PNHP

Spending growth greater in employer-sponsored, private plans than in Medicare

Spending growth greater in employer-sponsored, private plans than in Medicare

Variation In Health Spending Growth For The Privately Insured From 2007 To 2014

By Zack Cooper, Stuart Craig, Charles Gray, Martin Gaynor, and John Van Reenen
Health Affairs, February 2019

Abstract

We examined the growth in health spending on people with employer-sponsored private insurance in the period 2007–14. Our analysis relied on information from the Health Care Cost Institute data set, which includes insurance claims from Aetna, Humana, and UnitedHealthcare. In the study period private health spending per enrollee grew 16.9 percent, while growth in Medicare spending per fee-for-service beneficiary decreased 1.2 percent. There was substantial variation in private spending growth rates across hospital referral regions (HRRs): Spending in HRRs in the tenth percentile of private spending growth grew at 0.22 percent per year, while HRRs in the ninetieth percentile experienced 3.45 percent growth per year. The correlation between the growth in HRR-level private health spending and growth in fee-for-service Medicare spending in the study period was only 0.211. The low correlation across HRRs suggests that different factors may be driving the growth in spending on the two populations.

From the Discussion

US health spending has increased steadily since 1960. In this study we analyzed growth in health spending on Medicare beneficiaries and people with employer-sponsored private health insurance in the period 2007–14. Whereas Medicare spending per fee-for-service beneficiary decreased by 1.2 percent in real terms during this period, spending per private insurance enrollee increased by 16.9 percent. Of note, there was substantial variation in the growth rates for private health spending across HRRs (less so for Medicare spending). This variation suggests that some regions are more successful than others at constraining health spending growth. This is particularly apparent in HRRs where there were negative growth rates in both Medicare and private spending.

This divergence in growth rates suggests that at least during our study period, different factors were driving health spending growth in the Medicare and privately insured populations. Prior work has demonstrated that there is a low cross-sectional correlation between HRR-level health spending on fee-for-service Medicare beneficiaries and that on people with private health insurance. One driver of this low correlation is the low correlation between the regulated payments in fee-for-service Medicare and the prices that health care providers and insurers negotiate for care. It is likely that differences in growth rates between regulated fee-for-service Medicare provider payments and providers’ negotiated transaction prices are also driving some of the difference in the growth in spending across these two populations. Indeed, recent work has found that in the short run, growth in providers’ prices is driving growth in private health spending.

This research has one very clear implication for public policy: Given the low correlation between the growth in private health spending on people with employer-sponsored coverage and the growth in spending on fee-for-service Medicare beneficiaries, separate policies will be necessary to curb spending growth in the two populations.

Abstract:
https://www.healthaffairs.org…

Full article (behind a paywall):
https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

Growth in health spending on people with employer-sponsored commercial health insurance from Aetna, Humana, and UnitedHealthcare, three of the five largest health insurers in the US, was compared with growth in health spending in the traditional fee-for-service Medicare program which excluded the private Medicare Advantage plans.

There were two important observations. Spending growth in the employer-sponsored commercial plans was much greater than spending growth in the traditional Medicare program, with private spending growing 16.9 percent over 2007-14 and Medicare spending actually decreasing 1.2 percent (during SGR years). The other observation is that there was tremendous variation in private spending between hospital referral regions which had a very low correlation with Medicare spending in those regions.

The authors note, “One driver of this low correlation is the low correlation between the regulated payments in fee-for-service Medicare and the prices that health care providers and insurers negotiate for care. It is likely that differences in growth rates between regulated fee-for-service Medicare provider payments and providers’ negotiated transaction prices are also driving some of the difference in the growth in spending across these two populations. Indeed, recent work has found that in the short run, growth in providers’ prices is driving growth in private health spending.”

Thus the traditional, public fee-for-service Medicare program has been much more effective in controlling spending than have the large, private commercial insurers which have operated more as a loose canon in cost containment.

Since the study was done while the the Medicare sustainable growth rate formula was in effect, it may be that the negative spending growth for Medicare was too severe at that time (since abandoned), but it does show that public policies are more effective than the private market in controlling and stabilizing health care spending growth.

Regardless, this study does support enactment and implementation of the single payer Medicare for All model as a method of achieving a more sustainable growth in health care spending in the future.

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

Dr. Adam Gaffney on “WBUR CitySpace”

PNHP president Dr. Adam Gaffney participated in a WBUR CitySpace discussion titled, “Single Payer: The Pros, The Cons And What’s Possible” on March 26, 2019. (Click here to view our live tweet of the event.) He was joined by Profs. John E. McDonough and Anya Rader Wallack to discuss the policy and political implications of improved Medicare for all.

The U.S. Healthcare Cost Crisis

Discover how the high cost of healthcare impacts Americans' personal finances, individual healthcare choices and perceptions of the U.S. healthcare system. A new survey from West Health and Gallup reveals financial hardships but gaps between political parties on the overall quality of the system.

Gallup, March 26, 2019

Every day, Americans are burdened by the strain and fear of ballooning healthcare costs. Yet despite the hardships many Americans endure, 64% say they are “completely” or “mostly” satisfied with their personal experience of the healthcare system.

Additionally, one in four skipped a medical treatment because of cost, and in the past year alone, Americans collectively borrowed an estimated $88 billion to cover healthcare costs.

Partisan divides split Americans’ perceptions of the healthcare system’s quality. While 48% of the general population believes that the quality of care in the U.S. is the best or among the best in the world, this swells to 67% among self-identified Republicans, compared with just 38% among Democrats.

Other key findings in The U.S. Healthcare Cost Crisis include:

  • the sacrifices Americans make, and the tradeoffs they are willing to accept, to offset the impact of high healthcare costs
  • Americans’ concerns about the damage rising healthcare costs could do to the U.S. economy and to their own personal finances
  • Americans’ expectations about their healthcare costs over the next two years
  • the extent to which Americans defer or forgo care or medicine due to high costs
  • Americans’ understanding of their out-of-pocket costs before receiving care

https://news.gallup.com…

Democrats bailing on real health care reform

House Democrats to Unveil Plan to Expand Health Coverage

By Robert Pear
The New York Times, March 25, 2019

On Tuesday, Democratic leaders, including Speaker Nancy Pelosi, will put aside, at least for now, the liberal quest for a government-run “Medicare for all” single-payer system and unveil a more incremental approach toward fulfilling those campaign promises. Building on the Affordable Care Act, they would offer more generous subsidies for the purchase of private health insurance offered through the health law’s insurance exchanges while financing new efforts to increase enrollment.

They would also reverse actions by the Trump administration that allow insurance companies to circumvent protections in the Affordable Care Act for people with pre-existing conditions. Insurers could no longer sell short-term health plans with skimpy benefits or higher premiums for people with chronic illnesses.

Ms. Pelosi said the legislation would “strengthen protections for pre-existing conditions, reverse the G.O.P.’s health care sabotage and lower Americans’ health costs.”

The legislative package… seems to answer a question facing Democrats since they took control of the House: How would they balance the expansive demands of their most liberal members with the needs of more pragmatic Democrats elected in seats that were held by Republicans?

Ms. Pelosi, the committee chairmen and many other House Democrats see the new legislative package as a more efficient way of achieving universal coverage, a goal shared by champions of “Medicare for all,” led by Representatives Pramila Jayapal of Washington and Debbie Dingell of Michigan.

The House Democrats’ bill would…

…turn back the president’s action by stipulating that short-term plans are included in the definition of “individual health insurance coverage” under the Affordable Care Act and therefore must comply with coverage requirements of the health law…

…would revise the law to provide more of both types of assistance.,, tax credits to help them pay premiums, and cost-sharing reductions to lower their deductibles, co-payments and other out-of-pocket costs…

…make subsidies available to some working families who are now ineligible… eliminate this quirk in the law, sometimes called the family glitch…

…provide money to publicize the insurance options and subsidies available under the Affordable Care Act and to help people enroll…

…block guidance issued by the Trump administration under which states can get waivers allowing them to use federal funds to subsidize insurance that does not comply with coverage requirements in the Affordable Care Act…

…seeks to lower premiums by setting up reinsurance programs…

…would provide federal money to states that want to set up their own insurance marketplaces but have yet to do so.

https://www.nytimes.com…

Comment:

By Don McCanne, M.D.

So what do we know about politics?

Because of the persisting deficiencies in our overpriced and underperforming health care financing system, the majority of the people are now ready for the vastly superior model of single payer Medicare for All which would ensure affordable health care for everyone. But the Democratic leadership that now controls the House of Representatives is more politically astute than us so they will put aside single payer and move ahead with fine tuning the mediocre Affordable Care Act (ACA) with the dubious claim that it will move us closer to the deferred goal of Medicare for All. What could be wrong with this logic?

The number one rule is do not ever give away anything before you sit down at the negotiating table. With this maneuver they have given away everything except for a few tweaks to the Affordable Care Act. Oh my. But they’re master politicians.

Okay. It is agreed that if the House passes the Medicare for All Act of 2019 in this session of Congress it will be blocked in the Senate and would be vetoed by President Trump anyway. But would that be a futile gesture?

Let’s assume that the House does manage to pass a modest package of ACA tweaks and sends it on to the Senate. Isn’t that the deliberative body controlled by the party that has vowed for years to repeal Obamacare, i.e., the Affordable Care Act? Also, when the president has been busy slashing and burning ACA and only yesterday requested the courts to declare the entire Act unconstitutional, does anyone believe that he will sign on to a package of tweaks that move slightly in the opposite direction of where he has been headed? So wouldn’t the House passing a few ACA tweaks also be a futile gesture?

If the House Democratic leadership is honest about their claim that the ACA tweaks will eventually lead to single payer Medicare for All (a proposition that is very difficult to accept at face value) then which futile gesture should they choose, since either will be defeated?

The House can use the legislative process to further educate the nation on the reasons for the high costs and the cruel deficiencies in our system while demonstrating the solutions that will bring us the reform that we desperately need. The ACA tweaks barely touch on the problems and are even somewhat arcane from the public’s perspective, so this legislative package has virtually no instructive value that would help to increase the passion needed to push forward the movement for reform.

Contrast that with the Medicare for All Act. It is easy for people to understand what is meant by everyone being included (unlike the Affordable Care Act). They can understand what is meant by being affordable for everyone (unlike the Affordable Care Act). They can understand what is meant by health care being free at the point of service (unlike the Affordable Care Act). They understand that equitable means fair (unlike the Affordable Care Act). They understand what it means to have a program that covers you for your entire life (unlike the Affordable Care Act). And on and on.

The Senate and the White House remain barriers to any health care reform in this session of Congress. The plot of the Democrats seems to be to offer legislation that the Republicans will block so that they can use that in the 2020 elections, claiming the Republicans don’t care about your health care. But look at the measures listed above in the excerpts from the New York Times article. What percentage of the voters are going to be passionate about electing candidates that promise to pass those tweaks? Well, all we can say for sure is that it is not less than zero.

This is the time to greatly expand our educational efforts on single payer Medicare for All. We can do that by bringing the Medicare for All Act of 2019 to the committees that actually have the power to move the bill to the floor (instead of the committees that do not have that power), and then bring it to the House floor so that the nation can see on C-Span and cable news channels just what health care justice is all about. The policies are powerful and have tremendous support throughout much of the nation.

Think of entering the voting booth in 2020. Which is more apt to drive your vote? Comprehensive, affordable health care for everyone forever? Or excluding short-term health plans from the ACA exchanges?

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

How ‘Medicare for All’ went from pipe dream to mainstream

Universal health care debates could shape the 2020 election — and the future of the Democratic Party

By Mary Ellen McIntire
Roll Call, March 26, 2019

Political candidates and activists in Maine, especially in rural areas, often got a sharp reaction five years ago when they knocked on doors to promote universal health care.

“The reaction was, ‘Oh, you’re a commie,’” said Phil Bailey, who back then advocated for various Democratic causes.

Now, voters in those same conservative areas have a different take.

“Of course” is a common response to calls for universal coverage, said Bailey, now executive director of Maine AllCare, part of a national coalition campaigning for single-payer health care. The organization saw enough growing momentum and received enough financial support to justify hiring Bailey and another full-time staffer last summer for the previously volunteer-led group.

What was once seen as a long-shot pitch from Vermont independent Sen. Bernie Sanders during his 2016 presidential campaign is now a proposal that at least four of his Senate colleagues also vying for the party’s 2020 nomination supported during the last Congress. The issue is driving the national political health care debate.

But to succeed in enacting a single-payer system such as the “Medicare for All” plan that Sanders backs, liberals would need an unprecedented grassroots movement propelling the effort forward and would have to work out complicated policy details affecting nearly one-fifth of the nation’s economy.

Democrats are already contending with industry groups hoping to shift the focus back to strengthening the current system. Most drug companies, hospitals and insurers oppose Medicare for All, which undoubtedly complicates progressives’ efforts. The party’s left wing is pushing a bold, pricey plan carrying political risks that make Democratic leaders shudder. Despite all the inevitable political hurdles, getting a single-payer law enacted may look easy compared to implementing it.

The most ardent advocates for a government-run, single-payer system are not content with incremental steps. They are seeking a wholesale reorganization of the nation’s health care system.

The proposed two-year transition may be too fast for the entire industry to adapt to in an overhaul that experts warn would displace workers and jolt the economy.

“It is going to be a big administrative and logistical challenge. When you’re talking about moving everyone in the country into a new health insurance program, that is not a small feat,” said Linda Blumberg, an institute fellow at the Health Policy Center at the left-leaning Urban Institute.

Upending the industry

A single-payer health care plan would significantly change every sector of the health care industry. Hospitals and doctors would need to adjust to a new payment system, the insurance industry would shrink to a fraction of its size, and the government would bring drug companies to the negotiating table to determine prices.

The 2010 health care law left in place most of the existing health care infrastructure in the U.S. Still, experts warn that the lessons from that more incremental transition show how dramatic it would be to shift to a single-payer system.

Supporters aren’t intimidated by the seismic nature of the change. The hope is not just to ensure that everyone has coverage, but also to take on health care companies seeking to maximize their profits, said Adam Green, a co-founder of the Progressive Change Campaign Committee, a political action committee that supports liberal candidates.

“Medicare for All boils down to two things,” Green said. “One is universal coverage. The other is corporate accountability.”

Setting up a single-payer system would most likely require creating a new government program to serve as the payer and oversee the system. A House bill by the co-leader of the Progressive Caucus, Pramila Jayapal, would also establish a national health care budget to cap costs.

The Washington Democrat’s bill, like Sanders’ plan, doesn’t envision a large role for supplemental insurance.

It would be permitted, but aides say it would likely be unnecessary and used only to cover medically unnecessary treatments, such as cosmetic surgery. Unraveling the current insurance system is a Gordian knot-style task all its own.

Even public entitlement programs are often administered through private plans, with 68 percent of people in Medicaid and 34 percent of those in Medicare using comprehensive managed care plans.

Granddaddy of 2020 issues

The role of private insurance in a single-payer system has already emerged in the fledgling Democratic presidential primary race.

California Sen. Kamala Harris sparked the debate over the survival of private insurance earlier this year, saying she favors a single-payer system that would eliminate it. Harris has also backed other proposals, but called the single-payer plan her top choice.

Minnesota Sen. Amy Klobuchar said such a move is not feasible and supports a bill by Hawaii Democratic Sen. Brian Schatz to let people buy into Medicaid. Similarly, former Texas Rep. Beto O’Rourke, who previously supported a single-payer system, now says another path to universal coverage may be more efficient.

The single-payer bills introduced so far would not be based on the current Medicare program, but instead would greatly expand the program’s benefits.

Jayapal and Sanders both say the national health program would cover all medically necessary treatments. Those could be determined by a doctor or a newly formed national health program, said Jodi Liu, a RAND Corp. associate policy researcher.

Adam Gaffney, president of Physicians for a National Health Program, which supports a move to single-payer, said those decisions could resemble the way Medicare determines what care is medically necessary. He supports a national list of covered drugs.

Advocates for a single-payer system say that enrolling people in the program may be the easiest part. After all, decades ago, the government signed up seniors in the newly created Medicare program the year after it was enacted. Unenrolled patients could be signed up at a doctor’s office or hospital when they receive treatment, said Gaffney.

“Once you say you’re going to enroll everyone, it actually takes a lot of the administration out of it,” Gaffney said.

Compensation questions

One major challenge under a single-payer system would be how to pay medical providers. Advocates propose different types of plans, such as paying all providers at the same rate, possibly based on current Medicare rates, or global budgeting, through which institutions would regularly receive a lump sum of money as reimbursement for treatments.

Payment changes could benefit some doctors, such as those who currently treat many Medicaid enrollees and receive lower rates than Medicare. But providers who see mostly patients covered by commercial insurance could see payments fall.

The same goes for access to providers, said Liu. Since not all providers accept Medicaid, many patients would likely have an easier time finding doctors.

The government would face significant pressure to ensure that providers were compensated at the “right” rate, said Blumberg. Controlling health costs would be one goal, but the government would not want to skimp on quality or access to a sufficient number of providers.

In making decisions that affect the entire health care system, selecting the wrong payment rate could have serious ramifications, said Blumberg. “That process in and of itself is going to require a huge amount of attention and analysis and monitoring.”

Under the Jayapal bill, hospitals and the government would negotiate a budget based on factors like the historic volume of services over three years, a hospital’s normal expenditures and standard payment rates.

Hospitals would also get funding to cover their uncompensated care costs under an all-payer system.

Global lump-sum budgeting, which would give institutional providers an amount of money for health care services over a set amount of time, could contain costs, which advocates call a key benefit.

“If there was a national global budget, that’s certainly a direct lever to address how much spending there is on health care, but of course, there’s a lot of political issues that would come up,” such as budgetary pressures, Liu said.

While hospitals and other institutions would be paid quarterly through a capped budget under Jayapal’s proposal, individual doctors would be paid through a fee-for-service system for every procedure. The Health and Human Services secretary would have one year to set those providers’ fees. Hospitals are already sounding the alarm about receiving lower payments under Democratic proposals.

Whether Jayapal’s two-year transition is feasible is another question. A Jayapal aide said a fast transition provides less time for the industry to push back.

Still, Blumberg suggests a 10-year transition is more feasible. “The change for a lot of providers could be very substantial, and doing that in a very short period of time may have implications for disrupting the operation, the ability for these providers to continue to operate and the access for the patients,” she said.

Although the challenges are great, Medicare for All advocates note that other large developed countries ensure all citizens can access health care.

“Across industrialized countries, the hallmark of the health care system is universal coverage,” said Robin Osborn, a Commonwealth Fund vice president and director of international health policy and practice innovations.

Where’s the funding?

For all the questions around a single-payer system, the biggest question may be how to pay for it. Neither Jayapal or Sanders included a financing plan in their bills, although Sanders released a list of possible ways to pay for his.

The price tag for Sanders’ vision would be roughly $32 trillion over 10 years, according to two outside analyses of proposals Sanders put forward in 2016 and 2017, the first from the Urban Institute and the latter from the libertarian Mercatus Center.

That’s an eye-popping balance, although Sanders emphasizes findings that the U.S. would actually save money on health care spending over a decade. Single-payer advocates argue that the U.S. health care system is already the most expensive in the world and would be more efficient under a new program.

“When you think about the fact that people are already paying, you have to recognize that this is just a scare tactic, primarily from the right, saying you’re going to end up paying much more,” Jayapal said.

Still, asking taxpayers to pay the whole bill causes even some Democrats to balk.

Speaker Nancy Pelosi of California said in a recent Rolling Stone interview that a single-payer system may be easier administratively than other ways to reach universal coverage, but questioned how to pay for it.

Pelosi insists that Democrats should build on the 2010 health care law, which she helped shepherd through Congress a decade ago. Expanding the current Medicare program would not be as beneficial to Americans as that law, she argues.

“All I want is the goal of every American having access to health care,” she told the magazine. “You don’t get there by dismantling the Affordable Care Act.”

Critics will likely highlight the lack of a financing plan — and the expected high tax increase — that would come with implementing a system that covers essentially all medical expenses.

Sanders’ financing options include ending tax breaks that would become obsolete under a single-payer plan, adding a 4 percent income-based premium paid by households, imposing a wealth tax or a more progressive personal income tax, or leveraging fees on corporations, such as a one-time tax on offshore profits.

Other possibilities include sunsetting parts of the Republican 2017 tax overhaul or creating a tax on employers, which could mean that employers would not see much savings from not providing coverage to workers.

High-income earners are particularly at risk, said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation. “Depending on how it’s financed, high-income people could end up paying much more in taxes than they now pay for health care,” he said.

Because a transition to a single-payer plan would effectively eliminate most of the insurance industry, possibly 1 million to 2 million people who work in that industry would be displaced, according to Jayapal. Both Jayapal and Sanders proposed assistance for those workers with new job training, education or other programs.

Jayapal’s bill introduction in February led health insurance stocks to slip, although analysts did not express much concern. Spencer Perlman, director of health care research at Veda Partners, wrote to clients that he did not believe the bill to be a risk to managed care.

“The only conceivable analogues for the approach envisioned by House Progressives are the Medicare Act of 1965 and the ACA, each of which were generational policies that nevertheless largely left intact the commercial insurance paradigm and private control of healthcare services,” he wrote. That could be partially because a Medicare for All debate would draw in essentially every sector of the economy.

“It’s hard to imagine a bigger and more all-encompassing debate than over Medicare for All,” Levitt said. “Health care is such a big part of the economy, and you would just have every business and health care group weighing in.”

Political calculus

Some Democrats doubt that a Democratic president and Congress would implement a single-payer system.

Bob Kocher, a partner at Venrock and former senior Obama administration health care official, said actions in office typically don’t match the aspirations candidates invoke while campaigning.

“When you try to do it, the details matter and are hard and are often less disruptive and ambitious than what your poetry was,” he said.

Liberals insist that a single-payer system is the only path forward. “This is not a messaging event. We are going to get health care for every American,” Rep. Debbie Dingell, a Michigan Democrat, said at an event for the House bill.

If lawmakers were going to march toward a single-payer system, a massive shift in public opinion over a relatively short period of time would be needed.

Recent polls show that support for Medicare for All falls when people learn it would eliminate private insurance companies or raise taxes.

Whether Democrats decide to take up a single-payer plan would depend on how much a president campaigned on it, said Green.

A political boost could come if Medicare for All brought down “an old timer” who doesn’t support the policy, such as Ways and Means Chairman Richard E. Neal of Massachusetts, Green suggested.

“Now what we’re experiencing is there’s a lot of candidates who campaigned and won on Medicare for All, including flipping red seats blue, but ironically, there’s others who didn’t campaign on Medicare for All, got attacked anyway and won, but were kind of spooked from the whole experience,” Green said.

Still, Green added that if a “true progressive” wins the White House, he expects Medicare for All to be a priority.

Advocates hope that Medicare for All hearings in the coming months in the Rules and Budget committees will help the public understand the plan. Those hearings could also be a chance for single-payer opponents to raise concerns.

“Democrats are once again proposing fiscally irresponsible policies that will radically alter how hundreds of millions get their health care,” Rep. Steve Womack of Arkansas, the Budget Committee ranking Republican, said when Jayapal’s bill was released.

Mark Peterson, a political science professor at the University of California at Los Angeles, said historically, Americans have consistently said the health care system needs improvements, but they’re also afraid of what they don’t know.

“To the extent that what progressives are doing will stimulate that kind of action at the public level to really create that wave, a groundswell of support the way Social Security had, that can make an enormous political difference,” he said.

http://www.rollcall.com…

The high cost of preserving choice of private plans

Medicare for All Would Abolish Private Insurance. ‘There’s No Precedent in American History.’

By Reed Abelson and Margot Sanger-Katz
The New York Times, March 23, 2019

At the heart of the “Medicare for all” proposals championed by Senator Bernie Sanders and many Democrats is a revolutionary idea: Abolish private health insurance.

Proponents want to sweep away our complex, confusing, profit-driven mess of a health care system and start fresh with a single government-run insurer that would cover everyone.

But doing away with an entire industry would also be profoundly disruptive. The private health insurance business employs at least a half a million people, covers about 250 million Americans, and generates roughly a trillion dollars in revenues. Its companies’ stocks are a staple of the mutual funds that make up millions of Americans’ retirement savings.

Such a change would shake the entire health care system, which makes up a fifth of the United States economy, as hospitals, doctors, nursing homes and pharmaceutical companies would have to adapt to a new set of rules. Most Americans would have a new insurer — the federal government — and many would find the health insurance stocks in their retirement portfolios much less valuable.

“We’re talking about changing flows of money on just a huge scale,” said Paul Starr, a sociology professor at Princeton University and author of “The Social Transformation of American Medicine: The Rise of a Sovereign Profession and the Making of a Vast Industry.”

“There’s no precedent in American history that compares to this,” he said.

Most other countries with single-payer systems allow a more expansive, competing role for private coverage. In Britain, for example, everyone is covered by a public system, but people can pay extra for insurance that gives them access to private doctors. Most countries in Europe don’t have single-payer systems, but instead allow private insurance companies to compete under extremely tight regulations.

Legislators writing the bills acknowledge that people in the health insurance industry would lose their jobs. Proposals in the House and Senate would set aside large funds to help cushion the blow to displaced workers, offering them training, benefits, and income supports.

The health insurance industry is now composed of a mix of for-profit and nonprofit companies of various sizes. About 155 million Americans get private health coverage through an employer, but the reach of the industry extends into publicly funded insurance programs.

A third of Americans enrolled in Medicare, which insures older and disabled people, and four-fifths of those in Medicaid, which covers the poor and disabled, now get their benefits from a private insurer.

Many supporters of this approach see elimination of private insurance as a key feature, not a bug, meant to improve the program’s efficiency and equity by streamlining the health care system and weakening profit motives. With a single insurer covering every patient, hospitals and doctors could spend less time and money complying with differing policies, negotiating contracts, and filing forms to get paid.

“It’s worth it,” said Adam Gaffney, the president of Physicians for a National Health Program, which supports single-payer health care and helped design Ms. Jayapal’s bill. “Because we are not going to get to true universal health care without the greater efficiency of a single-payer system.”

The concept, in broad strokes, appeals to many Democratic voters. But overall support diminishes by a third or more when people are told that the plan would involve eliminating private insurance, raising taxes, or requiring waits to obtain medical care, according to surveys from the Kaiser Family Foundation.

NYT Reader Comment:

By Don McCanne, M.D.

Before expressing concern about the loss of the private insurance industry, it is crucial to understand the single payer model of Medicare for All. It truly reduces administrative waste by hundreds of billions of dollars while using public policies to finally price our health care services appropriately. The funds recovered are more than enough to fill in the voids in coverage for the uninsured and underinsured. The Affordable Care Act with the public option Medicare buy-in models forgo that efficiency and still leave tens of millions uninsured or underinsured.

The insurance industry is very expensive, yet it interferes with care through restrictive provider networks, financial barriers to care, and prior authorization requirements, while providing no direct health care for the hundreds of billions of dollars it consumes. Reform models include job retraining and transitional compensation for displaced workers, so they can engage in more productive occupations of greater benefit to our economy.

In any other industry, accolades are awarded for disruption of a system with very high costs and poor value, when it is replaced by products and services of greater value. Our sympathy for the insurance industry will evaporate once we finally experience affordable health care for all.

https://www.nytimes.com…

Comment:

By Don McCanne, M.D.

The promise of affordable care for everyone has helped to popularized the concept of single payer Medicare for All. However, those opposed either because of their conservative ideology or because of the disruptive impact this would have on the private insurance industry are now telling the public that this would take away the freedom to choose a private health plan, especially a plan offered through employment. The media has been particularly helpful to the insurance industry by making sure that people understand that Medicare for All threatens to take away their option to continue with the health plans they have.

What much of the public does not understand is that the single payer model of Medicare for All would recover close to half a trillion dollars of administrative waste – funds that when combined with the current spending level on actual health care would make it possible to pay for comprehensive health care for everyone. When they decide that they want to have the option of obtaining a health plan through work, they have a total disconnect with understanding the profound administrative waste that preserving such a health care financing system entails.

Keeping in place the private health plans forgoes this savings. The continued high costs would keep pressure on the payers to reduce spending which they do by erecting administrative and financial barriers to care (narrow provider networks, high deductibles, prior authorization requirements, etc.). Preventing people from getting the health care that they should have is the opposite of what a high performance health care system should be doing, and that is particularly shameful when we are paying the system so much more money for these intrusive measures that are superfluous to the provision of actual health care.

As I mentioned in my comment on the NYT website, “In any other industry, accolades are awarded for disruption of a system with very high costs and poor value, when it is replaced by products and services of greater value. Our sympathy for the insurance industry will evaporate once we finally experience affordable health care for all.”

Disruption is good if it’s beneficial disruption.

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

AP-NORC poll: Americans want more government spending on health care

Poll: More Americans say too little spending on health

By Hannah Fingerhut and Andrew Taylor
Associated Press, March 21, 2019

A growing majority of Americans want greater government spending on health care, and the increase is being driven by both Democrats and Republicans.

That’s according to new data from the General Social Survey, a widely respected trend survey that has been measuring views of government spending since the 1970s. An analysis by The AP-NORC Center for Public Affairs Research and General Social Survey staff reveals that Americans want to spend more money on a wide range of government functions.

The findings come as President Donald Trump’s latest budget plan proposes to cut many programs that are popular with the public, including alternative energy, the safety net for the poor, and health care.

Support for more government spending on health care has been on the rise since 2014. Seven in 10 consider the government’s spending on improving national health to be too low, up from 62 percent in 2016 and 56 percent in 2014. While Democrats are more likely than Republicans to say spending on health is too little, there has been a sharp increase across party lines. The poll finds 80 percent of Democrats say there is too little spending, up from 66 percent in 2014, and 59 percent of Republicans say the same, up from 42 percent four years ago.

https://apnews.com…

Since 1973, more than half of Americans have said that the United States is spending too little on health and improving and protecting the nation’s health. The percentage peaked in 2004, when 77 percent of Americans said we’re spending too little, and then steadily declined to 56 percent in 2014. Since 2014, the percentage of Americans who say we’re spending too little has been on the rise, climbing to 62 percent in 2016 and 70 percent in 2018.

http://www.apnorc.org…

Comment:

By Don McCanne, M.D.

Seventy percent of Americans believe that the government should be spending more on health care. That includes 80 percent of Democrats and a majority of Republicans as well – 59 percent – and the numbers have been increasing recently.

That does not seem to be consistent with the stated views of the politicians who are telling us that people would prefer to keep their private employer-sponsored health plans, so we should not enact a single payer Medicare for All program. In contrast, other polls have also confirmed the popularity of single payer.

By asking questions about your taxes and about freedom to choose your health plans, pollsters can make it appear that the support for single payer is malleable. But this AP-NORC poll is quite straightforward; there is a bipartisan consensus that the people want a publicly-funded health system. You won’t get that through a health plan offered at your place of employment.

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

Time to make health care right with Medicare for all

By Bill Honigman, M.D.
The Press-Enterprise (Riverside, Calif.), March 21, 2019

While working as an emergency-room physician in Orange County, I learned that most patients who entered our doors shouldn’t have been there in the first place.

Whether it was diabetes, high blood pressure or painful tooth infections, many had failed to get the basic care they needed over time. Largely due to cost, they had fallen through the cracks of our current healthcare system, one that’s becoming more unaffordable by the day.

Some had limbs amputated due to easily treatable diabetes or heart disease. Others died of strokes or heart attacks brought on by neglected high blood pressure or diabetes.

But today there’s hope. Rep. Pramila Jayapal, D-Washington has just introduced a new Medicare-for-all bill in the U.S. House of Representatives. This means that our country has another chance to get health care right.

We the people deserve a just system, one that promotes our general welfare while ensuring peace of mind. We deserve a healthcare system that’s paid for by all of its users. And one that takes care of everyone’s needs regardless of wealth, health or employment like every other large, rich country in the world already has.

Today, we’re at the mercy of insurance and pharmaceutical companies that are more concerned with profiteering than your family’s health and well-being.

You’ve probably heard of San Fernando Valley teen Nataline Sarkisyan, who died in 2007 after her insurance company initially denied her a liver transplant that doctors said would likely keep her alive. You may also know about the outrageous cost of simple yet life-saving drugs, such as Epi-Pen for allergic reactions. It’s reached $300 a dose.

A single-payer system like Medicare for All would save money and focus on quality medical care in part by eliminating the middlemen — the insurance companies. It would also give us the bargaining power that we the people need to control rising prescription drug costs, much like the U.S. Department of Veterans Affairs does.

But perhaps what’s most compelling is how much we will save.

While funding for Jayapal’s bill has yet to be identified, an economic analysis of Sen. Bernie Sanders’ Medicare for All Act of 2017 found that middle-income families’ healthcare spending as a share of income would fall between 2.6 and 14 percent, depending on how they were currently insured.

Healthcare costs would rise for the highest income families but even so, they would spend no more than 4.7 percent of their income for health coverage under that previous plan. (While the 2017 and 2019 bills are similar, they are not identical and these figures may differ.)

How would we pay for such a system? Jayapal has suggested that funding could be achieved with a mix of taxes, including mandatory employer contributions and “a wealth tax.” Savings from simplified billing, cost controls and other changes would lower overall U.S. spending on health care.

Meanwhile, Americans would no longer have to pay rising insurance premiums, high deductibles or co-payments.

Sound too good to be true? While some are decrying a potential “government takeover” of health care, Medicare for All would allow we the people to decide our health priorities and where that money is spent instead of insurance companies. And we would still be able to keep all of our doctors, clinics, and hospitals we now use.

It would also make doctors’ lives significantly easier, reducing physician burnout and subsequent mistakes , by eliminating the administrative hassles that come with a multi-payer system.

Several years after the implementation of Obamacare, some 264,000 Orange County residents were living without health insurance in 2017. Thousands more are underinsured.

This means that many residents who have chronic illnesses, as well as mental health and substance abuse disorders, are not getting the treatment or medicine they need to lead healthy, productive lives. The toll this takes on these patients and their families — and subsequently our businesses and community — is, well, staggering.

Medicare for All would also alleviate the financial and administrative burden that small businesses bear when sponsoring health insurance for their employees.

This is not rocket science. It’s time for all U.S. residents to unite and fight for the right to a dignified healthcare system. I urge you to educate yourself, organize and call your federal lawmakers at 202-224-3121 to express support of Jayapal’s lifesaving bill.

As the late U.S. Sen. Paul Wellstone of Minnesota said: “We all do better when we all do better.”

Dr. Bill Honigman worked as an emergency room doctor for more than 30 years, mostly in Orange County, before retiring nearly two years ago. He’s a member of Physicians for a National Health Program.

https://www.pe.com…

The fallacy that you can keep the insurance you have

In Iowa, Beto O'Rourke works to find his footing on health care

By Patrick Svitek
The Texas Tribune, March 17, 2019

Beto O’Rourke has long advocated for “universal, guaranteed, high-quality health care for all.”

But O’Rourke has a less-than-straightforward history with Medicare for All, and he continued to keep it at arm’s length in Iowa, saying at one point that he is “no longer sure that that’s the fastest way” to achieve universal health care. Instead, he arrived in the Hawkeye State ready to talk about a different health care proposal: Medicare for America.

Introduced in December by U.S. Reps. Rosa DeLauro of Connecticut and Jan Schakowsky of Illinois, the legislation would set up a government-run health care program — like Medicare for All — but aims to let people keep their employer-sponsored insurance if they have it and like it.

“It responds to the fact that so many Americans have said, ‘I like my employer-based insurance. I want to keep it. I like the network I’m in. I like the doctor that I see,'” O’Rourke said.

https://www.texastribune.org…

Comment:

By Don McCanne, M.D.

In my presentations in years past, I frequently asked audiences to think back to twenty years ago. Think about the insurance you had then. Now, how many here still have that same insurance? No hands go up. That is, except for people over 85 on Medicare, and except for a Kaiser Permanente physician who had worked for Kaiser for over twenty years.

The obvious point is that people do not have stable health care coverage throughout their lives. There are many reasons. To mention just a few: employment is not stable and individuals lose their coverage when they leave a job; moving to a new location usually results in loss of prior coverage, employers may change their employee benefits or change their insurers; frequent changes in insurer provider networks may cause individuals to lose their usual sources of care; low-income individuals may lose their Medicaid with a modest increase in income or a change in state eligibility policy; individuals with long term disabilities or end-stage renal disease may be shifted to Medicare; individuals on Medicaid have frequently been transferred into restrictive Medicaid managed care plans; states may have overly stringent eligibility requirements for Medicaid, such as the work requirements that are causing many to lose their coverage; patients in traditional Medicare may transfer to private Medicare Advantage plans with provider network restrictions; Medicare Advantage plans may withdraw from selected markets; unless grandfathered, as of 2020 individuals will no longer be able to enroll in more comprehensive Plan C and Plan F Medigap plans and may be subjected to underwriting requirements; plans in the individual market are quite unstable with frequent changes in benefits, in provider networks, and in the plans themselves since they are subject to cancellation; bankruptcies may impact retiree benefits including pension and health benefits; premiums may become truly unaffordable resulting in loss of coverage due to inability to pay; and, of course, at any given time tens of millions of people face being uninsured. There are endless other reasons for lack of continuity of coverage, but it is the norm.

And now many politicians besides Beto O’Rourke are telling us that we should not enact the single payer model of Medicare for All because it would not allow people to keep the insurance they have. Memory must be very short. Not too long ago President Obama received the Politifact Lie of the Year award for saying, “If you like your health care plan, you can keep it.”

So then they say, well, you can have your choice of plans. What choices? The most common coverage is through employer-sponsored plans, but you do not have the option of choosing one of the millions of plans offered by other employers, only that from your own employer, if one is even offered. You cannot choose Medicare or Medicaid plans if you have not met the eligibility requirement. Your only option may be to choose a plan in the individual market, but you may find that you have a very limited choice of highly restrictive plans that may not cover your physician or hospital. Some choice.

Besides, the choice you want is that of your health care professionals and hospitals, not a choice of your supposedly beloved health plans, even if mediocre. Under Single Payer Medicare for All you do have total free choice in your health care, choices that are being taken away by the private health insurers.

When you are told that you get to keep your health plan, you don’t have to respond by calling the person a liar (as was disrespectfully done with our president at the time). “Fallacy” is a less pejorative term than “lie” so you can emphatically respond with, “THAT IS A FALLACY; NOBODY GETS TO KEEP THEIR SAME INSURANCE THROUGHOUT LIFE; INSURANCE CHANGES ALL OF THE TIME!”

If you have the opening, you can go on with, “WHAT I WANT IS MY CHOICES IN HEALTH CARE. THE INSURERS ARE TAKING THAT AWAY FROM US WHILE WASTING OUR MONEY ON ADMINISTRATIVE EXCESSES.”

Anyway, we need to bring to an abrupt end the fallacy that you can keep the insurance you have, especially when it is being used to dismiss the great opportunity we have to bring health care to everyone in America by enacting and implementing SINGLE PAYER MEDICARE FOR ALL!

This is a time for PASSION. We have to get this message out there.

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

Medicaid is a health care program, not a work program

New Arkansas Data Contradict Claims That Most Who Lost Medicaid Found Jobs

By Jennifer Wagner
Center on Budget and Policy Priorities, March 19, 2019

A large majority of the more than 18,000 Arkansas Medicaid beneficiaries who lost their Medicaid coverage since the state began implementing a first-in-the-nation Medicaid work requirement in June not only haven’t found jobs, but they also probably don’t have health insurance, new state data suggest.

Those who lost their Medicaid last year could have re-enrolled effective January 1, but only about 2,000 have done so. Some federal and state officials have argued that such low re-enrollment means that most who lost Medicaid have found jobs with health coverage, but there are no data to support the claim.

Asked what happened to the 18,000 Arkansans who lost coverage due to the work requirement, Health and Human Services (HHS) Secretary Alex Azar told a House hearing last Tuesday that “we do not yet have data as to why they fell off the program.” At the Senate Finance Committee two days later, Azar pointed to the low share of people who lost coverage last year and re-enrolled in January and said, “That seems a fairly strong indication that the individuals who left the program were doing so because they got a job.”

But state data released on Friday show that very few beneficiaries who lost coverage found jobs. Of the 18,164 beneficiaries who lost coverage in 2018 for not complying with the work requirement, 1,981 had matches in the state’s New Hire Database, indicating they found new work. That means that for the more than 16,000 others who lost coverage, there is no evidence that they found new work.

https://www.cbpp.org…

Ruling on Medicaid work requirement expected by end of March, judge says

By Benjamin Hardy
Arkansas Times, March 14, 2019

(U.S. District Judge James E. Boasberg) in the District of Columbia heard oral arguments Thursday morning in a lawsuit challenging Arkansas’s work requirement for certain Medicaid expansion beneficiaries.

“Congress has made its intent clear — Medicaid is a medical assistance program, not a work program,” the plaintiffs argued in a brief submitted in November. The purpose of the Medicaid program is “to furnish health care coverage to people who cannot otherwise afford it,” it says.

“It’s easy to talk about [the work requirement] in broad strokes that this will improve people’s lives, and that’s not for me to say. But that’s not the purpose of Medicaid,” the judge said in reply to government attorneys at one point during Thursday’s hearing.

https://www.arktimes.com…

Comment:

By Don McCanne, M.D.

What kind of policy is it that when low-income individuals are unable to find jobs, the state punishes them by taking away their health care? The judge hearing the Medicaid work requirement case in Arkansas agrees, “that’s not the purpose of Medicaid”

Shouldn’t we instead have a public policy that says that anyone who needs health care should be able to receive it? That is not the case now, even though we are already spending enough to guarantee health care for everyone. We could do that merely by enacting and implementing a single payer Medicare for All program, and it doesn’t have to cost us any more than we are already spending.

It would be great if our government also supported more effective policies to ensure that every capable person has employment opportunities, but depriving people of their health care is not an effective work program, as Arkansas has demonstrated.

How can it be that we even tolerate such a cruel government policy?

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

Eli Lily Taiwan pulls Prozac over $US0.004 price reduction

Prozac to be pulled from Taiwan market on April 1

By Keoni Everington
Taiwan News, March 18, 2019

The popular antidepressant Prozac is to be permanently removed from pharmacy shelves this April in Taiwan, announced the drug’s Taiwanese manufacturer Zuellig Pharma (裕利藥廠) last week, reported CNA.

Claiming to be unable to cope with frequent price cuts by Taiwan’s National Health Insurance (NHI), the local Taiwanese maker of the Prozac 20 mg, Zuellig Pharma, announced last week that it will stop selling the antidepressant in Taiwan on April 1. The company said that it will completely withdraw the drug from the Taiwan market, but all orders received before March 29 will still be fully supplied.

On March 13, the company sent a letter to all hospitals announcing that due to the annual reduction of drug prices by the National Health Insurance Administration, along with an increase in raw material and transportation costs in recent years, it will be ceasing the supply of Prozac. The company also mentioned the rising costs of following the Pharmaceutical Inspection Co-operation Scheme (PICS) and Good Manufacturing Processes (GMP) to ensure the quality of the medication.

Zuellig Pharma said that after taking the above-mentioned factors into an actuarial analysis, it was notified by Eli Lily Taiwan, the owner of Prozac, to cease production on April 1 and withdraw the product from the Taiwan market. In order to ensure the rights of hospitals and patients, the company said that orders received before March 29 will be fully supplied.

In an interview with CNA, Chang Wen-ching 張文靜, spokesman for the Taiwan Pharmacist Association, said Prozac is a commonly used drug in treating depression. Chang said that it is a widely used first-line drug because of its long history of use and relatively fewer side effects.

For these reasons, its usage rate is very high, and in recent years, the cost of this drug under NHI coverage per tablet has dropped from NT$2.08 (US$0.067) to NT$1.96 (US$0.063).

Substitutes for Prozac:

Chang said there are substitute generic drugs available and there are also some other famous brand names with the same chemical composition in Taiwan. Chang recommends that patients return to their hospital and have their prescriptions adjusted with the help of professional physicians.

The active ingredient in Prozac is Fluoxetine, which is also sold under other brand names, such as Sarafem and Selfemra.

https://www.taiwannews.com…

Drugs.com, Accessed March 19, 2019

U.S. price of 20mg Prozac:
from $US503.98 for 30 capsules = $US16.80 per capsule

U.S. price of 20 mg fluoxetine (generic Prozac):
from $US15.52 for 30 capsules = $US0.52 per capsule

https://www.drugs.com…

Comment:

By Don McCanne, M.D.

Virtually everyone is in agreement that something must be done about the outrageous drug prices in the United States, though there is disagreement on how we do that. Some suggest that we should allow the free market to work to drive prices down (as if we were not already attempting to do that, unsuccessfully), while others suggest that the government should play a major role in establishing fair prices for pharmaceuticals. Since there is considerable interest in establishing fair prices through enactment of a single payer Medicare for All program, it can be instructive to look at how Taiwan establishes fair prices through their single payer health care financing system.

Because of our complex, dysfunctional health care financing system, it is difficult to determine drug prices here. Is it a brand name or a generic drug? Has the patent expired? Is it under a drug insurance plan? Is it under Medicare Part D? Is a discount coupon involved? Is it under a patient assistance program? And, perhaps most confusing of all, does it travel through the catacombs of a pharmacy benefit manager? Just for a rough idea of prices in the U.S., we’ll use those for Prozac and its generic version, fluoxetine, that are listed on the Drugs.com website.

In the United States, a 20mg capsule of Prozac sells for about $16.80. The generic version sells for about $0.52 per capsule. The discussion continues as to how much of a markup brand name drugs should have compared to the generic versions, but we likely won’t seriously address that until we are ready to switch to a publicly-administered and publicly-financed program (single payer).

Compare the price in Taiwan. The brand version of 20mg Prozac is only about six cents a capsule, and competing brand and generic versions are available. How tightly prices are controlled there is demonstrated by the fact that the government reduced the price by only four-tenths of a cent, but that proved too much for Eli Lily Taiwan, so they are pulling the product from the market. Two other brand versions and other generics are still available.

Having that kind of control over drug prices is only in our fantasies, but it doesn’t have to be. The public stewards of our single payer system, were we to establish a bona fide Medicare for All program, could work with the pharmaceutical firms (negotiating, bidding, or setting administered prices if necessary, etc.) to be sure that their legitimate costs are covered along with a fair profit margin. Is there risk of driving pharmaceutical firms out of the market? Although we don’t know the full background story in Taiwan, it is not likely that we would shut them out over four-tenths of one cent.

It is unlikely that HHS Secretary Alex Azar – former president of the U.S. division of Eli Lilly – is going to help us get there. But if the people understand that we can fix this problem, it wouldn’t matter much what he thinks since elections can have favorable consequences. But we do have to step up our education efforts directed to the public. After all, it is for their benefit. Besides, under Single Payer Medicare for All, Prozac would be freely available for Alex Azar and his colleagues in case they and their health care professionals think they need it.

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

Why did electronic health records become a problem?

Death By 1,000 Clicks: Where Electronic Health Records Went Wrong

The U.S. government claimed that turning American medical charts into electronic records would make health care better, safer, and cheaper. Ten years and $36 billion later, the system is an unholy mess. Inside a digital revolution that took a bad turn.

By Fred Schulte and Erika Fry
Kaiser Health News, March 18, 2019

In early 2017, Seema Verma, then the country’s newly appointed CMS administrator, went on a listening tour. She visited doctors around the country, at big urban practices and tiny rural clinics, and from those front-line physicians she consistently heard one thing: They hated their electronic health records. “Physician burnout is real,” she told KHN and Fortune. The doctors spoke of the difficulty in getting information from other systems and providers, and they complained about the government’s reporting requirements, which they perceived as burdensome and not meaningful.

What she heard then became suddenly personal one summer day in 2017, when her husband, himself a physician, collapsed in the airport on his way home to Indianapolis after a family vacation. For a frantic few hours, the CMS administrator fielded phone calls from first responders and physicians — Did she know his medical history? Did she have information that could save his life? — and made calls to his doctors in Indiana, scrambling to piece together his record, which should have been there in one piece. Her husband survived the episode, but it laid bare the dysfunction and danger inherent in the existing health information ecosystem.

The notion that one EHR should talk to another was a key part of the original vision for the HITECH Act, with the government calling for systems to be eventually interoperable.

What the framers of that vision didn’t count on were the business incentives working against it. A free exchange of information means that patients can be treated anywhere. And though they may not admit it, many health providers are loath to lose their patients to a competing doctor’s office or hospital. There’s a term for that lost revenue: “leakage.” And keeping a tight hold on patients’ medical records is one way to prevent it.

In the absence of true incentives for systems to communicate, the industry limped along; some providers wired up directly to other select providers or through regional exchanges, but the efforts were spotty. A Cerner-backed interoperability network called CommonWell formed in 2013, but some companies, including dominant Epic, didn’t join. (“Initially, Epic was neither invited nor allowed to join,” said Sumit Rana, senior vice president of R&D at Epic. Jitin Asnaani, executive director of CommonWell countered, “We made repeated invitations to every major EHR … and numerous public and private invitations to Epic.”)

Epic then supported a separate effort to do much the same.

Last spring, Verma attempted to kick-start the sharing effort and later pledged a war on “information blocking,” threatening penalties for bad actors. She has promised to reduce the documentation burden on physicians and end the gag clauses that protect the EHR industry. Regarding the first effort at least, “there was consensus that this needed to happen and that it would take the government to push this forward,” she said. In one sign of progress last summer, the dueling sharing initiatives of Epic and Cerner, the two largest players in the industry, began to share with each other — though the effort is fledgling.

When it comes to patients, though, the real sharing too often stops. Despite federal requirements that providers give patients their medical records in a timely fashion, in their chosen format and at low cost (the government recommends a flat fee of $6.50 or less), patients struggle mightily to get them. A 2017 study by researchers at Yale found that of America’s 83 top-rated hospitals, only 53 percent offer forms that provide patients with the option to receive their entire medical record. Fewer than half would share records via email. One hospital charged more than $500 to release them.

Nor, it seems, can high-ranking federal officials. When Seema Verma’s husband was discharged from the hospital after his summer health scare, he was handed a few papers and a CD-ROM containing some medical images — but missing key tests and monitoring data. Said Verma, “We left that hospital and we still don’t have his information today.” That was nearly two years ago.

https://khn.org…

The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care

By David J. Brailer, MD, PhD, National Coordinator for Health Information Technology
PNHP Quote of the Day (excerpts), July 21, 2004

While the federal government plays an important role in HIT adoption, the effective use of, and value creation from, this technology lies predominantly with the private sector. The federal government will provide a vision and a strategic direction for a national interoperable health care system, but will rely on a competitive technology industry, privately operated support services, and shared investments in HIT adoption. The private sector must develop the market institutions to deliver the products and services that can transform the paper-based health care system into an electronic, consumer-centered, and quality-based system. The private sector can best ensure that HIT products are successfully implemented in ways that meet the varying needs of American health care across settings, cultures, and geographies. The private sector can also continue constant innovation in HIT and ensure that products are delivered on an affordable basis.

Comment:

By Don McCanne, M.D.
Posted July 21, 2004

What has the magic of the competitive marketplace produced in the way of an integrated IT system to this date? High costs, very poor penetration, and system failures! Competitive market theory dictates that we should be leading the world with a high quality health care IT system at a low cost. What went wrong?

First of all, a fragmented system of multiple private plans, public programs and uninsurance does not provide an infrastructure that is very conducive to an integrated IT system. A single payer system, or, at minimum, a highly regulated system of universal coverage through multiple plans, would provide a framework that would ensure adaptability of an integrated IT system. Of course, a single, publicly administered system would be much preferred for an integrated IT system.

But the greatest difficulty with private IT solutions lies in the very nature of these marketplace models. Their goals are, above all, to maximize profits and to maximize the market price of their shares.

What might the private sector do that doesn’t serve our interests well? They will produce products that command the highest prices that the market will bear. They will design the products to provide a continuing revenue stream. Once gaining a significant share of the market, they will design incompatibility with other systems in an attempt to garner the entire market. They will design obsolescence into their systems to ensure future markets for their new innovative products. They will partner with and perhaps acquire other related entities that can expand profit potentials through greater control of components of the health care system which their products can influence. Although these are good business practices, they are terrible policies for our health care system.

The health information technology report released today (July 21, 2004) should alarm us all. Although we all agree on the importance of an integrated IT system, the Bush administration is limiting the role of the government to being an enabler that encourages the private sector to develop a successful business model. Rather than higher quality at a lower cost, we’ll end up with mediocrity at a much higher cost, wasting even more of our health care dollars.

https://www.pnhp.org…

Comment:

By Don McCanne, M.D.
Posted March 18, 2019

Fifteen years ago, and several times since, we’ve had quite a bit to say about the direction the nation was taking with electronic health records. The narrative in the comprehensive article today by Fred Schulte and Erika Fry comes as no surprise to us. The results of insisting that the project remain in the hands of competitors in the private marketplace, with a hands-off approach by our government stewards, has been a disaster.

It is ironic that CMS Administrator Seema Verma – an outspoken proponent of privatizing all things medical – two years after her husband’s emergency hospitalization, has been unable to obtain his electronic medical records. So much for the efficiency of the private sector.

Yet, Judith Faulkner, CEO and Founder of Epic Systems – the nation’s leading medical-record software provider – as of 3/18/19, ranks #597 on the Forbes list with a net worth of $3.8 billion.

Our health information technology system represents just a microcosm of our $3.8 trillion national health expenditures in a system that leads all nations in high costs while shamefully underperforming on universality, equity, efficiency, and affordable access. We know how to correct the deficiencies – simply enact and implement a well designed, publicly-administered and publicly-financed, single payer Medicare for All program. Yet the majority of our politicians, but by no means all, are rejecting Medicare for All as they insist on protecting and perpetuating our highly dysfunctional, multi-payer health care financing system.

The results of the refusal of our public stewards to be more involved in guiding our health information technology system surely must provide us with a lesson. Public systems in health care are designed as patient service models, whereas private systems are designed as business models. One directs the flow of money to enhance the care of patients, and the other directs that flow to enhance the financial success of the business entity. One has the objective of good health, and the other the objective of wealth enhancement. If that is difficult for Seema Verma to understand, maybe Judith Faulkner can explain it to her.

On a positive note, it should be mentioned that Judith Faulkner has signed The Giving Pledge, committing 99% of her assets to philanthropy. Business success in trying to deliver a public good does not necessarily equate with greed.

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