PNHP

A happy 48th to Medicare

A happy 48th to Medicare

By Laurence S. Jacobs, M.D.
Santa Fe New Mexican, July 27, 2013

On Tuesday, Medicare will be 48 years old. It covers more than 50 million Americans — those older than 65 and the disabled. It has improved financial security for the elderly and disabled and reduced health disparities related to race and socioeconomic status. Medicare recipients go to the doctor and the hospital of their choice, not to a restricted panel of caregivers. Medicare operates on an overhead of about 2 percent, compared with private insurers’ overheads from 12 percent to more than 20 percent. Medicare does have its flaws: It doesn’t cover vision or hearing problems, and the drug program (Part D) has the insane congressional restriction that it cannot negotiate with pharmaceutical manufacturers over medication costs, the way Veterans Affairs can. That’s why the VA spends 40 percent less for the same drugs.

An improved Medicare for all would make terrific sense. Low overhead, a single set of approved forms (not a separate one for each insurer, as is now the case), no outrageous CEO salaries, no marketing or advertising costs, first dollar coverage without copayments or deductibles, no restrictions on choice of doctor or hospital. All medically approved tests and treatments would be covered, and there would be no issue of physicians refusing to see certain classes of patients because of poorly paying insurance. Funding, from progressive taxes, would cost individuals less than they now pay in premium, copay, deductible and out-of-pocket expenses. Finally, Medicare as the only payer would be able to negotiate robustly over prices of drugs, medical devices and hospital bills.

Medicare recipients are happier with their health insurance, have fewer problems with access to care and delays in payment, and are more likely to have a medical home with a primary care provider who knows them well than are people with private health insurance.

Severe illness has extraordinary consequences in the U.S. Some 62 percent of personal bankruptcies are largely due to medical expenses, and three-quarters of those bankrupted had health insurance in place prior to illness. Those policies did not offer financial protection, which is one of the main purposes of insurance. Many low-income people go without insurance because of its high cost. The consequences are awful; it’s been estimated that approximately 45,000 people die in this country annually because of lack of insurance, associated with delay or deferral of needed care. An improved Medicare for all would eliminate these consequences.

So why don’t we have Medicare for all? Because insurers, drug companies and associated entrenched interests lobby our Congress intensely to preserve their huge profits, and because of ideologues’ lies about government intrusion into health care. Actually, it’s the private insurance companies that intrude into medical decision-making and deny expensive coverages, not for medical reasons but to maximize profits and restrict access to care by contracting with ever-smaller panels of physicians.

Medicare for all would simply be a payment mechanism. Ask current Medicare recipients whether the program interferes with their care in any way.

We need to eliminate our crazy patchwork of insurance coverages, which leads to the estimated $400 billion in administrative overhead we now annually waste, and, like every other developed nation, we need to find a way to offer comprehensive health insurance to all our residents. The best way to accomplish this goal is to improve and expand our Medicare program, by making its coverage truly comprehensive medical and by enrolling everyone. That would make the birthday of Medicare a truly happy one for our entire population.

Dr. Laurence S. Jacobs, an emeritus professor of medicine at the University of Rochester School of Medicine and Dentistry and a member of Physicians for a National Health Program, calls Santa Fe home part of the year.

http://www.santafenewmexican.com/opinion/my_view/article_5a8a6096-e06d-5a40-ad98-c933bac6495d.html

WellPoint/employer conspiracy on reference pricing

WellPoint program lets employers name their price for doctors

By Sue Ter Maat
American Medical News, July 29, 2013

Physicians collecting from WellPoint-insured patients who haven’t met their deductible or have a co-pay might have one more reason to send them a bill — to collect the difference between the price the insurer has negotiated with the doctor, and what the employer is willing to pay.

WellPoint plans to launch a program in 2014 in which self-insured companies can determine what they will pay for certain procedures. WellPoint would present a price range to the employer based on what has been negotiated with doctors. Then the company would determine the maximum price it’s willing to pay.

Patients insured through a participating employer would have access to a website that shows, in as much detail as possible, physician price and quality information, including what they would expect to pay out of pocket. Physicians would still be able to charge based on the rate WellPoint negotiated, but any difference between that rate and what a company is willing to pay would have to be collected from the patient, not the insurer.

Companies examine cost distributions for procedure midpoints to determine reference prices, said George Lenko, program director of national networks for WellPoint. So, for instance, hip surgery can range between $20,000 and $100,000. In that case, an employer may set what’s called a reference price at any point in between, Lenko said. If a physician’s contract with WellPoint calls for less than that amount, the doctor would be paid at that previously negotiated rate. But if a doctor’s negotiated charge was higher than the desired price, he or she would have to bill the remainder to the patient.

Reference-based benefits are becoming popular as it becomes easier to compare costs for the same service, Lenko said.

He said when employees know how much services cost, and they are sharing in that cost, they become more engaged with their health care. “The patient becomes a better consumer,” Lenko said. “The more they shop for their own health care, the more efficient they will be.”

http://www.amednews.com/article/20130729/business/130729955/6/

Comment:

By Don McCanne, M.D.

WellPoint has been a leader in private insurance innovations. These innovations have worked very well for WellPoint, but for the patients, providers, and purchasers? Well, let’s see how this new innovation in reference pricing for self-insured employers seems to be designed.

For employers who want to insure their own losses in their health benefit programs but who need help in the administration of these programs, private insurers offer health plan administrative services without assuming any of the risks of medical losses (health care bills). As part of their services, they provide employers with lists of network providers – physicians and hospitals who have agreed to contracted rates for their services.

However, those contracted rates may be higher than the employer would be willing to spend, that is, the employer’s reference price. So what happens when the providers bill for their services? If the charges are higher than rates contracted with WellPoint, then WellPoint, using the self-insured employer’s funds after the deductibles are paid by the patient, pays the contracted rate and the rest is adjusted off – just as is done today with in-network services in the typical PPO plan. If the charges are higher than the reference price that the employer is willing to pay, even though at or lower than the WellPoint contracted rate, then WellPoint pays only that reference price on behalf of the employer. Yet the provider’s contract allows the full negotiated fee. So who pays the difference? The patient!

What is going on here? Well, a few things. First, insurers have not been as effective as public programs such as Medicare in obtaining optimal lower pricing for their contracted networks. Also, some economists have suggested that employers should be playing a more active role in slowing the escalation of health care costs. Introducing reference pricing allows them to do just that. They find the lowest prices for which the services can be realistically provided, and then they set their allowed rates at that level. In addition, those who believe that patients should be financially involved in their utilization of health care services (consumer-driven health care) support reference pricing because it requires patients to either shop prices more effectively, or to be personally responsible for prices that are higher than the reference prices.

Who wins? Employers with self-insured plans experience a reduction in their health benefit payments. Insurers who are providing only administrative services are able to market these less expensive models to employers, while selling them yet more administrative services, increasing insurer revenues without any exposure to risk. Providers who reduce their rates to the level of reference pricing will receive fewer revenues per unit of their services, but they will increase their market share if the patients actually do end up choosing providers who will cost them less out-of-pocket. Providers who are unable to match reference prices will lose market share.

Who loses the most? The patients. They cannot always shop prices, and even when they can, they may find that the providers offering reference prices may be their least preferred choices, or they may find that they are simply not accessible due to distances or scheduling difficulties. Not only do patients lose their choices of their preferred providers, they are once more the victims of the current trend in shifting the costs of health care from insurers and employers to the patients themselves. This insurer/employer conspiracy is yet one more manifestation of The Great Risk Shift (Hacker) – moving funds from the workers to the uber-wealthy.

Single payer would jettison this nefarious conspiracy.

Obamacare: How It Should Be Fixed

By Arnold Relman
New York Review of Books, July 27, 2013

The US health care system urgently needs fixing. It is much too expensive and inefficient, and leaves too many people with no care or inadequate care. In March 2010, the recently elected Obama administration barely managed to pass the Affordable Care Act (ACA), a huge and complicated collection of legislative initiatives designed to correct the system’s problems.1 The statute is 2,700 pages long, and so far there are about 20,000 pages of regulations.

Most Democrats generally approve of the ACA as an important achievement in health care legislation, which moves the US closer to the kind of system it will ultimately need. Its central provision is a mandate for nearly all either to have insurance or else pay a fine. Despite its deficiencies and complexities, and however much it disappoints those hoping for more fundamental reform, the ACA’s supporters call it a good start that can be amended later as necessary.

However, more than a few liberals think the ACA was fatally compromised by deals the president made with the private insurance, hospital, and pharmaceutical industries to get their support, particularly the sacrifice of a “public option”—insurance the government would sell if private companies refused or their plans were seen as excessively expensive. They believe it will ultimately fail because it does not basically change our dysfunctional system. It expands and improves private insurance coverage, but provides no effective controls of rising costs and no significant change in the way medical care is delivered. Many of the critics think we need major reform that replaces private insurance and employment-based coverage with a publicly funded single-payer system.

Before the ACA was enacted, the president’s health care proposals were bitterly opposed by Republicans who said they violated two conservative principles: first, the familiar Reagan view that government involvement usually is the problem, not the solution; and second, an implied but rarely spoken belief that medical care is basically a special kind of business, and should conform to business practices. Republicans believe that the ACA flouts these principles by depending heavily on government regulation and interfering with free-market forces.

Republican opposition hardened even more after the legislation became law, culminating in a constitutional challenge before the Supreme Court. On June 28, 2012, the Court sustained by a 5–4 vote the contested major provision in the ACA that mandated insurance coverage. But by a 7–2 vote, the Court struck down the provision in the law that gave Congress the power to withhold federal Medicaid support from states refusing to expand their Medicaid program, which provides medical care for poor people. This decision made it financially feasible for states to opt out of the ACA’s provision requiring that the coverage of low-income patients be expanded. As of this writing, seven of them have done so. The Urban Institute estimates that this will deny insurance to nearly six million very poor people.

Democratic victories in the elections of 2012 retained the narrow Democratic majority in the Senate and virtually ensured the legal survival of the ACA, at least until the next presidential election. Nevertheless, the Republican minority in the Senate and the Republican-controlled House continue their unyielding opposition through legislative tactics designed to delay or prevent the ACA from being implemented, funded, or even revised. The House has voted many times to defund parts of the law, such as the provisions to expand community clinics and educate the public about the ACA, and in mid-May voted to repeal the entire act for the third time. But like the two other votes for repeal, this latest Republican initiative will be dead on arrival in the Senate.

Regardless of the Republican opposition, the long-term survival of the ACA will remain uncertain if it fails to control costs. National expenditures for health care grew by 3.9 percent each year from 2009 to 2011 and are estimated to have grown by 4.3 percent in 2012. In earlier years, increases were more than twice as high. The president’s economic advisers attribute most of this slowdown in costs to changes in the health care market produced by the ACA, with less owing to the recession. But a recent study by the Kaiser Family Foundation gave just the opposite explanation: the major cause of the slower increase in costs was the recession, while theACA had a much smaller effect.

The Congressional Budget Office estimates that when the expansion of insurance begins under the ACA in 2014, about 15 million more people will obtain it, with further additions in subsequent years. Per capita expenditures in both the private and public sectors will again grow substantially, and more costs will be shifted from government and employers to individuals.

Much of the increased expenditures will result from the overuse of high-cost tests and procedures. These technologies are available in all advanced countries, but are used far more often in the US (without generally better outcomes), partly because they are profitable for providers. The rise in expenditures does not augur well for the future of the ACA. Furthermore, it is uncertain whether there will be enough primary care physicians to care for all the newly insured. Even now, the preference of physicians for specialty practice makes it difficult to find primary care practitioners in many areas.

The law could unravel and ultimately collapse of its own weight if it becomes too difficult to administer and too expensive. Already there have been many delays and missed deadlines for issuing regulations and implementing various provisions of the law.

On July 2, the administration, in response to complaints from big business, announced a one-year postponement in the law’s mandate that large employers offer health insurance by 2014 or pay a fine. It is hard to imagine that this will not have ripple effects, and perhaps make it less likely that uninsured individuals will comply with the mandate to buy health insurance by 2014 or pay a fine—already a hard sell. In fact, many states are choosing not to establish their own insurance “exchanges.” These are the online marketplaces at which, under the ACA, uninsured people and small businesses can shop for private insurance at group rates. As of this writing, it appears that the federal government will have to create, and be ready to operate, exchanges in more than thirty states.

In apparent response to insurance industry lobbying, the government has weakened its power to regulate the exchanges by allowing any plan meeting minimum standards to qualify for the exchanges it will operate. The government will not require competitive bidding or standardization of benefits that would help consumers choose a plan. Estimates of federal costs to set up the exchanges have risen, and despite assurances by the president and other officials, it is uncertain that they will be available by October, as required by the law. Nor is it evident that the needed federal funds will be appropriated, in view of the opposition of the Republican-controlled House.

Up to three quarters of uninsured people do not know about health insurance opportunities under the ACA, and Health an
d Human Services Secretary Kathleen Sebelius has been soliciting private funding to help spread the word. However, if many uninsured healthy young people do not choose to buy insurance, and instead choose to pay a fine, private insurers might be forced to raise the premiums in the exchanges to unacceptable levels, because those remaining in the insured pools would on average be sicker and more expensive to care for.

By the end of Obama’s presidency the law will have existed for over six years, and may be much better understood and more accepted than now. Nevertheless, the current sequestration of funds by Congress and pressures to reduce health expenditures may require the administration’s health policies to change. The president’s budget message to Congress on April 10 proposed to cut federal spending on health care by $401 billion over ten years. This is only 3.5 percent of the projected increase of $14 trillion in total federal health costs over that time, but it suggests that he may ultimately agree to even larger reductions in his health care program to meet demands for fiscal austerity. Of course, much will depend on future political events.

Among the many recent publications on health care and how to fix it, two are notable for the power of their criticisms of the current health care system. The first is a book by David Goldhill, a successful business executive. The other is a cover story in Time magazine by reporter Steven Brill, to which Time devoted an unprecedented twenty-seven pages and nearly 25,000 words.

As his title—Catastrophic Care: How American Health Care Killed My Father—and How We Can Fix It—suggests, Goldhill believes that his father, an eighty-three-year-old practicing psychiatrist, was “killed” by errors in hospital care. Consumed by grief, and impressed by the strong published evidence that preventable errors cause far too many hospital deaths, he decided to take a hard look at what he calls the “complex mess” that is the current US health care system, and at the ACA, which he believes contributes to the “mess.”

Few of his criticisms are new; most of them are found in earlier writings by experts. But rarely has the irrationality of the system been so convincingly demonstrated, including the opaque and highly inflated prices of medical care. Prices for different medical treatments and procedures vary widely and unaccountably, as Goldhill observes. Without rational pricing, Goldhill says, consumers can’t evaluate their health care options, and ordinary market forces don’t work. Consequently, health care economics is almost totally dominated by the providers of care, mainly hospitals and physicians. This creates uncontrollable costs, and health providers have little incentive to focus on quality.

The most telling part of Goldhill’s critique is his explanation of how insurance distorts the system. In his words:

Health insurance isn’t real insurance…it’s the payment mechanism for health care…. Basically [it consists of] shifting money around from consumers and taxpayers to providers…at an almost inconceivable level of complexity and expense.

Insurance relieves patients of most of the responsibility for payment of major charges, such as for operations, making them less concerned about costs. This lessens their incentive to weigh the price and quality of what they buy, as consumers do in other markets. Together with a payment system that reimburses doctors for the fees they charge for each item of service, and pays hospitals largely in the same way, insurance is a major cause of rising health costs.

Goldhill’s criticism applies generally to all medical insurance, including Medicare, but private insurance is the worst offender (a point this corporate CEO overlooks). As I have explained elsewhere,2 the business overhead and administrative costs (including disgracefully high salaries for senior executives) for private insurance are much higher than those for public insurance, thus increasing the price of private premiums. Government actuaries estimate that private insurance increased health care costs in 2011 by about $150 billion. Adding to this, doctors and hospitals incur considerable expenses (probably more than $20 billion) in billing and collecting from the wide diversity of private insurance plans.

In two appendices at the very end of his book, Goldhill questions whether the ACA’s insurance exchanges will work as planned since they will probably reduce the number of competing insurers, increase premium costs, and encourage individuals to stay uninsured until they become ill. He also doubts the success of the “accountable care organizations” (ACOs) that are proposed by the ACA. These are groups of physicians affiliated with one or more hospitals that provide care for a group of patients who have chosen to be treated by a particular ACO. An ACO can accept a single payment for a complete episode of care—for example, treatment for cancer—rather than multiple itemized fees for each doctor’s services. Goldhill says that the ACA is much more likely to increase than decrease health care costs since increased insurance coverage inevitably raises expenditures. Once people are insured they and their doctors tend to use far more medical services. And none of the experimental measures in the ACA intended to control rising costs, such as ACOs and new payment methods, has yet been proven to work nationwide.

In the last three chapters of his book, Goldhill proposes to fix the system, but this is where he goes wrong. He relies on old conservative notions about the health care market that have never been demonstrated to work, and are based on a fundamental misunderstanding of medical care. He advocates gradual transition to a system in which patients would, according to their means, be given government vouchers in the form of “health savings accounts,” enabling them to act as consumers do in ordinary markets, shopping for the outpatient care they want at prices they find attractive. (Accounts would belong to the patient and could be used before taxation to pay for medical care or saved, with interest, and expended after taxation for any other purpose.) This idea is called “consumer-directed health care” (CDHC) and has been championed by many business leaders and conservative health policy experts. But CDHC is a delusion; seriously ill patients cannot be expected to know what treatment they need, even if they are well informed or are physicians themselves.

Goldhill’s recommendations for fixing the health care system differ from earlier CDHC ideas in that he would abolish all the usual types of public and private insurance plans in favor of a government-funded plan for catastrophic high-deductible insurance that would set prices for hospital services and thus control high-end hospital costs. Like other CDHC plans, his would use health savings accounts to discourage expenditures for outpatient care. However, CDHC with health savings accounts is unfair to patients of limited means because it shifts costs and risks to them, restrains their use of medical services they may generally need, and reduces the financial burden on employers.3

Brill’s story in Time, “Bitter Pill: Why Medical Bills
Are Killing Us,” is an investigative report on the astonishingly high prices charged by hospitals for medical care and for all the supplies and equipment they use. Brill gives detailed descriptions of the enormous bills faced by particular patients after their care at specific hospitals, and the devastating effects of these bills on their lives.

He shows that hospital prices usually exceed their costs by extravagant margins, with markups often nearing 1,000 percent. For example, one hospital charged $1.50 for a single Tylenol pill, one hundred of which could be purchased through Amazon for $1.49. Another hospital charged $151.61 for a blood count that Medicare says costs the hospital $11.02, and billed a patient nearly $8,000 for a special cardiac stress test that Medicare values at $554. With charges like that, even so-called not-for-profit hospitals have revenues large enough to pay their executives’ outsized salaries and greatly expand their facilities, while showing a respectable net income.

The greatest abuses involve patients with private insurance or with no insurance. Charges to those covered by Medicare or Medicaid are more modest because these large public payers can force hospitals to give substantial discounts based on the hospital’s actual costs, whereas private insurers usually get smaller discounts. They simply pass their costs along to patients in the form of higher premiums, deductibles, or copayments. But even Medicare and Medicaid are limited in controlling their costs by the lobbying and political influence of the hospitals.

Recent public disclosures by the government of the prices Medicare pays for services at three thousand hospitals around the country reveal great disparities among these institutions in their charges for similar services, thus supporting Brill’s description of unjustified and irrational hospital pricing. Growing resistance to rising inpatient prices has caused hospitals to shift more of their services to outpatient care, which is much less regulated. Outpatient tests and procedures can be billed at higher rates than in the hospital.

To solve the problems he has described, Brill recommends a number of initiatives such as tightening antitrust laws to prevent hospitals from monopolizing a market, making it possible for other health care organizations to compete, taxing the net income of all hospitals—whether legally classified as “for profit” or “not-for-profit”—and requiring them to make their pricing methods more transparent and more related to actual costs. He also recommends legislation imposing stronger price controls on imaging procedures, such as CT scans, and reform of medical tort laws to reduce the unnecessary services ordered by physicians who are concerned about malpractice claims.

Unfortunately, these measures only address the margins of the cost problem. They have the same limitation that he and Goldhill attribute to the ACA; they do not address the underlying causes of the health cost explosion, namely a private insurance system and a fragmented, income-seeking medical care delivery system that is largely paid by fee-for-service. Brill concludes that medical prices are much too high, but he never tells us why.

An article in Politico on March 14 suggests that Brill may be having second thoughts about how to fix the system. He is quoted at a March 13 panel discussion in Washington, D.C., as saying that he is increasingly siding with those who advocate a single-payer plan as the best solution for the health system’s cost problem. In aNew York Times Op-Ed piece on February 17, shortly after his book appeared, Goldhill offered a different opinion about single-payer, saying it would never be able to control costs in the US because of lobbying pressures on legislators. Nevertheless, in many quarters single-payer reform is gaining advocates who seem not to share his skepticism about the ability of government to help solve health care’s problems or his confidence that CDHC can.

The ACA will not provide affordable access to care for all citizens. Even after next year, loopholes in the ACA’s coverage will result in many millions who are uninsured. Among them will be very poor citizens not covered by Medicaid in some states, native Americans, and undocumented immigrants, as well as an unknown number of uninsured people who will choose to pay a fine rather than buy private insurance. True, the ACA extends and helps to pay for private insurance and eliminates many of its abuses. But health costs will continue to rise for the reasons I mentioned, and private (as well as public) insurance will continue to get more expensive and shift an ever-increasing burden to insured individuals in the form of copayments and deductibles, even as benefits shrink.

What can be done about this? The political gridlock in Washington, the financial interests of the health insurance industry, and the concerns of the physicians, clinical facilities, and businesses that are threatened by reform all make any significant change in the status quo unlikely—at least anytime soon. Probably nothing will happen until the public and the medical profession become sufficiently aroused by the growing failure of the system to provide the affordable care we need. At that point, the possibility of a single-payer system will be seriously considered because it is arguably the simplest and most logical solution—the best, and probably the only, way to ensure a universal right to affordable access to care.

The question will become: What kind of single-payer system will work best? Medicare is an example of a single-payer system that benefits those over age sixty-five and others with some types of disability (for example, end-stage kidney disease). It pays for care largely on a fee-for-service basis, and care is delivered by a mélange of independent physicians and facilities that compete for patients and income. Although Medicare forces large discounts on prices, it cannot control the volume or, with few exceptions, the choice of services. As a result, fee-for-service payments in such a system are an incentive to maximize services that can be billed separately, and Medicare’s costs have risen almost as rapidly as those in the private sector. Despite the cost-containing initiatives of the ACA, Medicare’s costs on a per capita basis are projected by the Congressional Budget Office to nearly double over the next decade, with unsustainable consequences for the federal budget.

“Medicare for all” is a policy favored by many advocates of single-payer reform. By replacing all private insurance plans, it would save a lot of money, but it would not solve most of Medicare’s problems. It would not address the rising costs that are generated by the various income-seeking medical care businesses; nor would it reduce the huge costs of the unnecessary and duplicated services delivered by the present fragmented and disorganized system. Neither would it prevent the fraudulent abuse of the billing system by physicians and health facilities that currently adds at least 5 percent to the total cost of health care. To avoid all these problems, “Medicare for all” would have to go beyond simply reforming the insurance system. It would have to change the method by which the single payer reimburses doctors and clinical facilities, and it would also have to change the way medical care is delivered.

Most experts agree that cost containment will require replacement of fee-for-service payment with some method that encourages quality of care rather than an increasing volume of services. The ACA provides for experiments with “pay for performance” to reward quality, and private insurers are already exploring this approach. But quality in medical c
are is hard to define, and most of the guidelines suggested so far have been controversial. Moreover, such an approach invites providers to avoid high-risk patients. “Risk adjustment,” in which payment is varied according to the severity and complexity of a given condition, is equally controversial. I doubt that initiatives based on any of these new payment ideas will prove practical enough to be widely adopted.

“Bundled” or “global” payment for a total episode of care (for example, complete treatment of a patient with pneumonia, a heart attack, or a fractured hip) has also been proposed as a substitute for fee-for-service, but for practical reasons, a system of global payment cannot generally be applied. Many medical services cannot be neatly divided into discrete episodes; neither can the contributions of all the doctors involved in the case be easily assigned and weighed. The only kind of bundled payment that is likely to be workable is payment for all the medical care needed by a patient. But such a system would require an organization that could receive the bundled payment and distribute it appropriately to the physicians delivering the care. In other words, bundled payment requires an accountable care organization (ACO).

The only type of ACO that has been proven to satisfy patients and physicians is multispecialty group practice. According to the American Medical Group Association, there are now well over 430 such group practices and their number is increasing rapidly as more physicians seek group employment. Multispecialty groups now employ about 130,000 full-time-equivalent physicians (which I estimate to mean about 200,000 individuals) who provide the medical care for about one third of all patients. Since there are some 878,000 working doctors in the US, more than one out of every four or five doctors is practicing in such groups. Some 70 percent of medical groups of all types are owned by, or affiliated with, hospitals, and in almost all, medical staff are paid according to bills collected, often with a small added base salary.

Data from the Medical Group Management Association indicate that average staff earnings in groups are fully competitive with earnings in solo or small partnership practice, particularly if the generous fringe benefits that groups usually offer are also considered (for example, office expenses, malpractice insurance, paid vacation, pension plans). And judging from their low turnover rate, physicians who choose employment in successful, well-managed groups are usually satisfied with their job.

However, only a few medical groups currently avoid the inflationary incentives of fee-for-service by contracting with insurance plans that pay them on a per capita basis for comprehensive care of some or all of their patients; and even fewer pay their medical staff by salary. Kaiser Permanente is an example of both. But as pressures increase to contain costs by avoiding fee-for-service, this kind of group practice will probably become much more common.

In my book A Second Opinion, I have described in detail how a single-payer system sponsored by the federal government would function when coupled with a reorganized medical care system based on independent multispecialty group practices with salaried physicians. Replacement of all public and private insurance and elimination of itemized bills with a public tax-funded system that simply paid medical groups per capita for comprehensive care would avoid much of the expense and many of the other problems with the current system. The enormous savings could ensure adequate compensation for all the facilities and physicians needed for universal care.

The loss of jobs in the eliminated private insurance industry would probably be more than compensated by increased employment in a greatly expanded public-payer system, and by the new jobs created by the emerging business opportunities created when employers no longer need to pay the health costs of their employees. Government would be able to contain the rise in total health expenditures by its power to set prices and determine the level of taxation required to fund the system, but it need not micromanage medical care. Medical decisions should remain in the hands of physicians and their patients, where they belong.

Most important, this revolution in our health care system would make universal access to good care affordable. It is a revolution that seems inevitable, even though it is not yet on the political horizon.

1 A detailed summary of the law’s many provisions and an excellent discussion of their significance can be found in Landmark: The Inside Story of America’s New Health Care Law and What It Means for Us All (PublicAffairs, 2010), written by the staff of The Washington Post. ↩

2 See my article “In Dire Health,” The American Prospect, January–February 2012. ↩

3 This argument is developed fully in my book A Second Opinion: Rescuing America’s Health Care—a Plan for Universal Coverage Serving Patients Over Profit(Century Foundation/Public Affairs, 2007), chapter 4. ↩

http://www.nybooks.com/articles/archives/2013/aug/15/obamacare-how-it-should-be-fixed/

Colorado cardiologist sounds 'the eternal Yes!’

By Andrew D. Coates, M.D., F.A.C.P.
WAMC Northeast Public Radio, July 26, 2013

Writing in the Journal of the American Medical Association at the beginning of July, a cardiologist and professor of medicine at the University of Colorado School of Medicine, Dr. Lawrence Hergott, calls upon his fellow physicians to fight for their profession by fighting for their own souls.

“I have seen that the preservation of the soul of medicine is also the preservation of the soul of the physician, and that both are essential,” he tells us.

Over the last couple of weeks I’ve been pointing out Dr. Hergott’s JAMA essay, “The View from Fiesole,” to a rainbow of physician colleagues. It has evoked a powerful and sympathetic response from elite specialists as well as primary care providers, medical students as well as leaders of academic and corporate medicine.

Dr. Hergott begins his essay with several short anecdotes to illustrate the personal consequences, for physicians, of “external forces” weighing down upon the profession. These forces are imposed, he writes, by “interests largely driven by economics and profit.”

In one anecdote the dean of the medical school asked the entering class of medical students for a show of hands. Dr. Hergott writes: “Our dean asked the students how many of them had been advised by at least one physician not to go into medicine. Eighty percent of the students raised a hand,” he tells us.

Dr. Hergott calls the whole process the “devolution of medicine.” Yet instead of portraying physicians as hapless victims of forces beyond our control, he lays responsibility for the fate of our profession where it most belongs – with the profession itself, with us.

“Physicians have historically not been sufficiently attentive to the financial implications of health care delivery,” explains Dr. Hergott. “This devolution of medicine must be reversed,” he implores us, “not just for us, but for the welfare of patients, our loved ones, future physicians, and our culture.”

Dr. Hergott seeks to rally his fellow physicians with an elegant metaphor, a trip to Italy. He contrasts “being in Florence” with “the view from Fiesole.” In his metaphor Florence represents the everyday life of the practice of medicine – hectic, insensitive, and perhaps somewhat dirty. The view from Fiesole represents the place of repose that, properly embraced, reveals to us the truth and beauty, liberty and love of practicing medicine.

“Fiesole is in Tuscany, just a few miles up a hill from Florence,” Dr. Hergott explains. “Galileo and many other notables spent time there, including John Milton, who mentioned Fiesole in ‘Paradise Lost.’” Dr. Hergott goes on to cite a contemporary writer who lists the view from Fiesole among the great muses, alongside Love, alongside Suffering.

Dr. Hergott reminds us that the soul of medicine still contains something pure and beautiful – a calling to serve humanity. He suggests that even if we must live in Florence we are still capable of the view from Fiesole.

His remarkable short essay employs several anecdotes to contrast Fiesole with Florence in terms of the bedside behavior of physicians. These tight paragraphs should prick everyone’s eyes with tears. Here is one of them. Dr. Hergott writes:

“Being in Florence would be admitting to the hospital a patient with chest pain who was quickly diagnosed with metastatic carcinoma so disseminated that a primary source could not be found, having the patient’s care taken over by Oncology, and moving on to the next responsibility. Taking the view from Fiesole would be going to visit the man at the end of work a few days later and, from something he said regarding his feelings about dying, learning what comfort that small gesture of presence brought to a dying man. ‘I fear death,’ he said. ‘No, I loathe death. I fear being cared for by someone who wouldn’t drop by at 6 o’clock on a Friday evening.’”

As Dr. Hergott sounds an alarm about the future of our profession he seeks to lead us all, as physicians should, by example. He writes: “I have learned from the work and the wonders that what is life giving – to my patients, my loved ones, and myself – is not only what I do but who I am,” he explains.

By living in Florence when we could take the view from Fiesole, we are not only failing ourselves. We are failing humanity by failing ourselves, Dr. Hergott suggests. Like I said, it’s an elegant, and powerful, metaphor.

Personally, for me the view from Fiesole conjures E.M. Forster’s “A Room with a View.” In the great novel, it is on the outing to Fiesole that George suddenly kisses Lucy. But it was the adaptation by Ismail Merchant and James Ivory, with the Academy Award-winning screenplay written by Ruth Prawer Jhabvala (who died here in New York earlier this year) that long ago made Fiesole something of a genuine muse in my own life, thanks to film.

Memories of watching “A Room with a View” cannot be untangled from the feelings of falling in love with Lori, the woman, friend, lover, companion, muse, with whom I’ve been now for almost 25 years, pretty much the adult half of my so-called life.

On the trip to Fiesole, in the Merchant-Ivory-Jhabvala film adaptation of the Forster novel, shortly before he kisses Lucy in the spectacular field of violets overlooking Florence, George bellows to the summer cosmos: “Liberty! Truth! Beauty! Love!”

“Could that be the silent, dour George?” one of the party asks. George’s father (immortally rendered in the film by Denholm Elliot) replies: “He’s saying his creed. He’s declaring the eternal Yes.”

Dr. Hergott’s essay really hits home. For our profession in this moment, Dr. Hergott has declared, in a brief JAMA essay, “the eternal Yes.”

Dr. Andrew Coates practices internal medicine in upstate New York. He is president of Physicians for a National Health Program.

You can listen to Dr. Coates’ radio broadcast here: http://www.wamc.org/post/andrew-coates-colorado-cardiologist-sounds-eternal-yes

Treat health care as a social need, not a commodity

By Elizabeth R. Rosenthal, M.D.
The Journal News (Westchester, N.Y.), July 25, 2013

The 48th birthday of Medicare on Tuesday reminds us that the birth of the Affordable Care Act has not and will not fix our broken health-care system.

Health care is simply unaffordable for too many of us. In October, the last phase of the reform act known as “Obamacare” will begin with the opening of the health-care exchanges (now known as “the marketplace”). Here many more people will be able to buy more affordable health insurance.

However, by continuing to rely on our for-profit, market-based system, we are wasting billions of dollars on inflated administrative costs. These dollars should instead be going to pay for actual health care.

We need to follow Medicare’s lead — with greatly reduced administrative costs — and treat health care as a social need instead of as a commodity, as an opportunity for profit-making.

Original Medicare, born July 30, 1965, brought affordable health care to the elderly, lifting most of them out of poverty. It has been working well for 48 years and is one of the most popular government programs. In recent years, efforts have been made to privatize it: The Part D drug program and the Medicare Advantage plans are both private. This has led to higher costs.

Although original Medicare’s costs are rising, they are rising more slowly than overall health-care costs. Lowering the costs to government by shifting more of the costs onto patients (e.g., through higher deductibles) does nothing to lower the total health-care expenditure. Even with the arrival of the Affordable Care Act’s insurance exchange, 2,000 New Yorkers will die each year for lack of health care.

We can do better. New York can adopt a publicly funded, privately delivered single-payer plan for all New Yorkers. We can pass the New York Health Bill (A5389/S2078) that provides such a plan. This will save New York billions of dollars and lift the burden from municipalities and companies of providing health care for their workers.

New York could show the nation that access to health care should not depend on one’s ability to pay. By doing so, we would also boost support for national legislation, the Expanded and Improved Medicare for All Act, H.R. 676, which would assure that every resident of the United States has access to high-quality care.

It is immoral to leave so many to suffer and die due to lack of health care. We can, with an improved and expanded Medicare for all, bring health justice to all.

Dr. Elizabeth Rosenthal lives in Larchmont.

http://www.lohud.com/article/20130725/OPINION/307250059/Community-View-Treat-health-care-social-need-not-commodity?nclick_check=1

Is accountability for patients? Or for policy wonks?

Accountable Prescribing

Nancy E. Morden, M.D., M.P.H., Lisa M. Schwartz, M.D., Elliott S. Fisher, M.D., M.P.H., and Steven Woloshin, M.D.
The New England Journal of Medicine, July 25, 2013

Physicians spend a lot of time treating numbers — blood pressure, cholesterol levels, glycated hemoglobin levels. Professional guidelines, pharmaceutical marketing, and public health campaigns teach physicians and patients that better numbers mean success.

The first line of defense against poor prescribing should be clinicians’ commitment to responsible, evidence-based practice. Unfortunately, clinicians frequently prescribe medications that improve numbers without necessarily improving health.

To avoid rewarding poor prescribing, we could more closely align quality measures with evidence. The table (available at link below) highlights widely used quality measures that span a spectrum in terms of encouraging accountability; we suggest revisions for those that we believe don’t adequately require prescribers to pursue evidence-based, cost-effective choices. Although some physicians may disagree with specific suggestions, our main interest is in the principle of moving beyond numerically driven quality measures to measures that match treatment goals to the best evidence and encourage use of the safest, most effective, and lowest-cost drugs or nondrug treatments.

Payers could accelerate implementation of accountable prescribing. The table provides a starting point for revising existing measures. In addition, payers could advance and facilitate less onerous measures through claims analysis. Although claims and surveys are the basis of some quality measures, much performance is assessed through Web reporting: payers provide practices with measure-specific lists of eligible patients, and physician groups or institutions review records and report performance for each patient according to definitions of the target care. This is the approach used by the Centers for Medicare and Medicaid Service (CMS) for accountable care organizations (ACOs) and by the PQRS. Because organizations such as ACOs are responsible for defined populations, payers could monitor quality through claims analysis. Prescribing quality may be particularly amenable to this approach. Performance measures based on prescriptions claims could include, for example, the population-level ratio of second-line treatments to first-line options or the ratio of brand-names to generics in drug classes in which ample generics exist. Monitoring could permit efficient determination of clinicians’ response to new drug warnings, and claims analysis could quantify long-term adherence to safe, effective drugs.

Accountable prescribing measures could also incorporate cost. Though some payers may hold providers accountable for prescription spending, CMS programs do not yet do so. CMS shared-savings calculations are currently based on inpatient and outpatient expenditures only, but that doesn’t preclude the inclusion of prescription spending in quality measures. Although prescribing decisions should be driven primarily by safety and effectiveness, cost can be an appropriate tiebreaker among drugs that are equally safe and effective. Considering costs may also discourage use of newly approved brand-name drugs that lack safety or efficacy advantages — drugs with potential shortcomings that have had less time to emerge.

As insurance coverage expands, we must ensure that greater access to prescription drugs confers better health, not harm. The need to advance performance measures as health care reform proceeds is well recognized. Ideally, we should assess outcomes valued by patients, but for reasons of feasibility, many measures focus instead on surrogate end points. To improve health, such end points must be based on strong evidence, and how you get there matters. Refining measures to incorporate best evidence and the notion of accountable prescribing could promote use of the safest and most effective drugs, better align measures with our professional responsibilities, and maximize the chance that meeting goal-driven performance measures will translate into improved population health.

http://www.nejm.org/doi/full/10.1056/NEJMp1301805

Comment:

By Don McCanne, M.D.

In the mania surrounding the implementation of Obamacare, the hope for controlling spending and improving quality lies in assigning accountability in the delivery of health care, especially through accountable care organizations. Supposedly we should be able shift from payments based on quantity of services to payments based on accountability for quality outcomes (certainly a sketchy premise). How is that playing out?

This article from the Dartmouth Institute gives a hint of how accountability might be measured in practice, in this case through accountable prescribing. Read what they propose and then use your imagination. First you extract the required data from the patient. Then, after you get the patient out of your way, you will need to access the algorithms for prescribing. Next you can go ahead and follow the appropriate algorithm pathway on your computer. After a period of interacting with your keyboard and your mouse you will have arrived at prescription nirvana, having determined the highest quality and lowest cost drug selection for your patient.

Of course, this is only the drugs. But since the goal is to include adequate measurements to determine the full level of accountability, similar algorithms will have to be followed for other aspects of the diagnostic and therapeutic interventions. Of course, there may be some complexity with the more technical aspects of care, such as the complex algorithms of intensive care, or of surgical management, or whatever.

But establishing accountability is the goal and is what must be measured. Today’s policy wonks are leading the way. The payers, to be led by Medicare, are to determine appropriate distribution of funds based on how well the providers follow the wonks’ algorithms. And the patient? Oh yes, if she hasn’t left the room yet, you can let her know that the computer’s algorithm has prescribed metformin as the next step in management of her diabetes. Score 100. One step closer to collecting your reward from the Medicare shared savings program.

And, oh, the patient. She says she wasn’t there for management of her diabetes? She’s there because her husband can’t give up sexting, and she’s profoundly depressed as a result? Gee, is there an algorithm for that? And doesn’t this mess things up by requiring a greater quantity of care? And would there be a way of lowering the cost for that care? In fact, not only does the situational depression need to be managed, but doesn’t something need to be done about the husband’s sexting paraphilia? Never mind. There is no accountability algorithm for that yet anyway. Besides this encounter has already received a perfect score for the shared savings program. Next patient.

Message to accountability policy wonks: The health care system doesn’t exist merely to assign and measure accountability of the health care professionals and institutions, which in itself is a time consuming and administratively burdensome endeavor. It exists to take care of patients. Can’t we get back to that?

Institutional Corruption of Pharmaceuticals

Risky Drugs: Why The FDA Cannot Be Trusted

By Donald W. Light
Harvard University, The Lab @ Edmond J. Safra Center for Ethics

A forthcoming article for the special issue of the Journal of Law, Medicine and Ethics (JLME), edited by Marc Rodwin and supported by the Edmond J. Safra Center for Ethics, presents evidence that about 90 percent of all new drugs approved by the FDA over the past 30 years are little or no more effective for patients than existing drugs.

All of them may be better than indirect measures or placebos, but most are no better for patients than previous drugs approved as better against these measures. The few superior drugs make important contributions to the growing medicine chest of effective drugs.

The bar for “safe” is equally low, and over the past 30 years, approved drugs have caused an epidemic of harmful side effects, even when properly prescribed. Every week, about 53,000 excess hospitalizations and about 2400 excess deaths occur in the United States among people taking properly prescribed drugs to be healthier. One in every five drugs approved ends up causing serious harm, while one in ten provide substantial benefit compared to existing, established drugs. This is the opposite of what people want or expect from the FDA.

Prescription drugs are the 4th leading cause of death. Deaths and hospitalizations from over-dosing, errors, or recreational drug use would increase this total. American patients also suffer from about 80 million mild side effects a year, such as aches and pains, digestive discomforts, sleepiness or mild dizziness.

The forthcoming article in JLME also presents systematic, quantitative evidence that since the industry started making large contributions to the FDA for reviewing its drugs, as it makes large contributions to Congressmen who have promoted this substitution for publicly funded regulation, the FDA has sped up the review process with the result that drugs approved are significantly more likely to cause serious harm, hospitalizations, and deaths. New FDA policies are likely to increase the epidemic of harms.

http://www.ethics.harvard.edu/lab/blog/312-risky-drugs

And…

Institutional Corruption of Pharmaceuticals and the Myth of Safe and Effective Drugs

By Donald W. Light, Joel Lexchin and Jonathan J. Darrow
Social Science Research Network (SSRN), Journal of Law, Medicine and Ethics, Vol. 14, No. 3, 2013, June 1, 2013

Abstract:
     
Over the past 35 years, patients have suffered from a largely hidden epidemic of side effects from drugs that usually have few offsetting benefits. The pharmaceutical industry has corrupted the practice of medicine through its influence over what drugs are developed, how they are tested, and how medical knowledge is created. Since 1906, heavy commercial influence has compromised Congressional legislation to protect the public from unsafe drugs. The authorization of user fees in 1992 has turned drug companies into the FDA’s prime clients, deepening the regulatory and cultural capture of the agency. Industry has demanded shorter average review times and, with less time to thoroughly review evidence, increased hospitalizations and deaths have resulted. Meeting the needs of the drug companies has taken priority over meeting the needs of patients. Unless this corruption of regulatory intent is reversed, the situation will continue to deteriorate. We offer practical suggestions including: separating the funding of clinical trials from their conduct, analysis, and publication: independent FDA leadership; full public funding for all FDA activities; measures to discourage R&D on drugs with few if any new clinical benefits; and the creation of a National Drug Safety Board.

Restoring Institutional Integrity for Safer Drugs

Many concerned experts have suggested ways to reduce conflicts of interest and improve the safety and effectiveness of drugs.

First, while research companies play important roles in discovering and developing superior drugs, they should play no role in testing them. Over the years, expert bodies and prominent scientists have called for an independent institute to test drugs because commercial trials were so poor, biased, and conflicted. Yet this bedrock reform has never been accomplished, as the industry’s lobbying of Congress and its contributions to Congressional campaigns have soared.

Second, the FDA needs new leadership to restore public trust and build a new culture focused on safety through enforcement of its existing rules. Hearings through the 1960s and 1970s documented how frequently the FDA fails to adhere to its own rules and protocols.
 
Third, user fees must end and the FDA must be entirely funded by taxpayers-as-consumers. The FDA should be entirely clear about whom it serves. 

Fourth, while approval criteria should allow for a sufficient number of therapeutically equivalent drugs in a class to give clinicians a range of choices, they should also require patient-relevant evidence of superiority. Non-inferiority trials should be allowed only if one can ethically justify entering patients into a trial in which there can be no benefit for them. All adverse events, including those occurring among subjects who drop out, must be reported with follow-up for two years.

Fifth, Congress needs to restore trust by creating a National Drug Safety Board with adequate powers, funds, and mandates to independently investigate and report on drug safety issues. The creation of this board would support the position that all data related to how drugs and vaccines affect people are a public good and that access to this data is a human right. Both the inadequacy of pre-approval safety testing and the lack of systematic post-approval monitoring need urgent attention.
 
None of this is likely to happen until third-party payers, politicians, and the people decide they want to stop paying so much for so many drugs of little value and then for treating the millions harmed by those drugs. Nor is it likely until the campaign to restore institutional integrity to Congress through funding elections by the 99 percent, rather than by the one percent, is successful.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2282014

Comment:

By Don McCanne, M.D.

Millions of people are being harmed by drugs, many of which have only negligible therapeutic value, and tens of thousands are dying. We need much greater government oversight of pharmaceuticals, certainly more than that which currently is being provided by the FDA.

Plan ignores 'free market' failure of health care costs

By Christopher Stack, M.D.
Indianapolis Star, Letters, July 23, 2013

Abdul-Hakim Shabazz (“We Need a Single Payer — You,” July 10) says he wants an adult discussion about U.S. health care and then presents a simplistic position on the issue: Get the government out. He proposes we return to our nation’s pre-World War II state when people bought individual insurance policies. He facetiously calls this a “single-payer plan” when in fact it is the diametrical opposite of a publicly financed, nonprofit plan that assures everyone high-quality care.

Shabazz’ proposal is no surprise, given he is a self-proclaimed “free-market conservative, social-libertarian political pundit.” But it shows a remarkable lack of understanding of the economics of health care and the private sector’s miserable failure to control costs over the last 60 years.

The basic principles of the free market (transparency, price competition, open access, informed consumers, etc.) do not and cannot exist in health care. Every other industrialized nation has already figured that out. Shabazz ignores the fact that Big Insurance is not about to give up its near-monopoly power, which it uses to keep out competitors and increase its bottom line. His proposal is completely unrealistic.

The way to solve our dilemma is to expand Medicare to cover everyone. Delivery of care would remain largely private; but instead of having private insurance middlemen maximizing profits at our expense, we’d have a lean, nonprofit single-payer program that emphasizes preventive care, no co-pays or deductibles, full choice of doctor and hospital, and cost controls through the program’s purchasing power.

Medicare, whose 48th birthday is July 30, works. It is time to make it truly universal.

Dr. Christopher Stack resides in Indianapolis.

http://www.indystar.com/article/20130723/OPINION10/307230078/Shabazz-plan-ignores-free-market-failure-health-care-costs

The Motley Fool on Medicare for All

How Much Could Medicare for All Save You?

By Rich Smith
The Motley Fool, July 21, 2013

But could it be that the ACA isn’t really needed at all? Could an alternative idea — “Medicare for all” — actually do a better job of controlling medical costs, and making health care affordable for Americans?

Harvard Medical School visiting professors David Himmelstein and Steffie Woolhandler recently noted on the pages of The New York Times that a Medicare-for-all health care system — known commonly as “single-payer” — is an incredibly efficient operation, in terms of costs.

On average, only 2% of the revenues that flow through Medicare are needed to cover overhead costs. In contrast, patients who subscribe to private health insurance spend 14% of their money — seven times as much — just paying for the overhead costs doctors incur from juggling the multitude of insurance procedures required for different patients subscribing to insurance plans.

In contrast, the U.S. government itself agrees that the ACA — the system we’ve settled upon instead of offering Medicare for all — costs more than a move to a cheaper, more efficient, and better single-payer system. The U.S. Government Accountability Office calculates that a switch to single-payer would shave $400 billion a year off the national health-care bill.

Little wonder, then, that a 2008 survey published in the Annals of Internal Medicine found that 59% of physicians polled support Medicare for all.

If an individual consumers think they’re better off with a private health insurance plan from WellPoint — or from UnitedHealth Group, Aetna, or Cigna — then fine. They could still sign up for one of those, either as a supplement to Medicare-for-all or, if they prefer, as an exclusive plan, and choose not to participate in Medicare at all. For that matter, there should be no need to require anyone to buy any insurance whatsoever.

Excerpts from representative Comments:

“Well, of course! But isn’t the ACA a step in the right direction?”

“Medicare for all would be far superior to any other plan, which was why it was killed before it could get out of committee.”

“ahh, if only the Republicans had not fought the entire idea so hard, that would have been the ideal solution.”

“A big concern, that not a lot of people know about-more and more doctors are refusing to take on new Medicare patients.”

“Medicare is an existing program that could simply be expanded and fixed a bit where necessary. This seem like a much much more common sense approach than a whole new bureaucracy.”

“Authors often site Medicare’s discount rate and admin cost. Both are a mirage. The Medicare discount rate is so low that it does not pay lights on costs.”

“It’s true that Medicare is already set up very well and that a minor legislative action could make it available to all…ObamaCare puts more power into the hands of private insurance companies and BigPharma, and how do you think those will use it?”

“Of course “single payer” would be better, but was not proposed in anticipation of Republican opposition to “socialized medicine” and their insistence on the primacy of a role for the private health insurance companies. As to Medicare for all on a voluntary basis, it still does not answer what to do about the uninsured who get sick. Who pays for them?”

“DUH! How soon could America deal Rich Smith and “Medicare for All” for Ovomit and OvomitCare?”

“Of course Medicare for all makes sense.”

“Regarding hospital charges vs. what insurers pay ($24,000 vs. $4000). . .that is a HUGE problem in healthcare that in a way, single payer WOULD correct.”

“You are dreaming in theory. The Complete Lives System that withholds medical care from infants, special needs children and reduces the amount of medical care available each year by a dollar amount to anyone over 50.”

“the money saving answer is to repeal the ACA and start over with insurance pools and letting those who could afford insurance and don’t have it suffer for their sin”

“PS: don’t forget that Obamacare expands IRS and gives IRS much control over your healthcare”

“Physicians often limit total Medicare patients, and broadening the program will just further stratify medical care from those who have the money to pay and those who do not.”

“Medicare for all would work but only if the discounts were renegotiated.”

“Obamacare will be the destruction of America !! Obama wouldn’t have it any other way !!! Hail to ol RACE BAITER IN CHIEF !!!”

“More and more doctors are refusing new Medicare patients since the pay is too low and it takes too long to get reimbursed. If we moved to a Medicare-based system, what would happen? We would all have insurance, but it would be next to impossible to find a doctor that accepts the insurance. Yeah, that’s smart. Real smart.”

“You don’t have the right to infringe on someone else’s liberties and that is exactly what happens when the government taxes one person to give it to another. Freedom is the answer. God Bless America.”

“This is exactly what Dr. Ben Carson has been proposing the past two years. EACH and every American citizen would have a medicare spending plan and credits to that fund would start immediately upon birth.”

“i think eveyone knows that single-payer is the only efficient answer, but the scum in washington d.c. won’t allow it – they their souls to big pharma”

“Great article. This is so straightforward anyone could understand it. Maybe even congresspeople?”

“Of course this is a step in the right direction, and someday a single payer system will prevail.”

http://www.fool.com/investing/general/2013/07/21/how-much-could-medicare-for-all-save-you.aspx#.UevtGUalfbA.email

About The Motley Fool

The Motley Fool is a multimedia financial-services company dedicated to building the world’s greatest investment community. Reaching millions of people each month through its website, books, newspaper column, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company’s name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king — without getting their heads lopped off.

http://www.fool.com/press/about.htm?source=ifltnvsnv0000001

Comment:

By Don McCanne, M.D.

This article is truly remarkable because of its source. The Motley Fool “champions shareholder values and advocates tirelessly for the individual investor.” Although they didn’t get everything right (they would include private insurance options and would have no requirement to even be insured), nevertheless this is a particularly strong statement for Medicare for All from a Wall Street source that is just now joining the parade.

Perhaps even more remarkable are the comments posted in response to this article. Considering that these comments are from the investment community, there is strong support for Medicare for All. Inevitably, as with most comment sections, there is a representation of ill-informed, ideologically-driven and sometimes belligerent comments, but those can be ignored.

We should take home from this the lesson that many in the investment community understand that Medicare for All really does make sense from the business perspective. We should tailor our message accordingly.

New York City Labor Council endorses H.R. 676

By Kay Tillow
Single Payer News, July 21, 2013

The Executive Board of the New York City Central Labor Council, AFL-CIO, unanimously approved a resolution supporting H.R. 676, national single-payer health care legislation, sponsored by Congressman John Conyers Jr., D-Mich.

NYC CLC President Vincent Alvarez calls this resolution “Labor’s way of standing up for the health and well-being of working men and women and their families,” noting “The national legislation is a true means of controlling ever-increasing health care costs, while ensuring that Americans get the medical care they so desperately need.”

In the resolution, the Council notes that almost every union is forced to battle and sacrifice to sustain health care benefits for members. The Council also notes that while the United States spends twice as much of our GDP on health care as other developed nations, we remain the only industrialized country without universal health care coverage.

Robert Score, recording-corresponding secretary of IATSE (Theatrical & Stage Employees) Local One, said, “As we all know, nobody in the United States should have to choose between health care and keeping a roof over their heads, food on their table or clothing on their children. H.R. 676 will prevent such calamities. I am thankful to President Alvarez for guiding the NYC CLC to endorse H.R. 676.” IATSE Local One submitted the resolution that was passed.

The NYC CLC, the 146th CLC to endorse H.R. 676, represents 300 local unions with a total membership of 1.3 million.

In other news, on July 19 Congresswoman Loretta Sanchez of California’s 46th district became the 44th co-sponsor of H.R. 676.

*

H.R. 676 would institute a single-payer health care system by expanding a greatly improved Medicare to everyone residing in the U.S.

H.R. 676 would cover every person for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental (including oral surgery, periodontics, endodontics), mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care and correction, hearing services including hearing aids, chiropractic, durable medical equipment, palliative care, podiatric care, and long-term care.

H.R. 676 ends deductibles and co-payments. H.R. 676 would save hundreds of billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs.

In the current Congress, H.R. 676 has 44 co-sponsors in addition to Conyers.

H.R. 676 has been endorsed by 605 union organizations including 146 Central Labor Councils/Area Labor Federations and 43 state AFL-CIO’s (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, NE, NJ, NY, NV, MA, RI, NH, & ID).

For further information, a list of union endorsers, or a sample endorsement resolution, contact: Kay Tillow, All Unions Committee for Single Payer Health Care–HR 676 c/o Nurses Professional Organization (NPO), 1169 Eastern Parkway, Suite 2218, Louisville, KY 40217. Phone: (502) 636-1551. E-mail: nursenpo@aol.com. Website: unionsforsinglepayer.org.

Medicare ‘cost-savings’ rules pushing costs onto patients

By Robert Kuttner
The Boston Globe, July 18, 2013

The cost of Medicare, the top driver of runaway entitlement outlays, seems to be stabilizing at last. For the past three years, Medicare inflation has moderated to an annual average of 3.9 percent. But if you look more deeply, a lot of these supposed savings are actually a shift in costs to patients. As Congress and the administration devise new ways to restrain Medicare, this disguised form of rationing is likely to worsen.

I had a vivid glimpse of this trend in my own family this past winter. In late February, my mother, age 99, had a bad fall. She was taken by ambulance to the closest hospital, Mass. General. Miraculously, she broke no bones, but her face was so badly swollen and bruised that she was unrecognizable and in severe pain.

My mother ended up staying four days. A couple of days in, we got an unpleasant financial surprise. Even though she was placed in the MGH’s maxillofacial inpatient unit, where she got excellent care, my mother was classified as being there “for observation” – meaning that she was considered an outpatient for billing purposes.

This meant that the bill – over $20,000 – was coded under the Medicare outpatient category (Part B) with a 20 percent patient co-pay. Being classed as an outpatient also disqualified my mother from any Medicare benefits in a rehab facility or skilled nursing home after she was discharged.

How could a 99-year-old badly injured woman on an inpatient unit be an “outpatient?” And why would Mass. General, one of our most distinguished community resources, do such a thing?

The culprit, it turns out, is Medicare cost containment.

In order to cut costs – actually shift them, partly to hospitals and partly to patients – Medicare applies extreme financial pressure on hospitals to book admissions as outpatients whenever possible. This shifts them from Medicare Part A (the hospital program) to Medicare Part B, which is designed to cover only doctor bills. The hospital gets paid a lot less and the patient gets stuck for a lot more.

Medicare does this through outside, for-profit vendors known as “recovery audit contractors,” who are paid based on how much they save Medicare. They achieve savings by punishing hospitals after the fact if a patient who might have been booked as an outpatient is classified by the admitting doctor as an inpatient. The contractor only gets paid when it overturns a medical decision – which sure seems like a gross conflict of interest.

So if the emergency room doctors make the medical judgment that a patient needs to be admitted, and the audit later concludes that the condition turned out to be not serious enough and the patient should have been considered an outpatient, the hospital not only doesn’t paid at the inpatient rate, it doesn’t get reimbursed at all.

The hospital can appeal, but appeals are often more expensive than just eating the cost. They typically take three or four years before they get to an administrative law judge. The patient can also appeal, but this is so unusual that the quality organization that supposedly monitors the process did not know how to handle my mother’s appeal. Mass. General reviewed my mother’s case and concluded that given Medicare rules, the “outpatient” classification was appropriate even though my mother was not discharged for four days.

A recent study by the journal Modern Healthcare reported that Medicare reimbursements for complex “outpatient” procedures, such as pulmonary treatments and ultrasounds, paid the hospital as little as two cents on the dollar for its charges.

Hospitals, needless to say, hate this system, and for good reason. “It makes no sense medically,” says John Belknap, Mass. General’s director of corporate compliance. “We deliver the same care to patients whether the classification is inpatient or observation. There is the presumption that the case is different, but it’s the same bed and the same nurse.”

The American Hospital Association has a lawsuit pending against Medicare to overturn the whole concept. Medicare, in an effort to settle the suit, partly modified its policy last March and hospitals denied claims by auditors will now be permitted to rebill in a less expensive category. But the suit is going forward. An official of the American Hospital Association told me that as hospitals have responded defensively to avoid getting punished, doctors end up getting second-guessed.

This system was the result of two George W. Bush-era laws aimed at reducing Medicare costs using “market incentives.” In 2003, the Medicare Modernization Act directed Medicare to conduct a demonstration project to use outside auditors to recover excessive hospital costs after the fact. After the three-year demonstration, held in five states including Massachusetts, recovered $900 million, Congress made it national and mandatory in the Tax Relief and Health Care Act of 2006, to take effect in 2010.

Today, hospital resources are wasted in complying with these arbitrary rules, and a lot of money goes into the pockets of the Medicare contractors or is absorbed by patients. The system doesn’t deter patients from seeking unnecessary treatment, since the process is one of bewildering complexity and patients typically learn about it only when they get the bill.

Though Medicare administers these rules, Medicare officials don’t necessarily consider them a sensible way to balance good medical care with cost containment. Don Berwick, an expert on cost-effective medicine, was interim national head of the Medicare program in 2010 and 2011 until Republicans blocked his confirmation as the permanent appointee. Berwick, who is now a candidate for governor of Massachusetts, is a critic of the current use of the categories of observation and inpatient to contain costs. “It’s a blunt instrument,” he told me. “The way it often nets out is that the patient pays more. The patient has far less sophistication and power in the system than the hospitals and the medical specialty societies.”

The big players in the system – hospitals, doctors, insurers – spend a small fortune working to game it, while patients remain in the dark. Thirty years of cost containment efforts using market incentives, beginning with the creation of health maintenance organizations in the Nixon era, have not altered the fundamental inefficiencies in the system. The more complications the forces of cost containment add, the more money the big players spend working the rules.

In addition to imposing gimmicks to shift costs to patients, Congress works with the health industrial complex to deny Medicare far more consequential savings. The privatized Medicare drug benefit, enacted in 2003, explicitly prohibits Medicare from negotiating bulk discounts with pharmaceutical companies. Medicare Part C allows commercial HMOs to target healthy seniors and reap big profits. These two gifts to big commercial players cost Medicare hundreds of billions of dollars.

The latest fad in the ideology of using commercial incentives and intermediaries to contain costs goes under the name of consumer-directed care. The idea is to combine tax-favored “health savings accounts” with high-deductible health insurance plans and to rely on the consumer’s capacity to shop around for the most suitable plan. But as the system becomes ever-more convoluted, the idea of consumers having the knowledge or market power to intelligently navigate it is laughable.

Converting Medicare to a voucher, as proposed by many Republicans, would make the cost-shifting trend explicit. People would get a fixed sum to buy private health insurance. But the fixed sum would likely cover only a bare-bones plan, and many seniors would have to bear more of the expense of getting sick – or forgo necessary care. The affluent could pay out o
f pocket or buy more expensive policies. Unless Congress devises more sensible and fundamental reforms, cost cutting by cost shifting is our likely future.

Happily, my mother has fully recovered, and celebrated her 100th birthday last week. Happily, too, she avoided the out-of-pocket costs associated with her “observation” status, because she is one of a minority of seniors with supplemental insurance that covers bills that Medicare shifts to patients. But that policy costs over $3,000 a year, and most elderly people can’t afford such extra insurance.

Medicare has been one of the crown jewels of American social policy. Historically, it has been far more cost effective than the commercial parts of the system because it has far fewer middlemen. Today, however, instead of being a model of a comprehensive national system that provides Medicare for all, Medicare is at risk of being pushed into the commercialized model that has made the rest of America’s health system such a costly and inefficient mess.

The risk is that as Congress seeks Medicare savings, it will require the Centers for Medicare and Medicaid Services to come up with more such self-defeating cost-containment tricks. Gimmicks that take money out of Medicare are the wrong means to address the federal deficit. The reform of Medicare is properly part of the larger project of getting a comprehensive and universal health coverage system.

Robert Kuttner’s new book is “Debtors’ Prison: The Politics of Austerity Versus Possibility.’’ He is co-editor of The American Prospect and a senior fellow at Demos.

http://www.bostonglobe.com/opinion/2013/07/18/medicare-disguised-form-rationing/W6sF7dkTW08oGOlSekzlFI/story.html

How Much Could Medicare for All Save You?

By Rich Smith
The Motley Fool, July 21, 2013

The government put a key piece of Obamacare back on the shelf last week, when it announced that companies employing more than 50 workers will have an extra year to begin offering health insurance without facing fines.

Whether you consider this good news or bad news probably depends on whether you were a fan or a foe of the Affordable Care Act in the first place.
But could it be that the ACA isn’t really needed at all? Could an alternative idea — “Medicare for all” — actually do a better job of controlling medical costs, and making health care affordable for Americans?

Obamacare — but cheaper

A new survey released by the number-crunching technocrats at NerdWallet last month clearly illustrates how extending Medicare coverage to all Americans might cut costs for everyone. According to NerdWallet, Medicare generally pays out no more than $0.27 for every dollar that hospitals bill it for medical services — a savings of 73%. Put another way, an uninsured patient receiving the same care as is provided to a patient covered by Medicare can expect to pay nearly four times as much.

And that’s just the average. Echoing the findings of a Time magazine report earlier this year, NerdWallet’s health-care survey noted that the prices charged by various hospitals offering the same procedure can vary widely. As you can see in the far-right column of the pricing chart, you could easily end up paying 30 to 40 times as much for a stay at one hospital than at a hospital down the road, for the same treatment.

Obamacare — but more efficient

How does a 73% discount on medical bills compare to what’s promised under the ACA?

Well, under the current structure, Obamacare works as a plan to require patients to sign up for private health insurance plans. Yet according to Forbes, many of these private insurers offer their members discounts of as little as 20% off hospitals’ ordinary pricing.

One of the standouts, Blue Cross plans from WellPoint  (NYSE: WLP  ) , is sometimes able to negotiate discounts as large as 60% — still far short of the average discount of 73% with Medicare.

Obamacare — but better

Harvard Medical School visiting professors David Himmelstein and Steffie Woolhandler recently noted on the pages of The New York Times that a Medicare-for-all health care system — known commonly as “single-payer” — is an incredibly efficient operation, in terms of costs.

On average, only 2% of the revenues that flow through Medicare are needed to cover overhead costs. In contrast, patients who subscribe to private health insurance spend 14% of their money — seven times as much — just paying for the overhead costs doctors incur from juggling the multitude of insurance procedures required for different patients subscribing to insurance plans.

Other commenters, such as Dr. Dave Dvorak, writing in the April 2013 issue of Minnesota Medicine, put the cost of Obamacare even higher, arguing that “a staggering 31% of U.S. health care spending goes toward administrative costs, rather than care itself.” As Dr. Dvorak notes, while “Obamacare … is expected to extend coverage to 32 million more Americans,” it does so by “expanding the current fragmented, inefficient system” and is likely to “do little to rein in health-care spending.”

In contrast, the U.S. government itself agrees that the ACA — the system we’ve settled upon instead of offering Medicare for all — costs more than a move to a cheaper, more efficient, and better single-payer system. The U.S. Government Accountability Office calculates that a switch to single-payer would shave $400 billion a year off the national health-care bill.

Little wonder, then, that a 2008 survey published in the Annals of Internal Medicine found that 59% of physicians polled support Medicare for all.

A government takeover?

So Medicare for all is cheaper, more efficient, and better than Obamacare — but isn’t it a “government takeover” of health care?

It needn’t be.

If an individual consumers think they’re better off with a private health insurance plan from WellPoint — or from UnitedHealth Group, Aetna, or Cigna — then fine. They could still sign up for one of those, either as a supplement to Medicare-for-all or, if they prefer, as an exclusive plan, and choose not to participate in Medicare at all. For that matter, there should be no need to require anyone to buy any insurance whatsoever.

All that’s really required for Americans to begin reaping the 73% savings of a Medicare-for-all plan is to open up Medicare enrollment to everybody. Give everyone the right to sign up for Medicare, rather than requiring us all to sign up for a private insurance plan under the ACA. And then let the marketplace decide if Medicare for all is really as good an idea as NerdWallet’s survey makes it sound.

PNHP note: The arrangements described above, namely, the proposed co-existence of private health insurance plans with a Medicare-for-all system, clearly indicate that the author is speaking of a “public option” rather than a single-payer system. Nonetheless, we offer it as further evidence that wide swaths of the U.S. public, including those associated with the financial-services company The Motley Fool, are aware of the compelling evidence in favor of an improved Medicare for all.

http://www.fool.com/investing/general/2013/07/21/how-much-could-medicare-for-all-save-you.aspx#.UevtGUalfbA.email