By Mitchell Katz, M.D., President and Chief Executive Officer, New York City Health + Hospitals
New York State Hearing, Joint Senate and Assembly Committees on Health, May 28, 2019

Good morning Chairpersons Gottfried and Rivera and members of the Assembly and Senate Committees on Health. I am Mitch Katz, M.D., President and Chief Executive Officer of the New York City Health + Hospitals (“Health + Hospitals”). On behalf of Health + Hospitals and the de Blasio Administration, thank you for the opportunity to provide testimony in support of the New York Health Act.

It is well established that health insurance coverage plays a critical role in enhancing one’s access to needed care and maintaining or improving health status. There is strong evidence that insurance coverage is associated with having a consistent source of care and being able to afford needed care, both of which are critical for achieving better health outcomes. Not having insurance also increases health disparities across race, ethnicity and socioeconomic status. Health insurance plays a major role in access to primary care and evidence-based preventive health services, which can help people avoid or delay the onset of disease, slow or prevent the progression of diseases, lead productive lives and reduce costs. In fact, studies have shown that lack of health insurance may increase the likelihood of mortality.

Health insurance coverage is also important for the city’s economy and job markets, as it directly supports health care providers, including hospitals, community health centers, nursing facilities, and health insurance plans. Expanding access to health insurance coverage and implementing a single payer system would support NYC Health + Hospitals mission to provide high quality health care services to all New Yorkers regardless of their ability to pay. Health + Hospitals is the largest public health care system in the nation and serves over a million patients each year, of which nearly 400,000 are uninsured.

Since the Affordable Care Act (ACA) was enacted in 2010, the uninsured rate in New York City across all ages has dropped significantly. During the most recent open enrollment period, a record 1 million New Yorkers, 57% of whom were New York City residents, enrolled in health insurance through the state’s ACA exchange; almost three quarters of those individuals signed up for Essential Plan. Overall, New York’s ACA exchange saw a 70,000 (7%) increase in Essential Plan and qualified health plan enrollment from the previous year , despite the fact that enrollment through the federally facilitated exchange declined by approximately 4% during the same period. Unfortunately, coverage gaps remain; over 1.1 million New Yorkers, including the estimated 600,000 New York City residents that remain uninsured.

A single payer health system would provide coverage to these uninsured and underinsured New Yorkers. The New York Health Act would create a comprehensive system of access to health insurance to provide a health plan available to every New York State resident. The program does not require participants to pay any premium or out-of-pocket costs, and provides all benefits currently included in Medicaid, Medicare, Child Health Plus and other state programs. This new system will ensure access to critical care for those who need it most, and will increase positive health care outcomes for all New Yorkers. We have read about concerns expressed by labor about the New York Health Act, and we are confident that the bill sponsors can address the concerns raised.

A single payer system would also make major strides to decrease segregation of care based on insurance type. Research has shown that many private practices do not accept Medicaid ; other studies suggest that Medicaid is generally accepted at hospital clinics, but not necessarily in the faculty practices of the same hospitals. The difference in rates paid by Medicaid when compared to private insurance is a contributor to this inequity, which would be eliminated with a single payer system.

As a primary care doctor, what is most important is care. A single payer system would allow me to spend more time on patient care than checking formularies. The current system makes me check formularies of each insurance company rather than providing prescriptions that I know work for my patients. It would also alleviate administrative burdens that safety net hospitals face. Health + Hospitals is currently fighting to make sure insurance companies pay us back when they have underpaid us in the past for care provided to patients.

The continued effort to undermine or eliminate the ACA is a threat to all New Yorkers and especially to Health + Hospitals patients. The threat of Federal Disproportionate Share Hospital payments cuts which will be devastating to Health + Hospitals, the proposed public charge rule and immigration policy changes harm our efforts to reach new patients and provide them the care they need. Despite these risks, Health + Hospitals will not be deterred from serving our patients across our health system.

As the Trump Administration continues its assault on the ACA and Medicaid, it is our job to ensure that everyone, regardless of their age, employment status, household income, immigration status or health status, has access to health care. The New York Health Act would guarantee this access for every New York State resident.

The City of New York strongly supports the New York Health Act. Thank you for the opportunity to join the growing chorus of voices in support of a single payer health care system.

Thank you to the Chairs of the Assembly and Senate Health Committees for your tremendous support of Health + Hospitals and I look forward to taking your questions.

(Thanks to New York Assembly Health Chair Richard Gottfried – author of the New York Health Act – for sending this draft of Mitch Katz’s testimony.)

Comment:

By Don McCanne, M.D.

Although today’s selection is standard testimony on behalf of the single payer model of health reform, it is highly authoritative because of the status of Mitchell Katz. He implemented the Healthy San Francisco program which established “universal” coverage in that city (under then mayor Gavin Newsom). He then led the Los Angles County Department of Health Services during implementation of the Affordable Care Act, transforming it into the Los Angeles County Health Agency – the nation’s second largest public health system. Now he is CEO of NYC Health + Hospitals – the largest public health care system in the United States.

Dr. Katz has received accolades for his efforts to improve health delivery under these public health systems, using all resources at his disposal in the most effective manner possible. This has been particularly important considering the safety-net role of these institutions. Yet 600,000 New Yorkers served by the system remain uninsured. It does not require a visionary like Dr. Katz to imagine what he could do if everyone were enrolled in a single payer system.

Although Dr. Katz’s comments are specifically in support of the New York Health Act, they can be extrapolated to apply to a national Single Payer Medicare for All. Without even asking, I know Dr. Katz would certainly concur.

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By Drew Altman
Axios, June 3, 2019

There’s a big disconnect between the health care debates that dominate Washington, the campaigns and the politically active — where all of the talk is about sweeping changes like Medicare for All or health care block grants — and what the voters are actually thinking about.

The big picture: In our focus groups with independent, Republican, and Democratic voters in several swing states and districts, the voters were only dimly aware of candidates’ and elected officials’ health proposals. They did not see them as relevant to their own struggles paying their medical bills or navigating the health system.

Details: We conducted six focus groups in three states (Texas, Florida, and Pennsylvania), facilitated by Liz Hamel, the Kaiser Family Foundation’s Director of Polling and Survey Research. Each one had eight to 10 people who vote regularly and said health care will be important in their presidential vote in 2020.

The highlights:

• These voters are not tuned into the details — or even the broad outlines — of the health policy debates going on in Washington and the campaign, even though they say health care will be at least somewhat important to their vote.
• Many had never heard the term “Medicare for all,” and very few had heard about Medicare or Medicaid buy-in proposals, or Medicaid and Affordable Care Act state block grant plans like the one included in President Trump’s proposed budget.
• When asked what they knew about Medicare for all, few offered any description beyond “everyone gets Medicare,” and almost no one associated the term with a single-payer system or national health plan.
• When asked about ACA repeal, participants almost universally felt that Republicans did not have a plan to replace the law.
• When voters in the groups were read even basic descriptions of some proposals to expand government coverage, many thought they sounded complicated and like a lot of red tape.
• They also worried about how such plans might strain the current system and threaten their own ability to keep seeing providers they like and trust.

Between the lines: Most voters in these groups don’t seem to see the current health reform proposals on either side of the aisle as solutions to their top problems: paying for care or navigating the health insurance system and red tape.

• That, combined with a general distrust of politicians, can make these voters wary of any plan that sounds just a little too good to be true to them.

The bottom line: For most voters, the debate will be more meaningful when they see stark differences on health between the Democratic nominee and President Trump in the general election. Then they may be able to focus more on what differences on health reform mean for the country and their daily lives.

https://www.axios.com…

Comment:

By Don McCanne, M.D.

Although we should be cautious about trying to draw Great Truths from half a dozen focus groups, we should be concerned about what these groups revealed about their understanding of the basis of the problems that they experience with our health care system.

They see problems with navigating the health care system and with paying their medical bills. But when offered solutions for these problems they show little understanding of even basic health policy, and they seem to be influenced more by political memes expressing a distrust of government, complexity of public solutions, and government interference with their interactions with the health care system.

A particularly important example of this is, “When asked what they knew about Medicare for all…almost no one associated the term with a single-payer system or national health plan.”

This lack of sophistication leaves them unaware that the government Medicare program is far more deserving of our trust than the private insurers (“surprise medical bills” anyone?), that a government program that includes everyone though a publicly funded universal risk pool is far less complex than a multitude of private insurers with various complex rules for accessing and paying for care, and that a single payer system interferes less since the patient has free choices in health care whereas the private plans are more restrictive of benefits while limiting coverage to their contracted provider lists (a minute fraction of the physicians and hospitals available throughout the nation).

Health policy is complicated, but the message for single payer Medicare for All need not be: enrollment for life, free choice of physicians and hospitals and other health care professionals and institutions, and automatic payment by our own public program. The focus groups already understand that the Republicans do not have a replacement plan, but what they do not understand is that only the single payer model of Medicare for All meets these goals whereas the ACA/public option Medicare for Some often leaves them exposed to the access and affordability issues they already face.

Again, single payer Medicare for All means:

• Never have to change insurers.
• Free choice always of doctors and hospitals.
• No medical bills since care has been prepaid through our taxes.

None of these are features of either the Republican proposals or the Democratic ACA/public option proposals. It’s a simple message. Let’s do our best to see that the American voter understands it.

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By Steffie Woolhandler, M.D., M.P.H.; David U. Himmelstein, M.D.
JAMA, Viewpoint, Health Policy, Published Online May 31, 2019

The prospect of single-payer “Medicare-for-all” reform evokes enthusiasm and concern. Proponents maintain that a single-payer system would be the simplest route to universal coverage; every US resident would qualify for comprehensive insurance under a public, tax-financed plan that would replace private insurers, Medicaid, and Medicare. Others are concerned that costs would escalate or that the government would limit and underfund care, particularly hospital care, which commands the largest share of health spending; innovation might lag; and government may infringe on medical decisions.

Physicians are understandably cautious about prescribing a radical cure for minor ills. However, current health policies have substantial shortcomings for many individuals, minor changes appear certain to fail, and the single-payer remedy may be less disruptive than often portrayed.

Few argue with the need for reform. The United States has fallen behind other nations in measures of life expectancy and access to care. Drug prices in the United States, already twice those in Europe, continue to increase, compromising patient adherence to vital medications, such as insulin. Twenty-nine million US residents remain uninsured, and co-payments and deductibles force many individuals with insurance to choose between skipping care and incurring overwhelming debts.

Many physicians feel frustrated by mandates and restrictions of insurers and by electronic health records (EHRs) with designs driven by the logic of billing. New payment modalities, euphemistically labeled “value-based,” favor large systems at the expense of small practices and community-controlled hospitals and impose new layers of quality reporting and fiscal managers. However, these payment modalities appear to have done little to improve care or moderate costs, and physicians continue to bear responsibility for patients even as their authority in many health care settings erodes.

Single-payer reform could mitigate the stresses on patients and clinicians. A well-designed reform could potentially generate large savings on billing-related costs and lower drug prices, which would make expanded coverage more affordable.

The current, fragmented payment system entails complexity that adds no value. Physicians and hospitals must navigate contracting and credentialing with multiple plans and contend with numerous payment rates and restrictions, preauthorization requirements, quality metrics, and formularies. Narrow clinician and hospital networks and the constant flux of enrollment/disenrollment as patients change jobs or their employers switch plans disrupt long-standing patient-physician relationships. Many insurers devote resources to recruiting profitable enrollees and encouraging unprofitable enrollees to disenroll.

This complexity drains resources from patient care. According to official estimates, insurance overhead is projected to cost an estimated $301.4 billion in 2019, including an estimated $252 billion for private insurers, approximately 12% of their premiums. In contrast, overhead is 1.6% in Canada’s single-payer system and 2.2% in Medicare’s fee-for-service plan. Reducing US systemwide insurance overhead to 2.2% could save an estimated $238.7 billion.

The complex payment system also increases hospital costs and prices. Single-payer nations, such as Canada and Scotland, pay hospitals global budgets, analogous to the way US cities fund fire departments. That payment strategy obviates the need to attribute costs to individual patients and insurers and minimizes incentives for upcoding, gaming quality metrics, bolstering profitable “service lines,” and other financially driven exertions; a 1272-bed multihospital system in Toronto employs only 5.5 full-time equivalent employees to handle all billing and collections. A 2014 report suggested that administration consumes 12.4% of hospital budgets in Canada (and 11.6% in Scotland) vs 25.3% in the United States, a difference of an estimated $162 billion annually.

Interacting with multiple insurers also raises physicians’ overhead and, in turn, the prices they must charge. In 2016, an efficient group practice at a North Carolina academic medical center spent $99 581 (and 243 hours of physician time) per primary care physician on billing.

As in Canada, a US single-payer system could pay physicians based on a simple fee schedule negotiated with medical associations. All patients would have the same coverage and office staff would not need to process prior authorizations, collect co-payments, or field pharmacists’ calls driven by the confusion that arises from multiple formularies. Anecdotal reports suggest that Canadian physicians have been spared much of the burden imposed by poorly conceived privacy regulations, “meaningful use” requirements, and quality and efficiency metrics. A 2011 study found that US physicians spent 4 times more money interacting with payers than their Canadian counterparts, who report spending only 24.7% of gross revenues on practice overhead (including rent and staff) and 4% of their workweek on insurance-related matters. US insurers try to detect billing abuses by demanding substantial amounts of documentation. In single-payer nations, the sole insurer can use comprehensive claims data to monitor for outlandish billing patterns.

A 2019 Congressional Budget Office (CBO) report concluded that single-payer reform could lower administrative costs, increase incentives to improve health, and substantially reduce the number of uninsured individuals. However, if undocumented immigrants were excluded, 11 million US residents could remain uninsured.

Realizing the benefits of single-payer reform entails many challenges and potential pitfalls. As the CBO report noted, the effects on the economy and individuals would depend on key features of the design of the program, such as how it paid clinicians and what services were covered. While single-payer reform could simplify bureaucracy and free up hospital resources and physicians’ time to meet the increased demand for care, poorly designed legislation might perpetuate Medicare’s burdensome payment and monitoring strategies. Even in a well-designed system, waiting time for care might increase; however, the Affordable Care Act, which covered 20 million uninsured individuals, did not significantly increase waiting time or compromise access for previously insured individuals. Nonetheless, enhanced funding for training programs might be needed to ensure an adequate supply of clinicians, particularly in primary and behavioral health care and in regions with physician shortages. In addition, as with Medicare, politics could affect decisions regarding coverage in a single-payer system.

Most individuals would have an insurance transition, but they could keep their physicians and would be spared future transitions. Although patients would not be able to choose among insurers, they would no longer face network restrictions and, in many cases, could have improved benefits. To protect innovation, some drug price savings could be used to augment federal research funding.

Single-payer reform would be best done at the federal level. Without federal waivers, state-based reforms cannot redirect federal and employer spending through the single-payer system, compromising the administrative savings needed to make expanded care affordable—a problem that bedeviled Vermont’s reform effort.

Consolidation of purchasing power in a public agency may raise concerns that funding reductions would endanger quality or cause rationing, and that physicians would essentially become tradesperson paid by a single entity. Schulman et al calculated that hospitals’ average margins would decline to −9% if all inpatient stays were reimbursed at Medicare’s current rates. While hospitals’ savings on their own administrative costs (as much as $162 billion) could allow them to transition to a leaner cost structure, a sensible phase-in plan would be needed. Although neither of the congressional Medicare-for-all bills calls for the adoption of Medicare’s rates, their budgeting is predicated on the assumption that hospitals could redirect resources from billing to clinical sites, allowing them to provide more care within current budgets.

Previous experience with coverage expansions is also reassuring. In Canada, mean physician income (in 2010 inflation-adjusted Canadian dollars) increased from about $100 000 in 1962 to $248 113 in 2010 (from 2.5 times the average worker’s income to 4.3 times), which was comparable to US physician income at the time. Similarly, hospital revenue per patient-day increased 8.9% annually in the 3 years after the 1959 startup of Canada’s universal hospital insurance program. The implementation of Medicare in 1966, the closest US analogue of a single-payer startup, also was associated with increased physician and hospital revenues.

State and federal legislators have introduced dozens of single-payer bills. Sixteen US senators and 110 representatives are cosponsoring companion Medicare-for-all bills that would implement universal, first-dollar coverage without network restrictions. Both federal bills would raise taxes, but those increases are projected to be fully offset by savings on premiums and out-of-pocket expenses. Both bills would augment funding for clinical services by redirecting funds now wasted on bureaucracy and excessive drug prices and the payer would pay physicians on a fee-for-service basis or salaries from hospitals or clinics that receive global budgets. The bill in the US House of Representatives adopts Canadian-style global budgeting for hospitals. However, the current US Senate bill retains Medicare’s payment strategies (although not Medicare’s payment rates), a provision that would modestly attenuate savings on hospital administration and maintain some unnecessary regulations that frustrate physicians. This shortcoming underscores the importance of physician input in crafting single-payer legislation.

Several legislators have introduced public-option (Medicare buy-in) proposals, portraying these proposals as more practical variants of Medicare for all. However, such reform would do little to simplify billing and paying, generating minimal administrative savings for clinicians or hospitals. Savings on insurance overhead would also be modest unless Medicare Advantage (in which overhead averages 13.7%) was excluded. Moreover, private insurers might selectively enroll healthy patients, turning the public option into a de facto high-risk pool requiring large subsidies. Hence, as the CBO report noted, expanded coverage would be costlier than under single-payer reform.

Halfway measures are politically attractive but economically unworkable. The $11 559 per capita that the United States spends on health care could provide high-quality care for all or it can continue to fund a vast health-managerial apparatus—it cannot do both.

https://jamanetwork.com…

Comment:

By Don McCanne, M.D.

This article, published by JAMA – the Journal of the American Medical Association – and written by Steffie Woolhandler and David Himmelstein – cofounders of Physicians for a National Health Program – is a highly credible, objective explanation of the single payer model of Medicare for All.

The article has been published online in advance of its publication in the June 25 edition of JAMA, and the paywall has been removed by the publisher. It is a very important article. The link above should be distributed widely to help enable others to understand just what this single payer Medicare for All proposal is all about.

There is nothing like facts to provide enlightenment.

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By Robert J. Blendon, Sc.D., John M. Benson, M.A., and Caitlin L. McMurtry, S.M.
The New England Journal of Medicine, May 29, 2019

U.S. health care costs — and not merely prescription-drug prices — have risen to the top of the national agenda. More than two thirds (69%) of the U.S. public has said that reducing these costs should be a top priority for President Donald Trump and Congress in 2019, ranking it behind only strengthening the economy (70%) on a list of 18 possible priorities (Pew, 2019) (see table). Given a list of 13 possible health-specific priorities, about 9 in 10 Americans said both prescription-drug prices (92%) and lowering the overall cost of health care (88%) were extremely important (Politico–HSPH, December 2018). In addition, when asked how much of a problem each of 18 domestic issues was, respondents ranked affordability of health care first, with 70% saying it was “a very big problem” (Pew, September–October 2018). We reviewed 14 national public opinion polls from 2018 and 2019 to elucidate the public’s perspective on health care costs and possible solutions.

Although the United States spends 18% of its gross domestic product on health — more than any other industrialized country — that is not the focus of the public’s concerns. In fact, 69% of the public believes that the United States is spending too little on health (only 10% believes we’re spending too much) (NORC–GSS, 2018); 56%, too little on Medicare (10%, too much); and 42%, too little on Medicaid (17%, too much) (West Health–NORC, February 2018).

Instead, the driving force for concern is the belief that health care services are unreasonably priced and that what people pay for care harms their household’s financial situation. More than half (53%) of Americans say the cost of health care affects their own household’s financial situation “a lot” (Pew, March 2018). Forty percent say they’re dissatisfied with the total amount they pay for care (Gallup, 2018).

So why, according to the public, are health care costs so high? When given lists of 12 or more possible reasons identified by policy experts and the media, respondents focus on charges by pharmaceutical companies (78% in one survey, 79% in another), insurance companies (70%, 75%), and hospitals (71%, 74%) as the main causes (KFF, 2018; Politico–HSPH, 2019).

Unlike many experts, the public does not see overuse of services as a significant contributor to the cost problem that concerns them. Some 60% of Americans attribute high costs to unreasonably high prices for services and drugs; 23% believe that Americans are getting more health care and prescription drugs than they need; and 11% consider these two factors equally responsible (Politico–HSPH, 2019).

About three fourths (76%) of the public believes that Americans are paying too much for most care they receive, relative to its quality. A majority also believes that health insurance premiums are increasing primarily either to boost profits for insurance companies (47%) or to accommodate high prices for care (16%), not because care is better (21%) or coverage is broader (13%) (West Health–Gallup, 2019).

Numerous broad-based proposals for reducing U.S. health care costs have been put forth by experts and covered by the media. More than half the public supported five of the seven such proposals they were asked to consider: making greater efforts to prevent disease and ensure that people live healthier lives (84%), having the government facilitate competition among health care professionals and hospitals based on price and quality (67%), having the government establish limits on what health care professionals and hospitals can charge (65%), allowing people 50 to 64 years of age to buy into Medicare (61%), and changing our health care system so that most people have Medicare and there is little or no private health insurance (52%) (Politico–HSPH, 2019). Although experts see competition and government regulation as fundamentally different ways of controlling health care costs, Americans are nearly equally supportive of both.

The two proposals the public does not favor would restrict patient access to treatments and prescription drugs: allowing payers not to cover some services deemed by experts not to be beneficial enough to justify their high cost, and giving individuals tax incentives to buy high-deductible plans. Each proposal was favored by only 37% of the public (Politico–HSPH, 2019). The public’s opposition to allowing experts to make decisions based on cost-effectiveness was similar in 2019 (56%) to what it was in 2012, when 43% were in favor and 54% opposed.

When asked whether they thought the five proposals favored by the majority would greatly reduce health care costs, however, a preponderance of respondents said they didn’t think any of the five, including Medicare for All, would do so (Politico–HSPH, 2019).

A similar pattern can be seen in attitudes toward high prescription-drug costs. Shortly after May 11, 2018, when Trump released the outline of a plan to lower prescription-drug prices, the public was asked whether they favored or opposed four components of the plan. Although a majority supported three of the four proposals, they saw only one as likely to be effective: having the Food and Drug Administration approve more generic, over-the-counter, and biosimilar drugs to encourage greater competition. Sixty-six percent favored this proposal, and 56% believed it would lower drug prices (Politico–HSPH, June-July 2018).

A large majority (82 to 89%) favors allowing the federal government to negotiate with drug companies for lower medication prices for people on Medicare (West Health–NORC, August 2018; KFF, February 2019; HSPH–SSRS, 2019). A smaller majority (58%) believes that such negotiations would reduce prices (HSPH–SSRS, 2019).

When asked whether government or private health insurance companies would be better at controlling health care costs, nearly half (47%) of respondents said government, while 38% said private companies. Notably, 61% of Republicans were in the latter camp, and 65% of Democrats were in the former (Politico–HSPH, 2019). And when respondents who thought that government-set limits on what health care professionals and hospitals can charge would reduce U.S. health care costs were asked which level of government would do a better job of establishing these limits, there was a similar lack of consensus: 51% said the federal government, and 45% said state governments. Once again, a partisan split was evident: 69% of Democrats chose the federal government, whereas 63% of Republicans chose state governments (Politico–HSPH, 2019).

What can we conclude from these findings as we approach the 2020 election? First, health care costs are likely to be an important election issue. But unlike many experts and political leaders, most Americans are not particularly concerned about aggregate health spending, either overall or on the part of government. In fact, when asked about the possibility of the Medicare Part A trust fund running out of money in the next 10 years, only 25% of the public was very concerned that it would (Politico–HSPH, 2019).

The public sees the issue of health care costs primarily as a price problem, rather than one of overutilization. Thus, proposals focused principally on reducing overuse of care are likely to be less popular than those that address high prices directly. People are likely to support candidates who talk about increasing overall health spending, not reducing it. In addition, it’s important to recognize that the public has not reached a judgment about whether increased competition or government regulation is more effective in controlling health care costs.

This debate tracks with the partisan divide: Republicans generally believe that private health insurance and state governments would be more effective at reducing costs, whereas Democrats tend to support efforts by government, especially the federal government, to address the problem. Finally, given the public’s skepticism that any approach will greatly reduce health care prices, if they are to actively support particular cost-saving proposals, they will have to be shown that those approaches would actually reduce what they pay for care. And if the public’s view is going to converge with that of many experts, they will have to be convinced that overuse of services plays a greater role in high health care costs than they currently believe.

https://www.nejm.org…

Comment:

By Don McCanne, M.D.

This review of recent national public opinion polls on health care costs shows that the public is very concerned about high costs, and that they believe those high costs are due to high prices rather than overutilization of health care services.

They are less consistent in their views of what can be done about it, and that confusion is compounded by political polarization.

What they do want are approaches that would actually reduce what they pay for health care. If you could remove ideology and political bias from their thinking, and if they would look more carefully at the policy options, then support for the single payer Medicare for All model would certainly prevail.

If we could only figure out why so many cling tenaciously to the simplistic antigovernment rhetoric that expresses concepts that are not in the interests of the great majority of us – if we could understand that, then maybe we could improve our message beyond that of affordable health care for all (not that there is anything wrong with our message).

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By David J. Meyers, Amal N. Trivedi, and Vincent Mor
Health Affairs, May 2019

In all but eight states, Medicare supplemental coverage (or Medigap) plans may deny coverage or charge higher premiums on the basis of preexisting health conditions. This may particularly affect chronically ill or high-need Medicare Advantage enrollees who switch to traditional Medicare and subsequently discover that they are unable to purchase affordable Medigap coverage. We found that in states with no Medigap consumer protections, high-need Medicare Advantage enrollees had a 16.9-percentage-point higher reenrollment rate in Medicare Advantage in the year after switching to traditional Medicare, compared to high-need enrollees in states with strong Medigap consumer protections—namely, guaranteed issue and community rating (charging all enrollees the same premium regardless of health condition). Expanding protections in the Medigap market may increase consumers’ access to this type of supplemental coverage.

From the Discussion

MA enrollees might not realize that in most states, if they switch to traditional Medicare, they might not be able to get Medigap coverage. Enrollees with higher health care needs are both more likely to leave MA and more likely to be denied access to Medigap coverage. These enrollees may then face out-of-pocket payments in traditional Medicare without any limits, causing financial burden and prompting reenrollment in MA.

Medicare beneficiaries with complex care needs often face a higher burden of costs and may benefit from a greater continuity of care. In most states these enrollees may face significant barriers to enrollment in Medigap that may increase their exposure to high out-of-pocket spending and lead to disruptions in the continuity of care if they need to switch between MA and traditional Medicare.

Additionally, in most states, even if an enrollee with a preexisting condition such as cancer does enroll in Medigap, they might not be able to receive any benefits to cover this condition during the first six months of enrollment. It is important to note that even if an enrollee has access to a Medigap plan, premiums are substantially higher in Medigap than in MA, which may place further limits on Medicare choices for lower-income enrollees.

https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

This is one more example of where Congress is neglecting the traditional Medicare program, in this case by allowing states to limit the effectiveness of Medigap plans which are required to ensure adequate catastrophic coverage in traditional Medicare. Those with complex problems who are enrolled in the private Medicare Advantage plans often become dissatisfied with their care, turning to traditional Medicare with Medigap backup. As this study reports, in most states affordable Medigap coverage is not guaranteed (if not selected when first becoming eligible for Medicare).

When we speak of an improved Medicare for All, that improvement includes benefits provided by the more generous Medigap plans (plus other uncovered benefits such as vision, hearing and long-term care).

Rather than fight two political battles – on to improve the benefits of the traditional Medicare program and a second to expand the improved Medicare to covering everyone – it would be better to enact and implement a single payer Medicare for All program in one step. The current path of incrementalism is leaving too many broke, sick, and sometimes dead. We have to end that.

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By Stephanie Goldberg
Modern Healthcare, May 21, 2019

If you can’t beat ’em, buy ’em: It’s a mantra health insurance giants like UnitedHealth Group and Humana have embraced for years as they’ve snapped up doctors practices to curb the cost of medical care. Now the parent of Blue Cross & Blue Shield of Illinois is getting into the game.

Health Care Service Corp., which owns Blue Cross plans in five states, is following its rivals’ lead, opening 10 primary care clinics in Texas next year and, in Pullman, launching a neighborhood center that offers everything from workshops on managing heart disease to yoga and meditation classes. As with its rivals’ earlier forays into physician practice acquisition, HCSC’s latest moves are made with several goals in mind, some that immediately redound to the bottom line—more tightly controlling where members seek care, for one—and others, like addressing social conditions from housing to food insecurity, that may improve results over the long haul.

A decade ago, the notion of insurers owning physicians groups was fairly unusual. There was a hope that payers and providers would be able to stay in different lanes and still bring costs down, says Carl McDonald, divisional senior vice president of treasury and business development at HCSC. “It just hasn’t quite worked out like that.”

In value-based payment models, which are slowly being adopted in many U.S. markets, insurers pay doctors a set amount per patient rather than reimbursing for each medical service. The arrangement aims to reward doctors who offer high-quality care at lower costs, but not all providers are open to the possibility of a financial loss.

Owning and operating medical practices, it turns out, is proving to be a more efficient way for insurers to trim hefty price tags for everything from lab tests to specialist visits. Getting closer to patients enables insurers to direct care, getting the cost outcomes they crave while controlling quality.

The 10 Dallas and Houston clinics are part of a joint venture between HCSC’s venture-capital arm and medical center operator Sanitas USA. The clinics are expected to control costs by referring patients to reasonably priced, quality specialists, and by educating patients about services that are covered, such as telemedicine or diabetes management.

“Everybody is basically playing catch-up to Optum,” the consulting and services unit of UnitedHealth, Akers says. Optum’s fast-growing medical care arm has been aggressively buying doctors groups. It’s acquiring DaVita Medical Group, which has 300 clinics in six states, for $4.3 billion.

America’s Health Insurance Plans, a lobbying group, says about 25 percent of its members are so-called integrated delivery systems, or organizations that include both payers and providers.

The new clinics from HCSC-owned Blue Cross & Blue Shield of Texas will be open to all Blue Cross members, as well as self-pay and Medicare patients. Sanitas is no stranger to the Blues. It already operates clinics with Florida Blue and Horizon Blue Cross & Blue Shield of New Jersey.

HCSC isn’t the only group looking to replicate such gains in Texas. In addition to traditional physicians groups, HCSC will be competing with Humana’s Partners in Primary Care unit, which plans to open five Houston clinics for patients with Medicare and Medicare Advantage, in which private companies contract with the government to offer Medicare beneficiaries additional benefits, such as dental care and wellness programs. Walgreens and VillageMD are also opening primary care clinics next to five Houston-area drugstores.

Blue Cross dominates the Illinois market, but that’s not the case in Texas. The Sanitas deal could help the insurer attract more members in the area, enabling it to more quickly grow its Medicare Advantage business.

Blue Cross of Illinois’ experiment in Pullman differs from a traditional clinic. The Blue Door Neighborhood Center, which opened late last month, works to address social determinants of health, including homelessness and food insecurity, by connecting residents—regardless of insurance carrier—with community resources. It also offers seminars on nutrition, behavioral health, diabetes and other conditions, as well as exercise classes.

Blue Door is a sign of the times, says Lyndean Brick, CEO of Advis Group, a healthcare consultancy in Chicago. “There is clear recognition, finally, that when we address (social determinants), overall healthcare improves,” she says. “All these other issues are really what cost the system incredible amounts of money. So while insurance companies are being good citizens when they do this, they’re also looking at the need to continue to drive financial profits.”

https://www.modernhealthcare.com…

Comment:

By Don McCanne, M.D.

We dream of a single payer Medicare for All system in which the highly inefficient, fragmented system of a multitude of private and public health insurers is replaced by a single efficient public payer, which would free up close to half a trillion dollars currently going to administrative waste – funds that could be directed to the health care delivery system that will fill the voids we have in health care today. But what happens to our dream when, right under our noses, the current payers become the health care delivery system?

One-fourth of the members of America’s Health Insurance Plans – the health insurance lobby organization – are already integrated delivery systems, and that transformation is accelerating. The insurers are rapidly becoming the health care delivery system. And to further solidify this transformation, they are now adding services to address the social determinants of health such as food and housing, as the insurers are “looking at the need to continue to drive financial profits.”

Go ahead and enact a single payer Medicare for All, but then how are you going to shut down the private insurers when they are the health care delivery system? If you try to break them up, what do you think our current Supreme Court would have to say about that?

We think that we’re in a battle with the private insurers, but now with the grasp they have of the medical industrial complex, it seems they may have already won. We can’t give up, but there is great urgency in doing all we can to save the system by reestablishing the primacy of the patient. Right now that profit thing is working pretty well for the insurers, and the patients are just pawns and the providers are the insurers’ tools.

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If you think the fight with insurance companies is tough, just wait until single-payer advocates have to go head-to-head with doctors.

By Mike Konczal
The Nation, May 13, 2019

The debate over expanding Medicare is at the center of the fight for the Democratic presidential nomination. Yet for such a crucial topic, there are still two questions that advocates—especially those championing Medicare for All—have yet to properly answer.

The first is how to take on the medical establishment and pay doctors less. Medicare for All would eliminate greedy and needless insurance companies, which will fight to the bitter end to keep making their fat profits. But even that battle pales in comparison with taking on the doctors, hospitals, and providers who charge private insurance higher prices for medical services. To understand this, consider where Medicare for All would get its savings. Proponents argue that Medicare for All would increase government spending but reduce overall spending on health care. That’s true; over the course of 10 years, Medicare for All could save $2 trillion. But only about 20 percent of those savings would come from eliminating insurance companies, while another 10 percent would come from cost controls on prescription drugs. The remaining 70 percent would come from cutting rates for medical providers. Without those cuts, health-care spending could increase more than $3 trillion under Medicare for All. That’s a $5 trillion swing, all determined by the question of how to tackle the medical establishment.

During a campaign, there’s good reason to focus on the insurance industry first; it’s the thing that most people absolutely hate about our broken health-care system. But if the campaign fails to make the case that the prices charged by medical providers are too high, then the politics could shift against Medicare for All once the doctors start complaining. The medical establishment will insist that hospitals will close, especially in poorer areas, and without a set of responses in place, that argument could imperil the push for health-care reform.

The political instinct will be to buy off the medical establishment, even as that increases the cost of the proposal. When Aneurin Bevan, the architect of Britain’s National Health Service, was asked how he overcame the initial resistance of doctors, he replied that he “stuffed their mouths with gold.” Today, that would involve maintaining the current high rates seen in private-insurance payments. And even then, when President Harry Truman tried to emphasize how much better off American doctors would be under his universal plan in 1945, they waged what was then the most expensive lobbying campaign in history to defeat it.

(The second question – who will bear the taxes – will not be addressed in this Quote of the Day, though the correct answer is that the taxes would be progressive and thus equitable for all. – DMc)

Mike Konczal is a contributor to The Nation and a fellow at the Roosevelt Institute.

https://www.thenation.com…

A Priceless Answer

The Nation, Letters, May 17, 2019

To justify sounding a false alarm that doctors’ opposition will torpedo single-payer health-care reform, Mike Konczal turns to a Koch-brothers-funded analysis that claims Medicare for All would either slash doctors’ income and hospital funding or break the bank [“The Score: $5 Trillion Questions,” May 13].

Konczal credulously adopts the Koch study’s underestimate of single-payer savings on insurance overhead. But more important, he (like that study) ignores overwhelming evidence that single-payer would save doctors and hospitals vast amounts on billing, insurance paperwork, and other wasteful tasks that are required by the current byzantine payment system but would be eliminated under single-payer. For instance, a recent Harvard Business School and Duke University study published in the Journal of the American Medical Association found that the average primary-care doctor at an efficient group practice spent $99,581 (and 243 hours) annually on billing. That’s four times what Canadian doctors spend interacting with insurers.

The $75,000 savings in per-doctor billing costs means doctors’ take-home pay could be stable even if their per-patient revenue goes down. It also means they could use the time they currently spend jousting with insurers to deliver (and bill for) more care.

A similar calculus applies to hospitals. At a six-hospital system in Toronto, the equivalent of just 5.5 full-time employees handle all insurance billing and patient collections. A comparable hospital system in the US employs more than 200 people for those tasks. US hospitals spend one-quarter of their budgets on administration, versus 12 percent in Canada. Streamlining hospital administration by paying hospitals global budgets (the way we currently pay fire departments and Canada pays hospitals) would produce major savings, freeing up vast resources for care. Indiscriminately slashing hospital budgets, by contrast, would be neither necessary nor desirable under Medicare for All reform—and the House and Senate bills propose no such thing.

All told, single-payer could save doctors and hospitals about $225 billion annually on billing and bureaucratic costs (in addition to about $220 billion saved on insurance overhead and tens of billions more from streamlining the billing for nursing homes, home-care agencies, etc., and by lowering drug prices), offsetting the costs of providing first-dollar comprehensive coverage to everyone in the nation. Even though Konczal doesn’t understand that, most doctors do. That (and altruism) explains why single-payer is now doctors’ favorite health-care-reform option and 23,000 have joined Physicians for a National Health Program.

David U. Himmelstein, MD
Co-Founder
Physicians for a National Health Program
New York City

Steffie Woolhandler, MD, MPH
Co-Founder
Physicians for a National Health Program
New York City

Adam Gaffney, MD, MPH
President
Physicians for a National Health Program
Boston

https://www.thenation.com…

Comment:

By Don McCanne, M.D.

Since prices have played an outsized role in driving up health care spending, it is widely assumed that price reductions under a single payer Medicare for All system would first have to come from the take-home income of physicians, thus likely provoking a rebellion by physicians against single payer reform. Having not completed his homework, Mike Konczal seems to have accepted this invalid conclusion, as have many others, including the media.

What is left out is that the single payer model would result in a tremendous reduction of administrative costs within the physicians’ practices. The overhead savings could very well be more than enough to offset potential fee reductions, thereby avoiding any reduction in take-home pay. Also physicians would be paid for care that is now provided as charity and for unavoidable care that the uninsured and underinsured currently may be unable to cover and thus is written off as bad debt. Plus they would no longer have to absorb the losses with Medicaid patients since they would transferred into the universal single payer program. There could also be some increase in the volume of services, increasing marginal income, because those who currently forgo care because of financial barriers would no longer have to since they would have access to guaranteed, prepaid health care.

Under this scenario, it is possible that physicians could see increases in net income, though we would assume that our public stewards would negotiate rates that are both fair for the health care delivery system and fair for the taxpayers. This goal is certainly achievable if we had our own public monopsony negotiating prices and global budgets for health care products and services serving the greater public good. That would be in sharp contrast to the dysfunctional health care market that we now have. Physicians could dump much of their administrative burden and devote more of their efforts to their altruistic pursuit of taking care of patients, and isn’t that what it’s all about?

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