PNHP leaders Drs. Steffie Woolhandler, David Himmelstein, and Adam Gaffney joined other public health luminaries on May 8, 2018 to discuss “The Trump Administration and the Health of the Public.” This daylong symposium was hosted by the Boston University School of Public Health, and cosponsored by the newly formed Lancet Commission on Public Policy and Health in the Trump Era. Click here for more details.
Merging insurers with the health care delivery system
Partners HealthCare, Harvard Pilgrim discussing possible merger
By Priyanka Dayal McCluskey
The Boston Globe, May 4, 2018
Hospital giant Partners HealthCare, looking to fortify its position in the rapidly changing health care market, is in potential merger negotiations with Harvard Pilgrim Health Care, one of the state’s largest medical insurers.
Executives from Partners, Massachusetts’ largest network of doctors and hospitals, and Harvard Pilgrim have been talking for several months, officials from both companies confirmed Friday in response to inquiries from the Globe. They are discussing a range of options, including an acquisition of Harvard Pilgrim by Partners.
The talks are taking place at a time of heightened deal-making in health care across the country, as hospitals, physician groups, insurers, and other companies pursue new strategies to manage costs and patient care. In Massachusetts, Beth Israel Deaconess Medical Center and Lahey Health are planning a big hospital merger to more aggressively compete with Partners.
Boston-based Partners is the parent company of Massachusetts General, Brigham and Women’s, and several other hospitals. Its expansion plans have been scrutinized in the past because the company is the most dominant health care provider in Massachusetts, and among the most expensive. Partners acquired specialty hospital Massachusetts Eye and Ear this year, and it’s negotiating a takeover of Care New England Health System in Rhode Island.
“Partners HealthCare is constantly exploring new partnerships and relationships with other providers and insurers with the goal of improving the delivery of health care to patients both locally and around the world,” Partners spokesman Rich Copp said. “Harvard Pilgrim is certainly among those organizations.”
“We’re looking at what we could do differently that brings value to our marketplace,” Harvard Pilgrim’s chief executive, Eric H. Schultz, said in an interview.
The US health care industry is in a time of rapid deal-making, with companies trying to cut costs by owning more pieces of the health care pie. CVS Health and the insurer Aetna have been working on a deal, for example.
In recent years, the lines between health care providers and health insurers have blurred.
Among the uncertainties around the combination of Partners and Harvard Pilgrim is what would happen to Partners’ existing insurance business, Neighborhood Health Plan.
Partners acquired Neighborhood in 2012. But instead of boosting Partners’ bottom line, Neighborhood — which traditionally focused on low-income individuals on Medicaid — contributed to historic financial losses at Partners.
Neighborhood shed many of its low-income members and worked aggressively to sell insurance to employers. But with about 142,000 members, it remains a small player compared with the state’s big three insurers: Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim, and Tufts Health Plan.
https://www.bostonglobe.com…
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Comment:
By Don McCanne, M.D.
The potential merger between Partners HealthCare and Harvard Pilgrim Health Care is not just another routine merger and acquisition activity, but it is one occurring at the heart of the U.S. health care system – Massachusetts General Hospital being one of the oldest and most prestigious hospitals in the nation.
It is distressing to see multiple hospitals and physicians merge to gain market advantage, but it is even more disturbing when an integrated health care delivery system is merging with one of the state’s largest insurers. The implication that this is to serve the patients better is belied by the fact that Partners’ previous acquisition of a smaller insurer – Neighborhood – was followed by the shedding of its low-income members as it aggressively marketed itself to the more lucrative employer-sponsored insurance market.
Under a well designed single payer national health program, supposedly we would eliminate the private insurers and switch to a publicly-administered pre-paid health program. But what happens when the private insurers become an integral part of the actual health care delivery system? As is there weren’t enough problems already, obviously that would make implementation of a single payer system that much more difficult.
We’ve spent eight years talking about improving Obamacare by the feeble act of adding a public option, perhaps as a Medicare buy-in, when right under our noses this M&A activity has been taking place. They are building a health care delivery system that will be unassailable by social insurance programs. Are we going to wait until the only solution to bringing health care justice to all will be to nationalize our health care delivery system? How feasible is that?
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Docs talk single-payer at forum
Group wants to remove barriers to health care
By Ashley Sloboda
The (Fort Wayne, Ind.) Journal Gazette, May 7, 2018
Dr. Jon Walker didn’t pressure his audience of about two dozen Sunday to agree with his case for a single-payer health care system, also known as Medicare for all.
“You don’t have to accept this,” he said.
He did, however, encourage those at the Allen County Public Library meeting room to research the topic. He and others said they want the single-payer model to be considered.
“What we want is a discussion,” said Dr. Alison Case, who joined Walker as a panelist during a forum sponsored by Hoosiers for a Commonsense Health Plan.
The group is the Indiana affiliate of Physicians for a National Health Program, a nonprofit research and education organization of 19,000 physicians, medical students and health professionals who support single-payer national health insurance.
Under a single-payer system, a single public or quasi-public agency organizes health care financing, but the delivery of care remains largely in private hands, according to the national nonprofit. The organization expects benefits would include the elimination of financial barriers to care, such as deductibles.
All were welcome at Sunday’s forum, but many attendees indicated they work in health care.
Multiple speakers said the existing system is too expensive and, among other problems, leaves many underinsured or uninsured, resulting in people suffering and dying from illnesses they shouldn’t be suffering or dying from.
“This is a loss to our entire nation,” said Elaine Fazzaro, a retired registered nurse involved with Hoosiers for a Commonsense Health Plan.
As a physician, Case said, it’s frustrating that costs prevent patients from following treatment plans, such as people with diabetes not taking insulin because it’s unaffordable.
Panelist Dr. Tom Hayhurst recalled a 41-year-old man whose economic gamble cost him his life. Instead of immediately seeking medical treatment, financial reasons prompted the married father to wait until his temperature reached 104 degrees and he was gasping for air. By then, doctors couldn’t cure his pneumonia, Hayhurst said, calling the man’s death preventable.
Some attendees doubted the country will implement a single-payer system.
“Don’t give up. Let’s go to Washington,” Edith Kenna of the state organization said to a skeptical attendee.
Fazzaro agreed that it’s important to put pressure on lawmakers.
“Our politicians get so much influence from the…corporate side of it,” she said. “We have to have people understand what a single-payer health care plan would be.”
http://www.journalgazette.net…
There is a better way to deliver health care
By Herbert Keyser, M.D.
San Antonio Express News, May 5, 2018
About 20 years ago, I accepted a position to be the backup obstetrician for nine well-trained midwives in a large medical center.
The institution had decided that all deliveries would be done by them unless complications ensued. Under those circumstances I would be called upon to either assist in the management or take over the case.
It was a wonderful and gratifying experience. I learned a new way of looking at normal birth, based on constant supportive care during labor and delivery. The results were more than phenomenal. A national publication wrote an article describing our results as some of the best in the country.
I wanted to understand why that should be.
It wasn’t that we were smarter than all the physicians in facilities where all the babies were delivered by obstetricians. We were doing the same proportion of complicated cases as seen elsewhere. There had to be another answer.
Soon it became apparent to me.
When cases became complicated, I did the interventionist procedures that were required. But without complications the midwives spent long hours with these patients. That allowed these mothers to accomplish normal uncomplicated vaginal deliveries.
In the world of physician-delivered newborns, other factors intervened. Rarely did an obstetrician sit for hours with a patient in labor. Office hours and surgery all took time.
Commonly, physicians do not appear until the point of delivery. The earlier stages are managed by a labor room nurse who frequently has multiple patients in labor.
The explanation was simple.
The presence, uninterrupted, of a supporting person made all the difference. Without pressures to end the labor, do an unnecessary cesarean section, or intervene in any way, women had their babies with fewer complications and better results.
This year, my wife had a serious medical problem. I decided to seek help from the famed Mayo Clinic. Their national statistics are the top in American medicine. However, the reason for this superiority is a conundrum. There are great physicians all over this country.
So, why is the Mayo Clinic overwhelmingly evaluated as being at the top?
From the moment we arrived, I was impressed by the efficiency of this organization. It took several days to understand what made the difference. It was not dissimilar from my experience with the midwives.
Today’s private-practicing, fee-for-service physician knows that to make the practice work, it is necessary to turn over a great number of patients. Expenses have soared, with malpractice, office rental and labor costs constantly increasing, only a large volume of patients can sustain the economic forces.
That is not the world of the Mayo Clinic.
Every physician spent a great deal of time with us, frequently over an hour.
The answer was quite simple. There is no fee for service. There is no bonus system for productivity. Everyone is on a fixed salary, which varies by specialty and longevity. The average salary is less than in some parts of the country, but is not terrible — at just under $300,000 per year.
Every physician can refer any patient to another physician in every area of medicine to rule out other possible causes of an illness, with no pressure to produce, just the need to care for patients.
If Mayo can do that, why can’t everyone?
We are told “we can’t afford a single-payer system.” The real truth is that we spend so much per person for health care, that just spending the same amount in a single-payer system we can provide better care than any of the other countries of the world and care for everyone, not just three-fourths of our population.
Some will be unhappy.
The insurance industry will not be pleased.
The pharmaceutical industry will have to be content with reasonable rather than exorbitant profits.
The physicians who charge huge fees will have to be paid less, although physicians in general will be quite well compensated.
Then the Mayo Clinic will be just one of many places providing the highest quality care.
Spending quality time with each and every patient can be a wonderful benefit in finding our way out of the disgraceful health care system that this country maintains.
The political pressure exerted by all the forces previously mentioned that profit from our present system must somehow be overcome.
Americans really can have the kind of health care they pay for and deserve.
Dr. Herbert H. Keyser of San Antonio was the co-director of the Department of Obstetrics and Gynecology for one of the largest hospitals in Long Island, New York, for eight years, served as a lieutenant colonel in the United States Army Medical Corps, and for the last 25 years delivered babies primarily in poverty areas, Indian reservations and in locations of migrant workers.
Beware the disruptors and their wellness-industrial complex!
The New Health Economy in the age of disruption: Novel combinations attempt to remake the health system
PwC Health Research Institute, April 2018
The last six months have seen an explosion in unusual deals with the potential to reshape the US health ecosystem. CVS Health announced its intention to purchase Aetna for $69 billion. Cigna Corp. has announced an agreement to buy Express Scripts Holding Co. for $67 billion. UnitedHealth Group’s Optum purchased DaVita Medical Group for $4.9 billion. Albertsons Cos. has agreed to merge with Rite Aid Corp. Other high-profile and novel healthcare deals have been floated in the press. Several unusual partnerships also have been announced, including one among Amazon, JPMorgan Chase & Co. and Berkshire Hathaway Inc.
And these are just the largest and most recent deals and partnerships. In 2017, 967 deals occurred in the US health services market, including healthcare payers and providers. Deal value increased 146 percent over 2016. The US health industry is undergoing seismic change generated by a collision of forces, including the shift from volume to value, rising consumerism and the decentralization of care. This shifting terrain is creating uneven opportunities in the New Health Economy and will likely drive players new and established to reconsider their business models and strike the sorts of deals announced in the past six months. Some will be driven to seek returns in new markets as their core revenues shrink. Others will find success creating value for other players, including consumers. Still others will thrive by building infrastructure for the emerging virtual health system.
The US health system is starting to reorganize to obtain more favorable pricing and reimbursements. Companies are building capabilities to cut costs and meet customer needs in more convenient and transparent ways. Companies with capabilities across vast swaths of the health ecosystem are emerging, offering consumers one-stop shops for care, treatments, financing and risk management, wellness products and services—and in the case of retailers, toys, milk and wireless speakers.
The New Archetypes:
* Vertical Integrators
Companies such as CVS Health and Aetna, UnitedHealth Group’s Optum and DaVita Medical Group, and Cigna Corp. and Express Scripts Holding Co. have announced mergers or acquisitions to offer millions of consumers access to a broad array of cost-efficient, integrated, transparent services and products. They are doing this, in part, by absorbing some of the industry’s middlemen and vertically integrating parts of the US health ecosystem. “In a value-based environment, the more pieces of the supply chain that you can influence, the more you can impact utilization and cost, driving a win-win across providers, payers and patients,” said Jane Sarasohn-Kahn, a healthcare economist and founder of the group THINK-Health.
Companies also need a wider, data-driven view to develop new ways to cut waste and improve outcomes at lower costs. Vertical Integrators can, in theory, pull together many sources of key consumer data, allowing that broader vision to come into focus. “Data is really key to integration efforts,” said Eric Topol, founder and director of the Scripps Translational Science Institute.
* Employer Activists
Employer Activists are banding together to find ways to cut their employees’ healthcare costs. In February 2016, 20 US companies formed the Health Transformation Alliance (HTA), which has since worked on developing tools for its members to cut employee healthcare costs. In January 2018, Amazon, JPMorgan Chase & Co. and Berkshire Hathaway Inc. announced they would partner to form an independent company to lower healthcare costs and improve satisfaction for their employees by addressing healthcare quality and transparency.
Employers have, of course, long worked to reduce the amount they spend on health benefits. They have shifted premium costs to employees, raised deductibles and other cost-sharing, narrowed choices of in-network providers, experimented with reference pricing, launched pricing transparency tools to help employees and their families make price-conscious choices, and used formulary decisions and pre-authorizations to curb use of higher-priced therapeutics.
These strategies have had an impact. Utilization has been mostly flat for the last decade. Medical price, however, has risen 3-6 percent each year and remains an important medical cost trend driver.
* Technology Invaders
Technology Invaders have been trying to disrupt the US health industry for almost a decade. In 2013, HRI found, 76 percent of the Fortune 50 were engaged in the healthcare industry; several were technology companies aiming to use their digital prowess, pragmatism and consumer savvy to develop better ways to deliver, pay for and access care. In 2018, a slightly higher percentage of the Fortune 50 is involved with health, with about the same number of tech companies.
These Technology Invaders are gaining traction. Besides being an Employer Activist, Amazon has quietly started selling private-label over-the-counter medical products, from hair growth formula to allergy medicine. It also started offering Medicaid recipients discounted access to its Prime subscription service.
Apple’s newest operating system allows users to access parts of their EHRs on their phones; the company has partnered with more than three dozen hospitals for its Apple Health Records platform.
While Technology Invaders have the capability to disrupt, they likely will need partnerships with existing healthcare companies to actually do so.
* Health retailers
Health Retailers such as CVS Health, Walgreens Boots Alliance, Walmart, Albertsons Cos. and others use their vast network of store locations, troves of consumer insights, national and global supply chains and national (and sometimes global) branding to attract consumers looking for affordable, convenient care and goods in a system known for its lack of affordability and convenience. Over the past five years, consumers have consistently told HRI that they are open to receiving a wide range of services in retail settings, from wound care to MRIs.
Health Retailers are expanding in size and adding to their health offerings. The Albertsons-Rite Aid deal would give the chain 4,350 pharmacy counters in 4,900 stores and an additional 320 medical clinics, according to the companies. They said they expected the combination of its retail locations and healthcare offerings to drive financial growth. “This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers’ evolving food, health, and wellness needs,” said John Standley, Rite Aid chairman and CEO.
Health Retailers have an opportunity to use their consumer financial savvy to bring patients into the fold and keep them coming back, using reward programs and other strategies. For example, companies can offer consumers incentives to obtain care at a clinic, or offer subscription-type services to keep consumers coming back on a regular basis.
What comes next?
Dramatic change has been predicted for the US health system for many years. Finally, the industry is seeing the emergence of fundamentally new models: Vertical Integrators, Employer Activists, Technology Invaders and Health Retailers. Whether they will succeed in disrupting the health system, which has stubbornly resisted significant change, remains unknown. But they may find the environment more amenable to change than ever before, as healthcare costs are increasingly borne by consumers and pressure to pay for value instead of volume increases.
Companies may find success in these models, but they are unlikely to be bound by them. In fact, companies that are able to blend various archetypes may be positioned best to win in an evolving environment. At a minimum, companies should consider how they fit in this new environment and how they can succeed in their particular space. Consolidation and integration may put new pressures on existing healthcare organizations like pharmaceutical manufacturers, but they also might open up new opportunities, such as partnerships between providers and Health Retailers.
Players new and traditional come at the shifting landscape from very different directions, but there are resilient moves all healthcare companies should consider making:
* Invest in customer experience.
Consumers’ views on health can change rapidly. Many consumers are ready for healthcare to mirror other parts of their lives in terms of convenience, choice and the presence of affordable options with predictable pricing. Vertical Integrators, Technology Invaders and Health Retailers all have a leg up on many established health players in understanding consumers and tailoring experiences for them.
* Plan for a broader workforce.
These new business models possess capabilities that are minimally present in established health players. The new models may have armies of workers coding, working on AI, analyzing data, prototyping new services and products, and focusing on customer experiences. These new companies also may have staff from traditional players with deep knowledge of the health industry. Health companies competing in this new world should plan for a much broader workforce. And they should be prepared to pay for them—the rest of the global economy is seeking these capabilities too.
* Focus on price.
Employers, the government and other players largely have focused on utilization over the past decade. Price is the next frontier. Vertical Integrators, Employer Activists, Technology Invaders and Health Retailers are positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain. Consumers, employers and the federal government are seeking relief on price and likely will reward companies able to significantly cut them without downgrading quality.
***
Comment:
By Don McCanne, M.D.
Arnold Relman warned us about the medical-industrial complex, but it is likely that even he did not realize how intense would be the disruptive innovation in health care that is beginning to take place.
What we are about to see is a takeover by the disruptors who “have a leg up on many established health players in understanding consumers and tailoring experiences for them.”
“This new world should plan for a much broader workforce (of disruptors), and they should be prepared to pay for them.”
The disruptors “are positioned to address price through greater scale, ownership of middlemen and a wider grip on the US health system value chain.”
It is almost as if the physicians, nurses and other health care professionals and the hospitals and clinics in which they provide their services have become a peripheral, albeit necessary, appendage to their wellness-industrial complex that is displacing our traditional health care delivery system and its more recent iteration of the medical-industrial complex – all for power and profit.
I remember when California enacted legislation that allowed the insurers to contract directly with the health care providers. I warned my friends about what this meant. “That can’t happen,” they said, and they hardly turned around when the managed care revolution was upon us.
Well, you say, this is different. It can’t happen. But it has already begun, and before you can turn around… well, you know.
Once the transformation is well along, imagine trying to implement a single payer, improved Medicare for all. It is likely that traditional Medicare will have been displaced by future iterations of Medicare Advantage plans, and so it would no longer serve as a model for reform. Once the silos of the health care delivery system are flattened, how will health care services be financed? Will there still be networks? Cost sharing barriers such as high deductibles? Will it be possible to fund this expansive model of the wellness-industrial complex through anything remotely resembling an insurance product, especially when the insurers are being amalgamated into what was formerly the health care delivery system? And now that the plutocracy is in control, how could we ever remove the passive investors that extract humongous rents through the wellness-industrial complex? And what about the patients? Did we forget about them?
The acutely ill, the injured, and those with chronic diseases will always be with us. The demand for decent health care will always be there. But the longer we wait to enact a truly universal, accessible, equitable and affordable health care system, the more difficult it will be. As an example, just think of how difficult it is to inform the public that they are getting a very bad deal when they support private Medicare Advantage plans. Compound that difficulty with the massive disruptions that are about to be foisted upon us by the New Health Economy that PwC describes in this report. The disruptors really understand marketing.
And, by the way, a Medicare buy-in public option won’t do it. It will only give the disruptors more time to fortify their New Health Economy. We must change our course today (yesterday, except that we can’t recover time already lost).
A single-payer national health program, aka an improved Medicare for all. Nothing less. Pull all stops today!
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The fiscal conservative case for universal health care
Interview with Dr. Ed Weisbart
WCHL The Hill (Chapel Hill, N.C.), May 3, 2018
PNHP-MO chair Dr. Ed Weisbart outlines the conservative case for improved Medicare for all, noting that it would save money and be much more efficient than our current multi-payer system. He also previews his May 3, 2018 lecture and discussion at the United Church of Chapel Hill, hosted by local PNHP chapter Health Care for All, Y’All.
ACOs are likely to leave the Medicare Shared Savings Program
National Association of ACOs, Press Release, May 2, 2018
Today, the National Association of ACOs (NAACOS) released results from a survey about assuming risk and future participation plans for Medicare Shared Savings Program (MSSP) Track 1 ACOs. The web-based survey was conducted in April 2018 and survey links were emailed to Track 1 ACOs entering their third agreement periods in 2019. NAACOS specifically reached out to the 82 ACOs that began the MSSP in 2012 or 2013 and remain in Track 1 in 2018, thus they are required to move to a two-sided ACO model in their third agreement period beginning in 2019. The goal of the survey was to better understand what ACOs are planning in the face of these requirements and how they feel about risk. While we are pleased that 43 percent of these Track 1 ACOs responded to the survey, we are troubled by the results which illustrate NAACOS’s long-standing concerns about forcing ACOs into risk-based contracts.
Results from a key survey question show that 71 percent of ACO respondents indicated they are likely to leave the MSSP as a result of having to assume risk.
NAACOS encourages ACOs to prepare to move to risk and strongly supports ACOs that are ready to do so, but we do not support forcing ACOs to assume risk if they are not ready. Clif Gaus, President and CEO of NAACOS, comments on the survey results, “These results paint a bleak future of what will happen if the government keeps its mandate to push ACOs into risk. It’s naïve to think ACOs that aren’t ready will be forced into risk in what is ultimately a voluntary program. The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value. This would be a real setback for Medicare payment reform efforts.”
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Comment:
By Don McCanne, M.D.
Accountable care organizations (ACOs) are the mainstay of CMS’s strategy to move health care financing away from paying for volume to paying for value instead. ACOs enter the Medicare Shared Savings Program (MSSP) through Track 1 in which they have the upside of being rewarded with a portion of any savings they can generate. But ACOs are required to move into a two-sided model in which they must also bear the downside risk of losses. In this survey, 71 percent of the ACO respondents indicated that they are likely to leave the MSSP if they are required to assume that downside risk.
Although the concept is that ACOs must demonstrate accountability for improving quality and reducing costs, the actual application of the concept demonstrates that it is really primarily about the latter – reducing costs. That is why CMS requires transition to the two-sided model with downside risk. They want to reduce federal spending. Yet the ACOs recognize that the model is so flawed because of their potential exposure to losses that they would rather abandon the program than to risk those losses.
This really should make the policy community and bureaucrats think about whether the ACO experiment should even be continued. If policy changes are made to give greater assurance to the ACOs that they will be profitable, then the whole idea of cost accountability tanks.
In fact, the concept that you can assign value to care while ignoring volume is fundamentally flawed. The delivery of health care requires a certain volume of services that have overhead costs. Paying based on a paucity of quality measurements and on patient satisfaction surveys ignores the cost of the resources that are required to deliver care.
It would be far better to design a system that improves allocation of those resources. Of course, that is what a well designed single payer national health program does. Let’s quit wasting our efforts and funds on the failed ACO model and move on with providing what we really need – an improved Medicare for all. That’s where the real value is.
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Making Medicare prices universal as an isolated policy for reform
The Case for Single-Price Health Care
By Paul S. Hewitt and Phillip Longman
Washington Monthly, April/May/June 2018
Excerpts
Obamacare has taken a licking but keeps on ticking. But while progress has been made on expanding access, another problem keeps getting worse: the soaring cost of health care for those who get their insurance through their employers. For these folks—who make up the majority of middle-class, working-age Americans—the ever-rising costs of premiums, deductibles, and co-pays has turned into a full-blown crisis.
Take a median-income family of four whose members are covered by a standard employer-sponsored plan. Last year, the amount that hospitals, doctors, and other providers charged to treat such a family reached an average of $26,944, according to the Milliman Medical Index—nearly $9,000 higher than in 2010, when the ACA was enacted. Families typically paid about a fifth of that difference directly in the form of increased premiums, deductibles, and co-pays. Who exactly paid how much of the rest is not certain, but it’s axiomatic among economists that employees bear most if not all of the cost of employer-sponsored health care. To employers, health insurance is just a form of employee compensation. When the cost goes up, they typically respond by cutting back on raises and other benefits.
Fortunately, there’s a straightforward way to attack this middle-class affordability problem. The Affordable Care Act dramatically tightened existing price controls on health care purchased by the federal government. It did so by setting fee schedules for how much doctors and hospitals can charge Medicare, Medicaid, and other federal health care programs for performing specific services or, in some cases, treating specific conditions. Similar price controls apply to Medicare Advantage Plans, under which private insurers are allowed to contract with providers at Medicare prices.
The answer to the most pressing aspect of our health care crisis is simply to apply these cost controls to commercial plans as well. For a typical middle-class family, such a move, if enacted today, would drop the total price of health care by about a third in the first year, without having to pass any new taxes and without forcing anyone to change their health care plan. Proof of concept comes from the fact that we already do this for everyone covered by Medicare and Medicaid. You’ve heard of single-payer. This is the case for single-price.
For people with commercial insurance, it keeps getting worse.
How did this happen?
A major, underappreciated reason is that in most markets, medical providers have merged with each other to the point that they effectively operate as local monopolies.
Where health care consolidation is strongest, hospital prices run roughly 20 percent higher than in markets where some real competition remains. Since we first wrote about the phenomenon in these pages (“After Obamacare,” January/February 2014), a vast literature has grown up confirming that monopoly in health care is a major factor pushing up prices for Americans not covered by Medicare or Medicaid.
What would happen if we just took the single measure of applying Medicare prices to all commercial health insurance—and did nothing else? According to a study by the Congressional Budget Office, the price for a one-day hospital stay is 89 percent higher when charged to commercial insurance plans and their customers than when a Medicare patient stays in the same bed for the same amount of time. Overall, the discounts Medicare and Medicaid receive are in the 20 to 40 percent range. Thus, if done at a stroke, the first-order effect of imposing Medicare prices universally would be to reduce the price of the health care received by a typical family by about one-third. That would translate into annual savings of about $9,000 today, and much more over time. The savings would still be substantial even if we implemented the plan in phases to ease the transition.
Wouldn’t “Medicare prices for all” cause massive disruption across the health care sector? Yes, but in a good way. Importantly, hospitals that disproportionately serve low-income and elderly patients—typically found in rural or poor, urban locations—would be the least affected. That’s because they already know how to break even or even earn a surplus at Medicare and Medicaid prices. Unable to pass inflated costs along to patients with commercial insurance, they’ve had to learn to be more efficient.
The same is true more generally of hospitals that lack monopoly power. Studies show that hospitals with real competition in their local markets have found ways to lower costs to the point that they can get by on Medicare prices. These hospitals might even welcome a move to universal Medicare prices because it would help level the playing field with monopolistic competitors when it comes to recruiting and retaining doctors.
It would be a different story, though, for hospital systems that have been living high off their ability to extract monopoly prices from commercially insured patients. These hospitals will scream that they are already losing money on every Medicare and Medicaid patient, and that unless they are able to inflate the prices they charge commercial payers, they will go broke. But the reason they lose money on Medicare and Medicaid patients is that their costs are too high. And the reason their costs are too high is that they don’t need to cut them so long as they can gouge commercial payers—which, as monopolies or near monopolies, they can. The majority of these hospitals are classified as nonprofits, so the revenue from their high prices doesn’t even have to go back to shareholders. Instead, it turns into inflated salaries for administrators, lucrative contracts for specialists, and, often, giant building projects. In order to survive on Medicare prices, they would have to become much more efficient and cost conscious.
In normal markets, price controls are seldom a good idea. But health care is not a normal market. Purchasers, whether consumers, insurers, or employers, have a hard time evaluating the quality of medical services, for example. There are also all kinds of agency problems involved with so much care being purchased with other people’s money, and a moral problem involved with the fact that a large and increasing share of the population can’t afford to pay the price of their own health care. And that’s all before you get to the problem of industry consolidation. In highly concentrated, opaque health care markets, administered prices are the only real alternative to prices dictated by the fiat of monopolists.
These are the reasons why literally every other developed country in the world uses administered prices in health care, including countries that rely on privately owned hospitals and entrepreneurial doctors. And it’s why their use in the Medicare and Medicaid programs has been successful in containing cost inflation while predatory pricing prevails everywhere else in the increasingly cartelized U.S. health care sector.
The idea of applying Medicare and Medicaid prices across the board is so compelling that it has started getting serious attention from influential policy wonks. On the conservative side, the Council for Affordable Health Coverage recently issued a white paper that calls for the expansion of Medicare prices to commercial plans. On the liberal side, Princeton’s Paul Starr broached the idea in an article in the American Prospect in January. More recently, the Center of American Progress has included the idea in a policy paper.
But there are very strong reasons to believe that starting with price controls alone is a better idea than trying to achieve them and universal coverage in one shot.
Medicare for All advocates make the case that, despite the sticker price, the plan will actually bring down overall health care spending by imposing lower prices on providers and saving on administration. But here’s the problem: almost all of those savings will come from money that voters don’t know they’re currently spending. More than 150 million Americans have employer-sponsored group health care plans. They can see what they are forking out directly for premiums, deductibles, and co-pays, and they don’t like it. But they are largely innocent of the far greater amounts they pay in lost wages. In a typical employer-sponsored family plan, two-thirds of the premiums are nominally paid by the employer, who in turn shifts much if not all of that cost to employees by reducing other forms of compensation. Yet few employees are aware of this reality. So selling a single-payer system involves promising to save people money on costs they don’t know they pay, while at the same time telling them that they’ll have to share more of their paycheck with Uncle Sam. Not easy.
So why not just keep it simple, at least to start? A “Medicare prices for all” plan doesn’t require tax increases or involve transfers paid for by the middle class. It doesn’t require Americans to give up their current health care plans. And it doesn’t repeal or replace the popular features of the Affordable Care Act. But it does directly attack the middle-class affordability crisis using a proven approach that the great majority of Americans might actually support.
Paul Hewitt is an economic adviser to the Council for Affordable Health Coverage. Phillip Longman is senior editor at the Washington Monthly and policy director at the Open Markets Institute and author of “Best Care Anywhere – Why VA Health Care Is Better Than Yours.”
https://washingtonmonthly.com…
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California Legislative Information; AB-3087 California Health Care Cost, Quality, and Equity Commission
This bill would create the California Health Care Cost, Quality, and Equity Commission, an independent state agency, to control in-state health care costs and set the amounts accepted as payment by health plans, hospitals, physicians, physician groups, and other health care providers, among other things.
The bill would require the commission, beginning July 1, 2019, to annually determine the base amounts that health care entities, as defined, are required to accept as full payment for health care services, and would specify that the base amount for a health care provider shall be a percentage of Medicare rates not lower than 100% of Medicare rates.
The bill would require the commission to obtain the information necessary to determine total health care expenditures and to set a global growth cap for total health care expenditures, as specified.
https://leginfo.legislature.ca.gov…
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Physicians converge on Sacramento to oppose dangerous rate setting proposal
California Medical Association, April 30, 2018
Over 500 physicians, medical students and stakeholders gathered in Sacramento on April 18 to bring the voice of medicine to legislators for the 44th annual California Medical Association (CMA) Legislative Advocacy Day.
Wearing white coats, physicians converged on the Capitol to educate legislators about critical health care issues, including a radical physician rate setting proposal (AB 3087) that would increase patient out-of-pocket costs, create state-sanctioned rationing of health care for all Californians and force physicians out of state or into early retirement. Informing legislators about the negative effect this dangerous rate setting proposal would have on access to care in California was the top priority for attendees.
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Comment:
By Don McCanne, M.D.
There is broad agreement that the two most important factors that lead to our egregiously high health care costs are our high prices and the profound administrative waste in our fragmented health care financing system. Paul Hewitt and Phillip Longman, in their long Washington Monthly article (long, but worth the read), make the case for rigid price regulation.
Although they and others contend that price simplification would address the administrative waste as well, the impact would be very small since the highly inefficient, dysfunctional financing infrastructure would remain in place.
Since affordability is the number one health care concern according to many polls, would establishing a unified pricing scheme (all-payer or single-price health care) be welcome as an incremental step since it would be much less disruptive than converting to a single-payer improved Medicare for all? Hewitt and Longman seem to think so.
But we should look at California’s current effort to enact a universal pricing system: AB-3087 California Health Care Cost, Quality, and Equity Commission. Use the link above to access the bill, and then click on the “Bill Analysis” tab. Though you likely don’t have time now to read the 28-page analysis, just glance at the last three pages for support and opposition. Support includes the cosponsors: California Labor Federation, Health Access California, SEIU California, and UNITE HERE along with about two dozen other organizations. Opposition fills most of the three pages and includes much of the medical-industrial complex in California. The release from the California Medical Association (above) gives you an idea of the fervor of the opposition. These organizations are not convinced, to say the least, that this legislation would not be disruptive. AB-3087 is doomed.
So why don’t we move forward with reform that would address both our high prices and the administrative waste, not to mention all of the other measures of a well designed single payer system – an improved Medicare for all – that would correct the deficiencies in our financing system while improving the allocation of resources within the health care delivery system?
Hewitt and Longman present an interesting twist on the argument that it is not politically feasible. Read the paragraph near the end of their excerpts above that begins, “Medicare for All advocates make the case that…” They make the case that most individuals do not realize how much they are already spending on health care since much of it is hidden from them, whether it’s the employer’s contribution to their health plan or the massive amount we are already paying through the tax system – almost two-thirds of all health care spending if the purchase of plans for government employees and the huge amount of tax expenditures for employer-sponsored plans are included. Hewitt and Longman say, “So selling a single-payer system involves promising to save people money on costs they don’t know they pay, while at the same time telling them that they’ll have to share more of their paycheck with Uncle Sam. Not easy.”
Now would it be that difficult to let people know about the hidden costs of health care that they are already paying? Do people really prefer being kept in the dark by an opaque financing system rather than being enlightened by the transparency of financing through an equitable tax system, especially if the amount being spent is somewhat less for all but the wealthiest of us?
Can you imagine the typical American saying, “Okay, so we’re spending more now and getting less than we would be with an improved Medicare that covered everyone, but just don’t tell me about it. Let me suffer in silence.” Are we a bunch of masochists?
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Solution to health care is Medicare for all
By Jack Bernard
Las Cruces (N.M.) News, May 2, 2018
In 2017 op-eds, I described the mess that Congress made of health reform. They were taking a flawed program, Obamacare, and modifying it to be much worse via Trumpcare…which I believe Donald Trump still has never given up on enacting; he is just waiting until the opportunity arises.
In the meantime, he and Alex Azar, his new DHHS secretary, will do everything that they can administratively to undermine the ACA. In 2017 there were fewer people covered by insurance than in 2016 due to Trump’s policies.
Many conservative politicians state incorrectly that we have the “best” health care in the world. But, our mortality-morbidity rates are higher than other developed nations. Reports by the respected Commonwealth Fund consistently rate us last or next to last on health-care quality, access and cost criteria.
Plus, our costs are escalating, via higher premiums and deductibles. In 1980, healthcare was 9 percent of GNP. It is more than double that now, taking money that could be used for other vital areas.
So, where should we go with Medicare, Medicaid and the ACA (Obamacare)?
The GOP House of Representatives has a radical health-care agenda, devised by and expressed repeatedly by departing Speaker Ryan and Tom Price, former House member and x-secretary of DHHS. Both Price and Ryan are motivated solely by federal budget concerns versus quality or financial access.
Former Rep. Mick Mulvaney, now the head of OMB, shares this lack of concern over the impact of policy changes on real people. Mulvaney, a Tea Party darling, founded the right-wing House Freedom Caucus which advocated a shutdown of our government rather than budgetary compromise.
The Ryan-Price strategy of Medicare and Medicaid abandonment is not supported by the majority of Americans in either party, as various surveys show. It is abandonment when you privatize Medicare via vouchers, destroying senior finances, and cut funding for Medicaid via state block grants, thus denying care to our poorest citizens.
The bill that Price originally proposed as a replacement for the ACA cut financial support for millions (85 percent of Health Exchange enrollees) who are now receiving a high level of governmental assistance in order to purchase insurance. The average cost of a family’s health-care insurance policy is over $18,000 annually. How many lower-income families can afford to purchase health-care insurance with a stipend of only $3,000 as detailed in the original Price legislation?
So, if the radical privatization schemes and confusing, elusive block grants won’t work, what will?
The situation becomes clearer when we look at the health-care costs in other developed nations. At a per capita cost of over $9,000 in the USA, we run nearly three timesthe per capita cost in Italy, whose health system is rated second best in the world by WHO.
How do these other developed countries do it? The answer may surprise you: single payer (Medicare for All) or something like it (utility models) with more government involvement, not less.
Through cutting out marketing and overhead expenses, savings are achieved. Medicare has only a 2 percent overhead versus 12 percent for private insurance. And, centralized budgeting combined with leveraging of governmental purchasing power makes sure that costs are contained.
The primary impediment to Medicare for All, which has been proposed in bill form by Senator Bernie Sanders and co-sponsored by 16 senators, is clear: big business lobbying. Why?
Price escalation by Big Pharma would be severely limited under Medicare for all, as it is in other nations. Instead of spending money on health insurance corporate marketing and overhead expenses, money would go to direct patient care. Insurance and pharmaceutical companies would lose business. Their executives would not be getting those seven figure salaries. So, they buy influence.
This situation can only be corrected by you, the American taxpayer, by knowing the issues and voting.
Jack Bernard, the first director of health planning for Georgia, has been a senior executive with several national health care firms, working with New Mexico hospitals on cost containment.
Four million working-age people have lost insurance coverage since 2016
First Look at Health Insurance Coverage in 2018 Finds ACA Gains Beginning to Reverse
By Sara R. Collins, Munira Z. Gunja, Michelle M. Doty and Herman K. Bhupal
The Commonwealth Fund, May 1, 2018
The marked gains in health insurance coverage made since the passage of the Affordable Care Act (ACA) in 2010 are beginning to reverse, according to new findings from the latest Commonwealth Fund ACA Tracking Survey. The coverage declines are likely the result of two major factors: 1) lack of federal legislative actions to improve specific weaknesses in the ACA and 2) actions by the current administration that have exacerbated those weaknesses. These include the administration’s deep cuts in advertising and outreach during the marketplace open-enrollment periods, a shorter open enrollment period, and other actions that collectively may have left people with a general sense of confusion about the status of the law. Signs point to further erosion of insurance coverage in 2019: the repeal of the individual mandate penalty included in the 2017 tax law, recent actions to increase the availability of insurance policies that don’t comply with ACA minimum benefit standards, and support for Medicaid work requirements.
Findings
* About 4 million working-age people have lost insurance coverage since 2016
* The uninsured rates among lower-income adults rose from 20.9 percent in 2016 to 25.7 percent in March 2018
* The uninsured rate among working-age adults increased to 15.5 percent
* The uninsured rate among adults in states that did not expand Medicaid rose to 21.9 percent
* The uninsured rate increased among adults age 35 and older
* The uninsured rate among adults who identify as Republicans is higher compared to 2016
* The uninsured rate remains highest in southern states
* Five percent of insured adults plan to drop insurance because of the individual mandate repeal
From the Policy Implications
In the absence of bipartisan support for federal action, legislative activity has shifted to the states.
More broadly, leaving policy innovation to states will ultimately lead to a patchwork quilt of coverage and access to health care across the country, a dynamic that will fuel inequity in overall health, productivity, and well-being. At some point, Congress will likely face pressure to step in to level the playing field.
http://www.commonwealthfund.org…
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Comment:
By Don McCanne, M.D.
Although building on our current fragmented health care financing system is the most expensive model of reform, it was understood from the beginning that the Affordable Care Act would fall far short of our goals of universality, comprehensiveness, and affordability. If there is any surprise here, it is how quickly some of the gains could be reversed without the formality of enacting repeal and replace legislation. Not only is ACA a fundamentally flawed model, it is subject to damage through the political whims of ideologues.
Some of the proposed policy options to improve coverage include more advertising of exchange plans, reinsurance to reduce risk of insurer losses, more premium and cost sharing subsidies, and even a public option such as a Medicare buy-in. The problem is that these leave in place the high costs and administrative waste and other deficiencies that characterize our system while failing to protect against political chicanery.
If we had in place a well designed single payer national health program – an improved Medicare for all – everyone would have access to their choice of health care professionals and institutions, and care would be prepaid automatically through progressive taxes and thus affordable for everyone. It would be the privilege once granted that became an irrevocable right, if there were any doubts before.
The Commonwealth Fund would have plenty of other features of our health care system to study, but no longer would they have to keep count of how many go without any health care coverage at all, or how many face financial hardship because they are underinsured. Everyone would be included and nobody would be deprived of care because it was not affordable. So the question is, why do we continue to tolerate the injustices of our highly dysfunctional financing system when we don’t have to?
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It Is Time to Liberate Hospitals from Profit-Centered Care
By Sidney M. Wolfe, M.D.1, Steffie Woolhandler, M.D., M.P.H.2,3, and David U. Himmelstein, M.D.2,3
Journal of General Internal Medicine, April 30, 2018
The way we pay hospitals is toxic. It rewards, indeed requires, bad behavior from hospital leaders and stifles the better angels of their nature.
In our market-driven payment system, hospitals’ success, and even survival, depends on generating profits. Even non-profit hospitals live or die based on profit margins (often labeled “surpluses” in non-profit facilities). Hospitals that lack profits (or the prospect of future profits that can entice lenders or investors) face a grim future. Unable to renovate or expand their original facilities, purchase new equipment, acquire other hospitals, or grow their provider networks, unprofitable hospitals often spiral downward. As one public hospital CEO admonished two of us, “no margin, no mission.”
In this issue of JGIM, Ly and Cutler1 demonstrate one noxious side effect of making profitability the arbiter of hospital success. Their analysis of changes in hospital profit margins between 2003 and 2013 indicates that hospitals won the profit game by boosting prices, not by improving efficiency, or through exemplary community service (e.g., by increasing their care for Medicaid patients). The losers cared for a disproportionate share of publicly insured patients (and presumably the uninsured, although Ly could not assess that) or had the bad luck to be located in rural America. Public hospitals lagged, while not-for-profits grew their profits even faster than for-profits. (Although not discernible from Ly’s analysis, MedPAC data indicates that investor-owned hospitals had much higher profit margins at baseline and retain a big profit lead.2) Chaining up was a winning strategy, presumably because it increased hospitals’ leverage in negotiations with insurers, allowing them to command higher prices.
Ly’s conclusion that upcoding did not drive profitability gains will surprise many clinicians whose hospital managers obsess about capturing every billable diagnosis. While the study found a positive relationship between growth in a hospital’s casemix index (CMI) and growth in its profit margin, this finding was not statistically significant. Unfortunately, this analysis was underpowered because it used all-payer CMI data, which was available for only a subsample of 587 hospitals in eight states. Nationwide, increases in the Medicare CMI (available for almost all hospitals) strongly predict total margin growth (Dickman S, Woolhandler S, Himmelstein DU. Unpublished analysis of Medicare Cost Report and Medicare casemix data, 1998–2016). It seems likely that upcoding is an important profit-driver.
Hospitals did not always have to turn a profit in order to survive. In our past (and today in Canada, much of Europe, and our VA system), funds for capital investments came from government grants or charitable donations.
During the first three decades of the twentieth century, private donors funded almost all US hospital construction.3 The federal government stepped in to provide capital funds to non-profit hospitals during the Great Depression, and its Hill-Burton program was the major funder of hospital construction in the post-war period. The seed of profit-based capital funding was planted by the hospital industry-controlled Blue Cross plans of that era, which paid hospitals a per diem rate that covered operating costs (including interest on loans, i.e., payment for existing capital investments), plus depreciation and a capital add-on to provide hospitals with reserves for future capital investment.4 But even as late as 1965 (when Congress passed Medicare and Medicaid), hospitals’ reserves together with their long-term borrowing accounted for only 31.9% of hospital construction funds.5
Two developments in the mid-1960s accelerated the shift from grant-based to profit margin-based funding for not-for-profit hospital capital. First, a 1963 IRS ruling triggered states to start offering tax-exempt bond funding for hospital construction, allowing hospitals to obtain loans with minimal down payments, and pay them off with future profits. Second, Medicare adopted Blue Cross’ capital payment model (with an extra profit allowance for investor-owned facilities). For hospitals with a good payer mix, this assured a flow of public dollars to build up reserves for future investments, and to pay off bondholders and investors. By the 1970s, 70% of construction was debt-funded, with much of the rest covered by hospitals’ reserves.6
Before the mid 1960s, explicit (if often flawed) public decision-making guided the allocation of government funding for hospital construction. Thereafter, the flow of taxpayer dollars surged but public control of decision-making shriveled. Profitability determined which hospitals could afford new projects, and private boards and executives decided how to deploy those funds.
Medicare’s (and private insurers’) capital payment policies have undergone many twists and turns over the past half century. But the link between profitability and ability to expand and modernize has been a constant. In effect, all non-federal hospitals have been forced to become quasi-commercial enterprises, and to think of themselves in business rather than social terms.4 As profitability became mandatory for hospital survival, the distinction between for-profit and non-profit hospitals began to erode—although even decades later, for-profits continued to deliver inferior quality care at higher prices.7,8
The price-boosting that Ly identifies as a key profit-driver (among non-profit as well as investor-owned hospitals) is just one of the ill-effects of making profit margin the mission. Hospitals’ manipulations of their payer and service mixes, the efforts squandered on financial gaming, and the ethical compromises that have become commonplace in the healthcare milieu are also, like price gauging, antithetical to the public’s interests.
Hospitals’ efforts to avoid money-losing patients, effectively excluding many of those most in need, have become so routine that many of us have become inured to this disgrace. New York City’s private academic medical centers exclude almost all uninsured persons and maintain separate clinic systems for patients with Medicaid, leading to the de facto racial as well as socioeconomic segregation of care,9 a situation that is not unique to New York. The CEO of the Mayo Clinic—which generated an operating surplus of $707 million last year, while investing $714 million in new capital projects—instructed employees to “prioritize” patients with private insurance over those with Medicaid, and even Medicare.10,11
The profit imperative, even among non-profit hospitals, similarly distorts the mix of services that hospitals choose to offer or promote. Money-losing services like mental health and primary care are accorded second-class status, in contrast to the opulent resources devoted to elective cardiac and orthopedic interventions, even those of dubious value.
Selectively recruiting profitable patients and excluding the unprofitably ill require considerable bureaucratic effort and expense. But that is just the beginning. Much more is spent to maximize billings and collect payment. At one non-profit Utah hospital system, 2,300 employees, 6% of all employees, work on claims processing and bill collections.12 Meanwhile, the patient chart has morphed from a clinical diary for facilitating care into a billing document driven by commercial imperatives, padded with redundant (and even misleading) material. Physicians now spend half their time on electronic documentation and other clerical/administrative tasks.13 Overall, the average US hospital now devotes more than one quarter of its budget to administration, a share that is continuing to increase, and is already twice that in Canada (or Scotland).14
Why is hospital administration so much leaner in Canada? Although physician payment in Canada’s single-payer system looks a lot like US Medicare’s, its hospital payment strategy is dramatically different, more akin to the way we fund the VA. Canadian provinces (and Scotland) pay hospitals’ global operating budgets, with separate government grants for capital costs. Even countries like France, Switzerland, and Germany which have more complex universal social insurance schemes, fund much of new hospital investments through government grants rather than hospitals’ profits. This dampens US-style entrepreneurial incentives, leading to lower bureaucratic costs, less price-inflating gaming, and greater healthcare equity.
Profit-seeking does not just undermine efficiency and equity, it also fosters corruption. For-profit hospital firms have been most frequently implicated in the most egregious incidents, paying billions to settle fraud and abuse claims. But the faltering moral compass of non-profit and even public hospital leaders has an even greater impact because they control 80% of community hospitals, and almost all academic medical centers. Massachusetts General Hospital received $123 million in royalties and licenses over a four-year period,15 mostly from orthopedic device-makers whose high prices are borne largely by Medicare. In 2013, 73 leaders of academic medical centers also sat on the boards of 85 publicly traded healthcare firms, receiving median compensation of $209,000 per directorship, and, in addition, held 5,493,946 shares of stock in those firms.16 It takes extraordinary ethical gymnastics to justify such dual commitments.
Ly implies that a crackdown on hospital prices would lead to salutary change, goading hospitals to seek profit through efficiency. But controlling prices without eliminating profits could amplify current profit-inflating misbehaviors, e.g., prioritizing the care of privately insured patients. As long as profit-centered care remains the key to hospital survival, patient-centered and community-centered care will suffer.
No law of nature requires that hospitals make profits in order to thrive. What is needed is a single-payer reform that:
- Pays hospital lump-sum operating budgets, like those for schools, fire houses, or VA hospitals;
- Claws back any money they do not spend on care; and
- Allocates truly needed capital funding through a region-wide accountable government grant program that directs investments to the highest priority, community responsive projects.
References
1. Ly DP, Cutler DM. Factors of U.S. hospitals associated with improved profit margins: An observational study. JGIM 2018; DOI: https://doi.org…
2. MedPAC. Report to the Congress: Medicare payment policy. Medicare Payment Advisory Commission, Washington: March 15, 2017. Available at: http://www.medpac.gov… (access 2/17/2018).
3. Stevens R. In sickness and in wealth: American hospitals in the twentieth century. New York: Basic Books, 1989.
4. Brown JB with Thomas SR and members of the Harvard University Health Capital Project. Health capital financing. Ann Arbor, MI: Health Administration Press, 1988.
5. Stambaugh JL. A study of the sources of capital funds for hospital construction in the United States. Inquiry June, 1967;14:3–22.
6. Wilson G, Sheps CG, Oliver TR. Effects of hospital revenue bonds on hospital planning and operations. N Engl J Med 1982;307:1426–1430.
7. Devereaux, PJ, Choi PTL, Lacchetti C, et al. A systematic review and meta-analysis of studies comparing mortality rates of private for-profit and private not-for-profit hospitals. Can Med Assoc J 2002;166:1399–1406.
8. Devereaux PJ, Heels-Ansdell D, Lacchetti C, et al. Payments for care at private for-profit and private not-for-profit hospitals: a systematic review and meta-analysis. CMAJ. 2004;170(12):1817–1824.
9. Tikkanen RS, Woolhandler S, Himmelstein DU, Kressin NR, Hanchate A, Lin MY, McCormick D, Lasser KE. Hospital payer and racial/ethnic mix at private academic medical centers in Boston and New York City. International Journal of Health Services. 2017; 47(3):460–476.
10. Kacik A. Mayo Clinic CEO Noseworthy to retire. Modern Healthcare February 26, 2018:6.
11. Olson J. Mayo to give preference to privately insured patients over Medicaid patients: Pushback on Medicaid, Medicare part of a trend. Star Tribune March 15, 2017. Available at: http://www.startribune.com… (accessed March 4, 2018)
12. Kacik A. Intermountain joins outsourcing trend for revenue-cycle management. Modern Healthcare January 29, 2018:8.
13. Sinsky C, Colligan L, Li L, Prgomet M, Reynolds S, Goeders L, Westbrook J, Tutty M, Blike G. Allocation of physician time in ambulatory practice: a time and motion study in 4 specialties. Annals of internal medicine. 2016;165(11):753–60.
14. Himmelstein DU, Jun M, Busse R, Chevreul K, Geissler A, Jeurissen P, Thomson S, Vinet M-A, Woolhandler S. A Comparison Of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far. Health Aff. September 2014;33:1586–1594.
15. https://openpaymentsdata.cms.gov… (accessed March 6, 2018).
16. Anderson TS, Good CB, Gellad WF. Prevalence and compensation of academic leaders, professors, and trustees on publicly traded US healthcare company boards of directors: cross sectional study. BMJ 2015:351:h4826.
Author credentials: 1. Public Citizen Health Research Group, Washington, DC, USA; 2. City University of New York at Hunter College, New York, NY, USA; 3. Cambridge Health Alliance/Harvard Medical School, Cambridge, MA, USA
Corresponding Author: David U. Himmelstein, M.D.; City University of New York at Hunter College, New York, NY, USA (e-mail: dhimmels@hunter.cuny.edu).
Compliance with Ethical Standards:
Conflict of Interest: No conflicts of interest to report.
We all need health care for royalty, though not necessarily with the posh suite
The Royal Baby Is Lucky He Wasn’t Born in America
By Laurie Garrett
FP, April 24, 2018
On April 23, the Duchess of Cambridge gave birth to her third child in a posh London maternity center called the Lindo Wing inside St. Mary’s Hospital, where a small army of attendants looked after her and Prince William for 24 hours in a secluded, luxurious room at a cost of $8,900, according to the Economist.
Most Western Europeans and Canadians, of course, don’t deliver babies in the Lindo Wing. Otherwise, however, their treatment and outcomes are pretty much consistent with the royal couple’s. Parents pay nothing for their maternity care and delivery, with low risks of maternal and infant mortality.
The average American woman gives birth in a noisy hospital with few frills or amenities and for an average cost of $12,290. Everything is quite average, in terms of quality and aesthetics in the birthing environment, except, on a worldwide scale, the costs. Should she require a cesarean section (an average of $16,907) or any emergency services, her bill could swiftly soar above $30,000. Have premature triplets and costs top $870,000.
According to the National Academy of Medicine, the United States lags far behind the rest of the OECD for a long list of health problems, including maternal and infant mortality. In the OECD, only Turkey and Mexico had higher infant mortality rates than Mississippi, and the state with the best infant mortality in the United States — New Hampshire — would still rank way down at 28 in OECD stature.
One study found that Americans used health care services at about the same rate as Europeans — perhaps even less — yet paid nearly twice as much for just about everything.
Today, tens of thousands of Americans are crowdfunding their health care, searching for help to offset the costs that their insurance companies refuse to cover. It has come to this. America is a nation of beggars, forced to seek the pity of strangers who may, in turn, choose who shall live based on charity and who shall die for lack of financial support. A blonde 2-year-old girl in a ballerina tutu may garner more such kindness than a black 10-year-old boy in a Black Panther suit, who in turn gleans greater compassion from the online masses than a 50-year-old gunshot victim or an elderly Latina dying from diabetes. It’s like a macabre version of the 1950s TV show Queen for a Day, in which needy women pleaded for a fridge, dishwasher, new flatware, or a smart set of work clothes and an “applause-o-meter” was used to measure studio audience choices.
In a sensible health care system, there are no applause-o-meters; insurance actually covers patients’ costs; drugs and medicines are purchased in volume to bring down those prices; and life expectancy is independent of personal income.
https://foreignpolicy.com…
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Comment:
By Don McCanne, M.D.
Fortunately most Americans are not dependent on crowdfunding or on Queen for a Day applause-o-meters to pay for health care, but in some ways these are symbolic of the humiliating dysfunctions inherent in our health care financing system. We should be ashamed that we spend twice the average of other nations on health care and yet leave tens of millions to suffer from financial hardship when they need health care, while not getting the results that we should be.
We already are spending enough money to provide health care for everyone, but we need to spend it more wisely. Through a well designed single-payer, improved Medicare for all, cost-sharing financial barriers could be essentially eliminated for everyone as they are in many other nations that spend much less.
Should we reprise the applause-o-meter to award that cute 2-year-old blond in a ballerina tutu the title of Princess for a Day in order to help pay at least some of the costs of her cancer care? Then what about the elderly Latina with late stage diabetes whose applause meter score did not qualify her as Queen for a Day, and who also failed to gain sympathy on a crowdfunding webpage?
This is America. We can do far better than that.
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