PNHP

Universal Health Care: Can We Afford Anything Less?

pnhpf3a

Universal Health Care: Can We Afford Anything Less?

Why only a single-payer system can solve America’s health-care mess.

By Gerald Friedman
Dollars and Sense, July 2011

America’s broken health-care system suffers from what appear to be two separate problems. From the right, a chorus warns of the dangers of rising costs; we on the left focus on the growing number of people going without health care because they lack adequate insurance. This division of labor allows the right to dismiss attempts to extend coverage while crying crocodile tears for the 40 million uninsured. But the division between problem of cost and the problem of coverage is misguided. It is founded on the assumption, common among neoclassical economists, that the current market system is efficient. Instead, however, the current system is inherently inefficient; it is the very source of the rising cost pressures. In fact, the only way we can control health-care costs and avoid fiscal and economic catastrophe is to establish a single-payer system with universal coverage.

The rising cost of health care threatens the U.S. economy. For decades, the cost of health insurance has been rising at over twice the general rate of inflation; the share of American income going to pay for health care has more than doubled since 1970 from 7% to 17%. By driving up costs for employees, retirees, the needy, the young, and the old, rising health-care costs have become a major problem for governments at every level. Health costs are squeezing public spending needed for education and infrastructure. Rising costs threaten all Americans by squeezing the income available for other activities. Indeed, if current trends continued, the entire economy would be absorbed by health care by the 2050s.

Conservatives argue that providing universal coverage would bring this fiscal Armageddon on even sooner by increasing the number of people receiving care. Following this logic, their policy has been to restrict access to health care by raising insurance deductibles, copayments, and cost sharing and by reducing access to insurance. Even before the Great Recession, growing numbers of American adults were uninsured or underinsured. Between 2003 and 2007, the share of non-elderly adults without adequate health insurance rose from 35% to 42%, reaching 75 million. This number has grown substantially since then, with the recession reducing employment and with the continued decline in employer-provided health insurance. Content to believe that our current health-care system is efficient, conservatives assume that costs would have risen more had these millions not lost access, and likewise believe that extending health-insurance coverage to tens of millions using a plan like the Affordable Care Act would drive up costs even further. Attacks on employee health insurance and on Medicare and Medicaid come from this same logic—the idea that the only way to control health-care costs is to reduce the number of people with access to health care. If we do not find a way to control costs by increasing access, there will be more proposals like that of Rep. Paul Ryan (R-Wisc.) and the Republicans in the House of Representatives to slash Medicaid and abolish Medicare.

The Problem of Cost in a Private, For-Profit Health Insurance System

If health insurance were like other commodities, like shoes or bow ties, then reducing access might lower costs by reducing demands on suppliers for time and materials. But health care is different because so much of the cost of providing it is in the administration of the payment system rather than in the actual work of doctors, nurses, and other providers, and because coordination and cooperation among different providers is essential for effective and efficient health care. It is not cost pressures on providers that are driving up health-care costs; instead, costs are rising because of what economists call transaction costs, the rising cost of administering and coordinating a system that is designed to reduce access.

The health-insurance and health-care markets are different from most other markets because private companies selling insurance do not want to sell to everyone, but only to those unlikely to need care (and, therefore, most likely to drop coverage if prices rise). As much as 70% of the “losses” suffered by health-insurance providers—that is, the money they pay out in claims—goes to as few as 10% of their subscribers. This creates a powerful incentive for companies to screen subscribers, to identify those likely to submit claims, and to harass them so that they will drop their coverage and go elsewhere. The collection of insurance-related information has become a major source of waste in the American economy because it is not organized to improve patient care but to harass and to drive away needy subscribers and their health-care providers. Because driving away the sick is so profitable for health insurers, they are doing it more and more, creating the enormous bureaucratic waste that characterizes the process of billing and insurance handling. Rising by over 10% a year for the past 25 years, health insurers’ administrative costs are among the fastest-growing in the U.S. health-care sector. Doctors in private practice now spend as much as 25% of their revenue on administration, nearly $70,000 per physician for billing and insurance costs.

For-profit health insurance also creates waste by discouraging people from receiving preventive care and by driving the sick into more expensive care settings. Almost a third of Americans with “adequate” health insurance go without care every year due to costs, and the proportion going without care rises to over half of those with “inadequate” insurance and over two-thirds for those without insurance. Nearly half of the uninsured have no regular source of care, and a third did not fill a prescription in the past year because of cost. All of this unutilized care might appear to save the system money. But it doesn’t. Reducing access does not reduce health-care expenditures when it makes people sicker and pushes them into hospitals and emergency rooms, which are the most expensive settings for health care and are often the least efficient because care provided in these settings rarely has continuity or follow-up.

Sources of Savings and Added Costs for a Hypothetical Massachusetts Single-Payer Health System

The great waste in our current private insurance system is an opportunity for policy because it makes it possible to economize on spending by replacing our current system with one providing universal access. I have estimated that in Massachusetts, a state with a relatively efficient health-insurance system, it would be possible to lower the cost of providing health care by nearly 16% even after providing coverage to everyone in the state currently without insurance (see Table 1). This could be done largely by reducing the cost of administering the private insurance system, with most of the savings coming within providers’ offices by reducing the costs of billing and processing insurance claims. This is a conservative estimate made for a state with a relatively efficient health-insurance system. In a report prepared for the state of Vermont, William Hsiao of the Harvard School of Public Health and MIT economist Jonathan Gruber estimate that shifting to a single-payer system could lead to savings of around 25% through reduced administrative cost and improved delivery of care. (They have also noted that administrative savings would be even larger if the entire country shifted to a single-payer system because this would save the cost of billing people with private, out-of-state insurance plans.) In Massachusetts, my conservative estimates suggests that as m
uch as $10 billion a year could be saved by shifting to a single-payer system.

Greater Increase in Cost for U.S. Health-Care System, 1971-2007

Single-Payer Systems Control Costs by Providing Better Care

Adoption of a single-payer health-insurance program with universal coverage could also save money and improve care by allowing better coordination of care among different providers and by providing a continuity of care that is not possible with competing insurance plans. A comparison of health care in the United States with health care in other countries shows how large these cost savings might be. When Canada first adopted its current health-care financing system in 1968, the health-care share of the national gross domestic product in the United States (7.1%) was nearly the same as in Canada (6.9%), and only a little higher than in other advanced economies. Since then, however, health care has become dramatically more expensive in the United States. In the United States, per capita health-care spending since 1971 has risen by over $6,900 compared with an increase of less than $3,600 in Canada and barely $3,200 elsewhere (see Table 2). Physician Steffie Woolhandler and others have shown how much of this discrepancy between the experience of the United States and Canada can be associated with the lower administrative costs of Canada’s single-payer system; she has found that administrative costs are nearly twice as high in the United States as in Canada—31% of costs versus 17%.

The United States is unique among advanced economies both for its reliance on private health insurance and for rapid inflation in health-care costs. Health-care costs have risen faster in the United States than in any other advanced economy: twice as fast as in Canada, France, Germany, Sweden, or the United Kingdom. We might accept higher and rapidly rising costs had Americans experienced better health outcomes. But using life expectancy at birth as a measure of general health, we have gone from a relatively healthy country to a relatively unhealthy one. Our gain in life expectancy since 1971 (5.4 years for women) is impressive except when put beside other advanced economies (where the average increase is 7.3 years).

The relatively slow increase in life expectancy in the United States highlights the gross inefficiency of our private health-care system. Had the United States increased life expectancy at the same dollar cost as in other countries, we would have saved nearly $4,500 per person. Or, put another way, had we increased life expectancy at the same rate as other countries, our spending increase since 1971 would have bought an extra 15 years of life expectancy, 10 years more than we have. The failure of American life expectancy to rise as fast as life expectancy elsewhere can be directly tied to the inequitable provision of health care through our private, for-profit health-insurance system. Increases in life expectancy since 1990 have been largely restricted to relatively affluent Americans with better health insurance. Since 1990, men in the top 50% of the income distribution have had a six-year increase in life expectancy at age 65 compared with an increase of only one year for men earning below the median.

Increase in Health-Care Expenditures per Capita Associated with an Increase of One Year in Female Life Expectancy, 1971-2007

Rising health-care costs reflect in part the greater costs of caring for an aging population with more chronic conditions. As such, the United States looks especially bad because our population is aging less quickly than that of other countries because of high rates of immigration, relatively higher fertility, and the slower increase in life expectancy in the United States. Countries also buy higher life expectancy by spending on health care; rising health expenditures have funded improvements in treatment that have contributed to rising life expectancy throughout the world. Female life expectancy at birth has increased by nearly nine years in Germany since 1971, by over eight years in France, by seven years in Canada and the United Kingdom, and by six years in Sweden. By contrast, the United States, where female life expectancy increased by a little over five years, has done relatively poorly despite increasing health-care expenditures that dwarf those of other countries. In other countries, increasing expenditures by about $500 per person is associated with an extra year of life expectancy. With our privatized health-insurance system, we need spending increases over twice as large to gain an extra year of life (see Figure 1).

Difference in Female Life Expectancy at Birth (in Years), U.S. Compared with Other Countries, 1971 and 2007

The international comparison also provides another perspective on any supposed trade-off between containing costs and expanding coverage. In countries other than the United States, almost all of the increase in health-care spending as a share of national income is due to better quality health care as measured by improvements in life expectancy (see Figure 2). The problem of rising health-care costs is almost unique to the United States, the only advanced industrialized country without universal coverage and without any effective national health plan.

In short, the question is not whether we can afford a single-payer health-insurance system that would provide adequate health care for all Americans. The real question is: can we afford anything else?

Gerald Friedman is a professor of economics at the University of Massachusetts-Amherst

Sources: Cathy Shoen, “How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007,” Health Affairs, June 10, 2008; “Insured but Poorly Protected: How Many Are Underinsured?  U. S. Adults Trends, 2003 to 2007,” Commonwealth Fund, June 10, 2008 (commonwealthfund.org); David Cutler and Dan Ly, “The (Paper) Work of Medicine: Understanding International Medical Costs,” Journal of Economic Perspectives, Spring 2011; Stephen M. Davidson, Still Broken: Understanding the U.S. Health Care System, Stanford Business Books, 2010; P Franks and C M Clancy, “Health insurance and mortality. Evidence from a national cohort,” The Journal of the American Medical Association, August 11, 1993; Allan Garber and Jonathan Skinner, “Is American Health Care Uniquely Inefficient?” Journal of Economic Perspectives, Fall 2008; Jonathan Gruber, “The Role of Consumer Co-payments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond,” Kaiser Family Foundation, October 2006 (kff.org); David Himmelstein and Steffie Woolhandler, “Administrative Waste in the U.S. Health Care System in 2003,” International Journal of Health Services, 2004; “The Uninsured: A Primer: Supplemental Data Tables,” Kaiser Family Foundation, December 2010; Karen Davis and Cathy Shoen, “Slowing the Growth of U.S. Health Care Expenditures: What are the Options?” Commonwealth Fund, January 2007 (commonwealthfund.org); “Accounting for the Cost of Health Care in the United States,” McKinsey Global Institute, January 2007 (mckinsey.com); “Investigation of Health Care Cost Trends and Cost Drivers,” Office of Massachusetts Attorney General Martha Coakley, January 29, 2010 (mass.gov);
 Trends in Mortality Differentials and Life Expectancy for Male Social Security-Covered Workers, by Average Relative Earnings by Hilary Waldron, Social Security Administration, October 2007; Richard G. Wilkinson, The Spirit Level, Bloomsbury Press, 2010; William Hsiao and Steven Kappel, “Act 128: Health System Reform Design.  Achieving Affordable Universal Health Care in Vermont,” January 21, 2011 (leg.state.vt.us); Steffie Woolhandler and Terry Campbell, “Cost of Health Care Administration in the United States and Canada,” New England Journal of Medicine, 2003.

http://www.dollarsandsense.org/archives/2011/0711friedman.html

Health care for all is Christian and practical, physician says

By Kay Campbell
The Huntsville (Ala.) Times, June 29, 2011

HUNTSVILLE, Ala. — Truly selfish people, once they consider the facts, will support national health care for all for purely self-serving reasons, states Dr. Pippa Abston in her new book. But Christians especially should understand why it’s time the U.S., one of the wealthiest countries in the world, made sure our health care standards are increased.

Abston, a pediatrician who has been active with Physicians for a National Health Program, has written “Who is my neighbor? A Christian response to healthcare reform” to answer objections to government interference in the current patch-work system of health care coverage in the U.S.

The book is structured around lines from the parable of the Good Samaritan, the story told by Jesus in which a heathen foreigner shows by example how to care for someone in need. Using simply told, heart-wrenching illustrations from her own work, Abston walks through the experience of navigating today’s insurance maze from the doctor’s point of view. In non-exaggerated explanations, she clicks through all the arguments against “socialized” medicine, as detractors disparage it, showing why good medicine for all means better physical health for all, better health options for all, and better economic health for the country.

Abston is a skilled writer, so the book’s self-published pedigree shows only in the simple design and infrequent typo of the self-edited book. (Abston decided to self-publish to get the book into circulation fast.) The essay diagrams the inevitable need for a health care system based upon reason, rather than the bake sales that fund so much cancer treatment now.

We have to learn to see everyone as important, just as Jesus did, Abston writes.

“Absolutely refuse to un-see any person — ever,” she writes. “No matter who and no matter what. Whomever God sees, so must we.”

The book is available at Blurb.com. Abston blogs at “A Pediatrician’s Perspective on Healthcare Reform.”

http://blog.al.com/living-times/2011/06/healthcare_for_all_is_christia.html

New CDC numbers on uninsured

Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2010

by Robin A. Cohen, Ph.D., Brian W. Ward, Ph.D., and Jeannine S. Schiller, M.P.H. Division of Health Interview Statistics, National Center for Health Statistics
Centers for Disease Control and Prevention, June 22, 2011

* In 2010, 48.6 million persons of all ages (16.0%) were uninsured at the time of interview, 60.3 million (19.8%) had been uninsured for at least part of the year prior to interview, and 35.7 million (11.7%) had been uninsured for more than a year at the time of interview.

* In 2010, the percentage of persons who were uninsured at the time of interview among the 20 largest states ranged from 4.0% in Massachusetts to 26.1% in Arizona.

* In 2010, the percentage of children under age 18 years who were uninsured at the time of interview was 7.8%.

* In 2010, among adults aged 19–25 years, 10 million (33.9%) were uninsured at the time of interview.

* Private coverage decreased among near poor adults aged 18–64 years, from 52.6% in 1997 to 34.7% in 2010. The uninsured rate (43.0%) was higher than the private coverage rate (34.7%) for this population.

* During 2010, 25.3% of persons under age 65 years with private health insurance at the time of interview were enrolled in a high deductible health plan (HDHP), including 7.7% who were enrolled in a consumer-directed health plan (CDHP). Almost 50% of persons with a private plan obtained by means other than through employment were enrolled in a HDHP.

http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201106.htm

Comment: 

By Don McCanne, MD

To no surprise, the number of uninsured continues to increase. In the 2010 survey, over 60 million individuals were uninsured for at least part of the year. Private health insurance coverage continued to decline, whereas public coverage increased, especially for children. The gains in public coverage failed to offset the losses in private coverage. Young adults continue to have the lowest coverage rates of all.

Although there is much information in this 28 page report, let’s briefly look at two notable findings:

* For “near poor” adults under 65 (100-200% of federal poverty level), more were uninsured than were covered by private plans (43.0% vs. 34.7%).

* For those under 65 covered by private plans, 25.3% are now enrolled in a high-deductible health plan (HDHP). Only 7.7% also have a health savings account or equivalent (consumer-directed health plan – CDHP).

Enthusiasts for the Affordable Care Act (ACA) would likely claim that deficiencies such as these are precisely why ACA is so important. So what will ACA do for these individuals?

The near poor will be moved into Medicaid plans. Because that is a chronically underfunded program, there is already a lack of willing providers, especially amongst specialists (plus an across-the-board lack of primary care professionals). Infusing this large number of newly qualified beneficiaries into the Medicaid program will not only provide them a “ticket-without-a-show,” but it will also further impair access for those already enrolled because of a lack of capacity amongst the willing.

The current trend of moving Medicaid patients into managed care organizations is not a satisfactory solution because the only way these business organizations can remain viable is by further reducing spending on the patients, especially since they have even higher administrative costs. Although health care prices are high in the United States, that is not true of Medicaid. Prices have already been squeezed to their bottom limit and beyond. That means that these managed care organizations have only one way left to reduce spending – cut health care services.

What about those who have high-deductible health plans? We already know of the harm caused by these HDHPs. (As an example, see: https://pnhp.org/news/2010/november/high-deductible-health-plans-foster-bad-decisions-by-rich-and-poor). We are now witnessing the rapid shift of employer-sponsored plans to HDHPs, because the premiums are lower (since they shift costs to the pockets of individuals with health care needs). The individual health insurance market has seen an even greater shift towards HDHPs since more comprehensive plans are no longer affordable for the majority of us.

Will the state insurance exchanges provide relief? No. Most plans will have a low actuarial value which will automatically require high deductibles (since they will be required to cover a basic benefit package which cannot be pared down).

The point of all this is that those who say that the increase in the numbers of uninsured isn’t important because we will be taking care of that by covering them through ACA have missed the whole point that we have been trying to make. The goal is not simply to improve the count of nominally insured individuals. The goal is to remove financial barriers to health care – for everyone. An underfunded Medicaid program and a market of private plans with intolerable cost sharing are not going to do that.

Other nations have figured out how to do it – with far less money. Surely we have enough ingenuity in this nation to accomplish the same. Come to think of it, we don’t need ingenuity. The beneficial policies of other nations are not intellectual property. We can copy them.

Doctors aren't accepting new patients with private insurance either

By Aaron Carroll
The Incidental Economist, June 28, 2011

With so much press being made about doctors refusing patients with Medicare and Medicaid, it seems like public insurance is just a bad deal. Some of us, however, have been arguing that you’re only hearing part of the story. For instance, both Harold and Austin have argued that only looking at one large and broad private plan ignores the fact that many other private plans are much less robust and offer more limited access than BCBS. Others, like me, have argued that by focusing on specialists and adult docs, we miss the populations most often covered by these prorgams.

A new study just published in Archives of Internal Medicine gets at some of these problems:

Methods:

We performed an analysis of trends from 2005 through 2008 using data from the National Ambulatory Medical Care Survey (NAMCS). NAMCS is a nationally representative survey administered by the Centers for Disease Control’s National Center for Health Statistics. It contains information about physicians practicing in nonfederally funded, nonhospital–based offices throughout the United States, excluding those in anesthesiology, radiology, and pathology. Data on hospital associated practices were not available. NAMCS uses a complex sampling design with physician weighting so that national estimates of physician and practice characteristics can be reliably generated… The sample was restricted to physicians who accepted new patients (4632 physicians, 95.1% of the sample). Pediatricians and obstetricians (520 physicians) were excluded in the analysis of Medicare acceptance rates. We report weighted percentages of physicians who accepted new patients by insurance type and year…

What did the researchers do? They examined data from a representative sample pf physicians. Specifically, they looked at how often physicians accepted new patients by insurance type and year.

What did they find? The overall acceptance rate of new patients was pretty static from 2005-2008, going from 94.2% to 95.3%. The percentage of physicians accepting new Medicare patients dropped from 95.5% from 92.9% (about 2.5%). But here’s the thing. There was a bigger drop in physician acceptance of patients with private noncapitated insurance from 93.3% to 87.8% (about 5.5%). In fact, they found that over 90% of physicians accepted new Medicare patients. Reports of reimbursement rates driving away physicians may be more anecdotal than widespread.

So, yes, Medicare acceptance rates dropped, but private insurance acceptance rates dropped more overall. Interesting.

Using data in tables attached to the study, I also made some charts showing how new patient acceptance rates of physicians differed in the groups I’ve argued matter. Let’s start with primary care physicians:

What should we note here? First that the difference in the rates of acceptance of new patients with Medicare, private non-capitated patients, and self-pay patients are pretty similar. If you want to get detailed, however, the acceptance rate of private non-capitated patients went down more than the other two groups. Second, Medicaid acceptance rates were lower. They were comparable, however, to the acceptance rate of patients in private capitated plans. Also, not much changed from 2005-2008.

Here’s pediatricians:

Now obviously there’s no Medicare line, as these are kids. But notice the Medicaid line? Not much change overall from 2005-2008. Here’s the shocker, though. The acceptance of Medicaid is much closer to that of private non-capitated patients, and much better than that of private capitated plans. Acceptance rates of patients with those plans dropped off pretty severely between 2005 and 2008.

Finally, here’s Ob-Gyns:

Medicaid acceptance rates? Up from 2005 to 2008. Acceptance of all private plans? Down from 2005 to 2008. Moreover, Medicaid acceptance rates crush those of private capitated plans once again.

I’m not arguing that Medicaid and Medicare don’t under-reimburse, or that they don’t have significant issues. They do, and they do.

But the story you’ve been hearing is that (1) doctors are fleeing Medicare and Medicaid in droves and that (2) doctors much prefer private insurance to either of these programs. That’s not the whole story. Doctors, especially primary care docs, seem more likely to accept new patients with Medicare than with private capitated plans and likely many private non-capitated plans. Medicaid performs comparably to private capitated plans with primary care docs overall. But remember that Medicaid is primarily a plan for pregnant women and children. And ob-gyns and pediatricians are more likely to accept new patients with Medicaid than private capitated plans. And, while they don’t seem to be cutting back on Medicaid patients, they do seem to be accepting fewer patients with private plans overall.

That’s a much different story. It’s one worth investigating further.

http://theincidentaleconomist.com/wordpress/doctors-arent-accepting-new-patients-with-private-insurance-either/

Orszag – Medicare, not commercial insurers, has the clout

Orszag sees legislative gridlock ahead

By Melanie Evans
ModernHealthcare.com, June 28, 2011

Peter Orszag, former director of the Office of Management and Budget, speaking before health finance executives in Orlando, said an overhaul of U.S. healthcare payment to reward value cannot succeed without Medicare, yet policymakers face gridlock in what is a highly politicized environment.

Commercial insurers are too fragmented to change healthcare payments, but Medicare has the clout, he explained. Options under consideration to address the nation’s rising healthcare costs, which Orszag called the primary source of the U.S. fiscal woes, won’t accomplish much, Orszag said. Cuts to Medicare provider payments are “blunt” and “temporarily effective” but not a “long-term answer.” He dismissed rationing care as politically unviable. Proposals to increase household financial liability for healthcare are least effective among the most costly patients, which policy makers must address to slow spending, he said.

http://www.modernhealthcare.com/article/20110628/NEWS/306289975

Healthcare Financial Management Association
http://www.hfmaconference.org/2011/06/orszag-key-to-improving-quality-is-reducing-variation/

Comment: 

By Don McCanne, MD

According to Peter Orszag, “commercial insurers are too fragmented to change healthcare payments, but Medicare has the clout.” Though he didn’t expand on that with the obvious extrapolation, we can. Let’s get rid of the commercial insurers and improve and expand Medicare so that it covers everyone.

Annual Meeting Registration Confirmation

Thank you for registering for Physicians for a National Health Program’s 2017 Annual Meeting, to be held Saturday, Nov. 4, 2017, in Atlanta. Your registration fee has been processed.

You can help sponsor a medical student to attend the meeting by making a donation to the Nicholas Skala Student Activist Scholarship Fund. A contribution of $100 will provide a student with meals for the day, while a gift of $250 will provide an average travel stipend.

The Annual Meeting will be held at the Omni Atlanta Hotel at CNN Center (100 CNN Center, Atlanta, GA 30303). Programming will begin promptly at 9 a.m. and sign-in will begin at 8 a.m. You will receive further details by email closer to the meeting date, and additional information may be posted on the PNHP’s website as it becomes available.

If you registered for the Leadership Training Institute, those events will be held at the Omni Atlanta Hotel at CNN Center on Friday, Nov. 3. Sign-in will begin at 9 a.m.

All attendees are invited to participate in a rally on Friday, Nov. 3, at approximately 4:30 p.m. Location and further details will be announced in the future.

Sleeping rooms are available at the Omni Atlanta Hotel at CNN Center for $165 per night (single/double). Reservations can be made in PNHP’s block by calling 800-THE-OMNI (800-843-6664). Reservations must be made by Monday, Oct. 2, 2017.

If you have any questions prior to the meeting, please contact me at matt@pnhp.org or 312-782-6006.

We look forward to seeing you in Atlanta!

Best regards,

Matthew Petty
Executive Director

Note: PNHP uses a third party to process our credit card transactions online. On your credit card statement the charge will NOT be from PNHP but rather from Democracy Engine, our online partner.

Declines in physician acceptance of Medicare less than private coverage

Declines in Physician Acceptance of Medicare and Private Coverage

By Tara F. Bishop, MD, MPH; Alex D. Federman, MD, MPH; Salomeh Keyhani, MD, MPH
Archives of Internal Medicine, June 27, 2011

A number of articles in the lay and medical press report a decline in the number of physicians who accept patients with Medicare; however, to our knowledge, recent trends in acceptance of different types of insurance have not been examined. Using data from a national survey of physicians, we examined trends in physician acceptance of different types of insurance and self-pay patients.

Results

The percentage of physicians accepting new patients did not vary significantly between 2005 and 2008, ranging from 94.2% to 95.3%. Physician acceptance of new Medicare patients dropped from 95.5% in 2005 to 92.9% in 2008 (P = .01). Physicians in private practice were largely responsible for the declining acceptance of Medicare patients as determined in stratified analyses (95.5% in 2005 vs 93.0% in 2008; P = .01) (eTable).

There was a more pronounced decline in physician acceptance of patients with private noncapitated insurance (93.3% in 2005 vs 87.8% in 2008; P < .001). A smaller percentage of adult primary care physicians accepted private noncapitated patients over the study period (97.3% in 2005 vs 89.9% in 2008; P < .001).

Rates of acceptance of new Medicaid and private capitated patients were lower than Medicare and private noncapitated insurance, but also showed a decline over the study period. Acceptance of self-paying patients was more than 96% in all years and did not change significantly over the study period.

While reports in the press highlight physicians’ dissatisfaction with Medicare, we found only a small decline in physician acceptance of Medicare patients between 2005 and 2008. In contrast, the decline in physician acceptance of noncapitated privately insured patients was more pronounced. Physicians continued to accept patients who were self-paying.

Although physician reimbursement under Medicare is often cited as the reason why physicians turn away Medicare patients, our findings that more than 90% of physicians continue to accept Medicare patients despite marginal increases in reimbursement suggest that anecdotal reports may be overstating access problems.

The observed decline in acceptance of private noncapitated insurance was unexpected and could be related to reimbursement but also to administrative burden. Acceptance rates of capitated insurance was lower and may reflect lower reimbursement in this model. Finally, the low and declining acceptance of new Medicaid patients is not surprising given the program’s historically poor reimbursement rate. Low rates of Medicaid acceptance may threaten access to care for the estimated 16 million Americans who will receive Medicaid coverage as a result of the Patient Protection and Affordable Care Act.

http://archinte.ama-assn.org/cgi/content/full/171/12/1117

eTable. Percentage of physicians accepting new patients by insurance type, practice type, and specialty, 2005-2008:
http://archinte.ama-assn.org/cgi/data/171/12/1117/DC1/1

Comment: 

By Don McCanne, MD

The good news in this report is that the often stated claim that physicians are dumping Medicare patients in favor of privately insured patients is not really true, at least as of 2008. Although there has been a small decline in the numbers of physicians accepting Medicare, well over 90 percent still do. Contrary to claims otherwise, the decline in the acceptance of privately insured patients was even greater.

Examining the breakdown in the eTable (link above) reveals some other interesting though not unexpected findings. With the exception of community health centers, close to one-third of physicians do not accept new Medicaid patients. Even more do not accept privately insured capitated patients (paid a flat amount per month per patient rather than fee for service). Over half of HMOs do not accept self-pay patients, though acceptance rates for these patients is very high in private practices and community health centers.

Although cash paying patients had the best access, this report does not cover the potentially catastrophic consequences of being uninsured or inadequately insured (e.g, high deductibles). Having adequate insurance is essential. The new lower actuarial value standards of private insurance make them a less desirable model for expanding coverage. Also the chronic underfunding of Medicaid makes it a poor choice.

Although Medicare remains popular and is widely accepted, it does need to be improved. Once we do that then it would be the ideal program to cover everyone. Acceptance rates would be virtually 100 percent.

Vladeck: It's Not a Medicare Crisis, It's a Revenue Crisis

By John Reichard, CQ HealthBeat Editor
CQ Healthbeat, June 23, 2011

Bruce Vladeck, who ran the Medicare and Medicaid programs in the Clinton administration, told a Senate Finance Committee hearing that the budget crisis facing the nation stems not from those two entitlements but from inadequate revenue and a flagging economy. Pump up revenues and get the economy growing and the financing challenges involved with the two government health care programs are manageable, he said.

Republicans on the panel and other witnesses at the hearing, which addressed the role of health care spending in the debt, sharply disagreed with Vladeck, who headed the Health Care Financing Administration, the predecessor agency to the Centers for Medicare and Medicaid Services (CMS).

It wasn’t clear whether Committee Chairman Max Baucus was buying the Vladeck analysis, either. But the Montana Democrat was clearly on board with the view that more revenue will be needed.

Baucus seemed worried, if not shaken, when he paused the hearing at one point to announce that House Majority Leader Eric Cantor, R-Va., had withdrawn from debt ceiling negotiations with the White House because of his opposition to revenue increases.

“I’m very disappointed over that,” Baucus said, calling the deficit a matter of national security. “I think revenue is needed, for a whole host of reasons … More important, I think leadership is needed. Leadership needed on both sides of the aisle, and at both ends of Pennsylvania Avenue.

“You can’t ask folks who receive federal benefits, whether they’re retirees or Medicare or Medicaid recipients or farmers, to bear the sacrifice of deficit reduction alone.”

Vladeck’s testimony was almost startling in how skeptical he was that Medicare is in crisis.

“While the Medicare program has long-term financial problems that must be addressed,” Vladeck said, “the current so-called crisis is in fact an artifact of broader problems with the federal budget and budgetary politics and should not be used as an excuse to dismantle one of the most important programs the federal government has ever operated, or to renege on the commitment this government has made to generations of working people as it has collected taxes from them.”

Sen. Orrin G. Hatch of Utah, the top Republican on the committee, responded that the Congressional Budget Office (CBO) reported that the debt held by the public will exceed 100 percent of GDP by 2021. “CBO concludes that ‘the explosive path of federal debt underscores the need for large and rapid policy changes that put the nation on a sustainable fiscal course,'” Hatch said, He also noted that credit-rating agencies are warning U.S. policy makers about the need for action and that President Clinton has voiced concern that Democrats would do nothing to address Medicare insolvency.

“Now with these facts for context, I’m shocked and frankly bewildered that in your mind that this is not a crisis,” Hatch told Vladeck. “Can you tell us what a budget crisis looks like to you?”

“Senator, there’s no question in my mind that there is a budget crisis,” Vladeck replied. “I don’t think it’s a Medicare crisis. I think the major source of our budget crisis … is we’re having a revenue crisis. Federal revenues as a proportion of the gross domestic product are at their lowest level since prior to the beginning of the Korean War,” Vladeck said. “We had a balanced national budget in 1999 and in 1920 with federal revenues at 19 or 20 percent of the GDP and a growing economy, and now we have a stagnant economy and federal revenues at less than 15 percent of the GDP. No wonder we have a budget crisis.” He added that “one can achieve long-term solvency in the Medicare program with decisions much less drastic than are being proposed” in the House budget resolution.

But former Congressional Budget Office Director Douglas Holtz-Eakin said, “I fundamentally disagree.”

“In all these projections, revenues go to above historic norms and we still have an exploding debt spiral. That’s just not our problem. It’s the spending and the growth of the spending fundamentally, and Medicare is part and parcel of that.”
The hearing included the usual charges that the health care law (PL 111-148, PL 111-152) will add to the already unaffordable costs of entitlement programs and countercharges that the health law will help slash deficit spending and spawn innovations that eventually tame health care spending growth.

But amid the partisan tussling there were brief glimpses of common ground. Democratic Massachusetts Gov. Deval Patrick and former Kentucky Gov. Ernest Fletcher, a Republican, agreed on the need to carefully scrutinize the relatively small percentage of Americans who account for a disproportionately large percentage of health care spending.
Better coordinated treatment would generate big savings, they suggested. Fletcher also said that serious wellness and prevention programs could sharply reduce coronary artery disease.

Vladeck agreed with senators who suggested that more uniform deductibles and co-payments in Medicare and a switch to more home-based care for chronically ill patients in nursing homes would help control costs.

Another area of agreement was the need to end the current fee-for-service payment system in favor of a payment system that spurs carefully coordinated, team-based care. But all of these changes would take many years to generate big savings, according to hearing testimony.

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/Jun/June-27-2011/Its-Not-a-Medicare-Crisis.aspx

Nurses union supports equal access for all

By Jean Ross, R.N.
Orlando Sentinel, June 28, 2011

The view from the hospital floor where nurses give care 24/7 is quite a distance from the halls of Congress, which is consumed with debates on debt ceilings. Or from Labor Department cubicles, where monthly unemployment numbers are being crunched. Or from corporate boardrooms, which are signing off on executive bonuses.

Our view is of the immediate needs of the sick. Still, in the end, these are pieces that inform a critical national discussion. For us, the question is: How can the richest country in the world — by far — be in such a serious crisis, and what can we do now to remedy it?

We nurses see the effects of the crisis up close. Very close. The insecurity that engulfs American communities reveals itself in a rash of stress-induced illnesses: high blood pressure, stroke, kidney failure, heart disease, mental illness.

“We are seeing people in their 40s with sky-high blood pressures,” Pamela Young, a registered nurse from Oviedo, told me.

“One was in the midst of a heart attack, and all he could think of was being afraid of losing income and racking up a bill he couldn’t afford.”

Everyone is aware that without a good payroll check, the bottom falls out: Money for a quality diet is gone; recreation and exercise take a backseat; getting to dentists and doctors is for emergencies only, if at all. Even for kids.

A future of uncertainty is all-consuming, and constant worry takes a terrible toll. We hear this from patients — and throughout the communities in which we live — every day.

At the hospital, we nurses also see the results of a health-care system that is about the bottom line, not about providing health care for all. Millions of Americans cannot keep up with galloping health-insurance premiums — up 40 percent in a decade.

Last year, the number of Americans denied access to medically necessary treatment increased 60 percent.

Anna Smith, an emergency room nurse in Oakland, Calif., said, “We are seeing more kids, and we are seeing sicker kids. They are forced to use our ER as their primary-care provider, and so when they come to us, they are really sick. Asthma flares are more prevalent and more deadly. Diets are high in fat, and children are developing pancreatitis, usually an adult illness.”

If there is anyone who understands the logic and necessity of an expanded Medicare for all, it is nurses. We support new federal legislation for single-payer health care — the Sanders/McDermott American Health Security Act of 2011.

We nurses are bewildered when we read headlines about corporate profit rates reaching a 60-year high in 2010 and the same companies paying few taxes. We know our tax dollars went for a huge Wall Street bailout and see reports of billions of dollars in bonus pools, yet “bankers making $5 million to $10 million a year don’t think they are making enough,” according to Atlantic magazine.

In Vanity Fair, economist and Nobel laureate Joseph Stiglitz recently wrote, “An economy in which most citizens are doing worse year after year — an economy like America’s — is not likely to do well over the long haul.”

It is time to take back the promise of this country and share the nation’s vast resources fairly. We have a plan: The Main Street Contract for the American People. It is not about any political, party but about goals that will make the difference. They include jobs at living wages and plans to reinvest in America; equal access to education, health care, good housing and protection from hunger; a secure retirement; a safe, clean and healthy environment; and a just taxation system.

We will start identifying legislation — state and federal — that furthers these goals before giving support in coming elections.

Nurses have said we help bring people into the world. Now we are going to follow through on behalf of your quality of life, for your children, for our future. We know that advocating for our patients means raising our voices beyond the bedside. It is time to cure this crisis once and for all.

Jean Ross of Minneapolis, Minn., is a registered nurse and co-president of the 170,000-member National Nurses United.

http://www.orlandosentinel.com/news/opinion/os-ed-health-care-jean-ross-062811-20110627,0,5530041.story

Study: Doctors More Likely To Drop Private Insurance Than Medicare

By Scott Hensley
NPR ‘Shots’ health blog, June 27, 2011

There’s a lot of chatter about how public policy can influence doctors’ decisions about which new patients to see and which to turn away.

One big question: Does the squeeze on Medicare that has limited the program’s pay increases to doctors lead them to see fewer of those patients?

Some researchers decided to look at recent data for clues. And they found a slight drop — a little less than 3 percent in the proportion of doctors taking new Medicare patients between 2005 and 2008.

But that drop, which still left 93 percent of docs taking new Medicare patients, wasn’t much compared with the hit for patients with typical private insurance.
 
For those people, there was a 5.5 percentage point drop, leaving about 88 percent of physicians who would add them as new patients.

The greater decline in doctors accepting private insurance was “unexpected,” the researchers write in the latest issue of Archives of Internal Medicine, where the findings appear.

What’s going on? I asked lead author Dr. Tara Bishop, an internist and assistant professor of public health at Weill Cornell Medical College in New York. She said there are a couple of possible reasons. Some doctors may be bucking the administrative hassles of private insurance, she said.

Medicare may not always pay top dollar, but it’s pretty reliable. And, she said, Medicare is still the largest payer, so it’s hard for doctors not to accept those patients.

For her part, Bishop sees patients with all kinds of insurance. But she said the findings are worrisome. “If these trends continue we may have problems getting care to patients in the ambulatory setting,” she said. “It’s possible patients might have health insurance but not be able to see a doctor.”

http://www.npr.org/blogs/health/2011/06/27/137454297/study-doctors-more-likely-to-drop-private-insurance-than-medicare

Medicare for all is best option

Letters
The Witchita Eagle, June 27, 2011

Kudos to a Wichita physician for speaking out for the need and benefits of Medicare (“Health care law preserves Medicare,” June 22 Letters to the Editor). His analysis of how “the current government-controlled, single-payer, 2 percent overhead system is preferable to a voucher system that turns seniors over to the vagaries of the private, for-profit insurance industry” helps us understand the improvements and the deficiencies of the Patient Protection and Affordable Care Act.

Going one step further, the group Physicians for a National Health Program advocates Medicare for all as the most economical and moral delivery system of health care.

These physicians from all over the country are busy presenting the facts of a Medicare-for-all system. Among them is Margaret Flowers, nationally known for her devotion to this issue, who will appear in Wichita on Sept. 27 to address questions. The venue to be announced.

ALICE POWELL
Wichita, Kan.

http://www.kansas.com/2011/06/27/1910054/letters-to-the-editor-on-medicare.html#ixzz1QZvDUeUF

In 'socialized medicine,' a man wouldn't rob a bank to get health care

By Leonard Pitts Jr.
The Baltimore Sun, June 26, 2011

I pay my taxes.

I will not offend your intelligence by pretending to enjoy it. Writing that check is about as enjoyable as a chain-saw root canal. But I don’t resent it, either.

I pay my taxes because this is how we the people pay for things we deem to be in our communal interest. This is how our military is sustained. This is how our children are educated. This is how our potholes are filled. This is how our libraries are stocked. This is how our police officers are supplied. This is how we take care of us. So I pay my taxes.

It is because I do, that I was appalled by the story of James Verone. He is a 59-year-old man from Gastonia, N.C. Drove a Coca-Cola delivery truck for 17 years until he lost his job three years ago. He got another job driving a truck, but that job went away, too. So Mr. Verone took part-time work at a convenience store, only to find himself physically unable to do it. Mr. Verone has a bad back, a problem with his left foot that causes him to limp, arthritis that swells his knuckles and carpal tunnel syndrome. He could not stand behind the register, bend to reach the low shelves, lift things to the high ones.

And he had no medical insurance. Then, to make matters worse, he found a lump on his chest. Desperate, Mr. Verone considered his options. He filed for disability and early Social Security but did not qualify. Meanwhile, his savings were running out like sand through an hourglass. He considered a homeless shelter. He considered asking for charity. “The pain was beyond the tolerance that I could accept,” he told a reporter from the Gaston Gazette, upon whose story this account is based. “I kind of hit a brick wall with everything.”

That’s when Mr. Verone turned to crime. On the 9th of this month, he walked into a randomly chosen bank and passed a teller a note demanding one dollar and medical attention. He never showed a weapon, stood there while she called police, waited on a couch in the lobby for them to arrive, surrendered quietly. He went to jail, where he now has shelter, food and, yes, medical care.

I am not here to lionize Mr. Verone. His stunt could have gotten someone hurt. Indeed, the teller was taken to the hospital because her blood pressure spiked.

No I don’t lionize him. But I do empathize.

I pay my taxes. I consider it a patriotic obligation — a sacrifice for the greater we.

But that is not how the anti-government forces that have dominated political debate in recent years see it. To hear them tell it, to pay taxes is to be robbed. And every federal program our taxes support is wasteful and unnecessary, except, of course, those that directly benefit the complainer himself.

During the health-care debate, we kept hearing that a government-run system amounted to “socialized medicine,” as if Marx would be your triage nurse and Lenin your doctor. As if, by that definition, our government-run libraries, police forces, schools and garbage pickup were not also “socialized.” As if it’s Aetna that really has your interests at heart.

If health care were “socialized,” a law-abiding workingman would not have felt driven to this extreme. A great nation has a moral obligation to provide a safety net, to care for the most broken and vulnerable of its people.

I pay my taxes. That’s one reason I do.

Leonard Pitts’ column appears regularly. His email is lpitts@miamiherald.com.

http://www.baltimoresun.com/news/opinion/oped/bs-ed-pitts-20110626,0,2950284.story