PNHP

The campaign to destroy Medicare-for-all has already begun

The campaign to destroy Medicare-for-all has already begun

By Paul Waldman
The Washington Post, May 13, 2019

As Democrats try to figure out precisely what kind of health-care reform they want to pursue if they regain power in Washington, the industries who would be affected by reform aren’t waiting around. In fact, they’ve already begun to put together what will no doubt be a spectacularly well-funded campaign to crush Medicare-for-all or any other ambitious reform that Democrats come up with.

Lee Fang reports on an interesting gathering that took place recently:

At a luxury resort just outside of the nation’s capital last month, around four dozen senior congressional staffers decamped for a weekend of relaxation and discussion at Salamander Resort & Spa. It was an opportunity for Democrats and Republicans to come together and listen to live music from the Trailer Grass Orchestra, sip surprisingly impressive glasses of Virginia wine — and hear from health care lobbyists focused on defeating Medicare for All.

The event was hosted by a group called Center Forward and featured a lecture from industry lobbyists leading the charge on undermining progressive health care proposals. …

The schedule shows that the health care discussion was led by Center Forward board member Liz Greer, a lobbyist at Forbes Tate; the firm manages the Partnership for America’s Health Care Future coalition designed to undermine Medicare-for-All. Paul Kidwell, a lobbyist from the Federation of American Hospitals, and Larry Levitt, from the Kaiser Family Foundation, also spoke. No proponents of Medicare-for-All were included. Kidwell’s trade association is part of the Partnership for America’s Health Care Future group opposing single payer.

These kinds of junkets are not uncommon, but it shows how the groundwork is already being laid to defeat Medicare-for-all long before there’s a Democratic nominee with a proposal that he or she is promising to pursue, let alone legislation that stands a chance of becoming law.

Now, let’s take a moment to talk about the Partnership for America’s Health Care Future. If you go to its website, you can read their inspiring mission statement:

The Partnership for America’s Health Care Future’s (PAHCF) mission is to improve what’s working in health care and fix what’s not. We support building on the strength of employer-provided health coverage and preserving Medicare, Medicaid, and other programs that so many Americans depend on, so we can deliver affordability, expand options, improve access, and foster innovation.

Affordability, options, access, innovation — all that sounds great! And you can watch this video the group produced, which for the first minute and a half seems like a friendly Vox explainer on how the U.S. health-insurance system works, but then takes a dark turn to saying how Medicare-for-all will destroy everything good about health care, full of Republican talking points.

“Health-care decisions would be shifted from patients and their doctors to politicians and bureaucrats,” it says, as opposed to the paradise we live in now, where insurance company bureaucrats have absolutely no role in health-care decisions.

PAHCF, which was formed last year, is a coalition that includes pretty much every industry with a financial interest in keeping medical costs high and avoiding more government oversight: the pharmaceutical industry, the health-insurance industry, the hospital industry, the biotech industry and the American Medical Association, among others. If we were to actually bring down the prices that make U.S. health care by far the most expensive in the world, they’d all suffer.

PAHCF is only getting started, by doing such things as placing op-eds; in March, Libby Watson wrote a revealing article for Splinter on how the “ordinary Americans” writing those op-eds and getting quoted on the partnership’s behalf all turn out to PR executives with insurance-company clients, people in the insurance industry, Republican officials, and the like. Scroll through its Twitter feed and you’ll see that it contains almost nothing about improving the health-care system; it’s virtually all attacks on Medicare-for-all.

If there’s a Democrat elected next year and health-care reform looks like a real possibility, these anti-Medicare-for-all forces will kick their campaign of lobbying and public persuasion into high gear. They have essentially limitless resources; they could easily spend hundreds of millions of dollars to defeat Medicare-for-all, given what they stand to lose.

That will be just one part of the anti-Medicare-for-all effort. It’s also important to understand that these interests are not just going to fight against a full-on single-payer system of the kind that Sen. Bernie Sanders (I-Vt.) advocates. They’ll fight just as hard against what I call “Medicare for anyone,” or plans that allow anyone to join a government program but don’t mandate it. In fact, they’ll fight against pretty much any serious expansion of the federal government’s role in health care, because it could all wind up in the same place: cutting their profits.

And the truth is they stand an excellent chance of winning that fight. This is a classic collective-action problem, as Mancur Olson explained half a century ago. You have a group of concentrated interests with a great deal to lose on one side, and a much larger group of diffuse interests on the other side. Many of the people in that group with diffuse interests — that would be the American public — have a lot to gain from a universal system, but they’re more difficult to organize than a small group of drug companies, insurers and doctors willing to pour millions upon millions of dollars into the effort.

They also have fear and loss aversion on their side as they set out to destroy Medicare-for-all, which is why they’re arguing that if Medicare-for-all passes, you’ll be left with nothing. And if you say, “They can’t say that, it’s transparently bogus,” you obviously weren’t around the last time we debated health reform.

Which is why the Obama administration decided in 2009 that the only way to pass the Affordable Care Act was not to fight those interests but to co-opt them, convincing them that there was enough in it for them in the ACA that they shouldn’t oppose it. And it worked.

Democrats haven’t yet figured out how they’re going to defeat the moneyed interests that will be working with Republican to fight the next version of health-care reform, and I wish I could say I knew exactly how to do it. But if those Democrats don’t come up with some kind of plan, they’re almost guaranteed to fail.

https://www.washingtonpost.com…

A doctor’s take on why we need Medicare for All

By Johnathon Ross, M.D., M.P.H.
Cleveland Plain Dealer, May 12, 2019

Americans are justifiably concerned about healthcare costs. Even though the U.S. spends twice as much on healthcare as other rich countries that provide universal coverage, our outcomes are mediocre in comparison.

Two-thirds of bankruptcies are caused by illness and medical bills. Nearly 30 million Americans are uninsured, another 40 million are underinsured and all of us are unsure whether our coverage will protect us when we are seriously ill and most vulnerable.

Uninsured and underinsured Americans suffer tens of thousands of unnecessary deaths every year due to care forgone.

Recent polls suggest that a solid majority of American people (including doctors like me) support Medicare for All. However, many also say they are happy with their current coverage and are afraid of the modest tax increases needed to expand Medicare to everyone.

I suspect that most who are “happy” with their coverage have not been sick enough to discover how flimsy private insurance can be, with high co-pays, multi-thousand-dollar deductibles, surprise bills, narrow provider networks and scandalous drug prices that can shock us and block us from needed care.

Those seriously ill must buy or die.

Most people don’t know what their private insurance costs them now. A Kaiser Family Foundation calculator sheds light on this. For example, a family of four earning $50,000 yearly with employer coverage pays 15 percent of its income ($7,450) on healthcare. That amount includes costs such as monthly insurance premiums and co-pays, as well as hidden costs like the taxes that support public employee coverage, veterans’ care, state Medicaid plans, ACA subsidies and tax breaks for employer health plans.

Families earning $150,000 per year pay 12 percent of their income ($21,250) toward healthcare costs.

Workers with employer-provided plans face another hidden cost. Economists agree that companies providing workplace coverage spend proportionately less on wages.

The disease of our healthcare system is its financial hyper-complexity. We need simplicity. The massive administrative savings, bargaining power and increased efficiency of a single-payer system such as an improved Medicare for All can save enough money to provide everyone in the U.S. with comprehensive benefits, protect us from medical bankruptcy and allow us to visit the doctor or hospital of our choice. We can seek care when needed, not just when we can afford the copays and deductibles.

Medicare for All will not be “free,” but will finally be financed equitably through progressive taxes. Except for the very wealthy, most Americans will pay less overall. And everyone will feel the freedom of increased financial security — of being able to change jobs, go back to school or start a new business without the fear of financial ruin from medical bills.

An improved Medicare for All would save lives and save money. It is the right thing to do.

We have comprehensive Medicare for All bills now in front of Congress. The powerful private insurance and pharmaceutical industries have a lot to lose under Medicare for All. They are ready to spend billions on lobbying, TV ads and campaign contributions.

But the rest of us have power, too. Call your member of Congress today and demand real change — improved Medicare for All.

Dr. Johnathon Ross is a past president of Physicians for a National Health Program. He has practiced and taught primary care in poor rural and urban communities, but it was his experience inside the health insurance industry that convinced him of the logic and need for a national health insurance program.

https://www.cleveland.com…

RAND: Private insurers pay hospitals excessive prices (but they left out why)

Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely

By Chapin White and Christopher Whaley
RAND, May 9, 2019

Large price discrepancies exist between what private health plans pay for hospital services and what Medicare pays. RAND Corporation researchers used data from three sources — self-insured employers, state-based all-payer claims databases, and health plans — to assess $13 billion in hospital spending in terms of hospital price levels, variation, and trends from 2015 through 2017 in 25 states. In this report, prices reflect the negotiated allowed amount paid per service, including amounts from both the health plan and the patient, with adjustments for the intensity of services provided. These negotiated prices are then compared with Medicare reimbursement rates for the same procedures and facilities to determine relative prices.

Key Findings

  • Relative prices, including all hospitals and states in the analysis, rose from 236 percent of Medicare rates in 2015 to 241 percent of Medicare rates in 2017
  • Relative prices for hospital outpatient services were 293 percent of Medicare rates on average, far higher than the average relative price for inpatient care (204 percent of Medicare rates)

Recommendations

  • Employers can exert pressure on their health plans and hospitals to shift from discounted charge contracts to contracts based on a multiple of Medicare or some other prospective case rates.
  • Employers can use networks and benefit designs to move patient volume away from high-priced, low-value hospitals and hospital systems.
  • Employers can encourage expanded price transparency by participating in existing state-based all-payer claims databases and promoting development of new ones.
  • Transparency by itself is likely insufficient to reduce hospital prices, and employers may need state or federal policy interventions to rebalance negotiating leverage between hospitals and employer health plans. Such interventions could include placing limits on payments for out-of-network hospital care or applying insurance benefit design innovations to target high prices paid to providers and allowing employers to buy into Medicare or another public option that pays providers prices based on Medicare rates.

RAND press release:
https://www.rand.org…

For links to full RAND report:
https://www.rand.org…

Many Hospitals Charge Double or Even Triple What Medicare Would Pay

By Reed Abelson
The New York Times, May 9, 2019

Across the nation, hospitals treating patients with private health insurance were paid overall 2.4 times the Medicare rates in 2017, according to the RAND analysis. The difference was largest for outpatient care, where private prices were almost triple what Medicare would have paid.

The RAND study underscores the widening chasm between what the federal government and the private sector pay the nation’s hospitals.

The disparity shows how competition has faltered in an opaque market where the costs of care are secret and hospital systems are increasingly consolidated, gaining outsize clout in price negotiations with employers, some experts say.

This yawning spread in hospital rates will likely fuel the debate over Medicare-for-all proposals that would give the federal government authority to decide what to pay hospitals and that have proved popular with many Democratic voters on the presidential campaign trail.

Some proponents of Medicare for all argue that employers and private insurers have failed to control costs. About one-third of all health care spending in the country goes to pay for hospital care. Many supporters point to the billions of dollars that could be saved annually if hospitals and doctors were paid at the much lower Medicare rates.

“The shadow of single payer hangs all over this,” said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, which helped fund the RAND research.

The RAND study shows “market forces are clearly not working,” said Richard Scheffler, a health economist at the University of California, Berkeley.

But soaring hospital costs have become a significant burden, and many businesses have off-loaded more of the expense onto their employees through higher premiums and deductibles. Families have struggled to cope with surprise medical bills and increasing out-of-pocket costs. The trend toward consolidation in the last several years has also spurred higher costs, as hospitals merged into bigger, more powerful systems that dominated their local markets, demanding ever-higher prices.

Unlike Medicare, which sets the price it will pay for a type of care, insurers often try to negotiate discounts with hospitals over charges, especially for outpatient services, said Chapin White, an adjunct senior policy researcher at RAND and one of the authors of the study.

The insurers don’t have a strong incentive to demand the lowest prices because many, working for employers that are self-insured, are “literally spending someone else’s money,” he said. Insurers are also frequently paid based on how much the employer spends; they take in more revenue when the employer spends more.

In contrast to private insurers, “Medicare has been much more zealous about keeping its payments down,” said Sherry Glied, dean of the Robert F. Wagner Graduate School of Public Service at New York University.

Policy experts say the hospitals have come to rely on higher payments from employers and insurers. “The whole system is symbiotic,” Ms. Glied said. If private insurers paid the hospitals less, they “would look different and have a different cost structure.”

Anthem says it is now developing new networks made up of significantly fewer hospitals and will steer people to places that deliver the best quality at lower prices, said Paul Marchetti, a senior vice president at Anthem. “That’s where we are headed as a company,” he said.

It will be up to the employers to prove that they can exert discipline on controlling health care costs, which (Robert J. Smith, executive director of the Colorado Business Group on Health) called an open question: “Can the U.S. market become more effective or more efficient or do we need a single payer?”

https://www.nytimes.com…

QOTD: Fixed MLR will drive health care costs higher

By Don McCanne, M.D.
April 20, 2010

Although this concept has been touched upon in previous qotd messages, it is important that we clearly understand that the newly enacted medical loss ratio (MLR) requirements provide insurers with an incentive to further drive up health care costs.

How could that be? The intent of placing minimum limits on the medical loss ratio (the percentage of premiums spent on actual health care) was to limit the maximum percentage of premium dollars spent on administrative costs and profits. When the administrative costs exceed the permissible limits, the insurers, it was suggested, would find administrative efficiencies in their own operations, thereby helping to control overall spending. But since administrative services are the product that they are selling us, why would they want to pare back their own business?

Rather than achieving compliance with the medical loss ratio by reducing their own product, doesn’t it make much more sense from a business perspective to increase the amount of medical services being paid for, thereby achieving compliance with the ratio without any reduction in their own product? Of course it does.

One way to do that is to reclassify as health care as much as possible of the administrative services that they provide. As the Senate report indicates, WellPoint has already reclassified more than half a billion dollars of administrative expenses as medical expenses. This has a double accounting advantage on the ratio since it both reduces the administrative component while increasing the health care component.

What should concern us even more is the potential impact on health care spending. The more health care that the insurers authorize, the greater the health care component of the medical loss ratio. If they can hold their administrative costs at about the same level, increasing the health care component of the ratio allows them to increase… guess what… profits!

There are two ways to increase health care spending. The insurers can approve more medical services, increasing both the frequency and intensity of services authorized. More scary is that they are also motivated to increase health care spending by simply paying higher prices!

For those who insist that all we need is incremental fixes to the legislation that passed (ACA), tell us how you’re going to fix this one. Private market forces will always place profits before all else. Change the rules, and they will always find another way.

Imagine instead a health care financing system with about 3 percent administrative costs, zero profits, and incentives to control excessive prices and limit the excessive growth in the frequency and intensity of non-beneficial, high-tech services and products. That’s what we would have if we enacted an improved Medicare system that covered everyone.

https://pnhp.org…

Comment:

By Don McCanne, M.D.

It has long been known that Medicare is very effective in controlling hospitals’ prices for both inpatient and outpatient services. Though it is also known that private health plans negotiate higher prices with the hospitals, because of the confidentiality of rate negotiations few realized that the differential compared to Medicare rates was this great. RAND shows us that, in 2017, private health plans paid 204 percent of Medicare rates for inpatient care and 293 percent of Medicare rates for hospital outpatient services.

That should be enough to make us question why we should leave the private health plans in charge of health care financing. But there is something much more nefarious under all of this. It is how insurers handle the medical loss ratio – the percentage of revenues that insurers spend on health care which is considered a loss by Wall Street standards. But it is really the other part of the ratio – the administrative costs – that the insurers divert from patient care. There is nothing new here. Read my Quote of the Day comment above from almost a decade ago. Really, read it.

Health plans keep a percentage of funds paid to hospitals for their own administrative costs and profits. Because the medical loss ratio is generally a fixed percentage, insurers can increase their profits by increasing the volume of health care services they authorize. But worse, they further increase their profits by authorizing higher prices paid to the hospitals, because they keep percentage of those prices. So why should anyone be surprised that the RAND study shows that the private health plans are paying hospitals egregiously high prices, when those high prices are contributing to the spectacular Wall Street performance of the private insurers?

This is criminal. When the politicians and health policy community are supposedly looking for ways to try to control our outrageous national health expenditures, the health insurance lobbyists are right under their noses promoting these devious schemes to take care of their own industry while placing ever greater financial burdens on the backs of hardworking American families.

Hospitals claim that Medicare payments are too low (and they are much lower than private insurer payments) so they fear that a Medicare for All program would not pay enough to meet their costs. But under a well designed single payer system, hospital financing would change. Hospitals would be placed on global budgets, much like our fire departments, and capital improvements would be separately budgeted based on local need, ensuring appropriate capacity. Our public stewards would have a mission to provide adequate funds to meet the health care needs of the community, while preventing gouging of our public funds.

It is obvious that a single payer Medicare for all system would fix this and many of the other problems that are contributing to high costs and poor performance in our health care system. Now that we have shown once again that the private insurers are crooks, it’s time to throw them out and enact and implement our own publicly-financed and publicly-administered, single payer, improved Medicare for All. (How many times do I have to write this?)

ADDENDUM to the Quote of Day on RAND study of hospital prices

By Don McCanne, M.D.

ADDENDUM to Quote of the Day, “RAND: Private insurers pay hospitals excessive prices (but they left out why)” May 10, 2019:

Although an excerpt from The New York Times article stated the well known fact that hospital consolidation has given them an “outsize clout in price negotiations with employers,” that, and the leverage from “must have” hospitals, was knowingly left out of my comment because the message was already too long. Discussing only the theory that insurers increase their own profits by deliberately negotiating higher hospital prices may have left the false impression that this latter point was the main driving force behind high hospital prices in private insurance contracts as opposed to hospital prices under Medicare.

In a personal communication, one of the nation’s leading health services researchers, Richard Kronick of the University of California at San Diego, made the following point:

“While it is true that if an insurer has a contract with an employer in which the administrative fee is expressed as a percent of medical spending, then, in the very short run, if hospital prices increase then the administrative fee increases.  But that insurer is likely to lose business to other insurers that keep prices down, and also will lose money on the portion of business that is insured (unless it is able to increase premiums, but in most markets there is at least some competitive pressure that at least partially restrains that behavior).  I don’t think it is correct to state that insurers make more money when the prices they pay hospitals increase.”

My supposition is not totally without support:

“Insurers are also frequently paid based on how much the employer spends; they take in more revenue when the employer spends more.” – The New York Times, May 9, 2019

“On the other hand, the target ratios (MLR) might give them (the insurers) added incentive to raise premiums. By doing so, they could keep overhead and profit fixed, even as those items decline as a percentage of the premium dollar.” The Washington Post, April 18, 2010

At PNHP we try to rigidly adhere to facts. Because of my failure to emphasize the importance of hospital consolidation and “must have” status in hospital price negotiation, I considered retracting this Quote of the Day. However I decided not to since this still supports our contention that including private insurers as intermediaries in health care financing is deleterious when compared to the much more efficient method of administered pricing through our public Medicare program, though we do recommend a change to the more precise and equitable methods of global operating budgets and separate budgeting of capital improvements for hospitals.

I thank Professor Kronick for his input in clarifying this issue.

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

The Hospital Under Medicare for All

Our goal shouldn’t be to lower hospitals’ prices, but to eliminate them entirely. Medicare for All is the way to achieve that.

By Adam Gaffney, M.D., M.P.H.
Jacobin, May 10, 2019

More than 24 million people require hospitalization annually in the United States, and many more see their doctors or other providers, or have tests and procedures, in these institutions. Yet as the health care reform debate heats up, some have painted a grim picture of how hospitals would fare under Medicare for All — predicting slashed budgets, shuttered wards, service cuts, and mass layoffs. Especially for those who rely on hospital care, such claims may sound an alarm.A recent commentary in the Journal of the American Medical Association predicted that Medicare for All would put hospitals deep in the red, forcing them to shed up to 1.5 million jobs. An article in the New York Times last month gave voice to similar concerns that hospitals, especially vulnerable ones, would close “virtually overnight” under Medicare for All, or would abandon “lower-paying services like mental health” altogether.An editorial from the Washington Post warned that single payer could “shutter smaller or regional facilities whose margins are already low.” Even some progressives have given credence to such claims, predicting — or even calling for — deep reductions in “prices,” i.e., insurance payments to hospitals, under Medicare for All, or under other reforms.

These claims have a common, flawed underpinning. For one thing, they fail to appreciate a key cost baked into the “prices” paid by insurers today: the billing-related cost forced on hospitals by our dysfunctional multi-payer system, and so they discount the potential savings for hospitals under Medicare for All.

More fundamentally, however, the focus on hospital “prices” fails to recognize that a properly structured single-payer reform would not merely change what hospitals are paid, but how they are paid. Indeed, it could move us away from a system where hospitals have prices at all.

Savings in the Short-Run: Covering the Cost of Universalism

Imagine if we funded public schools the way we funded hospitals. Instead of giving schools a lump sum “global” budget to take care of all their students, we required them to issue per-student bills that were to reflect each student’s unique educational needs, and the precise mix of services they received. Assume also that teachers had to issue bills for every episode of instruction provided to each pupil daily, using a complex fee schedule incorporating the length, complexity, and/or intensity of every interaction. Finally, imagine that the tsunami of resultant bills went not just to the local government, but to a welter of different “educational insurance” plans, with varying rules and requirements; that these insurers frequently contested the charges; and that schools were required to collect co-pays and deductibles from parents, which varied depending on how much education a child “consumed” and their particular insurance plan.

Among other issues, the waste would be colossal: large bureaucracies would be needed to issue and process the bills, and the paperwork would suck up large amounts of teachers’ time, taking them away from, say, teaching. That’s exactly what plays out in hospitals. At one large academic medical center, 25 percent of all payments to the hospital for an ER visit were consumed simply by the cost of processing the bill. Overall, approximately one-quarter of American hospitals’ total revenues is consumed by administrative and billing expenses.

In contrast, Canadian and Scottish hospitals receive global lump sum budgets, similar to public schools, which allows them to eschew “per patient” billing altogether, and spend only 12 percent of revenue on administration. Single payer, in other words, could cut US hospitals’ administrative spending by half, an enormous saving since hospital spending accounts for about one-third of our $3.5 trillion health bill.

This has two implications. Because hospitals’ wasteful administrative costs are baked into prices, single payer would allow us to reduce payments to providers without shrinking the resources they have available to take care of patients. More likely, as demand for care rises once everyone is covered and financial barriers to care like co-pays and deductibles are eliminated, hospitals could increase the amount of care they provide within their existing budgets.

Single-payer financing, in other words, can cover the cost of true health care universalism in the short run. And in the long run, it provides a second critical tool to control hospital cost growth.

Savings in the Long Run: Controlled and Equitable Capital Expansion

Let’s return to the public school analogy for a moment. Assume that once schools were done billing, they could retain revenues that exceeded their costs, i.e., they could turn a profit, even if they remained legally not-for-profit. And let’s say that these profits were the source of funds for capital projects: schools could use them (together with private debt) to upgrade their facilities, construct new wings, acquire new technology, or even build whole new schools. Finally, assume that schools competed for students — especially from well-off families — and that some avoided the poor kids.

In this scenario, highly profitable school systems would, predictably, enter a self-perpetuating cycle of expansion, upgrades, more business, more profits, more growth, hence rising operating costs. In contrast, unprofitable schools would fall behind, and could even go bankrupt, resulting in entire districts (especially poor ones) being left without a single school. (Obviously, large inequities exist among schools today — but they would be massively exacerbated by this financing system).

This is, again, a reasonable description of how hospitals are paid. As Public Citizens’ Sidney Wolfe and Physicians for a National Health Program co-founders (and colleagues) Steffie Woolhandler and David Himmelstein argued last year, hospitals’ profits are the source of funds for capital expenditures, like new wings, major new equipment, sumptuous atrium lobbies, or even the construction of new hospitals. Over the long term, this cycle of profit- and debt-funded capital expansion leads to rapidly escalating operating costs, and hence overall health spending, a key reason why US health care spending diverged so sharply from those of other nations in the second half of the twentieth century. In the 1970s, for instance, hospital spending soared, not because people used the hospital more, but because of an enormous expansion in hospital capital.

The problem is not capital expansion per se (nobody wants dilapidated hospitals), but inequitable and unregulated capital expansion tethered to profitability, rather than community health needs. Today, hospitals in well-served areas often relentlessly expand and upgrade, even as needed hospitals shutter in poorer areas, as seen with the recent epidemic of rural hospital closures. This system of hospital capital financing leads to what British general practitioner and epidemiologist Julian Tudor Hart called the “inverse care law,”: the “availability of good medical care,” as he put it, “tends to vary inversely with the need for it in the population served.”

Moreover, unconstrained capital investments can sometimes actually lead to worse care. For complex procedures like transplants, hospitals that treat only a small number of patients cannot develop (or maintain) the expertise needed to achieve the best outcomes.

Bloated costs, in other words, go hand in hand with inequity, and can even compromise quality. The solution is simple. Under Physicians for a National Health Program’s single-payer proposal, similar to the House Medicare for All bill recently launched by Representative Pramila Jayapal, hospitals’ global budgets could only be spent on operating costs. None of the budget could be retained as “operating margins” (i.e., profits), or spent on expansion. Instead, a separate, dedicated stream of federal funds would pay for hospital capital expansion, based on community need and not profitability, as is done in many countries.

Such policy tools are essential to control costs and ensure an equitable and efficient distribution of health care resources moving forward. Achieving this, though, means a paradigm shift in our conceptualization of health care “prices.”

Beyond “Prices”: Reimagining Hospitals as Social Institutions

A decade ago, the mainstream health care discourse was dominated by a concern that people were using too much hospital care: reducing costly ER visits and hospitalizations by the uninsured — by giving them a primary care doctor — was commonly cited as a justification for the Affordable Care Act. But that framing was simply false. Uninsured people actually use the hospital less (and the ER no more) than those with good coverage, while Americans overall actually use the hospital less than people in most other OECD nations.

Analysts then concluded that if the quantity of care we use isn’t the problem, high prices must be the explanation for our high health care costs. Consequently, in more recent years, mainstream health care discourse has swung behind an emphasis on lowering health care “prices,” whether by market mechanisms or regulation.

This shift is mostly a step in the right direction. But a simplistic conceptualization of “prices” will, invariably, fail us too.

There are three problems with centering our health care reform efforts on the “prices” paid by insurers.1 First, health care “prices” lump together a wide variety of items. As I’ve argued, insurance payments to hospitals pay for things we care about deeply (i.e., the delivery of quality hospital care), things we couldn’t care less about (i.e., the cost of processing hospitals bill), and things that are often valuable but need to be controlled in an equitable fashion (i.e., capital expansion). Single payer uniquely allows us to extract administrative waste — and thereby cover the cost of providing more care to the previously uninsured and underinsured — while controlling capital spending and directing the investments to what’s needed rather than what’s profitable.

If instead, as some propose, we were to indiscriminately slash hospital “prices” (while retaining current financing mechanisms), we would have no control over where the axe would fall. Hospitals would drop unprofitable service lines like mental health and intensify efforts to avoid unprofitable patients (e.g., the homeless); staffing ratios might rise; attacks on labor would likely intensify, even as executive pay and spending on advertising was maintained — or even increased! And in such a system, of course, unprofitable hospitals would still shutter.

The second problem is more epistemological. Quite simply, hospitals shouldn’t have prices, any more than public schools, parks, or libraries. For one thing, the very meaning of per-user “prices” in social institutions is murky. We could attempt to attribute the costs of maintaining Central Park to distinct visitors, I suppose, based on how long they spent lounging on the Great Lawn, whether they circle the reservoir once or twice, whether or not they ask for directions from park staff, and so forth. But it would be a very crude, and perhaps intrinsically fraudulent, effort. Regardless, it would necessitate a major diversion of park resources into a bookkeeping apparatus with zero social value.

Per-patient hospital bills may be somewhat more meaningful, but at the end of the day, a hospitalization, like a park visit or a year in school, is not analogous to mass-produced commodities churned out on assembly lines. A hospitalization for pneumonia may involve a few doses of intravenous antibiotics followed by discharge home after one or two nights, or it may lead to months in the ICU, requiring the services of nearly every specialist in the hospital. What is the meaning of the price of pneumonia?

The third problem with focusing on prices, however, is the most serious. It is not merely that the administrative effort needed to bill individual users of a park, school, or hospital is extravagantly wasteful, or that these prices have questionable meaning and validity. More fundamentally, allowing social institutions to bill individual users, and then use the resultant profits to expand and grow and modernize, invariably means that these institutions have their quality, technological prowess, and beauty — indeed their very existence — determined by profitability, by the logic of the market.

And they are too important for that.

https://www.jacobinmag.com…

Notes

1. To be clear, I specify “paid by insurers,” because it should be obvious that however hospitals are paid, patients should not be exposed to the cost of their hospitalization — protection from such costs is the entire point of insurance. Anyone who thinks patients need “skin in the game” to keep them from frivolously using the ICU where I work clearly has no idea what happens there.

Uninsured have plateaued; underinsured are increasing

Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2018

By Robin A. Cohen, Ph.D., Emily P. Terlizzi, M.P.H., and Michael E. Martinez, M.P.H., M.H.S.A.
U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics, May 2019

In 2018, the percentage of persons of all ages who were uninsured at the time of interview was 9.4% (30.4 million). There was no significant change from the 2017 uninsured rate of 9.1% (29.3 million). A total of 18.2 million fewer persons lacked health insurance coverage in 2018 compared with 2010 (48.6 million or 16.0%).

Estimates of enrollment in HDHPs and CDHPs

In 2018, 45.8% of persons under age 65 with private health insurance were enrolled in an HDHP, including 20.4% who were enrolled in a CDHP (an HDHP with a health savings account [HSA]) and 25.4% who were enrolled in an HDHP without an HSA (Figure 11) (see Technical Notes for definitions of HDHP, CDHP, and HSA). Among those with private health insurance, enrollment in HDHPs has generally increased since 2010. The percentage of persons enrolled in an HDHP increased 20.5 percentage points, from 25.3% in 2010 to 45.8% in 2018. More recently, the percentage of those enrolled in an HDHP increased from 43.7% in 2017 to 45.8% in 2018. The percentage of persons enrolled in a CDHP almost tripled, from 7.7% in 2010 to 20.4% in 2018. More recently, the percentage of those enrolled in a CDHP increased, from 18.2% in 2017 to 20.4% in 2018. The percentage of those enrolled in an HDHP without an HSA did not change significantly from 25.5% in 2017 to 25.4% in 2018.

https://www.cdc.gov…

The silent affordability crisis facing sick people

By Drew Altman
Axios, May 8, 2019

People with major medical illnesses are having serious problems paying for the health care they need — a crisis that is flying under the radar while attention is focused on hot policy issues like the Affordable Care Act and “Medicare for All.”

The big picture: A survey by the Kaiser Family Foundation and the Los Angeles Times shows that a strikingly large share of people with serious medical conditions are struggling to pay their medical bills, often wreaking havoc with their family budgets and causing them to cut back on care.

By the numbers: Take people with employer coverage who have a chronic condition such as hypertension, asthma, a serious mental health condition, diabetes, heart disease or cancer. It’s not a small group; just over half of those with employer coverage say someone in their family is currently receiving treatment for one of these or another chronic condition.

  • 6 out of 10 people in this group report that they or a family member skipped or postponed medical care or prescription drugs they needed because of costs, or tried a home remedy instead.
  • High deductibles can make things worse: Among those with chronic conditions whose deductibles are at least $3,000 for an individual or $5,000 for a family, three-quarters report skipping or postponing some type of care.
  • About half — 49% — say they or a family member had problems paying medical bills or difficulty affording their premiums, deductibles or co-pays in the last year.

There are ripple effects on family budgets, too. A substantial share of people reported taking measures such as increasing credit card debt (28%), using up most of their savings (26%), taking an extra job (19%), and borrowing money from others (14%) to pay for health care or insurance costs.

And this was over the last year. We ask the question that way because people can more easily remember more recent experiences. It’s not hard to imagine that the share of people with chronic conditions who experience these problems over the course of a longer time period is much higher.

People who do not have serious illnesses also struggle with affordability challenges, but fewer of them do (29%). Their worries that they will get sick and not be able to pay their bills fuels health care as a political issue.

The bottom line: It may not be surprising that people who are sick have more problems; they use more care. But it is the opposite of how a compassionate and functional insurance system should work.

https://www.axios.com…

Comment:

By Don McCanne, M.D.

Although the number of uninsured has declined since implementation of the Affordable Care Act (ACA), this year’s report can be summarized by noting that the number uninsured at the time of the 2018 analysis was 30.4 million, a statistically insignificant change from 2017 when it was 29.3 million (though this is being reported in the media as an increase in the numbers of uninsured). The point is that too many remain uninsured as the accomplishments of ACA have plateaued.

In terms of the numbers of people involved, an even greater problem is the statistically significant increase in the numbers of underinsured. The data on high deductible health plans, with or without a health savings account, demonstrate that this is a problem affecting far too many of America’s working families. In his Axios commentary, KFF’s Drew Altman describes the consequences of high deductible plans, concluding, “it is the opposite of how a compassionate and functional insurance system should work.”

Patching the Affordable Care Act or adding a Medicare public option will not fix this. Most of the perversities of our current health care financing system would remain in place. We need a bona fide, single payer, improved Medicare for All if we are going to ensure that affordable health care is there for everyone who needs it.

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

Preventing diabetic ketoacidosis through health financing system design

How the U.S. health-care system puts people with diabetes in danger

By Adam Gaffney, M.D., M.P.H.
Washington Post, May 8, 2019

The blood sugar rises, and nausea and vomiting follow. The blood acidifies, the breath hastens, dehydration and then delirium ensue: That’s how ketoacidosis, a feared complication of diabetes, progresses. Diabetic ketoacidosis, which results in nearly 190,000 hospitalizations a year, is a condition I treat frequently as an ICU physician: We infuse intravenous insulin, saline and electrolytes, while carefully tracking sugar levels and blood chemistries and vital signs. If all goes well, the sugar normalizes, acid levels fall, the breath begins to slow, the appetite returns. Not always, however: Every year, hundreds of people die of the condition.

What makes this such a tragedy is that the complication is typically preventable through the regular use of insulin. Yet the soaring price of that drug has put it beyond the reach of many — and for many of the 29 million Americans without insurance, insulin might be unaffordable at any price.

But what about ketoacidosis in a country with universal health care? I joined some colleagues at Harvard Medical School, the Cambridge Health Alliance and the City University of New York to collaborate with a team of researchers at the University of Manitoba in Canada to find out.

We compared ketoacidosis hospitalization rates in the United States and Canada, focusing on the transition from adolescence to young adulthood — a vulnerable time when many young people lose or change health coverage. Our results, published in the Journal of General Internal Medicine, were striking. Based on our analysis of two large databases of hospitalized patients — one covering the United States and the other the province of Manitoba — we found that the hospitalization rate for diabetic ketoacidosis among children and adolescents was somewhat higher in the United States than in Canada. However, as teenagers became young adults, the rate soared by 90 percent in the United States, compared with a 23 percent rise in Manitoba.

At least three major differences in the way our nations finance health care could contribute to this result. First, uninsured rates rise dramatically in young adulthood in the United States. And as numerous studies have demonstrated (to say nothing of common sense), the uninsured go without all types of needed medical care, ranging from doctors’ visits to prescription drugs. In Canada, in contrast, this is not a problem; the uninsured rate is zero.

A second factor might be Americans’ exposure to onerous out-of-pocket costs for medical care. Forty-six percent of privately insured adults have “high-deductible” health plans that require them to spend substantial amounts of money out of pocket before insurance kicks in. Such plans may be dangerous for patients with diabetes. A 2017 study, for instance, found that individuals with diabetes who were pushed by their employers into a high-deductible health plan saw specialists less but wound up in the ER with acute complications more. In Canada, in contrast, physician care and hospital care is free at the time of care; co-pays and deductibles are $0.

The Canadian system does not universally cover prescription drugs as comprehensively as it does other care, unlike places such as Wales or Scotland, where everyone has drug coverage without co-pays or deductibles. Still, drugs are more affordable in Canada than the United States: In 2015, Bloomberg reported that one 3-milliliter pen of long-acting insulin cost $186 in the United States (accounting for rebates), three times the $67 it cost in Canada. Meanwhile, about 16.8 percent of older adults in the United States report not filling a drug prescription or skipping dosages of a medication because of cost — about double the proportion in Canada.

Finally, there is a related problem that researchers call “churn.” Most Americans have little stability in their insurance coverage: Your plan can change every time your boss says so, or whenever you (or maybe your partner or your parents) lose or change jobs. A recent analysis from Axios estimated that 2 million workers, together with their families, lose or change coverage every month. Churn is not merely inconvenient, though; it can be hazardous to your health. A 2016 study found that churners with low incomes frequently face dangerous disruptions in care: 20 percent change doctors, while 34 percent skip medications or stopped taking them because of discontinuities in coverage. In Canada, in contrast, there is no churn, because there is but one “single payer” that provides universal coverage seamlessly throughout the life span, without insurance networks or disruptive plan-switching.

Discontinuities in coverage don’t affect only the young. Take Meaghan Carter, a 47-year-old nurse with Type I diabetes who was found dead on her couch last Christmas, as USA Today recently reported. At the time of her death, the paper noted, she was temporarily uninsured because she was in between jobs, and she had $50 in the bank and no insulin left in her fridge, leading her family to attribute her death to ketoacidosis.

Making the American health-care system work for patients with chronic diseases such as diabetes requires rectifying not just one, but all three of these interconnected dysfunctions. Yet of the various health-care reform proposals under discussion today, only one — single-payer, “Medicare-for-all” — would do so: It would cover all the insured, basically eliminate financial barriers to care such as co-pays and deductibles, and bring to an end the dangerous disruptions of coverage that are so common in our fragmented system. This is one reason that I, like so many in the medical profession, support it.

Individuals with chronic illnesses such as diabetes deserve no less. Without such a transformative reform, it seems likely that we’ll still have patients with ketoacidosis coming through the doors of ICUs, breathing deep, dry as a bone, acid levels soaring — even when it might have been avoided had a better, more just health-care system been in place.

Dr. Adam Gaffney is an Instructor in medicine at Harvard Medical School and a pulmonary and critical care physician at the Cambridge Health Alliance and serves as president of Physicians for a National Health Program.

https://www.washingtonpost.com…

The Incidence of Diabetic Ketoacidosis During “Emerging Adulthood” in the USA and Canada: A Population-Based Study

Journal of General Internal Medicine, May 8, 2019

https://link.springer.com…

Comment:

By Don McCanne, M.D.

The fact that a 3-milliliter pen of long-acting insulin costs $67 in Canada is shameful. Canadian diabetics of limited means can have difficulty affording that and may be tempted to reduce the dose or go without, risking the onset of ketoacidosis and even death.

It has often been said that no health care system is perfect, and that is true. But contrast Canada with the United States. That same dose of insulin costs $186 in the United States. Even of greater concern, the diabetic in the United States may be uninsured or has a significant chance of having inadequate coverage. For young adult diabetics going out on their own in the United States, the incidence of ketoacidosis soared 90 percent, whereas it increased 23 percent in Manitoba.

Canada can do better (pharmacare anyone?). But the United States? We certainly have no excuse either. We have the resources and the health policy know-how to do better than Canada and every other nation in the world. We should not have one single death from ketoacidosis that is due to financial barriers between the diabetic and her life-saving insulin.

We need a single payer Medicare for All system to eliminate the financial barriers to health care so that we can give more attention to reducing the other socioeconomic barriers as well.

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

The Incidence of Diabetic Ketoacidosis During “Emerging Adulthood” in the USA and Canada: a Population-Based Study

By Adam Gaffney, MD, MPH; Andrea Christopher, MD, MPH; Alan Katz, MBChB, MSc; Dan Chateau, PhD; Chelsey McDougall, MSc; David Bor, MD; David Himmelstein, MD; Steffie Woolhandler, MD, MPH; and Danny McCormick, MD, MPH. Journal of General Internal Medicine, published online May 8, 2019. DOI: 10.1007/s11606-019-05006-6

Abstract

Background:  As children with diabetes transition to adulthood, they may be especially vulnerable to diabetic ketoacidosis (DKA).  Cross-national comparisons may inform efforts to avoid this complication. 

Objective: To compare DKA hospitalization rates in the US and Manitoba, Canada, during the vulnerable years known as “emerging adulthood.”

Design: Cross-sectional study using inpatient administrative databases in the US (years 1998-2014) and Manitoba, Canada (years 2003-2013). 

Participants: Individuals age 12-30 years hospitalized with DKA, identified using ICD-9 (US) or ICD-10 codes (Manitoba). 

Main Measures: DKA hospitalization rates per 10,000 population by age (with a focus on those aged 15-17 vs. 19-21).  Admissions were characterized by gender, socioeconomic status, year of hospitalization, and mortality during hospitalization.

Key Results: The DKA rate was slightly higher in the US among those aged 15-17: 4.8 hospitalizations/10,000 population vs. 3.7/10,000 in Manitoba.  Among those aged 19-21, the DKA hospitalization rate rose 90% in the US to 9.2/10,000, vs. 23% in Manitoba, to 4.5/10,000.  In both the US and Manitoba, rates were higher among those from poorer areas, and among adolescent girls compared to adolescent boys.  DKA admissions rose gradually during the period under study in the US, but not in Manitoba. 

Conclusions:  In years of “emerging adulthood,” the Canadian healthcare system appears to perform better than the US in preventing hospitalizations for DKA.  Although many factors likely contribute to this difference, universal and seamless coverage over the lifespan in Canada may contribute.   

Introduction

The years that follow adolescence—a period developmental psychologists describe as “emerging adulthood”—are a time of exploration, but also vulnerability, particularly for those with illnesses like diabetes mellitus.(1-4)  During this period many young people leave home, gain independence, transition from pediatric to adult medical care (often rupturing the continuity of their healthcare), and, in the United States, lose health insurance. (2, 4, 5)  For some in this age group, disordered eating and substance use increase, while new health problems accrue.(1, 2)  These changes put these individuals at increased risk for non-adherence to insulin and thus acute complications, like diabetic ketoacidosis (DKA).   

DKA is dangerous and costly,(6,7, 8) but it is fortunately also largely preventable.(6)  As one of many “ambulatory care sensitive conditions”—complications that good ambulatory care can prevent—DKA rates are a proxy measure of outpatient quality and access to care.(9, 10)  

Using large inpatient databases, we investigated DKA hospitalizations among adolescents and emerging adults in the US and in Manitoba, Canada.  We focused on these age groups because it is a time of particularly sharp differences between the two nations in insurance coverage and continuity of primary care.  In Canada, a single-payer system assures universal, seamless coverage across the lifespan, while family physicians provide most primary care. In contrast, emerging adults in the US usually change insurance coverage and physicians, and many become uninsured.  We hypothesized that these health financing and organizational factors might confer an advantage to Canada in the prevention of DKA.

Methods

Data Sources

For the United States, we analyzed data from the National Inpatient Sample (NIS) (previously known as the Nationwide Inpatient Sample) for 1998-2014.  Prior to 2012, the NIS consisted of all hospitalizations from a 20% sample of US hospitals; since then, it has consisted of a 20% sample of hospitalizations from all US hospitals.  Because Texas and Pennsylvania grouped age in five-year categories for at least some children, we excluded those states for years prior to 2012, when the NIS stopped including state identifiers.

The NIS data includes up to 25 diagnoses for each admission, coded using the ICD-9.  We identified all hospitalizations among persons aged 12-30 whose primary diagnosis was DKA or a closely related condition, such as diabetes with hyper-osmolarity or diabetes with other coma (online appendix); these hospitalizations are henceforth referred to as “DKA hospitalizations”.  We repeated our main analysis using only the four most specific ICD-9 DKA codes (250.10, 250.11, 250.12, and 25.13), which accounted for 97% of the hospitalizations identified using our broader definition, and found virtually identical results, which we do not report further.

To estimate population denominators for calculation of DKA rates, we analyzed the Census Bureau’s Current Population Survey (CPS) Annual Social and Economic Supplements for 1999-2015, which provide data for the preceding calendar year.  For years prior to 2012, we excluded individuals from Texas and Pennsylvania.

We obtained data on hospitalizations in the province of Manitoba for the years 2004-2013 from the Population Research Data Repository at the Manitoba Centre for Health Policy at the University of Manitoba.  The Manitoba data included 100% of hospitalizations, and tabulated diagnoses based on ICD-10-CA codes,11 which we aligned with the US ICD-9 codes. Patients aged 12-30 were included if they had a code for DKA or a related condition (online appendix).  We also performed the analyses using a broader set of diabetes-related codes (online appendix), which yielded somewhat higher rates, but otherwise similar results, which we do not report further.  The Repository contains a complete population registry file, which was used to calculate the denominator for hospitalization rates.

Analysis

Our primary outcomes were age-specific annualized DKA hospitalization rates.  For this, and most other analyses, we averaged data for all study years. All analyses were carried out using SAS version 9.4 (Cary, N.C.) and (for the US) employed weights provided by the NIS that produce national estimates, and SAS procedures that account for complex sampling.

Our main analyses examined age trends in DKA hospitalization rates per 10,000 population in the US and Manitoba, and particularly cross-national differences before and after age 18, the age at which multiple transitions often occur, including movement out of the family of origin, loss of eligibility for public insurance in the US (Medicaid), and change from pediatric to adult medical physicians. We estimated hospitalization rates in the US and Manitoba for a “before” subgroup (ages 15-17) and an “after” subgroup (ages 19-21).  For this comparison we excluded those aged 18 years because, in the US, major insurance transitions often occur between the 18th and 19th birthdays. We then calculated the difference in hospitalization rates in the “before” and “after” groups in the US and Manitoba.

We characterized US patients by insurance status at discharge (dichotomized as insured or uninsured), race (although many states do not report race), sex, year of hospitalization, and in-hospital death (using the NIS “died” variable, which is based on discharge disposition records).  As a proxy for socioeconomic status we used median income of the patient’s ZIP Code of residence (categorized into quartiles). This ZIP Code income analysis was carried out only for the years 2003-2014 because prior to 2003, the NIS defined the ZIP Code income variable differently. Patients hospitalized in Manitoba were characterized by postal-code income quintile (derived from Canadian census dissemination area data), sex, in-hospital death, and year of hospitalization.

To calculate DKA hospitalization rates in the US we used corresponding CPS estimates for the denominator (e.g. hospitalization rates of the uninsured used CPS estimates of the uninsured as the denominator).  For the ZIP-code income quartile analysis, the denominator was the total population estimate divided by four. For Manitoba, we used actual population figures for each postal code income quintile.

We calculated mean charges for US DKA hospitalizations for 2014 using the NIS’ variable for total charges.  To estimate “excess” DKA hospitalizations in the US for persons age 18-30, we first calculated the expected hospitalization rate had the rise in the US hospitalization rate between age 15-17 and age 18-30 been equal to the change with age in Manitoba.  We then subtracted this “expected” rate from the observed rate, and used this excess rate and mean charges per DKA hospitalization to estimate total excess DKA spending for those aged 18-30.

The study was deemed exempt from review by the Institutional Review Board of the Cambridge Health Alliance.

Results

We identified and analyzed 168,946 patients hospitalized with DKA in the US and 1,278 in Manitoba.  The Table presents characteristics of these patients. In the US, 41.7% were non-white, 52.5% were female, and 20% were uninsured. A large share of admitted youths resided in lower-income ZIP codes.  Similarly, in Manitoba, 52.3% of hospitalized DKA patients were female, and were also disproportionately from lower income areas.

Table: Selected characteristics of patients ages 12-30 hospitalized with DKA in the US and Manitoba

 

US

(n=168,946)

 Manitoba

(n=1278)
Race
  White 58.3 % –
  Black 25.0
  Hispanic 12.3
  Asian or Pacific    Islander 0.9
  Native American 0.8
  Other 2.8
Sex
  Male 47.5 47.7 %
  Female 52.5 52.3
Insurance
   Uninsured 20.0 0
   Insured 80.0 100*
ZIP/Postal Code Income Quartile (US)

or Quintile (Manitoba), lowest to highest
1 36.0 29.7
2 28.1 24.7
3 21.8 20.7
4

5

 14.1

–

 14.9

9.9
DKA diabetic ketoacidosis. In the USA, 35,795 had missing data on
race, 357 on sex, 580 on insurance status, and 3199 on ZIP code
income quartile. For ZIP code income, percentages reflect years 2003–
2014. Race data were not available for Canada
*Data on percent population insured in Canada are for overall
Canadian population and are drawn from OECD health statistics (12)

Figure 1 (Panel A) displays DKA hospitalization rates by age in the US and Manitoba.  In the US, the rate was 4.2/10,000 at age 15, after which it began rising, peaking at 9.7/10,000 at age 19.  In Manitoba, the DKA hospitalization rate remained below 4.0/10,000 until age 17, and peaked at 5.4/10,000 at age 24.  Figure 1 (Panel B) shows the corresponding uninsurance rates by age (averaged across study years) for the overall US population, which rose from 12.8% at age 17, to 23.6% at age 19, and 31.7% at age 23; in contrast, Canada has close to 100% population insurance coverage. (12)

Figure 2 displays the DKA hospitalization rates in the US and Manitoba for the “before” (age 15-17) and “after” (age 19-21) subgroups.  In the “before” group, the rate was 4.8/10,000 in the US and 3.7/10,000 in Manitoba. In the US, the rate increased to 9.2/10,000 (a 90% rise) in the “after” group, while in Manitoba, it increased only 23% to 4.5/10,000.

Figure 3 shows US DKA hospitalization rates by age and income quartile of the patients’ ZIP code.  DKA hospitalizations were more frequent in lower-income ZIP codes, a difference that widened after age 18.  Among residents of the highest-income ZIP codes, the hospitalization rate increased 84.4% between the before (age 15-17) and after (age 19-21) subgroups, vs. an increase of 117.7% for residents of the lowest income ZIP Codes.

Lower income also predicted DKA hospitalizations in Manitoba; rates were 2.0/10,000 in the highest income quintile, rising to 5.4/10,000 in the lowest.   DKA hospitalization rates rose as youths entered emerging adulthood in all quintiles except the highest (online appendix, E-Figure 1).

The in-hospital DKA mortality rate increased with age in the US, from 0.5 per million population for ages 12-17, to 0.9 per million for ages 18 – 23, and to 1.4 per million for ages 24-30.  No inpatient DKA deaths occurred in Manitoba during the study period.

DKA hospitalization rates were higher for females than for males in the US from ages 12 – 25, especially in adolescence, with a peak female-to-male ratio of 1.4 at age 16.  However, after age 25, the DKA hospitalization rate for men exceeded that of women. A spike in the female-to-male ratio during adolescence was also observed in Manitoba, peaking at 2.7 at age 16 and 17 (online appendix, E-Figure 2).

In the US, the rate of DKA hospitalizations among the uninsured (6.1/10,000) was slightly lower than among the insured (7.0/10,000), a difference that was most marked among children but was attenuated at older ages, as DKA hospitalizations rose more steeply among the uninsured in the early years of emerging adulthood.  These insurance figures should be interpreted cautiously since a hospitalization for diabetes may cause some persons, especially children, to gain public coverage through a variety of mechanisms, potentially confounding the relationship between DKA and insurance.

The DKA hospitalization rate increased over time in the US, from 5.1/10,000 in 1998 to 8.9/10,000 in 2014.  In contrast, in Manitoba DKA hospitalizations declined from 2003 to 2013 (online appendix, E-Figure 3).

Charges for a DKA hospitalization in the US averaged $21,445 in 2014.  If the difference between US and Manitoban DKA hospitalization rates among those aged 15-17 (4.8/10,000 – 3.7/10,000, or 1.2/10,000) had persisted for those aged 18-30, the US DKA hospitalization rate among those aged 18-30 would have been 2.2/10,000 lower.  Based on this figure, the cost of “excess” DKA hospitalizations in the US totaled $263.1 million in 2014.

Discussion

DKA hospitalization rates increased during emerging adulthood in both the US and Manitoba, but this rise was far steeper in the US. While DKA hospitalization rates were higher among US residents of poorer ZIP codes at all ages, this disparity widened after age 18, implicating socioeconomic factors as contributors to the US upswing.  However, disparities in DKA hospitalization rates by income exist in Manitoba as well. Additionally, DKA hospitalization rates appeared to rise over time in the US but not in Manitoba. Overall, our results suggest that the Canadian healthcare system may be better at preventing DKA during the transition to emerging adulthood.

Differences in diabetes prevalence are unlikely to explain the cross-national differences we observed.  While diabetes prevalence among adults (most of whom have type II diabetes) is higher in the US than in Canada (13), this is not the case for young people, where type I diabetes predominates.  Among people younger than 20, the prevalence of diabetes in the US in 2009 was 0.2%, (14) while in Canada, the figure (excluding those less than one year old) was 0.3% around the same time. (15)  In 2015, the estimated incidence of type I diabetes among children under age 15 was slightly higher in Canada than in the US.(16 ) Additionally, in our study, DKA hospitalization rates in the nations were similar in childhood, sharply diverged in early adulthood, and then converged somewhat in the mid-20s, a pattern that cannot be explained by differences in prevalence.

One possible cause of a US-Canada difference is that emerging adults in the US frequently undergo health insurance disruptions, including loss of coverage, while Canada offers universal, seamless coverage.  In the US, children more readily qualify for coverage under Medicaid than adults. Prior to the implementation of the Affordable Care Act, the median state eligibility threshold was 235% of the federal poverty line for children,(17) vs. 61% for working parents. (18) Moreover, many states had simplified enrollment procedures or special programs for children that made it easier for them to obtain public coverage.  

However, while the ACA lifted the Medicaid eligibility threshold for adults to 138% of the FPL in states that accepted the Medicaid expansion, eligibility standards for adults remain much more stringent than for children.  Consequently, as of 2016, public programs covered 41.5% of children younger than 19, vs. 23.1% of those age 19 to 25. (19) And notably, undocumented immigrants, including children, continue to face additional barriers in the US: they cannot purchase subsidized insurance on the ACA’s marketplaces or, for the most part, participate in Medicaid.  

However, even those emerging adults who remain covered over time frequently face disruptive insurance transitions in the US.  Until 2010, most private family plans terminated a dependent child’s coverage at age 18 or 19, although the ACA raised this threshold to 26.  Changes in coverage often require changing doctors since many insurance plans have narrow provider networks; such “churn” has known harmful effects. (20)

Our observation that relatively few young people hospitalized with DKA in the US were uninsured likely reflects reverse causation.  Insurance status in the NIS is defined at the time of discharge, and hospital social workers often arrange coverage for uninsured patients (especially retroactive Medicaid coverage) during a hospital stay.  Hence, insurance coverage of DKA patients at hospital discharge may not reflect their coverage prior to hospital admission. Not surprisingly (given the age-based eligibility differences) uninsured DKA hospitalizations increased sharply after age 18.  

However, multiple factors could have contributed to our results.  For instance, underinsurance in the US may have played a role. While Medicaid generally requires no, or very low copayments or deductibles, most Americans with private insurance face significant cost sharing for physician services, hospitalizations, and medications.  Prescription drug cost-sharing reduces adherence to insulin, (21) and discontinuation of insulin because of cost can lead to DKA. (22)  Underinsurance also reduces the use of diabetic specialty care: patients with diabetes transitioned into high-deductible healthcare plans are less likely to see a specialist, and, among those with low-incomes, more likely to visit the ER for diabetes-related complications. (23)  In Manitoba, patients pay nothing for physician or hospital services, but must pay an annual, income-related deductible before medications become fully covered, although those on social assistance do not pay any deductible.

While coverage-related barriers to care increase acute complications from conditions like diabetes, (24-28) and likely explain some of the US/Canada differences we observed, other factors probably also play a role.  Cultural differences between pediatric and adult specialty care, declining parental oversight, increased financial independence and strain, and a difficult-to-navigate adult healthcare landscape could all contribute to poor outcomes for emerging adults with diabetes. (1, 2)  About one third of individuals aged 22 – 30 at one US diabetes center, for instance, experienced a six-month gap between pediatric and adult endocrinology visits. (29)

Several organizational factors in Manitoba might mitigate care disruptions.  Most primary care in Canada is delivered by family doctors, minimizing age-related primary care transitions.  Although the vast majority of children with Type I diabetes in Manitoba (including 95% of those under age 14) are cared for by the specialized diabetes program at the Children’s Hospital in Winnipeg, (30) the continuity provided by family practitioners may provide a useful backstop during the transition from pediatric to adult specialty care.  Starting in 1995, the Winnipeg center also implemented a program designed to transition adolescents aged 13-18 into adult medical care. (31) A second program, launched in 2002 to provide navigators and other resources to guide diabetic teens into the adult medical care system, (31, 32) apparently reduced the proportion of emerging adults who dropped out of medical care, although not DKA rates. (32)

Finally, non-medical factors, such as youth mobility, may come into play.  U.S. emerging adults may be slightly less likely to reside in their parental home. (33, 34)

While overall age trends and cross-national differences were our main focus, other patterns are also notable.  The spike in hospitalization rates we observed in both nations among adolescent females as compared to males does not reflect the epidemiology of type I diabetes, which affects males and females at similar rates.35 This disparity may instead reflect young females’ higher rates of disordered eating, or insulin omission for the purpose of weight loss—both of which are risk factors for DKA. (2)

Our finding of a socioeconomic gradient in DKA hospitalizations in both nations is consistent with previous findings connecting socioeconomic status (and area-level deprivation) with DKA. (36)  The higher incidence of DKA among lower income youths likely reflects a combination of factors, including poorer healthcare access in the US, as well disparities in health literacy and food security in both nations.

Some limitations of our study should be noted.  The data we analyzed represent hospitalizations, not individuals.  Hence, we cannot differentiate first episodes of DKA from recurrent admissions.  Additionally, we used income in patients’ postal code as a proxy for socioeconomic status, an imperfect measure.  Manitoba’s experience may not be entirely typical of Canada-wide trends. The time period of study differed between the populations, but substantially overlapped.  The two nations used different versions of the ICD coding system, although coding artifacts could not explain differing age trends. Finally, our study design does not allow us to definitively prove that differences in insurance coverage caused the differences we observed.

A century ago, young people with diabetes could expect to live for a year or two following diagnosis. (37) The development of insulin at the University of Toronto in 1922 was a milestone, transforming DKA from a death sentence to a treatable illness.  Today, despite this progress, far too many suffer from DKA. Our findings suggest that the US healthcare system fails many emerging adults with diabetes, and that improving the pediatric-to-adult medical transition is imperative. (4)  They also carry broader implications: reforms of the healthcare system—including achieving universal coverage, eliminating financial barriers to care and medications, and improving continuity of care—might reduce the toll not only of DKA, but the complications of other chronic, yet thankfully now manageable, conditions.

Acknowledgements

Contributors

The authors acknowledge Carole Taylor for her analysis of the Manitoba data.  

Funders

The Manitoba researchers were supported through a contract with the Manitoba Government.   Dr. Christopher received funding support from an Institutional National Research Service Award (T32HP12706) and the Ryoichi Sasakawa Fellowship Fund.

Prior Presentations:

This work was previously presented at the Society of General Internal Medicine 2016 Annual Meeting in Miami, FL, and at the North American Primary Care Research Group 2016 Annual Meeting in Colorado Springs, CO.

Disclaimer:  The authors acknowledge the Manitoba Centre for Health Policy for use of data contained in the Manitoba Population Research Data Repository under project # 2014-028 (HIPC# 2014/2015 – 39).  The results and conclusions are those of the authors and no official endorsement by the Manitoba Centre for Health Policy, Manitoba Health, Seniors and Active Living, or other data providers is intended or should be inferred. Data used in this study are from the Manitoba Population Research Data Repository housed at the Manitoba Centre for Health Policy, University of Manitoba and were derived from data provided by Manitoba Health, Seniors and Active Living.

Conflicts of Interest

The authors report no conflicts of interest with any relevant commercial entities.  Drs. Gaffney, McCormick, Himmelstein and Woolhandler are leaders of Physicians for a National Health Program, a non-profit organization that favors coverage expansion through a single payer program, and Drs. Bor and Christopher are members of that organization.  None of them receive any compensation from that group.  Dr Katz is supported through the Manitoba Health Research Council Chair in Primary Prevention.

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How the U.S. health-care system puts people with diabetes in danger

Ketoacidosis is more common here than in Canada, my colleagues and I found.

By Adam Gaffney, M.D., M.P.H.
Washington Post, May 8, 2019

The blood sugar rises, and nausea and vomiting follow. The blood acidifies, the breath hastens, dehydration and then delirium ensue: That’s how ketoacidosis, a feared complication of diabetes, progresses. Diabetic ketoacidosis, which results in nearly 190,000 hospitalizations a year, is a condition I treat frequently as an ICU physician: We infuse intravenous insulin, saline and electrolytes, while carefully tracking sugar levels and blood chemistries and vital signs. If all goes well, the sugar normalizes, acid levels fall, the breath begins to slow, the appetite returns. Not always, however: Every year, hundreds of people die of the condition.

What makes this such a tragedy is that the complication is typically preventable through the regular use of insulin. Yet the soaring price of that drug has put it beyond the reach of many — and for many of the 29 million Americans without insurance, insulin might be unaffordable at any price.

But what about ketoacidosis in a country with universal health care? I joined some colleagues at Harvard Medical School, the Cambridge Health Alliance and the City University of New York to collaborate with a team of researchers at the University of Manitoba in Canada to find out.

We compared ketoacidosis hospitalization rates in the United States and Canada, focusing on the transition from adolescence to young adulthood — a vulnerable time when many young people lose or change health coverage. Our results, published in the Journal of General Internal Medicine, were striking. Based on our analysis of two large databases of hospitalized patients — one covering the United States and the other the province of Manitoba — we found that the hospitalization rate for diabetic ketoacidosis among children and adolescents was somewhat higher in the United States than in Canada. However, as teenagers became young adults, the rate soared by 90 percent in the United States, compared with a 23 percent rise in Manitoba.

At least three major differences in the way our nations finance health care could contribute to this result. First, uninsured rates rise dramatically in young adulthood in the United States. And as numerous studies have demonstrated (to say nothing of common sense), the uninsured go without all types of needed medical care, ranging from doctors’ visits to prescription drugs. In Canada, in contrast, this is not a problem; the uninsured rate is zero.

A second factor might be Americans’ exposure to onerous out-of-pocket costs for medical care. Forty-six percent of privately insured adults have “high-deductible” health plans that require them to spend substantial amounts of money out of pocket before insurance kicks in. Such plans may be dangerous for patients with diabetes. A 2017 study, for instance, found that individuals with diabetes who were pushed by their employers into a high-deductible health plan saw specialists less but wound up in the ER with acute complications more. In Canada, in contrast, physician care and hospital care is free at the time of care; co-pays and deductibles are $0.

The Canadian system does not universally cover prescription drugs as comprehensively as it does other care, unlike places such as Wales or Scotland, where everyone has drug coverage without co-pays or deductibles. Still, drugs are more affordable in Canada than the United States: In 2015, Bloomberg reported that one 3-milliliter pen of long-acting insulin cost $186 in the United States (accounting for rebates), three times the $67 it cost in Canada. Meanwhile, about 16.8 percent of older adults in the United States report not filling a drug prescription or skipping dosages of a medication because of cost — about double the proportion in Canada.

Finally, there is a related problem that researchers call “churn.” Most Americans have little stability in their insurance coverage: Your plan can change every time your boss says so, or whenever you (or maybe your partner or your parents) lose or change jobs. A recent analysis from Axios estimated that 2 million workers, together with their families, lose or change coverage every month. Churn is not merely inconvenient, though; it can be hazardous to your health. A 2016 study found that churners with low incomes frequently face dangerous disruptions in care: 20 percent change doctors, while 34 percent skip medications or stopped taking them because of discontinuities in coverage. In Canada, in contrast, there is no churn, because there is but one “single payer” that provides universal coverage seamlessly throughout the life span, without insurance networks or disruptive plan-switching.

Discontinuities in coverage don’t affect only the young. Take Meaghan Carter, a 47-year-old nurse with Type I diabetes who was found dead on her couch last Christmas, as USA Today recently reported. At the time of her death, the paper noted, she was temporarily uninsured because she was in between jobs, and she had $50 in the bank and no insulin left in her fridge, leading her family to attribute her death to ketoacidosis.

Making the American health-care system work for patients with chronic diseases such as diabetes requires rectifying not just one, but all three of these interconnected dysfunctions. Yet of the various health-care reform proposals under discussion today, only one — single-payer, “Medicare-for-all” — would do so: It would cover all the insured, basically eliminate financial barriers to care such as co-pays and deductibles, and bring to an end the dangerous disruptions of coverage that are so common in our fragmented system. This is one reason that I, like so many in the medical profession, support it.

Individuals with chronic illnesses such as diabetes deserve no less. Without such a transformative reform, it seems likely that we’ll still have patients with ketoacidosis coming through the doors of ICUs, breathing deep, dry as a bone, acid levels soaring — even when it might have been avoided had a better, more just health-care system been in place.

Dr. Adam Gaffney is an Instructor in medicine at Harvard Medical School and a pulmonary and critical care physician at the Cambridge Health Alliance and serves on the board of directors of Physicians for a National Health Program.

https://www.washingtonpost.com…

Dangerous diabetes complications soar in the U.S., but not Canada, as teenagers become young adults: New study

Research by an international team finds that Canada’s health care system prevents diabetic ketoacidosis among young people better than the U.S.’

Contact: Clare Fauke, clare@pnhp.org, 312-782-6006

Hospitalizations for a feared complication of diabetes, diabetic ketoacidosis (DKA), rise sharply as adolescents transition to adulthood in the U.S, but not in Canada, according to a new study published today in the Journal of General Internal Medicine. DKA can generally be prevented with regular use of insulin. The increased DKA rate in the U.S. occurs around age 18, a time when many adolescents change or lose insurance coverage, a disruption that places them at risk for skipping medical visits or being unable to afford insulin.

The study, conducted by an international team of researchers at the Harvard Medical School, Cambridge Health Alliance, the City University of New York at Hunter College, and the University of Manitoba in Canada, analyzed nearly 170,000 hospitalizations in the U.S. and 1,300 in Manitoba, Canada. Among teenagers, the investigators found, the DKA hospitalization rate was slightly higher in the U.S. compared to Manitoba. However, as teenagers became young adults, the hospitalization rate soared by 90% in the U.S., but only rose 23% in Canada.

“The U.S. health care system is failing far too many patients, including those with diabetes,” noted lead author Dr. Adam Gaffney, an instructor at Harvard Medical School and a pulmonary and critical care physician at Cambridge Health Alliance. “In American, 29 million are uninsured, while far more face unaffordable deductibles or sky-high drug costs—including for insulin. The consequences can be deadly.”

“Despite Obamacare, millions of Americans are uninsured, and the uninsurance rate is highest among young adults,” noted Dr. Andrea Christopher, lead author and a primary care doctor now at the University of Washington School of Medicine. “Even with insurance, drug copayments are often so high that young people with diabetes can’t afford the insulin they need to survive.”

Dr. Steffie Woolhandler, study author and a distinguished professor of public health at CUNY’s Hunter College and lecturer in medicine at Harvard Medical School added, “We know from other studies that thousands die each year because they’re uninsured, and millions skip their medications because of costs. Meanwhile, drug companies have been hiking the price of insulin and other vital drugs in our country, charging twice as much as elsewhere. The combination of poor coverage and outrageous drug prices often lands patients in the hospital—or worse.”

“The Incidence of Diabetic Ketoacidosis During ‘Emerging Adulthood’ in the USA and Canada: a Population-Based Study.” Adam Gaffney, MD, MPH; Andrea Christopher, MD, MPH; Alan Katz, MBChB, MSc; Dan Chateau, PhD; Chelsey McDougall, MSc; David Bor, MD; David Himmelstein, MD; Steffie Woolhandler, MD, MPH; and Danny McCormick, MD, MPH. Journal of General Internal Medicine, published online May 8, 2019. DOI: 10.1007/s11606-019-05006-6

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 23,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

Private Medicare Advantage insurers sign up Medicare patients who have lower spending

Do People Who Sign Up for Medicare Advantage Plans Have Lower Medicare Spending?

By Gretchen Jacobson, Tricia Neuman, and Anthony Damico
Kaiser Family Foundation Issue Brief, May 2019

People on Medicare can choose coverage from either traditional Medicare or Medicare Advantage plans, typically trading off broad access to providers for potentially lower premiums and out-of-pocket costs. Beneficiaries who choose Medicare Advantage may differ from those in traditional Medicare in both measurable and unmeasurable ways, which may influence their use of services and spending. Yet, Medicare payments to Medicare Advantage plans per enrollee are based on average spending among beneficiaries in traditional Medicare.

This analysis looks at whether beneficiaries who choose to enroll in Medicare Advantage plans have lower spending, on average – before they enroll in Medicare Advantage plans – than similar people who remain in traditional Medicare. We compare average traditional Medicare spending and use of services in 2015 among beneficiaries who switched to Medicare Advantage plans in 2016 with those who remained in traditional Medicare that year, after adjusting for health risk. We adjust Medicare spending values for health conditions and other factors, with a model similar to the CMS HCC Risk Adjustment Model that is used to adjust payments to Medicare Advantage plans.

Key Findings

  • People who switched from traditional Medicare to Medicare Advantage in 2016 spent $1,253 less in 2015, on average, than beneficiaries who remained in traditional Medicare, after adjusting for health risk.
  • Even among traditional Medicare beneficiaries with specific health conditions, those who shifted to Medicare Advantage in 2016 had lower average spending in 2015, including people with diabetes ($1,072), asthma ($1,410), and breast or prostate cancer ($1,517).

Even after risk adjustment, the results indicate that beneficiaries who choose Medicare Advantage have lower Medicare spending – before they enroll in Medicare Advantage plans – than similar beneficiaries who remain in traditional Medicare, suggesting that basing payments to plans on the spending of those in traditional Medicare may systematically overestimate expected costs of Medicare Advantage enrollees.

Overview

Medicare payments to Medicare HMOs and PPOs, known as Medicare Advantage plans, have always been based on Medicare spending by similar people in traditional Medicare, partly because Medicare has never had accurate, complete data on the use of services or health care spending for beneficiaries in Medicare Advantage plans. The assumption has been that adjusting payments to plans for health status and other factors accounts for differences between beneficiaries in traditional Medicare and those in Medicare Advantage plans. Profits are assumed to be due to plans reducing spending by either managing fees (e.g., by having lower-cost hospitals in their network) or changing patterns of care (e.g., reducing hospital readmissions), rather than to favorable selection. Nonetheless, selection bias has been an ongoing concern and the subject of many studies over the years, with mixed evidence of favorable selection. This question is important because it affects the accuracy of Medicare payments to plans on behalf of 20 million Medicare beneficiaries, and rising.

This is the first known analysis to examine whether beneficiaries who choose to enroll in Medicare Advantage plans have lower spending and use fewer services – before enrolling in Medicare Advantage – than similar people in traditional Medicare. If Medicare Advantage enrollees use fewer services and have lower Medicare spending before they enroll in Medicare Advantage plans, compared to similar beneficiaries in traditional Medicare, then basing payments to Medicare Advantage plans on the Medicare spending for similar beneficiaries in traditional Medicare would overestimate the expected costs of Medicare Advantage enrollees and overpay plans by billions of dollars over the next decade. Studies that have looked at differences in the use of services and Medicare spending for Medicare Advantage enrollees compared to beneficiaries in traditional Medicare that did not account for actual prior differences may have overestimated the extent to which plans are reducing enrollees’ spending or use of services.

Discussion

This analysis examines whether beneficiaries who choose to enroll in Medicare Advantage plans have lower spending and use fewer services – before enrolling in Medicare Advantage – than similar people in traditional Medicare. The study found that beneficiaries who chose to enroll in a Medicare Advantage plan in 2016 had average expenditures in traditional Medicare (in 2015) that were $1,253 less, on average, than similar beneficiaries who remained in traditional Medicare. Similar differences in spending were found across all demographics and chronic conditions, even after adjusting for health risk factors. The results suggest that favorable self-selection into Medicare Advantage plans is occurring, even among traditional Medicare beneficiaries with similar health conditions. The findings raise questions as to why beneficiaries who are higher utilizers are less likely to go into Medicare Advantage and instead remain in traditional Medicare.

Other studies have examined services used by people while they were enrolled in Medicare Advantage plans, based on limited data, and have generally found that beneficiaries in Medicare Advantage plans use fewer services than those in traditional Medicare. Notably, the authors of these studies almost universally attribute differences in service utilization to care management by the plans – rather than to pre-existing differences in care seeking behavior and use of health services. This study suggests that differences in health care use, and spending, are evident before beneficiaries decided to enroll in Medicare Advantage plans or remain in traditional Medicare, raising questions about the extent to which plans are actually lowering spending or managing care.

It is not clear whether the differences in spending observed in this study increase, decrease, or persist over time as beneficiaries age, which has implications for whether a similar difference in spending could be assumed for all Medicare Advantage enrollees. Likewise, it is not clear how this difference in spending will change as the share of counties with the majority of beneficiaries in Medicare Advantage plans grows. This missing information could have important implications for Medicare spending. Potential overpayments could amount to billions in excess Medicare spending over a ten-year period if the observed differences in spending hold up as beneficiaries age and Medicare Advantage enrollment continues to rise. To illustrate, if the difference in average Medicare spending ($1,253) applied to just 10 percent of all Medicare Advantage enrollees in 2016, or 1.8 million enrollees, it would amount to more than $2 billion in excess spending in one year alone.

Policymakers could consider adjusting payments to reflect Medicare Advantage enrollees’ prior use of health care services, which could lower total Medicare spending and in turn reduce Medicare Part B premiums and deductibles for all beneficiaries. With more than 20 million enrollees in Medicare Advantage plans and Medicare payments to plans projected to reach $250 billion in 2019, the stakes are high for making payments to plans as accurate as possible.

https://www.kff.org…

Comment:

By Don McCanne, M.D.

It has long been contended that private Medicare Advantage plans have been able to reduce spending and thus increase profits by managing fees and by changing patterns of care (managed care). But this study indicates that Medicare Advantage patients already had had lower spending when they were enrolled in the traditional Medicare program and thus suggests that “favorable self-selection into Medicare Advantage plans is occurring.” Since Medicare Advantage payments are based on average spending in the traditional program, the Medicare Advantage plans are being overpaid for these patients with lower health care costs.

There are many reasons that private Medicare Advantage plans are a worse choice, even though marketing techniques have made them popular. Administrative costs are higher in the private plans. Choice of health care professionals is less because of the networks used by the private plans as opposed to the unlimited choices in the traditional Medicare program. Also administrative chicanery has been used by the government to increase payment rates for the private plans in an effort to move toward privatization of Medicare. Now we see that apparently healthier patients with fewer needs are enrolling in the private plans yet they are being paid as if they are comparable to the average health status of those in the traditional program. Once again, the taxpayer is being ripped off in order to support the private insurers that offer the Medicare Advantage plans.

Ironically, the single payer Medicare for All model provides superior benefits with much greater choices in care than does the private Medicare Advantage model. Yet politicians and the insurance industry have convinced the public that they are getting a better deal through the private insurers. As one famous politician said, “It’s complicated.” But it is not that complicated to understand when you see that private insurers benefit and taxpayers lose.

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

Soaring deductibles make health care unaffordable

Health insurance deductibles soar, leaving Americans with unaffordable bills

By Noam N. Levey
Los Angeles Times, May 2, 2019

Soaring deductibles and medical bills are pushing millions of American families to the breaking point, fueling an affordability crisis that is pulling in middle-class households with health insurance as well as the poor and uninsured.

In the last 12 years, annual deductibles in job-based health plans have nearly quadrupled and now average more than $1,300.

Yet Americans’ savings are not keeping pace, data show. And more than four in 10 workers enrolled in a high-deductible plan report they don’t have enough savings to cover the deductible.

One in six Americans who get insurance through their jobs say they’ve had to make “difficult sacrifices” to pay for healthcare in the last year, including cutting back on food, moving in with friends or family, or taking extra jobs. And one in five say healthcare costs have eaten up all or most of their savings

The conclusions are based in part on a nationwide poll The Times conducted in partnership with the nonprofit Kaiser Family Foundation, or KFF. Two Washington-based think tanks — the Health Care Cost Institute and the Employee Benefit Research Institute — provided supplemental analysis.

The conclusions are based in part on a nationwide poll The Times conducted in partnership with the nonprofit Kaiser Family Foundation, or KFF. Two Washington-based think tanks — the Health Care Cost Institute and the Employee Benefit Research Institute — provided supplemental analysis.

And it is feeding resentments and deepening inequalities, as healthier and wealthier Americans are able to save for unexpected medical bills while the less fortunate struggle to balance costly care with other necessities.

Hardest hit in the cost shift are lower-income workers and those with serious medical conditions such as diabetes, heart disease and cancer — who are more than twice as likely as healthier workers, according to the Times/KFF poll, to report problems paying medical bills and to say they’ve cut back on spending for food, clothing and other household items.

“There has been a quiet revolution in what health insurance means in this country,” said Drew Altman, the longtime head of the Kaiser Family Foundation. “This happened under the radar while everyone was focused on the Affordable Care Act.”

The 2010 healthcare law — often called Obamacare — provided landmark protections to Americans once shut out of health coverage. But as Democrats and Republicans fought over the law, Altman said, neither focused on the rapid run-up in costs for people covered through work.

“We forgot that most people get their insurance through an employer, and for them, the issue is medical bills that they increasingly cannot afford,” Altman said.

This wasn’t how the high-deductible revolution was supposed to play out.

Twenty years ago, amid a backlash against HMO restrictions on people’s ability to choose their doctors, high-deductible plans were billed as a way to empower patients and free them from the unpopular constraints of managed care.

Even then there were red flags: As far back as the 1970s, a landmark study by the California-based Rand Corp. had found that requiring people to pay more out of pocket caused them to cut back on medical care they needed as well as on unnecessary services.

Backers of the high-deductible strategy nevertheless argued that patients, given “skin in the game,” would become active consumers who would force drugmakers, hospitals and other medical providers to rein in prices.

“The thing that caught people’s imagination was this idea of unleashing American patients as consumers,” said Dr. Arnie Milstein, medical director of the California-based Pacific Business Group on Health, an organization of large companies, including Boeing, Safeway, Walmart and Wells Fargo.

Employers, desperate for a way to control healthcare spending, saw an opportunity to hold down costs.

Many of the first companies to offer high-deductible plans gave employees seed money for medical savings accounts, with the idea that the cash would help workers pay their deductibles. Within a few years, the George W. Bush administration — backed later by Congress — carved out tax benefits for the accounts.

As high-deductible plans caught fire, however, many employers saw they could save even more by not contributing to their employees’ accounts.

The change left workers responsible for saving for healthcare on their own.
Yet government data show that most workers haven’t had extra money to set aside.

“In the real world, average people are living paycheck to paycheck,” said Helen Darling, the former head of the National Business Group on Health, a leading employer organization focused on health benefits. “Unfortunately, that never got through to the policy debate.”
Moreover, the vision of legions of patients becoming engaged shoppers pushing down prices has turned out to be a mirage.

In a major reversal from 15 years ago, six in 10 Americans with job-based coverage now call affordability the most important feature of a health plan, outranking previous top concerns such as a broad choice of doctors and hospitals and a wide range of benefits.

https://www.latimes.com…

Kaiser Family Foundation/LA Times Survey Of Adults With Employer-Sponsored Health Insurance:
http://files.kff.org…

Comment:

By Don McCanne, M.D.

Several politicians who got on the single payer Medicare for All bandwagon are now backing off saying that people should be able to keep the insurance they get at work. But why? Health care under employer-sponsored plans has become much less affordable for those who happen to need health care. It isn’t working the way most people think it should, and the majority believe that the government should do something about that.

The design features of single payer Medicare for All make the insurance itself affordable for everyone by using progressive tax policies, while eliminating the financial barriers at the point of care, ensuring that everyone has affordable access to care. The current employer-sponsored plans are going in the opposite direction – health care that is less and less affordable, especially for those with needs. Our politicians need to know what the public thinks about that since they don’t seem to be listening those of us who are providing them with the grim facts.

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Politics, not policy, is holding back the New York Health Act

What Happened to New York’s Plans for Single-Payer Health Care?

By Raina Lipsitz
The Nation, May 2, 2019

The Albany machine is working to torpedo the New York Health Act—again.

New York’s Democratic voters sent a new class of true-blue legislators to Albany in 2018. With the governor’s office and both houses of the state legislature firmly under Democratic control—and a raft of progressive bills rapidly signed into law—many hoped this would be the year New York finally enacted single-payer health care.

Health care was, after all, a top concern of voters in 2018, and support for single-payer legislation is strong and growing.

Yet recent reports indicate that the New York State Senate has no plans to vote on legislation this session, preferring to hold more hearings on a bill that has been proposed in the legislature since 1992. Assembly member Richard Gottfried, whom I interviewed in February, has sponsored the pro-single-payer New York Health Act (NYHA) for nearly 30 years, and the Assembly passed his bill in the past four legislative sessions. But a number of new or re-elected state senators, faced with the fresh possibility that single-payer might actually become a reality, have walked back their formerly full-throated support.

Pressed to clarify their positions, (Governor) Cuomo and a number of Democratic legislators played variations on this tune: Single-payer is ideal, but here and now—at the state level and without the elusive waiver—is not the time or place.

Cuomo has gained from strengthening alliances with legislators who support cost-free Democratic priorities but oppose or are willing to backtrack on those that require money. He and his allies prefer to avoid inconveniencing wealthy donors or worrying suburban voters. Cuomo fears the rich will flee New York if they have to pay higher taxes.

Knowing some unions oppose the bill “breaks my heart,” Dr. Martha Livingston told me in a phone conversation. She is the chair of SUNY Old Westbury’s public health department, the vice chair of the NY Metro chapter of Physicians for a National Health Program, and a national board member of the Labor Campaign for Single Payer Healthcare. “I speak as a union activist in my own union,” she said, and “my position and other unions’ position is, if we can get health care off the bargaining table, we can advocate for so much more in our members’ pockets.”

Katie Robbins directs the Campaign for New York Health and works for the New York State Nurses Association, the state’s largest union for registered nurses. The NYSNA and 1199SEIU are the NYHA’s two most powerful union backers. Robbins said in a phone conversation that she and her allies are “disappointed” that public-sector unions oppose the bill. She takes their concerns seriously and has called for “a labor roundtable to work through these issues.” It is, she said, both possible and “necessary” to make the bill work for unions.

State Senator Gustavo Rivera, the chair of the Health Committee and the bill’s sponsor in his chamber, acknowledged in a phone conversation that “attacks from the right” and “resistance from the left” have created “a very narrow path” to passing the NYHA.

Divisions over the NYHA exist both within and among unions. Many rank-and-file members have no opinion on or support single-payer at the state level, while many leaders oppose it. The Movement of Rank and File Educators (MORE) is an opposition caucus in the United Federation of Teachers. MORE member Peter Lamphere was blunt about why he thought UFT president Michael Mulgrew supported the Municipal Labor Committee’s decision to send a letter opposing the NYHA to Cuomo, Assembly Speaker Carl Heastie, and Senate Majority Leader Andrea Stewart-Cousins.

“Mulgrew has caved to Cuomo and some of the more conservative elements in the union movement on NYHA,” Lamphere wrote in an email. “MORE has a position in favor of [statewide] single payer and we campaigned on this in the UFT elections.”

Asked whether UFT members voted to oppose the bill, Mulgrew said the Municipal Labor Committee decided to send an opposition letter, and he was elected to serve on the committee. “You’re an elected rep from your union,” he said. “If you had to, every time you were asked to vote or to give your opinion, stop and go back to your union, you’d never get any of that work done.”

Few New York Democrats openly oppose it. But the New York Health Act won’t pass until they are all willing to fight.

“Single-payer is clearly the morally correct choice to make, and we need to be on the right side of history,” Dan Lupkin, a MORE member, told me on the phone. “There is a case to be made, and the union should be making the case for the greater good.”

It’s a case people like Gottfried have been making for decades. But insurance-industry money, tax phobia, political cowardice, and anxiety over scrapping a broken but familiar system remain.

At an April forum on the NYHA at Brooklyn College… “What you ought to care about is how much money leaves your wallet,” Gottfried told one skeptical man. “Under the act, less money will leave your wallet…. The fact that the money, after it leaves your wallet, is called a tax as opposed to a premium and a deductible and a copay—all that means is that the money will be going to an entity that is accountable to you as a voter, as opposed to going to an entity that is accountable to insurance company stockholders.”

This year, Cuomo called for a commission to study health care. The Senate is delaying a vote on the NYHA until public hearings are held.

Single-payer legislation has been studied, debated, proposed, and refined for three-quarters of a century. The only question left is how to make lawmakers do it.

https://www.thenation.com…

Comment:

By Don McCanne, M.D. 

New York seems to be primed to be the first state to enact a single payer system, but rumblings have indicated that there is some resistance within the state. The article in The Nation, excerpted above, provides clues to the intrigue involving the governor, a couple of unions, and some hesitant Democratic legislators.

I asked Assemblyman Richard Gottfried, who authored the New York Health Act (with Senator Gustavo Rivera sponsoring it in the Senate), if he had any comment on this article. His response:

“The article is generally accurate. Many large unions strongly support the NYHA— the NYS Nurses Assoc., 1199, 32BJ SEIU (building service workers), RWDSU (retail workers), UAW, much of the CWA, etc. The building trades in NYC have questions but want to work them out with us. They all know the importance of getting health benefits off the bargaining table and understand the advantages of single payer for their members. But most of our public sector unions are opposing it. We’re working on their concerns.

“Yes, there are legislators who campaigned in support of the bill and now need reassurance. Senator Rivera and I are talking with them.”

With the amount of money that we are already spending, we could easily have comprehensive health care for absolutely everyone, but mere politics remains the barrier. Mere politics? Is that the penalty we pay for supporting democracy in action? Leaving health care screwed up is some penalty for trying to do the right thing.

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