PNHP

U.S. Senate Panel on Challenges of Providing Rural Health Care

U.S. Senate Panel on Challenges of Providing Rural Health Care

Testimony by Dr. Deborah Richter
C-SPAN, September 26, 2018

U.S. Sen. Bernie Sanders (I-Vt.) heard testimony Tuesday afternoon from Dr. Deborah Richter of Cambridge, Vt. during a Senate roundtable discussion focused on the costs and availability of health care in rural America.

Sanders invited Richter, who works in primary care and addiction medicine in rural areas of Vermont, to testify before the Senate Subcommittee on Primary Health and Retirement Security. Richter told the senators she sees “the inadequacies of our health care system every day.”

Richter said the problems with our nation’s health care system “are magnified in rural America” since patients are “older, sicker and poorer.” “This is particularly true of the impact of the opioid epidemic which started in rural America,” she said.

Recent studies show rural Americans, compared to those in urban areas are disproportionately more likely to suffer premature death from heart disease, cancer, stroke and many chronic diseases. Deaths among rural Americans from opioid overdoses, vehicle crashes and other accidents are about 50 percent higher than those among people living in urban areas, the studies state.

“When we are looking to reduce health care costs now and in the future, we must first address the primary care shortage,” Richter said. “Primary care represents most of the medical office visits in any one year. In a nutshell, primary care is most of the care to most of the people most of the time. Yet, we represent less than eight percent of total costs.”

During the discussion, Sanders emphasized that a Medicare-for-all system would provide better and more affordable health care than our current system, including in rural America.

“As a physician who has practiced in the U.S. health care system for the past 30 years, I would say that in my experience, unless we address the system as a whole we will not solve any of the pressing problems in health care. We need to regard health care as a public good and make it accessible to all. We have wonderful health professionals and hospitals in this country. We are spending enough money,” Richter said. “We need a program of expanded Medicare for all Americans.”

https://www.c-span.org…

Ban Ki-moon says US health care system is ‘morally wrong’

Ex-UN chief Ban Ki-moon says US healthcare system is 'morally wrong'

By Jessica Glenza
The Guardian, September 25, 2018

The former United Nations secretary general Ban Ki-moon has denounced the United States’ healthcare system as politically and morally wrong, and urged American leaders to enact publicly financed healthcare as a “human right”.

Ban made the comments in an exclusive interview with the Guardian in New York, as part of his work with The Elders, a group founded by Nelson Mandela to work on issues of global importance, including universal health coverage.

The US has the world’s most expensive health system, accounting for nearly one-fifth of American gross domestic product and costing more than $10,348 per American. The United Kingdom, by comparison, spends a little under 10% of GDP according to the latest available statistics, and healthcare is free at the point of delivery.

“It’s not easy to understand why such a country like the United States, the most resourceful and richest country in the world, does not introduce universal health coverage,” said Ban. “Nobody would understand why almost 30 million people are not covered by insurance.”

Failing to provide health coverage, he said, was “unethical” and “politically wrong, morally wrong”. He accused the “powerful” interests of pharmaceutical companies, hospitals and doctors that “inhibit the American government” of having prevented the US from moving towards universal healthcare.

https://www.theguardian.com…

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Comment:

By Don McCanne, M.D.

Ban Ki-moon was Secretary-General of the United Nations from 2007 thru 2016. He knows something about the world. He says that the failure of the United States to provide health care coverage for everyone is “unethical” and “politically wrong, morally wrong.” He’s right, of course.

It doesn’t have to be this way. We have the greatest resources, but we are not allocating them efficiently nor equitably. We can correct that with one simple albeit massive change: Switch our health care financing to a well designed, single payer, improved Medicare for All. With such a financing system we can much more easily make the refinements needed to improve the functioning of our health care delivery system so it works well for everyone.

When our president opens his mouth before the United Nations General Assembly and they laugh at him, that should be a sure sign that we need more national soul-searching. Listening to and acting upon the words of Ban Ki-moon should be a great place to start.

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Improved Medicare for All: Simple, Prudent and Proudly American

Interview with Dr. Ed Weisbart

The Jim Bohannon Show, September 26, 2018

PNHP-MO chair Dr. Ed Weisbart appeared on the nationally syndicated radio program “The Jim Bohannon Show” to discuss the benefits of improved Medicare for all. He spoke with guest host McGraw Milhaven about pharmaceutical price gouging, insurance company abuses, and the urgent need for reform.

https://omny.fm…

Reducing California’s single payer legislation to a public option

California Legislative Information

Assembly Bill No. 1810
Approved by Governor June 27, 2018. Filed with Secretary of State June 27, 2018.

PART 4. Council on Health Care Delivery Systems

1001. (a) Effective January 1, 2019, there is hereby established the Council on Health Care Delivery Systems as an independent body to develop a plan that includes options for advancing progress toward achieving a health care delivery system in California that provides coverage and access through a unified financing system for all Californians.

002. (a) On or before October 1, 2021, the council shall submit to the Legislature and Governor a plan with options that include a timeline of the benchmarks and steps necessary to implement health care delivery system changes, including steps necessary to achieve a unified financing system.

https://leginfo.legislature.ca.gov…

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Assembly Bill No. 2472: An act to add Section 1002.5 to the Health and Safety Code, relating to health care coverage.
Approved by Governor September 22, 2018. Filed with Secretary of State September 22, 2018.

AB 2472, Wood. Health care coverage.

From the Legislative Counsel’s Digest

Existing state law establishes the Council on Health Care Delivery Systems as an independent body to develop a plan that includes options for advancing progress toward achieving a health care delivery system in California that provides coverage and access through a unified financing system for all Californians. Existing law requires the council, on or before October 1, 2021, to submit to the Legislature and the Governor a plan with options that include a timeline of the benchmarks and steps necessary to implement health care delivery system changes, including steps necessary to achieve a unified financing system. [AB 1810 (Committee on Budget), Chapter 34, Statutes of 2018]

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SEC. 2. Section 1002.5 is added to the Health and Safety Code, to read:

1002.5. (a) The council shall prepare an analysis and evaluation, known as a feasibility analysis, to determine the feasibility of a public health insurance plan option to increase competition and choice for health care consumers.

(d) (1) The council shall submit the feasibility analysis to the Legislature and the Governor on or before October 1, 2021.

(e) This section does not authorize the council to apply for a waiver under Section 1332 of the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any amendments to, or regulations or guidance issued under, those acts.

CONCURRENCE IN SENATE AMENDMENTS AB 2472 (Wood)
As Amended August 17, 2018

COMMENTS: According to the author, in California there are some counties that only have one health plan choice, including Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo, Mono, and in most of Kings County. Additionally, 22 other counties have two or fewer health plan choices. This limited plan choice has impacted not just the prices of health care in these areas but also the quality of health care that consumers receive. Although the federal Patient Protection and Affordable Care Act has greatly reduced the number of uninsured in California, premiums continue to rise for many consumers. Policymakers have an obligation to find ways to make healthcare more affordable and accessible to consumers. One proposed solution to the problem of limited health plan competition in the individual market is the establishment of a public option as an alternative to existing private plans. However, among other considerations, the structure, financing, and governance of a public option needs to be evaluated. This bill would require the Council to conduct an analysis and evaluation of a public health insurance plan option and determine if this public option is possible to implement in California.

A March 2018 issue brief published by the Insure the Uninsured Project (ITUP) entitled “Exploring Public Option in California,” highlights the issues and options related to public option. The issue brief defined public option as a publicly operated health plan choice that directly competes with private health plans in specified target markets. A public option does not include public programs such as Medicare, Medi-Cal, or the Children’s Health Insurance Program, but may be modeled after, or offered as an adjunct to, public programs. The issue brief highlights California-specific factors that will influence a public plan choice, including: an active purchaser exchange (Covered California); existing network of local public health plans; strong California standards and consumer protections; California communities with severe provider shortages and lack of competition; and, a state safety net linked to public health plans. In the issue brief, ITUP also developed three scenarios of how a public plan choice might be organized in California and notes that the scenarios acknowledge California’s extensive network of local health plans and the heavy concentration of managed care in the existing Medi-Cal program.

https://leginfo.legislature.ca.gov…

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Comment:

By Don McCanne, M.D.

In June of this year, the California Legislature passed and Gov. Jerry Brown signed AB 1810 – a bill that, amongst other measures, would establish the Council on Health Care Delivery Systems with instructions to develop a plan that would provide coverage and access through a unified financing system for all Californians, whatever that means. This week, Gov. Brown signed AB2472 – a bill that instructs the Council on Health Care Delivery Systems to determine the feasibility of a public health insurance plan option to increase competition and choice for health care consumers, or, simply stated, a public option, and report back October 1, 2021 (deferring further consideration until after the next two year legislative session in California and after the next presidential election). So much for California’s single payer proposal.

Lest California’s single payer supporters go off in a funk, it should be realized that there is an opportunity here. What we really want is an improved Medicare that covers everyone throughout the entire nation. Californians should join in a coalition effort with other states to bring us, in the next presidential election, a Congress and an administration that would enact and implement such a national health program. We should encourage all political parties to participate, especially now that close to half of Republicans support the concept.

When do we start? Now! Don’t even consider waiting until after the midterm elections to begin the effort. There are many proponents of Medicare for all running now. We can start by electing them, thereby establishing an environment in Congress more conducive to serious deliberation of the clear superiority of a well designed, single payer, improved Medicare for All.

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People worry most about unexpected medical bills

Surprise medical bills could be a powerful campaign issue

By Drew Altman
Axios, September 24, 2018

As the chart shows, unexpected medical bills are the number one health cost problem people worry about, ahead of all the cost issues that get more attention, including deductibles, drug costs, and premiums. They’re even a bigger concern than other family expenses, such as paying the rent, mortgage, or utilities.

* Surprise medical bills also affect a lot of people. In a recent Kaiser Family Foundation tracking poll, four in ten adults (39 percent) say they had a surprise bill from a doctor, hospital or lab in the past year.

* 10 percent report that an unexpected bill was from an out-of-network provider.

* Almost 18 percent of inpatient admissions result in non-network claims for patients with large employer coverage.

Percent who are very or somewhat worried about being able to afford…

67% – Unexpected medical bills

53% – Health insurance deductible

46% – Gasoline or transport costs

45% – Prescription drugs

43% – Monthly utilities

42% – Monthly health insurance premium

41% – Rent or mortgage

37% – Food

The bottom line: Unlike consumers, experts do not generally put surprise bills at the top of their list of the problems in the health system. But people talk about their unexpected bills a lot, and with a sense of outrage.

https://www.axios.com…

Discussion draft of “Protecting Patients from Surprise Medical Bills Act”:
https://www.scribd.com…

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Comment:

By Don McCanne, M.D.

According to this survey, unexpected medical bills such as the surprise bills from out-of-network providers are the number one health cost problem that people worry about. Even if insured, an individual may be exposed to large medical bills that were not expected.

Currently under discussion is proposed federal legislation that would limit the patients’ exposure to these unexpected bills but would shift at least some of the extra charges to the insurer. Not only would those costs be transferred to the insured through higher premiums, but we should also ask if it is fair to pay physicians who agree to becoming a network provider less than is paid to those physicians who refuse to cooperate. Although opinions on that would certainly vary, we can say that such a payment scheme is, at least, inequitable.

The fundamental problem is more than the fact that insurers deliberately limit the breadth of their provider networks; it is that private insurers include a multitude of design features to enhance their business model for the benefit of their investors.

Under a well designed, single payer, improved Medicare for all there would be no surprise medical bills, nor would there be any of the other injustices that a market model would inflict upon their enrollees. Plus everyone would be included and it would be affordable for all. We spend a lot of time talking about the injustices of our fragmented, dysfunctional system such as these surprise bills, but it is the last point – affordable care for everyone – that should be the driving force behind health care reform.

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

Our current medical system is failing

By H. Dixon Turner, M.D.
Portsmouth (N.H.) Herald, September 24, 2018

To the Editor:

I have been involved in providing primary care medical care for 44-plus years. Unfortunately, I now on a daily basis encounter many ways that our current medical system is failing. The costs of medical insurance, medications and many aspects of care are outrageously expensive and many patients do not even have access to basic care.

A case in point is the cost of epinephrine. I regularly order epinephrine ampules for the emergency cart in my office. Not too long ago I could get 25 ampules for around $25. When I ordered ampules about 18 months ago the cost for 25 ampules had risen to $62.50 or $2.50 per ampule. When I ordered the same ampules 2 weeks ago the cost had risen to $23-$25 per ampule!! That represents a 10 fold increase in cost in 1 ½ years. This is outrageous and quite frankly immoral. Unfortunately under our current medical care system such arbitrary price increases are allowed and are not regulated.

President Trump’s and the Republicans’ efforts to dismantle the Affordable Care Act will further fragment our medical care system, lead to more people not having access to care and will greatly increase the cost of medical care for all of us. These efforts — in the name of allowing “free choice” — only lead to increased profits for insurance and pharmaceutical companies.

Currently in the USA 17 percent of our GPA is spent on medical care, which does not cover all of our citizens. Compared to other developed countries, we have the worst medical outcomes even though those countries’ expenditures are as little as half as much as ours.

We must move toward a single payer or regulated payers’ system where reasonable limits are set on the cost of medications and medical care and in which all people are included and have access to medical care.

http://www.seacoastonline.com…

For profit hospitals have higher readmission rates

Proprietary management and higher readmission rates: A correlation

By Manish Mittal, Chih-Hsiung E. Wang, Abigail H. Goben, Andrew D. Boyd
PLOS ONE, Abstract, September 18, 2018

Introduction

Reducing preventable readmissions among Medicare beneficiaries is an effective way to not only reduce the exorbitantly rising cost in healthcare but also as a measure to improve the quality of patient care. Many of the previous efforts in reducing readmission rate of patients have not been very successful because of ill-defined quality measures, improper data collection methods and lack of effective strategies based on data driven solutions.

Methods

In this study, we analyzed the readmission data of patients for six major diseases including acute myocardial infarction (AMI), heart failure (HF), coronary artery bypass graft (CABG), pneumonia (PN), chronic obstructive pulmonary disease (COPD), and total hip arthroplasty and/or total knee arthroplasty (THA/TKA) from the Center for Medicare and Medicaid Readmissions Reduction Program (HRRP) program for the period 2012–2015 in context with the ownership structure of the hospitals.

Results

Our analysis demonstrates that the readmission rates of patients were statistically higher in proprietary (for profit) hospitals compared to the government and non-profit hospitals which was independent of their geographical distribution across all six major diseases.

Conclusion

This finding we believe has strong implications for policy makers to mitigate any potential risks in the quality of patient care arising from unintended revenue pressure in healthcare institutions.

From the Discussion

The policy makers need to carefully evaluate and design healthcare policies that mitigate potential risks associated with unintended revenue pressure in harming patients.

https://journals.plos.org…

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Comment:

By Don McCanne, M.D.

Is the primary mission of the health care organization to serve the needs of patients, or is it to make a buck? It makes a difference. This study shows that readmission rates were higher in proprietary (for profit) hospitals than in non-profit hospitals.

This fundamental difference in hospitals that must cater to passive investors is one reason why the single payer, improved Medicare for all model as supported by Physicians for a National Health Program would covert for profit entities to non-profit. Unfortunately, this important policy recommendation is being left out of many of today’s discussions on health care reform.

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There is just no denying that Medicare for all is the right solution

By Olveen Carrasquillo, M.D., M.P.H.
Miami Herald, September 21, 2018

Keep the government away from Medicare.

Seriously?

Herman Cain, former CEO of the National Restaurant Association and a former presidential candidate, ludicrously argues that single-payer healthcare would be a death sentence for seniors in his Sept. 19 op-ed in the Miami Herald.

He seems unaware seniors are already insured through single-payer health insurance — it’s called Medicare.

He cites anecdotes from other countries, yet all academic studies show such nations have better access and quality healthcare. They also have better health outcomes at much lower costs.

In our public hospital, we are confronted daily with the suffering that results from having so many with poor access to health care.

In our offices, we waste way too much time fighting private insurance companies that arbitrarily deny tests, procedures and medications to our patients.

Skyrocketing insulin prices force many with diabetes to ration or not take their lifesaving medications.

It is easy to dismiss rhetoric from someone whose political ads highlighted the virtues of smoking.

But Cain is correct that Obamacare was problematic. It provided many with expensive private insurance with limited benefits. Wisely, Obama has seen the error of his ways and now advocates for an improved Medicare for All.

Medicare is the right solution for our seniors and now needs to be extended to everyone else!

Dr. Carrasquillo is professor of medicine and public health, and chief, division of General Internal Medicine at the University of Miami, Miller School of Medicine.

https://www.miamiherald.com…

Middle Georgia medical crisis made worse by state- and national-level decisions

By Jack Bernard
The (Macon, Ga.) Telegraph, September 20, 2018

Georgians self-report poor/fair health at a much higher rate than Americans in general, 19 percent to 16 percent. Georgians are correct based on objective morbidity factors (University of Wisconsin “County Health Rankings and Roadmaps”) as shown below. Even more important to a Telegraph reader, Bibb County is significantly worse than the rest of the state, ranking 143 out of 159 counties on statistical health outcomes and 98 on general health factors.

A major reason for Georgia’s poor health status is that our rate of medically uninsured (younger than 65) is 16 percent, much higher than the national average of 11 percent. This dismal situation was caused by the failure of our state leaders to accept Medicaid expansion via the Affordable Care Act (Obamacare), although 90 percent of the cost of expansion is paid by the federal government. But, the long-term solution is Medicare expansion, not Medicaid.

I’ve pulled two indicators to illustrate how our state falls short: (a) Premature deaths for the U.S. as a whole are 6,600 per 100,000 versus 7,500 per 100,000 for Georgia. The low birth weight rate for the USA is 8 percent versus 10 percent for Georgia.

On the provider end, The Medical Center of Central Georgia and other hospitals that serve a disproportionate number of medically uninsured have high levels of bad debt, causing medical price increases for Bibb’s private pay patients. Also, due to indigent care, many of Georgia’s public hospitals are asking for increased subsidies paid for from local taxes.

The bottom line is that Georgia is a less healthy state, and Bibb is even more unhealthy. Clearly, providing health insurance to more Georgians will have a greater positive impact on Bibb citizens versus the state as a whole. And that is the reason that single payer (Medicare for All) should be supported by all Bibb taxpayers. But it is not because of deliberate misinformation, some of it by health professionals.

Medicare is one of the nation’s most efficient and popular programs, having an overhead of just 2 percent versus an average of 12 percent for private insurance. Few conservative Americans older than 65 believe that their Medicare represents socialism. All providers are private, as will be the case when it is finally expanded.

Countries with single payer and similar systems all provide universal care at a fraction of the cost here while covering everyone.

All have better healthcare outcomes. Some of this is undoubtedly due to a healthier lifestyle. But, I doubt that all my distant relatives in Naples and Paris turn down second helpings of food while bicycling to work daily.

It is a real pity that the word “socialism” scares politicians who would otherwise endorse Medicare for All. Trump repeatedly endorsed single payer until he became a politician.

Health coverage and cost are not problems that will resolve themselves via minor changes. Thirty million folks are still uninsured. Since my time as director of health planning for Georgia, national expenditures on health care as a percent of GDP has risen from 8 percent to over 18 percent. This situation has meant less money for infrastructure and education.

But, there is hope long term. The majority of Democrats now supports single payer. Someday, so will the GOP. If for no other reason than cost, change will inevitably come. At that point, hopefully health status for Bibb residents will improve.

Jack Bernard, the first director of health planning for Georgia, has been an executive with several national health care firms. A Republican, he’s a former chairman of the Jasper County Commission.

https://www.macon.com…

Kentucky’s Medicaid expansion is cost-effective and saves lives

By Barbara Casper, M.D.
Louisville Courier-Journal, September 20, 2018

I am a physician who has spent my entire 32-year career caring for uninsured and underinsured patients – 20 of those in Kentucky. I have written editorials in the past supporting the ACA as well as the Medicaid expansion and I feel that I need to respond to an editorial published in this paper written by Jordan Harris.

First of all, Mr. Harris points out in his editorial that 1.4 million of our neighbors are poor enough to qualify for Medicaid. That is simply stunning – it means that 1.4 million people are living below 127 percent of the poverty level inner state. As someone who cares for many of these patients, I can tell you that the idea that these folks are taking advantage of the system is simply untrue. Are there a few “able-bodied” people who have chosen not to work and therefore qualify for Medicaid? Yes there are. However, the vast majority of our patients work in jobs that do not provide employer-based insurance, have disabilities that have taken them out of the workforce or are caring for aging parents and children. In addition more and more of my patients are caring for their grandchildren as the children’s parents are suffering in the current opioid use crisis.

Secondly we cannot afford to let these folks lose their insurance. The cost of medical care does continue to increase but taking insurance away from patients will not decrease that cost, but will shift it. Patients will continue to get sick. We have to make a decision as a society whether we are OK with patients dying because they cannot afford lifesaving treatment or if we are willing to absorb that cost. It is also much more cost-effective to treat illnesses earlier rather than when the disease has progressed. Let me give you a real-life example.

A 50-year-old man has a screening colonoscopy as recommended for his age. A 1 cm polyp is found in his rectal area and is removed and has no evidence of cancer. Because he had a polyp, he has a repeat colonoscopy every five years for the next 10 years and thankfully has no further polyps. The cost of the initial colonoscopy with biopsy is $2,145 and the subsequent colonoscopies are $1,905 each for a total cost over 10 years of $5,955.

By contrast his brother does not have insurance and cannot afford to pay for a screening colonoscopy. Five years later he develops rectal cancer requiring a resection and a colostomy. He also undergoes chemotherapy and radiation treatment. The cost of the colon resection alone can be up to $38,000. The cost of chemotherapy and radiation treatment will be equally if not more expensive. I am not an accountant but it seems much more cost-effective to allow people to have recommended treatments and preventive care. This does not even take into account the pain and suffering for our patient now with a colostomy.

The only way taking Medicaid away from the patient is cost effective is if we allow them to die. People die from lack of insurance. Unfortunately, I have personally experienced situations where patients delay treatment due to concerns of cost and seek care when there is little we can offer. I hope we will not, as a society, get to the point that this is acceptable.

Which brings me to Mr. Harris’ second point. He posits that conservatives are uncomfortable with a “welfare” state. He cites studies which do not show cost-effectiveness of the expansion of Medicaid. I can provide equally compelling evidence from the literature that shows that since the implementation of the ACA and Medicaid expansion, there have been fewer ED visits, increased primary care visits and improved compliance with medications in Kentucky. My own experience corroborates this. It will take years to prove the benefits of management of chronic medical conditions such as diabetes and hypertension. However, I have witnessed improved BP and diabetes control in my patients who now have access to medications and other resources. As a physician I am confident we are making a difference.

I also believe it is time to have an honest discussion about the role of government in our lives. I find it interesting that conservatives decree government intervening when people need help with health care, housing, etc., but have no issue with telling me who I can love or what I can do with my body. It is true that the cost of health care has skyrocketed but taking insurance away from people will NOT change that cost. Please be clear that very few people could afford to pay for health care with the assistance of insurance, whether employer-based or Medicare or Medicaid. The absolute best solution would be to have a single payer system – Medicare for all. Until we, as a country, decide we need to provide essential medical care to all citizens, we cannot afford to dismantle the Medicaid expansion.

Dr. Barbara R. Casper is a professor at the University of Louisville School of Medicine.

https://www.courier-journal.com…

Follow the money to health care’s undo administrative costs

By George Bohmfalk, M.D.
The Aspen (Colo.) Times, September 20, 2018
(Part 3 of 6. Read parts 1, 2, 4, 5 and 6.)

Last year, the United States spent around $3.5 trillion on health care. As there are about 325 million of us, that comes to a bit over $10,000 per person.

Not only is that twice the per-person average that other industrialized countries spend, at around 18 percent it is also about twice the percentage of gross domestic product that those countries spend on health care. And they cover everyone.

According to data provided by the Organization for Economic Co-Operation and Development, a group of 36 countries working on economic and social issues, we are not getting our money’s worth.

We pay the world’s highest prescription drug prices. Our medical outcomes, such as maternal and infant mortality and our overall life expectancy, are worse than those of most other modern nations. Millions of Americans have no health care insurance, and millions more who have insurance either defer needed care or go bankrupt due to unaffordable deductibles and copayments. Where is all the money going, if not to good care?

Some experts point to our high prices as the culprit. They believe that price transparency and more competitive markets can solve our problems. Our prices are high, but there’s an even larger elephant in the room, gobbling up a ton of money. In fact, it consumes close to one-third of all health care spending. That unproductive and ravenous elephant is administrative overhead.

How did we come to spend around $1 trillion a year on health care administration? There are many reasons, but the main ones are for-profit private insurance companies and a bureaucratic industry called managed care.

The overheads of private insurance companies average around 20 percent. Until reigned in by provisions in the Affordable Care Act (aka Obamacare), many companies spent even more than that, on advertising, executive compensation, sales commissions, shareholder dividends, and routine claims processing, including denials and appeals. The overhead of Traditional Medicare is 2 percent to 3 percent, because all it does is process claims.

In the 1970s, as health care costs were rising everywhere, we in the United States tried to bring them under control through better management. We experimented with health maintenance organizations and hired physicians, nurses and case managers, to reduce hospital lengths of stay, deny treatments and otherwise micromanage health care. The result has been a slight improvement in some medical costs, but this has been accompanied by an enormous new managed care bureaucracy, spread among hospitals, physicians’ offices and insurance companies. The cost of all this bloated administration accounts for that trillion dollars.

About the same time that we went in that direction, Canada implemented its single-payer national health care system, with private doctors and hospitals. By eliminating around half of the administrative overhead of a complex, multi-payer, for-profit insurance system, their percentage of GDP spent on health care remained fairly flat, while ours has continued to escalate. Their health outcome results are better than ours, and everyone is covered.

Multiple academic studies agree that we could cut our health care administrative overhead by around half by moving to a single-payer system, saving as much as $500 billion each year. We could save $100 billion more by negotiating prescription drug prices. That total amount is many billions more than it would cost to provide full health care insurance to everyone, with no deductibles or copayments. That amount is more than enough to pay negotiated prices for prescription drugs, as well as dental, vision and hearing care. Billions now spent each year on paperwork could be redirected to actual care.

How do we move the money around? There will be taxes, as you have no doubt heard. What you may not have heard is that for 95 percent of households, those taxes will be less than what they currently pay in insurance premiums, deductibles, copayments, prescription drugs and other components of health care. The only ones expected to pay more are those with annual incomes around $400,000 and higher. For the 99 percent, you would pay less and get more.

The simplest route to this goal is to expand and improve Medicare, a proven and efficient single-payer system. There may be some tradeoffs, but the greatest result would be improvement in our nation’s health and the relief of much unnecessary physical and financial suffering.

Dr. George Bohmfalk practiced neurosurgery in Texas before retiring to spend half of each year in the Roaring Fork Valley. He is active in Physicians for a National Health Program, a physician-driven group advocating for a single-payer health care system.

https://www.aspentimes.com…

Opening the Pandora’s Box of commercial insurance data

Health Care Spending Under Employer-Sponsored Insurance: A 10-Year Retrospective

By Amanda Frost, Eric Barrette, Kevin Kennedy, and Niall Brennan
Health Affairs, September 19, 2018

Abstract

Using a national sample of health care claims data from the Health Care Cost Institute, we found that total spending per capita (not including premiums) on health services for enrollees in employer-sponsored insurance plans increased by 44 percent from 2007 through 2016 (average annual growth of 4.1 percent). Spending increased across all major categories of health services, although the increases were not uniform across years or categories. Growth rates for total per capita spending generally slowed after 2009 but increased between 2014 and 2016. Spending on outpatient services grew more quickly (average annual growth of 5.7 percent) compared to spending on the other types of services. However, the overall distribution of spending across categories remained largely unchanged. In the context of the dramatic economic and policy events that have taken place since 2007—including the Great Recession, the Affordable Care Act, and numerous medical innovations—this assessment of ten-year spending trends provides insights into how the largest insured population in the US contributes to health care spending growth.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

Previously much of our access to data on health care spending has been through government programs – Medicare and Medicaid. Data on commercial insurance spending, especially employer-sponsored plans, were hidden in a cloud of secrecy as proprietary information. Now a group of major insurers has made that information available though the Health Care Cost Institute. Having this information is helpful because it can reveal underlying health care spending trends in the very large sector of commercial insurance (covering 54 percent of Americans) that was not disturbed by the Affordable Care Act (ACA).

In the decade that included the Great Recession and the enactment and implementation of ACA, there was an initial slowing in the rate of health care spending increases. The ACA enthusiasts were quite willing to take credit for that slowing, though there was not much evidence that the specific polices contained in ACA could be credited for it. It seemed much more likely that the slowing in health care spending growth was merely a manifestation of the global slowing of the economy during the recession.

In the latter part of the decade studied, health care spending growth increased again. Although ACA is still in force, this increase further suggests that the previous slowing was due to the recession and not due to any magical policies contained in ACA. In fact, many other studies have demonstrated disappointing results in the ACA measures that were supposedly designed to contain spending.

The significance of this is that it is wrong to continue to support ACA based on the concept that we merely need to give it more time to work, maybe while adding a public option – an option that would not change in any fundamental way the huge, highly dysfunctional, fragmented infrastructure of our health care financing system. It is wrong to reject a proven model that would be effective in reducing the rate of spending increases to sustainable levels – a single payer national health program.

Now that we have opened the Pandora’s Box of private commercial insurance data, we have confirmed that private insurance is not capable of containing the excessive growth in health care spending. So let’s move forward with establishing our own public program that would work – a single payer improved Medicare for all.

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