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Why provider consolidation is not a cure-all

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Why provider consolidation is not a cure-all

Research says hospital consolidation isn’t a cure-all for health care

By Tim Vogus, Associate Professor of Management at Vanderbilt University
The Conversation, February 23, 2015

In his new book, America’s Bitter Pill, Steven Brill dives deep into the history of the Affordable Care Act (ACA) and how it was passed. He concludes that, although providing more Americans with health insurance is worthy of praise, the ACA does far too little to address the costs of health care.

And he makes his own proposal for bringing costs down: consolidation. As hospital systems expand and eye ways to grow even more, Brill proposes that these systems start to insure patients as well as treating them. If the hospital system is the insurer, he reasons, it has an incentive to keep costs down. And these new integrated systems would treat all their patients’ needs from primary care, to surgery and more. In short – treating the whole patient.

Economists and other researchers have been looking at what consolidation, big integrated systems and dwindling competition mean for health care. And so far, it looks like consolidation isn’t a cure for high costs or a way to improve care. In fact, it might make it harder for hospitals to deliver care well.

Consolidation is already happening

Hospital consolidation is either “horizontal,” like buying a hospital and reducing the number in the market, for instance, or “vertical,” like buying clinics and physician practices.

The truth is that hospitals are already a long way down this road. Both kinds of consolidation are happening and in recent years there has been unprecedented consolidation, with more planned for 2015.

And the ACA creates an incentive for organization to consolidate and offer insurance by encouraging the development of Accountable Care Organizations (ACOs). These are networks of doctors, hospitals and other care providers that coordinate care for patients. The idea is that they save money by increasing efficiency because they care for all of the patients health needs. That means everything from primary care to specialists, hospital services and more. ACOs are especially prominent in Medicare, but the Department of Health and Human Services (HHS) is pushing for more of this quality- and value-based contracting over traditional fee-for-service.

Some critics say that consolidation in general means that hospital systems have a tremendous amount of market power – something that isn’t known for keeping costs down. But Brill argues that any concerns about the market power these systems would hold can be overcome by simple regulations to ensure minimum competition.

So in other words, both Brill and the ACA would push health care delivery toward large integrated entities that would manage the entire spectrum of patient needs from insurance to primary care checkups to cancer treatment to managing chronic disease. But research shows that consolidation has a poor track record of keeping costs down and that very large organizations have trouble delivering care and working efficiently.

Consolidation doesn’t have a track record of keeping costs down

Earlier attempts to control costs through consolidation did not succeed. In the 1990s integrated delivery networks attempted to lower costs, but failed due to financial losses from purchasing physicians practice, difficulties with integration and managing risk. Researchers argue that new attempts to control costs through consolidation are likely to experience similar disappointing results.

Martin Gaynor of Carnegie Mellon and Robert Town of the University of Pennsylvania’s Wharton School summarize recent research indicating that increases in consolidation – and the resulting lack of competition – lead to higher health care costs. And these increases are especially high in consolidated markets with few hospitals.

Beyond higher costs, consolidation can also reduce the quality of care provided. Research from outside the US suggests that increases in consolidation can have a negative impact on survival from heart attack. Concentrated markets also mean less choice for patients when it comes to choosing hospitals or doctors, and research indicates that more choice can lead to better health outcomes for procedures like coronary artery bypass graft surgery.

Bigger systems don’t always make for better care

Brill also ignores another major problem: integrating and operating a very large or consolidated health system is hard.

In research at a large, academic medical center, Brian Hilligoss and I found even simple, everyday care transactions and decisions are fraught with problems. Different units, like general medicine and emergency, have different workplace cultures and different ways of operating, which can make integration difficult. Units might be interdependent, but their administration is separated. And the physical size of these organizations matters too. The hospital we studied occupied over 6 million square feet putting a lot of physical distance between units and between doctors and patients. In our study we found that these factors led to a heavy reliance on technology to coordinate care rather than direct communication.

In another study Hilligoss found that this poor integration between different units in the hospital means that doctors rely on an elaborate process of “selling patients” to other departments in order to transfer them. One department has to make a case for the patient to be transferred to another department, even if that is where they objectively need to be. And inpatient services have the right to refuse transfers.

We found that physicians have to consistently engage in elaborate workarounds to carry out their work. And nurses face similar challenges in complex organizations. Anita Tucker of Brandeis University documents how, like doctors, they frequently encounter operational failures like missing materials and information that require workarounds.

Mergers don’t always mean coordinated care

The consolidation encouraged by Brill exacerbates all the challenges identified in this research. For example, in her book Code Green, Dana Beth Weinberg documents how the merger of Beth Israel and Deaconess hospitals in Boston had profound effects on the way care was delivered at the bedside. The merger prioritized cost reductions through higher patient loads for each nurse which undermined Beth Israel’s comprehensive and influential primary nursing model. In practice that meant shifting critical patient care tasks away from highly skilled registered nurses to less skilled aides which compromised care quality.

And early evidence from Accountable Care Organizations suggest that is difficult for different organizations to integrate their cultures. Sara Kreindler of the University of Manitoba and colleagues examined early Accountable Care Organizations and found that in no case did these organizations see themselves as integrating different groups into one whole. In fact, the organizations studied painstakingly avoided the idea of integration.

While Brill’s work offers a compelling personal narrative and a provocative and thorough recounting of the development and passage of the ACA, it has substantially less to offer as guidebook for change. He fails to sufficiently grapple with existing economic research, earlier attempts to achieve similar aims, and the real difficulties posed by consolidation for those doing the hard work at the point of care delivery.

(The article includes links to resources cited plus a response by Steven Brill and a reply by the author.)

http://theconversation.com/research-says-hospital-consolidation-isnt-a-cure-all-for-health-care-36282

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Comment:

By Don McCanne, MD

Considerable attention has been directed to the phenomenon of provider consolidation. It is celebrated by some as a means of providing greater efficiency and quality by means of integration of services, advancing the model of accountable care organizations. Others have criticized consolidation because of its anti-competitive influence on markets, driving prices ever higher.

This article by Professor Tim Vogus is presented in its entirety since it explains why we need to look elsewhere than provider consolidation if we truly want to improve value delivered by our health care system.

If we had publicly-administered health care financing through a single payer system, then consolidation would not be a tool of gaining greater market leverage and thus higher prices. Rather, consolidation would occur only if it improved the delivery of care. Single payer is a much more effective way of achieving our goals of improving quality while controlling costs.

Government endorses Medicare Advantage upcoding fraud

CMS pitches 1.1% boost to Medicare Advantage payments

By Bob Herman
Modern Healthcare, February 20, 2015

The CMS has proposed increasing health insurers’ Medicare Advantage payment rates by 1.05% for 2016, a move that kicks off a 45-day dogfight in Washington before the rates are cemented.

The base rate was an 0.95% average decrease, but “when combined with expected growth in plan risk scores due to coding,” Advantage plans will actually receive the 1.05% hike in revenue next year, according to a release from the CMS posted late Friday afternoon. Risk scores relate to how Medicare pays for the health status of beneficiaries. CMS pays more for patients who have more health conditions and less for those who are healthier. 

Like last year, Advantage plans that earn at least four stars out of five will receive a 5% bonus payment in 2016, the CMS said. Any plans with 3.5 stars or fewer will continue to get no additional payments.

Breaking from proposals in the previous two years, the CMS said it will not propose any adjustments to the use of home visits for patient risk assessments. Many Advantage plans diagnose the severity of patients’ illnesses at home instead of in a physician’s office. But this has raised concerns that many plans are falsely inflating the diagnoses in a bid to warrant higher payments for sicker members, a process called upcoding.

Medicare Advantage’s risk-assessment process has been under fire from policymakers and consumer advocates who argue private insurers are purposefully bilking money from the program, which covers 17.3 million people as of this month. The Medicare Payment Advisory Commission has said the risk scores of Advantage patients have grown more rapidly than those of regular fee-for-service beneficiaries, and the current risk-score payment reductions mandated by the Affordable Care Act may not be enough.

Humana, one of the largest Advantage insurers in the country, disclosed this week that it is facing increased scrutiny from the U.S. Justice Department for its risk-adjustment practices.

Health insurers have already begun their Medicare Advantage lobbying campaign in the hope of extracting higher rates come April. The Coalition for Medicare Choices, part of America’s Health Insurance Plans, has aired several ads featuring seniors advocating for the private plans.

Many members of Congress have also weighed in on the process. A bipartisan group of 53 senators, led by Chuck Schumer (D-N.Y.) and Mike Crapo (R-Idaho), sent their own letter to Tavenner this week urging the agency to “minimize disruptions for beneficiaries enrolled in the MA program by maintaining payment levels and providing a stable policy environment for 2016.”

The health insurance industry also happens to be one of the top financial backers of Schumer and Crapo. Since 2009, health insurers have given more than $493,000 to Schumer’s campaigns and more than $234,000 to Crapo’s, according to OpenSecrets.org.

http://www.modernhealthcare.com/article/20150220/NEWS/150229988

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CMS proposes 2016 payment and policy updates for Medicare Health and Drug Plans

CMS Press Release, February 20, 2015

The Centers for Medicare and Medicaid Services (CMS) today released proposed changes for the coming year for the Medicare Advantage (MA) and Part D Prescription Drug Programs that will advance Health and Human Services Secretary Sylvia M. Burwell’s vision of building a better, smarter health care system and moving the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.

The proposed changes reflect the commitment to a Medicare program that delivers better care, spends health care dollars more wisely and results in healthier people.

http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-02-20-3.html

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NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties
SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter

CMS, February 20, 2015

Section H. Medicare Advantage Coding Pattern Adjustment

Below we offer three analyses that strongly suggest that the health status of MA enrollees is no worse, and more likely is better, than the health status of FFS beneficiaries of similar age, gender, Medicaid, and institutional status. These include analyses of self-reported health status and mortality rates, as well as Part D drug information.

Self-Reported Health Status. Analysis of self-reported data on health status and on whether the respondent has ever been diagnosed with one of a variety of conditions from the 2006-2011 Medicare Current Beneficiary Survey (MCBS) suggests that the average risk for MA enrollees is approximately 96% of the average risk for FFS beneficiaries.

Mortality Rates. Mortality rates for MA beneficiaries are significantly lower than mortality rates for FFS enrollees. For example, in 2012, the mortality rate in MA was 81% of the mortality rate in FFS. (It is possible that lower mortality rates result from better quality of care in MA, but it seems more likely, given the size of the difference, that this reflects, at least in part, relative health status.)

Part D Drug Information. MA enrollees are significantly less likely than FFS beneficiaries to be prescribed drugs that are predictive of high expenditures. HHS has used information from Part D data to construct risk scores for MA and FFS enrollees, and has found that MA enrollees are at significantly lower risk than demographically similar FFS beneficiaries.

Of the three sources of information that are independent of the diagnoses reported by MA plans, each suggests that MA enrollees are at similar or lower risk than demographically similar FFS beneficiaries.

CMS Advance Notice (172 pages): http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2016.pdf

Letter from U.S. Senate members to Marilyn Tavenner, CMS Administrator: http://www.usatoday.com/story/news/nation/2015/02/20/medicare-advantage-prescription-drug-part-d-cms/23744123/

Comment:

By Don McCanne, MD

The 2016 base rate for private Medicare Advantage (MA) plan payments was to have decreased by 0.95%, phasing in a correction of the overpayments that have been made to the MA plans. Instead, CMS will increase the payment rates by 1.05%, a full 2.0% increase over the projected base rate. This is the fourth year in a row that CMS has violated the intent of ACA and other legislation to bring MA rates down to the equivalent of payments made in the traditional fee-for-service Medicare program.

CMS’s Advance Notice provides three sources of evidence demonstrating that the MA patients are a healthier subset of patients than those in the traditional Medicare program. Since this results in adverse selection in the traditional Medicare program, the rates paid to MA plans should be even lower than payments made in the traditional program, not higher.

The record is now clear that the MA plans have been using various methods of upcoding the severity of illness of their customers (known to us as patients) thus qualifying for higher risk adjustment payments. One of the latest schemes is to make home visits, not to provide more care but merely to try to find more diagnoses to be used in inflating risk adjustments – diagnoses that do not appear in the billing documents from physicians and hospitals! Although this abuse is widely recognized, CMS said “it will not propose any adjustments to the use of home visits for patient risk assessments.” This is at a time that the Justice Department has increased its scrutiny of these likely criminal acts.

As if we didn’t have enough reason to be disgusted with our government, over 50 Senators have sent a letter to CMS Administrator Marilyn Tavenner requesting preservation of the overpayments made to the MA plans. The rhetoric of the letter is clearly that of America’s Health Insurance Plans (AHIP) – the lobby organization for the health insurance industry. To no surprise the lead signers of the letter, Senators Mike Crapo and Charles Schumer, between them have received from the insurance industry close to three-quarters of a million dollars.

The Coalition for Medicare Choices has already begun its intense campaign to drum up public support for MA overpayments, of course disguised as protecting Medicare. It surely surprises no one that this organization is headquartered not only in the same building as AHIP, but it even shares the same suite.

Perhaps even more ominous is the statement in the CMS press release that states that the proposed changes “will advance Health and Human Services Secretary Sylvia M. Burwell’s vision of building a better, smarter health care system and moving the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.” And the the Senators’ letter that states, “At the time of broad agreement on the need to shift U.S. health care to focus on care coordination, quality, and value-based payments, it would be counterproductive to jeopardize a program that is already driven by and aligned toward those goals.” This political support of MA plans clearly advances the agenda of privatizing Medicare – only one step away from converting to a defined contribution premium support (voucher) program – the dream of the private insurance industry.

So who is paying the higher costs of these private MA plans? We, the taxpayers, and the beneficiaries in the traditional Medicare program who are paying higher Part B premiums to help fund this gift to the private insurers.

If there were even a thread of moral fiber left in D.C., instead of shamelessly supporting overpayments to the private insurance industry, our representatives would be advocating for using those funds to improve benefits for all Medicare beneficiaries. Under that scenario, the private insurers who are keeping three-fourths of the overpayments, would be dismissed. But then Crapo and Schumer would likely decide that three-quarters of a million dollars is too dear of a price to pay for a strand of moral fiber.

What are the barriers to real health reform?

By Marcia Angell, M.D.

PNHP note: The following text contains the prepared remarks of Dr. Angell at a panel titled “Persistent Barriers to Reform of the American Health Care System” at the 27th Annual Policy Research Conference of the National Academy of Social Insurance in Washington, D.C., on Jan. 28, 2015.

This country has long subscribed to the ideology that the best and most efficient way to distribute anything is through a private market, and we’ve applied that ideology to health care. We distribute it like a market commodity, according to the ability to pay, and not like a social service, according to medical need.

But there’s a great mismatch between the ability to pay and medical need. The people who most need health care are precisely those least able to pay. So while the private sector concentrates on those who can pay, as businesses are supposed to do, those who can’t pay go without adequate care or depend on the government to step in.

At the same time, well-insured people often get far more medical care than they need or is even good for their health.

This reliance on a private market to distribute health care is what leads to the grotesque inadequacies, maldistribution, and inefficiencies in our system, and what distinguishes us from every other advanced country. Even in countries that permit the sale of private health insurance, the prices and benefits are tightly regulated, and care is delivered in a predominantly nonprofit system.

A welter of financial incentives

There are different financial incentives at work in our profit-driven system, depending on who you are. Employers and insurers, including government insurers, have every incentive to stint on care. The best way to do that is to refuse to insure high-risk people at all, if possible; to shift costs to patients at the point of service by increasing deductibles and co-payments; and to limit the benefit package.

In contrast, hospitals and other facilities have every interest in expanding, so that they’re in a better position to bargain with insurers for higher prices. In Boston, for example, we’ve witnessed a colossal struggle over the years between insurers and Partners Health Care – the giant entity created by the merger of the Massachusetts General Hospital and the Brigham and Women’s Hospital. Partners now controls large panels of physicians, and facilities throughout the region. Since no insurer can afford to leave Partners out of its network, it can command much higher prices than other hospitals in the state.

For their part, physicians just want to keep their income up, while the wars between insurers and hospital conglomerates rage around them. Like society at large, however, the inequality among physicians is huge.

While primary care doctors struggle, specialists are thriving – particularly procedure-oriented specialists. They are mainly paid fee-for-service, and those fees are greatly skewed to reward tests and procedures. Specialists thus have every incentive to do as many of them as possible, particularly when prices are controlled.

There’s much talk now about aligning these disparate incentives. But in our current system, none of these incentives is good for patients, and perhaps the last thing we should want is to align them.

The main problem: costs

We need to remember that the main problem with our health system is costs, because everything else depends on that. After all, if money were no object, everyone could have all the health care they could possibly use or want.

But money is an object. And sadly, the Affordable Care Act is a misnomer, because it’s not really affordable. Yes, it has expanded access, but the costs will not be sustainable – unless deductibles and co-payments are greatly increased and benefits cut.

The problem is that the ACA attempted to reform the system while retaining the private insurance industry and the profit-driven delivery system, with all its distortions and waste. It even made the private insurance companies the linchpin of the reform, providing them with millions more publicly subsidized customers.

The thought was that anything else was politically unrealistic. Given our politics, that may have been so, but that does not mean that the ACA can work. It’s unrealistic for different reasons.

A lesson in point. In 2006, Massachusetts implemented Romneycare, the prototype of Obamacare, in a state that had everything going for it – an already high rate of insurance, a large fund to provide for the uninsured, and a Medicaid waiver. But the state now spends more per capita on health care than any other state in the union (in 2009, about $9,278 per person, compared with a national average of $6,815). Health spending now consumes over half the state budget, at the expense of nearly every other state function – including education, public safety, human services, and infrastructure.

We need Medicare for all, but …

I believe the only way to provide universal and affordable health care is to extend Medicare to everyone – perhaps gradually, by lowering the qualifying age one decade at a time. The public, I’m sure, is much friendlier to this idea than Congress, despite the latter’s protestations to the contrary.

Max Baucus, the chairman of the Senate Finance Committee who pushed Obamacare through Congress, received more money from the health industry that year than any other member of Congress, so it’s no wonder that he dismissed the idea of Medicare for all as politically unrealistic.

But Medicare for all is not enough. We also need a less profit-driven delivery system in which physicians are paid by salary, and hospitals are not permitted to divert operating income to expansion.

So what are the barriers to achieving such a reform? Much of the public now opposes the new health reform law, and it’s often claimed that their opposition reflects the American public’s antipathy toward big government.

I see no reason to believe that. While it may be true for some people, I believe it’s largely a canard promulgated by the health industries and many public officials (such as Max Baucus) and the media.

The issue for the public, I suspect, is not the size of government, but the feeling that it often doesn’t work for their benefit, and instead serves special interests. I have no doubt that if instead of Obamacare, the plan had been to extend Medicare to everyone, most of the public would have been delighted.

In fact, polls have consistently shown that a majority of Americans favor such a system; the percentages vary according to the framing of the question, but they are almost always well above 50 percent. Americans have no problem with government programs that serve their interests, such as Medicare, Social Security, or, say, the National Institutes of Health.

But they are very suspicious of the private health industry, which now has the largest lobby in Washington – even larger than the defense industry. The major barrier to real reform, then, is money – the wealth of the medical-industrial complex.

Dr. Marcia Angell is senior lecturer in social medicine, Harvard Medical School, and former editor in chief, The New England Journal of Medicine.

Health care shouldn’t be determined by the insurers

By Deborah Schumann, M.D.
The Washington Post, Letters, Feb. 20, 2015

The Feb. 17 front-page article “Faces of the subsidies case” was right when it said that health insurance “payments, which are referred to as tax credits, go directly from the federal government to the insurance companies.” That is how the Affordable Care Act was designed, by the insurance industry.

In the article, Erin Meredith, a self-identified Republican, said, “I’m just trying to make it … and not be on government assistance.” So this tax credit isn’t government assistance? The federal government is subsidizing the insurance industry with the intention of making cheap products available to consumers. Perhaps some of us don’t want health insurance, but we all (even Republicans) want health care when we get sick. The United States spends twice what some countries spend per capita on health care because of our profit-driven system. Many patients are still left out.

That the Supreme Court will decide the meaning of the words “established by the State” is ludicrous. “State” is not just Texas or Georgia; it is a body politic, especially one constituting a nation. We all need the state to organize payment for our health care. When we leave it to the profit-driven insurance industry, it tries to avoid that expense.

Dr. Deborah Schumann resides in Bethesda, Md.

http://www.washingtonpost.com/opinions/health-care-shouldnt-be-determined-by-the-insurers/2015/02/20/a5698478-b79c-11e4-bc30-a4e75503948a_story.html

Cuba’s health system: an eyewitness report

By Josh Freeman, M.D.

I just returned from a week’s visit to Cuba with a group of journal medical editors and public health people. We met with many people in the medical professions including family doctors and nurses and people from highly specialized referral centers in pediatric cardiac and hepatobiliary surgery, nutrition, and diabetes, and with faculty and leaders from the school of public health and some of Cuba’s medical journals, including the Cuban Journal of Public Health. We met with US students from ELAM, the Latin American Medical School that trains (for free) students with social commitment and economic need from not only Latin America (and North America) but the entire world.

Much has been written on the Cuban medical system, and how it is structured. One of the best recent articles is by C. William Keck and Gail Reed in the American Journal of Public Health in 2012, “The Curious Case of Cuba”.[1] Keck and Reed are, respectively, editor-in-chief and executive editor of MEDICC Review, an academic journal that publishes research and commentary from both Cuban and US (and other international) authors about the Cuban health system and health status, and is part of MEDICC (Medical Education in Cooperation with Cuba). They were also leaders of our MEDICC-sponsored trip. I will not try to provide yet another in-depth description of the Cuban health system, with which many readers may be familiar, but will rather highlight some aspects of it that struck me as particularly important, and explain why.

First of all, the medical system in Cuba is a national priority. As a socialist country, its centralized nature exceeds that seen in the more-commonly described wealthy Western European nations, and it provides care for everyone. This is a positive, obviously, but also (of course) limits the access to some elective procedures for those who would be rich enough to afford it in another society. It also, of course, limits the ability of those people to be at the front of the queue, which is a particular irritation to the privileged, high-income people who are often those most critical of any type of equitable health system. The health statistics are excellent; several indicators, including infant mortality rate (4.8/1000 in 2013) are much better than in the US.

It is also very primary-care based. Teams of family doctors and nurses are in every neighborhood (in the densely populated parts of central Havana where we were, actually every few blocks) and are responsible for the health of a geographically defined population of 800-1800 people (depending on percent of older, high need people). They spend half their day seeing people in the office, and the other half making home visits, most frequently to those who are high-need because of chronic disease or recent mothers (the nurse sees almost daily). They also live in the neighborhood, frequently in or over the clinic, and are expected to be available 24-7 for any of the patients in their community who needs urgent help. Some of the doctors in these settings are residents in the second of their two-year FM residency, and they include those from other countries whose governments permit residency training in Cuba (we met a resident from Ecuador, who would be returning to his own country).

At the next level are polyclinics, also very neighborhood-based and serving a number of family medicine practices. Staffed with a family medicine professor as well as other specialists (pediatrics, IM, OB-Gyn, etc.) they see patients referred to them by the FM practices (and send them back for continuing care) as well as provide some procedural and imaging services. All physicians complete the 2-year FM residency, and then do residencies in other specialties; about 40% of doctors are FM. There are also hospitals, emergency / urgent care settings, and several levels of referral centers. The ones we visited in Havana for pediatric specialty surgery (including transplants of livers, although not yet hearts for children), nutrition, and diabetes were the most high-level referral centers in the country. At every level the centrality of the family medicine community practice for ongoing follow-up was emphasized. Specialty doctors have great respect for this system. In addition, although they make earn more than family doctors, the difference is small, and all earn far less in relation to the income of others in society than in the US. Doctors are not in it for the money. Public health is a much more prominent part of the health system in Cuba than it is in the US, and there are strong centralized efforts to integrate it more with the medical care, and particularly primary care, system. It remains underfunded relative to medical care delivery, but the inequity is significantly less than in the US where public health receives about 3% of the health care dollar compare to 97% for medical care.

In addition to the medical care that they provide to their own people, the Cubans provide care all around the world, and train doctors (as indicated above) from all around the world. Many poor nations have their health facilities staffed by Cuban physicians, and their human resource commitment to fight the Ebola outbreak in West Africa dwarfs any comparable effort by the US or other nations (see the article “Cuba vs. Ebola” on the MEDICC webpage). As noted above, ELAM graduates several thousand physicians from other countries every year, including the US. The students from the US, selected by the organization Pastors for Peace, are typically from lower-income families and ethnic groups under-represented in US medicine. The US students are required to have at least 2 years of college, and spend at least 6 years in the medical school, plus an extra one before if they are not fluent in Spanish. They are provided free tuition, room, and board. Life is not easy, and like most Cubans – even those working in the most advanced centers, including the National Medical Library – have limited and slow Internet access, a result, apparently of the lack of access to satellites resulting in the “low bandwidth” we heard about constantly. But the graduates are expected to enter primary care and work in communities of need that are like those they come from, and despite the inability of Cuba to enforce this, most of them do. Many have completed residencies in the US and others are currently training, predominantly in primary care. They tend to bring excellent history-taking and physical examination skills, although need time to adapt to the electronic medical record and the ability to “just order a CT scan”.

The hardest part for me about the US medical students at ELAM is that they are exactly the kind of students that every medical school in the US should be aggressively recruiting: from families and communities that have not typically produced physicians, from underrepresented groups, and with a passion and commitment to provide care for those communities. It embarrasses me that they have to go to Cuba to school, while our medical schools are filled with “more of the same”: privileged, generally majority, students with much more interest in high-specialization than primary care, and much more commitment to themselves than to the needs of society.

There are a lot of problems with Cuba, and even with their health system. It is very expensive and very dependent upon physicians and upon paying relatively low salaries to health workers. It is handicapped by limited resources in a relatively poor country, even though the largest portion of that nation’s resources are spent upon health care and education. Its poor access to the Internet and lack of money for international travel limit the ability of its health professionals to collaborate and stay on top of what is happening in the rest of the world. But what the Cuban model shows is that it is possible to have a health system based on trying to provide needed health care, relatively equitably, to everyone in the society. It starts with primary care, and everyone gets that before anyone gets more; as time and resources progress, more people get more, but still equitably. The emphasis is that health and healthcare and medical care are for everyone, not for a portion of the population. It is based upon the presumption that everyone should get what they need before anyone gets what they do not.

Advocates of a market-based model for health care in the US may insist that they are not mean or selfish, but that the market is the best model for organizing everything, including health care. Their mantra is that “the market will provide”, presumably not just profit for the providers of services, but health to the people.

How’s that working for us?

[1] C. William Keck and Gail A. Reed.  The Curious Case of Cuba. American Journal of Public Health: August 2012, Vol. 102, No. 8, pp. e13-e22. doi: 10.2105/AJPH.2012.300822

Dr. Joshua Freeman is chairman of the department of family medicine at the University of Kansas School of Medicine and a member of Physicians for a National Health Program. This article was originally posted to Dr. Freeman’s blog, Medicine and Social Justice, and titled “Cuba: A health system designed to serve to health of the people, not the profit of a few.”

http://www.medicinesocialjustice.blogspot.com/2015/02/cuba-health-system-designed-to-serve-to.html

Health Care for All rally brings hundreds to Salem

Northwest Labor Press (Portland, Ore.), Feb. 20, 2015

A coalition of more than 100 organizations — including many labor unions — rallied at the State Capitol Feb. 11 where they called on Oregon lawmakers to create a single-payer health insurance system. Bills have been introduced in previous sessions but have gone nowhere.  State Sen. Mike Dembrow (D-Portland), a member of American Federation of Teachers-Oregon, is leading the charge.

Last session, lawmakers did authorize a study on how such a system could be set up in Oregon. The study was to be funded with private money, and supporters so far have raised about $50,000 of the $200,000 needed.  Rallygoers on Feb. 11 called on lawmakers to extend the deadline for the study, and have the state match the amount of private dollars raised. Dembrow also re-introduced a bill to implement a single-payer system. SB 631, which has 27 co-sponsors, will get a hearing in March, but it’s not expected to pass.

“Thank you for sticking with this for so many years,” Dembrow told rally-goers. “We have so much work to be done, and it’s going to be done in our neighborhoods, churches and organizations, one on one. We have to explain to people that we are talking about a simple system here, so that people do not fall through the cracks and are not denied coverage.”

Also speaking at the rally were Portland Democratic state representatives Barbara Smith Warner and Jennifer Williamson.

http://nwlaborpress.org/2015/02/health-care-rally-brings-hundreds-salem/

Why high-risk pools won’t work

Why High Risk Pools (Still) Won’t Work

By Jean P. Hall
The Commonwealth Fund, February 13, 2015

As the new Congress convenes and the Supreme Court prepares to hear arguments in the King v. Burwell case challenging tax subsidies for insurance purchased through the federally facilitated marketplaces, proposals to repeal and replace the Affordable Care Act (ACA) are resurfacing. Many of these rely on high-risk health insurance pools to cover people with preexisting health conditions.

In fact, the risk pools are suggested as a viable alternative to the ACA’s ban on preexisting condition exclusions in the individual market and the marketplaces. My recent analysis of high-risk pools, however, explains why these entities simply are not a realistic alternative to coverage requirements under the ACA. In a nutshell, high-risk pools:

  1. are prohibitively expensive to administer,
  2. are prohibitively expensive for consumers to purchase, and
  3. offer much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.

Recent proposals to replace ACA reforms with high-risk pools focus on using state-based programs, but historical experience with 35 state-based high-risk pools and more recent experience with the national Pre-Existing Condition Insurance Plan (PCIP) illustrate the problems with this approach. Even though state-based high-risk pools charged premiums of up to 250 percent of those charged to healthy beneficiaries in the individual insurance market, premium revenues paid just 53 percent, on average, of program costs. In addition to these high premiums, enrollees in state-based high-risk pools faced annual deductibles as high as $25,000 and annual coverage limits as low as $75,000. Past research indicated that high costs and limited benefits associated with high-risk pool coverage resulted in delayed or forgone care and adverse outcomes for enrollees. Many also accrued medical debt despite having insurance.

For these reasons, use of high-risk pools in lieu of marketplace and Medicaid expansion coverage would result in greater state and federal costs, fewer people with preexisting conditions able to obtain coverage, and coverage that fails to meet the often greater needs of people with chronic conditions.

http://www.commonwealthfund.org/publications/blog/2015/feb/why-high-risk-pools-still-will-not-work

Brief: Why a National High-Risk Insurance Pool Is Not a Workable Alternative to the Marketplace

http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2014/dec/1792_hall_highrisk_pools.pdf

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Comment:

By Don McCanne, MD

Those who wish to repeal or at least drastically reduce the provisions of the Affordable Care Act realize that they must come up with a replacement.

Most of the proposals would grant much greater flexibility to insurance products while reducing regulatory oversight. The problem that creates is that individuals with high medical expenses tend to be shut out of the insurance market. To ensure coverage for these individuals, high-risk insurance pools have been proposed.

This article and the brief that it is based on explain why high-risk pools are not a satisfactory solution. The premiums are unaffordable, and the pared-down benefits are unsatisfactory. These over-priced plans do not provide the financial protection that patients with chronic disorders need.

Even with the Affordable Care Act, enrollment in the temporary high-risk pools had to be closed early because they proved to be too expensive, threatening depletion of the allotted funds. They provide poor coverage at a very high cost.

With a single payer system this problem disappears. Funding is based on ability to pay, through the tax system, and not on the basis of anticipated medical expenses. Everyone receives the care they need, regardless of their health status. The fragmented plans supported by the repeal and replace people cannot do that.

Increasing Mainers’ Access to Healthcare

By Julie Pease, M.D.
Maine Medicine, Jan.-Feb.-March 2015

MMA’s Public Health Committee has designated access to healthcare as one of its priorities for 2015. During 2014, access to care changed for many Mainers. On the bright side, thousands who had previously been left out of our system are now newly insured and able to access healthcare.

Regrettably, there is another side to the story. Maine is one of only two states in the country where the numbers of uninsured have actually increased – from 130,000 up to approximately 147,000 people in Maine.

And, although nearly 50,000 Mainers are enrolled in health insurance plans through the exchange, many of those individuals, plus thousands more in employer-sponsored group insurance plans are underinsured. In a low-income state like ours, with a high percentage of individuals choosing “bronze” plans and with more employers offering high-deductible plans, an estimate of 200,000 underinsured Maine people is probably conservative.

The insured or underinsured are often unable to access healthcare due to cost. They do not fill prescriptions, or they do not take them as prescribed. They delay getting necessary treatment, and the treatment they do get is marginal. This can be catastrophic. It is reliably estimated that for every 1,000 uninsured, one person will die each year due to inability to access timely medical care. We call these “excess deaths,” estimated in Maine to be between 137 and 157 deaths annually.

A survey conducted by the Maine Health Access Foundation in December 2013 showed that “a significant proportion of Maine people who were uninsured, as well as many with health insurance had difficulty paying for health care services in 2013. Those with the lowest incomes reported the hardest time affording health services, yet more than one-quarter of Mainers with health insurance (25.3%) experienced problems paying medical bills as well. Paying medical bills was a challenge for those in the lowest income group (32%), but it was also a significant problem for Mainers with middle incomes (35.4%).”

“In addition, nearly 41% (of uninsured Mainers) reported barriers to getting dental care and over one-third reported forgoing needed medical care because they couldn’t afford it.” [See more at: http://www.mehaf.org/news/2014/03/26/statewide-survey-finds-mainers-struggled-pay-health-care-costs/#sthash.N75aGHD6.dpuf ]

In countries with universal healthcare, access problems are significantly less, and healthcare costs are about half of those in Maine. With the increasing trend toward “bronze” high-deductible underinsurance, and dim prospects for Medicaid expansion, many physicians and health professionals in Maine and elsewhere are stepping up their activism for universal healthcare. Dr. Donald Berwick, former Medicare chief, garnered 21% of the Massachusetts Democratic primary vote with his single-payer platform. Despite the recent setback in Vermont’s efforts to achieve universal access, single-payer forces in Vermont are already rallying to reverse their governor’s decision to abandon this effort. A 2014 MMA poll showed that 64.3% of Maine physicians would prefer a single-payer system such as a “Medicare for all” approach. Last year, several physicians went to the Maine Legislature to testify in support of universal healthcare. Maine AllCare, a chapter of Physicians for a National Health Program, has almost 900 supporters, many of them physicians. The virtues (including universal access), the value, and the simplicity of a publicly financed single-payer approach continue to have broad popular appeal. Please join me and other MMA physicians in our advocacy for universal healthcare.

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

References:

147,000 uninsured – US Census Bureau, September 18, 2014. http://www.census.gov/newsroom/press-releases/2014/cb14-170.html
Nearly 50,000 Mainers in exchange – http://www.healthinsurance.org/maine-state-health-insurance-exchange/
Underinsured – http://www.commonwealthfund.org/publications/fund-reports/2014/mar/americas-underinsured
Excess deaths – Wilper, A. et al, Health Insurance and Mortality in US Adults, AJPH, December 2009, Vol. 99, No. 12, p 2289-2295
137 deaths – https://www.pnhp.org/excessdeaths/excess-deaths-state-by-state.pdf
157 deaths – http://healthaffairs.org/blog/2014/01/30/opting-out-of-medicaid-expansion-the-health-and-financial-impacts/
Maine Health Access Foundation Survey – http://www.mehaf.org/news/2014/03/26/statewide-survey-finds-mainers-struggled-pay-health-care-costs/#sthash.N75aGHD6.dpuf
Key Facts about the Uninsured Population – http://files.kff.org/attachment/key-facts-about-the-uninsured-population-fact-sheet
MMA Poll Question – http://www.mainemed.com/sites/default/files/content/Payment%20Reform%20 Survey%20-%20%28Crescendo%29.pdf
Dr. Donald Berwick and Single Payer – http://commonhealth.wbur.org/2014/09/single-payer-don-berwick

http://www.mainemed.com/sites/default/files/content/news-archive/JanFebMar%202015%20Final.pdf

Greed, fear and other roadblocks to health care reform

By Philip Caper, M.D.
Bangor (Maine) Daily News, Feb. 19, 2015

We often hear boasts about American exceptionalism. But there is at least one area where being exceptional is a negative.

Most other wealthy democracies have made health care a de facto right of all. Yet we have been arguing about whether to do so for nearly a hundred years and haven’t done it yet. We spend twice as much as other wealthy countries on health care, but still leave 15 percent of our people completely without health care coverage and many more vulnerable to illness-related financial hardship.

I recently helped organize a panel discussion at a conference in Washington, D.C., celebrating the 50th anniversary of Medicare and Medicaid, to examine why achieving health care as a right in America is so hard. The participants included world-class experts from academia, medical journalism, public service and advocacy groups. Here’s a summary of what emerged from our discussion. It’s not a very flattering picture of current American politics, culture and values regarding health care, but I think it’s accurate.

The barriers to reform these experts identified fall into four categories:

Apathy. Think of labor unions or corporate executives with tax-subsidized Cadillac plans. “I’ve got mine. Why should I worry about anybody else?” We pay dearly for such thinking. Or, think of the young and healthy who don’t believe they need health care and are willing to go without coverage despite the cost to others should they need care.

Fear, distrust and anger. Fear of change, not trusting that people are going to be better off if things change, no matter what that change is, especially if government is involved. Fear by doctors and other health care professionals that reform would be too effective in controlling health care costs, resulting in loss of profits and income.

Ideology and ignorance (not stupidity). Health care is complicated, and most Americans don’t understand the health care system or that there are better ways organize it. This includes doctors. We are trained to be experts in clinical medicine, not health care systems. Many Americans are unaware (ignorant) of the fact that wealthy countries have health care systems that are more popular than ours, produce superior results, include everybody and cost about half what we spend. It doesn’t occur to us that people in other countries don’t even think about money when illness or injury strikes. Many of us seem to subscribe to a unique ideology — rejected by most cultures — that health care must be “earned,” no matter how much or how little control a person has over their health status. Many are put off by the idea of accepting any government assistance, often known as “being on the “dole.”

Greed. This may seem harsh, but the evidence is piling up. The widely accepted view of health care as just another business is uniquely American, at least in degree. Some people view the health care system as a way to prevent, diagnose, treat and cure disease and assist in healing. Others view it as a business opportunity. These two differing views frequently are in conflict. The medical-industrial complex in the U.S. is an enormously profitable industry. Those putting profits above appropriate and effective health care would like to continue to be able to do so, and they use their wealth and the influence it buys in our corrupt political system to make sure they can.

Some believe the American health care system has become more of a wealth-extraction machine — from people who buy health care products and services to those who sell them — than a system concerned with health and well-being. This view is reinforced by recent news stories about the seemingly opportunistic and predatory pricing of critical medicines, nursing homes taking legal custody of elderly patients as a means of getting control of their bank accounts and aggressive collection tactics that include garnishing the wages of low-income workers, even by “nonprofit” hospitals.

A recent report by the charity Oxfam revealed that the health care and financial services industries are the largest contributors to increasing income and wealth inequality throughout the world.

These barriers to reform can and are being exploited by those with a financial or ideological interest in maintaining the status quo. If you wonder why health care reform in the U.S. is so difficult, just remember AFIG: apathy; fear, distrust and anger; ignorance and ideology; and greed.

To succeed in reforming our dysfunctional health care system, we must continue to motivate the apathetic, reassure the fearful, educate the ignorant and call out the greedy. We have a lot of work to do.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net.

http://bangordailynews.com/2015/02/19/health/blogs-and-columns/greed-fear-and-other-roadblocks-to-health-care-reform/?ref=HealthBox

Let’s wise up on the costs of health care

By Rod Watson
The Buffalo News, Feb. 18, 2015

The spat between doctors and a health insurer over which anti-addiction drug patients can get raises again the fundamental health care question Americans answer one way, and the rest of the world answers another: Whom do you trust?

While the rest of the industrialized world puts its faith in the single-payer system, and spends much less as a result, we spend 50 percent more while relying on insurers and not even insuring everyone.

Not that disputes like the one over Independent Health’s switch to a cheaper drug – which it says works just as well with fewer risks – would disappear under single-payer.

Under the model pushed by Physicians for a National Health Program, there would still be restrictions to curb unneeded costs. But instead of doctors versus insurance companies, it would be doctors versus the government, said Dr. Robert Milch, retired medical director at Hospice Buffalo and part of the local PNHP chapter.

That model would not be “socialized medicine,” in which doctors work for the government. It would be more like Medicare, in which the government simply pays the bill for care provided by private-sector doctors.

There would still be cost constraints, said Milch. There also might still be some insurers to cover care beyond a certain baseline, such as cosmetic surgery, said Dr. Kathleen Grimm, who heads the local PNHP chapter.

The difference? Patients wouldn’t have to worry about whether profits to fuel executive salaries, new facilities and a medical-equipment arms race were the motive behind medical decisions.

Peer review, global budgets and similar mechanisms would hold down costs while eliminating a huge layer of bureaucracy that eats up dollars while not performing a single medical procedure. That bureaucracy is why we spend nearly 18 percent of gross domestic product on health care, while our competitor nations spend less than 12 percent.

And what do we get for all that extra spending?

In a Commonwealth Fund ranking of 11 industrialized nations, the United States was dead last when it came to access, quality and cost. In a similar World Health Organization analysis, the U.S. ranked 37th, well below competitor nations.

Single-payer would give us less fragmented, more streamlined care, with the government using its clout to hold down prices and put money into direct care rather than bureaucracy, Grimm said. It would make health care a “public good,” similar to police and fire protection.

“We don’t have health insurance in that way, but we could,” she said.

We could, once we get past the fearmongering over “government takeover,” “socialized medicine” and “rationing,” which already exists based on economics but is rarely acknowledged.

Insurance companies talk about “evidence-based” medicine to justify decisions. But the evidence is clear that we’re not benefiting from a system in which prior-approval reviewers, lobbyists, CEOs and others standing between patients and doctors skim off nearly a third of all health care dollars while administering no care. The evidence shows we spend far more to get far less than countries relying on single-payer.

Using the industry’s own rationale, it’s time to change prescriptions.

Rod Watson is the News Urban Affairs Editor at The Buffalo News. He can be reached at rwatson@buffnews.com.

http://www.buffalonews.com/columns/rod-watson/lets-wise-up-on-the-costs-of-health-care-20150218

Student activism for single payer

Report Back from the 4th Annual Students for a National Health Program (SNaHP) Summit

The 4th annual SNaHP summit took place on Saturday, February 14, 2015, on the medical campus of the University of Illinois-Chicago. More than 170 medical and health professional students from over 50 schools gathered to discuss single payer, develop their activism and advocacy skills, and create a national strategy for achieving Medicare for All. There were students from states that had never been represented before including, among others, Alabama, Florida, Tennessee, and North Carolina. The fact that so many students, more than double the number that attended the prior year, flocked to Chicago on Valentine’s Day is a testament to the growing commitment of health professional students to achieving equitable and universal access to health care. Click on the link below to view presentations and photos from the conference. 

https://www.pnhp.org/student-summit

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Guest Comment: 

By Scott Goldberg, MS3 

I had the honor of delivering the opening address – entitled “Where We’ve Been and Why We’ll Win – at the 4th annual SNaHP summit. The talk focused on the century-long struggle for national health insurance, what we can learn from these efforts, and why students are well-positioned to spark a broad, social movement for single payer. Here is an excerpt from the speech:

“Now, I’m not disillusioned by the 100-plus year history of failing to achieve national health insurance. In fact, there are important lessons that can inform our efforts and that give me hope that we will be successful where those before us were not.

First, the AMA has opposed single payer since 1917. But while the AMA could honestly say it represented the voice of doctors, it no longer can. Only about 20 percent of physicians are members. This provides an opening, for another physician organization to step into the void that speaks on behalf of what is just and right for patients. You may see where I’m going with this – but this is where Physicians for a National Health Program comes in. PNHP is the only physician organization dedicated to the sole purpose of transforming American health care by passing NHI. And the organization can only grow. If there are 800,000 active doctors in this country, then about 2.5% of them are members of PNHP. This means we, as students and future doctors, have a lot of work to do to get our colleagues to sign up. We should be doing this on a daily basis. Think about all the time you spend with fellow students, residents and even attendings. Think about how many times the issue of insurance comes up and you want to scream out: “If we had single payer, this would not be an issue!” Now, every time that thought comes to mind, do something about it. Mention single payer and encourage those around you to sign up for PNHP. These conversations are not, at the core, political. They are essential to the foundations of our profession, and we must normalize them. I want you to recruit at least one new colleague to PNHP each month. It’s a modest ask, but if everyone here does it we’ll have nearly 2,000 new members in a year. Then, we can start to envision a future where PNHP will usurp the AMA as the organization that speaks on behalf of doctors.

While the AMA might have been a major barrier to NHI in the 20th century, our biggest barriers now are private health insurance companies and Big Pharma. You all know that we are facing one of the most well-financed and formidable opponents in American history. Both have fought tooth and nail against single payer with their army of lobbyists and have contributed heavily to candidates for public office to protect their position and maximize their profits. It is no secret that they spent $173 million to defeat the public option, which amounted to about a million dollars a day during the debate over health reform. So when we talk about single payer, we must talk about the massive profits reaped at the expense of patient care. The neoliberal corporate agenda has infiltrated health care and we must vigilantly fight back against the idea that health care is a commodity and, instead, declare that health care is a public good that all Americans, regardless of race or class, should have access to.

But I am not discouraged by our well-resourced foes for three reasons. One, their arsenal of smear tactics is dwindling. The fear of “socialized medicine” is waning. Communism coming to America is an outdated notion. Two, these companies are universally despised. A recent poll demonstrated that almost all Americans believe that private insurance companies are the biggest problem in our system. So there’s our message right there – we must get rid of private insurance companies to have real health reform. Three, ultimately, the system cannot function without us. If we remain silent, we will only allow these companies to continue to reap massive benefits at the expense of our patients and our professional code of ethics. If we, as health care providers, are united in opposition, we will not be defeated.

You may believe that after 100 years of struggle we will never achieve single payer. But let me tell you why we will win and what we have to do to get there.

I want you to look around you. Our movement is growing exponentially. There are now 35 student PNHP chapters, with 10 new ones in the last year alone. There are 19,602 PNHP members, 731 of whom are students. The second SNaHP summit had 40 students, the third had 80, and the fourth has 160. I emphasize this growth because, historically, students have been the stimulus and source for broader activism. Just recently in Chile, following three years of nationwide student protests, the country will make college tuition-free and are paying for it with a 27% tax on corporations. Look at the civil rights movement in the US. It was the Student Nonviolent Coordinating Committee (SNCC) that spearheaded the civil rights movement. The Freedom Riders, not all, but the majority were young people and students. Over time, it grew and became a mass popular movement and achieved historic things. We don’t know the names of the leaders of SNCC, but that is the point with movements. We know the name of Martin Luther King Jr, but who do you think organized the marches, the talks, the sit-ins? Members of SNCC did. They did the heavy lifting of organizing, going door to door, and putting their lives on the line. Our movement does not need a figurehead. It needs unified direct action.

As Noam Chomsky has said: ‘Direct action carries the message forward in a very dramatic fashion. Direct action means putting yourself on the line. It indicates a depth of commitment and clarification of the issues, which often stirs other people to do something.’ Achieving single payer will require resistance and civil disobedience. All the great movements in history have. Look again at the civil rights movement. Institutional segregation had been going on for hundreds of years, but what sparked the movement? A couple of incidents of direct action. Rosa Parks insisting on sitting in the front of the bus. Black students sitting at a lunch counter in Greensboro. Without these actions, the movement would probably never have happened. You can make as many speeches as you like but they will never have the effect of those actions. And while the movement started with students, it became broad-based and diverse. Just like the movement for single payer, we must reach out to and build ties with labor unions (over 600 have already endorsed HR 676), civic and faith-based movements, and even small businesses. While businesses may seem like natural allies of the private insurance companies, many of them feel the strain of paying to insure their employees and would clearly benefit from government-run health insurance.

In closing, Americans are literally dying for equitable, universal health care access. And so I know that deep down you feel, as I do, that the time has come for direct action. The question is – when do we get started? Here’s one idea – Medicare’s 50th birthday is coming up and a nationwide coordinated action would be a powerful first step.

When I talk to people about single payer, I often hear: “Oh yeah, I support single payer but it will never happen in this country.” I tell them that people once thought the abolition of slavery and women’s suffrage could never be won – that these were “unrealistic” dreams. And yet both of these “unrealistic” dreams were ultimately won. While moderates were advocating for incremental change, the activists pushed for revolutionary change and were successful. What seemed impossible yesterday is something we accept as a given today. So next time someone says single payer will never happen, tell them this: “If you believe it won’t happen, it never will. But if you believe that the only way it will happen is to actually do something about it, then I am sure you will make the only choice that a moral and principled person would, and that is to join me in this struggle.”

Thank you.”

Scott Goldberg is a medical student at the University of Chicago Pritzker School of Medicine and a member of the board of directors of Physicians for a National Health Program.

Cost of PCSK9 Inhibitors, and the president’s Precision Medicine Initiative

In The Debate About Cost And Efficacy, PCSK9 Inhibitors May Be The Biggest Challenge Yet

By William Shrank, Alan Lotvin, Surya Singh, and Troyen Brennan
Health Affairs Blog, February 17, 2015

Health care reform is intended to lower costs, but they are still rising, albeit less steeply than in the past. Moderation is not however the case in the area of specialty pharmacy. The medications to treat Hepatitis C are the most cited examples of a general inflationary trend, but the pipeline of expensive medications is extensive.

Yet, policymakers and payers appear unwilling to undertake significant cost controls on medication pricing. Indeed the controversy over the $84,000 price tag for Sovaldi (sofosbuvir) has largely faded, suggesting a certain resiliency in our system’s ability to absorb costs.

We believe that resiliency is about to be challenged in a manner unlike we have seen in the past, at least in the area of pharmaceuticals. A number of pharmaceutical manufacturers are developing a new class of medication to manage high cholesterol — the PCSK9 (proprotein convertase subtilisin/kexin 9) enzyme inhibitors.

The PCSK9 inhibitors will be specialty medications and likely priced as such. While we will not know exact pricing until the first generation of these medications is approved for use by the Food and Drug Administration sometime in mid-2015, estimates of annual pricing for these injectable drugs are in the range of $7,000 – $12,000. Given the number of people potentially eligible for treatment with the PCSK9 inhibitors will number in the millions, the potential overall expenditures by payers are huge.

As this is chronic therapy, PCSK9 sales could be expected to persist and grow over time, and will likely be the highest selling class of medications in history. Plus, as a biologic agent, there will not be a simple pathway to cheaper generics in a 10-15 year timeframe. Even in a system that costs $4 trillion per year, a single therapy adding $100-200 billion in costs annually is extraordinary.

Managed pharmacy care, indeed the health care system, has never seen a challenge like this to our resilience in absorbing costs. Payors, the employers, and health insurers, will first be shocked, then expect action. Action will take the form of compliance with clinical guidelines, and careful managed care oversight.

But in addition, perhaps the costs of PCSK9 inhibitors will push us to develop some consensus about the pricing of new specialty medications, as part of a more thoughtful discussion about the use of scarce resources on behalf of patients.

(The authors are from CVS Caremark and CVS Health.)

http://healthaffairs.org/blog/2015/02/17/in-the-debate-about-cost-and-efficacy-pcsk9-inhibitors-may-be-the-biggest-challenge-yet/

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President Obama’s Precision Medicine Initiative

The White House, January 30, 2015

Building on President Obama’s announcement in his State of the Union Address, today the Administration is unveiling details about the Precision Medicine Initiative, a bold new research effort to revolutionize how we improve health and treat disease.  Launched with a $215 million investment in the President’s 2016 Budget, the Precision Medicine Initiative will pioneer a new model of patient-powered research that promises to accelerate biomedical discoveries and provide clinicians with new tools, knowledge, and therapies to select which treatments will work best for which patients.

Public-private partnerships:

The Obama Administration will forge strong partnerships with existing research cohorts, patient groups, and the private sector to develop the infrastructure that will be needed to expand cancer genomics, and to launch a voluntary million-person cohort.  The Administration will call on academic medical centers, researchers, foundations, privacy experts, medical ethicists, and medical product innovators to lay the foundation for this effort, including developing new approaches to patient participation and empowerment.

http://www.whitehouse.gov/the-press-office/2015/01/30/fact-sheet-president-obama-s-precision-medicine-initiative

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Comment:

By Don McCanne, MD

In the United States, innovation and research in health care have been well rewarded… too well rewarded. The hepatitis C drugs, and now the PCSK9 inhibitors for high cholesterol are cases in point.

Our obsession with letting the market perform its miracles has led to a culture in which we accept and even expect the medical entrepreneurs to be rewarded with the maximum prices that the market will bear. In fact, prices have been pushed up well beyond what any normal functioning market would bear simply because the new products are able to bury their prices in the risk pools established by the private insurers and the pharmacy benefit managers.

Prices are so outrageous that now even the pharmacy benefit managers are complaining, as in the article by Shrank, et al. It is interesting that they suggest, as a solution, “careful managed care oversight.” Yet it is the intermediary “care managers” that have permitted this outrage. Besides, the private insurers are using these high prices to their advantage by placing these drugs in tiers that shift much of the costs to patients, thereby chasing away patients that would have higher health care costs.

President Obama’s Precision Medicine Initiative, as proposed, should have us all concerned. He calls for public-private partnerships that include medical product innovators. You can be assured that these biomedical innovators have already plotted to share in this lucrative market, knowing that their products will be introduced with prices in the stratosphere after they complete the nuisance stage of developing the products for the market. 

The government already plays a role in taxpayer financed research. The public has a vested interest in these products and the government should be protecting our interest. When markets go awry it is the government that has the responsibility to step in and right the wrongs. Since the private insurers and pharmacy benefit managers have served us so poorly, we should replace them with our own public program – a single payer national health program. That would end our culture of developing new products that have outrageously high prices built in as an essential component.