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Healthcare ‘Oligopoly Wave’ Continues As Anthem Gobbles Cigna

Healthcare ‘Oligopoly Wave’ Continues As Anthem Gobbles Cigna

Human rights campaigners say mega consolidation will erode healthcare access and hike prices, illustrating deep problems with for-profit model

By Sarah Lazare
Common Dreams, July 24, 2015

The health insurance giant Anthem announced Friday that it is buying its behemoth rival Cigna for $54.2 billion, launching the largest such merger the country has ever seen and reducing the number of major U.S. insurers to a paltry three.

Analysts and human rights campaigners warn that the move is poised to further slash access to healthcare and hike prices across the country, illustrating the problems with the for-profit model in terms of delivering vital services.

The mega deal comes less than a month after insurance giant Aetna acquired Humana for $37 billion, part of a nationwide push to consolidate in what the Wall Street Journal referred to earlier this year as an “oligopoly wave.”

The Anthem and Cigna merger is expected to be finalized in 2016, after which the joint company will provide coverage for at least 53 million people.

Numerous studies show that insurance mergers lead to higher premiums, including a 2012 analysis of a 1999 merger between Aetna and Prudential, as well as a report released in February which showed having more, not less, insurers in the insurance marketplace established by the Affordable Care Act leads to lower premiums.

Moreover, the mergers are taking place in a country that already has a dismal record with providing real care. A report released last year by the Commonwealth Fund finds that the U.S. healthcare system is already the most expensive in the world yet delivers the worse care among 11 industrialized nations.

Cait Vaughan, a Healthcare Is a Human Right organizer with the Southern Maine Workers Center, told Common Dreams that Friday’s merger underscores the fact that the Affordable Care Act model “is still a for-profit system that is not determined by our needs, but determined by the desires and profit margins of huge conglomerates.”

Dr. David Himmelstein, co-founder of Physicians for a National Health Program, told Common Dreams that the merger wave “will leave us with a small handful of insurance giants that are essentially monopolies. Much of their revenue comes from the government that pays hundreds of billions annually in premiums for private ‘Medicare Advantage’ plans, Medicaid managed care plans, and much of the premiums for the private plans bought on [ACA] insurance exchanges. Much of this money is wasted; Anthem and Cigna have overhead that’s nearly tenfold higher than traditional Medicare.”

What’s more, Himmelstein continued, “These monopolies are lightly regulated, and have used their enormous financial and political clout to avoid real oversight. Just this month, the insurers’ lobbying group hired as their new CEO Marilyn Tavenner, who as head of Medicare and Medicaid was responsible for regulating them until this spring.”

Vaughan emphasized that, in the “medical industrial complex,” people “made incredibly wealthy off of us being sick and limiting very basic access to healthcare while increasingly shrinking our ability to make choices.” In a presidential campaign cycle where we are “hearing a lot about how rich people control policy and elections,” Vaughan emphasized that it is vital to talk about the control of the wealthy over one of the most basic human rights: healthcare.

The growing nationwide movement for publicly-funded, universal healthcare is calling for a single-payer system in which the profit motive is cut out of the equation, and everyone is included.

But Brian Quinn, a law professor at Boston College, told the Washington Post that the frenzy of mergers could signal that the country is moving in the opposite direction: “It’s a little ironic I suppose that—over time—we may find ourselves moving towards a single payer healthcare system, but rather than it being government run, it may well be a small number of private, highly-regulated insurance companies.”

Sarah Lazare is a staff writer at Common Dreams.

http://commondreams.org/news/2015/07/24/healthcare-oligopoly-wave-continues-anthem-gobbles-cigna

Medicare Part D pays needlessly high brand-name drug prices

Mirror, Mirror on the Wall: Medicare Part D pays needlessly high brand-name drug prices compared with other OECD countries and with U.S. government programs

By Marc-André Gagnon, PhD. and Sidney Wolfe, MD.
Carleton University, School of Public Policy and Administration and Public Citizen, July 23, 2015

With $69.3 billion in prescription drug spending in 2013, Medicare Part D alone represents approximately 7% of the $993 billion global prescription drug market. Around 58% of Medicare Part D spending on prescription drugs is paid to brand-name manufacturers.

Despite its size, Medicare Part D is not allowed to “interfere with the negotiations between drug manufacturers and pharmacies and [Part D plan] sponsors” (P.L. 108-73, Section 1860D-11). Plan sponsors can obtain substantial rebates from both drug manufacturers and pharmacies, but the federal program is prohibited from leveraging its purchasing power to realize economies of scale due to this non- interference clause.

As this policy brief will show, by using previously unavailable data comparing U.S. brand-name drug prices with those of all other countries members of the Organization for Economic Co-operation and Development (OECD), Medicare Part D needlessly pays significantly higher prices than any other comparator countries. Moreover, even in comparison to other U.S. government programs such as Medicaid and the Veterans’ Benefits Administration (VBA), significantly higher prices are paid by Medicare Part D.

Highlights

1. After including rebates, brand-name drugs cost Medicare Part D 198% of the median costs for the same brand-name drugs in the 31 OECD countries.

2. Medicare Part D pays on average 73% more than Medicaid and 80% more than the Veterans Benefits Administration (VBA) for brand-name drugs.

3. Medicare Part D would save from $15.2 billion to $16 billion a year if it could secure the same prices that Medicaid or VBA, respectively, receives on the same brand-name drugs.

4. While Medicaid and VBA often are used as benchmarks because of the rebates or discounts they secure, even these organizations pay higher prices than many OECD countries.

5. Under current Medicare Part D pricing, non-innovative “me-too” drugs are priced as much or more than older, equally effective versions. By currently paying inflated prices for drugs that do not provide value for money, Medicare Part D artificially increases the returns and incentives for non-innovative “me-too” drugs to the detriment of new innovative medicines for unmet needs.

6. Reducing brand-name drug prices would reduce the high level of cost-related non-adherence (people not filling their prescription for financial reasons) found in Part D, by reducing beneficiaries’ premiums and co-pays. In addition, since the government pays for the majority of Medicare Part D, taxpayers’ contribution would decrease by at least $11 billion every year.

From the Conclusions and Policy Considerations

The after-rebate prices Medicare Part D plan sponsors pay for brand-name drugs remain significantly higher than the current market prices found in other countries or in other programs such as Medicaid or VBA. Medicare Part D would save between $15.2 billion and $16 billion a year if it could obtain the same manufacturer prices that Medicaid or VBA, respectively, obtains for the same brand-name drugs. Lower brand-name drug prices for Medicare Part D not only would generate savings, but, by increasing patient access to prescribed drugs, it also could improve adherence to treatments by reducing the high level of cost-related non-adherence found in Medicare Part D.

While Medicaid and VBA obtain almost equivalent brand-name price levels, they create completely different incentives for pharmaceutical R&D. The unconditional “basic rebates” of Medicaid foster the current business of developing me-too drugs while creating an incentive to artificially inflate official prices. The proactive drug formulary management of VBA maximizes therapeutic value for every dollar spent and thus provides greater incentives for producing more innovative products.

The main argument against managed formularies is that such formularies restrict patients’ choices. Indeed, managed formularies do not reimburse all new drugs, only those that provide value for money. However, freedom of choice is never at stake, since patients can decide to pay out of pocket for the drugs or treatments they desire, even if clinical evidence shows that these treatments do not provide therapeutic value for money. A managed formulary for prescription drugs does not reduce freedom of choice; it only reduces the freedom to needlessly waste taxpayers’ money.

https://carleton.ca/sppa/2015/sppas-marc-andre-gagnon-releases-report-with-public-citizen-on-medicare-part-d-medication-prices/

Policy Brief (19 pages): http://carleton.ca/sppa/wp-content/uploads/Mirror-Mirror-Medicare-Part-D-Released.pdf

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Comment:

By Don McCanne, MD

This report compares drug spending in the United States with other OECD nations and contrasts the higher prices in Medicare Part D with the lower prices in the Veterans’ Benefits Administration (VBA) and the Medicaid programs. Although supporters of the Medicare Part D drug program continue to tout the savings from the plans, this report shows us how we would be far better off if we used a public purchasing program such as that of the VBA instead of depending on competition of private pharmacy benefit managers wherein the government is prohibited from interfering in negotiations.

This report provides data that can be used to refute PhRMA’s contention that “fundamentally alter(ing) the structure of the successful Medicare Part D program would hurt both taxpayers and beneficiaries” (WSJ Pharmalot, July 23). To the contrary, it would help both taxpayers and beneficiaries.

Happy 50th Medicare!

By Paul Y. Song, M.D.
The Huffington Post, July 24, 2015

When I graduated from medical school almost 25 years ago, I was asked by then U.S. Surgeon General, Dr. C. Everett Koop, to raise my right hand and recite the Hippocratic Oath. In it, I recall “I will abstain from that system which is deleterious and mischievous to my patients.”

Unfortunately, in the years since, I have seen far too many of my patients fall victim to a system that is very deleterious, mischievous, and just plan immoral.

While the Affordable Care Act (ACA) was a start and has definitely helped a lot of people, it should be noted that in the run-up to the ACA, there were more than 3,300 registered healthcare lobbyists spending $1.2 million a day. In total, more than the entire cost of the Bush-Kerry election was spent lobbying Congress, and that is why much of the ACA looks like it was written by the private insurance industry. As a result, it firmly entrenches a for-profit industry that only makes money by denying people care in charge of our healthcare decisions and system.

The inconvenient truth about the ACA is that even with all of the positive aspects of the law, we still have a deeply flawed system where:

  1. Our nation still spends twice as much as any other industrialized nation.
  2. Our undocumented brothers and sisters are left out and over 30 million people will still be uninsured by 2025.
  3. Far too many people with insurance continue to go bankrupt due to a medical illness.
  4. This year alone, 10 million insured Americans are projected to accumulate medical bills they will not be able to pay off.
  5. Up to 35 million Americans with insurance will delay seeing a doctor due to high co-pays and deductibles.
  6. Premiums continue to climb well above wages and inflation, and workers are having to contribute more every year, all while the private insurance industry rakes in record profits and watches their stock prices hit all time highs.
  7. Healthcare benefits remain the number one cause of labor negotiation strife.
  8. Medicaid remains a second-class system with too many doctors and hospitals refusing to accept Medicaid.

As we lament these continuing deficiencies, many Americans will come together this July 30th to celebrate the 50th birthday of our country’s most successful healthcare system, Medicare. When Medicare was established, only 44 percent of all seniors were insured and nearly one-third of all seniors were living in poverty.

While many conservative politicians like to bash Medicare and are constantly trying to privatize it, it is important to remember the facts.

In 1995, Republicans pledged that by placing at least 20 percent of Medicare beneficiaries in private HMOs would save $270 billion over seven years. Instead, Medicare has overpaid private insurers $282.6 billion since 1985, roughly 24.4 percent of all Medicare payments. And despite the initial ACA plan to reduce future wasteful payments for Medicare Advantage, there has since been bipartisan and White House approval to actually increase payments despite the fact that beneficiaries continue to rate traditional Medicare more favorably than Medicare Advantage in terms of access and quality of care.

When powerful insurers like United Healthcare and Anthem use their massive market share to negotiate deep discounts in prescription drugs for their members, it is considered good “free market” business tactics. Yet, Medicare Part D enacted by Congress not only prevented Medicare from doing the same, but also saddled Medicare with private administrative costs of almost 10 percent.

And unlike private insurance companies that constantly get between patients and their doctors, Medicare does not. Medicare does not tell my patients which doctor they have to see or which hospital they can go to. It does not require pre-approval and it is does not tell doctors like me what tests to order or what drugs to prescribe.

Thus it is very important that we continue to all remind naysayers that Medicare despite being undermined by Congress and consistently caring for older and sicker patients, is more cost effective, provides better coverage, and has greater patient satisfaction than the private sector.

So on this 50 birthday, we need to take back the overall narrative about Medicare. We need to fight to not only protect Medicare by eliminating these indefensible subsidies for big powerful corporations, but to make it better and expand it for all.

But, this will only happen once we as a society, wake up and say enough is enough to private insurance strangle hold that only cares about profits, and not patients.

As more and more private insurers consolidate and merge into a de facto for-profit single payer, we need to fight harder than ever to protect the only single payer that cares as much for least among us as it does the top 1 percent.

In 1966, Martin Luther King raged that “of all the forms of inequality, injustice in healthcare is the most shocking and inhumane.” Sadly, this inequality is worse now than it was back then.

It is therefore time for us to come together with one voice to hold our elected officials who protect the status quo accountable and fight back against this immoral and evil system. It is time for Medicare for all!

Paul Y. Song is a physician, executive chairman of the Courage Campaign, and health care activist.

http://www.huffingtonpost.com/paul-y-song-md/happy-50th-medicare_b_7859398.html

Health care: Policy makers ignore exploitation

By Richard A. Damon, M.D.
The Missoulian, Letters, July 23, 2015

I am convinced the health care system’s systematic exploitation of the middle class, for the benefit of the privileged few in the U.S., has been purposefully overlooked, underestimated and conveniently ignored by congressional policy makers, major health industry players and health care reform analysts.

The regressive policy-making, in my view, is no accident, but primarily based on self-serving political interests that welcome the financial benefits from medical industrial stakeholders, who in turn profit from the status quo. Policy-makers refuse to view health care as an economic good for the entire nation. They promote illusions and outright misconceptions to manipulate public thinking about health care issues.

The premises ignored by those who make the laws are: (1) The burden of paying for health care, a common good, should not fall disproportionately on those who are least able to pay for it, and (2) Americans with lower incomes should not be compelled to pay for health care coverage that is consumed disproportionately by the well-to-do.

Nevertheless, the system we have is designed by and for elite interests, rewarding the providers of insurance, drug makers and essential medical devise purveyors. The eventual day may come where populist policymakers will tell consumer-voters the truth about the extortion-like protection schemes practiced on them by the health care industry complex that guarantees profits off the sick while making consumers choose between paying what the system demands versus putting their family’s health at risk. This truth has been kept from consumers and preserved under the cloak of trickle-down, market-based economics.

Responsible health care reform legislation lies idle (H.R. 676) at the door of congressional action. The improved “Medicare for all” movement might gain political traction if middle-income consumers were enlightened about how much they are paying to support a health care industry essentially unaccountable for its escalating costs.

Dr. Richard A. Damon resides in Bozeman.

http://missoulian.com/news/opinion/mailbag/health-care-policy-makers-ignore-exploitation/article_9ccc04db-be09-56a9-b960-cb6d0848cbc2.html

Chicago Stagehands Local 2 Endorses HR 676, National Single Payer Legislation

Single Payer News, July 19, 2015

Thomas Cleary, Secretary-Treasurer of Stagehands Local 2 in Chicago, reports that his local has wholeheartedly endorsed HR 676, Congressman John Conyers’ national single payer health care legislation, Expanded and Improved Medicare for All. 

“I would rather see my members’ contributions go to their personal wellness than to another nameless insurance company’s administrative costs,” Cleary said.

“The Affordable Care Act, passed in 2010, made it possible for some of the uninsured to find coverage, but did not resolve the problem that health insurance companies are providing inadequate coverage and pricing care beyond our means,” states the Local 2 resolution.

The resolution notes the difficulties that all unions are having in negotiations over health care and asserts that the Excise Tax of 2018, the so-called “Cadillac Tax”, will make things worse.

“HR 676 would save billions of dollars annually by eliminating the administrative burdens, overhead, and profits of the private health insurance industry and apply those savings to improved and expanded coverage for all,” the resolution concludes.

Hale Landes, a member of IBEW Local 134 and labor outreach chair of the Illinois Single Payer Coalition, and Bill Bianchi of Illinois Progressive Democrats of America organized to bring the single payer resolution to Local 2 leaders.

Local 2 is affiliated with International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts (IATSE), a union that has played a major role in galvanizing support for single payer in locals around the country.

IATSE Local 2 is the 620th labor organization to endorse HR 676.  The local also passed a resolution supporting the Illinois legislation, HB 108, introduced by State Representative Mary Flowers.

http://unionsforsinglepayer.org

https://www.facebook.com/unionsforsinglepayer

Single payer would change the game

By Chinh Le, M.D.
Corvallis (Ore.) Gazette Times, Letters, July 23, 2015

“Readers will react quite differently to the headline: “Medicaid costs: Oregon faces soaring price tag” (Gazette-Times, July 20), depending on their ideological inclination.

“Can’t trust those irresponsible bureaucrats! Obamacare is a fraud, I told you so,” would say my fiscally conservative friend.

“Well, spending 10 percent of our state budget (as projected by 2010) to care for our medically indigents is actually not an irresponsible figure,” my socialist counterpart would say. “Aren’t we our brothers’ keepers?”

The headline, unfortunately, is somewhat misleading: predicting medical costs based only on body counts and insurance rates is like forecasting the economy on a very limited set of data and assumptions. Our health costs are driven by a multitude of factors that are in a state of constant changes and interactive adjustments, such as delivery of care, providers’ payments, medical innovations, consumer behavior, access to preventive care and mental health, just to name a few.

Non-Medicaid insured patients should also brace themselves for increases in premiums and out-of-pocket expenses, justified by the “free-market” side of medical economics, says one person, or to assure greedy profits for the medical-industrial complex, says another.

Balancing medical costs, funding, and benefits is like a game of bouncing hot potatoes. Another term is “cost-shifting.” One way or another, we will all pay for them.

Tired of the way the game is played? Then think “single payer system;” universal health care, privately delivered, and publicly funded by an equitable progressive taxation policy. An improved form of Medicare-for-All. Affordable, dependable, and socially responsible.

Dr. Chinh Le resides in Corvallis.

http://www.gazettetimes.com/letter-single-payer-would-change-the-game/article_2b1a052e-1b4d-5d19-88aa-21cf30d0b149.html

Wrong Prescription?

The failed promise of the Affordable Care Act

By Trudy Lieberman
Harper’s, July 2015

In July 2009, as the Affordable Care Act moved through Congress, Steny Hoyer, the second-ranking Democrat in the House of Representatives, laughed at the idea that any legislator would actually read the bill before voting on it. If such full-body immersion were necessary to support the A.C.A., he said, “I think we would have very few votes.” In March 2010, just before the law passed, speaker of the House Nancy Pelosi made a similar point. Addressing a national conference of county officials, she declared, “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”

Five years after its passage, the A.C.A. is not only the most hotly debated and vituperatively denounced law of the era — it is still shrouded in a fog of controversy. Many Americans have no idea how the bill works or what it was designed to accomplish. In March, a Kaiser Family Foundation study found “significant” knowledge gaps in the public’s understanding of the law. A third of the participants were unaware of the law’s key provision: offering subsidies for the uninsured.

It is no wonder Americans have been hard-pressed to learn anything about the actual workings of the A.C.A. There has been little criticism of the A.C.A. from the left, with prominent figures such as Paul Krugman, the economist and New York Times columnist, acting as cheerleaders. The right has confined itself to disinformation and risible smears, with G.O.P. presidential hopeful Ben Carson memorably defining the A.C.A. as “the worst thing that has happened to this nation since slavery.” A lack of clarity on both sides — and some deliberate bait-and-switch tactics — dogged the very creation of the law.

The A.C.A. was sold to the public on the pledge of “affordable, quality health care.” This slogan, crafted in the shop of the Democratic pollster Celinda Lake, was incessantly pushed by everyone from grassroots advocates to top government officials, even as healthcare.gov, the new A.C.A. website, was crashing down around them in the fall of 2013. Trying to spin the disaster on Meet the Press, Pelosi grandly promised her viewers “more affordability, more accessibility, better-quality care, prevention, wellness, a healthier nation honoring the vows of our founders of life, a healthier life, [and] liberty to pursue their happiness.” President Obama, too, repeated the mantra at every opportunity. Shortly before the exchanges established by the law opened for business, he affirmed that uninsured Americans would now have “the same chance to buy quality, affordable health care as everyone else.”

Full article: http://harpers.org/archive/2015/07/wrong-prescription/

Chicago nurses, community leaders plan celebration for Medicare’s 50th anniversary

National Nurses United, July 23, 2015

CHICAGO — Registered nurses and other community leaders will celebrate the 50th anniversary of Medicare and Medicaid Thursday July 30 with a festive event and action in Chicago.

The celebration is part of a national day of action, in over 25 U.S. cities, that calls on policy makers to protect, improve, and expand Medicare to cover all Americans with a single standard of quality care not based on ability to pay. The overall theme is  “Medicare is as American as Apple Pie,” i.e. to Protect, Improve and Expand (PIE) Medicare to cover everyone.

“After 50 years, we have a lot of experience with Medicare, enough time to see that it works, has kept tens of millions of Americans out of poverty, and remains enormously popular,” said NNU Co-President Jean Ross, RN, who will be one of the event’s speakers.

Details on the Chicago event:

What: Celebration and Protest Action for Medicare’s 50th Anniversary
When: Thursday, July 30 11:30 am – 2 pm. Protest action at Humana 11:45 a.m.
Where: Heritage Green Park, 610 W. Adams (at Des Plaines)
Protest action at Humana, 550 W. Adams

As part of the day’s activities, a protest will be held at Humana health insurance, to highlight the problems with privatization proposals put forth by Medicare opponents, such as Rep. Paul Ryan. Efforts to even partially privatize Medicare, such as through the Medicare Advantage program, through companies like Humana, costs much more than public delivery of healthcare through traditional Medicare, nurses say. The action will underscore the fact that while Medicare’s administrative costs remain very low at 1.6%, Humana has charged billions of dollars in “administrative costs,” that should have gone directly to patient care.

“Schemes to privatize or erode Medicare would be devastating for many, many people. The best way to protect Medicare is to upgrade it and expand it to cover everyone. It is time for this country to catch up with other nations and implement a universal system of guaranteed healthcare,” Ross said.

“The Affordable Care Act has failed to eliminate the vast numbers of uninsured and underinsured. It is weak in its attempt to control costs as insurance companies seek to increase their rates. A Medicare-for-all system would be a strong negotiator for fair pricing and give truly equitable access for all,” said Duane Dowell, M.D. a retired pediatrician and past president of Physicians for a National Health Program-Illinois.

“July 30th marks the 50th anniversary of the successful Medicare program. In order to guarantee access to comprehensive, high quality health care for all residents in the U.S. Medicare has to be improved and extend to everyone from birth to death. Everybody in, nobody out,” said Sonja Rotenberg, Board President, Illinois Single Payer Coalition.

The event is co-sponsored by National Nurses United, Illinois Single Payer Coalition, Physicians for A National Health Plan, Alliance for Community Services, Chicago Federation of Labor, Champaign County AFL-CIO, Northern Illinois Jobs with Justice, Chicago Jobs with Justice, Health and Medicine Policy Research Group, Radical Public Health, Students for a National Health Plan, Illinois Alliance for Retired Americans, Fox Valley Citizens for Peace and other co-sponsoring organizations.

The day of action for Medicare’s 50th anniversary includes actions in Boston and Western Massachusetts, Chicago, Dearborn, Detroit, El Paso, Tx., Lakewood, Oh., Las Vegas, Los Angeles, Miami, Oakland, Portland, Me., St. Paul, Mn., Washington DC, and other cities, including additional locales to be announced.

Information about events in other cities can be found at: https://www.healthcare-now.org/medicares-anniversary/50th/events/#DC

Source: www.nationalnursesunited.org

Medicare Trustees Report: Part B premiums a threat to solidarity

Good News, Bad News In Medicare Trustees Report

By Phil Galewitz
Kaiser Health News, July 23, 2015

As Medicare approaches its 50th anniversary next week, the federal program got some welcome financial news Wednesday: Its giant hospital trust fund will be solvent until 2030, and its long-term outlook has improved, according to a report from the program’s trustees.

But the report warned that several million Medicare beneficiaries could see their Medicare Part B monthly premiums skyrocket by 52 percent in January — from $104.90 to $159.30. Medicare Part B, which is paid for by a combination of federal funds and beneficiary premiums, generally covers physician and outpatient costs.

The huge rate hike is predicted because of a confluence of two factors: Medicare Part B costs increased more than expected last year, and Social Security is not expected to have a cost of living increase next year. By law, the cost of higher Medicare Part B premiums can’t be passed on to most Medicare beneficiaries when they don’t get a Social Security raise. As a result, the higher Medicare costs have to be covered by just 30 percent of Medicare beneficiaries. This includes the 2.8 million Medicare enrollees new to the program next year, 3.1 million Medicare beneficiaries with incomes higher than $85,000 a year and 1.6 million Medicare beneficiaries who pay their premium directly instead of having it deducted from Social Security. An additional 9 million people affected by the higher rates are so called “dual eligibles” — those on Medicare and Medicaid. States pay the Medicare Part B premium for duals.

Medicare Part B premiums are set largely by a complicated formula written into law. The trustees’ predictions on premiums are typically close to the final rates that are announced each fall by the Department of Health and Human Services.

Medicare advocacy groups expressed concern about the projected rate increase. Judith Stein, executive director of the Center for Medicare Advocacy, said she is concerned the predicted Medicare Part B premium hike signals that, for many, the program is becoming too expensive. She said the higher premiums will force more seniors to join Medicare Advantage which offers lower costs but also restricts which providers they can use.

“I am concerned that people will start to rail against Medicare rather than love it, as they have for 50 years,” Stein said.

The trustees report noted that the financial health of the program is being helped by factors such as an improved economy, while other factors such as more seniors in private Medicare Advantage are increasing costs. The government pays higher costs for those in Medicare Advantage, which is managed care.

http://khn.org/news/good-news-bad-news-in-medicare-trustees-report/

Medicare Trustees Report (Premiums covered in Appendix E): http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2015.pdf

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Comment:

By Don McCanne, MD

Fifty years ago Medicare was established as an egalitarian program designed to ensure affordable access to care, beginning with our senior citizens, with plans to eventually cover everyone. Financing was through equitable payroll taxes and general revenues based on ability to pay. Benefits were the same for everyone eligible. Its success can be attributed to citizen solidarity in support of this highly popular program.

However, very powerful political elements, driven by conservative and libertarian ideology, have been successful in preventing a serious effort to expand Medicare to cover everyone. Instead, they have been trying to shift the responsibility of financing Medicare away from an equitable public risk pool and toward privatizing the system. We are already witnesses a bait and switch operation in which individuals are enticed into private Medicare Advantage plans not realizing that the intent is to eventually shift to a defined contribution method of financing (premium support, vouchers) in which the individual will be responsible for an ever-increasing share of the costs.

Initially everyone paid the same premiums for Part B Supplemental Medical Insurance (SMI) that covered physician, outpatient and other services. The premiums currently cover one-fourth of the Part B costs, and the other three-fourths is paid through general revenues. The premium is regressive since higher-income individuals pay a smaller percentage of their income for premiums than do lower-income individuals (though income taxes for general revenues are progressive). It was decided to increase premiums for higher-income individuals, though without reducing premiums for those with lower incomes. This has a net affect of shifting costs away from the government pool and onto individuals. Understandably, many of those who had to pay higher premiums thought that they were not getting as good of a deal as the others. The perception has now been established that the benefits are no longer equal for all.

The current Medicare Trustees Report projects what is happening to these Part B premiums. It is anticipated that there will not be a cost-of-living increase in Social Security benefits next year. Part B premiums are deducted from the Social Security benefits, but the rules prohibit any increase in Part B premiums from reducing the Social Security payment. Thus the 70 percent of Medicare beneficiaries who pay the premiums through Social Security deductions will not have any increase in their Part B premiums next year.

Since one-fourth of Part B costs are paid by the premiums, and 70 percent of beneficiaries will have no increases in their premiums, the other 30 percent will have to make up the difference. The numbers are significant. For the 30 percent without a freeze in their premiums, the standard premium is projected to increase from $104.90 to $159.30. For individuals with higher incomes, premium increases are on a sliding scale. Those at the 80 percent threshold will see their Part B premiums increase from the current $335.70 to an estimated $509.80 (Table V.E3 in Trustees Report). These individuals surely will think that this is not a good deal.

With diminishing solidarity, many of these wealthier individuals will be intrigued with a system that allows them to take care of their own health care needs by buying an insurance product in the marketplace, and leave the rest of us on our own to take care of ourselves. This, of course, is where Medicare Advantage and the next iteration of premium support is taking us.

Egalitarianism. Solidarity. Social justice. Your brother’s keeper. What happened? I guess we’ll have to ask Cain. Or maybe the Koch brothers since we don’t have Cain’s phone number.

Universal Healthcare Expert to Visit Oregon, Tout Single Payer Plan

Efforts are underway in Colorado and Oregon for universal healthcare

By Shelby Sebens
The Lund Report, July 21, 2015

T.R Reid is hoping that Colorado is the first state in the nation to provide a healthcare system that covers everyone. But he’d still be happy if Oregon got there first.

“Some state has to get this going and prove that it will work and then it will spread,” Reid said.

An author and chairman of the Colorado Foundation for Universal Health Care, Reid will be in Oregon this weekend touting healthcare for all. Advocates in Colorado will put a measure on the 2016 ballot. Though the Affordable Care Act, better known as Obamacare, was intended to get every American insured, the Congressional Budget Office predicts 31 million people will still be uninsured as of 2025.

“The Obamacare solution doesn’t get us there,” said Reid, who has traveled the world studying universal healthcare in other countries. “It’s a national disgrace that we would have 31 million people uninsured in the world’s richest country.”

Reid said he thinks the way to universal coverage in the United States is through state initiatives.

“Congress can’t do this. This is a proven route to universal coverage,” he said of states adopting it first.

Efforts have been underway toward universal healthcare in Oregon for years and advocates say it’s gaining momentum though most universal healthcare bills that have made their way to hearings in the legislature have yet to pass.

“Each time that the state single payer bill is submitted to the legislature it gets more attention, more support and it becomes more viable,” said Dr. Samuel Metz, a member of Oregon Physicians for a National Health Program.

A bill on its way to Governor Kate Brown’s desk would fund a study that will look at methods for financing universal healthcare, Metz said. “The study in Oregon is necessary but not sufficient. It’s a first step but it doesn’t guarantee that the legislature will take action.”

Colorado’s Purple Plan

Reid thinks universal healthcare has a good shot in Colorado because of the state’s political Make up, divided evenly between Democrats and Republicans. He intends to appeal to Democrats as a way to insure everyone and save money and to Republicans as a way to get out of Obamacare. An opt out clause in the Affordable Care Act allows states to get out of the federal mandates while still receiving Medicaid dollars if they can insure people another way, Reid said.

“That’s why I think we can pass it,” said Reid who expects a fight from insurance companies. He argues the private market can still offer supplemental insurance as well as private insurance for those that don’t want a state run plan similar to parents paying to send their children to private schools.

The Colorado plan would add a 3.3 percent state income tax. Employers would also have to pay into the plan. Reid said studies showed Colorado families typically pay 8 percent of their salaries on healthcare.

Oregon’s efforts

Metz thinks Oregon is uniquely poised to push forward on universal healthcare because many insurance companies are non-profit and might benefit under a universal healthcare plan.

“They would thrive in this new business environment. We don’t see this in other states.”

Reid said Colorado is a little more ahead of the game, with its universal healthcare study completed and a ballot measure ready to go.

“We beat you to marijuana and we’ll beat you to universal healthcare,” he quipped.

Here are the events featuring T.R. Reid:

July 24th, Friday Noon, Collaborative Life Sciences Building, OHSU, 2730 SW Moody, South Waterfront, Portland. Open to PSU and OHSU students.

July 24th, Friday 6:00 pm in Portland: Health Care for All Oregon fundraiser with Mr. Reid as the featured guest. Please contact Terry Rogers at (503) 756-4273 or ibuterry@gmail.com for more details.

July 25th, Saturday 12:00 pm in Salem: “Obamacare: Is it the answer?” Presentation by Mr. Reid to the Salem City Club followed by discussion. Creekside Room, Building D, Salem Hospital Campus, 890 Oak Street SE, Salem. Details will be available at http://salemcityclub.com/page-953771

July 25th, Saturday 7:00 pm at the Russell Tripp Theater, Linn-Benton Community College, Albany: Presentation by Mr. Reid followed by discussion: “Our Costly and Troubled Sick Care System: U.S. Health Care, What to Do About It.”

July 27th, Monday 6:00 pm at the Multnomah County Building, 501 SE Hawthorne, Portland, Board meeting room: Presentation by Mr. Reid followed by discussion: “Universal Health Care: Why Oregon Won’t Be First.” No charge. Registration is encouraged (http://www.pdxcityclub.org/calendar_day.asp?date=7/27/2015&event=294). This event is hosted by the City Club of Portland, Health Care Member-Led Forum. Mr. Reid will be introduced by Mike Marshall, executive director of the Portland City Club.

https://www.thelundreport.org/content/universal-healthcare-expert-visit-oregon-tout-single-payer-plan

Local doctor comments on Medicare’s 50th anniversary

Federal health insurance program reaches milestone anniversary, push continues for ’Medicare for All’

By Evan Tuchinsky
Chico (Calif.) News and Review, July 23, 2015

Dr. Aldebra Schroll understands the workings of Medicare from the physician’s side of health care, but also as the daughter of policyholders. Her parents, ages 89 and 87, retired from New York to New Mexico 25 years ago and continue to live independently.

“When medical issues come up, it’s nice to know that they can access health care without a lot of worries or concerns,” Schroll said by phone while visiting her parents. “As a family member, it’s a relief to know they have something that’s necessary and I don’t have to worry about them losing their home because of medical complications; it provides a certain security, taking care of your loved ones.”

Financial peril—expenses from health care depriving seniors of all their resources—was in fact the impetus for Medicare, which celebrates its 50th anniversary next week.

Schroll has plenty of experience with federally funded health insurance. Before joining Chico State’s Student Health Service in 2011, she worked as a general practitioner in private practice with many North State seniors as her patients. She has spent parts of the past five years in Colorado providing hospice and palliative care—expertise for which she has received board certification and now also utilizes when called upon by Enloe Medical Center.

She’s also a member of Physicians for a National Health Program (PHNP), which advocates for a single-payer plan. Along with coordinating 50th birthday celebrations, PHNP has been lobbying on behalf of HR 676, aka the Expanded and Improved Medicare for All Act, which essentially would offer a Medicare-like plan to every U.S. resident.

For Schroll, insurance is more than a financial issue. When she was in private practice, patients would often withhold their medical information because they were afraid their private insurer would drop them, and that fear lingers even since the Affordable Care Act passed with protections for pre-existing conditions.

“That wasn’t the case with Medicare,” she said. “People didn’t feel uncomfortable revealing their health history because they didn’t have to worry about losing their plan.”

President Lyndon Johnson signed Medicare into law on July 30, 1965, beside former President Harry Truman in Independence, Mo. Truman, who first proposed a national health care program in 1945, became the first beneficiary.

David Sayen, Medicare’s regional administrator for California, explained that when the program started, only one in four Americans had private health insurance. The 75 percent who didn’t, he said, often would find themselves in poverty after hospitalization for a serious ailment. Even though medical care cost less then, “they were hobbled.”

Medicare was designed to protect people in retirement, but it is not just for the elderly; it now also covers people with disabilities and certain disabling illnesses, along with their dependents. The Medicare Modernization Act (MMA), signed by President George W. Bush in 2003, added a prescription drug component—Part D—among other changes, including “value-based pricing” in an effort to control costs.

Enrollment after the first year was 19.1 million; today it’s around 55 million.

Sayen says he doesn’t “do crystal balls” when asked what’s on the horizon for Medicare. He did say by phone from the Bay Area that laws “always have a long tail”—meaning that legislation takes time to implement. Elements from the 12-year-old MMA, and even the 19-year-old Heath Insurance Portability and Accountability Act (HIPAA), are process-pending.

Sayen understands the reasoning behind single-payer advocates’ admiration of Medicare, which is often considered a model of reform. After all, the program has demonstrated longevity, which gets equated with sustainability. Without passing judgment or taking a political stance, he highlighted some key considerations.

“Medicare has been a great success in that it has improved the health and well-being of seniors and people with disabilities,” Sayen said. “But the challenge ahead is to manage the cost of the program so that the benefits can be maintained.” His agency, CMS (Centers for Medicare & Medicaid Services), continues to develop new payment structures in an attempt to slow the rise of health care costs because, as the largest single payer, i.e. customer, “Medicare is the gorilla in the room,” he said. Its decisions are “driving what happens” industry-wide.

Consolidating all plans into a one entity would make that gorilla even larger. Sayen compared the impact on negotiations with providers, equipment manufacturers and pharmaceutical makers to the dealings the Defense Department has with defense contractors.

Single-payer supporters point to Medicare’s low administrative costs: roughly 3 percent, compared to around 30 percent for insurance companies.

“While our administrative costs appear low, we cannot use benefit costs for safeguards,” he said, referring to fraud protection. “Private insurers use dollars to protect dollars.”

This may be why Medicare imposes fewer hurdles—claim denials, prior authorizations—for doctors to clear. That ease of use earned praise from Schroll, who acknowledged Sayen’s concern for fraud but said there is a middle ground to be found for administrative costs.

As for fears of a monopoly, Schroll offered a reminder of the purpose of Medicare.

“Is it for the stockholders? Is it to provide health care to people? To negotiate for prices that benefit people would not benefit stockholders, probably,” she said. “We as a society have to decide where we are going to come down on that.”

Local celebrations:

The Medicare 50th Birthday Committee, a coalition of North State groups supporting single-payer health care, is organizing three events in Butte County:

Tuesday (July 28)—Celebration with birthday cake, 8-11 a.m., Paradise Farmers’ Market (6491 Clark Road).

July 30—Ice cream social and The Healthcare Movie screening, 5-7 p.m., Southside Oroville Community Center (2959 Lower Wyandotte Road).

Aug. 1—Celebration with cake, speakers and music, 7:30-noon, Chico Farmers’ Market (parking lot at Second and Wall streets).

For more information, contact Tom Reed at 966-3414.

PNHP note: This article was original published under the title “Medicare turns 50.”

https://www.newsreview.com/chico/medicare-turns-50/content?oid=17655484

Better communication a good reason to go for single payer

By James Binder, M.D.
Charleston (W.Va.) Gazette-Mail, July 23, 2015

Medical students are taught empathic, patient-centered interviewing skills during the first two years of medical school. Patient-centered interviewing is strongly linked to better health outcomes in patients.

These interviewing skills erode as students become residents and young practitioners. Why? I believe the most important factor is an adversarial climate that is now pervasive in our health-care system, a climate created by competing private health care insurance companies.

I have noticed a harshness that was not present 30 years ago. Many professionals do provide compassionate care everyday, but the culture has changed.

I didn’t initially appreciate the importance of empathic communication. I learned through clinical experiences, including one incident that hit close to home.

An elderly woman cried as Dr. Tim Campbell made his morning rounds. The distraught woman explained that, during the previous night, she had not been allowed to visit with her gravely ill husband of 50 years (because the nurses were busy caring for him). Dr. Campbell responded with simple compassion. He hugged the woman. She calmed down, and they talked. I remember the incident because that woman was my mother.

Empathy opened the door for Dr. Campbell to be able to talk with her and make plans to transfer my dad to the ICU. The power of empathy to open up patients and collaborate with them in treatment planning is well documented in the medical literature.

Our fragmented health-care system is competitive and adversarial. This is not a surprise to anyone working in the field or to patients receiving care. What is surprising is that we continue to believe competition will improve quality and save money. It does neither.

The evidence of a hostile climate is inescapable: the new patient is asked for her insurance coverage before receiving a simple welcome; a family has to fight with a case manager to obtain needed medical coverage for their mother; a rushed doctor types into a computer and does not really listen to his patient’s concerns.

A combative approach to patient care is the direct result of believing that patients must be stopped from overutilizing the health-care system, since over utilization is considered the primary cause of our high health costs in the U.S. It is misguided.

Excessive bureaucracy is the most important factor for high costs. “A simplified, single-payer system of financing health care similar to Canada’s or the U.S. Medicare program could result in savings of approximately $375 billion annually,” says a 2014 article in BMC Health Services Research.

If we eliminated the needless bureaucracy inherent in a multi-payer system, we would realize enough savings to cover all citizens for all needed care, including mental health, dental and chronic care.

The following consequences of our current adversarial culture are powerful roadblocks to providing compassionate, patient-centered care:

1. Time spent with patients is severely limited to increase profits.

Currently about one-sixth of patient time is devoted to paperwork and red tape. Its takes time to talk, listen and partner with patients. Richard Schwartzstein reflected the thinking of many practicing physicians when he commented in the New England Journal of Medicine that, “Our system forces them (physicians) to have time-constrained interactions that challenge even the most caring doctors to apply their training.”

2. Clinicians burn out at a very high level, largely because of a loss of autonomy, working in an adversarial climate, and the massive paperwork and red tape demands that result from working in our multi-payer system.

Primary care physicians are particularly vulnerable to burnout (around 50 percent), contributing to our primary care physician shortage.

Burnout, a condition of emotional exhaustion, depersonalization, and decreased sense of accomplishment, leads to personal and family losses, with high rates of substance abuse and divorce.

Four-hundred physicians die each year from suicide, according to the American Foundation for Suicide Prevention. Studies show lower quality of care from burned out physicians. A burned out physician is unlikely to be empathic and patient-centered. Health outcomes of patients suffer.

3. Patients view the health-care system and its leaders as adversaries, not advocates.

Although most patients are satisfied with their individual clinicians, there is distrust of the system itself. This distrust does permeate into individual physician-patient relationships. Trust is fundamental to partnership and positive health outcomes. This lack of trust does not affect physicians in many other countries. The level of public trust in U.S. physicians as a group ranks near the bottom of trust levels in the 29 industrial countries recently surveyed by the International Social Survey Programme.

Insurers are well aware of the above information. Overtly, they endorse the concept of patient-centered, compassionate medical care. It is not their priority.

As Joe Biden stated, “Don’t tell me what you value. Show me your budget and I’ll tell what you value.”

We will not create a compassionate culture by legislating it or by checking a box on a computer template that we partnered with our patient. That would require a change in our attitude, our core beliefs.

One belief that would be important to adopt is: There is enough health care resources to go around and treat all patients with care, respect and competence. Imagine the improvement in health care that would result from eradicating the adversarial climate and including everyone automatically with the $375 billion saved by eliminating the excessive bureaucracy of the multi-payer system.

Dr. James Binder works at Cabin Creek Health Systems and is the author of “Pediatric Interviewing: A Practical Relationship-Based Approach and Primary Care Interviewing: Learning Through Role-Play.” He is a member of Physicians for a National Health Program.

 http://www.wvgazettemail.com/article/20150723/GZ04/150729780/1455#sthash.QwloKK4F.dpuf