PNHP

The nefarious plot of generic drug tiers

The nefarious plot of generic drug tiers

Is All “Skin in the Game” Fair Game? The Problem With “Non-Preferred” Generics

By Gerry Oster, PhD, and A. Mark Fendrick, MD
AJMC.com, September 17, 2014

The new blockbuster drug sofosbuvir (Sovaldi) is offering hope to many patients with hepatitis C, but treatment is expensive and many insurers are demanding that patients shoulder a large portion of the cost. The demand that patients pay a larger share of their drug costs, however, is not limited to expensive new medicines. In fact, many patients are now facing substantially higher co-pays for various generic drugs that their insurers have designated “non-preferred,” often including those recommended as first-line treatment in evidence-based guidelines for hypertension, diabetes, epilepsy, schizophrenia, migraine headache, osteoporosis, Parkinson’s disease, and human immunodeficiency virus (HIV). We are concerned about this relatively recent development.

For many years, most insurers had formularies that consisted of only 3 tiers: Tier 1 was for generic drugs (lowest co-pay), Tier 2 was for branded drugs that were designated “preferred” (higher co- pay), and Tier 3 was for “nonpreferred” branded drugs (highest co-pay). Generic drugs were automatically placed in Tier 1, thereby ensuring that patients had access to medically appropriate therapies at the lowest possible cost. In these 3-tier plans, all generic drugs were de facto “preferred.” Now, however, a number of insurers have split their all-generics tier into a bottom tier consisting of “preferred” generics, and a second tier consisting of “non-preferred” generics, paralleling the similar split that one typically finds with branded products. Co-pays for generic drugs in the “non-preferred” tier are characteristically much higher than those for drugs in the first tier.

To better understand coverage policies in plans with 2 tiers for generic drugs, we identified several such offerings, including both commercial plans and those under the Medicare Part D program, via an informal search of the Internet. For 6 such plans, we examined coverage policies for 10 widely used drugs—all generically available—that are recommended as first-line treatment in current evidence-based guidelines.

While 2 of the plans provide access on a “preferred” basis to all of the medicines we considered, 1 or more of the drugs are “non-preferred” in all of the remaining plans. Metformin, for example, is a “non-preferred” drug in 1 plan, despite being a first-line treatment for type 2 diabetes mellitus. Two plans have no “preferred” generic anticonvulsant drugs; 3 plans have no “preferred” generic antipsychotic medicines; levodopa is designated a “non-preferred” agent in 3 plans; 4 plans have no “preferred” generic triptans (for migraine headache); and all generic antiretrovirals are Tier 2 agents in 4 plans. When there are no “preferred” generics from which clinicians and patients with particular diseases can choose, it may be argued that the diseases themselves effectively are “non-preferred.”

It is sometimes argued that patients should have “skin in the game” to motivate them to become more prudent consumers. One must ask, however, what sort of consumer behavior is encouraged when all generic medicines for particular diseases are “non-preferred” and subject to higher co-pays. The answer is informed, we believe, by a 2007 JAMA study of cost sharing by researchers at RAND, which was based on a review of 132 published studies. The authors report that “(i)ncreased cost sharing is associated with lower rates of drug treatment, worse adherence among existing users, and more frequent discontinuation of therapy” and that “for certain conditions, the evidence clearly indicates that more cost sharing is associated with increased use of other medical services, such as hospitalizations and emergency department visits.

When insurers designate clinically important generic medicines “nonpreferred” and there are no therapeutically equivalent “preferred” alternatives from which to choose, it cannot be argued that patients are thereby motivated to become more prudent consumers. The existence of clinically sound therapeutic choices is a precondition for any meaningful effort intended to make patients put “skin in the game.” Without choice, such policies are simply punitive and run counter to established principles of formulary design and management.

http://www.ajmc.com/publications/issue/2014/2014-vol20-n9/Is-All-Skin-in-the-Game-Fair-Game-The-Problem-With-Non-Preferred-Generics

Charles Ornstein of ProPublica provides an excellent discussion of this in today’s New York Times: http://www.nytimes.com/2014/09/18/upshot/how-insurers-are-finding-ways-to-shift-costs-to-the-sick.html

****

Comment:

By Don McCanne, MD

Why are the insurers establishing tiers of generic drugs with different levels of cost sharing? Cost sharing does shift some of the responsibility of paying for care from the insurer to the patient, but this goes far beyond that.

Establishing tiers of drugs with different levels of cost sharing originally was to encourage patients to select generic drugs which were much less expensive for the insurer to cover. Unfortunately, with our let-the-market-work policies, drugs are being priced in the stratosphere. Even generics have seen skyrocketing price increases. You might think that this is why the private insurers have decided to place generics in tiers, but you would be missing their nefarious strategy.

What we are seeing is the placement of generic drugs used to treat serious chronic diseases into the non-preferred tier which then exposes the patient to greater cost sharing. The shopping behavior that the insurer is encouraging is to have patients with chronic disorders leave their plans and enroll in their competitors’ plans instead. Thus the tier of non-preferred generic drugs has been established to chase away patients who have “non-preferred” chronic diseases – non-preferred by the insurer, that is.

This really does demonstrate how much more evil the private insurers have become. They will continue to find new ways to swindle us. What is insane is that we continue to tolerate them when we know that there is a far better solution – a single payer national health program. Why is the nation not outraged?

Single-payer savings

By Jonathan B. Kotch, M.D.
The Herald-Sun (Durham, N.C.), Letters, Sept. 18, 2014

Early indications are that the Affordable Care Act may be slowing down medical cost increases, but the potential for significant cost savings is nil as long as we tolerate outrageous administrative costs.

In a study that appeared this week in the prestigious journal Health Affairs, researchers found that hospital bureaucracy consumed 25.3 percent of hospital budgets in the United States in 2011, far more than in other nations. Administrative costs were lowest (about 12 percent) in Scotland and Canada, whose single-payer health care systems fund hospitals through global, lump-sum budgets, much as a fire department is funded in the U.S.

The authors attribute the high administrative costs in the U.S. to two factors: (1) the complexity of billing a multiplicity of insurers with varying payment rates, and (2) the entrepreneurial imperative for hospitals to amass profits (or, in the case of nonprofit hospitals, surpluses) in order to fund the modernization and upgrades essential to institutional survival.

The authors state that single-payer reform could save $150 billion annually on hospital overhead. Unless we reshaped health care financing under a single, public payer, we can’t hope to get a handle on runaway health care costs.

Dr. Jonathan Kotch resides in Durham.

http://www.heraldsun.com/opinion/letters/x711469017/Letters-to-the-Editor-Sept-18

The Fight for Single-Payer Health Insurance, 2014

By Paul Song, M.D.
Labor Campaign for Single Payer Healthcare, Sept. 15, 2014

The Labor Campaign for Single Payer held its largest ever strategy conference August 22-24 in Oakland, CA. Over 300 attendees packed the joint session at the historic ILWU Local 6 Hall, which was co-sponsored by Healthcare-NOW! and One-Payer States. Dr. Paul Song gave the keynote address for the workshop on “One-Payer States.” The following are his notes from his talk.

I am so honored to be here and speak to you, both as the head of the Courage Campaign and also as a co-chair of the Campaign for a Healthy California and a board member of Physicians for a National Health Program – California.

I believe that we as a society are judged by how we care for the least amongst us. And I love everyone in this room because you all get this!

When I hear people on the right say that America is under attack and heading in the wrong direction, I absolutely agree. I find our nation’s declining care and concern for the least among us and the overall waning progressive influence in our country as well as the declining overall share of America’s workforce that is unionized to be no coincidence.

It is labor organizations and progressives working together who stick up for the middle class, our sick, our elderly, and our uninsured. No one else does!

When times are hard, it is always our most vulnerable who bare the biggest brunt, but when times are good, it is always corporations who reap all the benefits.

It is corporations who use huge profits at the expense of laying off workers, cutting healthcare benefits for their employees, or actually denying care for patients to buy and elect their corporatist legislators who then give them more corporate tax breaks and more deregulation. It is corporations who bought off our elected corporate whores like Max Baucus, who in turn wrote the ACA and continue to stand in the way of real progress and Medicare for all.

Because the inconvenient truth is that while the ACA is a good start:

Health care costs as a proportion of GDP will continue to rise while tens of millions remain uninsured. Family premiums are currently $15,000 per year and rising, with employees having to contribute more every year. Premiums, copays, and out-of-pocket costs will continue to increase as insurance companies continue to maximize their profits under the ACA. Provider networks will continue to be very limited and patients enrolled in Medicaid will have an even tougher time finding a provider who will see them, Our undocumented brothers and sisters are left out and over 30 million people will still be uninsured by 2025.

Now, we all know the facts about single payer and why it is the only solution, but unfortunately most of our general public remains ignorant as to its benefits and instead continues to believe that private insurance is the best.

So we need to be careful not to bash the ACA too much. It is very fair game to point out the limitations of the ACA, but if we spend too much time tearing it down, between this and the VA debacle, the American public will begin to believe that the government is incapable of healthcare.

What we need to do is take back the overall narrative. We need to make the moral argument for single payer or rather point out how immoral our current healthcare system is and we need to make the economic argument by sharing Gerald Friedman’s great economic research on the benefits of single payer.

At the same time, it is very important that we point out the facts about our current single-payer system (Medicare) and how despite it constantly being trashed and financially undermined by Congress, the fact is that it is run far more efficiently and with greater patient satisfaction than the private sector.

Remember that Medicare was established when 44 percent of adults over 65 years of age were uninsured and one-third of all seniors were living in poverty. Sadly in 2012, close to 50 million people were living in poverty in the U.S., the largest number since the great depression and 50 million were uninsured.

In the run up to the vote on Medicare, the AMA hired an actor by the name of Ronald Reagan to record an album to disparage it. He said “If you don’t stop Medicare and I don’t do it, one of These Days, you and I are going to spend our sunset years telling our children, and our children’s children what it once was like In America when men were free.” Despite his pleas and what many conservatives still say, Medicare has been a huge success and clearly demonstrates that a single-payer system is indeed superior and possible.

Seniors and practicing physicians have much more freedom than patients in the private insurance system. Patients have greater choice and do not need pre-authorizations. The government does not tell doctors how to practice, what tests to order, which hospitals to go to, or what medications to prescribe.

A study by the Commonwealth Fund reveals that Medicare patients continue to have much greater satisfaction, better access to care, and fewer billing problems than those with employer sponsored plans.

A Kaiser Family Foundation study showed greater overall satisfaction and much more cost efficiency than private insurance companies.

But in spite of how successful Medicare has been, it does face significant future challenges. Each year it takes up more and more of the federal budget, patients in Medicare tend to be older and have more chronic conditions, and this population is only expected to get larger and larger in the coming years.

While many worried that Medicare would lead to a government takeover of healthcare, it is the private healthcare industry that has been quietly increasing its influence and control over government. In fact, while Congress continues to publicly criticize growth of Medicare costs it privately restrains it from getting a better deal for Medicare patients and U.S. taxpayers, through corporate welfare disguised as privatization.

Kip Sullivan, in an excellent study, showed that the real administrative costs of Medicare are 1.4 percent and could be lower if not for the administrative excesses of the private Medicare Advantage and Medicare Part D drug programs.

In 1995, The GOP pledged that by placing at least 20 percent of Medicare beneficiaries in HMOs would save $270 billion over seven years. In reality, since 1985 Medicare has overpaid private insurers by $282.6 billion, or 24.4 percent of all Medicare payments.

In 2012 alone, we find that Medicare Advantage plans are being overpaid by $34.1 billion, or 6.2 percent of total Medicare spending.

The Affordable Care Act called for cuts to the Medicare Advantage program, but the politics of cutting Medicare have been getting in the way.

Just this past April, the Obama administration turned a proposed 1.9 percent cut to 2015 Medicare Advantage health plans into a .4 percent increase after heavy lobbying from insurers and the Hill. It was the second-straight year that the Medicare agency transformed a proposed rate cut into a raise.

Congress should really question whether the higher administrative costs associated with the growing privatization of Medicare are justified!

As for drugs, per capita spending on drugs in the U.S. is 40 percent higher than in Canada and 75 percent greater than in Japan and 300 percent higher than the amount spent in Denmark. And Medicare Part D is a huge part of this.

When I hear the GOP talk about trying to protect Americans from a huge government run healthcare program, they must not remember Medicare part D for prescription drugs.

Rep. Billy Tauzin (R-La.) and the GOP-controlled House and Senate crafted Medicare Part D, which was then signed into law by President Bush. Soon after, Tauzin left congress to head PhRMA for an annual salary of $2 million.

In 2006, the first year of Medicare Part D, the combined profits of the largest drug companies soared 34 percent to $76.3 billion.

Medicare Part D made it illegal for Medicare, the nation’s biggest health plan, to use its market power to negotiate for lower prescription drugs prices. It is also banned importation of cheaper drugs and gave drug companies stronger protections against their generic competitors.

And the administrative costs for administering it are almost 10 percent.

How come when WellPoint negotiates lower prices, it is good business and the free market at work, but when Medicare tries it, it is government interference?!

It is clear that removing these pork spending constraints on Medicare would not only lead to lower prices at the drugstore, hospital, and doctor’s office, it could spark a new era of healthcare innovation.

So whenever anyone criticizes Medicare or says it is a failure or that it should be privatized, I hope you will hit them over the head with these facts.

I think we can learn a lot from the marriage equality fight. There was no federal appetite to pass legislation in the dysfunctional highly partisan Congress. Instead it started state by state and within 10 years we now we have 19 states with full marriage equality and another 14 states where judges have issued rulings in favor or freedom to marry. I think one of the biggest reasons for the incredibly fast shift in opinion was due to more and more gay individuals coming out to their friends, family, co-workers in a way that made this an issue that the general public could individually relate to. We need to find a way to come out to our greater communities at large (especially those of color and those who have continually left behind) and not just continue to preach to the choir.

So that in 2017 when the federal waiver sets in, it is finally time for at least one state to pass single payer, and this can begin to spread state by state.

But this can only be done if all Americans wake up and say enough to the stranglehold of the private health insurance industry along with their excessive rate increases and to the continued privatization of Medicare!

Finally, I want to say that we need to stop fighting with one another and eating our own. As a Korean American, I am always being asked how come there are so many Korean churches. I wish it was because our hearts are so on fire for God, which for many it is. But, the fact is that Koreans can also be pig-headed and always want to be in charge, and as a result when the elders of a church cannot put their God before their own agenda, they often split and go form their own church.

Sadly, this also happens in the single-payer movement. We have those who rail against the ACA and anyone who shows any support for it and we have those who believe we must embrace the ACA as a good start. We have those that believe a national federal program is what we should fight for and others who feel it should be state by state. We have those who believe we can achieve single payer legislatively and those who think it will be via ballot initiative. Whatever you believe, we all should be able to respectfully share our thoughts and opinions constructively while remembering that we are all on the same team. It is the corporatists and the private healthcare industry that are our enemy, not one another. We need to save our energy and our bullets for them and not on friendly fire.

It is time for us to come together with one voice to hold our elected officials accountable and fight back against this corporate bull, and to make sure corporations do not continue to get their way.

And while we rid ourselves of this corporatist evil, all of us need to continue to work very hard to educate everyone about the true merits of single payer and continue to build the broadest coalition possible to make this a reality.

Enough is enough!!

Thank you!!

http://singlepayer2014.wikidot.com/ops-keynote-paul-song
http://www.laborforsinglepayer.org/2014-national-strategy-conference-outcomes/
http://www.healthcare-now.org/2014-strategy-conference-wiki

Dartmouth studies sending us in the wrong direction?

Why the Geographic Variation in Health Care Spending Can’t Tell Us Much about the Efficiency or Quality of our Health Care System

By Louise Sheiner
Brookings Institution, September 2014

Abstract

This paper examines the geographic variation in Medicare and non-Medicare health spending and finds little support for the view that most of the variation is likely attributable to differences in practice styles. Instead, I find that socioeconomic factors that affect the need for medical care, as well as interactions between the Medicare system and other parts of the health system, can account, in an econometric sense, for most of the variation in Medicare health spending.

The paper also explores the econometric differences between controlling for health attributes at the state level (the method used in this paper) and controlling for them at the individual level (the approach used by the Dartmouth group.) I show that a state-level approach can explain more of the state-level variation associated with omitted health attributes than the individual-level approach, and argue that this econometric difference likely explains much of the difference between my results and those of the Dartmouth group.

More broadly, the paper shows that the geographic variation in health spending does not provide a useful way to examine the inefficiencies of our health system. States where Medicare spending is high are very different in multiple dimensions from states where Medicare spending is low, and thus it is difficult to isolate the effects of differences in health spending intensity from the effects of the differences in the underlying state characteristics. I show, for example, that previous findings about the relationships between health spending, the share of physicians who are general practitioners, and quality, are likely the result of omitted factors rather than the result of causal relationships.

I. Introduction

It is well known that Medicare spending per beneficiary varies widely across geographic areas. The conventional wisdom from the leaders in this research area, the Dartmouth group, is that little of this variation is accounted for by variation in income, prices, demographics, and health status, and, instead, most of the variation represents differences in “practice styles.” Further, the Dartmouth research suggests that the additional health spending of the high-spending areas does not improve the quality of health care, and, indeed, might even diminish it.

One of the implications of the Dartmouth work is that health care spending can be reduced without significant effects on health outcomes. For example, Sutherland, Fisher, and Skinner (2009) argue “Evidence regarding regional variations in spending and growth points to a more hopeful alternative: we should be able to reorganize and improve care to eliminate wasteful and unnecessary service.” This view was promoted by the Obama Administration as part of the effort to reform health care. In a Wall Street Journal op-ed, then OMB-director Peter Orszag, referring to the Dartmouth work, noted “If we can move our nation toward the proven and successful practices adopted by lower-cost areas and hospitals, some economists believe health-care costs could be reduced by 30% — or about $700 billion a year — without compromising the quality of care.

The Dartmouth group has also argued that this geographic variation holds the key to reducing excess cost growth in health care. According to Fisher, Bynum, and Skinner (2009), “By learning from regions that have attained sustainable growth rates and building on successful models of delivery-system and payment system reform, we might… manage to “bend the cost curve.” ……. Reducing annual growth in per capita spending from 3.5% (the national average) to 2.4% (the rate in San Francisco) would leave Medicare with a healthy estimated balance of $758 billion, a cumulative savings of $1.42 trillion.”

In this paper, I reexamine the geographic variation in health spending at the state level and find little support for the Dartmouth views. I find that most of the geographic variation in Medicare spending is explainable, at least in an econometric sense, by differences in socioeconomic factors that affect the need for medical care and the resources available in the nonelderly population to finance it. Although it is not possible to rule out the Dartmouth view that the differences in spending reflect differences in practice styles, I show that there are other explanations for the variation in spending that seem to be better supported by the data. Furthermore, I show that the relationships between health spending (both Medicare and non-Medicare), physician composition, and quality are likely the result of omitted factors rather than the result of causal relationships.

More broadly, the paper shows that the geographic variation in health spending does not provide a useful way to examine the inefficiencies of our health system. States where Medicare spending is high are very different from states where Medicare spending is low, and thus it is difficult to isolate the effects of differences in health spending intensity from the effects of the differences in the underlying state characteristics. Insights into the relationship between health spending and outcomes are more likely to be provided by natural experiments such as that analyzed by Doyle (2007), who showed that among visitors to Florida who had heart attacks, outcomes were better at hospitals with higher spending, the true experiment run in Oregon in which a group of uninsured low-income adults was selected by lottery to be given the chance to apply for Medicaid (Finkelstein et al, 2011), or the recent paper by Finkelstein et al which focuses on Medicare beneficiaries who move (Finkelstein, 2013).

It is important to note at the outset that nothing in this paper suggests that improvements in our health system are unattainable. Rather, the paper suggests that comparisons of spending between high cost states and low costs states are unlikely to provide a measure of how much we can hope to gain by efforts to improve health system efficiency.

The paper is organized as follows. I first give a brief overview of the literature on geographic variation. Then I present the basic results from the Medicare regressions, and show that the cross-state variation in average Medicare spending is well explained by differences in population characteristics across states. I compare my results to those of the Dartmouth group and suggest a number of reasons why my results differ. I show that, econometrically, there is a difference between controlling for attributes at the individual level (the Dartmouth approach) and controlling for them at the state level (the approach used here), and that this difference is likely to be empirically important when it comes to health care. I argue that my state-level approach better controls for the variation in health and other socioeconomic variables that affect health demand. In addition, to the extent that there are area differences in practice styles, I show that these too likely reflect systemic differences across states, and thus would likely be difficult to alter.

I then explore the relationships between Medicare and non-Medicare spending across the states, and show that the two appear to be somewhat negatively correlated. This correlation is quite important in thinking about the relationship between provider workforce characteristics, quality, and health spending. In particular, I show that taking into consideration some of the demographics and health insurance variables by state changes the conclusions one gets from previous studies. Finally, I show that the growth rates of Medicare spending are negatively related to the level of health spending—that is, low spending states tend to have higher growth rates than high-spending states. The conclusion assesses the implications of this work for Medicare policy.

VIII. Conclusions

The evidence presented in this paper shows that most of the variation in Medicare spending across states is attributable to factors that affect health and health behaviors, rather than to random variation in practice styles. Isolating the exact channels through which differences in health affect Medicare spending is difficult, however, because both the need for health spending and provider practice styles will likely be affected by variations in population health and variables that are correlated with it.

But the paper has several findings that suggest that the variation in Medicare spending does not represent wasteful spending that could be easily eliminated without significant effects on the health system. First, population characteristics have more explanatory power for Medicare spending than measures of social capital, indicating that the variation in patient characteristics is more important than variation in provider characteristics. Second, health measures are significantly more correlated at the state level than at the individual level, making it likely that state level regressions do a better job of controlling for unobserved variation in population health. Third, there does not seem to be a significant relationship between the use of “preference- sensitive procedures” and the level Medicare spending. Fourth, states with high levels of Medicare spending tend to have lower levels of non-Medicare spending. Providers in these states may face greater financial difficulties, and may “volume shift” to Medicare patients in order to cover costs.

The paper also shows that conclusions about the relationships between health spending, physician composition, and quality are sensitive to the inclusion of variables like the share of the population uninsured, black, or diabetic. What this sensitivity demonstrates is the difficulty of using the geographic variation in spending for hypothesis testing. It is not surprising that states in the South spend more on Medicare and have worse outcomes. These states perform significantly worse in numerous areas, including high school graduation rates, test scores, unemployment, violent crime, and teenage pregnancy. There are many ways that such differences can affect health utilization and outcomes, including differences in underlying health, social supports and social stressors, patient self-care and advocacy, ease of access to services, capabilities of hospital and physician nurses and technicians, and cultural differences in attitudes toward care. A comparison of health spending in Mississippi with health spending in Minnesota is not likely to provide a useful metric of the “inefficiencies” of the health system in isolation; rather, the difference in spending likely mirrors broader societal problems unrelated to the health system per se.

Finally, the evidence also suggests that low-cost states are not low-growth states. Thus, the geographic variation in Medicare spending is probably not the key to finding ways to slow spending growth while continuing to improve quality over time.

http://www.brookings.edu/~/media/projects/bpea/fall%202014/fall2014bpea_sheiner.pdf

****

Comment:

By Don McCanne, MD

Did this paper really say what it seems like it said? Wow! It is important because it seems to be a highly credible challenge to the principle that much of the waste in health care spending is due to variation in practice styles, as allegedly demonstrated by the Dartmouth group.

According to this Brookings paper by Louise Sheiner, “The evidence presented in this paper shows that most of the variation in Medicare spending across states is attributable to factors that affect health and health behaviors, rather than to random variation in practice styles.” Further, “But the paper has several findings that suggest that the variation in Medicare spending does not represent wasteful spending that could be easily eliminated without significant effects on the health system.”

Double wow! This suggests that the efforts of reducing waste through accountable care organizations (ACO) that are designed based on the Dartmouth studies of waste are mostly for naught. It also explains why to date the experiments with ACO models have had very little impact on either efficiency or quality.

Of particular concern is the finding that areas in the South with high Medicare spending have worse outcomes, and they also “perform significantly worse in numerous areas, including high school graduation rates, test scores, unemployment, violent crime, and teenage pregnancy.” You cannot help but think that more resources need to be directed toward these societal ills. It is not just health care that needs our attention.

For us, the important take-home point of this paper is that we should turn our attention away from puff programs such as ACOs that hold little promise of delivering on higher quality and lower costs, and turn instead to policies that have been proven in other nations to be effective. Of course we’re referring to a single payer national health program. We already know that it works.

Health care overhead is costing us big bucks

By Jim Landers
Dallas Morning News, Sept. 16, 2014

WASHINGTON — Americans spend more than $9,000 apiece on health care every year. Ouch, you say. But how does it feel to know that more than $1,000 of that sum goes to administrative costs? Or that Americans spend more than $210 billion a year on the health insurance claims system?

Needless back-office spending is one of the biggest sources of waste in health care, according to health insurers, providers and academics alike.

In a recent Health Affairs article, the authors estimated that administrative expenditures account for 25.3 percent of the average American hospital’s annual spending. No other developed nation comes close. The next highest, the Netherlands, spends 19.8 percent on administration.

“It’s getting worse,” said Dr. David Himmelstein, an internist who teaches at Hunter College in New York and Harvard Medical School. Himmelstein was the lead author of the article.

“It’s because we’re running health care more and more like a business. What that means is, if you think you can make $101, it’s worth spending $100 to do it. Hospitals are saying, gee, if we hired another financial person here they might help us bring in just a little more than their salary. There’s a whole variety of games you can play.”

Any business with 25 percent of its spending going to administration should be trying to cut, not add, to that burden. Hospitals, physicians and insurers all say that’s what they’re doing.

“We’re continuously looking at administrative costs and looking for ways to reduce the costs,” Wendell Watson, director of public relations with Texas Health Resources, wrote in an email.

“Over the last 10 years, we’ve consolidated many administrative functions to gain efficiencies and economies of scale and improved our processes to reduce costs where we can.”

Texas Health Resources owns 25 hospitals in North Texas. In the 12 months ending May 31, 2013, Texas Health Presbyterian Hospital of Dallas spent $119.8 million on administrative costs, or 20.3 percent of its expenditures that year. The figures come from Medicare reports sifted by American Hospital Directory, which compiles statistics on more than 6,000 hospitals.

Much of the administrative expense in American health care is due to the complexity of billing. There are many insurance companies and hundreds of thousands more companies that self-insure their employees with their own nuanced health plans. A hospital or physician’s office has to find the policy that matches the patient and send in a bill.

Insurers, meanwhile, collect those bills and promptly slash them. Whether it is BlueCross BlueShield of Texas, Aetna, Cigna or government insurance plans like Medicare and Medicaid, the billed price usually isn’t even close to the reimbursement. There are formulas that work through negotiated discounts that determine reimbursements. Then there are the co-payments and deductibles that the patient pays.

The American Medical Association says 10 percent of these reimbursements have errors. It put out a report card last year on various insurers, working out the average cost to handle each claim. Cigna did the best. Only 5.45 percent of their claims had to be reworked, and the average cost of a reworked Cigna claim for a physician’s office was pegged at $1.25.

Chicago-based Health Care Services Corp., whose divisions include BlueCross BlueShield of Texas, scored the worst. The AMA said 14.85 percent of its claims had to be reworked, and the average cost to process them through HCSC was $3.32.

Insurers say it would help if physicians and hospitals did a better job of filing claims. Some still come on paper. And even with electronic medical records, there are problems getting providers to send in the right information.

Taxpayers have paid $27 billion to help providers get with it. Physicians, meanwhile, are complaining that these electronic records have slowed care delivery. The average doctor now spends an extra 48 minutes a day struggling with electronic health records, says the American College of Physicians.

Himmelstein argues the current system would be vastly improved if the nation went to “single payer” health insurance — one national insurance company, with standard billing procedures.

Vermont has committed to implementing such a system, which is similar to the Canadian approach. It’s not a popular system in most other parts of the country. And so administrative costs continue adding to the cost of care.

Follow Jim Landers on Twitter at @landersjim.

http://www.dallasnews.com/business/columnists/jim-landers/20140915-health-care-overhead-is-costing-us-big-bucks.ece

Rashi Fein, Economist Who Urged Medicare, Dies at 88

By Douglas Martin
The New York Times, Sept. 13, 2014

Rashi Fein, an influential economist who strove to bring ethical and humanitarian perspectives to the nation’s health care system and helped lay the intellectual groundwork for Medicare in the 1960s, died on Monday in Boston. He was 88.

The cause was melanoma, his son Alan said.

When Dr. Fein began working on health issues as a young aide in the administration of Harry S. Truman, health care accounted for about 3 percent of the American economy. By the time he weighed in as a respected elder in the field during the debate over President Obama’s health care proposals, the expenditures had risen to 18 percent, an amount roughly equal to the economy of France.

As the money Americans spent on medical care increased, so did the role of economists specializing in health issues. Dr. Fein moved between government and academia, offering research and views on issues like meeting the demand for physicians. During the administration of President Lyndon B. Johnson, he led a public-private panel to develop ideas for the Medicare legislation, which, along with Medicaid, was signed into law in 1965.

Dr. Fein, a proud liberal, regretted that Medicare did not apply to everyone, just as he was disappointed that Mr. Obama’s Affordable Care Act did not consolidate insurance payments under the federal government. A federal single-payer system, he maintained, would be more cost effective and inclusive. The Obama plan, passed by Congress, relies on private insurance.

But Dr. Fein was nonetheless satisfied with incremental progress, Dr. Ezekiel J. Emanuel, chairman of the department of medical ethics and health policy at the University of Pennsylvania, said in an interview on Thursday. He quoted Dr. Fein, a former professor of his, as saying, “Getting everybody under the tent is better than standing on principle and not getting anything.”

Dr. Fein regarded both Medicare and the Affordable Care Act as important steps toward the overriding goal of helping “the people who have the least,” Dr. Emanuel said. In his 1986 book, “Medical Care, Medical Costs: The Search for a Health Insurance Policy,” Dr. Fein wrote, “Decent people — and we are decent people — are offended by unnecessary pain and suffering; that is, by pain and suffering for which there is a treatment and for which some (who are affluent) are treated.”

Mr. Fein was born in the Bronx on Feb. 6, 1926. His father, Isaac, was a history professor whose work took him to a chain of cities in the United States and Canada, including Winnipeg, Manitoba; and Bridgeport, Conn. His mother, the former Chaya Wertheim, was a schoolteacher.

Mr. Fein’s son Alan said his father and his father’s younger brother, Leonard — who went on to found organizations to combat hunger — had gotten their zeal for social justice from their parents.

“My preference for a universal insurance program derives from my image of a just society,” Dr. Fein wrote in his 1986 book. “It is an image based on a broadly defined concept of justice and liberty, nurtured by stories my parents told me, the books they encouraged me to read, and the values they expressed. To them, liberty meant more than political freedom; it also meant freedom from destitution — in Roosevelt’s phrase, ‘freedom from want.’ ”

After graduating from Central High School in Bridgeport, Dr. Fein was a Navy radar technician during World War II. He went on to earn a bachelor’s degree in economics and a doctorate in political economy from Johns Hopkins University.

In 1952, he took a teaching post at the University of North Carolina at Chapel Hill, while working on a Truman administration commission charged with exploring the possibilities for national health insurance.

Six years later, he led a study by the federal Joint Commission on Mental Illness and Health, which estimated that mental illness cost the United States $3 billion a year ($24.7 billion in today’s dollars) in treatment costs and lost work years, a small fraction of the estimated costs today.

In 1961, Dr. Fein became a senior staff member on the Council of Economic Advisers under President John F. Kennedy. He studied education issues in addition to helping to write legislation for Medicare. He moved on to the Brookings Institution as a senior fellow in 1963 and remained with it while directing the Medicare panel for Johnson, Kennedy’s successor.

After leaving Brookings, Dr. Fein was a professor of economics at the Kennedy School of Government and the Medical School of Harvard University. He retired in 1999.

In addition to his son Alan, Dr. Fein is survived by his wife of 65 years, the former Ruth Judith Breslau; another son, Michael; a daughter, Karen Fein; and four grandchildren. Another daughter, Bena Fein, died in 1995. Dr. Fein’s brother, Leonard, died in August.

Dr. Fein spoke of the importance of language in describing health care, deriding the term “death panels” that some opponents used in the debate over the Affordable Care Act.

“A new language is infecting the culture of American medicine,” he wrote in The New England Journal of Medicine in 1982. “It is the language of the marketplace, of the tradesman, and of the cost accountant. It is a language that depersonalizes both patients and physicians and describes medical care as just another commodity. It is a language that is dangerous.”

A version of this article appears in print on September 14, 2014, on page A26 of the New York edition with the headline: Rashi Fein, 88, Economist Who Urged Medicare, Dies.

Private insurers using “virtual credit cards” to loot physician payments

Footing bill for insurers’ pay methods shouldn’t fall on doctors

AMA Wire, September 12, 2014

An increasingly common payment method among health insurers offers these companies significant financial rewards while sticking physicians with all the associated fees and extra work. But physicians are fighting back as the AMA and other health care associations take the issue to the federal government.

Many insurers are choosing to use virtual credit cards for claims payments to physicians, instead of sending paper checks or paying via the electronic funds transfer (EFT) standard transaction. When paying via virtual credit card, insurers send single-use credit card payment information and instructions to physicians via mail, fax or email. The physician’s office staff then processes the payment as they would a patient’s credit card.

For each of these payments, physicians are charged fees that typically amount to 3-5 percent of the total payment, the AMA explained in recent testimony (log in) to the National Committee on Vital and Health Statistics, an advisory board to the secretary of the U.S. Department of Health and Human Services (HHS).

That adds up. If a physician contractually is owed $5,000, for instance, he or she could have to shell out up to $250 in fees.

In a letter (log in) sent last week to HHS Secretary Sylvia Burwell, the AMA and three other leading organizations called on the agency to prohibit insurers from forcing physicians to accept this payment method.

http://www.ama-assn.org/ama/pub/ama-wire/ama-wire/post/footing-bill-insurers-pay-methods-shouldnt-fall-doctors

****

Letter , August 25, 2014

To:  The Honorable Sylvia Mathews Burwell, Secretary, Department of Health and Human Services

We, the undersigned organizations, are writing to you to convey our views and recommendations in response to recommendations made to you by the National Committee on Vital and Health Statistics (NCVHS) on May 15, 2014.

At issue is a type of non-standard electronic funds transfer (EFT) transaction known as a “virtual card” payment. In a virtual card payment, a health plan or its vendor sends a single-use credit card number to a provider by mail, fax or email. This is known as a virtual card because a physical card is never created or presented to the provider. The provider must then manually enter the virtual card number into its Point-of-Sale (POS) processing terminal, and the card processing network provides an authorization for the payment. The provider then receives funds in the same way as for other card payments – via an Automated Clearing House (ACH) funds transfer from the POS merchant acquiring vendor to the provider’s bank account. For these virtual card payment authorizations, providers pay interchange fees of approximately 3 percent of the value of the payment (though anecdotally some providers have reported paying as much as 5 percent). Providers are unexpectedly losing income through these card fees, which essentially reduce the contracted fee rate that has been negotiated with the health plan for a particular service or services. Many providers are understandably opposed to incurring these fees, especially when they did not choose to use this payment method and when they are faced with a manual, burdensome opt-out process that further delays payment. In many cases, decision- makers in the provider’s office only become aware of the incurred fees after receiving monthly statements from credit card merchants, as the virtual cards are processed by billing office staff without any strategic decision in the practice to accept this form of payment.

American Hospital Association (AHA)
American Medical Association (AMA)
Medical Group Management Association (MGMA)
NACHA, The Electronic Payments Association

(Requires login): https://download.ama-assn.org/resources/doc/psa/x-pub/joint-virtual-card-letter-hhs.pdf

****

Comment:

By Don McCanne, MD

It’s in their blood. Private insurers will always find a way to cheat others under the guise of good business practices. Now private insurers are using the scam of “virtual credit cards” in order to keep 3 to 5 percent of agreed upon payments made to physicians under their network contracts, while loading more administrative work onto the backs of the physicians’ staff members.

Thieves. That’s all they are. Thieves.

Addendum:

Some readers commented that the insurers do not receive the transaction fees.

It is true that the insurers do not get the full 3-5% processing fee, but, like reward credit cards, the insurers receive a rebate of up to 1.75% cash.

Private insurers are infamous for their administrative waste. With these virtual credit cards, the insurers are dumping on the providers the administrative fees associated with these virtual cards, plus keeping the card rebates. So the insurers are costing the providers 3-5% even though they are pocketing only a portion. When you think about it, the insurers are receiving roughly a 35 percent return on the administrative investment made by the physicians, and that return is being paid by the physicians. It’s not even the insurers’ own money!

$1.43 of every $100 in America goes toward hospital administration

By Sarah Kliff
Vox, September 15, 2014

America spends a lot of money on the paperwork that makes hospitals run— $218 billion per year, to be exact. That works out to 1.43 percent of the entire American economy is spent on hospitals’ administrative costs. Of every $100 spent in America, that means $1.43 is going toward the billing specialists and schedulers that make hospitals here work.

Hospital administration has grown as a percent of the economy over the past decade, from 0.9 percent in 2000 to 1.43 percent in 2012, a new paper in the journal Health Affairs shows.

To put this in a bit of context: America spends twice as much on hospital administration as it does on the entire food budget. For what we pay for hospital paperwork, we could pay for all professional American sports three times over (they had a budget of $61 billion this year, according to PriceWaterhouseCooper).

This makes the United States different from most other countries. In 11 countries that this Health Affairsarticle looked at, hospitals usually put about 12 percent of their budget toward administrative activities. But in the United States, hospitals spend a full quarter of their funds on filing the necessary paperwork to make sure that surgeries happen and patients get scheduled.

This reflects something particular about the American health care system — namely, it’s a complex mess. Most other countries have some central agency that sets a national price for every procedure, from a heart transplant to an MRI. But that’s not how the United States works. Here, we have thousands of health insurance companies that each negotiate their own prices. For a hospital contracting with a dozen health plans — each charging a different price for an MRI, and anything else — that necessitates a whole bunch of paperwork.

There are, of course, trade-offs with a system like this. If the government sets the price too low — pays less, for example, for an MRI than hospitals would accept — that could restrict access to needed medicine. In that case, patients have little mode of recourse; they can’t switch to another plan, because there’s only one game in town.

You can learn more about how that system works, and its trade-offs, in the video below. Then read about Vermont’s plan to sharply reduce administrative costs by switching to a single-payer plan (and the massive obstacles the state faces) here.

http://www.vox.com/2014/9/15/6151861/1-43-of-every-100-in-america-towards-hospital-paperwork

Restructure our economically unsustainable health care system

By Ed Weisbart, M.D.
St. Louis Post-Dispatch, Letters, Sept. 16, 2014

If public policy decisions were driven by good business sense, the United States would long ago have stopped wasting so much of our health care dollar on the preservation of an irrational insurance industry. With millions remaining uninsured despite 17.6 percent of our gross domestic product being devoted to health care, we must restructure our economically unsustainable system.

New information from a multinational research team reveals yet another piece of information about the United States: More than a quarter (25.3 percent) of our hospital spending is dedicated to administration. Scotland and Canada, whose single-payer systems pay hospitals global operating budgets, with separate grants for capital, had the lowest administrative costs at 11.6 percent and 12.4 percent respectively. Other developed nations form a spectrum varying with their nation’s particular model for health care finance.

If our hospital finance system were as efficient as Canada’s, we would have saved more than $150 billion in 2011.

It’s difficult to see the value we gain by continuing to carry these costs. Our life expectancy lags other developed nations’, millions of us remain without access to affordable care, and we live with the unique fear that one major illness can force us into bankruptcy.

The uniquely American solution is hiding in plain sight: Improve Medicare and provide it to all Americans.

Dr. Ed Weisbart resides in Olivette, Mo.

http://www.stltoday.com/news/opinion/mailbag/restructure-our-economically-unsustainable-health-care-system/article_a629ab05-b92e-5fdb-bafa-29c5ef0102d6.html

Study: U.S. squanders $150B a year on hospital bureaucracy

By William Ulwelling, M.D.
Albuquerque Journal, Sept. 15, 2014

How affordable is the American health care system? And are matters getting better or worse? One factor is the cost-effectiveness of our hospitals. A major study published recently in Health Affairs revealed a big problem, and proposed an answer.

This study of hospital administrative costs in eight nations found that hospital bureaucracy consumed 25.3 percent of hospital budgets in the United States, far more than in other nations.

Step across the border into Canada and administrative costs in its hospitals – funded through a single-payer system – run about 12 percent. On a per capita basis, Americans are spending $667 per person on hospital administration, while Canadians spend only $158.

Of note, the study found no evidence that the high U.S. administrative costs translated into better care or yielded any other benefits.

These administrative costs are increasing – from 23.5 percent of U.S. hospital budgets in 2000 to 25.3 percent of hospital budgets in 2011. And the $215 billion American hospital administrative cost is a big-ticket item, amounting to 1.43 percent of our GDP.

The article attributes the high hospital overhead costs in the United States to two factors: (1) the complexity of billing a multiplicity of insurers with varying payment rates, rules and documentation requirements; and (2) the entrepreneurial imperative for hospitals to amass profits (or surpluses for nonprofits) to fund modernization and upgrades essential to survival.

Paradoxically, this entrepreneurial imperative has reduced hospital efficiency, driving them to divert personnel and dollars to marketing, to cherry-picking profitable patients and services (and avoiding unprofitable ones), and to expensive computer systems and consultants to game the payment system.

The study’s author summarizes the problem: “We’re squandering $150 billion each year on hospital bureaucracy, and $300 billion more is wasted each year on insurance companies’ overhead and the paperwork they inflict on doctors.

“Only a single-payer reform can squeeze out the bureaucratic waste and use the money to give patients the care they need. Instead, we’re layering on more bureaucracy and insurance exchanges and ‘accountable care organizations.’”

The Patient Protection and Affordable Care Act was a step in the right direction but we need to move to a single-payer system. The recent Health Affairs article adds to the concerns that, unless health care financing reform is put in place, Americans may be saddled with an un-Affordable Care Act.

Implementation of a single-payer system, also known as “Improved Medicare for all,” would provide substantial administrative and cost efficiencies. Additionally, it could remedy the greatest shortcoming of the ACA, which falls short of providing true patient protection.

While the ACA is expected to cover an additional 26 million people by 2024, forecasters expect that 31 million Americans will still lack insurance coverage in 2024. If our health care system became more cost-efficient and affordable, the savings could cover the final step of ensuring universal patient protection for all Americans.

Physicians from across the country – myself included – are fighting for improved Medicare for all. The organization leading the fight is Physicians for a National Health Program and, with 19,000 members, it is the nation’s largest single-payer advocacy group.

Here in New Mexico, the local chapter of Physicians for a National Health Program has invited Dr. Andy Coates, president of PNHP, to speak to the public at University of New Mexico Health Science Center Domenici Auditorium this Thursday from 5:30 p.m. to 7 p.m. His talk, “Beyond the ACA: The Single-Payer Solution” will discuss the new research on hospital waste, as well as other reasons why the American health care system needs to progress beyond the ACA. 

Dr. William Ulwelling is a resident of Albuquerque.

http://www.abqjournal.com/462071

U.S. hospitals burdened by high administrative costs

By Dr. Steffie Woolhandler
Modern Healthcare, September 13, 2014

When I was a kid in Shreveport, La., my father was chief of radiology at the local hospital. He also ran the hospital and supervised the cafeteria. Today he’d be the COO.

Now hospital administration takes a village. And that’s not a good thing.

Hospital administration cost the U.S. $215 billion in 2011. Other nations administer modern, first-class hospitals for far less. 

A study by our international team just published in Health Affairs found that administration consumed 25.3% of U.S. hospital budgets—1.43% of GDP (up from 0.98% in 2000), or $667 per capita. Canada spent $158, Scotland $164, England $225 and The Netherlands $325. If U.S. hospitals ran as efficiently as Canada’s or Scotland’s, the average family of four would save $2,000 annually on health costs. 

Not surprisingly, administrative costs were highest where hospitals must cope with a multitude of insurers, with varying copayments, rates and regulations. Canada and Scotland—where costs are lowest—have single-payer systems that pay hospitals a lump-sum budget, the way we fund fire stations. And like fire departments, their hospitals don’t collect from each victim of misfortune.

But payment complexity isn’t the only cost driver. Canadian and Scottish hospital administrators don’t have to play financial games that generate profits. Government grants, rather than capital markets or accumulated surpluses, fund new buildings and equipment. Even in Germany and France—which have multi-payer systems—administrative costs remain modest because government grants fund most hospital capital.

In contrast, as England has forced hospitals to seek profits in an increasingly market-oriented system, administrative costs have soared. And administrative costs in the Netherlands, which is implementing radical market-based reforms, are second only to ours.

Our findings challenge conventional wisdom that market discipline leads to hospital efficiency. Within the U.S., for-profit hospitals spend less than not-for-profits on clinical personnel like nurses, yet have higher total and administrative costs. Internationally, hospital efficiency is best in nations shunning market forces.

Accountable care organizations that force hospitals to behave like insurance companies won’t streamline administration. But a single-payer reform could realize vast savings on administration and redirect them to improved coverage and care. 

Dr. Steffie Woolhandler is a co-founder of Physicians for a National Health Program and a professor at the City University of New York’s School of Public Health at Hunter College.

Obamacare not enough, so some in labor want single-payer system; forum Sept. 13

By Olivera Perkins
The Plain Dealer (Cleveland), Sept. 12, 2014

CLEVELAND, Ohio – When many in the labor movement speak about health care reform they are not talking about Obamacare, but a single-payer system.

“It has been a historic goal of the labor movement to establish a Medicare for all, single-payer system in the U.S., just like almost every industrialized country in the world,” said Mark Dudzic, national coordinator for the Labor Campaign for Single Payer. “The labor movement, we believe, has to be in the forefront of the fight, if we are going to win that.”

Dudzic is one of the speakers in a forum tomorrow (Sept. 13) being sponsored by his Washington, D.C.-based group and the Single Payer Action Network of Ohio, or SPAN, which is lobbying for instituting such a health care system in Ohio. The event is scheduled for 2 to 4 p.m. at the North Shore AFL-CIO Federation of Labor, 3250 Euclid Ave., in Cleveland.

Those supporting single payer emphasize that they are not seeking a publicly funded system run by the government, in which health care workers would be public employees. Instead, they want one more like Medicare, in which users would go to private doctors, using public money to pay the bills. Supporters say one of the reasons such a system would cost less to operate is that administrative costs associated with a private insurance system would be gone.

Dudzic said single-payer advocates lobbied for the system’s adoption as Congress was considering the Affordable Care Act, also known as Obamacare. He believes the passage of ACA, has left more people open to single payer.

“It is a mass of contradictions,” he said of ACA.” On one hand, the Affordable Care Act expands health insurance coverage to millions more Americans, but it doesn’t control costs.

“In some ways, it models the dysfunctionality of the for-profit health care system,” Dudzic said. “It makes health care more of an individual responsibility than a social right that is inherent. It makes the individual responsible for paying for health insurance. It provides access to health insurance, but not access to affordable health care. That is a big difference between it and single payer.”

It is not that he doesn’t like the ACA, Dudzic believes it just doesn’t go far enough.

“Let me make it very clear,” he said. “No one we work with is calling for the repeal of the Affordable Care Act. We ought to finish the job by getting single payer.”

Many disagree single payer will be cheaper and allow better access to health care than a private insurance system. Ryan Thorn, president of the National Association of Health Underwriters, said health care costs need to be brought under control, but there are better options for doing this than a single-payer system.

He said if health care providers were required to tell consumers the cost of services and procedures before they were rendered, competition would lower medical costs. Thorn said, things being equal, most consumers would opt for providers with the most affordable prices.

“One important way to control costs is through transparency,” he said. “Health care is one of the only commodities in America in which nobody has a clue as to what it is gong to cost until you get the bill.

“We believe competition is a good thing,” he said. “Competition, in most cases, will help keep control of costs. Competition keeps technology sharp.”

Thorn said when single-payer advocates say they want the U.S. to have a health care system similar to that of other industrial nations, they are seeking to replace what has historically existed here with a lesser system.

“In most countries that have single payer, you will find a rationing of care,” Thorn said. “It works great as long as you’re healthy, but when you become sick, then you are going to be thinking twice about single payer.”

Debbie Silverstein, state director of SPAN, which is trying to get single payer in Ohio, said such efforts so far haven’t gained traction. A bill in the Ohio House and another in the state Senate, remain in committee — not evening having received hearings, she said.

“They are not taking these bills seriously,” Silverstein said of state legislators. “They are pretty much ignoring us.”

She said SPAN wants a universal health care system in Ohio, which could be publicly funded through such taxes as a payroll tax, a financial tax on investments and/or a sales tax. Beginning in 2017 – waivers — such as those associated with the ACA health insurance exchanges – could also help fund state single-payer systems, Silverstein said.

Thorn doubts if single payer would lower costs, but he is sure the system would raise taxes.

“As soon as the taxes are depleted, your health care is done until new taxes come in the door,” he said.

Like Silverstein, Dudzic believes interest in single payer will increase once waivers become available. So far, they say Vermont is the only state that has approved a single-payer system. While both advocates support single payer, they differ on whether ACA has become a vehicle for moving the country closer to single payer. Silverstein doesn’t see the connection. Dudzic does.

“There is buyers’ remorse,” he said of ACA.

For example, Dudzic said silver tier plans on the ACA exchanges have become the gold standard for coverage. He said unions who have negotiated coverage equivalent to gold or platinum tier plans, could risk facing a hefty tax because they offer more expensive coverage. Dudzic said this has made contract negotiations for many unions contentious.

Despite what he sees as an increasing desire for single payer, Dudzic said he doesn’t believe the fight to win it will be easy.

“We’re dealing with a gigantic, for-profit health care system that is a huge massive corporate power,” he said. “Anytime there is any attempt to change the health care system, so that it impacts their profits, that corporate power just mobilizes all of its resources.

“For every congressperson and senator, there are at least four people whose job it is — from the moment they get up everyday to the moment they go to bed — to ensure that no substantial change happens to the health care system,” Dudzic said.

Olivera Perkins is a staff writer at The Plain Dealer.

http://www.cleveland.com/business/index.ssf/2014/09/obamacare_not_enough_so_some_i.html