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Insurance costs and benefits are top concerns of Americans

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Insurance costs and benefits are top concerns of Americans

Soaring costs, loss of benefits top Americans' healthcare worries: Reuters/Ipsos poll

By Maria Caspani
Reuters, June 15, 2018

For over a year now, Americans have listed healthcare as the most important problem facing the country, according to Reuters/Ipsos polling.

When asked what concerns them about U.S. healthcare, this is what they had to say:

Total cost of health insurance

Sixty-five percent of Americans said in the poll that they are “very concerned” about the overall cost of health insurance, including premiums, deductibles and copays.

This concern is consistent throughout the country: A majority of both millennials and baby boomers, whites and minorities, Democrats and Republicans were worried about healthcare costs.

Prescription drugs

Nearly three in four Americans use prescription drugs, and 58 percent said they are “very concerned” about the cost of paying for them, according to the Reuters/Ipsos poll. These drugs are expected to see the fastest annual growth over the next decade, rising an average of 6.3 percent per year, according to the U.S. Centers for Medicare and Medicaid Services (CMS).

Choosing care

Sixty-six percent of U.S. adults who took part in the survey said they were concerned about their ability to see a doctor of their choice going forward.

Medicare and Medicaid

About one in three U.S. adults said they were “very concerned” about losing benefits from government-run programs Medicare and Medicaid.

Enrollment in Medicare is expected to increase as baby-boomers reach retirement age, according to CMS projections, which will contribute to growing healthcare spending.

The poll also showed that 58 percent of Americans think Congress should keep the Affordable Care Act either entirely as it is, or with some fixes, while 24 percent think lawmakers should repeal it once an alternative law is passed and 18 percent want the ACA to be repealed immediately.

The Reuters/Ipsos poll surveyed 3,982 people in English in the United States from May 22 to June 3 and it has a credibility interval of about 2 percentage points.

https://www.reuters.com…

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Comment:

By Don McCanne, M.D.

Plenty of polls confirm the concern of Americans over high health care costs. This new Reuters/Ipsos poll provides some specifics that should be seriously considered as we address our health care cost concerns.

Two-thirds of Americans throughout all sectors – millennials, baby boomers, whites, minorities, Democrats, Republicans – are worried not just about health care costs in general but specifically about insurance premiums, deductibles and copays. It seems that the private insurance model of financing health care does raise significant concerns about affordability. People have to realize that it doesn’t have to be that way.

Three-fourths of Americans use prescription drugs, and 58 percent say they are very concerned about the cost of paying for them. We need a better system of financing prescription medications.

Two-thirds of U.S. adults say they are concerned about their ability to see a doctor of their choice going forward. Although supporters of narrow provider networks contend that patients are quite willing to accept network restrictions in exchange for lower premiums, limiting choice of physicians is nevertheless a real concern for the majority. If we had an automatic, equitable method of financing health care that would eliminate the need for premiums, deductibles and copays, and did not need to rely on provider networks for cost containment, then certainly everyone would demand to have their choice of health care professionals and hospitals.

One-third of adults are very concerned about losing benefits under our government-run programs – Medicare and Medicaid. Concerns would likely be even less if we were all unified under an improved Medicare that covered everyone. The political support would be greater than it already is for our Medicare program, making a Medicare for all less vulnerable to political chicanery. Demonstrating how strong that support is, Speaker Paul Ryan just abandoned his career-long dream of diminishing the role of Medicare because he could not break through the political support it has.

The poll shows that 58 percent of Americans support keeping the Affordable Care Act entirely as it is or with some fixes. As is true of many polls, this is an incomplete question. It is designed to elicit support or opposition to the Affordable Care Act, but it does not offer the specific option of replacing ACA with a single payer improved Medicare for all. Other polls have repeatedly confirmed the very strong support for such a model of reform.

Yet much of the media seems to think that the options available are to repeal portions of the Affordable Care Act as the Republicans would do, or to add a public option or Medicare buy-in as perhaps the Democrats would do. But these options would leave in place those concerns demonstrated by this poll – high premiums, deductibles and copays, high drug costs, loss of choice of health care professionals, and political vulnerability of our existing public programs.

What most people really want is a lifelong guarantee of affordable, accessible health care such as would be found in an improved Medicare for all. We have to intensify our education efforts until we reach a threshold wherein people fully understand that it is our current dysfunctional financing model that is at fault so that they will reject being limited to only pro-ACA or anti-ACA choices and instead demand an improved Medicare for all.

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Patients not above gaming private insurers

NBER Working Paper 24668; Take-Up, Drop-Out, and Spending in ACA Marketplaces

By Rebecca Diamond, Michael J. Dickstein, Timothy McQuade, and Petra Persson
National Bureau of Economic Research, May 2018

Abstract

The Affordable Care Act (ACA) established health insurance marketplaces where consumers can buy individual coverage. Leveraging novel credit card and bank account micro-data, we identify new enrollees in the California marketplace and measure their health spending and premium payments. Following enrollment, we observe dramatic spikes in individuals’ health care consumption. We also document widespread attrition, with more than half of all new enrollees dropping coverage before the end of the plan year. Enrollees who drop out re-time health spending to the months of insurance coverage. This drop-out behavior generates a new type of adverse selection: insurers face high costs relative to the premiums collected when they enroll strategic consumers. We show that the pattern of attrition undermines market stability and can drive insurers to exit, even absent differences in enrollees’ underlying health risks. Further, using data on plan price increases, we show that insurers largely shift the costs of attrition to non-drop-out enrollees, whose inertia generates low price sensitivity. Our results suggest that campaigns to improve use of social insurance may be more efficient when they jointly target take-up and attrition.

http://www.nber.org…

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Comment:

By Don McCanne, M.D.

There is a lot to not like about private insurance companies: high premiums, excessive deductibles and coinsurance, narrow provider networks, prior authorization requirements, tiering of benefits, and the like. But the insurers are businesses, and these features are designed to ensure that they are a business success.

What about their enrollees? This research paper shows that many insured individuals will maintain their coverage for a limited amount of time, moving their annual heath care consumption into the months that they are covered, and then drop out. They are concentrating as much of their full year’s care into those few months as they can, and then avoiding the full year of premiums by dropping out. This means that they do not pay their full share of health care whereas those that remain covered the full year pay higher premiums to cover the unpaid premiums of those who dropped out – a variation of adverse selection.

Are those who dropped out to be blamed for gaming the system? For that matter, are the insurers to be blamed for crafting a business model that ensures their success even at the cost of their beneficiaries? In both instances they are doing their best to make our current system work for themselves. It is neither the insurers nor their beneficiaries who are in the wrong; it is the design of our health care financing system that is at fault.

Contrast that to a public financing system that is designed to ensure that patients get the care they need. It is not designed as a business model but rather as a public service model. Likewise, patients would not be conspiring to game the system, but rather they simply would access the health care that they need when they need it.

It is so obvious that we need to replace our current, fragmented, dysfunctional financing system with a single payer improved Medicare for all that the perplexing question is why haven’t we done it before now?

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Paying for low-value care

2018 Report to the Congress

MedPAC – Medicare Payment Advisory Commission, June 2018

Chapter 10: Medicare coverage policy and use of low-value care

Chapter summary (excerpts)

Some researchers contend that a substantial share of Medicare dollars is not spent wisely. Many new services disseminate quickly into routine medical care in fee-for-service (FFS) Medicare with little or no basis for knowing whether or to what extent they outperform existing treatments. In addition, there is substantial use of low-value care—the provision of a service that has little or no clinical benefit or care in which the risk of harm from the service outweighs its potential benefit.

In this chapter, we review the coverage processes used in FFS Medicare and by Medicare Advantage (MA) plans and Part D sponsors. FFS Medicare covers many items and services without the need for an explicit coverage policy. When an explicit coverage policy is required, some services do not show that they are better than existing covered services. Coverage policies are often based on little evidence and usually do not include an explicit consideration of a service’s cost-effectiveness or value relative to existing treatment options.

MA plans are generally required to provide the same set of benefits that are available to beneficiaries under FFS Medicare. However, MA plans are permitted to use tools that are not widely used in FFS Medicare, such as requiring providers to obtain prior authorization to have a service covered and controlling utilization through the use of cost sharing. Part D plan sponsors are responsible for creating and managing formularies, which are lists of drugs their plans cover. By contrast, Medicare FFS lacks the flexibility to use formularies for drugs that Part B covers.

We also review the literature on low-value care, which reveals that such care is prevalent across FFS Medicare, Medicaid, and commercial insurance plans. Evidence suggests that the amount of low-value care in a geographic area is more a function of local practice patterns than payer type.

We analyzed selected low-value services in FFS Medicare using 31 evidence-based measures. In 2014, there were between 34 and 72 instances of low-value care per 100 beneficiaries, depending on whether we used a narrow or broad version of each measure. Between 23 percent and 37 percent of beneficiaries received at least one low-value service, and annual Medicare spending for these services ranged from $2.4 billion to $6.5 billion. The spending estimates are conservative because they do not reflect the downstream cost of low-value services (e.g., follow-up tests and procedures).

We discuss six tools that Medicare could consider using to address the use of low-value care.

* Expanding prior authorization, which requires providers to obtain approval from a plan or payer before delivering a product or service, could help reduce the use of low-value care.

* Implementing clinician decision support and provider education could decrease low-value care.

* Increasing cost sharing for low-value services has the potential to reduce their use.

* Establishing new payment models that hold providers accountable for the cost and quality of care—such as accountable care organizations (ACOs)—creates incentives for organizations to reduce low-value services.

* Revisiting coverage determinations on an ongoing basis has the potential to both decrease use of low-value services and result in the development of more rigorous clinical evidence.

* Linking information about the comparative clinical effectiveness and cost- effectiveness of health care services to FFS coverage and payment policies has the potential to improve the value of Medicare spending. For most items and services, Medicare lacks statutory authority to consider evidence on cost-effectiveness in either the coverage or the payment process.

Chapter 10:
http://medpac.gov…

Fact sheet on the 2018 MedPAC Report to Congress:
http://medpac.gov…

***

Comment:

By Don McCanne, M.D.

When concerns are expressed about the high costs of health care, frequently the excess use of low-value health care is cited as a major contributor to these high costs. MedPAC (Medical Payment Advisory Committee) in its 2018 report to Congress discusses its perception of the extent of the problem and potential policies that might reduce the overuse of low-value care. We should examine not only MedPAC’s views but also the larger perspective of cost containment in relation to improving health care value.

First of all, how do you define low-value care? Most would agree that care that is of no value whatsoever should not be covered by public or private insurance programs. But low-value? That seems to imply that the care may have very limited value, but does that mean that it should not be covered if the patient has medical needs and there is no better care available? Where do you draw the line?

We could probably agree that we should exclude from coverage care that is confirmed to have no benefit at all, care that might have very limited benefit but clearly always has greater detrimental effects, or care that clearly is always inferior to other less costly care. But in many instances, care that might be considered of low value should probably be covered. Often we do not have enough data to know the precise value of care, but we should avoid moving into the treacherous zone of micromanaging every health care decision. Regardless, it is much more difficult to objectively and fairly exclude low-value care from coverage than many in the policy community suggest. This is true not only in the United States but in all other health care systems as well.

So what policies does MedPAC suggest to reduce the use of low-value care? Let’s take a look.

* They suggest expanding prior authorization. Rather than being decided by those most acutely involved – the patient and the attending health care professionals – the decision is moved to a financial intermediary whose role is more often to protect the pooled health care funds that it is to improve resource allocation to benefit the patient. Not only does prior authorization waste administrative resources, it also results in a definitive decision when the potential benefit lies somewhere along a linear scale. What point do you select in that scale to come to an all or none conclusion on health care? That point should be pretty close to zero which then makes most of the prior authorization process a bureaucratic boondoggle. Besides, prior authorization is a significant source of patient discontent and a major contributor to health professional burnout – neither of which should be part of a high performance health care delivery system.

* They suggest implementing clinician decision support and provider education. More valid information is always helpful. Accumulating data and developing and improving patient care algorithms are always helpful. Some criticize this as “cookbook medicine,” but that is nonsense. The more information the better. These protocols and algorithms are most appropriately used as helpful guidelines rather than as dictates of a rigid bureaucracy. This is what the science and art of medicine always has been and should continue to be in the future as we constantly refine our standards.

* They suggest higher patient cost sharing for low-value care in order to deter the patient from receiving such care. However it would be very difficult to quantify just what the cost sharing should be since low value lies along a linear scale rather than occupying one point. More importantly, cost sharing impairs access to care and if care is appropriate, even if of low value, it should be covered. Financial barriers should be removed so patients can receive the care they should have. Other more effective methods of cost containment that are more patient friendly should be used instead of cost sharing (e.g., reduction of administrative waste, administered pricing, etc.).

* They suggest establishing new payment models that hold providers accountable for the cost and quality of care, such as accountable care organizations (ACOs). We now have fairly extensive experience with accountable care organizations and other alternative payment models that demonstrate they they are not particularly effective. They have had only a minimal impact on spending, sometimes to the detriment of patients, and the quality parameters are too inadequate to objectively demonstrate any significant systemic quality improvement. More voices are now calling for an end to this failed experiment.

* They suggest revisiting coverage determinations on an ongoing basis. As new information regarding the value of care becomes available, continuing reevaluation of current practices is certainly in order so that changes can be made in recommendations that improve care and its value. If low-value care proves to be no value care then it should be eliminated from coverage, and vice versa.

* They suggest linking information about the comparative clinical effectiveness and cost effectiveness of health care services to FFS coverage and payment policies. This is where we have been too protective of the medical-industrial complex. We should increase our research in comparative effectiveness and use that information to improve patient care. We should also demand that high priced care and products be repriced at a level deemed to be cost effective. Although the level may be relatively arbitrary, it’s clear that we shouldn’t be paying half a million dollars for a health outcome gain that some may judge to be worth only ten cents. Cost effectiveness determinations should be used to terminate outrageous pricing.

So we can conclude that care that is beneficial, even if only modestly so, should be covered, and it should be priced right.

That leaves us with a decision of how we could accomplish the goal of improving value in health care without exposing patients to potential financial hardship though the misguided application of consumer-directed care. Single payer advocates know the answer. Instead of reducing beneficial health care services through financial barriers, we should recover the large amount of waste inherent in our health care financing system: profound administrative excesses, and excessive pricing.

By changing to a single payer national health program – an improved Medicare for all – we could recover a few hundred billion dollars in administrative waste. Since our health care prices are often too high, we could reduce them over time to levels that would provide adequate value while ensuring fair margins for the health care delivery system. The funds recovered would be enough to ensure that all of us would receive the health care services that we should have – better care and better value for everyone.

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Physicians for a National Health Program: A Primer on This Growing Nonprofit

Interview with Dr. Ed Weisbart
Tulsa (Okla.) Public Radio, June 18, 2018

On this edition of ST Medical Monday, we learn about Physicians for a National Health Program (or PNHP). This collective, per its website, is “a nonprofit research and education organization of 20,000 physicians, medical students, and health professionals who support single-payer national health insurance.”

Our guest is Dr. Ed Weisbart, who heads the Missouri Chapter of PNHP. He joins us to argue for “Medicare for All” as both a corrective to and expansion of the Affordable Care Act — that is, as a means to nationwide health care for everyone that is truly and universally affordable, accessible, and high-quality.

full audio:
http://publicradiotulsa.org…

Medical students bring the AMA into the single payer dialogue

AMA House of Delegates 2018 Annual Meeting, June 9-13, 2018

Resolution 108

Introduced by: Medical Student Section

Subject: Expanding AMA’s Position on Healthcare Reform Options

Referred to: Reference Committee A

Excerpts

Whereas, Current AMA Policy H-165.847 establishes that comprehensive health system reform achieving quality healthcare for all Americans is of the highest priority to our AMA; and

Whereas, Our AMA is limited in its ability to engage in open and honest debate about all health care reform options via its blanket opposition to single payer financing mechanisms (AMA Policy H-165.838); and

Whereas, Evidence suggests that our AMA’s stance on single payer does not currently represent the majority of physicians, with two recent surveys by the Merritt Hawkins and the Chicago Medical Society each reporting a majority of physicians either strongly or somewhat supporting the concept of a broadly labeled single payer health care system; and

Whereas, Several US senators have recently supported legislation to move forward with a national single-payer health care financing reform, and as such our AMA must be equipped to have open, productive discussions on the matter in the coming years; and

Whereas, H.R. 676 – Expanded & Improved Medicare For All Act – has 122 cosponsors, and as such will likely come to the AMA for debate in the near future; therefore be it

RESOLVED, That our AMA rescind HOD Policy H-165.844; and be it further

RESOLVED, That our AMA rescind HOD Policy H-165.985; and be it further

RESOLVED, That our AMA amend HOD Policy H-165.888 by deletion as follows:

Delete: “B. Unfair concentration of market power of payers is detrimental to patients and physicians, if patient freedom of choice or physician ability to select mode of practice is limited or denied. Single-payer systems clearly fall within such a definition and, consequently, should continue to be opposed by the AMA. Reform proposals should balance fairly the market power between payers and physicians or be opposed.”

RESOLVED, That our AMA amend HOD policy H-165.838 by deletion as follows:

Delete: “12. AMA policy is that creation of a new single payer, government-run health care system is not in the best interest of the country and must not be part of national health system reform.”

https://www.ama-assn.org…

***

Report of Reference Committee A

Excerpt

Your Reference Committee heard mixed testimony on Resolution 108. A member of the Council on Medical Service recommended reaffirmation of existing policy in lieu of Resolution 108, and shared the Council’s belief that the current approach of our AMA’s policy to health reform is the right one – emphasizing pluralism, freedom of choice, freedom of practice and universal access to patients. Another Council member noted that the Council has already studied international approaches to single payer. Testimony on both sides was passionate. Testimony in opposition raised concerns that Resolution 108 would open the door to the AMA supporting single payer, while testimony in support of the resolution noted the changes to policy outlined in the resolution would enable the AMA to participate in legislative discussions addressing single payer. An amendment was also offered to call for a study. Your Reference Committee underscores that this issue is highly complicated, and there is a need to examine AMA policy addressing health reform and single payer, study the pros and cons of single payer and alternative approaches to universal coverage, and study the impacts of single payer systems on physician practices and patients. As such, your Reference Committee recommends that Resolution 108 be referred.

***

HOD ACTION: Resolution 108 referred.

https://www.ama-assn.org…

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Comment:

By Don McCanne, M.D.

The Medical Student Section of the American Medical Association is to be commended for advancing the consideration of single payer health care reform. Until now, the AMA has been consistently opposed to single payer. Resolution 108 calls for the AMA to expand its consideration of health care reform options by including single payer in its deliberations.

Although the resolution striking single payer opposition from AMA policies was not adopted at this time, rather than recommending that it be rejected, the reference committee recommended that it be referred to the AMA Board of Trustees for further consideration. In the words of the reference committee, “there is a need to examine AMA policy addressing health reform and single payer, study the pros and cons of single payer and alternative approaches to universal coverage, and study the impacts of single payer systems on physician practices and patients.”

The recommendation to refer was approved by the AMA House of Delegates.

This could be historic, and the thanks go to the medical students.

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Dr. Margaret Flowers on ‘The Real News’

PNHP board adviser Dr. Margaret Flowers appeared on the Marc Steiner Show on June 15, 2018. She was joined by Rev. Annie Chambers to discuss the closing of a Baltimore pediatric hospital, the growing role of for-profit corporations in medicine, the plight of low-income Medicaid patients, and the ongoing need for single-payer reform.

OMB’s Joseph Grogan acknowledges failure of volume-to-value push

Trump OMB Appointee Blasts Obama-Era Value Programs

By Cheryl Clark
MedPage Today, June 7, 2018

The Obama-era strategy to move the healthcare system from volume to value is too complicated and isn’t working well, a Trump administration health official said here Wednesday.

The volume-to-value push has resulted in “a big sprawling complicated series of byzantine programs that few people understand” and it “sucks more value out of the system than it delivers,” Joseph Grogan, associate director for health programs for the Office of Management and Budget (OMB), said at the start of a three-day conference on accountable care organizations (ACOs), bundled payments and MACRA.

Grogan took specific aim at the Center for Medicare & Medicaid Innovation (CMMI), a division of the Centers for Medicare & Medicaid Services (CMS) created by the Affordable Care Act. He said his office recently sent a rescission package that includes an $800 million cut from what Congress has appropriated to CMMI, “because so far, CMMI has failed to deliver.”

Take, for example, CMMI’s experiment with ACOs — groups of doctors and hospitals working together to deliver high-quality, low-cost care to a defined group of patients. When the Congressional Budget Office scored ACOs in 2011, it estimated that the ACO model called the Medicare Shared Savings Program “would save $4.9 billion over 10 years,” Grogan said. But so far, programs using that model have cost over $384 million, according to CMS actuaries.

“There were a lot of broken promises and failed estimates in the ACA. But the hope and promise of these complicated value designs is certainly one of them,” he added.

In effect, these designs are trying to get doctors and hospitals to act more like insurance companies, absorbing any losses if their enrollees and beneficiaries end up using too many expensive services, Grogan said. But the complexity of these program designs has become overwhelming.

The Trump administration, he said, is trying to reduce reporting requirements, use broader claims data, begin to move toward passive data collection efforts, “and see if we can get people to spend less time treating codes and entering on an iPad, and concentrate more on the patient.”

One problem is the way defenders of these models have tried to justify them, saying the metrics used are unfair, and if different data were used, the picture would be different, Grogan said. “If we’re constantly using counterfactuals to evaluate (the programs) and waiting for another study to bear out … They’ll never be termed as failures.”

https://www.medpagetoday.com…

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Trump appointee you’ve never heard of who’s reshaping health policy

By Paige Winfield Cunningham
The Washington Post, November 13, 2017

There’s one set of eyes that President Trump’s appointees absolutely cannot ignore as they set about trying to reshape Obamacare and enact sweeping new changes to the government’s health-care programs.

They belong to Joe Grogan, director of health programs at the White House’s Office of Management and Budget.

You’ve probably never heard of Grogan — but you should know who he is. Grogan, perhaps more than any other member of Trump’s administration, holds the power to nix or give the nod to hundreds of regulations shaping how the federal government runs Medicare, Medicaid, the Affordable Care Act marketplaces, the FDA, the CDC and all the other sub-agencies contained within the sprawl of the Department of Health and Human Services.

https://www.washingtonpost.com…

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Comment:

By Don McCanne, M.D.

Finally, a government bureaucrat – Joseph Grogan, associate director for health programs for the Office of Management and Budget (OMB) – acknowledges that the volume-to-value programs such as accountable care organizations (ACOs) are “a big sprawling complicated series of byzantine programs that few people understand.” The concept “sucks more value out of the system than it delivers.”

Let us hope that he is effective with his intent to “see if we can get people to spend less time treating codes and entering on an iPad, and concentrate more on the patient.”

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Enjoy health care deflators, or would you rather be a frog?

Medical cost trend: Behind the numbers 2019

PwC, June 2018

PwC’s Health Research Institute (HRI) projects a 6 percent medical cost trend in 2019, consistent with the 5.5-7 percent range of the previous five years. But employers continue to struggle to contain their employee coverage costs. Medical costs continue to grow, yet the workforce’s health and performance aren’t improving. Average labor productivity growth of 1.1 percent over the last 10 years falls far below the 2.3 percent average of the last seven decades. Efforts by employers to cut utilization have mostly run their course. Employers and consumers are plagued by high prices that continue to grow because of new, expensive medical services and drugs, and other factors, such as consolidation.

HRI’s analysis measures anticipated medical cost trend in the employer-based market, which covers about half of non-elderly Americans.

HRI’s research points to three factors inflating medical cost trend in 2019:

Inflator #1: Care anywhere and everywhere

New high-touch points of care—from retail clinics to video visits to urgent care in the home— have popped up over the past few years.

Many consumers are seeking out care in settings outside of the traditional doctor’s office; of those surveyed with employer-based insurance, 60 percent said they have received care in an urgent care center, 25 percent in a retail health clinic and 11 percent by video visit. At the same time, consumers with employer-based insurance are increasingly willing to receive care in settings outside of the traditional doctor’s office.

Achieving appropriate utilization will require employers, payers and providers to strike a balance between access and convenience to avoid delaying care or creating unnecessary demand.

Inflator #2: Provider megamergers

In 2017, the number of announced hospital and health system deals increased nearly 13 percent from 2016, the highest number of transactions since 2000. Of 115 health system and hospital mergers announced in 2017, 10 were mega-deals involving sellers with net annual revenues of at least $1 billion. The intent of these deals is to achieve scale to invest in the infrastructure and programs necessary to drive quality, convenience and customer satisfaction, and ultimately deliver value to consumers, employers and health insurers. The short-term result is often higher prices.

“There has been little to no action taken to stop providers from concentrating or taking price increases,” said Sherry Glied, dean of New York University Wagner Graduate School of Public Service. “If inflation ramps up and consolidation continues, expect to see strong upward pressure on prices.”

As the market becomes more concentrated, medical prices may rise in two main ways. First, overnight price increases may occur when the acquiring organization has higher reimbursement rates. Second, “You’re going to increase prices because you’ll have more leverage to negotiate higher prices going forward,” said Thomas Getzen, former executive director of the International Health Economics Association.

Movement to a more consolidated provider landscape is expected to continue, with 72 percent of provider executives surveyed by HRI noting that reorganization is important to their organization’s success over the next five years.

Inflator #3: Physician consolidation and employment

As physicians consolidate, prices can rise. Physicians are increasingly practicing in larger, concentrated groups because of acquisitions by other physician groups, hospitals and health systems.

Physicians working in highly concentrated markets charge 14 to 30 percent more than their counterparts working in less concentrated markets.

The percentage of physicians employed by hospitals grew to 42 in 2016 from 26 in 2012.
While this shift has been occurring for several years among primary care physicians and certain specialties—such as cardiology—it’s now more widespread. A recent HRI survey shows medical and surgical specialists’ interest in employment by a hospital, health system or medical group is on par with that of primary care physicians’; those specialties largely remained unconsolidated until recently.

Three factors are tempering the spending increases:

Deflator #1: Flu impact

The 2017-18 influenza season was the worst in several years. Hospitalizations, mortality and prevalence were up across the country. A bad flu season can significantly affect medical cost trend in one year but be a deflator in the next when flu cases return to the mean.

Deflator #2: Care advocacy

Employers and health plans are offering care advocacy services to help employees manage their high deductible health plans (HDHPs), creating a dampening effect on medical cost trend for 2019. Seventy-two percent of employers surveyed by PwC offered health advocacy services to their employees in 2018; in 2016, that percentage was 57 percent.

Employers have increasingly relied on HDHPs to keep medical costs under control. But though HDHPs may reduce utilization, they also may deter necessary care for early diagnosis or management of chronic conditions. With the healthcare system’s ever-expanding number of care options, limited price transparency and complexity, consumers often struggle to navigate the system and make the best use of their benefits. Patient advocacy services have existed for several decades but were primarily offered as an exclusive, concierge-type service available to only a select few. This is changing as employers and health plans see such services’ value for their employees and members.

Health Care Services Corporation (HCSC), a not-for-profit health insurance company based in Chicago that operates Blue Cross Blue Shield plans in five states, has started a program for large, self-funded employers that supplies live advocates to help consumers estimate and compare costs, analyze treatment options and identify the most cost-effective treatment plans. Third party health advocacy firms such as Accolade Inc., based in Plymouth Meeting, Pa., and Quantum Health Inc., based in Columbus, Ohio, offer treatment decision support, transparency tools, provider coordination, help with integrated behavioral health needs, and even logistical help, such as transportation support.

Carolyn Young, chief actuary at Accolade, told HRI that when a member calls for help in finding a specialist, an Accolade health assistant will find out why the member wants to see a specialist, determine whether a primary care visit will suffice, conduct the search for the proper provider, help prepare the member for the appointment and, depending on the circumstance, follow up with the member after the appointment.

Deflator #3: The high-performance network

Employers are looking to high-performance networks after years of selling employees on HDHPs. Employees’ increased interest in plans other than HDHPs and their willingness to select a plan with a limited choice of doctors or hospitals make high-performance networks, which trade lower costs for a limited provider network.

In a recent HRI survey, 64 percent of respondents with employer-based coverage who are enrolled in an HDHP said they would select a non-HDHP next year, even if it meant paying a higher premium. Forty-four percent of consumers with employer-based insurance surveyed by HRI said they would select a health plan with a limited choice of doctors or hospitals under certain circumstances, such as lower monthly premiums, lower deductibles and access to quality providers.

Employers increasingly are implementing or considering performance-based networks created and maintained by a health plan or are contracting directly with providers or accountable care organizations (ACOs). Employers that say they have implemented a performance-based network increased by 267 percent since 2014, while those saying they have implemented direct contracting increased by 80 percent. Consumers are interested. Of those 44 percent surveyed by HRI who are willing to limit their provider choice, nearly all said they would do so if the providers were high quality.

Many providers are positioning for high-performance networks. Sixty-three percent of provider executives surveyed by HRI in 2017 said they plan for their organization to be included in a narrow network plan in the next five years, and 59 percent said they will engage in direct-to-employer contracting in the next five years. Providers’ capacity to engage in high-performance networks should continue to expand as hospitals and health systems consolidate and physicians increasingly are employed by hospitals and health systems.

New combinations

The healthcare market has seen significant deal activity in the last year.

Any meaningful changes to the existing healthcare system will take significant time and require capturing and integrating data, developing new capabilities and hiring new staff. So it’s too early to measure these potential healthcare system disruptors’ impact. They may have a deeper understanding of consumer experience and behavioral data than traditional healthcare companies do. The disruptors aim to bring best practices from other industries to create a more streamlined patient experience and better outcomes. Whether they also can achieve cost savings will depend first on their ability to successfully integrate, and then on whether they can effect lower prices.

PwC Health Research Institute report (38 pages):
https://www.pwc.com…

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Comment:

By Don McCanne, M.D.

Employer-sponsored plans were the sector of health care financing that the Affordable Care Act (ACA) was designed to protect. Although the rate of increase in health care spending has declined from double digits since the enactment of ACA, spending is still increasing at 6 percent – twice the rate of inflation. Since these increases are not sustainable, employers are not standing still.

There is much in this report, but perhaps the greatest interest will be found in the eight paragraphs excerpted above – under “Deflator #2: Care advocacy” and “Deflator #3: The high-performance network.” The traditional relationship between patients and their health care professionals is being displaced by the medical-industrial concept in which physicians, nurses and other professionals are relegated to the workforce while disruptors take control of the reins.

It doesn’t have to be this way, but I suspect that most physicians will be relegated to a subservient role unless they are willing to comply with the will of the disruptors by becoming transformed from princes into frogs – Frog Kings, that is.

(Grimm Brothers – The Frog King – https://germanstories.vcu.edu/grimm/frog.html)

Wouldn’t it be better to take control by fixing Medicare and then expanding it to take care of everyone. Then we would spring loose the bands on our hearts.

Obscure? Not really.

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Social Insurance in the Great Recession

The Great Recession worsened blood pressure and blood glucose levels in American adults

By Teresa Seeman, Duncan Thomas, Sharon Stein Merkin, Kari Moore, Karol Watson, and Arun Karlamangla
PNAS – Proceedings of the National Academy of Sciences, March 27, 2018

Abstract

Longitudinal, individual-specific data from the Multi-Ethnic Study of Atherosclerosis (MESA) provide support for the hypothesis that the 2008 to 2010 Great Recession (GR) negatively impacted the health of US adults. Results further advance understanding of the relationship by (i) illuminating hypothesized greater negative impacts in population subgroups exposed to more severe impacts of the GR and (ii) explicitly controlling for confounding by individual differences in age-related changes in health over time. Analyses overcome limitations of prior work by (i) employing individual-level data that avoid concerns about ecological fallacy associated with prior reliance on group-level data, (ii) using four waves of data before the GR to estimate and control for underlying individual-level age-related trends, (iii) focusing on objective, temporally appropriate health outcomes rather than mortality, and (iv) leveraging a diverse cohort to investigate subgroup differences in the GR’s impact. Innovative individual fixed-effects modeling controlling for individual-level age-related trajectories yielded substantively important insights: (i) significant elevations post-GR for blood pressure and fasting glucose, especially among those on medication pre-GR, and (ii) reductions in prevalence and intensity of medication use post-GR. Important differences in the effects of the GR are seen across subgroups, with larger effects among younger adults (who are likely still in the labor force) and older homeowners (whose declining home wealth likely reduced financial security, with less scope for recouping losses during their lifetime); least affected were older adults without a college degree (whose greater reliance on Medicare and Social Security likely provided more protection from the recession).

From the Discussion

Differences by age, educational attainment, and homeownership provide additional insights by exploiting two defining features of the GR. First, the collapse of the housing and stock markets resulted in dramatic declines in the wealth of those who owned housing and those who were invested in the stock market, including those invested through a retirement account. With homeownership at historically high levels and the shift out of company-provided retirement plans, many older adults were exposed to increases in economic insecurity that were both unanticipated and unprecedented in almost a century. Second, earnings opportunities of those in the labor market were negatively affected as the labor market froze, job insecurity spiraled, and real wages declined for many workers.

For those on medication, BP rose most for the younger cohort, irrespective of level of education, all of whom were more likely in the labor market and concerned about retirement in the coming years. BP also rose significantly for those in the older cohort who were better educated and so more likely invested in the stock market and owned their home (among the better educated, 78% owned their home but only 59% among the less educated owned their home). The effects were substantially and significantly smaller for one group on medication: those age at least 65 at the start of the GR who had not completed college. They are the least likely to be working and most likely to rely on Social Security for income rather than a retirement plan invested in the stock market; these people were, therefore, likely to be the least affected by the recession among the four demographic groups.

Patterns for glucose by education and homeownership for those not on medications are similar to the patterns for BP for those not on medication, with significant increases seen among the younger cohort, again irrespective of education or home- ownership. The pattern for glucose among those on medication differs from that for BP, with significant increases seen only among younger adults who do not have a college education and among older adults who own a home. These increases are very large: 11 to 15% relative to each individual’s prerecession trend, possibly reflecting the extent to which these groups were (i) more vulnerable with respect to glucose regulation, being on medication even before the recession, and (ii) among the most heavily impacted by (i) unemployment among the younger cohort [as unemployment rates climbed 16% for those who did not complete high school while never exceeding 5% for those who completed college] and (ii) housing market upheavals among the older cohort.

Our findings provide support for the hypothesis that the economic and social stresses associated with the GR had a deleterious impact on adult health as seen in increases in BP and glucose. Importantly, the patterning of the health changes shows that the worst of the health impacts is among subgroups likely more negatively impacted by the Great Recession: younger adults (who are most likely still in the labor force) and better educated older homeowners (who are most likely invested in the stock market as well as their home). Direct examination of homeownership confirms that older homeowners indeed had the largest increases in BP and glucose from pre- to post-GR. The smallest effects were seen for less educated and nonhomeowning older adults (i.e., those no longer in the labor force and without “investment” in the housing market).

http://www.pnas.org…

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Comment:

By Don McCanne, M.D.

It is not surprising that the stresses of the Great Recession resulted in worsened blood pressure and blood glucose levels in American adults. But when looking at the subgroups, this study reinforces the importance of our social insurance programs – Medicare and Social Security.

Younger adults were stressed by a decline in earnings opportunities because of the freezing of the labor markets, spiraling job insecurity, and a decline in real wages. Older homeowners with private retirement accounts experienced decline in their investments, including a decline in the value of their homes, at a time that they were nearing retirement. Not unexpected, their health parameters were worse.

Of great importance is the fact that the least affected were those over 65 without a college education and who had little decline in wealth because they did not own their homes and were not as dependent on investments in private retirement accounts. They were protected by Social Security and Medicare, demonstrating the stability (if not the generosity) of social insurance programs when compared to private, individual investments.

Obviously an improved Medicare for all would provide everyone with social insurance covering health care regardless of the status of our economy. Social Security could also be improved to ensure basic income when unemployed, disabled, or retired. This study confirms, once again, that social insurance is good for our health. Private investment is great, but it should be built on a solid foundation of social insurance.

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Justice Department will not defend guaranteed issue nor community rating

Justice Dept. Says Crucial Provisions of Obamacare Are Unconstitutional

By Robert Pear
The New York Times, June 7, 2018

The Trump administration told a federal court on Thursday that it would no longer defend crucial provisions of the Affordable Care Act that protect consumers with pre-existing medical conditions.

Under those provisions of the law, insurance companies cannot deny coverage or charge higher rates to people with pre-existing conditions.

The Justice Department said the provisions were part of an unconstitutional scheme that required most Americans to carry health insurance.

In a court case filed by Texas and 19 other states, the Justice Department said in a brief on Thursday that the requirement for people to have insurance — the individual mandate — was unconstitutional.

If that argument is accepted by the federal court, it could eviscerate major parts of the Affordable Care Act that remain in place despite numerous attacks by President Trump and his administration. Insurers could again deny people coverage because of their medical condition or history.

The Supreme Court upheld the individual mandate in 2012 as an exercise of the government’s power to tax. But since Congress repealed the tax last year, the mandate and the law’s consumer protections can no longer be justified, the Justice Department said.

The mandate cannot be interpreted as a tax “because it will raise no revenue as Congress has eliminated the monetary penalty,” the department said in a brief filed in the Federal District Court in Fort Worth.

The Justice Department said that the protections for people with pre-existing conditions were inseparable from the individual mandate and must also be struck down.

But it did not go as far as Texas and the other states, which argued that all of the Affordable Care Act and the regulations issued under it were now invalid.

The 2010 health care law includes many other provisions, such as the creation of health insurance marketplaces, premium subsidies for low- and moderate-income people and expansion of the Medicaid program, as well as changes in Medicare and public health services.

The Justice Department did not challenge those provisions of the law. Indeed, it said, they can continue to operate without the individual mandate.

By contrast, the department said, the Supreme Court held that the individual mandate was “closely intertwined” with the requirement for insurers to offer coverage to all consumers at the same basic prices, regardless of their health status.

Attorney General Jeff Sessions sent a letter to congressional leaders on Thursday notifying them that he would not defend the constitutionality of the individual mandate or the requirement for insurers to sell insurance to all applicants at standard rates — the “guaranteed issue” and “community rating” provisions.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Amongst the more important provisions of the Affordable Care Act were the requirements for guaranteed issue and community rating. For individuals with preexisting conditions, insurers could not deny them coverage nor could they charge them higher premiums than are charged for others in the same age group. This corrected two of the most serious defects in the individual insurance market that existed before enactment of ACA and made insurance available to many who otherwise could not purchase the plans.

Now Attorney General Jeff Sessions says that he will no longer defend these provisions. If the courts uphold his position, individuals with significant health care needs may find insurance with adequate benefits to be either unaffordable or not even available to them. Then concepts such as “universal” or “affordable” become moot.

How does this compare to our traditional Medicare program? The courts have already ruled that Part A of Medicare – the hospital benefit – is mandatory and must be accepted if the individual also accepts Social Security benefits. However, this does not apply to Part B – the physician benefits – nor to Part D – the drug benefits. Thus the courts have ruled that the government can require certain mandates in health care, but it also demonstrates that our current Medicare program needs to be improved, for this and for a great many other reasons. So a single payer, improved Medicare for all should be able to pass constitutional muster.

Once we have an improved Medicare that covers everyone, instead of thinking of it as some sort of unwanted government mandate, most of us would think of it as an automatic program ensuring health care financing for all of us – one that we have earned though our individual contributions based on ability to pay – guaranteed, affordable health care forever.

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Future physicians ask if the AMA is ready for single payer

Is this the year the AMA finally joins the single-payer movement?

By Jonathan Michels, Robertha Barnes, and Sydney Russell Leed
STAT, June 8, 2018

Fifty years ago this month, at the 1968 meeting of the American Medical Association, a fourth-year medical student named Peter Schnall seized the microphone and scolded several hundred of the most prestigious, highly educated white men in America.

“Organized medicine has never felt responsible and accountable to the American people for its actions and continues to deny them any significant voice in determining the nature of services offered to them,” Schnall chastised the group.

Today, in the midst of a revived Poor People’s Campaign, physicians and medical students are again pressuring the AMA to be more responsive to the needs of the nation’s uninsured and underinsured. At the AMA’s House of Delegates annual meeting in Chicago this weekend, its Medical Student Section will ask the AMA to end its decades-long opposition to a single-payer health insurance program, a system better known as Medicare for All that would be publicly financed but privately delivered. Why bother? For better or for worse, the AMA sets the agenda for American health policy.

Our wildly inefficient system is currently dominated by private insurance companies, a health care model spearheaded by the AMA. It produces some of the worst health outcomes in the industrialized world — the U.S. has the highest infant mortality rate and the highest number of avoidable deaths — and devours an ever-increasing share of our economy, with health spending accounting for a whopping 17.9 percent of our gross domestic product. Despite the improvements of the Affordable Care Act, 28 million Americans remain uninsured, without access to primary care that could prevent costly and life-threatening diseases. Those fortunate enough to have insurance face prohibitively expensive co-pays, premiums, and deductibles that limit access to care, and medical expenses are a leading cause of bankruptcy.

Contrary to the AMA’s assertions, a single-payer system would give health care providers more autonomy because their clinical decisions wouldn’t be second-guessed by insurance companies. Patients would have free choice of any doctor, allowing providers to compete based on quality of care. Physicians would spend less time on administrative responsibilities like paperwork and billing, and more time seeing patients, which boosts both their work satisfaction and income.

Will the AMA choose to move toward guaranteeing health care as a human right or continue down the wrong side of history by linking patients’ health to the vagaries of the private insurance market?

The activists who staged the protest at the AMA meeting in 1968 hoped that the organization would finally recognize health as a human right. It didn’t. A lot has changed in the ensuing 50 years. It’s time the AMA does, too.

Jonathan Michels is a premedical student at the University of North Carolina at Greensboro. Robertha Barnes is an MS/MD student at SUNY Upstate Medical University. Sydney Russell Leed is an MD/MPH student at SUNY Upstate Medical University. All are board members of Physicians for a National Health Program, an organization that advocates for an improved and expanded Medicare for All health system.

https://www.statnews.com…

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Comment:

By Don McCanne, M.D.

The destiny of health care lies in the hands of our nation’s present and future medical students. We are very proud of the student members of the board of Physicians for a National Health Program who authored this inspiring article. They represent the values that health care needs.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Is this the year the AMA finally joins the single-payer movement?

By Jonathan Michels, Robertha Barnes, and Sydney Russell Leed
STAT, June 8, 2018

Fifty years ago this month, at the 1968 meeting of the American Medical Association, a fourth-year medical student named Peter Schnall seized the microphone and scolded several hundred of the most prestigious, highly educated white men in America.

“Organized medicine has never felt responsible and accountable to the American people for its actions and continues to deny them any significant voice in determining the nature of services offered to them,” Schnall chastised the group.

“Shut up!” yelled the doctors, who were accustomed to being treated with respect and deference, not with outrage and indignation.

Schnall’s outburst, coordinated by members of Martin Luther King Jr.’s Poor People’s Campaign and the Medical Committee for Human Rights, aimed to be a wake-up call to an institution that was highly successful at protecting physicians’ “interests against encroachment” but failed to meet the public health and human needs of patients by opposing both civil rights and the expansion of safety-net health programs.

At a time when Jim Crow racism harmed the health of millions of African-Americans in the South, the AMA repeatedly rebuffed requests from the National Medical Association, an organization that represents African-American physicians, to work together to end racial health disparities.

Even after the passage of the Civil Rights Act in 1964, the AMA allowed local medical societies to discriminate against physicians and patients of color. The AMA also mobilized attacks against major social programs intended to benefit all Americans, from Social Security to Medicare and Medicaid. In 1948, the AMA leadership spent millions on a campaign to characterize President Truman’s popular universal health care plan as “socialized medicine.”

Today, in the midst of a revived Poor People’s Campaign, physicians and medical students are again pressuring the AMA to be more responsive to the needs of the nation’s uninsured and underinsured. At the AMA’s House of Delegates annual meeting in Chicago this weekend, its Medical Student Section will ask the AMA to end its decades-long opposition to a single-payer health insurance program, a system better known as Medicare for All that would be publicly financed but privately delivered. Why bother? For better or for worse, the AMA sets the agenda for American health policy.

It is clear to medical students that no matter how well they are trained, far too many Americans will remain sick and poor under market-based medicine.

Our wildly inefficient system is currently dominated by private insurance companies, a health care model spearheaded by the AMA. It produces some of the worst health outcomes in the industrialized world — the U.S. has the highest infant mortality rate and the highest number of avoidable deaths — and devours an ever-increasing share of our economy, with health spending accounting for a whopping 17.9 percent of our gross domestic product. Despite the improvements of the Affordable Care Act, 28 million Americans remain uninsured, without access to primary care that could prevent costly and life-threatening diseases. Those fortunate enough to have insurance face prohibitively expensive co-pays, premiums, and deductibles that limit access to care, and medical expenses are a leading cause of bankruptcy.

Contrary to the AMA’s assertions, a single-payer system would give health care providers more autonomy because their clinical decisions wouldn’t be second-guessed by insurance companies. Patients would have free choice of any doctor, allowing providers to compete based on quality of care. Physicians would spend less time on administrative responsibilities like paperwork and billing, and more time seeing patients, which boosts both their work satisfaction and income. In fact, when Canada implemented its single-payer program, physicians enjoyed long-term salary increases.

The AMA’s opposition to Medicare for All puts the organization at odds with the public and with America’s doctors. Sixty percent of Americans believe the federal government has a responsibility to provide health coverage for all; 51 percent specifically support the creation of a single-payer health system, as does the majority (56 percent) of practicing physicians. The single-payer bill in the House of Representatives, H.R. 676, now has a record 122 co-sponsors; in the Senate, Bernie Sanders introduced his updated Medicare for All Act in 2017 with a record 16 Senate co-sponsors, including most of the leading Democratic contenders for president in 2020.

In the AMA’s evaluation of these and other health system reform proposals, it asserts that a national health program could lead to a concentration of market power in the hands of the government, limiting patient choice and physician autonomy: “Reform proposals should balance fairly the market power between payers and physicians or be opposed.”

Although the AMA’s membership has steadily declined since the 1950s, it remains the most powerful doctors group in the country. The growing Medicare for All campaign is unlikely to be won without its support.

Will the AMA choose to move toward guaranteeing health care as a human right or continue down the wrong side of history by linking patients’ health to the vagaries of the private insurance market?

The activists who staged the protest at the AMA meeting in 1968 hoped that the organization would finally recognize health as a human right. It didn’t. A lot has changed in the ensuing 50 years. It’s time the AMA does, too.

Jonathan Michels is a premedical student at the University of North Carolina at Greensboro. Robertha Barnes is an MS/MD student at SUNY Upstate Medical University. Sydney Russell Leed is an MD/MPH student at SUNY Upstate Medical University. All are board members of Physicians for a National Health Program, an organization that advocates for an improved and expanded Medicare for All health system.

https://www.statnews.com…