PNHP

Why Canadian Hospitals Outperform U.S. Hospitals

Why Canadian Hospitals Outperform U.S. Hospitals

By Steffie Woolhandler and David Himmelstein
The Huffington Post Canada, Feb. 12, 2015

In many countries, bereaved families get condolence cards and flowers. In the U.S., they are also deluged with hospital bills and insurance paperwork.

That paperwork isn’t merely an insult. It costs U.S. society a fortune. Take hospitals, for instance. According to research we recently published in Health Affairs, U.S. hospitals spent $215 billion in 2011 on billing and administration, a striking 1.43 per cent of GDP.

Put another way, about $1 of every $4 of U.S. hospital spending goes to bureaucracy rather than patient care.

Other countries manage modern, first-rate hospital systems for far less. While administration devoured $667 per capita annually in the U.S., we found that Canada spent only $158, Scotland $164, England $225 and the Netherlands $325.

If U.S. hospitals ran as efficiently as Canada’s, the average U.S. family of four would save $2,000 annually on health care.

Moreover, U.S. hospital paperwork costs have risen sharply since 2000, even after adjusting for inflation. In contrast, administration’s share of hospital budgets in Canada has actually fallen since 1999.

A generation ago, it took just one or two managers to run a U.S. hospital. Now, the CEO has been joined by “chief officers” for operations, finance, compliance, information, quality management, and more.

Each chief commands his/her own legions – hundreds of billing and registration clerks, referral managers, upcoding specialists (to translate doctors’ diagnoses into the most profitable billing codes), and massive IT departments whose first commandment is “get the bill right.”

Why are U.S. hospitals so inefficient? Our multiple-payer insurance system forces every hospital to negotiate rates with dozens of insurance plans, each with its own coverage rules, billing procedures and documentation requirements. And each hospital must collect deductibles, co-payments and co-insurance from tens of thousands of patients.

In contrast, Canada and Scotland — where bureaucratic costs are lowest — have single-payer systems that reject this kind of red tape and the need to bill for every Band-Aid. They pay hospitals simple lump-sum budgets, the way we fund local fire stations. And like fire departments, their hospitals don’t need to collect from each victim of misfortune.

But the complexity of hospital billing isn’t the only thing driving bureaucracy. Hospitals have been forced to add layers of business expertise in order to survive in our market-driven system.

A hospital that doesn’t show an operating profit can’t fund essential new investments in new equipment and cutting-edge services, or modern buildings. That means administrators have to devote resources to financial gaming like marketing lucrative services (e.g. sports medicine); billing units to squeeze every penny from insurers and patients; and strategies to recruit profitable (well-insured) patients, and avoid unprofitable (e.g. uninsured) ones.

The dismal record of for-profit hospitals illustrates the problem with running hospitals as businesses. The for-profits have higher death rates and employ fewer clinical personnel like nurses than their non-profit counterparts. But care at for-profits actually costs more, and they spend much more on the bureaucracy, a reflection of the high cost of implementing shrewd financial strategies.

Canadian and Scottish hospital administrators don’t have to play financial games to assure their survival. Government grants — rather than operating profits — pay for new buildings and equipment. Even in France and Germany, where hospitals bill multiple payers, bureaucratic costs are modest because government directly funds most hospital investments.

England and the Netherlands provide unfortunate counter-examples. Pro-market reforms initiated during the Thatcher era have driven English hospital administrative costs sharply higher. And only U.S. hospitals have higher administrative costs than those in the Netherlands, where radical market-oriented reforms now pressure hospitals to show a profit.

Economics textbooks hold that subjecting medicine to market forces will stimulate efficiency and root out waste. But reality stubbornly refuses to obey. In health care, market-oriented policies encourage hospitals to shift resources to business strategies that boost the bottom line, but contribute nothing to care.

Dr. Steffie Woolhandler is an advisor with EvidenceNetwork.ca and co-founder of Physicians for a National Health Program. She is professor of public health at the City University of New York and lecturer in medicine at Harvard Medical School. She is also an internist at the Montefiore Medical Center in New York.

Dr. David Himmelstein is an advisor with EvidenceNetwork.ca and co-founder of Physicians for a National Health Program. He is professor of public health at the City University of New York and lecturer in medicine at Harvard Medical School. He is also an internist at the Montefiore Medical Center in New York.

http://www.huffingtonpost.ca/steffie-woolhandler/canadian-vs-us-healthcare_b_6663650.html

A Healthy Simplification

New study shows single-payer system would provide huge savings in the administrative costs of medical care

By Ali Hibbs
Metroland (Albany, N.Y.), Feb. 12, 2015

Eighty percent of medical costs associated with billing and insurance practices in the United States—approximately $375 billion—is squandered annually due to systemic inefficiency, according to a study released last month by a group of physicians and health policy researchers connected with Harvard Medical School, the University of California-San Francisco and the City University of New York School of Public Health, who attribute the staggering waste to the nation’s complex, multi-payer way of financing care.

The four-member research team reported its findings in the peer-reviewed journal BMC Health Services Research, where they noted that a simplified, single-payer system of financing health care similar to Canada’s, or the U.S. Medicare program, could result in savings of more than $1 trillion over three years.

Those savings, they said, could be used to cover everyone who is currently uninsured and to upgrade coverage for the tens of millions of Americans who now have inadequate policies with no increase in national health spending.

“Most significant,” said Aliya Jiwani, the article’s lead author, “is our finding that were the U.S. to adopt a simplified health care financing system—either along the lines of Canada’s system or our Medicare program—80 percent of those itemized expenditures would disappear. That’s how much administrative waste is embedded in our fragmented, dysfunctional system of paying for care.”

Senior author Dr. James G. Kahn said that the study is the first scientific article to provide a comprehensive portrayal of billing- and insurance-related costs (BIR) in the U.S. health care system.

“Synthesizing costing data on BIR costs from existing studies, using a uniform yardstick for defining BIR, and comparing those results with costs in simplified insurance systems in other countries, we see the true magnitude of administrative bloat in U.S. health care,” he said. “Money spent on such unnecessary bureaucratic tasks is money that could and should be spent on patient care.

“The potential savings of adopting a single-payer system is striking,” Kahn continued. “Such a system would enjoy powerful economies of scale, sharply reduce the burdens of claims processing, and obviate the need for marketing, advertising and underwriting expenses. Our nation’s patients, our physicians, and the U.S. economy all stand to gain from such a shift.”

The study was released just prior to the last of a series of hearings that were held around the state where lawmakers, medical professionals and healthcare advocates spoke in favor of a law known as NY Health, which has been introduced in both houses of the Legislature proposing a single-payer system here in New York.

“The Affordable Care Act has made some important improvements in how we organize and pay for health care in this country but it still leaves us and our health care, and our wallets, in the hands of insurance companies—with their premiums, and their administrative costs, and deductibles, and co-pays, and limited network, and denials of payment for the care we need,” said Richard Gottfried, longtime chairman of the state Assembly committee on health care. “We can do better and New York can do better.”

http://metroland.net/2015/02/12/a-healthy-simplification/

Exchange plans increasingly use abusive drug tier design

Exchange Benefit Designs Increasingly Place All Medications for Some Conditions on Specialty Drug Tier

By Caroline F. Pearson
Avalere, February 11, 2015

New analysis from Avalere Health finds that some exchange plans place all drugs used to treat complex diseases – such as HIV, cancer, and multiple sclerosis – on the highest drug formulary cost-sharing tier.

“Plans continue to innovate on benefit design in the exchange markets,” said Dan Mendelson, CEO of Avalere.  “These designs are calibrated to optimize enrollment by delivering low and stable premiums – the primary metric that consumers use to select a plan.”

Specifically, in five of the 20 classes of drugs analyzed, plans placed all drugs in a class on the specialty tier. Specifically, in the Protease Inhibitor and Multiple Sclerosis Agents classes, 29 and 51 percent of plans respectively place all drugs, including available generics, on the highest tier.

Moreover, a subset of plans in each of 10 drug classes1 placed all single-source branded drugs in a class on a specialty tier. Specifically, in 8 of the 10 classes, 2015 exchange plans were more likely than 2014 plans to assign all single-source branded drugs to the highest cost sharing tier. A single-source branded medication is a brand name drug without a generic equivalent. The practice was most common for some cancer drugs and drugs used to treat multiple sclerosis. Roughly 30 percent of plans also place all single-source drugs for HIV/AIDS on the specialty tier.

“Enrolling in a plan that places all medications for a particular disease on the specialty tier can mean significant out-of-pocket costs for consumers, particularly if they do not qualify for cost sharing reductions,” said Caroline Pearson, Vice President at Avalere.

http://avalere.com/expertise/life-sciences/insights/avalere-analysis-exchange-benefit-designs-increasingly-place-all-medication

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Comment:

By Don McCanne, MD

Some plans in the insurance exchanges are placing all drugs used to treat complex diseases, such as HIV, cancer, and multiple sclerosis, on the highest drug formulary cost-sharing tier. We have covered this terribly abusive process before, but this update shows that they are “increasingly” placing all medications for expensive conditions into specialty drug tiers. In spite of the pushback, it’s getting worse, not better.

The reasons are obvious. Higher patient cost sharing reduces the insurer’s portion of the payment for the drugs. Higher cost sharing increases the probability that patients will not fill their prescriptions due to the cost, saving the insurer even more money. Most importantly, placing all drugs for an expensive chronic disorder in the highest tier greatly increases the probability that the insurer will not have to cover these high cost patients as they much more likely will obtain their insurance from a competitor.

What then will the competitor do? It’s obvious. They will also move these drugs to the highest tier. That is the nature of business competition. When we rely on private insurance plans to cover health care, we should expect that those plans will always follow an optimal business model.

This devious policy is great for insurers’ businesses, but it is terrible for patients. Health care reform should have been all about the patient. We can still make it so by firing the private insurers and placing our own public insurer in charge through an improved Medicare that covers everyone.

Advocates press case for single-payer health plan

By Peter Wong
Portland (Ore.) Tribune, Feb. 11, 2015

State Sen. Michael Dembrow and a few hundred people have not given up on a single-payer system under which the government pays for all health care.

The Portland Democrat, for the third consecutive cycle, has introduced a bill to institute such a system in Oregon. No state has done so; Vermont Gov. Peter Shumlin abandoned his attempt when he could not come up with a way to pay for it.

But Dembrow, at a rally Wednesday at the Capitol in Salem, says he will persevere.

“Thank you for sticking with this for so many years,” he says.

“We have so much work to be done, and it’s going to be done in our neighborhoods, churches and organizations, one on one. We have to explain to people that we are talking about a simple system here, so that people do not fall through the cracks and are not denied coverage.”

Dembrow’s two previous proposals got a hearing by the House Health Care Committee, but advanced no further. His current Senate Bill 631, he says, is headed for a hearing by the Senate Health Care Committee in March.

He did get a bill requesting a study by the Oregon Health Authority about how health care should best be funded. The study was not funded, although some aspects were carried out; House Bill 2828, which is up for a hearing Monday, would extend the deadline two years.

Under the federal Affordable Care Act passed in 2010, and implemented starting last year, the share of Oregonians with coverage has increased to 95 percent through a combination of private insurance and expanded state-supported care.

But advocates of a single-payer system argue that still leaves thousands of Oregonians without any coverage, and many more with large deductibles and copayments for medications and services.

“We should give people the freedom to choose their medical providers and to get health care when they need it without the intervention of big for-profit insurance companies,” says Lee Mercer of Silverton, board president of Health Care for All Oregon, the rally’s sponsor. Mercer is a former small-business owner and former executive director of the Main Street Alliance of Oregon.

Peter Wong writes for the Capital Bureau and can be reached at pwong@PamplinMedia.com.

http://portlandtribune.com/pt/9-news/250302-119251-advocates-press-case-for-single-payer-health-plan

Consumer-directed health plans reduce utilization of essential drugs

Patient Responses to Incentives in Consumer-Directed Health Plans: Evidence from Pharmaceuticals

By Peter J. Huckfeldt, Amelia Haviland Ateev, Mehrotra Zachary Wagner, and Neeraj Sood
National Bureau of Economic Research, NBER Working Paper No. 20927, February 2015

Abstract

Prior studies suggest that consumer-directed health plans (CDHPs) – characterized by high deductibles and health care accounts – reduce health costs, but there is concern that enrollees indiscriminately reduce use of low-value services (e.g., unnecessary emergency department use) and high-value services (e.g., preventive care). We investigate how CDHP enrollees change use of pharmaceuticals for chronic diseases. We compare two large firms where nearly all employees were switched to CDHPs to firms with conventional health insurance plans. In the first firm’s CDHP, pharmaceuticals were subject to the deductible, while in the second firm pharmaceuticals were exempt. Employees in the first firm shifted the timing of drug purchases to periods with lower cost sharing and were more likely to use lower-cost drugs, but the largest effect of the CDHP was to reduce utilization. Employees in the second firm also reduced utilization, but did not shift the timing or use of low cost drugs

From the Introduction

Overall, we find evidence that employees in the CDHP with pharmaceuticals subject to the deductible use more low cost drugs and shift the timing of drug purchases to periods with lower cost sharing. The majority of the response, however, is to reduce overall drug utilization. These results imply that enrollees possess some awareness of benefit design and availability of low cost drugs, but also suggest that enrollees either discount or are not cognizant of the adverse consequences of poor adherence. Employees in the CDHP with pharmaceuticals exempt from the deductible also exhibit decreased utilization relative to firms with conventional coverage. The presence of a utilization response may suggest a lack of understanding of plan design or reflect secondary effects where increased cost sharing leads to fewer physician visits where drugs are prescribed. The persistence of the response into the second year of the plan (presumably a sufficient time period for enrollees to understand plan design) may suggest this response is due to cost sharing for physician visits.

From the Conclusion

We investigate the effects of CDHPs on use of pharmaceuticals that treat and prevent chronic diseases including high cholesterol, hypertension, and type 2 diabetes. We compare changes in utilization among employees in two firms that shift all of their employees to CDHPs relative to employees in firms that offered no CDHP; in one firm (CDHP firm 1) pharmaceuticals are subject to the deductible and in the other pharmaceuticals are exempt from the deductible (CDHP firm 2). We find that enrollees in CDHP firm 1 change utilization of pharmaceuticals along each hypothesized margin: enrollees shift the timing of purchase to periods with lower cost sharing, increase the use of lower cost drugs (but only when such drugs were equally or more effective), and reduce overall pharmaceutical utilization. The majority of the response, however, is focused on the reduction in overall utilization. In addition, most of these effects persist into the second year of the CDHP. In CDHP firm 2, we observe insignificant changes in utilization for statins, but statically significant or marginally significant reductions in utilization of antihypertensive drugs and diabetes drugs. We observe no effect, however, on the percentage of days supply purchased or used that were low cost. The utilization effects for CDHP firm 2 are larger and statistically significant for all drug categories in the second year of the CDHP. We interpret the persistence of these effects, combined with the absence of a change in use of low cost drugs, as suggestive evidence of a “gatekeeper” effect, where higher cost sharing for physician visits result in reductions in pharmaceutical use. Moreover, some of the reduction in utilization in CDHP firm 1 could also be driven by a reduction in access to physician visits, a phenomenon observed in the RAND Health Insurance Experiment (Leibowitz, Manning, and Newhouse 1985).

http://www.nber.org/papers/w20927?utm_campaign=ntw&utm_medium=email&utm_source=ntw

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Comment:

By Don McCanne, MD

One of the most important changes taking place in the financing of health care is the widespread adoption of high-deductible health plans, not only with the plans offered in the ACA insurance exchanges, but also with employer-sponsored health plans. When high-deductible plans are combined with a personal health account (health reimbursement arrangement or health savings account) then they are referred to as consumer-directed health plans (CDHPs). This study further informs us on the perverse consequences of this model of health care financing.

Three different paragraphs, each describing this study, were selected for today’s quote to help the reader get through the fog of this fairly complex, technical study. Basically, patient utilization rates for drugs in three chronic conditions (hypercholesterolemia, hypertension, and Type 2 diabetes) were measured under three different scenarios: a large employer with a CDHP in which pharmaceuticals applied to the deductible, requiring full payment until the deductible was reached, a large employer with a CDHP in which pharmaceuticals were exempt from the deductibles, requiring only copayments, and a third group of 19 other firms that offered only traditional coverage and no CDHP.

The primary finding was that patients in CDHP plans decreased utilization of pharmaceuticals for these disorders compared to patients in traditional health plans. This was true whether or not drug purchases applied to the deductible. It is crucial to note that having a personal health account from which funds could be drawn to pay for these drugs did not prevent patients from decreasing utilization of these important drugs.

It is easy to understand why patients declined to purchase drugs for which they had to pay the full cost, even though those drugs were important in their medical management. We have innumerable studies that show that patients will decline care that they should have when they are faced with significant out-of-pocket expenses, demonstrating why high-deductible plans are a such a perverse method of controlling health care spending.

But why would patients with high-deductible plans reduce their use of beneficial drugs if they were exempt from the deductible, requiring them to pay only the copayments? One reason may be that the intrusions and complexities of private insurer cost-shifting arrangements, such as through CDHPs, may be training patients to decline care except in the most dire of circumstances. Another reason may be that the physician visit required to obtain the prescription must be paid in full until the deductible is met, causing patients to drop off of their therapeutic program. Again, the availability of an employer-funded health reimbursement arrangement did not prevent patients from declining to fill their prescriptions (although an empty personal health account is not very helpful).

The bottom line is that too many patients are not receiving drugs and other care that they should have merely because of the increasing transition to CDHPs, with their high-deductible barriers to care. We should abandon CHDPs and shift to first dollar coverage in a program that controls spending through patient-friendly efficiencies – a single payer national health program.

Antidote to Growing Inequality = Universal Healthcare: World Health Organization Head

‘We have to evict private insurers and other profiteers from our healthcare system,’ says U.S. doctor and single-payer advocate

By Andrea Germanos
Common Dreams, Feb. 10, 2015

Providing universal health coverage is a key way to address increasing global inequality, the head of the World Health Organization said Tuesday.

WHO Director-General Margaret Chan made the comment—which echoes previous comments she’s made—during a keynote address on the first of a two-day conference on universal health coverage taking place in Singapore.

“Universal health coverage is one of the most powerful social equalizers among all policy options. It is the ultimate expression of fairness,” Agence France-Presse quotes her as saying.

Achieving such coverage demands “deliberate policy decisions,” she said, adding, “At a time when policies in so many sectors are actually increasing social inequalities, I would be delighted to see health lead the world towards greater fairness in ways that matter to each and every person on the planet.”

The WHO defines the goal of universal health coverage as ensuring “that all people obtain the health services they need without suffering financial hardship when paying for them,” and describes such coverage as “the hallmark of a government’s commitment to improve the well-being of all its citizens.”

A fact sheet from the UN body issued in September 2014 states: “At least a billion people suffer each year because they cannot obtain the health services they need.”

In her comments to the 34-member WHO executive board last month, Chan also referred to universal coverage as “one of the most powerful social equalizers,” and stressed the importance of investing in healthcare systems.

“Health systems and supporting infrastructures … are not a luxury to invest in when funds are available or other priorities have been met,” she said at the time. “They are an essential cushion against the shocks our 21st-century societies are delivering with ever greater frequency, whether from a changing climate or a runaway virus.”

Dr. David Himmelstein, a professor at the CUNY/Hunter College School of Public Health and lecturer at Harvard Medical School, agrees with Chan that healthcare coverage is key to tackling inequality — a challenge he says can be helped in the United States by a single-payer healthcare system that puts healthcare security above corporate profits.

“It’s clear that universal and comprehensive health coverage is a key to fighting inequality,” Himmelstein said in a statement to Common Dreams. “Unfortunately, in the U.S. we still have 30 million or more who remain uninsured despite Obamacare, and tens of millions more with such skimpy coverage that a serious illness would bankrupt them,” he stated.

“And Dr. Chan is clearly correct that we won’t get the coverage Americans need until our government is willing to take on the powerful corporate interests that block needed reform. To make care affordable we have to evict private insurers and other profiteers from our health care system. Insurers’ overhead and the paperwork they inflict on hospitals and doctors drains hundreds of billions each year from the healthcare budget, and they add no value to our system. And our government has to ask the wealthy to help pay for the poor,” he continued.

“Only a single payer national health insurance plan can provide the health security Americans need,” he said.

Andrea Germanos is a staff writer at Common Dreams. This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

http://www.commondreams.org/news/2015/02/10/antidote-growing-inequality-universal-healthcare-world-health-organization-head

Take profit out of basic health care

By Howie Wolf, M.D.
The Daily Camera (Boulder, Colo.), Feb. 10, 2015

It was refreshing to read the article in The Camera about “Changes in Colorado’s health insurance market,” (Daily Camera, Jan. 16) especially so because it was written by Marguerite Salazar, our state’s insurance commissioner. She cited how health insurance companies can no longer charge higher premiums for women than men or deny coverage for those applicants with pre-existing conditions. In the past, companies selling health insurance weren’t required to cover maternity, preventative care, and other essentials. Now they are. Besides all of that, they cannot spend more than 20 percent of premium dollars on “administrative costs.” As we all know, some of those costs still include the golden parachutes given their retiring millionaire CEOs. Before these changes, more than one U.S. insurance company ran on as much as 32 percent administrative costs, meaning that the dollars they spent on actual health care were but 68 percent of premium dollars. In Marguerite Salazar’s words, the carriers could make as much profit as they wanted.

Contrast those percentages with Medicare, whose administrative costs are usually 3-5 percent. In other countries where taxes are paid to run a type of national health system, insurance companies are not allowed to profit on citizens’ basic health coverage.Yes, higher taxes for most European countries, Canada, Japan, and Australia, but significantly cheaper than average USA insurance premiums. Their administrative costs are also less.

Our “non-system” has improved somewhat under Obamacare. More citizens now have access to care than ever before. Medicaid is now available to 30 million more Americans, but sadly this does not mean better access to our nation’s specialists and surgeons. As a family physician that sees many Medicaid patients, I have witnessed the angst of patients having to wait months just for a consultation.

An analysis by The New York Times shows that the cost of a mid-level silver insurance plan in Colorado rose 36 percent west of the Rockies while another dipped nearly 40 percent in northeast Colorado! The Affordable Care Act (ACA), or Obamacare, is still too insurer-friendly, allowing them to capture certain markets with a low, seductive price, only to be followed by rate increases after the competition has been thinned out.

Pharmaceutical company greed, too, needs to be reined in. The Prescription Drug Act of 2003 allows these companies to charge whatever they want; negotiations are not permitted. What is more remarkable is that countries who buy the same drugs from U.S. manufacturers will receive huge discounts because of the buying power of their national health systems. Our VA and Medicaid formularies are given favorable prices, but not so for the rest of Americans; not even senior citizens.

Despite the many problems with Obamacare, trying for the umpteenth time to repeal it is ludicrous. Certainly it needs fixing and should include a public option. What we need, in my view, is to take the profit out of basic health care and make improvements on what the ACA has started, eventually getting to Medicare for all. An excellent book on this subject is T. R. Reid’s “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care.”

Howie Wolf, M.D. has practiced in Longmont and Lafayette and now practices in Thornton. He lives in Boulder.

http://www.dailycamera.com/guest-opinions/ci_27500953/dr-howie-wolf-take-profit-out-basic-health-care

A simpler approach to health care

By Aatif Mansoor, Channing James and Jenny Zhang
Minnesota Daily, Letters, Feb. 11, 2015

We are medical students who have devoted eight years of our lives to educating and training ourselves, along with three to seven more years of training left for our chosen specialty.

We don’t put ourselves through all of that because we have a penchant for staying in school, purchasing expensive textbooks and accruing student loans — we do it so we will be able to properly take care of our future patients.

During the application process, we are all asked to write a personal statement about why we want to go medical school. I would wager that 100 percent of the responses from my classmates and from across the nation included some verbiage that referred to wanting to help people.

But as we have learned more and more about the system in place to take care of people in this country, we have become more concerned.

Yes, the Affordable Care Act has gotten more Americans insurance coverage — but what kind of coverage? Increasingly, ultra-high deductibles and copays are making patients reluctant to seek care when they need it — and vulnerable to financial ruin when they do.

America spends plenty on health care — twice per capita as other industrialized nations — but with staggering inefficiency. Administrative overhead devours 31 percent of our health spending.

It’s our health insurance premiums that pay for those catchy health-maintenance organization commercials, ads that cover an entire light-rail car, marketing departments, underwriters, lobbyists, eight-figure insurance executive salaries and handsome investor profits. None of this has helped us take care of our patients.

What if we redirected those wasted health care dollars into actual health care, while ensuring that all citizens have access to quality care?

This is the case for single-payer health reform.

The power of single-payer health care is its efficiency.

It replaces the dizzying labyrinth of private insurance plans with a single, unified public-financing stream. Yet it maintains the private practice of medicine, encouraging market-based competition where it matters — among providers.

Single-payer care streamlines payment for health services and products by establishing uniform, transparent pricing.

It replaces the costly, cumbersome practice of itemized hospital billing with global annual budgeting, removing layers of hospital administrators and bloated billing departments.

Most importantly, single-payer care guarantees quality coverage to all, removing crippling out-of-pocket liabilities.

The win-win is that we as future physicians would be compensated fairly for every patient we treat, while our patients no longer fear crushing medical bills and visits by debt collectors.

Because we believe single-payer care is the most sensible, equitable and sustainable way forward, we are members of the Minnesota chapter of Physicians for a National Health Program, which advocates for universal coverage through single-payer reform.

We currently have support from over 1,000 fellow Minnesota physicians, medical students and other health professionals who have signed the resolution in support of single-payer.

We encourage all University of Minnesota students at our institution to learn more about the single-payer system and consider supporting the movement.

The authors are University of Minnesota Medical School students.

PNHP note: The text above was originally published in two parts, one on Feb. 10 and the other on Feb. 11. They’ve been combined here for the reader’s convenience.

http://www.mndaily.com/opinion/letters-editor/2015/02/09/simpler-approach-health-care
http://www.mndaily.com/opinion/letters-editor/2015/02/10/simpler-approach-health-care

How far can we go with Sec. 1332 waivers?

Understanding the Affordable Care Act’s State Innovation (“1332”) Waivers

By Jessica Schubel and Sarah Lueck
Center on Budget and Policy Priorities, February 7, 2015

Considerable uncertainty surrounds the potential scope of the “waivers for state innovation” authorized under the Affordable Care Act (ACA), which allow states to modify how they implement key elements of health reform beginning in 2017. Also known as “1332 waivers” for the section of the ACA creating them, the waivers are attracting attention as a way states may pursue their own approaches to expand coverage, including alternatives that would represent a significant departure from the ACA’s standards and requirements.

Many aspects of the ACA, however, cannot be waived. Moreover, the ACA establishes several conditions that states must satisfy if they diverge from ACA standards and requirements. These conditions ensure that states using the ACA’s waiver authority continue to meet the overarching goals of health reform, such as extending access to affordable health coverage that provides a basic level of benefits.

In addition, section 1332 waiver authority doesn’t extend to Medicaid or the Children’s Health Insurance Program (CHIP). If a state wants to change these programs at the same time that it changes how it implements health reform, it can simultaneously request approval of a Medicaid or CHIP demonstration project under section 1115 of the Social Security Act. Section 1332 waivers aren’t themselves “super waivers” that give states sweeping new authority over Medicaid or CHIP (or Medicare), as some have suggested.

This paper describes key elements of 1332 waivers, how states may use them, what conditions states must satisfy to receive federal approval, and how they interact with existing waiver authority related to other federal health programs.

http://www.cbpp.org/files/2-5-15health1.pdf

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Comment:

By Don McCanne, MD

“Forget about our gridlocked Congress. We’ll get an ACA waiver and enact our own state-level single payer system, just like Saskatchewan did in Canada.” Great idea. The problem is that the Sec. 1332 waivers authorized in the Affordable Care Act are extremely limited in their scope. This very helpful article from CBPP explains the uses and limitations of the Sec. 1332 waivers.

Although the limitations are disappointing, single payer activists should vigorously proceed on two fronts. While Congress remains non-receptive to legislation moving us toward single payer, efforts should continue on a state level to enact whatever single payer policies are possible. That not only would make the eventual transition to a single payer system smoother, but it would also improve access and affordability for those who need relief now.

The more important front is to immediately step up advocacy for federal legislation, using John Conyers’ H.R. 676 – the Expanded and Improved Medicare for All Act – in educating the public as to reform that would really work. Although the Republican-controlled 114th Congress is preoccupied with responding to the Affordable Care Act and will not advance a single payer bill, nevertheless it is essential that we use this time to educate, form coalitions, educate, initiate grassroots efforts, and educate. As people discover how severe the deficiencies in our current system are, they will want to hear about a system that does not take away their choices while exposing them to financial hardship.

So understand the limitations of Sec. 1332 waivers as you continue your advocacy for state reform, but, by all means, simultaneously intensify your efforts for federal legislation that will enable not only your state, but all states, to ensure that everyone in the nation will have access to all essential health care services, free of financial barriers.

Med student: Activism for single payer, equality on the rise

The following is an unofficial transcript of an interview that Vanessa Van Doren, a first-year medical student at Case Western Reserve University School of Medicine, gave to Ed “Flash” Ferenc, host of the labor-oriented, Cleveland-based “America’s Work Force Radio” on WERE-AM 1490, on Feb. 9, 2015. You can listen to the audio recording of this interview beginning at the 39:44 minute mark here:http://awfradio.com/todays-show-2-9-15/

HOST ED ‘FLASH’ FERENC: When we come back we’re going to talk with a medical student at Case talk about a single-payer health care system in America. Other countries have it; it’s about time we have it here. … Let’s go to Vanessa now. Vanessa Van Doren is a first-year medical student at Case Western Reserve University School of Medicine. She is a native of Boston. You’re probably glad you’re not in Boston — I heard they’re getting nailed with snow today. Did you know that?

VANESSA VAN DOREN: Oh, yeah. My mom works downtown and she emailed me and told me she doesn’t have work. I wouldn’t mind that.

HOST: We occasionally get dumped on — we had a pretty good one last week — but nothing like what they got in Boston or in Buffalo back in November. That was ridiculous. Getting back to Vanessa, she graduated from Brown University, good school, in 2007 with a degree in anthropology, worked as a genetics researcher for several years before deciding to pursue a career in medicine. So you want to be a doctor, right?

VAN DOREN: Yes, after a lot of thinking about it, I guess I do.

HOST: What, specific, I mean, everything is specialized in medicine today. What field do you want to go into?

VAN DOREN: It’s pretty early now, and every time I shadow a new doctor I get excited about another thing, but I think I’m leaning toward infectious disease. I’m interested in global health, too, so there’s a lot of overlap between the two.

HOST: With the Ebola scare, I can understand why. That’s scary stuff. And that doesn’t bother you. You can get exposed. We’ve seen nurses, we’ve seen other things happen here, that kind of stuff doesn’t bother you?

VAN DOREN: No, I actually think we’re pretty safe in the United States. We have much better protocols and better health overall. Especially given how many people are still dying from that, there are thousands who have died in West Africa. I feel that it would be a good thing to get behind.

HOST: Well, we’ve got a good health care system here, we just can’t pay for it. That’s the problem. That’s what you’re here to talk about.

VAN DOREN: Yes.

HOST: You’re with an organization that’s called Students for a National Health Program, right? And you have a number of students at Case? Talk to us about the organization. It’s part of a bigger organization, right?

VAN DOREN: Yes. We’re student chapter of Physicians for a National Health Program. That’s an organization of about 19,000 physicians in the United States who are advocating for universal, single-payer health care in the U.S. So our group is a student chapter of that. We started in January and we’ve already got about 50 members that have joined the group so far — so we’re pretty excited about that.

HOST: What about nationwide? How large is just your organization nationwide, just the students’ part?

VAN DOREN: The student part, I believe there are thousands of students who are involved. About 160 of us are going to a big conference in Chicago next weekend to talk about what we’re going to be doing on a national level a little bit.

HOST: Now that’s going to be in Chicago? Talk to me about that.

VAN DOREN: Yes, that’s in Chicago this weekend, actually. And so eight of us are going from this new group and we’ll be getting together as med students from across the country that want to advocate for universal coverage and for single payer, and how to get more students and physicians involved and the intersections between the goals other groups that are focused on issues of equality and social justice and our own, and members of Congress who support the single-payer bill. Yes, I’m pretty excited about it.

HOST: So, is the discussion on how to implement this kind of thing? Because we’ve often heard it’s Medicare for All.

VAN DOREN: Yes.

HOST: Do you want to take the Medicare system as we know it and expand it? Because right now you don’t go on Medicare until you’re 65. So just take that — and there’d be no age limits? Is that what we’re talking about?

VAN DOREN: Yeah. It would cover every citizen in the United States, much like just about every other developed country in the world does. It would be universal, and the single- payer part of it is how to finance it. So that means that instead of having dozens of different for-profit insurance companies reimbursing hospitals and physicians, the government would be the single payer, it would be streamlined, a lot more efficient, a lot more cost-effective. So they would be responsible for reimbursing.

HOST: So, get the insurance companies out if then, altogether?

VAN DOREN: Yeah, definitely. I don’t think that health care, human lives, should be a commodity like that. That’s something that should be covered for everyone in a developed country.

HOST: Because the insurance companies are the ones kind of dictating who gets what — medicines, certain health care, or if you have a horrible disease, they can say “You’re not worth saving.” That kind of stuff goes on, doesn’t it?

VAN DOREN: Yes. I mean the Affordable Care Act has improved that. They’ve eliminated exclusions for pre-existing conditions, and tried to standardize some forms of health insurance, so that some things have to be covered now, but it doesn’t go far enough. There are still tens of millions of people who have no coverage whatsoever. 44,000 people die each year due to lack of access to care: that’s just unconscionable. We’re the richest country in the world. We should be able to do that.

HOST: 44,000 people every year.

VAN DOREN: Yes, from unexpected things, from not being able to pay. If you have some kinds of cancer, the medications for that are hundreds of thousands a year a lot of the time. So even if you have health insurance that covers 80 percent of your bills, you’re going to be in a lot of trouble. The leading cause of bankruptcy in the United States is medical bills, which is outrageous. And of people filing for bankruptcy for medical bills, over half of them had insurance, they just didn’t have very good coverage.

HOST: OK. To expand Medicare to all, there’s a Medicare tax. Are you advocating raising that tax to cover everybody and do you know what that tax would be, or is it too premature right now?

VAN DOREN: I think it’s too hard to give exact numbers right now, but the main cost-savings would be from streamlining the system. Instead of having all of these different payers, all these different insurance companies, and this massive bureaucracy and red tape that goes along with that, you’d have one system, one payer. You could eliminate billing departments in hospitals, and if you’re only interacting with one set of rules and one payer, and everyone was covered. The cost savings from that would be enormous, and that would be the primary way we’d be funding the system.

HOST: Yes. I remember the stats on Medicare. Isn’t there, as far as administration, something between 2 and 3 percent, where you have private insurance companies, the margin is something like 15 to 20 percent. Isn’t it something like that?

VAN DOREN: Yeah. It’s much higher.

HOST: So by eliminating that, you would encompass more people getting health care. I that what you’re saying?

VAN DOREN: Yes. Right now we spend about 17 percent of our GDP on health care, but we don’t have universal coverage. We pay about double per capita of what other countries pay. It doesn’t make any sense.

HOST: And we’re the only major industrialized country that doesn’t have a single-payer system — that’s the crazy thing about this. OK, Vanessa, let’s go back here. I see you had this “White Coat Die-In” on Dec. 10. It caught my attention. What was that all about?

VAN DOREN: So, the die-in was a national event in December at about 90 med schools across the country and over 2,000 med students participated. It started off as response to the Eric Garner and Michael Brown verdicts, and the point of it initially was to recognize that institutionalized racism is a public health crisis, and that it affects all area of society, I mean law enforcement and the courts, as we saw with those cases, but also in medical care. So the focus originally was primarily on institutionalized racism in medicine. And that’s been getting some attention recently. There have been a number of studies coming out recently, showing that white physicians spend less time with black patients.  There’s a particularly study that shows physicians treat white patients versus black patients for a fracture differently. So anyone who’s had a broken leg knows that these are excruciating injuries that require serious pain medication, but this study showed physicians were twice as likely to prescribe Tylenol to black patients and twice as likely to prescribe opiates to white patients. So with all this stuff coming out, and what we’ve learned as med students, we identified this overlap between institutionalized racism in law enforcement and racism in medicine.

And when underlying racism manifests itself in law enforcement, the consequences are very obvious — a person being choked to death, or grand juries that decide not to indict the perpetrators — but when a patient dies of diabetes complications due to lack of access to care, or a misdiagnosis because a physician dismissed that patient’s symptoms because of these underlying biases, it’s not as dramatic as killing someone in cold blood but the impact on that person and their family and community is the same.

HOST: Yes.

VAN DOREN: So that’s the rationale for why we had this demonstration.

HOST: And a single-payer system would alleviate that kind of thing because costs would be taken out of it then, right?

VAN DOREN: Yeah, single payer — I mean it wouldn’t eliminate institutionalized racism, but it would help reduce the burden by providing access to care for all people. And we would still have a long way to go beyond that, to treat patients with the same attention and compassion that they deserve, but single payer would be a crucial step. And actually the group that started the die-in helped identify single payer as a key component in eliminating racism in medical care. So there’s a big overlap between the two.

HOST: So that happened on Dec. 10 at the Case campus, and did you get a good turnout for that? And what about the university. Did the university go along with that?

VAN DOREN: Well, they were pretty involved. We only had about two days to plan it. It was mostly done through Facebook and we simply started inviting people. We had 70 people out there with this quick turnaround, which was exciting. And it wasn’t just students — there were members of the community, physicians from the university hospitals, there were deans — a couple of our deans came. My dean, Dr. Haynie, was out there holding a sign — that was exciting. A big part of Case’s curriculum is talking about the social determinants of health, health policy, and that kind of stuff, so it was exciting to see our faculty members practicing what they preach and out there supporting us. We were lucky.

HOST: And this was part of a national effort, too. I see there were 2,000 medical students at 90 schools?

VAN DOREN: Yeah, and this was all organized through Facebook over about two days. It was pretty amazing to see it broaden out like that.

HOST: Thank god for social media today. It’s amazing.

VAN DOREN: Yes, it was the most Facebooking I’ve ever done on my life, I think.

HOST: Are you going to do something like that again, perhaps?

VAN DOREN: So that group has started chapters at different schools and we’re trying to keep the movement going and the conversation going. One of the big things we’re trying to do now is to have roundtable discussions with med students and physicians who supported the concepts but didn’t want to come out and participate, just to kind of discuss what of roles med students and physicians should have in addressing these kinds of issues. I think that’s an important conversation to have.

HOST: Social media is big and I also see you’re getting into the mainstream media. I see you had a response as a letter to the editor in replying to an Ohio libertarian. Now the libertarians, they don’t want any government intervention, do they?

VAN DOREN: No. Yes, how that letter happened is that Joshua Niforatos, he another first-year medical student at Case – he’s one of the founders of the chapter — saw the op-ed by Sarah Bevins, one of the leaders of the Libertarian Party in Ohio. Her op-ed was arguing against the Medicaid expansion in Ohio. She argued that government safety-net programs like Medicaid should be totally overhauled and replaced by “free market” solutions. So we wrote just a short letter, just a few hundred words, a letter to the editor, explaining why her argument was wrong — from any perspective, but predominately financial and ethical perspectives, and to explain why single payer is a better solution to address the problems of high costs, red tape, and lack of access to care — hallmarks of our current system.

HOST: They don’t seem to understand those 44,000 people who are dying because they don’t have that program that you just referred to. It doesn’t seem to make a difference, though, does it?

VAN DOREN: Yes. That’s the thing that really gets to me, it’s totally unconscionable to say that. I mean that’s what we have with Medicare and Medicaid and CHIP, which is for lower-income kids. If we pull those safety-net programs, what are people going to do? The poverty line for an individual right now is set at $11,670 a year, and Medicaid covers people making under this amount. And in states that are expanding Medicaid, that line is set at about $16,000 a year. So this is a group that Bevins was saying that people should be paying for care just out-of-pocket, which is ridiculous. Private insurance premiums are thousands of dollars a month, and these are people who are struggling to pay rent and put food on the table. Medicaid is not a complete solution, but I just can’t see how a free-market approach would help these people get access to care.

HOST: No. They have a “let them die” attitude. That’s the sad part about it, it really is. Well Vanessa, I think you’re on the right track on this issue. I’d like to keep in touch with you. So you’re a first-year medical student so you have a little way to go, don’t you?

VAN DOREN: Oh, yeah, a long road. But it’s exciting. I’m really glad to be in this field.

HOST: So let’s check in with you, to see how things are going. If you have another demonstration or something like that, feel free to send it over our way to BMA Media and we’ll get it on the show, OK?

VAN DOREN: That would be great. Thank you so much.

HOST: And the national website is pnhp.org. Vanessa, thank you so much, keep up the fight, we’ll be in touch, all right?

VAN DOREN: Thanks a lot.

Single payer criticism often untruthful

By James Burdick, M.D.
The Baltimore Sun, Feb. 9, 2015

After discouraging election results, Vermont Gov. Peter Shumlin abandoned his effort to establish a single payer health system. This is bad news not only for the Green Mountain State but for all Americans. Governor Shumlin had been one of the only major U.S. office holders with the backbone to advocate this remedy for our ailing health care system.

The single payer system is already working well in Canada. The Canadian Medical Association strongly supports the system and is working to improve it. But some enemies of reform here are using Canadian stats and the Shumlin setback to decry the single payer system.

Arch-conservative Sally Pipes, president of the Pacific Research Institute and a prominent foe of single payer, claims that Vermont dodged a bullet. In the National Review, Ms. Pipes noted that “78 percent of Canadians over 45 are worried that they won’t be able to access care when they need it.”

So what? It is the rare Canadian who wants to cancel his or her health care system.

In fact, the 78 percent number she cites is from a Canadian Medical Association report, advising a change in funding strategy. The report is an endorsement of continuing the system by improving it. Of course any national system needs updating and other tinkering to keep it running smoothly. But we do not even have a functioning system in the U.S. to evaluate.

Ms. Pipes has joined other naysayers of health care reform in pointing to lengthy waiting times for care in Canada. Americans need to be aware that this is harmful propaganda. Yes, Canadians have to wait a few months for some elective procedures. They recognize this and are working on it. But Canadians typically find that if they get sick they will be well taken care of without a big bill afterward.

The truth about such comparisons with the U.S. was highlighted when a Canadian newspaper responded with indignation to Sen. Mitch McConnell’s claim that the U.S. health care system was superior to Canada’s because of the waiting times. A spokesperson for the Republican senator’s home state of Kentucky, asked by an Ontario newspaper reporter what waiting times were typical in the U.S., admitted to not knowing what these were but said “anyway, they can always go to an E.R.”

A country’s waiting times represent averages for all citizens. In the U.S., our citizens without insurance would have to be included in our averages for comparison with other countries that do have national health coverage. In effect, the skewed comparison with other countries would be so distorted as to be meaningless.

This sort of disinformation is common in the health care debate: Statistics are applied manipulatively, leading to grossly incorrect generalizations being used to criticize “universal” health care systems. This is not civic discourse. It is nothing but a big lie.

But let’s look further ahead. Given the extensive benefits for many from the Affordable Care Act, how do business interests vested in the status quo argue that more comprehensive reform is not the answer? For that big lie, proponents of the status quo say we must blame the ACA. In truth, the political impediments that prevented more complete legislation in 2010 are the cause of the trouble we’ve had.

With the ACA we made a good start, but there is much more to be done in order to enable our health care system to work for everyone. It is critical to recognize and neutralize malicious misinformation directed against further health care reform. The real fix lies in the prospect of a single payer system along the lines of the Vermont legislation.

Although moving directly to a national system such as single payer would be the most prompt and effective next step, the present political climate provides little hope for this. Perhaps gradual coalescence of state programs would work. After all, gradual provincial participation is the way the federal Canadian health care system grew to maturity. Efforts such as those in Vermont, and the similar “Health Care is a Human Right” campaign in Maryland, provide encouraging steps toward that goal.

But even that is a political fight few of our politicians seem to have the gumption to wage right now. Keeping the debate truthful will at least level the playing field.

Dr. James Burdick is a professor of surgery at Johns Hopkins University School of Medicine. He is writing a book detailing his plan for patient-centered health reform. His email is jburdic1@jhmi.edu.

http://www.baltimoresun.com/news/opinion/oped/bs-ed-single-payer-20150209-story.html

Dr. Robert Zarr on ‘The Big Picture’

PNHP President Dr. Robert Zarr appeared on Thom Hartmann’s “The Big Picture” on RT America on Feb. 9, 2015, to discuss the limitations of the Affordable Care Act and the continuing need for single-payer reform — an improved Medicare for all.