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A PNHP response to recent criticisms of single payer, Medicare for All

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A PNHP response to recent criticisms of single payer, Medicare for All

By Ida Hellander, M.D.
Director of Health Policy and Programs, PNHP

Misinformation about single payer is nothing new. When the U.S. was at war with Germany in WWI, national health insurance was attacked as “the Kaiser’s health plan.” President Johnson’s Medicare program – which turned 50 last year – was aggressively red-baited as “socialized medicine” by the right.

Responses to 10 recent attacks on single payer in the news are below.

1. Single payer is an expensive “tax hike on the middle class.”
   
By eliminating the waste and bureaucracy associated with the private insurance industry, single payer saves over $400 billion (yes, that’s with a “b”) a year on administrative costs that can be funneled into patient care. That’s enough money to cover all the uninsured and to eliminate co-pays and deductibles for everyone. Negotiating drug prices with pharmaceutical companies, as other nations do, will save even more. As a result, single payer is able to cover everyone with no increase in national health spending, and is the only reform that pays for itself. A recent attack by Ken Thorpe that single payer will raise costs is refuted here.

Over the long term, single payer’s ability to control health care costs will generate even more savings compared to the status quo. At the current rate of medical inflation (5.6 percent), health care is projected to consume 20 percent of GDP in 2024 year, about double the share of GDP other wealthy nations devote to health care. Single payer controls costs with proven effective strategies such as negotiated fees with doctors, global budgets for hospitals and other institutions, bulk purchasing from drug and device companies, and real health planning for capital investment. Since Canada adopted a single-payer program, their health care costs have grown more slowly than costs in the U.S. One study estimated that U.S. could have saved over $2.2 trillion between 1980 and 2009 in the Medicare program alone if costs had grown at Canadian rates.

A new study shows that taxes already fund 64.3 percent of U.S. health spending. As a result, the tax increase necessary to fund a national health program is relatively low. Americans spend more public dollars per capita ($5,960 per capita in 2013) on health care than the citizens of other nations pay – including those with universal health systems – except Switzerland. In that sense, Americans are paying for national health insurance, but not getting it.

In terms of how single payer would be financed, PNHP does not have a specific plan, but advocates replacing most private funding from households and businesses – about one-third of health spending – with progressive taxes. Taxes would replace health benefit costs by employers and the heavy burden of current health care spending by families on insurance premiums, co-pays, and deductibles for medically necessary care.

In addition to replacing premiums and other health spending with income-based taxes, single payer redistributes the current burden of health care costs from the poor and sick (who often fall into bankruptcy from medical debt and job loss) to the wealthy. Health care costs must be redistributed because they are so high that people of low and middle-incomes can no longer afford health care. This is evidenced by research showing that medical bankruptcy was unaffected by ACA-like reforms in Massachusetts. The Milliman actuarial firm estimated the cost of health care for an average family of four in a PPO to be $23,215 in 2014, while average household income was $53,657. By redistributing health care costs, single payer helps reduce income equality.

The reason health care costs are so high in the U.S. is because we have a market-driven health care system. This is especially obvious with medications, as drug companies price their products as high as the market will allow, irrespective of how much it cost to develop and produce a drug. But it’s true across the medical-industrial complex: From hospitals to hospice care, studies show that for-profit health care raises costs and lowers quality. And among insurers, overhead is sevenfold high in private insurance than in the traditional Medicare program, where it is less than 2 percent.

Two possible financing schemes have been proposed for single payer, one for H.R. 676, single-payer legislation in the House, and another by Sen. Bernie Sanders. Both plans would raise household incomes for the vast majority of families. An attack on the Sanders financing plan is refuted here.

The Sanders plan would institute a small payroll tax or “income-based health premium” that would replace current health care spending by middle-class families on insurance premiums, co-pays, and deductibles for medically necessary care. (Goods and services that would not be covered include over-the-counter medications – $44 billion in 2014, or 1.5 percent of health spending – as well as luxury eyeglasses, cosmetic surgery, and some dental. Long-term care services would require case management.) In his financing plan, this tax is 2.2 percent of income. As a result, net household incomes for the vast majority of families would rise under single payer. Employers would also pay a payroll tax of 6.2 percent for health care for their workers that would replace what they are currently spending on health benefits (private employers pay 7.7 percent of total compensation towards health benefits, while state and local government pays 11.6 percent).

The Sanders plan redistributes the burden of health care costs from low- and middle-income households to the wealthy by raising marginal tax rates on incomes above $250,000, taxing capital gains, dividends, and estates, and closing some tax loopholes. The top one-tenth of 1 percent of households (average incomes of $2 million – $10 million) and in particular, the 1,300 wealthiest households (average incomes over $10 million) would pay the highest marginal tax rates (48 percent and 52 percent, respectively). The average middle-class household would pay less in taxes than they are already paying for care.

2. Single payer would “eliminate the ACA” and its protections for people with preexisting conditions.

In fact, single payer would replace current skimpy policies that are inadequate and require very high cost sharing (e.g. a $10,545 deductible for a “bronze” family plan, a $6,010 deductible for a “silver” plan) with guaranteed lifelong coverage regardless of age, income, or health status. It would also eliminate co-payments and deductibles, which is important for people with preexisting and chronic conditions, and anyone with a serious illness. A recent article by oncologists advocated for single payer because of the burden of the high cost of cancer care on their patients.

Single payer does not “eliminate” the ACA or require that we “re-litigate” old health debates. It moves the country forward, replacing the ACA and other public and private programs with a program that works by addressing the underlying cause of the health care crisis – a market-based health care system driven by profits, not patients.

3. Single payer would require that we pay physicians and hospitals less.

No. Single payer is not financed by reducing physician incomes and hospital revenues, but by slashing administrative overhead and bureaucracy associated with the private insurance industry and funneling those resources – $400 billion annually – into patient care. Currently, one-quarter of hospital spending goes to billing and insurance related overhead, and administrative work consumes one-sixth of physicians’ time. Doctors in the U.S. spend four times as much ($82,975) as Canadian physicians on overhead due to the complexity of our payment system. Private insurance overhead is sevenfold as much as Medicare’s. By slashing administrative costs, and monopsony purchasing of drugs and devices, single payer frees up enough money to expand coverage to the uninsured and eliminate co-pays and deductibles for everyone.

While physicians on the whole won’t make less, the gap between what the various specialties earn may narrow. In Canada, physician income has increased under their single-payer plan.

Single payer is also a potent tool for improving quality and detecting fraud in health care because health care utilization and payment information is all in one database, instead of hundreds of proprietary databases run by insurance companies. This makes it easy to identify outliers (e.g. a physician billing for many more tests than their peers) and to track what’s going on (e.g. the UK was able to easily track down every patient who had received a certain type of defective hip implant, and Medicare was able to detect inappropriate anti-psychotic prescribing to seniors in nursing homes).

4. Single payer will put state governors in charge of health care.

No. The ACA did that with Medicaid, after the Supreme Court ruled that the Medicaid expansion contained in the ACA was, in effect, optional. As a result of the opposition of Republic governors and legislatures, 5 million poor Americans in 19 states remain uninsured.

Single payer would be administered at the federal level, as Medicare is today. In some single-payer proposals, starting with the late Sen. Paul Wellstone and in earlier versions of Sen. Sanders’ plan, single payer would have been administered at the state level, like Canada’s provincial health plans, but the federal government would have taken over running the health system for any state that did not do so. Sen. Sanders’ current plan is administered at the federal level.

 5. Vermont decided not to adopt single payer because it was too expensive.

The Vermont plan, known as Green Mountain Care, was not a single-payer plan. The ultimate design for GMC retained multiple payers, and would have continued to pay hospitals and other institutional providers on a per-patient basis, perpetuating the expensive billing apparatus that siphons funds from care. Hospitals would have continued to rely on surpluses from day-to-day operations as their main source of capital funds, forcing hospital administrators to identify and pursue profit opportunities. Single payer pays hospitals via lump-sum budgets with separate grants for capital costs. Even so, it was political will, not cost, that defeated the Vermont health reform. The health exchange the state set up under the ACA didn’t work (as happened in several other states as well), draining political capital, and the governor barely squeaked through his re-election. A contributing factor was that the financing plan developed by the governor’s own team was not very progressive or diversified. Finally, making formerly hidden health care costs transparent by replacing them with taxes, even if the taxes are lower, is a heavy political lift.

6. Moving to a single-payer system would be a “tumultuous” experience. Single payer would require a massive transformation of the health care system.

Transitioning to single payer would be easier than for any other health reform, or dealing with annual insurance changes at work, for that matter. Americans would only need to enroll once for life, and most people could be automatically enrolled through the Social Security System. For those that aren’t enrolled automatically, it should be noted that Medicare enrolled 19 million people in 1966 with index cards, for a cost of $867 million (in today’s dollars), including the cost of beneficiaries’ medical care. In contrast, the transition to the ACA was filled with “glitches” and cost $6 billion.

The major change in the health system would be that patients would be able to choose their doctors and hospitals, and doctors would only need to bill one source. Patients would no longer receive medical bills and doctors and hospitals would no longer have to commit so much time and money to getting paid.

No other reform will actually control costs and get us to universal coverage. What is tumultuous is the health care crisis, which will remain until we have a single-payer system. Providers are rapidly consolidating into large health and hospital systems to gain market power and assure their revenues for the future. This process is raising, not lowering, costs. Consolidation would not be necessary under a single payer. In fact, by simplifying the payment system, single payer enables providers to return to small or solo practice if they choose.

7. A simple, efficient single payer is not politically feasible in the current Congress.

That’s why we need a grassroots mobilization and campaign finance reform, so that Congress can represent the people they are supposed to serve, not the insurance and drug companies. A December 2015 poll found that 58 percent of Americans support Medicare for All, including 81 percent of Democrats, 60 percent of Independents and even 37 percent of Republicans. Women’s suffrage and abolition were once politically infeasible too.

Incidentally, in 2009 the Democrats had the White House, a large majority in the House, and 60 Senators – all the votes needed to pass single payer. What was lacking was political will.

8. Single payer would cause “debate over abortion, contraception, HIV prevention, immigration policy, and other matters.”

This is a red herring. Controversial matters are debated all the time, in the context of health reform, and outside it, as with immigration policy.

As physicians, we advocate that everyone living and working in the U.S. be covered for all medically necessary care, including immigrants. Undocumented immigrants are currently excluded from many state and federal health programs, including the ACA, even though recent research shows that unauthorized immigrants contributed a net of $35.1 billion to the Medicare Trust Fund between 2000 and 2011.

9. Single payer would cut benefits for workers with employer-sponsored coverage.

Employer-sponsored benefits have been steadily eroding for over a decade, with more employees now saddled with unaffordable co-payments and deductibles. The average deductible for a family with HMO coverage is $2,758 and for an individual is $1,318. Also, workers are increasingly limited to a narrow network of providers. In contrast, 83 percent of primary care physicians and 91 percent of specialists nationally report they are accepting new Medicare patients, giving beneficiaries a much wide choice of doctors.

The ACA’s 40 percent excise tax on high-cost workplace private health insurance, the misnamed Cadillac tax, had already begun to drive benefits down when it was postponed late last year. Although the tax wasn’t supposed to go into effect until 2018, unions negotiating multi-year contracts found that employers were using it as leverage at the bargaining table to push for wage and benefit cuts.

Single payer would improve benefits for children, working age-adults, and seniors (see note below) by eliminating out-of-pocket costs and premiums and by giving patients a free choice of providers. It would also end “job lock” whereby people have to stay in a job to keep their benefits.

Note: The current Medicare program requires co-payments and deductibles and requires beneficiaries to purchase drug coverage separately (with federal subsidies). Single payer would eliminate out-of-pocket costs and the need for separate drug coverage and supplemental plans. For that reason, national single payer legislation is called the “Expanded and Improved Medicare for all Act.” It would help seniors, who have average incomes of $23,500 and currently spend an average of $4,734 a year on out-of-pocket medical costs and premiums.

10. Single payer plans “lack details.”

Not all of them. Physicians for a National Health Program’s single-payer plan (cited in the New Yorker recently as a good model) has more details about how single payer would work in practice, and served as the model for national legislation, H.R. 676. PNHP’s proposal appeared in the Journal of the American Medical Association and may be found here.

But the length of a plan is not correlated with its effectiveness. Some single-payer plans, including plans adopted in other countries, have been succinct.

The Canada Health Act was just 8 pages long. It specified the five key principles of Canadian health insurance: Universal (“all insured residents”), Comprehensive (coverage for “all necessary health services”), Portable (from province to province), Accessible (“reasonable access to health facilities” and “reasonable compensation” for providers, and Public Administration. Every provincial health plan must meet these principles, which have stood the test of time.

Rep. John Conyers single payer plan, H.R. 676, is just 30 pages long.

Conversely, the ACA contains 906 pages of details, but it hasn’t solved the health care crisis. The ACA was drafted by a former insurance company executive, Liz Fowler, who left government to become a lobbyist for a drug company.

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The health care crisis by the numbers – 2016

33.0 million Americans (10.4 percent) are still uninsured, including 5 million children (Census Bureau).

31 million Americans are underinsured (Commonwealth Foundation). 20 percent of insured Americans have trouble paying their medical bills. Among those who reported having problems paying their bills despite having insurance, 63 percent said they used up all or most of their savings; and 43 percent said they skipped medical care they needed in the past year due to the cost (New York Times/Kaiser poll. 1/5/16).

Health care costs are high and rising by 5.6 percent a year. In 2014, health spending was $3.0 trillion, $9,523 per capita, 17.5 percent of GDP. By 2024 health care will be 19.6 percent of GDP, nearly 20 percent of the economy. Deductibles are rising seven times faster than wages. The average employer-based family policy costs $17,545, of which employees are paying $4,955 of the premiums for a plan with a deductible $2,758 for HMO coverage.

Drug prices are skyrocketing. Pfizer raised their list prices on over 60 brand name drugs with at least $10 million in annual U.S. sales by 10.6 percent at the beginning of the year, according to the Wall Street Journal (1/10/16). At least four other large drug firms have similarly raised prices across a broad spectrum of products for no reason other than to boost profits.

Dr. Ida Hellander is director of policy and programs at Physicians for a National Health Program, a 20,000-member nonprofit, nonpartisan organization of doctors headquartered in Chicago. She co-edits PNHP’s newsletter and specializes in teaching clinicians evidence-based health policy and empowering them to become effective advocates for reform.  Dr. Hellander received her B.A. from Yale and her M.D. from the University of Minnesota Medical School.  Before joining PNHP in 1992, she was a research associate with the Public Citizen Health Research Group.  She is a member of the International Association of Health Policy, a frequent contributor to the International Journal of Health Services and co-author of the book “Bleeding the Patient: The Consequences of Corporate Health Care.” 

Voters to decide ColoradoCare in November

By Anne C. Courtright, M.D.
The Pueblo (Colo.) Chieftain, Jan. 30, 2016

I would like to set the record straight regarding the ColoradoCare Amendment 69, which will be on the November 2016 ballot.

The movement for Expanded and Improved Medicare for All formally began in 1987 with the establishment of Physicians for a National Health Program, because a couple of young doctors were irate over the contrast between the lovely one- and two-bed rooms, many of which were empty, in the private hospital to which they were assigned in their training, contrasted with the waiting list and overcrowded wards with multiple beds in the Community Hospital, where they also worked.

State Sen. Irene Aguilar’s Amendment 69 is a variation of but a continuation of the work that Health Care for All Colorado has been doing in Colorado, since July 15, 2003. It is a movement to get affordable, quality health care available to all of the people of Colorado.

HCAC does not like to see people die or become disabled because they cannot afford to get needed health care or, all too often, go bankrupt when they do. Our current system is not working well.

The ColoradoCare Plan would be financed by a government-collected, designated fund, just as Medicare is nationally. Initially, it would be administered by an appointed board, which would be replaced by an elected board for the long term.

HCAC submitted a true single-payer plan to the 208 Commission in 2007. It was found by the Lewin Commission to be the only plan submitted that really covered everyone in the state, and it would have saved the state $4 billion a year. However, it was not recommended to the Legislature by the commission because it “was too disruptive to the present system.” Do you suppose that could have represented the influence of the health insurance companies?

The ColoradoCare plan would replace the Affordable Care Act in Colorado, which the ACA allows, as long as the plan provides care “as good as or better than the ACA.” Amendment 69 would undoubtedly do so and with a far less convoluted system. It would provide everyone in the state affordable, quality care and cost less than we are currently spending. It would not replace Medicare or the VA, but it would serve as a Medicare supplemental plan.

And, yes, it would likely mean the end of for-profit health insurance companies in the state except for cosmetic surgery, high-cost end of life care and such extra things that Amendment 69 would indeed, not cover. But all necessary health care would be covered, and you would no longer have the cost of your health insurance premiums, prescription drugs, deductibles and most co-pays.

Eighty percent of Coloradans would pay less overall for their medical care under Amendment 69 than they do now. There would be no more Medicaid or CHIP, people dying or becoming disabled because they could not afford needed treatment, or going bankrupt all too often if they got the needed care.

Rather than bankrupting the state, it would make Colorado one of the healthiest states in the union and one in which providers would enjoy practicing medicine, rather than having to spend half of their time fighting with the insurance companies over needed care or payments.

Providers, including hospitals, would save a great deal of money from the reduced need for staff in their billing departments, so costs would go down, not up. Individuals could go to the provider and hospital of their choice.

Providers and hospitals would send a simple bill to the elected board of trustees and be reimbursed. No longer would one third of our health care dollar in Colorado, go to administrative costs, huge CEO salaries and shareholder profits.

The only thing that would be better than Amendment 69, would be Expanded and Improved Medicare for All in the United States. Tell U.S. Rep. Scott Tipton to sign on to Rep. John Conyers’ bill, HR 676, which would make that happen. That is what we really need and HCAC and PNHP are working toward.

Amendment 69 would be a step in that direction, and Colorado would have the distinction of being the first state in the union to actually establish a single-payer type of plan. Groups in many other states are also working in this direction.

Anne C. Courtright is a psychiatrist, now retired from the Colorado Mental Health Institute at Pueblo.

http://www.chieftain.com/opinion/4297194-120/care-health-colorado-plan

PNHP note: For an analysis of ColoradoCare by Drs. Ida Hellander, David Himmelstein and Steffie Woolhandler, click here.

Paul Song on the real debate we should be having

The Real Healthcare Debate Democrats Should Be Having

By Paul Y. Song, M.D.
HuffPost Politics, January 31, 2016

Recently, a fierce debate has been ignited within the Democratic Party regarding the merits and feasibility of a single-payer Medicare-for-All universal healthcare system. Some liberal commentators have summarily dismissed Senator Sanders’ proposal as politically unrealistic or as greatly lacking in details while championing a slightly improved status quo, and other political surrogates have spread GOP-like untruths that have no place in any honest discussion.

Regardless of ones’ individual beliefs on Medicare-for-All, it is crucial to note some indisputable facts regarding the Affordable Care Act (ACA) and the current status quo:

1.  While the ACA did indeed do some very positive things like end lifetime caps on medical coverage and do away with discrimination for pre-existing conditions, it was never intended to cover every uninsured individual. In fact, after the ACA is fully implemented, the Congressional Budget Office estimates that up to 29 million residents will still remain uninsured.

2.  The only area of the ACA that both Democrats and Republicans found mutual agreement on was to exclude our undocumented brothers and sisters.

3.  The average insured family still pays an extra $1,017 in premiums (hidden tax) to cover the cost of care for the uninsured.

4.  A recent Commonwealth Fund study revealed that 31 million people with insurance had such high out-of-pocket costs or deductibles relative to their incomes that they were UNDER-insured and that 51% of these adults reported problems with their medical bills, while 44% of all adults reported not getting care because of high co-pays and deductibles despite being insured.

5.  Even after a significant decrease in the total number of uninsured, there were still 1.7 million medical related bankruptcies in 2014 of which 75% were actually insured, and this is only expected to get worse.

6.  Most individuals in the U.S. cannot afford an annual deductible of $6,850 and most families of four cannot afford an annual deductible of $13,700.

7.  Despite premiums increasing over 150% over the past 9 years, there is no federal insurance rate regulation.

8.  Despite the fact that average branded drug prices have increased 127% during the past 8 years to the point that 73% of Americans now find the cost of drugs unreasonable, there was no mechanism to control drug prices.

9.  Many states have huge underfunded retiree healthcare liabilities. California’s alone is $150 Billion.

10.  Healthcare costs are currently 17.5% of GDP with over 1% of GDP spent on Prescription drugs alone, and will only continue to climb as mandatory federal health spending is projected to double in the next 10 Years.

11.  Recent data from the American Journal of Public Health found that tax-funded expenditures accounted for 64.3% of all U.S. health spending. U.S. health spending for 2013 was $9,267 per capita, with government’s share being $5,960.

12.  Prior to the bailout, GM spent more on healthcare for its employees than it did on steel. Rising healthcare costs are making U.S. companies less competitive and taking money away from wages and capital investments.

13.  Most Americans continue to get employer-sponsored healthcare but worker’s contributions to premiums have increased 212% since 2000 while wages have only increased 54% during the same period.

14.  Healthcare benefits have become the biggest source of labor negotiation strife.

So if anything, most health policy experts believe that our current healthcare system is unsustainable for individuals, businesses, states and our federal government, and to continue this status quo is what is really unrealistic.

The real debate Democrats should be having should not be about whether single payer, a highly successful proven system in so many industrialized nations, is the solution, but rather how we can collectively come together to overcome the corporate forces that derailed the ACA from providing a public option, drug price controls and insurance rate regulation, and how we get to the ultimate goal of Medicare for All.

Back in 2003, then Illinois State Senator Barack Obama said in a speech to the AFL-CIO, “I happen to be a proponent of a single payer universal healthcare plan…but first we need to take back the White House, then the Senate, then the house”.

Sadly, when Barack Obama became President and had a supermajority in the Senate and House, single payer was never even introduced as an option. In fact, well before the ACA was even written, the pharmaceutical industry under the guidance of former congressman and Medicare Part D architect, Billy Tauzin, negotiated a sweetheart deal that would provide industry support for the administration’s health reform agenda in exchange for no significant reform of the pharmaceutical industry.

At the same time there were over 3,300 registered healthcare lobbyists for the 535 members of congress who spent more in total than what was spent on the entire Bush-Kerry election to influence the legislation. Many of these lobbyists were former congressional staffers including two former chiefs of staff to then Finance Committee Chairman Senator Max Baucus. Many legislators from both sides of the aisle received lots of money, but it was Baucus who received over $1.4 million and held up the legislation in his committee for so long that Senator Ted Kennedy was not alive to vote for it.

In the end, despite some positive aspects, the ACA looks like it was essentially written by the pharmaceutical and insurance industry. It is not socialism, but rather a $475 billion corporate welfare program that mandated uninsured Americans buy a product from a for-profit industry that only makes money by denying care, and this is why we still have so many of the problems stated above.

Paul Krugman is correct when he says that Senator Sanders’ Medicare-or-All plan is not politically feasible today. As long as we have Democrats who are consistently beholden to the Insurance and Pharma cartels, we will definitely continue the status quo. As long as we do not fight to reverse the awful cloud of Citizens’ United and the grossly disproportionate influence of money in politics, we cannot achieve any meaningful progress in healthcare or any other critical challenge facing our country and world.

Far beyond any Medicare-For-All proposal, what the Senator is really calling for is a transformational movement, much larger than any one individual, which can come together to fight against the Super PACs and suffocating corporate influences. His campaign is the personification of this fight.

58 percent of Americans currently favor Medicare-for-All once they learn more about it, and 81% of Democrats already believe it is the best solution. So, rather than demonize it with lies and scare tactics, we should be educating more and more people who are disillusioned with their current healthcare so that more and more of us can demand something better from our representatives.

Sadly, the biggest major insurers also recognize the benefits and efficiencies of a single payer system and have begun to rapidly consolidate through huge mergers, which further eliminates what little competition consumers have. So the question is not whether we will have single payer, but whether it will be administered by one ruthless for-profit entity that will keep all realized savings for its shareholders while continuing to gauge, deny, and shortchange its patients. Or whether it will be a Medicare-for-all, which will use the cost savings of administrative efficiency and bulk purchasing power to increase coverage and benefits for everyone, to provide the humane and comprehensive health care system we as a society truly deserve and already pay for.

Above all, we need to remember that we ARE the party that rejected the status quo and created a very bold disruptive new program called Medicare at a time when 44% of seniors were uninsured and 1/3 were living in poverty. We are the party for the least among us and for those without a voice. We are the party of “Yes, we can”.

Paul Y. Song, is a board certified radiation oncologist and the Executive Chair of the Courage Campaign, Co-Chair for a Campaign for a Healthy California, and Board Member of Physicians for a National Health Program.

http://www.huffingtonpost.com/paul-y-song-md/the-real-healthcare-debat_b_9121210.html

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Comment:

By Don McCanne, M.D.

Currently the two leading candidates for the Democratic nomination for president are debating whether or not a single-payer Medicare-for-All universal healthcare system is politically feasible. Paul Song provides us with evidence that our current system is inadequate and unsustainable, so the real debate we should be having is whether we should leave our health care system under the control the industries and policies that are responsible for much of what is wrong, or if we should initiate a transformational movement that will include Medicare-for-All so that we can have “the humane and comprehensive health care system we as a society truly deserve and already pay for.”

This debate is not just for members of the Democratic Party. It is a debate that the entire nation should be having. It is important that the debate be informed with facts such as those presented here by Paul Song.

Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party. Although Paul Song is a board member of PNHP, any partisan views expressed in this article are his own and not those of PNHP.

Himmelstein and Woolhandler set the facts straight on Thorpe’s analysis

On Kenneth Thorpe’s Analysis of Senator Sanders’ Single-Payer Reform Plan

By David Himmelstein and Steffie Woolhandler
Huffpost Politics, January 29, 2016

Professor Kenneth Thorpe recently issued an analysis of Senator Bernie Sanders’ single-payer national health insurance proposal. Thorpe, an Emory University professor who served in the Clinton administration, claims the single-payer plan would break the bank.

Thorpe’s analysis rests on several incorrect, and occasionally outlandish, assumptions. Moreover, it is at odds with analyses of the costs of single-payer programs that he produced in the past, which projected large savings from such reform (see this study, for example, or this one).

We outline below the incorrect assumptions behind Thorpe’s current analysis:

1. He incorrectly assumes administrative savings of only 4.7 percent of expenditures, based on projections of administrative savings under Vermont’s proposed reform.

However, the Vermont reform did not contemplate a fully single-payer system. It would have allowed large employers to continue offering private coverage, and the continuation of the FEHBP and Medicare programs. Hence, hospitals, physicians’ offices, and nursing homes would still have had to contend with multiple payers, forcing them to maintain the complex cost-tracking and billing apparatus that drives up providers’ administrative costs. Vermont’s plan proposed continuing to pay hospitals and other institutional providers on a per-patient basis, rather than through global budgets, perpetuating the expensive hospital billing apparatus that siphons funds from care.

The correct way to estimate administrative savings is to use actual data from real world experience with single-payer systems such as that in Canada or Scotland, rather than using projections of costs in Vermont’s non-single-payer plan. In our study published in the New England Journal of Medicine we found that the administrative costs of insurers and providers accounted for 16.7 percent of total health care expenditures in Canada, versus. 31.0 percent in the U.S. – a difference of 14.3 percent. In subsequent studies, we have found that U.S. hospital administrative costs have continued to rise, while Canada’s have not. Moreover, hospital administrative costs in Scotland’s single-payer system were virtually identical those in Canada.

In sum, Thorpe’s assumptions understate the administrative savings of single-payer by 9.6 percent of total health spending. Hence he overestimates the program’s cost by 9.6 percent of health spending — $327 billion in 2016, and $3.742 trillion between 2016 and 2024. Notably, Thorpe’s earlier analyses projected much larger administrative savings from single-payer reform — closely in line with our estimates.

2. Thorpe assumes huge increases in the utilization of care, increases far beyond those that were seen when national health insurance was implemented in Canada, and much larger than is possible given the supply of doctors and hospital beds.

When Canada implemented universal coverage and abolished copayments and deductibles there was no change in the total number of doctor visits; doctors worked the same number of hours after the reform as before, and saw the same number of patients. However, they saw their healthy and wealthier patients slightly less often, and sicker and poorer patients somewhat more frequently. Moreover, the limited supply of hospital beds precluded the kind of big surge in hospitalizations that Thorpe predicts. In health policy parlance, “capacity constraints” precluded a big increase in system-wide utilization.

Thorpe bases his estimates on what has happened when a small percentage of people in a community have had copayments eliminated or added. But in those cases there are no capacity constraints, so it tells us little about what would happen under a system-wide reform like single-payer.

Thorpe does not give actual figures for how many additional doctor visits and hospital stays he predicts. However, his estimates that persons with private insurance would increase their utilization of care by 10 percent and that those with Medicare-only coverage would increase utilization by 10 to 25 percent suggest that he projects about 100 million additional doctor visits and several million more hospitalizations each year – something that’s impossible given real-world capacity constraints. There just aren’t enough doctors and hospital beds to deliver that much care.

Instead of a huge surge in utilization, more realistic projections would assume that doctors and hospitals would reduce the amount of unnecessary care they’re now delivering in order to deliver needed care to those who are currently not getting what they need. That’s what happened in Canada.

3. Thorpe assumes that the program would be a huge bonanza for state governments, projecting that the federal government would relieve them of 10 percent of their current spending for Medicaid and CHIP — equivalent to about $20 billion annually.

No one has suggested that a single-payer reform would or should do this.

4. Thorpe’s analysis also ignores the large savings that would accrue to state and local governments — and hence taxpayers — because they would be relieved of the costs of private coverage for public employees.

State and local government spent $177 billion last year on employee health benefits – about $120 billion more than state and local government would pay under the 6.2 percent payroll tax that Senator Sanders has proposed. The federal government could simply allow state and local governments to keep this windfall, but it seems far more likely that it would reduce other funding streams to compensate.

5. Thorpe’s analysis also apparently ignores the huge tax subsidies that currently support private insurance, which are listed as “Tax Expenditures” in the federal government’s official budget documents.

These subsidies totaled $326.2 billion last year, and are expected to increase to $538.9 billion in 2024. Shifting these current tax expenditures from subsidizing private coverage to funding for a single-payer program would greatly lessen the amount of new revenues that would be required. Thorpe’s analysis makes no mention of these current subsidies.

6. Thorpe assumes zero cost savings under single-payer on prescription drugs and devices.

Nations with single-payer systems have in every case used their clout as a huge purchaser to lower drug prices by about 50 percent. In fact, the U.S. Defense Department and VA system have also been able to realize such savings.

In summary, professor Thorpe grossly underestimates the administrative savings under single-payer; posits increases in the number of doctor visits and hospitalizations that exceed the capacity of doctors and hospitals to provide this added care; assumes that the federal government would provide state and local governments with huge windfalls rather than requiring full maintenance of effort; makes no mention of the vast current tax subsidies for private coverage whose elimination would provide hundreds of billions annually to fund a single-payer program; and ignores savings on drugs and medical equipment that every other single-payer program has reaped.

In the past, Thorpe estimated that single-payer reform would lower health spending while covering all of the uninsured and upgrading coverage for the tens of millions who are currently underinsured. The facts on which those conclusions were based have not changed.

Drs. David Himmelstein and Steffie Woolhandler are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School. The opinions expressed here do not necessarily reflect the views of those institutions.

http://www.huffingtonpost.com/david-himmelstein/kenneth-thorpe-bernie-sanders-single-payer_b_9113192.html?1454092127

***

Comment:

By Don McCanne, M.D.

In the political battle over Bernie Sanders’ proposal for a single payer national health program, it is unfortunate that the perspective of just how much single payer would benefit Americans is being lost in all of the clamor.

This is not an issue with two opposing sets of facts. There is only one truth and that is that a well designed single payer system would bring comprehensive health care to everyone, while removing financial barriers to care and making our national health expenditures sustainable well into the future.

It is not at all clear why so many progressives have decided to attack Sanders’ single payer proposal. Most of them do understand the clear advantages in improving access while controlling costs, but they seem fixated on opposing it based on the alleged lack of political feasibility. It is fine to condemn the politics, but that should give us even more reason to advance a clearly superior model of health care financing reform.

The latest attack that is being circulated widely is that by Kenneth Thorpe, a highly respected Emory University professor. David Himmelstein and Steffie Woolhandler lay the record straight. It is crucial that we not be caught up in the numbers being bandied about – the trees – when we need to see the forest – the fundamental principles of the single payer model.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

Cancer’s Financial Burden Tied to Poorer Survival, Study Finds

By Steven Reinberg
HealthDay, Jan. 26, 2016

The staggering cost of cancer care forces many patients to file for bankruptcy, and that financial stress may play a role in cutting their lives short, new research suggests.

In fact, patients suffering from colon, prostate or thyroid cancers who went broke had almost 80 percent higher odds of dying during the study period compared with similar patients who remained financially sound, the researchers said.

“Bankruptcy, for reasons that we don’t know, is a serious threat to survival for cancer patients,” said lead researcher Dr. Scott Ramsey, from the Fred Hutchinson Cancer Research Center in Seattle.

While the study found a link between financial strain and cancer death, the research wasn’t designed to prove a definitive cause-and-effect relationship between these factors.

Still, medical costs are one of the most common reasons why people go bankrupt, Ramsey said. “We think that what happens is that when people are diagnosed, they had to leave their job, use up all their savings, go into debt and at some point the debt was overwhelming,” he explained.

When patients go bankrupt, they may stop getting care or stop their treatment early, or they don’t go for recommended treatment, he said. The link between bankruptcy and dying “is probably a failure to get necessary care,” Ramsey said.

In addition, the stress of bankruptcy on top of cancer may also play a role, he suggested.

Patients with financial pressures should ask their doctor to consider cost of treatment options, Ramsey said. “Many of the treatments that are recommended equally can vary 10 or 100 times in price,” he said. “Choosing a therapy that’s less expensive might be better because the patient may be able to complete it.”

For example, there are five recommended treatments for stomach cancer. “The least expensive treatment costs $800, the most expensive treatment costs $57,000,” he said.

In addition, patients can forgo some suggested treatments that are expensive but not vital, such as high-cost scans and drugs used to treat certain side effects of chemotherapy, Ramsey said.

Even insured patients need to take costs into account, he added. These patients may face high out-of-pocket costs and co-pays.

“We have to figure ways of keeping people out of severe financial distress,” he said. Doctors need to ask patients about their finances and “be aggressive in trying to help them manage their finances, and get them to financial services earlier rather than later so they don’t end up in this extreme situation,” Ramsey explained.

The new report was published in the Jan. 25 online edition of the Journal of Clinical Oncology.

For the study, the researchers collected data on more than 230,000 cancer patients listed in the Western Washington Surveillance, Epidemiology and End Results program cancer registry. The investigators linked these data with federal bankruptcy records for the region.

Between 1995 and 2009, more than 4,700 patients filed for bankruptcy. These patients were more likely to be younger, female, non-white and to have received treatment for cancer, the findings showed.

Jason Zheng, a senior epidemiologist at the American Cancer Society, said, “We know that cancer patients are more likely to file bankruptcy, compared with other patients.”

These patients are more likely to skip medications, which can “lead to bad results and higher mortality,” he said. “We need to identify patients at financial risk before they file for bankruptcy,” Zheng suggested.

Dr. Steffie Woolhandler, a spokeswoman for Physicians for a National Health Program, said, “It’s shocking that we have a society that would bankrupt people when they have cancer and put them in a situation where they can’t get the medical care they need to stay alive.”

She said that people whose medical debt drives them to bankruptcy may also have trouble affording food and utilities, as well as medical care. “We need to make medical care completely free,” said Woolhandler, a professor in the School of Public Health at Hunter College in New York City.

Changes within the Affordable Care Act (sometimes called “Obamacare”) reduce the number of uninsured Americans, she said. But high co-pays and out-of-pocket costs, along with uncovered procedures, can cost cancer patients hundreds of thousands of dollars, she explained.

“Skimpy coverage leaves many cancer patients at risk for bankruptcy, which puts them at risk for early death,” Woolhandler said. “Unfortunately, Obamacare did not improve the problem of underinsurance.”

For more on the cost of cancer care, visit the American Society of Clinical Oncology.

http://health.usnews.com/health-news/articles/2016-01-26/cancers-financial-burden-tied-to-poorer-survival-study-finds

Some employers exclude outpatient surgeries from their health plans

Check The Fine Print: Some Work-Based Health Plans Exclude Outpatient Surgeries

By Jay Hancock
Kaiser Health News, January 25, 2016

Last year regulators blocked companies with millions of lower-wage workers from claiming that coverage with no inpatient hospital benefits met Obamacare’s strictest standard for large employers.

Now that those so-called “skinny plans” aren’t allowed, insurance administrators and many cost-conscious employers are purporting to meet the rules with a new version that excludes another major category: outpatient surgery. The new plans may not survive regulatory scrutiny any more than the old ones did, some experts believe.

For 2016, such insurance has been marketed primarily to staffing companies, home health agencies, hoteliers and other lower-wage employers that had historically never provided major medical coverage. Those are the same firms that were sponsoring skinny coverage a year ago, industry consultants say.

“I really wonder whether they can do that,” said Timothy Jost, a law professor at Washington and Lee University in Virginia who is an authority on the health law. “Refusing to cover any outpatient physician surgical services is arguably a violation.”

Unlike insurance sold to individuals and small businesses through online marketplaces, large employers are not required to offer a list of “essential health benefits.” Instead, they must offer minimum value — roughly comparable to that of a high-deductible, “bronze” marketplace plan — as determined by an online calculator and regulatory guidance, or face a penalty. There is also a lesser standard for large employers — “minimum essential coverage” — that triggers different fines for noncompliance. But nearly all workplace-based plans that offer some types of preventive care meet this requirement.

http://khn.org/news/check-the-fine-print-some-work-based-health-plans-exclude-outpatient-surgeries/

***

Comment:

By Don McCanne, M.D.

One of the arguments made for choosing the incremental policies of the Affordable Care Act  (ACA) over a comprehensive single payer model of reform was that the politicians wanted to avoid disrupting the part of health care financing that was working well – particularly the employer-sponsored health plans. So are employees being assured of adequate health care coverage?

The onslaught of higher deductibles and narrower networks indicates that maybe these plans are not working so well after all. But you cannot underestimate the conniving behavior of some of the private sector employers in shirking their responsibilities for providing adequate coverage, as supposedly was intended by the architects of ACA.

Since the employers are allowed considerable flexibility in plan design, some thought that they could exclude inpatient hospital benefits. That, of course, would be disastrous for anyone requiring hospitalization. Fortunately that loophole was closed.

Now they claim that they can exclude outpatient surgery. Considering that now about two-thirds of surgeries are done on an outpatient basis, that too will lead to financial disaster for far too many patients. It is likely that our federal stewards will also disallow the exclusion of outpatient surgery. But then what scheme will they think up next?

Leaving the private sector in control inevitably leads to devious behavior designed to save money for the employers or insurers at a cost to the patients. That is the way the private sector and their markets work. In contrast, responsible public stewards act in the interests of patients, and part of that means ensuring an adequate health delivery infrastructure to take care of the patients.

We really do need to dismiss private managers of health care funds and replace them with our own public administrators. That’s precisely what a single payer national health program would do.

Medicare for all: A solution for health care

By Sean Lehmann, D.P.M.
Nevada Appeal, Jan. 20, 2016

The Affordable Care Act (ACA or Obamacare) has most certainly had some successes. There are many who didn’t have health coverage that do now and many others who can now get coverage that were previously denied due to pre-existing conditions.

With that said, still others have seen increases in their premiums, deductibles and co-pays. It has become more and more obvious the ACA is not a long term solution for our health care system. Unfortunately, neither party has championed a viable alternative. The majority of Democrats vow to protect the ACA, while the Republicans repeatedly attempt to “repeal Obamacare” which isn’t a plan at all.

I began practice as a sole practitioner nearly 16 years ago. One of my first workplaces was the Fallon Tribal Clinic. The family practice doctor at that clinic told me it was a “grave mistake” when we decided as a country that health care would be treated as a for-profit commodity. During the years I have learned he was definitely right. I have had the unique perspective of being on the front lines of health care as both a provider and consumer.

In our current system, private for profit insurance companies are middlemen and as such, drive up the cost of health care. There are only two ways in which an insurance company can increase profits for its shareholders: raising premiums and denying care. This is a serious conflict of interest, yet we have allowed it to happen.

During 2014 alone, the CEO of United Health Care made $66.1 million. Not to be outdone, the CEO of Gilead Pharmaceuticals made $192.8 million in the same year. As a nation we spend 17 percent of our GDP on health care, while the next closest country, Norway, spends only 9.3 percent. The vast majority of nations spend less than 10 percent of their GDP on health care and still provide universal coverage for their citizens. We spend significantly more on health care than any other nation on earth, yet more than 50 percent of personal bankruptcies are due to medical bills or illness.

How do we fix this? The overhead for private for profit health insurance companies is nearly 20 percent, yet the overhead with Medicare is only 1.3 percent. Eliminating the middleman would account for an immediate 18 percent reduction in our healthcare costs. As Americans well know, we also pay infinitely more for prescription drugs than the rest of the world. In fact, we’re the only country that allows pharmaceutical companies to charge whatever they want. By negotiating these prices, we could realize large savings.

Personally, I pay nearly $6,000 a year to insure my family. We also have a $10,400 deductible. This means I pay $16,000 per year before my family and I get any health care coverage. I have heard horror stories from patients of mine who pay even more, some significantly more.

What about Medicare? The program that covers seniors isn’t perfect, but the costs to patients are infinitely lower. The monthly premium is $104.90 and the deductible is $166. This means seniors will pay just more than $1,400 yearly before Medicare begins to cover them. My father was self-employed and paid enormous premiums to a private insurer before he turned age 65. He was relieved when he was finally able to enroll in Medicare, just like many others were when they became eligible. So why not extend Medicare to everyone? There’s a bill to do just that, HR 676, “expanded and improved Medicare for all”.

So how do we pay for it? There is already a payroll tax for Medicare. This payroll tax would be increased slightly, but the increase would pale in comparison to what we’re already paying for health care. Remember, I’m already paying $16,000 per year. Others are paying even more. Employers would see huge savings over what they are contributing to private for profit plans. A recent study by the University of Massachusetts showed there would be an annual savings of $592 billion. No other plan can achieve this magnitude of savings on health care.

It’s clear Medicare for all could be positive for many patients, but what about physicians? Physicians for a National Health Program (PNHP) is a National organization of more than 20,000 physicians and other health care providers that endorse this plan. In my own practice, it would be welcome change. Instead of dealing with hundreds of insurance companies and literally thousands of plans, I would only have to deal with one. Talk about making things easier! The countless hours spent credentialing, negotiating, and appealing with all these different plans would be reduced significantly. The extra time I would have available could be spent where it should be: patient care. Moreover, with everyone on Medicare, there would be no networks and patient access would be increased substantially.

There’s no perfect solution to our health care dilemma. However, I would propose Medicare for all is a viable and workable alternative. A recent poll by the Kaiser Family Foundation shows 58 percent of Americans agree. We have recently organized a Nevada Chapter of PNHP and invite all those who support this initiative to join us. Please visit www.pnhp.org for more information.

Dr. Sean L. Lehmann is a practicing podiatrist in Carson City. He also has a master’s degree in health care administration and is chair of the Nevada Chapter of Physicians for a National Health Program.

http://www.nevadaappeal.com/news/opinion/20170905-113/sean-lehmann-medicare-for-all-a-solution-for#

Is ‘Medicare for All’ really unrealistic?

By Ken Brummel-Smith, M.D.
Tallahassee Democrat, Jan. 27, 2016

There has been much in the news lately about the “single payer” health insurance reform idea, or so-called “Medicare for All,” and whether it is realistic or politically unfeasible. I have been a member of the Physicians for a National Health Program, the original proponents of this idea, for more than 20 years. I’ve also been practicing medicine since 1978 so I have some idea of how things work in medicine.

Here are the facts:

1. The single-payer system is the only health reform that will pay for itself. By replacing the thousands of private insurers — each with its own marketing, billing and corporate profits — estimates of savings range from $400 billion to $600 billion. This alone would cover the 30 million people who don’t have health insurance now.

2. Studies have shown that 95 percent of Americans would come out ahead financially. They would not have to pay as much in taxes for this program (it would be funded through a progressive tax) as they pay now for their health insurance.

3. Doctors and hospitals would be freed from the huge burden they deal with in having to bill hundreds of different insurers. That would add more savings to the cost of health care, and more time they have to see patients.

4. Surveys show a majority of both patients and doctors favor a single-payer system.

5. It would fix some of the problems of the Affordable Care Act — such as rapidly rising premiums and copays. It would also cover things not in the ACA — like dental and long-term care.

So who fights Medicare for All? It is the insurance companies (they won’t be needed), the pharmaceutical companies (they don’t want to negotiate to have fair pricing) and the for-profit medical-industrial complex (they want to keep the money flowing in, from your pockets).

So the question Americans need to answer is: Do you want to keep the “reality” of our current system, which doesn’t work and empties your wallet, or do you want a system that saves money, is easier to use and is fairer. Which one is realistic?

What can you do to help make “Medicare for All” a reality? Ask your representatives to support and co-sponsor HR 676. (It has 60 co-sponsors, but Gwen Graham has not signed on.) Physicians can join the Physicians for a National Health Program (www.php.org). Citizens can join HealthCare-Now! (www.healthcare-now.org). Finally, people can speak up at Democratic and Republican forums to call for the truth.

Ken Brummel-Smith, M.D., is the Charlotte Edwards Maguire Professor and chair of the Department of Geriatrics, Florida State University College of Medicine.

http://www.tallahassee.com/story/opinion/2016/01/27/medicare-really-unrealistic/79414698/

OHSU Reform Experts Weigh in on Affordable Care Act

By Jan Johnson
The Lund Report (Portland, Ore.), Jan. 26, 2016

The Affordable Care Act was expected to revolutionize healthcare in the US. But is access to healthcare easier? Have costs gone up or down? A Portland City Club forum puts tough questions to Oregon Health & Science University professors.

Healthcare is a $3 trillion industry in the U.S. with one out of every $5 passing through the hands of someone working in the industry, Dr. Samuel Metz of Physicians for a National Health Program, told a City Club audience Monday night.

And, everyone agreed costs are not going down. ”The best forecast I’ve seen shows healthcare (costs) will rise faster than GDP by about one percent,” a year said John McConnell, an economist who heads OHSU’s Center for Health Systems Effectiveness.

New, high-cost drugs put additional cost pressure on the system, and the stock market sees more money to be made in high-tech solutions that don’t give what McConnell called a “return on health.”

“Competition between large health systems causes us to acquire more technology,” said OHSU’s Dr. Paul Gorman. If one hospital systems buys the latest cardiac technology, competing systems buy it too – and hire staff to use it, creating what he calls “overproduction of capacity” that leads to “some cities having 10 times more procedures than other cities, not because it’s needed. We do overdo quite a lot of things.”

Then there’s administrative costs. “We have a byzantine system,” said Gorman, with an estimated $350 billion difference in the cost of administration between the Canadian and U.S. health systems and makes health literacy almost impossible. When his attorney son was struggling to choose a health plan, Gorman and his wife, both physicians, couldn’t help figure which health plan was best.

Will the current trend in consolidation of health plans, hospitals and health systems help or create too much market power?

“It’s too soon to say what’s going to happen,” said McConnell, who sees interesting “tinkering on the edges” with Medicare pilots bundling rates for hip replacements in random communities and Medicaid reform throughout the country.

Some audience questions seemed beyond the professors’ pay grade: Could a Medicare for all system slowly be achieved by reducing the age limit to qualify for Medicare each year? What will happen to health reform with a Republican president and Congress? Why is change so hard?

“Mythology is more powerful than facts,” said Gorman, noting that even medical students sometimes think the US has the best healthcare in the world while tribalism – who is proposing the reform –plays a role.

ObamaCare succeeded at getting more people insured, especially those with pre-existing conditions, Gorman said, but 29 million people remain uninsured and high deductibles make access difficult for many. “Co-pays reduce access for patients in the lowest social economic strata.”

And, with more people going on Medicaid, the healthcare system can’t always provide sufficient care – and except for emergency rooms, providers are not required to take Medicaid patients.

Under a single payer system, “95 percent of households would save money,” Gorman said. But the feasibility of such a system is “challenging politically” because the healthcare industry comprises 18 percent of the economy, McConnell said.

Still, McConnell was pleased with the broader conversation. “It’s neat to see people this energized about it. There’s a lot of passion and interest in public health.”

https://www.thelundreport.org/content/ohsu-reform-experts-weigh-affordable-care-act

Fidelity is providing us with incremental reform

Retirement Giant Fidelity Now Wants Workers’ Health Insurance

By Zachary Tracer
Bloomberg Business, January 25, 2016

Fidelity Investments is already the U.S.’s No. 2 mutual fund company. Now, it wants to get bigger in the health insurance business.

The financial services firm is introducing a shopping website for health insurance and other employee benefits called Fidelity Health Marketplace. Targeted at businesses with as many as 2,500 workers, the site, known as a private health exchange, complements Fidelity’s existing benefits products such as retirement accounts.

The private exchanges set up by companies like Fidelity are separate from the government-run websites created under the 2010 Patient Protection and Affordable Care Act. But they share some of the same features and goals, such as letting customers shop for the best deal by examining the cost and coverage offered by different health plans. They can also help limit the cost to employers, by giving workers a set amount to spend.

In a private exchange, when a worker enrolls in a more expensive plan, the added expense comes out of their paychecks. If a plan costs less, the employees can use the extra funds to buy life insurance or other benefits on the same platform.

It’s a change that echoes the shift from pensions to employee-funded retirement accounts that happened in the U.S. over the past decades, and helped give rise to investment management giants like Fidelity.

“What they’re trying to do is move to a model where employers are defining a contribution amount for employees to use on their benefits,” according to Mike Trilli, senior health-care analyst at Aite Group, a research and consulting firm.

Fidelity may also be able to use the health offerings to draw customers to its investing products, according to Amy Gurchensky, an analyst at consulting firm NelsonHall. When customers pick a high-deductible health plan — for example, one that pairs a $5,000 deductible with a tax-free savings and investment account — Fidelity will be able to offer its own investing services.

http://www.bloomberg.com/news/articles/2016-01-26/retirement-giant-fidelity-now-wants-workers-health-insurance

***

Comment:

By Don McCanne, M.D.

Although a majority of Americans favor a national health program, many in the policy and political communities express a preference for incrementally building on the existing multi-payer system, as modified by the Affordable Care Act (ACA). Although 64 percent of our heath system is already funded through our taxes, our government gives control of much of our total spending to the private sector, such as the private insurance companies. Thus the private sector is the source of much of the incremental changes that are taking place. Now that Fidelity Investments is entering the scene, what incremental change are they offering that will benefit patients?

*  They are introducing Fidelity Health Marketplace – similar to the government insurance exchanges under ACA except that they are privately owned and operated. Since they are targeted at small businesses, they are an additional intermediary that increases administrative complexity and expenses. That adds to the cost of the insurance, so that does not benefit the patient.

*  The plans will be purchased with a defined contribution from the employer. Because the contribution is fixed, more of the premium costs are shifted to the employee, especially over time. Either the employee must contribute more to the premium, or choose a plan with fewer benefits, which then increases financial exposure in the event of medical need. That does not benefit the patient.

*  Fidelity already offers health savings accounts – savings accounts that are linked with high deductible health plans and can be used to pay the deductibles and other cost sharing. Since high deductible plans have lower premiums which are less likely to exceed the defined contribution, Fidelity will no doubt heavily market the plans which are linked to their own health savings accounts. Since employers would use the Fidelity Marketplace to reduce their own health benefit spending, by offering a defined contribution, it is likely that employees will have difficulties keeping their health savings accounts funded. Higher deductibles linked to an empty savings accounts certainly does not benefit the patient.

*  If an employee or family member has an expensive chronic disorder then a more comprehensive plan should be selected to mitigate the higher costs. But with the smaller defined contribution, the portion of the premium that the employee must pay is significantly greater, and often unaffordable. That does not benefit the patient.

Private sector solutions in health care financing, including insurers and other fiscal intermediaries, are designed primarily to benefit the industry, usually at a cost to the patient, though often opaque and thus deceptive. Public sector solutions, such as Medicare and Medicaid, are designed to benefit the patient. But even there the private sector has moved in with their private Medicare Advantage plans and their private Medicaid managed care programs, to the detriment of patients and taxpayers.

How much more of this private incremental invasion of our already dysfunctional health care financing system can we take? The next time you hear a politician say that we need to build on the system we have through incremental steps, do not remain silent. Say something. Yell, if necessary. Scream, if that’s what it takes. But do not let them con us out of the national health program that a clear majority of us want.

Libby Medicare for Flint

By Kay Tillow
Daily Kos, Jan. 27, 2016

There is a precedent for expanding Medicare to a region suffering from a public health disaster.

Montana Senator Max Baucus tucked into the Affordable Care Act a special section that expands Medicare to the people of Libby and the surrounding area who were poisoned by W. R. Grace’s deadly mine causing mesothelioma and asbestos-related disease.

Shouldn’t the people of Flint, all of them not just the children, have Medicare also for life?  We must do much more, but, at least, we can start here.
Below are two stories on this topic.  All of the supporting data appears in the bottom link of each story.  (For instance, here’s the Libby link on the Social Security website.)

Kay Tillow, Coordinator
All Unions Committee for Single Payer Health Care–HR 676
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551

Email: nursenpo@aol.com
www.facebook.com/unionsforsinglepayer 

*****

How Libby, Montana, Got Medicare for All

By Kay Tillow
Original article on FireDogLake.com, June 15, 2011

In 2009 when the Washington beltway was tied up with the health care reform tussle, Montana Democratic Senator Max Baucus, chairman of the all powerful Senate Finance Committee, said everything was on the table–except for single payer. When doctors, nurses and others rose in his hearing to insist that single payer be included in the debate, Baucus had them arrested. As more stood up, Baucus could be heard on his open microphone saying, “We need more police.”

Yet when Senator Baucus needed a solution to a catastrophic health disaster in Libby, Montana, and surrounding Lincoln County, he turned to the nation’s single payer healthcare system, Medicare, to solve the problem.

http://unionsforsinglepayer.org/news_releases/2011-06-15
https://shadowproof.com/2011/06/15/how-libby-montana-got-medicare-for-all/

*****

Discretionary Deeming: How Libby Montana got Improved Medicare with free drugs

By Kay Tillow
Original article on firedoglake.com, Jan. 6, 2014

Buried deep in the health reform law is Section 10323. It amends the Social Security Act to extend Medicare coverage to individuals exposed to environmental health hazards in the region defined by the Emergency Declaration of June 17, 2009. That declaration limits this benefit to the area around Libby, Montana.

http://unionsforsinglepayer.org/articles/2014-01-06/discretionary-deeming-how-libby-montana-got-improved-medicare-with-free-drugs
https://shadowproof.com/2014/01/06/discretionary-deeming-how-libby-montana-got-improved-medicare-with-free-drugs/

Streamlined health system would save money, expand care

By Elmore F. Rigamer, M.D.
The Times-Picayune (New Orleans), Letters, Jan. 15, 2016

Recent headlines speak of skyrocketing drug prices, rising health insurance premiums, high deductibles that discourage people from seeking care, and private health plans threatening to leave markets if they don’t make enough profit.

Our health system does not work. One-third of the nation’s $3 trillion health care bill is spent on navigating complexities imposed by the private insurance industry. We spend much more on health care than other countries, yet we have the most rationed (by cost) care in the world.

Today a family of four could pay $23,000 for health insurance and still face medical bankruptcy if a member has an expensive medical condition. A new Kaiser Family Foundation survey shows about 20 percent of Americans who have health insurance have problems paying medical bills.

One solution is to cover everyone with an improved version of Medicare. Medicare’s administrative costs are a fraction of those of commercial insurers. With the resultant savings, about $400 billion annually, we could cover everyone and eliminate co-pays and deductibles. A streamlined, single-payer payer plan would also free up physicians to spend more time with patients, and it would help our national economy.

A fresh look at how the system works is at www.FixItHealthcare.com.

Dr. Elmore F. Rigamer resides in New Orleans.