variable where (America) keeps getting more and more out of whack with the rest of the world.”

Now, the collective strengths of Buffett, Jeff Bezos and Jamie Dimon (not to mention their combined $4 trillion in company assets) would be brought to bear on the cost crisis. The health care world braced for a shock wave of innovation.

In short order, the highly respected Harvard surgeon and author Dr. Atul Gawande was hired to spearhead the project. It was widely anticipated that Haven would use such items as value-based purchasing and massive economies of scale to radically alter health care delivery.

Instead, the whole thing landed with a flop.

To date, there’s been no evidence of meaningful innovation. Gawande left the project after less than two years, and last month came this announcement — Haven would cease operations in February.

Advocates of market-based health care are now scratching their heads. If three of America’s most successful business leaders can’t solve our country’s health care cost dilemma, who can?

In the coming months, the issue of health care will echo through the halls of Congress. With the COVID pandemic spotlighting our national deficiencies, the scope of the Affordable Care Act (the ACA, or, Obamacare to some) will again come into focus. Democrats, who crafted the original legislation, will seek to bolster it, and Republicans, who came within a whisker of demolishing it (save for the courageous vote of John McCain), will try to diminish it.

But will any of this really move us forward? Let’s look at the past 10 years. Incremental changes such as the ACA have expanded coverage to a degree, but failed to address costs. Republican proposals have sought to reduce costs, but would have resulted in further loss of coverage.

What has been virtually absent from any meaningful congressional discussion has been the concept of a single-payer, universal health insurance approach — what some call Medicare for All.

But with over 400,000 dead from COVID-19, millions either lacking insurance or with inadequate coverage, and costs that continue to spiral upward, consideration of universal coverage is long overdue.

As a physician for over 40 years, let me make this observation: Haven didn’t fail because it was too bold and innovative. It failed because it wasn’t bold enough.

Moving forward, it will take bold innovation by our Congress to address our twin dilemmas of cost and coverage. Medicare for All is our only reasonable path forward.

Or not. We can continue to just nibble incrementally around the edges of our health care crisis. But if we do, we should expect our results to be no different than those of Haven.

Dr. Donald R. Frey is professor of family medicine at Creighton University’s School of Medicine, and the author of “Pay Me Now or Pay Me Later: One Physician’s Guided Tour through an Insane Asylum called American Health Care.” This essay expresses his views alone and not those of Creighton University.

https://omaha.com…

Health Economists May Be Getting The Supply-And-Demand Framework All Wrong

Podcast: Health Economists May Be Getting The Supply-And-Demand Framework All Wrong

By Alan Weil, Adam Gaffney
Health Affairs, January 26, 2021

Have health economists been underestimating supply-side constraints when making predictions regarding cost and utilization for universal health coverage programs, such as Medicare For All? That’s certainly what Dr. Adam Gaffney, a pulmonary specialist from Cambridge Health Alliance and Harvard Medical School, and colleagues posit in a new policy paper published in the January 2021 issue of Health Affairs.

As Gaffney and co-authors note in their paper, “focusing only on the impact of health care reform on government expenditures is short-sighted.” On the supply side, there’s a natural limit to doctor and nurses’ time as well as the number of hospital beds in a given facility.

Their analysis suggests that while first-dollar universal coverage expansion would increase ambulatory visits by about 7-10% and hospital use by about 0-3%, modest administrative savings could offset the costs of these increases.

On this episode of A Health Podyssey, Alan Weil and Adam Gaffney take listeners through health reform economics 101 before sharing the implications of the paper, ultimately questioning whether health reform is too focused on a demand-side framework.

Alan Weil, Health Affairs Editor-in-Chief: “If we free up physicians’ time, we say, ‘Oh, there’s going to be more utilization,’ and in a fee-for-service world, more utilization is more cost, but if you change how a physician spends time from administrative tasks to clinical care, they’re more productive and that actually isn’t a new cost to the health care system. That’s a more efficient use of the money we have, and it actually, once you move out of a fee-for-service world, that isn’t a cost-creating phenomenon.”

Adam Gaffney, former president of PNHP: “We do need to actually plan so we can have supply when we need it, and not just where it’s revenue-generating.”

Reader Comment:

By Don McCanne, M.D.

This Podcast is really important because it answers President Biden’s question he asked repeatedly during the campaign, “How can we pay for Medicare for All? We can’t afford it.”

Ironically, he has chosen the most expensive method of expanding coverage. On top of what we are already spending, he is going to give more taxpayer subsidies to the private commercial insurance industry – the source of the highest prices, and, even worse, the source of profound administrative waste, both their own and the administrative burden they place on the health care delivery system.

Medicare for all would greatly reduce the administrative waste by eliminating the private insurers, saving hundreds of billions of dollars, plus prices would be set at a lower level – enough to cover costs plus fair profit margins.

But the most important reason that single payer Medicare for All would be affordable is explained in this Podcast. Listen to it if you haven’t, and then encourage President Biden and his advisers to listen to it as well.

https://www.healthaffairs.org…

The Health Affairs article, “Pricing Universal Health Care: How Much Would The Use Of Medical Care Rise?” by Adam Gaffney, David U. Himmelstein, Steffie Woolhandler, and James G. Kahn was previously covered in the Quote of the Day, “We can easily afford to include everyone in Medicare for All”:
https://pnhp.org…

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Podcast: Health Economists May Be Getting The Supply-And-Demand Framework All Wrong

Interview with Dr. Adam Gaffney

January 26, 2021

Have health economists been underestimating supply-side constraints when making predictions regarding cost and utilization for universal health coverage programs, such as Medicare For All? That’s certainly what Dr. Adam Gaffney, a pulmonary specialist from Cambridge Health Alliance and Harvard Medical School, and colleagues posit in a new policy paper published in the January 2021 issue of Health Affairs.

As Gaffney and co-authors note in their paper, “focusing only on the impact of health care reform on government expenditures is short-sighted.” On the supply side, there’s a natural limit to doctor and nurses’ time as well as the number of hospital beds in a given facility.

Their analysis suggest that while first-dollar universal coverage expansion would increase ambulatory visits by about 7-10% and hospital use by about 0-3%, modest administrative savings could offset the costs of these increases.

On this episode of A Health Podyssey, Alan Weil and Adam Gaffney take listeners through health reform economics 101 before sharing the implications of the paper, ultimately questioning whether health reform is too focused on a demand-side framework.

https://www.healthaffairs.org…

Rural hospitals are closing

RURAL HOSPITAL CLOSURES: Affected Residents Had Reduced Access to Health Care Services

United States Government Accountability Office (GAO), December 2020

What GAO Found

GAO found that when rural hospitals closed, residents living in the closed hospitals’ service areas would have to travel substantially farther to access certain health care services. Specifically, for residents living in these service areas, GAO’s analysis shows that the median distance to access some of the more common health care services increased about 20 miles from 2012 to 2018. For example, the median distance to access general inpatient services was 3.4 miles in 2012, compared to 23.9 miles in 2018—an increase of 20.5 miles. For some of the less common services that were offered by a few of the hospitals that closed, this median distance increased much more. For example, among residents in the service areas of the 11 closed hospitals that offered treatment services for alcohol or drug abuse, the median distance was 5.5 miles in 2012, compared to 44.6 miles in 2018—an increase of 39.1 miles to access these services.

GAO also found that the availability of health care providers in counties with rural hospital closures generally was lower and declined more over time, compared to those without closures. Specifically, counties with closures generally had fewer health care professionals per 100,000 residents in 2012 than did counties without closures. The disparities in the availability of health care professionals in these counties grew from 2012 to 2017. For example, over this time period, the availability of physicians declined more among counties with closures—dropping from a median of 71.2 to 59.7 per 100,000 residents—compared to counties without closures—which dropped from 87.5 to 86.3 per 100,000 residents.

Median Distance in Miles from Service Areas with Rural Hospital Closures to the Nearest Open Hospital that Offered Certain Health Care Services, 2012 and 2018:

  • General Inpatient
    • 2012: 3.4
    • 2018: 23.9
  • Emergency Department
    • 2012: 3.3
    • 2018: 24.2
  • Alcohol or drug
    • 2012: 5.5
    • 2018: 44.6
  • Coronary Care Unit
    • 2012: 4.5
    • 2018: 36.1

https://www.gao.gov…

Comment:

By Don McCanne, M.D.

The declining numbers of rural hospitals have been of concern for many years. Of perhaps greater concern is the decline in the availability of health care providers in counties where rural hospitals closed. Look particularly at the extra distance that must be traveled if you are having a heart attack. That delay could be a matter of life or death.

One of the advantages of a single payer improved Medicare for All program is that it includes regional planning that is based on need. If rural hospitals and their facilities are needed, then they should be available, regardless of cost.

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