By Sam Baker
Axios, October 31, 2018

When you hear candidates talk about “Medicare for All,” what do you think they are proposing?

52% – Single-payer, universal, government-run
21% – Competitive, optional, government-run
24% – Neither

Which of the following health care options do you prefer?

34% – Single-payer, universal, government-run
33% – Competitive, optional, government-run
30% – Neither

Data: Survey Monkey online poll conducted Oct. 24-26, 2018 among 2,949 U.S. adults. Total margin of error is ±2.5 percentage points.

https://www.axios.com…

Comment:

By Don McCanne, M.D.

This new poll confirms that the label, “Medicare for All,” no longer refers exclusively to a single payer program that includes everyone, but, for many people, it refers to a competitive, multi-payer market of health plans that includes Medicare as an option (i.e., a public option). In fact, the polling indicates that just as many believe that they would prefer a competitive, multi-payer model of “Medicare for All” as would prefer a true single payer model of “Medicare for All” that actually includes absolutely everyone.

Single payer advocates understand the crucial distinction, though many of the public option advocates do not seem to understand the consequences of their choice. The single payer version of “Medicare for All” corrects the major deficiencies in health care financing, making health care equitable, accessible, and affordable for everyone. The public option version of “Medicare for All” perpetuates our highly dysfunctional, fragmented, inequitable, and often unaffordable health care financing system and merely adds one more option that increases the administrative complexity of our system. The differences are absolutely critical, but they are being glossed over by misuse of the “Medicare for All” label.

It is imperative that we educate the public as to the difference, but the labeling is a problem. “Single payer” is a somewhat wonkish term that often is still not well understood by everyone. In contrast, Medicare is a program that is almost revered, and most individuals can hardly wait until they are eligible to enroll in it. Although we have been using “Improved Medicare for All,” that does not distinguish it from a “Medicare for All” that supposedly has been improved by adding a public option.

Until there is a consensus on precisely how we should proceed, I would suggest in the interim the two following measures:

1. We should keep the label simple, but to distinguish a bona fide single payer system, I would suggest calling it “Single Payer Medicare for All.”
2. When others use “Medicare for All” when they mean only adding a public option, always call them on it. Insist that they label their model “Medicare for Some,” explaining that they are proposing Medicare for a few more but not for most of us who would still have to deal with the current dysfunctional system.

At the PNHP annual meeting November 9 & 10 in San Diego there will be a workshop on “Faux single-payer plans and legislative deficiencies,” presented by David Himmelstein and President-elect Adam Gaffney. Maybe we can reach a consensus on our strategy at that time.

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

By Kip Sullivan
October 30, 2018

That was an excellent Quote of the Day, Don.

I want to emphasize the difference between what you and Alfie Kohn (the author of the NY Times essay) said, and what the RAND study authors said. You and Kohn said, “No more tinkering with P4P schemes, they don’t work, they make things worse.” The RAND study authors said, “Let’s keep tinkering, we can make P4P better.”

Here’s Kohn’s conclusion: “By now it should be clear that the trouble doesn’t lie with the type of reward, the schedule on which it’s presented, or any other detail of how it’s done. The problem is the outdated theory of motivation underlying the whole idea of treating people like pets — that is, saying: Do this, and you’ll get that.” In other words, the diagnosis underlying the entire P4P fad was wrong to begin with (it wasn’t merely “outdated”), ergo, the recommended solution — giving doctors little food pellets when they pull on the right lever and taking food pellets away when they fail to pull on the right lever — can’t work.

The RAND study is a useful contribution to the literature on what tended to be called P4P schemes from about 2000 to 2010, and since 2010 is more often called “value-based purchasing” (VBP) (The most important P4P/VBP schemes today are ACOs, medical homes, bundled payment, and the MIPS program.) The RAND study is useful because the authors actually went to the trouble of speaking to doctors — y’know, the people who treat patients who must cope with the useless feedback created by the proliferating VBP schemes imposed upon them by public and private insurers. It’s very rare to see a study that seeks to present the views of the creatures in the Skinner box created by VBP advocates over the last two decades (the Leapfrog Group, MedPAC, the Patient-centered Primary Care Collaborative, what used to be called the Institute of Medicine, the Robert Wood Johnson Foundation, Elliott Fisher, Stephen Shortell, Atul Gawande, Peter Orszag, Ezekiel Emanuel, members of both parties in Congress, etc.) The RAND study tells us that the creatures in the VBP Skinner box are confused and unhappy, and want out.

But the recommendations of the RAND study are ridiculous. They’re ridiculous because RAND has apparently totally ignored the research, accurately summed up by Kohn and Don, to wit, no amount of tinkering can fix a problem that was diagnosed incorrectly. (I say “apparently” because I have read only the summary of the RAND study.) RAND recommends merely:

• reducing the rate at which Congress, Medicare and the insurance industry gin up more VBP schemes,
• giving doctors some extra dollars to buy more IT hardware and software from Cerner and Epic so they can, in theory, make more sense of the white noise in the Skinner box, and
• provide more “understandable performance data.”

These pathetic recommendations reflect profound confusion about (a) the cause of high US health care costs (it’s our high prices caused by administrative waste and galloping consolidation, not excessive volume triggered by the FFS payment method) and (b) the solution (we need a true single-payer system, not Bernie’s bill or any other bill that doubles down on VBP nostrums).

How did the VBP buffs and RAND get so confused about the correct diagnosis of the American health care crisis and the correct response? Who told them per capita US health care costs are double those of the rest of the world because American doctors (and only American doctors) are motivated by greed and, therefore, routinely cave into the FFS incentive to order unnecessary services? Who told them physician “merit” or “efficiency” (their cost and quality) can be measured so accurately that the Masters of the Skinner Box can send doctors precise signals — more food pellets for you, fewer for you — that will accurately tell doctors when they’re being inefficient and when they’re failing to exercise good medical judgement?

Quote of the Day of October 29, 2018 — “Payment models are stuck in carrots and sticks”:
https://www.pnhp.org…

Comment:

By Don McCanne, M.D.

Yesterday’s Quote of the Day message was too important to let it pass on without further comment. Government legislative and administrative officials and the policy community in both the public and private sector continue to lead us down the wrong pathway to reform. Their value-based purchasing models for health care reform (paying for value instead of volume) are failing because they are based on the incorrect assumption that physicians will repair our health care system if only they are presented with petty rewards or penalties. They completely miss the ethical and professional foundations of the science and art of medicine.

The RAND study is an important contribution because they actually looked at physicians and how they are responding to the current health care payment models. They showed that the models are increasingly complex, that they are changing at an accelerating pace, and that risk aversion is a consequence. The error that RAND makes is that they ignore their important findings and fall in line with the rest of policy community in recommending more of the same.

The article yesterday by Alfie Kohn shows us that the petty rewards or punishments of carrots or sticks, or success or failure of obtaining reward pellets from a Skinner box, “can never create a lasting commitment to an action or a value, and often they have exactly the opposite effect.” Value-based purchasing (MIPS, APMs, ACOs, etc.) reduces health care to a petty reward system that fails on goals of higher quality and lower costs, while creating harm, especially through physician burnout.

Yesterday’s Quote of the Day and today’s comments by Kip Sullivan present two rhetorical versions of the same concept just to be sure that everyone understands it: value-based purchasing is the wrong pathway to reform. Both will be posted on the PNHP website so that they will always be available to help educate others (https://www.pnhp.org/news/quote-of-the-day, Oct. 29 & 30, 2018).

After the midterm election the legislative proposals for Medicare for All will be undergoing refinement. We need to be sure that the architects are not deceived into thinking that the legislation needs updating by adding the flawed concepts of value-based purchasing. We cannot allow the ethics and professionalism of medicine to be replaced with the carrots, sticks, and Skinner box pellets of value-based purchasing.

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

By Mark W. Friedberg, et al.
RAND, October 24, 2018

This report, sponsored by the American Medical Association (AMA), describes how alternative payment models (APMs) affect physicians, physicians’ practices, and hospital systems in the United States and also provides updated data to the original 2014 study. Payment models discussed are core payment (fee for service, capitation, episode-based and bundled), supplementary payment (shared savings, pay for performance, retainer-based), and combined payment (medical homes and accountable care organizations). The effects of changes since 2014 in the Affordable Care Act (ACA) and of new alternative payment models (APMs), such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program (QPP), are also examined.

Key Findings

Payment models are changing at an accelerating pace

Physician practices, health systems, and consultants find it difficult to keep up with the proliferation of new models, with some calling for a “time out” to allow them to better adapt to current APMs.

Payment models are increasing in complexity

Alternative payment models have become increasingly complex since 2014. Practices that have invested in understanding complex APMs have found opportunities to earn financial awards for their preexisting quality — without materially changing patient care.

Risk aversion is more prominent among physician practices

Risk aversion among physician practices was more prominent. Risk-averse practices sought to avoid downside risk or to off-load downside risk to partners (e.g., hospitals and device manufacturers) when possible.

For full document (96 pages):
https://www.rand.org…

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

***

Science Confirms It: People Are Not Pets

Research on the efficacy of rewards tells us that we can’t bribe others into doing what we want.

By Alfie Kohn
The New York Times, October 27, 2018

The field of social psychology is sometimes accused of doing no more than ratifying common sense, so it’s worth paying attention when its findings are genuinely surprising. Case in point: the discovery that when we are rewarded for doing something, we tend to lose interest in whatever we had to do to get the reward.

This outcome has been confirmed scores of times with all sorts of rewards and tasks, and across cultures, ages and genders. Yet many teachers, parents and bosses persist in using versions of what has been called “sugarcoated control.”

Psychologists often distinguish between intrinsic motivation (wanting to do something for its own sake) and extrinsic motivation (for example, doing something in order to snag a goody). The first is the best predictor of high-quality achievement, and it can actually be undermined by the second. Moreover, when you promise people a reward, they often perform more poorly as a result.

Over the years, researchers have investigated some intriguing questions that stemmed from these basic findings. For instance: What if the reward is really large and luscious? (Answer: It’s apt to do even more damage to intrinsic motivation.) Are rewards destructive because they distract people from the task? (Apparently not, because other distractions don’t have the same negative effects.) Which is worse, giving people a set reward for doing something or making it contingent on how well they do it? (The latter, by a long shot.)

By now it should be clear that the trouble doesn’t lie with the type of reward, the schedule on which it’s presented, or any other detail of how it’s done. The problem is the outdated theory of motivation underlying the whole idea of treating people like pets — that is, saying: Do this, and you’ll get that.

The best that carrots — or sticks — can do is change people’s behavior temporarily. They can never create a lasting commitment to an action or a value, and often they have exactly the opposite effect … contrary to hypothesis.

https://www.nytimes.com…

***

Comment:

By Don McCanne, M.D.

There is much more here than a casual glance might imply. The search for value-based payment in health care, as opposed to paying for volume, has led to various payment models such as shared savings, accountable care organizations, bundled payments, pay for performance (P4P), medical homes, and other alternative payment models. How well is that working?

To date, most studies have been quite disappointing. Claims of cost savings are belied when considering the additional provider costs of information technology and human manpower devoted to these models, not to mention the high emotional cost of burnout. This RAND study shows that these models are increasing in complexity, making it difficult for the health delivery system to keep up. Even worse, they are inducing risk aversion. The health care providers are trying to avoid those who most need health care – the opposite of what our health care system should be delivering.

Much of the experimentation in delivery models has been centered around reward or punishment. But, as Alfie Kohn writes, “intrinsic motivation (wanting to do something for its own sake)… is the best predictor of high-quality achievement,” whereas “extrinsic motivation (for example, doing something in order to snag a goody)” can actually undermine intrinsic motivation. It has been observed by others that the personal satisfaction of achievement of patient health care goals is tremendously rewarding, whereas the token rewards based on meager quality measurements are often insulting because of the implication that somehow token payments are a greater motivator than fulfilling Hippocratic traditions. Even more insulting are the token penalties for falling on the wrong side of the bell curve simply as a result of making efforts to care for patients with greater medical or sociological difficulties.

Quoting Alfie Kohn again, “carrots or sticks… can never create a lasting commitment to an action or a value, and often they have exactly the opposite effect … contrary to hypothesis.” The RAND report suggests slowing down and working with these models some more while increasing investment in data management and analysis with the goal of increasing success with alternative payment models. No. These models are making things worse. It’s time to abandon them and get back with taking care of our patients. The payment model we need is an improved version of Medicare that takes care of everyone. Throw out the sticks and carrots.

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

By Angela Hart
The Sacramento Bee, October 26, 2018

The union representing 100,000 nurses across California has shifted its “Medicare-for-all” campaign from California to the national stage, perhaps relieving political pressure on Democratic gubernatorial candidate Gavin Newsom to fulfill what the union sees as his top campaign promise: Delivering a single-payer health care system in the nation’s largest state.

The California Nurses Association, which led the coalition behind the high-profile 2017 push for a single-payer system, has re-branded its campaign with the slogan “Fight to Win Medicare-for-All!” Its social media feeds reflect the new national scope of their efforts.

Until this month, the coalition, previously called “Campaign for a Healthy California,” was focused solely on passing a single-payer health care bill in California. Their campaign reached a fervor in late 2017 and early 2018, when nurses and single-payer activists stormed the California Democratic Party convention and later, the state Capitol, calling on Democratic lawmakers to approve their single-payer bill.

Representatives for the union, joined by its parent organization, National Nurses United, are now expanding their efforts to Congress and other states, such as Florida, Maine, Minnesota and Texas. They say they’re not letting up in California.

“We’re not conceding or taking a loss here. There will be a single-payer bill next year,” said Stephanie Roberson, a spokeswoman for the California nurses union. “Our aim is to put strategic pressure on states where we see opportunities to provide health care for all, so we can make that national shift.”

“California is a starting point,” Roberson said.

Still, individual states face steep challenges in creating, within their borders, a new health care system that operates under a different set of rules and laws than the nation as a whole, said Gerald Kominski, a professor of health policy at the UCLA Center for Health Policy Research.

He said the nurses’ new efforts to apply pressure on Congress, and national candidates, could also be an acknowledgment that California can’t do it alone.

To create and pay for a single-payer system, under which the government would be the sole “payer” of health care services, California would need multiple approvals from the federal government to both collect federal health care dollars for the state-run system and to bypass regulations on employer-based private health plans. It would also have to amend the state Constitution.

“I think it’s the realization that developing a single-payer system at the state level faces significant legal barriers that maybe they’ve acknowledged…are more substantial than they were willing to admit publicly a year ago,” Kominski said. “It also might be a recognition that you’re pushing the next governor out too far on a limb, where you’re likely to be left hanging.”

Newsom has shifted his tone on single-payer, a system under which government, generally, becomes the primary payer of all health care services. Before the primary he said of single-payer: “It’s about time, Democrats.” He now says universal health care is the ultimate goal.

Nurses say they plan to hold Newsom accountable on his earlier comments and expect him sign a single-payer health care bill into law should he become governor. But their shift to a national focus could also be an opening to letting Newsom off the hook, Kominski said.

“Part of what this shows is the fight really does need to take place in Washington,” he said.

Holly Miller, a spokeswoman for the national nurses union, said the expansion into other states also aligns the push for a nationwide single-payer system, championed by Sens. Bernie Sanders and Kamala Harris.

“We did the re-branding of the social media feeds so we could show the much broader focus of the ‘Medicare-for-all’ campaign,” Miller said. “We’re using the movements in California and Florida to talk about the national fight. We’re for single-payer health care, whether we get it at the state level, or nationally.”

Newsom has acknowledged the political and financial challenges he’d face should he and others lawmakers decide to push for a single-payer system.

“We need partners in the federal government, so I’m not Pollyannaish about any of this. I’m a hard-headed pragmatist about it,” Newsom said in an interview last month.

Still, he said, “I do believe single-payer financing, as broadly defined in (a) “Medicare-for-all” type system, is an advantageous system compared to our multi-payer system, and I’m deeply engaged in figuring out the how…I’m not walking away from this.”

https://www.sacbee.com…

***

Comment:

By Don McCanne, M.D.

This is not just another routine news report about Medicare for All advocacy. Rather it is a report of a milestone in the advancement of the single payer, Medicare for All movement, citing two of the most credible resources on the topic: 1) California Nurses Association/National Nurses United (CNA/NNU), and 2) UCLA Professor Gerald Kominski. Even the politically-guarded comments of the likely next governor of California – Gavin Newsom – provide valuable insight on the prospects for reform.

Although many Quote of the Day subscribers read just the comment (a wise time saver), this time I would suggest reading the lightly-edited Sacramento Bee article posted above. The nuances presented will hopefully calm down those who currently take a strong stand on whether single payer reform should be on a national or on a state basis.

I’ll step into it and say that the ultimate imperative remains a national improved Medicare for All. We want everyone throughout the nation in the system. Until that can be accomplished it is quite reasonable to do on a state level whatever can be accomplished to ensure that more people receive the health care that they should have.

If I were speaking instead of writing you would now hear me screaming as loud as I can that we cannot relax in the least with our mission to establish a national health program. State efforts must be in addition to and not in place of our national advocacy. CNA/NNU understands that. Gerald Kominski understands that. Gavin Newsom understands that. At PNHP it is even in our name: Physicians for a National Health Program.

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

By Cathy Schoen, Karen Davis, Christine Buttorff, and Amber Willink
The Commonwealth Fund, October 24, 2018

Abstract

Issue: Out-of-pocket expenses are capped for enrollees in Medicare Advantage (MA) plans but not for beneficiaries in traditional Medicare, which also requires a high deductible for hospital care. The need for supplemental Medigap coverage adds to traditional Medicare’s complexity and administrative costs. Shortfalls in financial protection also make it difficult to offer traditional Medicare as a choice for people under age 65, as some have proposed.

Goals: Describe alternative benefit designs that would limit out-of-pocket costs for traditional Medicare’s core services, assess their cost, and illustrate financing mechanisms.

Methods: Analysis of a $3,500 ceiling on annual out-of-pocket expenses for Parts A and B benefits and options for replacing Part A hospital cost-sharing with a $350 or $100 copayment per admission.

Key Findings: Estimates of the costs of the reforms are $36–$44 per beneficiary per month, assuming no behavioral or supplemental coverage changes. This could be financed by a $9–$11 increase in premiums combined with a 0.3-to-0.4-percentage-point increase in the Medicare payroll tax (split between employer and employees). Medicaid costs would decrease, while employers, retirees, and Medigap enrollees would see reduced premiums.

Conclusion: The reforms would improve affordability and put traditional Medicare on a more equal footing with MA plans. They would also make it easier to open traditional Medicare to people under age 65.

From the Conclusion of the Full Report

Implementing a ceiling on liability for traditional Medicare’s benefits would provide greater financial protection to people covered by Medicare only, while also reducing the costs of supplemental coverage for other beneficiaries — making all better off. If financed by a mix of premiums and payroll taxes, the savings from these reforms could be substantial. Because we did not offset the costs of an out-of-pocket limit with increased cost-sharing for other services, such an approach could gain beneficiaries’ support and make it possible for many to rely on Medicare alone for their health care coverage needs.

Improving Medicare’s core benefit design also could make it easier to offer Medicare as a coverage option to people under age 65 who are not eligible for the program. The marketplace for individual coverage nationwide is currently plagued by risk selection, premium instability, and the withdrawal of private insurers. Many markets also lack affordable plan choices: prices paid by private plans to hospitals and physicians for care continue to increase at rates much faster than Medicare, driving up premiums.

One option for ensuring more affordable plan choices to people under age 65 would be to offer an improved traditional Medicare plan in the private insurance market. Such a plan also could be offered in the small-group market. Medicare has the strong advantages of low administrative costs and broad provider networks. Improving traditional Medicare thus could help stabilize the insurance market for those seeking individual coverage or small-employer groups who are not yet eligible for Medicare. This could be especially attractive to older adults who are preparing for coverage under Medicare when they retire.

A viable Medicare option in the individual and small-business markets with predictable and affordable benefits would put pressure on private plans to generate value for the coverage they offer. A further step would be to require Medicare Advantage insurers to offer plans in individual marketplaces where they have substantial networks, bringing both their provider networks and ability to pay providers at near-Medicare rates. The enhanced leverage in negotiating provider payment rates, given the alternative of using Medicare provider payment rates for in-network and out-of-network providers, would help counter rising health care prices and costs.

A better Medicare benefit package, therefore, is an investment in more affordable coverage as well as lower health care costs across insurance markets. Not only would it ensure that beneficiaries can access the care they need, it also would simplify coverage choices and remove waste from the health system.

https://www.commonwealthfund.org…

Issue Brief (PDF):
https://www.commonwealthfund.org…

***

Comment:

By Don McCanne, M.D.

The Abstract defines the issue covered in this report: “Out-of-pocket expenses are capped for enrollees in Medicare Advantage (MA) plans but not for beneficiaries in traditional Medicare, which also requires a high deductible for hospital care. The need for supplemental Medigap coverage adds to traditional Medicare’s complexity and administrative costs.”

Simply stated, the marketing appeal of the private Medicare Advantage plans (MA) is that Congress and HHS have used our tax funds to pay the private MA plans enough extra so that they can cap the out-of-pocket costs and sharply reduce or eliminate the cost sharing – deductibles and coinsurance. If Congress truly believed in fairness and competition, then for the traditional Medicare program they would reduce the cost sharing requirements and place a cap on out-of-pocket spending. Why should we pay taxes for extra benefits for those in the MA plans, benefits that we are deprived of?

The differences are great enough such that those enrolled in traditional Medicare must obtain a Medigap plan, especially because of the potential for catastrophic losses (unless they have other additional coverage such as dual Medicaid coverage or a retiree plan). When we already have egregiously excessive administrative costs and complexity, why should we increase our administrative waste by adding another superfluous private plan – Medigap. Besides, if traditional Medicare had the same support as the private MA plans, then there would be no reason to have to put up with the narrow networks and extra administrative waste of the private plans.

For those who would like to see the addition of the choices of lowering the age for Medicare eligibility, or buying into Medicare, then it is almost imperative that a cap be established and cost sharing adjustments be made, otherwise the out-of-pocket costs would create too great of a financial burden for the new Medicare enrollees.

Incrementalists should be doing all they can to improve the traditional Medicare program if they truly believe in a Medicare buy-in or in lowering the age of Medicare eligibility. Those who wave the banner of Medicare for All but actually support incremental steps should be front and center in support of the proposals here.

That said, those of us who understand that incremental approaches are inadequate because they unnecessarily prolong suffering and financial hardship for those whose reforms are postponed until some unspecified future date, should continue to fight for uncompromising reform. An improved Medicare should eliminate all cost sharing and, instead, be fully funded through equitable tax policies. The other policies of the PNHP model of single payer reform also should be enacted and implemented as soon as possible.

It has been over fifty years since completing the first incremental step of enactment of Medicare with the intent of expanding it soon thereafter. Half a century! What moral basis is there for continuing on the incremental pathway when people are facing bankruptcy or suffering physically or even dying, when all we have to do is immediately take that last giant step to health care nirvana – enacting and implementing a well designed, single payer, improved Medicare for All?

For you incrementalists, Cathy Schoen and her colleagues are shining the light on the moral pathway to reform. But please excuse us when we pass you on the way there as we move forward immediately toward the full package of reform. We don’t want to stop you in case we stumble temporarily, but likewise we hope you’ll join us when you see that we are well on our way there. In fact, why delay? Join us now. We’ll get there faster.

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

By Binyamin Appelbaum and Jim Tankersley
The New York Times, October 23, 2018

Karl Marx. Vladimir Lenin. Mao Zedong. Elizabeth Warren?

The White House Council of Economic Advisers on Tuesday published a 72-page report criticizing what it described as the socialist ideas of leading Democratic Party politicians, and seeking to link President Trump’s political rivals with figures reviled by most Americans.

The document departs from the council’s long tradition of delivering sober, albeit partisan, studies on current questions confronting economic policymakers, such as the value of tax cuts or the effects of increased corporate concentration. Instead, the report seeks to tar Democrats by linking them with the failed economic policies of communist governments in China, the Soviet Union and other countries.

The word “socialism” appears 144 times — on average, twice a page.

In case the point was lost on anyone, the message was driven home by a follow-up release from the White House press office with the headline “Congressional Democrats Want to Take Money From Hardworking Americans to Fund Failed Socialist Policies.”

“There are proposals on the table, like the ‘Medicare for All’ proposal, that are very consistent with the design of socialism,” Kevin Hassett, the chairman of the council, told reporters during a conference call to discuss the report on Tuesday.

https://www.nytimes.com…

***

The Opportunity Costs of Socialism

The Council of Economic Advisers, October 2018

From the Introduction

The Nordic and European versions of socialized medicine have been viewed as so desirable by modern U.S. socialists that they have proposed nationalizing payments for healthcare — which makes up more than a sixth of the U.S. economy — through the recent “Medicare for All” proposal. This proposal would create a monopoly government health insurer to provide healthcare for “free” (i.e., without cost sharing) and to centrally set all prices paid to suppliers such as doctors and hospitals. We find that if this policy were financed out of current Federal spending without borrowing or tax increases, then more than half the entire existing Federal budget would need to be cut. If it were financed through higher taxes, GDP would fall by 9 percent, or about $7,000 per person in 2022. Evidence on the productivity and effectiveness of single-payer systems suggests that “Medicare for All” would reduce longevity and health, particularly among the elderly, even though it would only slightly increase the fraction of the population with health insurance.

(For details on Medicare for All, use the link to access the section, “Socialized Medicine: The Case of Medicare for All,” pages 39-53.)

Report – The Opportunity Costs of Socialism:
https://www.whitehouse.gov…

Council of Economic Advisors – Staff:
https://www.whitehouse.gov…

***

Comment:

By Don McCanne, M.D.

No authorship is claimed for this document other than that it is a product of President Trump’s Council of Economic Advisers (CEA). It does seem to represent the conservative ideology of some of the prominent members and staff of the CEA. Specifically, it attacks as socialism the Medicare for All proposal that has become quite popular. It seems to be timed to suppress the vote for the candidates in the forthcoming midterm election who support the Medicare for All concept.

You should be prepared to hear from some of our conservative or libertarian politicians the highly biased rhetoric contained in this document.

They claim that the taxes required to finance Medicare for All would cause the GDP to drop by 9 percent. But under the PNHP model of an improved Medicare for All, the total spending would be about the same as it is now, and the volume of services also would be about the same since any additional care required for unmet needs would displace care that is of little benefit, simply because of the capacity limits of the system. The claim that diverting resources to health care suppresses the economy is without merit since health care is a robust sector of our economy. There should be no negative impact on the GDP.

They label Medicare for all as a monopoly when most economists consider it to be a monopsony – serving as a buying agent benefiting patients.

The report also claims that there is an opportunity cost (inability to use funds elsewhere) of paying the taxes required to fund Medicare for All. But the collective amount that we will be paying in taxes is no more than we are already paying in public and private funds, so there is no additional opportunity cost. If there were no taxpayer funded program and we instead were paying directly for health care, there would still be the same opportunity cost of not being able to spend those funds elsewhere.

In the full report, they make some preposterous statements designed to dismiss the benefit of recovering the hundreds of billions of dollars in our current administrative waste. By denying that, they are also, in effect, denying that we would be receiving greater value in our health care spending since that waste would be redirected to beneficial health care services.

Probably the most outrageous claim of all is that they say that Medicare for All would reduce longevity and health, particularly among the elderly. But our seniors would be receiving more and better services under a more efficient financing system. How could they claim that that would impair health and shorten life?

How many times do we have to say it? Can’t we just do away with the divisive politics and get down to the policy issues that would benefit all of us – like affordable health care for everyone? It’s really very simple, not to mention that it would place us on the moral high ground.

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

By Julia Manchester
The Hill, October 22, 2018

More than half of Republicans in a new American Barometer poll say they support “Medicare for all,” also known as a single-payer health-care system.

The survey, conducted by Hill.TV and the HarrisX polling company, found that 52 percent of Republicans polled said they supported the option, while 48 percent said they opposed it.

Twenty-five percent said they “strongly” supported “Medicare for all,” while 27 percent said they “somewhat” supported it.

Twenty-two percent said they “somewhat” opposed the idea, while 26 percent said they “strongly” opposed it.

The poll comes as Democrats aim to make health care, along with “Medicare for all,” a central campaign issue.

Reid Wilson, campaign reporter for The Hill, told Hill.TV’s Joe Concha that Republicans have yet to find their messaging on the issue.

“Republicans are only beginning to think about how to message this. So this is not baked in at all. This is a debate that plays out over the long term,” he added.

The American Barometer was conducted on October 19-20 among 1,000 registered voters. The sampling margin of error is 3.1 percentage points.

https://thehill.com…

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Comment:

By Don McCanne, M.D.

The question asked? Would you support or oppose providing Medicare to every American? This is not an ambiguous question.

According to this poll, half of registered Republicans now support Medicare for all (52% with a sampling error of 3.1%). Well over four-fifths of Democrats (86%) and two-thirds of Independents (68%) also are in support.

The support of the Democrats is understandable, but we can only speculate as to what has resulted in the sharp increase in support from Republicans, especially considering the intensity of political polarization in this nation. It is likely that Republican and Independent voters are quite dissatisfied with the status quo in health care financing, and that they have grown weary of the Republican politicians who have continued to call for the repeal of Obamacare, but when it came time to perform with a replacement program, they came up empty handed. The turning point may well prove to be when Sen. John McCain expressed the will of the American people by turning thumbs down on the empty charade of reform without substance.

Although the voters are aligning themselves in support of Medicare for all, the politicians are not, though the Republicans have latched onto supporting coverage of pre-existing conditions to show the voters that their hearts are in the right place, even if they have not developed any effective policies to implement it should Obamacare be repealed.

People lead, politicians follow. Hopefully the Republican voters will cause their candidates to develop some introspection and seriously consider the greater value that a Medicare for all would bring us – just common business sense – not to mention that the program would be truly universal, equitable, and affordable for all.

The congressional Republicans would have to neutralize the McConnell curse – if the the Democrats are for it, we’re against it – the insane attitude that partisan politics must take precedence over sound policy. It would be easiest if Sen. McConnell could simply experience a revelation. If the Republican voters are loud enough, that just could happen.

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The Centers for Medicare & Medicaid Services (CMS), October 22, 2018

Today, the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of the Treasury (collectively, the Departments) issued new guidance so states can move their insurance markets away from the one-size-fits-all rules and regulations imposed by the Affordable Care Act (ACA) and increase choice and competition within their insurance markets. The new guidance grants states more flexibility to design alternatives to the ACA and to give Americans more options to get health coverage that better meets their needs. Under this new policy, states will be able to pursue waivers to improve their insurance markets, increase affordable coverage options for their residents, and ensure that people with pre-existing conditions are protected. These waivers are called State Relief and Empowerment Waivers to reflect this new direction and opportunity.

“The Trump Administration inherited a health insurance market with skyrocketing premiums and dwindling choices,” said CMS Administrator Seema Verma. “This is a new day – this is a new approach to empower states to provide relief. States know much better than the federal government how their markets work. With today’s announcement, we are making sure that they have the ability to adopt innovative strategies to reduce costs for Americans, while providing higher quality options.” 

https://www.cms.gov…

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State Relief and Empowerment Waivers

Federal Register, Scheduled to be published October 24, 2018

Agencies: Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services; Department of the Treasury

Action: Guidance

Summary: This guidance relates to section 1332 of the Patient Protection and Affordable Care Act (PPACA) and its implementing regulations. Section 1332 provides the Secretary of Health and Human Services and the Secretary of the Treasury (collectively, the Secretaries) with the discretion to approve a state’s proposal to waive specific provisions of the PPACA (a State Innovation Waiver, now also referred to as a State Relief and Empowerment Waiver), provided the section 1332 state plan meets certain requirements. The Department of Health and Human Services and the Department of the Treasury (collectively, the Departments) finalized implementing regulations on February 27, 2012. This updated guidance provides supplementary information about the requirements that must be met for the approval of a State Innovation Waiver, the Secretaries’ application review procedures, the calculation of pass-through funding, certain analytical requirements, and operational considerations. This guidance supersedes the guidance related to section 1332 of the PPACA that was previously published on December 16, 2015. Changes include increasing flexibility with respect to the manner in which a section 1332 state plan may meet section 1332 standards in order to be eligible to be approved by the Secretaries, clarifying the adjustments the Secretaries may make to maintain federal deficit neutrality, and allowing for states to use existing legislative authority to authorize section 1332 waivers in certain scenarios. The Departments are committed to empowering states to innovate in ways that will strengthen their health insurance markets, expand choices of coverage, target public resources to those most in need, and meet the unique circumstances of each state. This guidance aims to lower barriers to innovation for states seeking to reform their health insurance markets.

From I. Overview

This guidance intends to expand state flexibility, empowering states to address problems with their individual insurance markets and increase coverage options for their residents, while at the same time encouraging states to adopt innovative strategies to reduce future overall health care spending. Section 1332 of the PPACA permits a state to apply for a State Innovation Waiver (referred to as a section 1332 waiver or a State Relief and Empowerment Waiver) to pursue innovative strategies for providing their residents with access to higher value, more affordable health coverage. The overarching goal of section 1332 waivers is to give all Americans the opportunity to gain high value and affordable health coverage regardless of income, geography, age, gender, or health status while empowering states to develop health coverage strategies that best meet the needs of their residents. Section 1332 waivers provide states an opportunity to promote a stable health insurance market that offers more choice and affordability to state residents, in part through expanded competition. These waivers could potentially be used to allow states to build on additional opportunities for more flexible and affordable coverage that the Administration opened through expanded options for Association Health Plans (AHP) and short-term, limited-duration insurance (STLDI).

The Secretaries will consider favorably section 1332 waiver applications that advance some or all of these five principles as elements of a section 1332 waiver application. The principles are:

* Provide increased access to affordable private market coverage. Making private health insurance coverage more accessible and affordable should be a priority for a section 1332 waiver. A section 1332 state plan should foster health coverage through competitive private coverage, including AHPs and STLDI plans, over public programs. Additionally, the Departments will look favorably upon section 1332 applications under which states increase issuer participation in state insurance markets and promote competition.

* Encourage sustainable spending growth. Section 1332 waivers should promote more cost-effective health coverage and be fair to the federal taxpayer by restraining growth in federal spending commitments. For example, states should consider eliminating or reducing state-level regulation that limits market choice and competition in order to reduce prices for consumers and reduce costs to the federal government, as part of their section 1332 waiver applications.

* Foster state innovation. States are better positioned than the federal government to assess and respond to the needs of their citizens with innovative solutions. We encourage states to craft solutions that meet the needs of their consumers and markets and innovate to the maximum extent possible under the law.

* Support and empower those in need. Americans should have access to affordable, high value health insurance. Some Americans, particularly those with low incomes or high expected health care costs, may require financial assistance. Policies in section 1332 waiver applications should support state residents in need in the purchase of private coverage with financial assistance that meets their specific health care situations.

* Promote consumer-driven healthcare. Section 1332 waivers should empower Americans to make informed choices about their health coverage and health care with incentives that encourage consumers to seek value. Instead of only offering a one-size-fits-all plan proposal, a section 1332 state plan should focus on providing people with the resources and information they need to afford and purchase the private insurance coverage that best meets their needs.

From II. Changes to 2015 Guidance

A major disadvantage of the 2015 interpretation was that it deterred states from providing innovative coverage that, while potentially less comprehensive than coverage established under the PPACA, could have been better suited to consumer needs and potentially more affordable and attractive to a broad range of its residents. For example, even if coverage similar to that made available under the PPACA remained available in a state, an offer of more attractive, but less comprehensive plans would have reduced the number of residents who elected PPACA-like coverage, and would likely have caused the state waiver plan to fail the comprehensiveness guardrail. To avoid this effect of the 2015 guidance, this guidance focuses on the availability of comprehensive and affordable coverage. This shift in focus ensures that state residents who wish to retain coverage similar to that provided under the PPACA can continue to do so, while permitting a state plan to also provide access to other options that may be better suited to consumer needs and more attractive to many individuals.

The coverage guardrail requires that coverage be provided to at least a comparable number of residents as would occur absent the waiver. However, the text of the coverage guardrail provision of the statute is silent as to the type of coverage that is required. Accordingly, to enable state flexibility and to promote choice of a wide range of coverage to ensure that consumers can enroll in coverage that is right for them, this guidance permits states to provide access to less comprehensive or less affordable coverage as an additional option for their residents to choose. This guidance on the coverage guardrail continues to consider the number of state residents who are actually receiving coverage. As long as a comparable number of residents are projected to be covered as would have been covered absent the waiver, the coverage guardrail will be met.

From III. Statutory Guardrail Requirements

A. Comprehensiveness and Affordability

The Departments may consider these guardrails met if access to coverage that is as affordable and comprehensive as coverage forecasted to have been available in the absence of the waiver is projected to be available to a comparable number of people under the waiver. The Departments will not require projections demonstrating that this coverage will actually be purchased by a comparable number of state residents; in other words, these guardrails will be met if the state plan has made other coverage options available that state residents may prefer, so long as access to affordable, comprehensive coverage is also available.

B. Number of State Residents Covered (Coverage)

A section 1332 state plan will be considered to comply with this coverage guardrail if, for each year the waiver is in effect, the state can demonstrate that a comparable number of state residents eligible for coverage under title I of PPACA will have health care coverage under the section 1332 state plan as would have had coverage absent the waiver. For purposes of meeting this guardrail, in line with the Administration’s priority favoring private coverage, including AHPs and STLDI plans, the Departments will consider all forms of private coverage in addition to public coverage, including employer-based coverage, individual market coverage, and other forms of private health coverage.

C. Deficit Neutrality

Under the deficit neutrality requirement, the projected federal spending net of federal revenues under the section 1332 waiver must be equal to or lower than projected federal spending net of federal revenues in the absence of the section 1332 waiver.

https://s3.amazonaws.com…

***

Comment:

By Don McCanne, M.D.

Section 1332 of the Affordable Care Act authorizes the states to apply for waivers to modify health plans offered through their insurance exchanges as long as they still meet certain specifications that fulfill the intent of the legislation. Now the Trump administration wishes to reduce federal regulatory oversight of the exchange plans with the ideological goal of allowing states to “increase choice and competition within their insurance markets.”

They plan to do that by using the “Guidance” released today. Wading through their regulatory jargon, their intent is made clear by this statement: “… in line with the Administration’s priority favoring private coverage, including AHPs (Association Health Plans) and STLDI plans (short-term, limited-duration insurance), the Departments will consider all forms of private coverage in addition to public coverage, including employer-based coverage, individual market coverage, and other forms of private health coverage.”

The perilous deficiencies of AHPs and STLDI plans have provoked concerns, but the administration apparently has been tone deaf to these concerns. They state that it remains their priority to favor private coverage, including these deficient insurance products.

According to the Guidance, “the Departments have determined that the analysis of comprehensiveness and affordability of coverage under a waiver should focus on the nature of coverage that is made available to state residents (access to coverage), rather than on the coverage that residents actually purchase” and “this guidance permits states to provide access to less comprehensive or less affordable coverage as an additional option for their residents to choose.” As they repeatedly state, it’s all about access (to insurance products, not health care).

Also, “the Departments will consider the longer-term impacts of a state’s proposal, and may approve a waiver even where a state expects a temporary reduction in coverage but can demonstrate that the reduction is reasonable under the circumstances, and that the innovations will produce longer-term increases in the number of state residents who have coverage such that, in the aggregate, the coverage guardrail will be met or exceeded over the course of the waiver term.” They will approve waivers that reduce the number of insured, in exchange for a promise (a la Trump) that they’ll cover them later.

Deficit neutrality is met even if federal spending net of federal revenues is lower than projected federal spending net of federal revenues in the absence of the section 1332 waiver, but, of course, not if it is higher. Obviously, this administration’s goal is to reduce federal spending.

This would all go away if we would enact and implement an improved Medicare for All. But Seema Verma says, “Medicare for All would become Medicare for None.” We desperately need government health care stewards with a much better vision than that.

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