Privatization Warning, The American Prospect, April 11, 2024, by Suzanne Gordon and Steve Early

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A VA advisory panel issues a red alert on outsourcing.

In response to cost overruns on care for nine million patients of the Veterans Health Administration (VHA), the Department of Veterans Affairs (VA) recently convened a high-level “Red Team…”

The panel of six health care leaders includes former VHA undersecretaries for health, ex-DOD officials with military health experience, and prominent health care system executives. …

Rarely has a group of inside-the-Beltway experts gotten to the point so quickly or sounded the alarm so clearly. In the report, obtained by the Prospect before its public release, the group unanimously concluded: “The increasing number of Veterans referred to community providers … threaten to materially erode the VA’s direct care system.” Without a course correction, they said, mass closures of VA clinics or certain services could ensue, “eliminating choice for the millions of Veterans who prefer to use the VHA direct care system for all or part of their healthcare needs…”

The cost of reimbursing the 1.7 million private-sector providers enrolled in the five-year-old Veterans Community Care Program (VCCP), which facilitates patient outsourcing, has “dramatically increased, rising from $14.8 billion in FY 2018 to $28.5 billion in FY 2023,” the report states. Referrals outside the VHA are rising by 15 to 20 percent per year and now involve more than 40 percent of all patients, who are getting at least some care in the private sector.

The Red Team members lay out a series of very concrete steps that VA leaders can take to address problems identified in the report. Many can be implemented without remedial action by Congress…

Many can be implemented without remedial action by Congress.

High on the list is that Veterans Affairs Secretary Denis McDonough revise the “drive time and wait time” standards that his pro-privatization predecessor Robert Wilkie implemented, and which are now bankrupting the VA.

As the Prospect has suggested for several years, the authors state that the VA could immediately save over $1 billion by making telehealth services count as access to care. Secretary McDonough himself said this should happen two years ago.

The report urges McDonough to go further, by conducting a more thorough revision of the Wilkie access standards. Right now, a veteran who has to drive a long distance for a medical appointment could show up at a private-sector facility across the street from a VHA hospital or clinic that could provide the patient with the same service.

To better manage overuse and misuse of private-sector services, the report recommends that the VA should replace its use of what are called standardized episodes of care (SEOCs). Currently, VCCP providers can deliver services that a veteran might not need, or that the VHA could provide following an initial VCCP visit. The VCCP can bill for a veteran’s initial visit to an orthopedist for back pain, and for X-rays or MRIs, and for physical therapy services, and for 20 sessions of massage therapy. No utilization review is applied, and the veteran is not sent back to the VHA, where these services may be available in a more timely fashion, at higher quality, and for a lower cost. This practice, the authors argue, should be jettisoned, and a more effective utilization management system developed.

Similarly, when it comes to controlling ER costs, the Red Team says the VA should make it easier for veterans to access VA ER care through telehealth, and “repatriate” patients back to the VHA for follow-up care once they have been stabilized. VA should also make sure veterans aren’t directed to VCCP ERs as their main option on VA websites.

Another critical recommendation is that VA initiate an “attraction campaign” so that veterans, VA staff, policymakers, and the public understand what reams of data confirm: The VA delivers stellar care to some of the nation’s most complex patients, more quickly and at lower cost than private-sector providers. Marketing the system’s remarkable successes, the Red Team insists, should be “a top organizational priority.” …

These would be welcomed by longtime advocates for veterans like Michael Blecker, director of Swords to Plowshares in San Francisco.

“If the VHA collapses, we will see an increase in veteran homelessness, veteran suicides, veteran unemployment, and a host of other serious consequences,” Blecker predicts. “Plus, the nation will have lost its only model of comprehensive health care. We in the veteran community cannot allow this to happen.”

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Comment:

By Suzanne Gordon, M.D.

Over the past decade, the outsourcing of VA care to the private sector has increased dramatically.  Market ideologues have helped the medical industry grab more and more taxpayer dollars as they’ve crafted, and then lobbied for, legislation that would drain the Veterans Health Administration of both funds and patients. HJM has covered these worrisome trends.

Now we see a call for action. The Red Team Report, referred to in the article above, and a follow up article – Is Denis McDonough a Slow Reader? – is perhaps the most significant challenge to VHA outsourcing. The authors are classic inside-the-beltway players not known for their anti-privatization positions.  Yet, they unanimously conclude that the VHA faces an existential threat – and by this they are not referring to something abstract or philosophical.

What has been most frustrating about following the Red Team story has been the response of the very VA leaders who commissioned the report.  The report provides the Biden administration with just the mainstream cover it needs to initiate a reversal of VA privatization.  And yet, instead of taking this opportunity, they are maintaining the course Republican privatizers, from John McCain to Donald Trump have charted.

Our hope in writing this article for The American Prospect and many others like it, is that healthcare reform activists and those concerned with veterans’ issues will pressure the administration to do what’s needed before it’s too late.  If the DoD (which is reversing the privatization of the military health system)  can do it, the VA certainly can – and must.

https://healthjusticemonitor.org..

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The day will come when we will succeed in making health care a human right, YouTube video (7 min), May 23, 2024, by Bernie Sanders

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Transcript:

Thank you very much for joining me. I want to say a few words today about our broken health care system and the need for us to join the rest of the industrialized world and guarantee health care for all as a human right. The quality of health care that a nation provides is not only a major factor in determining whether people live long happy and productive lives, but it gets to the heart of what a country stands for and what its values are. In a sense nothing is more important than that. In my view there is a fundamental and simple question that all of us have got to answer: Should health care in the United States be a right for all people or should it be a privilege based on our wealth and our ability to pay?

Let’s be clear the health care system of the United States is broken. It is dysfunctional and it is cruel. It is a system which spends nearly twice as much per capita as any other major country, while 85 million Americans are uninsured or underinsured, where one out of four Americans cannot afford the cost of the prescription drugs that doctors prescribe, and where over 60,000 people die each year because they don’t get to a doctor on time.

It is a system in which our life expectancy is lower than almost all other major countries and is actually declining, a system in which working class and low-income Americans die at least 10 years younger than wealthier Americans. It is a system in which some 500,000 people go bankrupt because of medically related debt. It is a system in which large parts of our country are medically underserved, where rural hospitals are being shut down, and where people even with decent Insurance have to travel hours in order to find a doctor. It is a system in which amidst a major mental health crisis when over a 100,000 people in our country died last year from drug overdoses and where suicide, alcoholism, depression, and anxiety are rising, Americans are unable to find the affordable mental health care and substance abuse treatment that they need.

It is a system where despite our huge expenditures, we don’t have enough doctors, nurses, dentists, mental health professionals, pharmacists, and other health care providers. And where we spend less than half than in other countries on primary care.

It is a system in which people spend endless hours filling out form after form after form and arguing with insurance agents. It is a system in which the quality of care you receive is largely dependent on the generosity of your employer or whether you have a decent union. It is a system in which millions of people stay in their jobs not because they like them but because they need the insurance that the job provides.

Further, our current health care system is not, as everybody knows, comprehensive. Yes dental care is health care, yet tens of millions of our people including many seniors cannot afford to see a dentist. Yes the treatment of mental illness is health care, yet our long-standing mMental health crisis is now worse than ever. Yes providing services to millions of elderly and disabled Americans in their homes is health care.

Let’s also be clear and understand that while our health care system is failing ordinary Americans it is working exceptionally well for the people who own the system. While more than 60,000 people die from preventable deaths every year in the US, the seven largest health insurance companies in America made over 70 billion in profits last year, led by United Health Group which made over 32 billion. Not surprisingly the CEOs in the insurance companies and the pharmaceutical industry receive huge and I mean huge compensation packages.

In my view the function of a rational and humane health care system is to provide quality care for all as a human right. It is not to make tens of billions of dollars every year for the insurance companies and the drug companies. In 1965 president Lyndon B Johnson signed the Medicare and Medicaid Act into law declaring that the time had finally come to end “the injustice which denies the miracle of healing to the old and to the poor.” Today almost six decades later Medicare is the most popular Healthcare program in America, providing comprehensive health care for all those 65 and older.

It is also the best model in my view for health care reform in the United States in the face of a dysfunctional and failing health care system. The time is long overdue for us to improve and expand Medicare to cover all Americans and that is why I have introduced Medicare for All legislation in the Senate which would provide comprehensive health care coverage without out-of-pocket expense for every man, woman, and child in America – regardless of age, regardless of family income or where they live. Medicare for All is a system based on addressing the health care needs of the American people not the profit needs of insurance companies and the pharmaceutical industry. Under Medicare for All there will no longer be insurance premiums, deductibles, or co-payments; no more worrying about whether you can afford to see a doctor, no more arguing with insurance agents about the nature of your coverage, no more hounding by bill collectors for unpaid medical bills, no more worries about going bankrupt if you end up in a hospital. This legislation not only expands Medicare to cover all Americans, it also significantly improves upon the services for the elderly and disabled.

Would a Medicare for All health care program be expensive? Yes it would. But while providing comprehensive health care for all it would be significantly less expensive than our current dysfunctional system because it would eliminate an enormous amount of the bureaucracy, profiteering, administrative costs, and misplaced priorities inherent in our current for-profit system. In fact the Congressional budget office has estimated that Medicare for All would save Americans $650 billion a year, a year.

Charting the right course, the humane and healthy course for this country, in terms of health care, is not going to be easy. We are taking on the most powerful economic and political forces in the entire world. But I have no doubt that the day will come sooner than later when we will succeed in making health care what it must be: a fully recognized and fully supported human right. Thank you all very much.

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Comment:

By Jim Kahn, M.D., M.P.H.

As a health economist, I sometimes encounter a fraught situation: potential spending on life-saving health care exceeds available resources. In other words, the ethically compelling position that quality health care is a human right is unaffordable.

Not so with single payer. As Bernie notes (and has been demonstrated repeatedly by economists), single payer saves money while saving lives. Health care as a human right at no cost, indeed at lower cost. The economists’ supposedly non-existent “free lunch” is offered to us on silver platter.

All we need to sacrifice is massive profits for insurers and other health care profiteers. Sounds right to me.

Nobody makes the argument better than Bernie. Let’s redouble our efforts for the humane and efficient single payer path.

https://healthjusticemonitor.org…

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I’m a Former Surgeon General and I Couldn’t Believe My $10k Medical Bill, MedPage Today, May 17, 2024, by Jerome Adams, M.D., M.P.H.

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While attending a conference in Arizona in January, I embarked on a popular hike up the renowned Camelback Mountain. Unfortunately, mirroring the experiences of many who preceded me, I underestimated the effects of the dry desert air and midday temperature. I consequently found myself dizzy and dehydrated, necessitating an emergency department visit. 6 weeks later, I received medical charges approaching $10,000. Despite my insurance company negotiating it down to $4,800, the onus of the entire amount still fell on me due to my high-deductible health plan (HDHP).

The ordeal underscores a harsh reality: Millions of Americans face unforeseen out-of-pocket expenses, but few can shoulder such a burden.

Surprise medical bills, such as the one I received, often stem from patients unwittingly receiving care from out-of-network providers, resulting in substantially higher costs that insurance fails to cover.

Despite healthcare purportedly operating as a free market, I was not furnished with the requisite information to make an informed decision regarding my purchase. Moreover, I was not apprised of the cost of my care until 6 weeks later!

The proliferation of HDHPs, encompassing almost 60% of individuals with employer-provided health insurance post-ACA, compounds the issue.

To address the scourge of surprise and exorbitant medical bills and ameliorate the healthcare system for all Americans, I proffer several recommendations:

1. Enhance transparency in healthcare pricing
2. Institute arbitration for billing disputes
3. Advocate for consumer protections
4. Support legislative efforts to address surprise medical bills
5. Foster collaboration between providers and insurers
6. Improve HDHPs

My advocacy transcends personal interests; it serves as a clarion call for healthcare reform, ensuring that everyone can access necessary care without fear of financial ruin.

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Published Comment:

By Don McCanne, M.D.

Although we desperately need reform, Dr. Adams’ recommendations would have a negligible impact on our system. With a well designed single payer system – an improved version of Medicare provided for everyone – we could provide accessible, affordable, equitable, high quality health care for all. The single payer model removes billions of dollars in administrative waste. It allows free choice of health care providers without the need for cost sharing barriers. It is affordable for all because it is funded through progressive taxes. All would pay less than they are currently paying under the current system, except for the very wealthy who would pay more but not so much that it would have any negative impact upon their lifestyles. (Keep in mind that the wealth of society is a product of the individual workers and the resources of nature and that the wealthy use capitalistic tools to segregate that wealth to their own ends. Returning some of that wealth in the form of health care for all should achieve the altruistic goal of health justice for all.)

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HJM Comment:

By Don McCanne, M.D.

We can thank Jerome Adams for providing us a fine example of one of the reasons why we have such an expensive health care system that ranks so poorly (U.S. spends the most but ranks last amongst 11 modern nations, per the Commonwealth Fund). This reason here is that our political leaders frequently resort to garbage policy science when we know what policy would actually bring us a vastly superior system. Of course, that’s single payer.

When you see how our former Surgeon General was stung by our current system, and then he makes recommendations that are sort of an offshoot of market economics that he says would “ameliorate the healthcare system for all Americans,” you know that he has not learned anything. The market concepts he supports have kept us as the most expensive and poorest performing system of wealthier nations.

In contrast, single payer policies would accomplish the goals of universality, affordability, equity, accessibility, freedom of choice, prevention of medical debt and other features that people are looking for in health care today. This is evident around the world. Many economists have explained how a great excess of wealth is accumulating at the top, and the tax system can be used to lower health care costs for the rest of us, notably without threatening the extreme affluence of the wealthy.

But we, the people, have to do it. We have to elect legislators and government politicians who demonstrate to us that they do understand policy, rejecting policies that are for the billionaires with a few crumbs for the masses, but rather advancing policies for all of the people, so that we all have a right to housing, food, education, retirement, and, yes, health care.

https://healthjusticemonitor.org…

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Health costs threaten to overshadow Biden’s historic coverage gains, Axios, May 14, 2024, by Caitlin Owens

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President Biden has come closer than any of his Democratic predecessors to reaching the party’s standing goal of universal health coverage, but unaffordable care costs may overshadow the achievement.

Voters feeling the pain of inflation are more concerned about their own health costs than whether everyone will have some level of coverage.

• Voters’ most common health care priority by far is lowering out-of-pocket costs, KFF polling found.
• “Certainly we have more people covered, whose concern has shifted from fear of being discriminated against (by insurers) to fear of not being able to access care affordability,” said Democratic strategist Chris Jennings.
• “Health reform efforts in the past have been largely framed around expanding insurance coverage,” said KFF executive vice president Larry Levitt. “Whenever the next health reform debate comes, it will likely be focused on the cost burden, including for those with insurance.”
• A Commonwealth Fund survey last year found that more than half of people who buy their own coverage on the ACA marketplaces or elsewhere said it was difficult to afford care.
• People have always been concerned about health care costs, but the salience goes up when I can’t pay for food and milk and gas and everything else,” said Harvard professor emeritus Robert Brendon, an expert on public opinion and health care. “The temperature about this rises because they’re having trouble paying their bills.”

The bottom line: “We’re always going to be (going) at the quality of health care and the cost,” said Wendell Primus, a former adviser to House Speaker Nancy Pelosi. “Those issues are not going to go away. Even if we solve them temporarily, they’re never going to go away.”

[HJM bolding]

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Comment:

By Don McCanne, M.D.

So people are more concerned about their own health care costs than they are about whether or not other people are covered for their costs. This would be better phrased if we said that people are concerned about their own health care costs, but they also want to be participants in a thriving economy where everyone else is doing well.

What do you suppose they would think if they were offered a system that provided better coverage than they have now but cost them less? Do you think that they would object if that system offered the same comprehensive benefits to everyone else, but was made affordable by funding it through progressive taxation? Would the fact that the very wealthy paid more taxes that would have absolutely no negative impact on their lifestyles be a reason to reject a program that ensured that everyone had access to the health care that they needed? Of course, that is precisely what a well-designed single payer system would bring us. The cost might not ever go away, but we can readily manage it for everyone by the simple process of enacting and implementing single payer.

https://healthjusticemonitor.org…

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Medicare Advantage and Vertical Consolidation in Health Care, American Economic Liberties Project, April 30, 2024, by Hayden Rooke-Ley

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[HJM Editor: Today’s excerpt is dense with policy, economic, and regulatory ideas. We’ve bolded major points. See the Comment for a summary of Rooke-Ley’s 3-part policy vision.]

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From the Executive Summary:

A new wave of health care consolidation is underway. Health insurance and retail conglomerates are rapidly acquiring providers, from primary care practices and surgery centers to home-based and post-acute care. UnitedHealth Group (UnitedHealth), for example, is now the nation’s largest insurer and the largest employer of physicians. Humana is now the largest provider of “senior-based” primary care and in-home care. CVS Health, Walgreens, and Amazon, which have been aggressively consolidating the prescription drug supply chain, are now acquiring physician practices. And private equity investors—looking to consolidate industry segments and then sell to these conglomerates as an eventual exit—are accelerating these rollups.

With dominant market power, the new health care conglomerates dictate which physicians patients can see, which medications are prescribed to them, and which insurance plans they enroll in. By acquiring medical practices, these corporate employers shorten visit times, require more clinical coding and box-checking, and replace physicians with lower-cost clinicians. Meanwhile, by coordinating across lines of business, conglomerates like UnitedHealth squeeze out independent practices and community pharmacies. They can also shuffle money between subsidiaries and use other financial tactics to skirt regulations and exploit payment loopholes, increasing health care costs.

This paper details the causes and costs of this new frontier of consolidation …. In short, sweeping changes in health care financing policy are causing insurers and retailers to restructure as vertically integrated conglomerates. While technical, how the government pays providers and insurers fundamentally shapes the business strategies of health care companies. As the government continues to privatize Medicare and Medicaid, it is significantly overpaying insurance companies to administer benefits. With this excess capital, insurers are acquiring providers, gaining control of key points in the delivery system that enable them to capture greater government payments and minimize spending on patient care. To take one prominent example, control over primary care clinicians allows these corporate owners to manipulate billing and coding practices to make patients appear sicker to the government, thereby increasing payments.

Government policy over the last two decades has transformed health care financing. In an attempt to solve health care’s value problem— high spending and poor health outcomes—policymakers have steadily abandoned “fee- for-service” financing … [in favor of] “capitation-based” financing. In this model, the government pays a fixed budget to a “risk-bearing entity”—an insurance company, hospital system, or group of physicians—to manage the total health care costs for a patient. The risk-bearing entity turns a profit if it keeps costs below the established budget … In this paper this policy [is] referred to as [the] “Capitation Consensus.”

Medicare Advantage, the privatized version of Medicare that now covers more than half of Medicare beneficiaries, is the most prominent example of the Capitation Consensus. But this financing approach has spread across public health care programs: nearly all of Medicaid has moved to capitation-based financing, and Medicare’s prescription drug benefit, Part D, operates entirely on capitation. In the last decade, traditional Medicare— the historically fee-for-service model of Medicare—has been integrating versions of capitation through accountable care organizations and other value-based care models. Despite high hopes, the shift to capitation has yet to deliver on its primary objective of cost reduction. Most concerning is that Medicare Advantage now costs taxpayers anywhere from $75 billion to $140 billion annually in over-subsidization relative to traditional Medicare.

Part II … explains how the Capitation Consensus is driving vertical consolidation. With excess capitation payments, Medicare Advantage insurance conglomerates are plunging capital into provider acquisitions, and retailers and private equity investors are following suit. As noted above, owning physician practices enables conglomerates to inflate the perceived disease burden of patients, thereby enhancing capitation-based payments from the government. Vertical consolidation also enables patient steering: conglomerates can push patients to receive care at their own provider subsidiaries. In doing so, these companies squeeze out local providers, such as independent physician practices and community pharmacies. Steering also generates “captive revenue,” which allows conglomerates to game federal regulations requiring that government payments are spent on patients, not profits. …

… Part III … argues for … at a new “industrial policy” for health care … suspicious of concentrated corporate power—whether horizontally or vertically combined … promote the autonomy and collective power of clinicians [and] protect the medical profession from corporate influence … minimize [corporate] financial strategies that increase prices and administrative costs … [embolden] policymakers, particularly in Medicare, to exercise greater control of public money and directly rationalize the production and allocation of health care capacity. … [and] build robust health care infrastructure—owned by clinical providers and local communities …

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Comment:

By Jim Kahn, M.D., M.P.H.

This is exciting work. Hayden Rooke-Ley offers a policy vision consistent with, and extending, the Biden administration’s pro-public regulatory philosophy. For too long, US health policymakers and regulators have accepted the “Capitation Consensus” that enabled and served as cover for the corporate takeover of insurance and then providers – as a result tolerating rising prices and profits coupled with fading access and outcomes. This can change.

In the Executive Summary excerpted above, Rooke-Ley describes how widespread dysfunction arose from the “Capitation Consensus.” In the full report, he also calls out pharmacy benefit managers (PBMs). This corporate mechanism, supposedly to negotiate lower drug prices, has been co-opted by insurer ownership, permitting manipulation of the formulary, prices, and rebate structures to benefit the vertical conglomerates while financially penalizing patients and independent pharmacies.

Rooke-Ley calls for a new “industrial policy” for health care: an integrated framework to structure the sector towards public aims, not corporate interests. As the Federal Trade Commission (transformed by visionary Chair Lina Khan) and Department of Justice pursue vigorous interventions in various economic sectors, this report offers a compelling roadmap for a broad activist approach in health care. It advocates fundamentally remaking regulation, policy, and financing.

I spoke with Hayden about his policy vision. It has 3 core elements:

(1) Combat corporate consolidation and elevate the power and autonomy of clinicians and their patients. This has regulatory components: Strengthened antitrust enforcement, e.g., forcing break-up of vertical consolidation; and supporting clinicians by fostering unionization and banning restrictive contracting practices like noncompete agreements. On the policy side: Congress can prohibit insurance company ownership of providers, similar to the New Deal era Glass-Steagall Act for banks. States can update and repurpose existing bans on the corporate practice of medicine to limit private equity and insurance company control of medical practices. Investment can be incentivized toward physician and public ownership of hospitals and practices.

(2) Use public utility regulation to foster healthy and fair competition: Rooke-Ley persuasively argues that price competition is harmful in health care: it needlessly fuels consolidation, undermines small providers and community pharmacies, and disadvantages patients on public entitlement programs like Medicaid. Congress could standardize prices, generating immense savings and encouraging providers to focus on delivering the best clinical care. For example, it could treat hospitals as critical public infrastructure, migrating to standard payment rates and ultimately global budgets. On the payment side, more ambitiously, Medicare could get insurers (e.g., Medicare Advantage) out of the business of widespread prior authorization and claims adjudication, instead operating like traditional Medicare. Rooke-Ley also advocates for a “public option” Medicare Part D drug benefit that bypasses insurers and PBMs, with their collusive rebate schemes.

(3) Use public funds more responsibly to build and deploy health care resources. The Center for Medicare and Medicaid services could recapture known over-payments to Medicare Advantage and redirect the funds to expanded traditional Medicare benefits. It would use Medicare leverage to improve physician specialty mix and geographic distribution. For primary care, it could align compensation with specialties and explore global reimbursement.

I’m pleased to see a convergence of proposed actions that are consistent with the new anti-monopoly mindset of the Biden administration, and also with single payer. For example, under single payer insurers would not own providers, hospitals would use standard payment rates and likely global budgets, and public funds – the entire health care budget! – would be dedicated to efficient and effective pursuit of an appropriate balance of primary and specialty care. Thus, these proposed steps would advance key principles and practices of universal publicly-funded comprehensive, equitable, and efficient insurance.

Money as Medicine – Clinicism, Cash Transfers, and the Political-Economic Determinants of Health, New England Journal of Medicine, April 10, 2024, by Eric Reinhart

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[HJM bolding]

Clinicism is the reduction of health to individualistic biomedical paradigms that overemphasize clinical perspectives and interventions (even though clinical care is estimated to account for only 10 to 20% of modifiable factors shaping health in the United States) while normalizing existing social conditions and neglecting to prioritize preventive policies that target other key drivers of health and disease. These include, for example, policies affecting labor and environmental conditions, poverty and associated housing and food insecurity, social isolation, and public infrastructures for community-building social care involving supportive interpersonal relationships. Despite its limitations, clinicism pervades US public health efforts, which are primarily led by physicians more familiar with biologic and clinical sciences than with political economy and associated social services. Many scholars, recognizing this shortcoming, have called for greater attention to social determinants of health, including research on structural violence and the causes of the causes, commercial determinants, and “capitalogenesis” of disease. Such paradigms, however, generally remain descriptive academic projects that have not been translated into prescriptive policy action and the political organizing such action requires.

One reason for this lack of application is that scholars, university and health systems administrators, and public health officials face incentives, imposed by philanthropic funders and politicians, to abstain from foregrounding the political-economic determinants of health or insisting on specific policies to address economic inequality. In many cases, acting otherwise would entail challenging policies that have been embraced since the 1980s by both Republican and Democratic administrations that have overseen historic increases in inequality while defunding public support systems, empowering in their place private businesses or charitable organizations dependent on wealthy benefactors, and fueling the growth of an inefficient health care industry providing inequitable and limited benefits.

Though the Covid-19 pandemic laid bare the consequences on long-standing U.S. health policy norms and partisanship, it also temporarily disrupted the status quo by provoking overwhelmingly popular emergency measures that illustrated both the potential of supportive social policies to improve health and the necessity of approaching health, safety, and economic policy as intertwined. One early pandemic policy in particular, cash transfers, demonstrated the promise of a policy tool that could enable health scholars, clinicians, administrators, and public health officials to collectively overcome undue clinicism and expand health policy beyond just health care, rebuild trust in public health institutions, and directly address the political-economic determinants of health.

Beyond a staggering global death toll, one of the most concerning consequences of failed pandemic control was the rapid expansion of poverty. In 2021 alone, after three prepandemic years of annual reductions in the global poverty rate, an estimated 115 million people – nearly all in formerly colonized countries – were pushed into extreme poverty (i.e., subsisting on less than $2.15 per day), which brought the global population living in extreme poverty to nearly 700 million people. But in the United States, where estimates suggest that poverty was the fourth-leading risk factor for death, the pandemic led to sharp reductions in poverty owing to the expansion of eligibility for public aid in addition to emergency cash disbursements to large swaths of the population. Federal household subsidies in 2021 – nearly $570 billion in pandemic stimulus checks plus improved unemployment insurance and child tax credits – led to a historic 50% reduction in the child poverty rate and a 15% decrease in overall poverty.

The changes to the child tax credit that contributed to this shift were particularly effective – and instructive for health policy. Suddenly, the lowest-income families were receiving the same government benefits afforded to middle-class families, bureaucratic obstacles were largely eliminated, and more cash was directed to the households and local economies that most needed it. For many of the 40 million U.S. residents living in poverty, this provision of public support in the form of basic income didn’t merely reduce poverty; it had a dramatic stabilizing effect and substantially improved their health and experience of everyday life.

Financial insecurity is a major driver behind cycles of poor mental health, disease, violence, crime, and incarceration – all of which, in turn, further entrench poverty, destabilize families, undercut public health and childhood education, and constrain people’s life opportunities. Historically, most U.S. policymakers have ignored this reality, constructing one of the most insufficient, inefficient, and onerous welfare systems among wealthy countries, exacerbating instability for people living in poverty and making receipt of public support unnecessarily restrictive, time-consuming, unpredictable, and stigmatizing. This failure has wide ranging consequences for the country as a whole, affecting everything from public health to economic growth and the declining competitiveness of the U.S. workforce.

Guaranteed basic income, by providing financial predictability to people and families who have been deprived of it, has the potential to mitigate much of the economic, medical, social, and psychological harm that inadequate U.S. welfare programs alongside tax breaks for the rich have enforced. People who care about addressing poverty should stop talking about basic income as simply an antipoverty policy. Investments in such programs also return major benefits for shared public health, public safety, and collective economic prosperity – population-wide gains that improve quality of life for everyone. We can’t effectively build any of them without building all three.

Many studies have shown that cash-transfer programs lead to substantial reductions in homicide, assault, intimate partner violence, property crimes, recidivism, and overdose deaths.

As the popularity of federal initiatives such as Social Security, child tax credits, earned income tax credits, and unemployment insurance reflects, the United States has a long history and widespread support for using cash transfers to mitigate and prevent financial hardship. The truth is that cash-transfer programs don’t represent a radical shift from conventional US policy; they’re a continuation and expansion of what have long been America’s most effective and popular government programs. What has often been missing from public perception of such programs is recognition of their importance not only for their direct beneficiaries, but also for everyone else.

Delivering effective clinical care and ensuring robust public systems for social care are interdependent and synergistic projects. It is difficult to care for patients as effectively as possible without addressing root political-economic causes of sickness and death, from poverty, malnutrition, homelessness, and mass incarceration to health care exclusion. In the United States, medical institutions have often neglected this reality and sometimes even leveraged their political influence to oppose investments in social care that they saw as threats to their economic interests. This attitude has undermined both public health and the medical profession, which is now facing a related crisis of demoralization and attrition. For the sake of the profession and our patients, it is time to reassert a concept of medicine that goes beyond the clinic alone to advance supportive social policies without which our work cannot succeed.

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Comment:

By Don McCanne, M.D.

At Health Justice Monitor we have previously visited the astute writing of Eric Reinhart, once in JAMA when he explained why physicians need to become a progressive force in transforming our health care system and again when he explained in the New York Times how physicians are being demoralized by forces primarily interested in extracting profits from the health care system.

We now revisit his writing in the New England Journal of Medicine wherein he makes the very important political-social-economic case that the health of individuals and society is not just the result of mere “clinicsim” or the overemphasis of clinical perspectives and interventions, but rather should be the result of delivering effective clinical care synergistically with robust public systems for social care, with guaranteed basic income and other appropriate, proven cash-transfer programs that result in major benefits for shared public health, public safety, and collective economic prosperity – population-wide gains that improve quality of life for everyone.

We are spending a lot of money on health care but we are falling terribly short. So what lessons can we learn by applying this “social” approach of Reinhart?

We should include everyone.

It should be affordable for each individual.

The services should be comprehensive and accessible.

The stewards should design it to provide needed services for the people, not profits for investors.

Essentially it would be a social program designed by the people’s stewards to serve all of the people.

https://healthjusticemonitor.org…

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Rethinking Health Care from a Global Perspective: Looking Abroad, The Commonwealth Fund Blog, May 2, 2024, by Aaron Carroll

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All other high-income countries have adopted a universal health coverage system, and many middle- and low-income countries are also moving in this direction.

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The American health care system is broken. Life expectancy is dropping, maternal mortality is on the rise, disparities abound, and it costs way, way too much. But when we discuss fixing it, the debate is a pendulum swinging between two extremes: maintaining the status quo and adopting a single-payer system. But what if we’re asking the wrong questions? What if the answers lie not in the extremes but in the nuanced experiences of other countries?

At its core, the concept of insurance is a social contract. We pool our resources so that no individual must bear the brunt of an unexpected health crisis alone. This serves two goals: people do not avoid care because of costs, and unexpected illness doesn’t lead to financial ruin.

The Affordable Care Act expanded health coverage to millions of Americans in the U.S., but 26 million remain uninsured. All other high-income countries have adopted a system of universal coverage, and many middle- and low-income countries are also moving in this direction. In the past few years, I’ve had the privilege of visiting some while on a Commonwealth Fund/AcademyHealth study tour. Let’s look at how they achieve their goals.

[HJM bolding]

Switzerland entirely eliminates government entitlement programs like Medicare and Medicaid; everyone is on private insurance from birth to death. Plans are tightly regulated and decoupled from employment. Out-of-pocket expenses are relatively high to combat the moral hazard (i.e., people are more likely to spend an insurance company’s money than their own), but the system ensures everyone has some coverage. The private insurance market is highly competitive, with more than 60 insurers offering basic health insurance. Insurers cannot earn profits from basic insurance but can offer supplemental insurance for additional services and amenities….

Canada has a single-payer system. The country’s Medicare system is funded mainly through general taxation, and the federal government sets national standards for health care in all provinces. The provincial and territorial governments, however, are responsible for managing, organizing, and delivering health care services for residents. Medicare covers all medically necessary services provided by hospitals, physicians, and dentists but does not include prescription drugs, eye care, or dentistry for adults.

Australia’s system functions much like Canada’s if people stay within the public delivery system. However, it differs from Canada in that patients can opt for a private system; doing so incurs costs. This dual approach allows people to choose better access based on their needs and willingness to pay more. The public system, also known as Medicare, covers most of the costs of hospital and physician services and some preventive and community health services. It’s funded by general taxation, a specific income-based tax, and copayments by those seeking care. About one-third of Australians have private health insurance. Such insurance can provide access to private hospitals and specialists and cover services not included in Medicare, such as dental care, optical care, and physiotherapy.

New Zealand’s system is like Australia’s but with unique features, such as a stronger focus on community-based care and public health initiatives. This approach aims to reduce the burden on hospitals and provide more holistic care. The public system offers universal coverage for a range of services, including hospital care, primary care, prescription drugs, mental health care, and disability support services. The system is funded mainly by general taxation and copayments. A private system also plays a supplementary role by offering faster access to elective surgery and specialist consultations, as well as covering services not funded by the public system, like dental care and cosmetic surgery. About one-third of New Zealanders have private health insurance.

In France, the insurance provided by the statutory system sets a good baseline for all, but people are encouraged to spend more if they wish. The public system, known as Social Security, covers most of the costs for hospitals, physicians, long-term care, and prescription drugs. The system is funded primarily by payroll taxes, a national income tax, and tax levies on specific industries and products. The government sets the national health strategy and allocates budgeted expenditures to regional health agencies responsible for planning and service delivery. Patients are responsible for coinsurance, copayments, and balance bills for physician charges that exceed covered fees. However, almost all citizens have supplemental insurance to help with these out-of-pocket costs and dental, hearing, and vision care. Private insurers provide this supplemental insurance, most of them nonprofit.

In England, the National Health Service (NHS) provides health care to all residents, covering hospital, physician, and mental health care without any cost at the point of care. The NHS is funded mainly through general taxation, and the government sets a global budget for health spending. This global budget allocates resources to health services and trusts responsible for local planning and care delivery. There are trade-offs in terms of wait times and sometimes even quality. Still, this approach effectively removes financial barriers to care and eliminates any risk of health care–related bankruptcies.

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Comment:

By Jim Kahn, M.D., M.P.H.

Dr. Carroll gets it right – other wealthy nations use predominantly public (or not-for-profit private) systems to assure universal “basic” medical coverage, with limited and variable supplemental roles for private insurance.

Here are a few additional features, regarding the patient and provider experience:

Patients:

• The “basic” insurance is quite comprehensive and standard. Thus the population broadly has high quality consistent coverage. Voluntary private insurance spending is optional and at the margin, just <1% to 13% of total health spending.
• Deductibles are imposed in only 14% of wealthy nations, and only a few hundred dollars – FAR less than the thousands in the US. In 90% of these nations, there is either no cost-sharing all, or exemptions for poorer individuals and annual caps. Medical bankruptcy is not a thing.
• In the vast majority of wealthy nations, patients have free choice of physicians. No restrictive networks.

Providers:

• Providers know that patient care is broadly and consistently covered, using standard payment rates. This simplifies their lives – no long hours on billing and prior authorizations. No moral hazard.
• Providers use a standard drug formulary, and standard or at least well-integrated electronic health records. Again, simplicity … enhancing their clinical focus.
• Two-thirds of these nations use global budgets for the system (and for hospitals). Thus, no pressure to manipulate data to justify higher capitation rates or to stint on care.

Who wouldn’t want to emulate the other wealthy nations’ successful approaches? Oh, yeah, the profiteers … insurers, PBMs, private equity, and pharma. We must wrest control of our health care, following the model amply proven around the world.

https://healthjusticemonitor.org…

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This Date in UCSF History: National Health Insurance Ahead?, Synapse, UCSF Student Voices, April 23, 2024

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(Originally authored by Dr. Philip R. Lee — a UCSF professor of social medicine and director of the Institute for Health Policy Studies — and published in Synapse on April 24, 1986.)

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Twenty years ago, states throughout the country began to implement federal legislation (Title XIX, Social Security Act) establishing a national program for medical care for the poor (Medicaid). In the same year, 1966, the federal Medicare program began providing hospital and medical insurance for the elderly.

With these two public programs, the public sector began to fill the major gap in private health insurance.

Private health insurance was largely provided on a group basis, through employment, with employers paying the bulk of premiums.

In the 1960s and early 1970s the idea that access to health care was a merit good or a right of citizenship was widespread.

It seemed only a matter of time before the remaining gaps would be filled by universal health insurance, albeit with a mixture of public and private payment mechanisms.

In the 1970s and early 1980s, as costs of health care rose rapidly and as efforts to contain costs seemed ineffective, the idea took hold that national health insurance was impossible and that health care was not a merit good.

Instead, many advocated that health care should be treated like other goods and services, and that price competition and the marketplace should be the primary approach to resolving the problems of cost, access and quality.

Policies established by Congress and the Reagan administration have strongly supported this approach.

Many states, including California, have adopted pro-competitive policies. The results of the recent policy changes have been mixed.

The rate of increase in health care costs has slowed, hospital admissions have declined, length of hospital stay has been shortened and hospital occupancy has been reduced. All this seems to be for the better, but patients have found themselves discharged from hospitals “sicker and quicker.”

Posthospital services, described as a “no-care zone” by UCSF Professor Carroll Estes, have been unable to cope adequately with the changes.

The number of people who are uninsured or underinsured has risen rapidly and local governments, such as San Francisco County, have found themselves obliged to care for increasing numbers of sick, disabled and poor.

Three future scenarios seem possible given the current environment:

• Continued reliance on price competition and the marketplace with the evolution of a “three-tiered” system of care consisting of fee for service, HMOs and public sector.
• A variety of incremental strategies to fill the gaps in coverage at the state level through mandated private insurance coverage, state funds to cover the uninsured and an expansion of Medicaid.
• Publicly funded national health insurance, along the lines of the Canadian model.

Although the odds are against national health insurance, this proposal would provide the most equitable solution to health care access with effective means to control costs while assuring freedom of choice for consumers and providers.

Personally, I believe it is the preferred solution.

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Comment:

By Don McCanne, M.D. and Jim Kahn, M.D., M.P.H.

Philip Lee was an icon of health care justice, perhaps most noted for his role in implementing Medicare. Particularly noble was his use of Medicare funding as a lever to eliminate segregation in the nation’s hospitals and, by extension, throughout the medical system. Over his career, he remained a champion of health equity and justice for all. Thus, his commentary authored 38 years ago comes as no surprise to us.

Let’s review the challenge he described from today’s perspective, nearly four decades later. Of the three scenarios Dr. Lee described, the US followed a mix of free market and incremental changes; not the national health insurance option he preferred. Dr. Lee was prescient. As a result, we accumulated decades of fraught experience – high costs, low health care access, and high mortality.

Dr. Lee’s “publicly funded national health insurance, along the lines of the Canadian model” has proven to be quite effective in other wealthy nations. We should have chosen the option that, as he describes, would combine equity, choice, and cost control. Health justice for all, efficiently.

Clearly the market approach and mandated private insurance succeeded in creating wealth for health care investors but was certainly ineffective in ensuring affordable, comprehensive care for everyone.

Philip Lee bestowed on us this powerful message of health justice. We should act on his advice. It’s not too late.

https://healthjusticemonitor.org…

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