RAND, Press Release, March 12, 2020

Placing limits on what hospitals can collect for out-of-network care could yield savings similar to more-sweeping proposals such as Medicare for All or setting global health spending caps, according to a new RAND Corporation report.

RAND researchers examined the potential impact of four proposals for out-of-network payment limits: 125% of Medicare payment rates (a strict limit), 200% of Medicare payment rates (a moderate limit), the average of payments made by private health plans in a state (a moderate limit), and 80% of average billed charges in a state (a loose limit).

The analysis found that limiting out-of-network payments to 125% of Medicare would create the biggest drop in hospital payments.

A more-moderate payment limit set at 200% of Medicare rates would reduce negotiated hospital payments by 8% or 23%, depending on the modeling assumptions, while using the average private payment prices in a state are estimated to reduce negotiated hospital prices by 16% or 30%.

“Under the strict and moderate scenarios, the cost savings created by placing limits on out-of-network hospital bills creates savings that are similar to ideas such as Medicare for All, statewide rate setting and creating global health care budgets, without the particular potential disruption that could come from implementing these plans, although the limits would admittedly create some as-yet unknown level of disruption of their own,” said Christopher Whaley, co-author of the report and a policy researcher at RAND.

https://www.rand.org…

---

RAND Report: The Price and Spending Impacts of Limits on Payments to Hospitals for Out-of-Network Care

By Erin L. Duffy, Christopher Whaley, Chapin White

Key Findings

Strict out-of-network payment limits on hospital care could yield savings similar to more-sweeping proposals, such as Medicare for All, rate setting, and global budgets

Although cost containment can benefit patients facing rising health costs, such changes are disruptive to hospital revenues

From the Conclusions and Policy Recommendations (Page 21 of the full report)

“Notably, single-payer health care options seek to expand coverage in addition to controlling costs. In comparison, out-of-network payment limits directly address the cost of care for privately insured patients without directly expanding coverage among uninsured and underinsured people. This distinction is important in considering the potential impacts of these health reforms for different subsets of the U.S. population and the policy objectives of proponents of these different approaches.”

https://www.rand.org…

---

Media reports

“Cutting out-of-network hospital payments may save as much as single-payer system”

https://www.healthcaredive.com…

“Savings from capping out-of-network payment rates could save as much as $124 billion in hospital spending, making the policy a potential alternative to Medicare-for-All.”

https://revcycleintelligence.com…

---

Comment:

By Don McCanne, M.D.

There has been considerable discussion over what to do about surprise medical bills – bills that arise from care given outside of the insurers’ provider networks. For single payer advocates, it’s easy. Eliminate the private insurers and their networks through enactment of single payer Medicare for All and then all essential care is automatically covered by the public plan.

In this report, RAND has provided an analysis showing that placing a cap on surprise bills can yield savings similar to single payer. This conclusion is prominent in their report and has been picked up by the media. But it ignores all of the many other tremendous advantages of a single payer system – universality, elimination of restrictive provider networks, elimination of financial barriers to care, dramatic reduction in administrative waste, and making health care affordable for everyone through progressive tax policies, to name a few.

It is not as if the authors didn’t understand this. Buried in their conclusions they note that, in addition to controlling costs, single payer directly expands coverage among uninsured and underinsured people, whereas placing limits on out-of-network payments only addresses the cost of care for privately insured patients. It is difficult to see how capping out-of-network payment rates could be considered “a potential alternative to Medicare-for-All” when it fails to correct all of the other profound deficiencies in our health care financing system.

Passing surprise billing legislation would do almost nothing to correct the injustices in our health care system, but it would allow the legislators to once again walk away pretending that they have corrected the problem, when the real problem is so much larger than what they have tackled. We desperately need single payer Medicare for All, and we need it now.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By C. Jason Wang, MD, PhD; Chun Y. Ng, MBA, MPH; Robert H. Brook, MD, ScD
JAMA, March 3, 2020

Conclusions

Taiwan’s government learned from its 2003 SARS experience and established a public health response mechanism for enabling rapid actions for the next crisis. Well-trained and experienced teams of officials were quick to recognize the crisis and activated emergency management structures to address the emerging outbreak.

In a crisis, governments often make difficult decisions under uncertainty and time constraints. These decisions must be both culturally appropriate and sensitive to the population. Through early recognition of the crisis, daily briefings to the public, and simple health messaging, the government was able to reassure the public by delivering timely, accurate, and transparent information regarding the evolving epidemic. Taiwan is an example of how a society can respond quickly to a crisis and protect the interests of its citizens.

https://jamanetwork.com…

---

Taiwan’s Response to the Coronavirus Challenge of 2020

By Tsung-Mei Cheng
Taiwan Insight, University of Nottingham, Taiwan Studies Programme, March 5, 2020

Ultimately, the outcome of any infectious disease outbreak depends to a significant degree on the response of not only the government but also the public to the threat. Taiwan’s response to date has played an important role in Taiwan’s so far limited spread of Covid-19, despite its geographic proximity and close economic and cultural ties to China, which is the source of the global Covid-19 outbreak.

https://taiwaninsight.org…

---

Remarks by President Trump in Address to the Nation

The White House, March 11, 2020

This is the most aggressive and comprehensive effort to confront a foreign virus in modern history.

The virus will not have a chance against us.

No nation is more prepared or more resilient than the United States.

https://www.whitehouse.gov…

---

MSNBC, March 13, 2020

Dr. Ashish Jha, director of Harvard’s Global Health Initiative, joins Morning Joe to discuss the latest details in the spread of the coronavirus and the staggering government response.

“The federal response really has been a fiasco.”

10-minute video:
https://www.youtube.com…

---

Comment:

By Don McCanne, M.D.

Taiwan has a single payer national health program. The United States does not. Both nations now face the COVID-19 pandemic. “Taiwan is an example of how a society can respond quickly to a crisis and protect the interests of its citizens. (JAMA)” Yet in the United States, “The federal response really has been a fiasco. (Jha)”

Is the difference due to the single payer system? Well, it is an important factor. Taiwan’s single payer system has removed barriers to health care – certainly crucial during a pandemic. The United States is stumbling around just trying to figure out how we can test people to see who might be contagious. Forget about ensuring payment for care for the critically ill who are uninsured or underinsured.

But more important than insurance coverage is the fact that the Taiwanese government is lead by politicians who understand the importance of ensuring the general welfare of its people. In contrast, the Trump administration has left the nation ill-prepared by neglecting our safety-net public health functions. The President’s response primarily has been to issue his usual blowhard statements that often conflict with both the competent and incompetent members of his administration.

Uwe Reinhardt and Tsung-Mei Cheng recognized the importance of the government role in the health care systems of various nations. They deemed the single payer model to be appropriate for Taiwan, and they helped them achieve it. So it is instructive to see her response to the Taiwanese efforts to limit the harm that could be done by this highly contagious disorder.

(As this comment is being composed, Congress is preparing legislation to expedite testing for COVD-19. Why does the President of the United States need an act of Congress to prompt him into action that he should have taken long ago when it appeared that the pandemic was inevitable? Not to mention that the government should always be maintained in a state of preparedness. And why did he launch his administration with a slash and burn approach with no apparent intent to replace those crucial government functions?)

We’ve known that Taiwan has had lessons for us on single payer, which we have ignored, but do we really have to turn to them to find out about the fundamental basics of governing? Surely we have competent individuals we can elect who would put us on a path toward social justice for all.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By The Editorial Board
The New York Times, March 6, 2020

In late January, as the new coronavirus was making its first incursion into the United States, the Supreme Court upheld the Trump administration’s contested “public charge” rule, which enables federal officials to deny green cards to immigrants who use social safety net programs. The decision received scant media attention, in part because it was overshadowed by the emerging epidemic. But public health experts warn that the two stories are intimately, perhaps disastrously, related: Infectious disease outbreaks have a long history of preying on society’s most vulnerable, disenfranchised members. Noncitizens who don’t have access to health insurance, nutritious food or safe, affordable housing fall squarely into that category.

Doctors and immigration advocates have long worried that the public charge rule would present a grave public health danger. The rule could deter millions of noncitizens — even those who were not technically subject to its provisions — from using programs like Medicaid, WIC and SNAP or from seeking medical care of any kind, lest they imperil their immigration status.

The wisdom of each of those measures will be sorely tested now, as the coronavirus threatens to morph into a full-blown pandemic.

Already, citizens who are underinsured or uninsured are being slammed with medical bills that they can’t afford when they seek testing and treatment for the virus. Unsurprisingly, experts say that many of them are bound to avoid such care as the outbreak rages on. If quarantines become routine, tens of millions of low-wage workers, many of whom don’t have health insurance or paid sick leave, will not be able to stock up and stay home. One shudders to think what will happen if the courts dismantle the Affordable Care Act in the next year — a move that could ultimately leave 21 million or so more people without health insurance.

It’s easy to see how all this fear might feed on itself in the months ahead and also where that might lead. If citizens struggling to cover their own health care nurture resentments against any group perceived to be getting help to which they themselves are not entitled — or worse, if they grow xenophobic and subscribe to the notion that immigrants carry diseases — they might be compelled to endorse policies even more draconian than those already in play.

The best way to break this cycle of fear and further contagion is to dispense with zero-sum thinking and stitch together a safety net big enough, and strong enough, for everyone.

---

NYT Reader Comment:

By Don McCanne, M.D.

Why should we have “a safety net big enough, and strong enough, for everyone” only during an epidemic? Every day people face potential financial hardship, suffer from injury and illness and perhaps die prematurely. We need a “safety net” that is ready for all of us, all of the time.

The single payer model of an improved Medicare that covered everyone would do just that. Such a system would have built-in surge capacity plus the support of our public health agencies standing ready for us when the need arises.

Let’s not just tweak the system for one threatened pandemic. Let’s fix it forever for all of us.

https://www.nytimes.com…

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By James G. Kahn, Jeffrey Sachs, Anders Fremstad, Robert Reich, Robert Pollin, Leonard Rodberg, Emmanuel Saez, Gabriel Zucman, Alison Galvani, Gerald Friedman
The Hopbrook Institute, February 28, 2020

We are economists interested in public policy and healthcare. Some of us have worked to estimate the cost of alternative healthcare programs. Others have reviewed such estimates. We believe the available research supports the conclusion that a program of Medicare for All (M4A) could be considerably less expensive than the current system, reducing waste and profiteering inherent in the current system, and could be financed in a way to ensure significant financial savings for the vast majority of American households. Of course, the details would depend on the design of the M4A system.

Compared with the current system, Medicare for All would achieve considerable savings on administration and by reducing payments to monopoly drug companies and hospital networks. Within a few years of operation, M4A could save hundreds of billions of dollars per year from these sources. Additional savings will come when a rational healthcare finance system allows needed investments in coordinated care and preventive care, as well as reductions in fraudulent billing. Over time, global budgeting would slow the rate of future healthcare costs significantly, as has been done in Canada and other countries. Bending the cost curve could save more than $2 trillion over the next decade, and even more with a well-designed system. Costs will be predictable, enabling households and businesses to plan in a way that is impossible today.

There are added costs associated with Medicare for All. Universal coverage and increased utilization, coming from reduction or elimination of cost sharing, will add costs, but studies show that these added costs will be far less than the savings outlined above.

The need for increased public funds (replacing premiums) can be financed with some combination of payroll, income, and wealth taxes. By eliminating insurance premiums and out-of-pocket expenses, and lowering overall healthcare costs, Medicare for All will result in enormous savings for almost all households, all except the richest households who will pay more in taxes. Shifting the burden from per-person payments for premiums and cost sharing to income- and wealth-related taxation will magnify the savings for most households. The current system is particularly burdensome for middle-income working households who receive relatively little support through Medicaid or other public programs but are responsible for health insurance premiums either paid directly or by their employer as nonwage compensation. A system that cuts costs and shifts financing to income and wealth taxes will dramatically lower this burden, producing significant savings for workers and businesses.

The net financial savings will be accompanied by substantial improvements in productivity through improved health, and the elimination of “job lock” coming from the need to stay on a job to retain health coverage. Most important, Medicare for All will reduce morbidity and save tens of thousands of lives each year.

James G. Kahn, Professor, Institute for Health Policy Studies, School of Medicine, University of California, San Francisco

Jeffrey Sachs, University Professor and Director, Center for Sustainable Development, Columbia University

Anders Fremstad, Assistant Professor, Economics, Colorado State University

Robert Reich, Carmel P. Friesen Professor of Public Policy, Goldman School of Public Policy, University of California, Berkeley

Robert Pollin, Distinguished University Professor of Economics and Co-Director of Political Economy Research Institute, University of Massachusetts Amherst.

Leonard Rodberg, Professor Emeritus of Urban Studies, Queens College/CUNY

Emmanuel Saez, Professor of Economics, Director, Center for Equitable Growth, University of California at Berkeley

Gabriel Zucman, Associate Professor of Economics, University of California at Berkeley

Alison Galvani, Burnett and Stender Families’ Professor of Epidemiology, Director of the Center for Infectious Disease Modeling and Analysis, Yale School of Public Health

Gerald Friedman, Professor of Economics, University of Massachusetts at Amherst

(Additional endorsers at link)

https://www.hopbrook-institute.org…

---

Comment:

By Don Mcanne, M.D.

Can’t say it too often.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Quoctrung Bui and Sarah Kliff
The New York Times, March 10, 2020

It is a common refrain from Bernie Sanders on the campaign trail: The United States is the only developed country that does not provide health coverage to all residents.

“Canada can provide universal health care to all their people at half the cost,” he said at a recent Democratic debate. “The U.K. can do it. France can do it. Germany can do it. All of Europe can do it.”

Mr. Sanders is right: All these countries provide universal coverage. But what he doesn’t talk about is the excruciating battle they went through to get there.

It took Canada more than a decade to move from a patchwork of insurance plans to a single-payer system. At one point, doctors were so incensed that they went on strike for 23 days. Doctors from the United States and Britain flew in to help keep the health system going.

Today, most Britons revere their National Health Service: One lawmaker has called it the closest thing the English have to religion, and the 2012 Olympic opening ceremony honored it with a four-minute song-and-dance routine.

But when it began in the mid-1940s, 89 percent of doctors were opposed. They raised £1.6 million (or £58 million today, equivalent to $76 million) for a “fighting fund” to protest the plan. Some patients showed interest in contributing, too.

Look around the world and you start to see a common theme: Creating universal coverage is hard. The countries with the systems that Mr. Sanders admires went through years of failed legislation, doctor protests and uncertain futures.

Abroad, the arguments made against universal coverage were similar to those we hear today: that it’s just too expensive, or gives government too much control over the practice of medicine.

“No country did this without a huge political conflict,” said Jacob Hacker, a professor of political science at Yale who studies the formation of international health systems. “But once they put in the strong, basic foundations, there was no going back.”

Mr. Hacker said: “People look at the current levels of support that other systems have, and extrapolate backwards to think that universal coverage was always popular. But that isn’t the case. Everywhere this happened, it was a very fierce fight.”

(The article discusses the struggles in Canada, Britain, and Australia.)

Australia, Canada and Britain all overcame enormous opposition to build health systems that their citizens now support. In each case, politicians stood firm, and eventually the outcry subsided.

Could something similar happen in the United States?

Those who study the history of other health systems say it is certainly possible — but will probably be more difficult.

The United States is different in that its medical industry is bigger and more powerful. Health care spending accounts for one-sixth of the American economy, and no industry spends more on lobbying Congress.

Another obstacle comes from the structure of the U.S. government, in which dueling political parties often wield partial control over different branches of government.

“The American political system makes this harder,” said Mr. Hacker, the Yale professor. “The kind of determined, take-no-prisoners approach that happened in some provinces like Saskatchewan doesn’t work as well here.”

That said, there is nothing so structurally different about the United States that leads historians to think of universal coverage as impossible.

https://www.nytimes.com…

---

Comment:

By Don McCanne, M.D.

The lesson here is clear. All nations that have universal health care systems experienced significant political struggles to achieve them. The fact that there are political barriers ahead is never a reason to not move forward with reform.

In the case of the United States, the leading proposal for universal health care – the single payer model of an improved Medicare for All – once enacted and implemented would be the finest health care system in all the world – the pride of all Americans.

So what are the barriers? It costs too much? No, we are already spending enough to provide comprehensive care for everyone. Doctors and hospitals would be underpaid? No, the hundreds of billions of dollars in administrative waste that would be recovered is enough to adequately fund the system. Waiting times would be too great? No, resource allocation would be improved, helping to reduce some of the excessive queues we now have. Superfluous vested interests such as the private insurers would lose out? Yes, but that would allow health care dollars to be redirected to patient care, where they belong. Anti-government ideologues would be offended? And what is their counter-offer to ensure health care for all? Leave it to the marketplace? Kenneth Arrow taught us that lesson many decades ago.

So what about the politics of 2020? The Republicans wanted to repeal and replace the Affordable Care Act, but they have not found a replacement that would work. In the meantime there had been a crescendo of support for Medicare for All, but now the Democratic leadership has declared that, in order to defeat Donald Trump in the upcoming presidential election, we must abandon Medicare for All. What? That’s a non sequitur. Yet in only one week there was a massive shift of Democratic voters from the candidate supporting Medicare for All to a candidate who was outspoken in opposing it.

There is certainly strong opposition to President Trump within the Democratic Party, but how did the spinmeisters transfer that to voting against one of the most outspoken Trump opponents who happened to be the leading supporter for Medicare for All? As today’s article indicates, there will always be significant barriers to enacting a program of universal health care. We have to identify those barriers and knock them down.

PNHP advocates for a single payer national health program. We do not support any political candidates or any political parties. Rather we ask that all candidates and political parties join us in supporting health care justice for all though enactment of a single payer national health program.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.