PNHP

Bain & Company on the absence of ‘a compelling way forward’

Bain & Company on the absence of ‘a compelling way forward’

2017 US Front Line of Healthcare Survey

Bain & Company

The US healthcare industry is still in search of a cure—a breakthrough model that can deliver high-quality care at lower cost. Over the past five years, hospitals, healthcare groups and medical practices have adopted new management structures and systems to curb spiraling costs. But none has proven to be a compelling way forward, and the pace of change since 2015 has slowed substantially.

The US healthcare model remains firmly centered on physicians.

In fact, more than 60% of the physicians we surveyed believe it will become more difficult to deliver high-quality care in the next two years as they struggle to cope with a complex regulatory environment, increasing administrative burdens and a more difficult reimbursement landscape. After years of experimentation, physicians now want evidence that new models for care management, reimbursement, policy and patient engagement will actually improve clinical outcomes. Without it, they see little reason to alter the status quo and move toward widespread adoption.

Why change has slowed

Physicians and healthcare organizations have become more cautious about adopting new structures, systems and tools for several reasons. With the first wave of change well under way, many practices already have implemented changes that are easy or required, and are reluctant to adopt more-complex systems and tools. Physicians are particularly hesitant to embrace new systems when the clinical implications and the return on investment are unproven and the administrative burden significant.

Comparing our 2015 and 2017 survey findings, one notable slowdown has been in the adoption of value-based payment models. Many physicians anticipated a broad rollout of value-based care two years ago and a corresponding decline in practices using the traditional fee-for-service model. But few have been persuaded to switch, noting a lack of evidence that outcomes are the same or better using value-based care.

More than 70% of physicians prefer to use a fee-for-service model, citing concerns about the complexity and quality of care associated with value-based payment models. Fifty-three percent of physicians say that capitation reduces the quality of care, and most see little advantage from pay-for-performance models either. Further, many believe their organizations are not sufficiently prepared for the shift to value-based care.

The road ahead

After a decade of trying out new models, the US healthcare industry has yet to rally around an innovative approach that provides quality care at lower cost. In fact, a disruptive, technology-based solution like those that have transformed the telecom or retail industries may take much longer to develop for healthcare, although a comparable outcome seems inevitable. In the meantime, the industry will continue to innovate, with progress in fits and starts as different models gain traction in different places.

https://app.shorthand.com…

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Comment:

By Don McCanne, M.D.

Bain & Company is a management consultancy organization. They are believed to have a good grasp of the business prospects of the health care industry. Their 2017 US Front Line of Healthcare Survey is important because it demonstrates that physicians do not believe that the current experiments in models of payment are the way forward.

The report states, “the US healthcare industry has yet to rally around an innovative approach that provides quality care at lower cost.” Dare we say that it is because we are turning to Bain-approved, value-based approaches more suited for the medical-industrial complex rather than being designed by placing the patient front and center?

The Bain report also states, “a disruptive, technology-based solution like those that have transformed the telecom or retail industries may take much longer to develop for healthcare, although a comparable outcome seems inevitable.” Inevitable? Some disruption is inevitable if we are to eliminate our current highly dysfunctional financing system that results in high costs, gaps in coverage, and mediocre quality. Technological advances may be helpful, but they need to be much better targeted than they currently are.

Instead of searching for nebulous, value-based, MBA-designed payment models, we need to adopt the already proven model of a well-designed single payer national health program. More physicians are now beginning to realize that a system designed to provide optimal care for the patients is a system in which physicians themselves will also thrive.

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

Cost-sharing payments have far outpaced wage growth

Increases in cost-sharing payments have far outpaced wage growth

By Gary Claxton, Larry Levitt, Michelle Long and Erik Blumenkranz
Kaiser Family Foundation, Peterson-Kaiser Health System Tracker, October 4, 2017

Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years.  For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,505 between 2006 and 2017.

To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.

We find that, between 2005 and 2015, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell.  As can be seen in the chart below, over this time period, patient cost-sharing rose substantially faster than payments for care by health plans as insurance coverage became a little less generous.

From 2005 to 2015, the average payments by enrollees towards deductibles rose 229% from $117 to $386. The average payments towards coinsurance rose 89%, from $134 to $253, while average payments for copays fell by 36%, from $218 to $139. Overall, patient cost-sharing rose by 66%, from an average of $469 in 2005 to $778 in 2015. Wages, meanwhile, rose by 31% from 2005 to 2015.

The relatively high growth in payments toward deductibles is evident in the changes over time in the distribution of cost sharing payments: deductibles accounted for 25% of cost sharing payments in 2005, rising to 50% in 2015.

Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers continue to show concern about their out-of-pocket costs for care. Although health insurance coverage continues to pay a large share of the cost of covered benefits, patients in large employer plans are paying a greater share of their medical expenses out-of-pocket. And, while health care spending has been growing at fairly modest rates in recent years, the growth in out-of-pocket costs comes at a time when wages have been largely stagnant.

https://www.healthsystemtracker.org…

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Comment:

By Don McCanne, M.D.

In the past decade, payments for health insurance deductibles increased by 229% – over 7 times the 31% rate of increase in wages during that same period. The authors conclude, “Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers continue to show concern about their out-of-pocket costs for care.”

In yesterday’s Quote of the Day message, David Himmelstein, Carol Paris and Steffie Woolhandler explained why cost sharing, such as deductibles and copayments, are detrimental to health care and should be abandoned. If you do not yet have down pat an “elevator speech” on why cost sharing should be eliminated, perhaps you should read again (or for the first time) their background explanation, available at the following link:

https://pnhp.org…

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

Why cost sharing should be abandoned

Down With the Copay

By Natalie Shure
Jacobin, October 6, 2017

In the week preceding the release of Bernie Sanders’s Medicare for All bill, the Vermont senator’s office was flooded with calls — so many, in fact, that the legislative aides on the other line often guessed callers’ purpose before being prompted. At issue was whether the single-payer health care system Sanders’s bill envisions should include copayments, out-of-pocket payments for health services at the point of care.

For the single-payer advocacy group Physicians for a National Health Program (PNHP), the answer was a resounding “no.” So upon discovering that copays remained in Sanders’s penultimate draft, they sprang into action. After a week of open letters, tweets and appeals from like-minded organizations, Sanders ultimately struck copays from the bill’s final version.

Earlier versions of Sanders’s bill probably included copays for doctors visits and prescription drugs for the same reason that economists like them: they drive down health care usage and costs. After all the attacks branding Sanders’s relatively pedestrian social-democratic platform as fantastical promises of ponies for all, perhaps Sanders’s legislative aides believed meager copays gave their proposal an air of seriousness.

But the obliteration of copays isn’t a bug in the thinking behind Medicare for All — it’s the feature.

“Cost-sharing” features like copays, coinsurance, and deductibles are major manifestations of market logic in the US health-care system. If we want to overturn for-profit health care’s rebranding of “patients” as “consumers,” we have to eliminate financial barriers at the point of care.

The cliched justification for charging copays is to relieve doctors’ offices of the burden of patients showing up at the first sign of a sniffle. (Never mind that we observe no such behavior among the wealthy, for whom copays are no barrier.) But we do know that even meager copays make people seek less care, and that the poor suffer worse health outcomes as a result.

“I spent my entire career taking care of low-income people, and trust me — a copayment will keep people away from a doctor. I’ve seen it again and again in my practice,” Dr. Steffie Woolhandler, the co-founder of PNHP, told me over the phone. “It’s a huge amount of money for a low-income person.”

While several countries with universal health care systems do charge copayments at the point of use, they don’t tolerate the amount of poverty that we do in the United States. No other wealthy country does. In a grotesquely unequal society, a copayment doesn’t create “better consumers” of care — it helps us scrimp by shoving the most powerless out of the system.

Over decades of bending over backwards to accommodate the internal contradictions of the private health insurance industry, few made the one point that really mattered: we never built an insurance system that strove to guarantee universal health care; we built one that strove to protect capitalists’ profits. We can build one based on addressing all people’s health care needs right now.

Medicare for All could create a universal health-care system designed to provide health care for everyone. The logic of the market has no place in such a system. Winning a truly universal system means zero deductibles and zero copays.

https://www.jacobinmag.com…

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Physicians for a National Health Program, August 23, 2017

Dear Senator Sanders:

We are writing to express our concern about elements of your draft single payer legislation, especially the inclusion of copayments for medically-necessary care.

Copayments

Copayments undermine the goal of eliminating financial barriers to care, a goal that is at the heart of our single-payer advocacy. Copayments, even relatively modest ones, deter patients from seeking needed medical care.

For instance, in the Rand Health Insurance Experiment, compared to persons with entirely free care, those with copayments (as low as 16% of costs) reduced their use of essential and low-value medical services to a similar degree. Among non-poor adults, copayments reduced the use of “highly effective” care for acute conditions such as chest pain, urinary tract infections and fractures by 29% and “rarely effective” care (e.g. for a cold) by 22%. Highly-effective care for chronic conditions fell by 15%, and for acute-on-chronic conditions fell by 21%. For non-poor children, copayments reduced highly-effective care (e.g. for ear infections and strep throat) by 15%, and cut well-child visits by 21%. Cost sharing reduced prescriptions for several potentially life-saving medications such as insulin, asthma inhalers, and beta blockers by about 50% and oral contraceptive use by 25%. While the Rand Experiment was too small and too short to detect the expected deleterious outcomes of these shortfalls in care, it documented that copayments resulted in significantly worse control of blood pressure, a key cause of heart attacks, kidney failure and strokes.

More recent studies confirm the health-endangering effects of out-of-pocket charges for care. Among persons with employer-paid coverage, raising out-of-pocket charges cut care much more for those in poor health. When Medicare added new copayments, outpatient visits dropped but hospitalizations rose. Among insured post-heart-attack patients, eliminating medication copayments increased compliance, and (for minority patients), led to a 35% reduction in major complications such as recurrent heart attacks. Similarly, among insured school-age children with asthma, those with higher copayments used fewer medications but had a 41% greater risk of asthma-related hospitalization. For nearly one- third of lower-income asthmatic children with high-cost-sharing coverage through the Kaiser Health Plan, parents reported delaying or avoiding outpatient visits, and 14.8% reported non-adherence to medications because of cost. The low income group in the study included those with family incomes up to 250% of poverty, some of whom would be hit by copayments under the proposed legislation. In that study, 15.6% of all parents (including those with higher incomes) reported borrowing money or cutting back on necessities to pay for their children’s asthma care.

Paradoxically, the reduction in care-seeking because of copayments may fail to cut system-wide utilization, instead shifting care from sicker and lower-income persons to the healthy and wealthy. When lower-income patients avoid care, doctors and hospitals fill the empty appointment slots and beds with less price-sensitive patients, an example of supply-sensitive demand.

International evidence indicates that cost-sharing is neither necessary nor particularly effective for cost control. Canada, which outlawed copayments and deductibles in 1981, has seen both faster health improvement and slower cost growth. Notably, Canada experienced no surge in care when it abolished copayments. Similarly, in the U.S. there was no overall increase in doctor visits or hospitalizations when Medicare and Medicaid were first implemented in 1966; care shifted from more affluent and healthier persons to those who were sicker and poorer. Scotland, which has eschewed patient payments—even going so far as to abolish parking fees—has costs about half those in the U.S. Strikingly, the U.S. has the world’s highest health care expenditures despite its extensive patient cost sharing.

The inclusion of copayments would also undermine the breadth of support for single-payer reform. Many Americans would see no improvement in their current coverage. In 2014, about 28% of Americans incurred no out-of-pocket costs, and 84.3% had out-of-pocket costs of less than $1,000. For them, the proposed coverage would not reduce out-of-pocket costs, at least in the short run. About 5% of those with employer coverage—about 8 million people—currently have plans with zero deductibles and zero copayments. They would have worse coverage under the proposed reform.

Finally, retaining copayments would substantially diminish the administrative savings achievable through a single-payer reform. In order to implement copayments, the single payer insurer would need to track individuals’ changing incomes, family status (to calculate their income relative to the poverty level) and their copayments to date (to ascertain whether they’ve exceeded the out-of-pocket cap), and make that information available in real time to every hospital, clinic, lab, doctor’s office, etc., in the U.S. Providers would need to collect the copays, and bill patients unable to pay at the time of a visit.

Conclusion

In sum, Physicians for a National Health Program cannot endorse or wholeheartedly advocate for a reform that includes copayments for medically-necessary services. While we would welcome the proposed reform as a useful step forward in advancing health justice, the persistence of copayments would unacceptably compromise the legislation’s ability to improve health and foster equality in care. We urge you to reconsider the inclusion of copayments.

Sincerely,

David U. Himmelstein, M.D., Co-founder PNHP
Carol Paris, M.D., President, PNHP
Steffie Woolhandler, M.D., Co-founder, PNHP

References available at link:
https://pnhp.org/docs/SandersLetter_2017.pdf

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Comment:

By Don McCanne, M.D.

It is irrefutable that deductibles, copayments, and coinsurance cause patients to forgo beneficial health care services, and that often results in physical suffering and sometimes death. For those who cannot avoid health care, financial hardship is frequently a consequence.

A health care financing system should be designed to assist patients in getting the health care they should have by removing financial barriers to care. Since cost sharing has the opposite effect, it should be abandoned as a policy designed to reduce health care spending. There are other much more patient-friendly policies in a well-designed single payer system that are more effective in containing health care spending.

It is a specious argument that people who do not need health care will seek health care anyway simply because it is free. Some say that it would reduce low-value care, but what is low-value care? When a patient is legitimately concerned about his or her health but then doesn’t require any therapeutic intervention other than reassurance, is that low-value care? No. We want patients to come in to reassure them and ourselves that there isn’t anything more serious that requires medical intervention.

The letter by Himmelstein, Paris and Woolhandler provides an excellent explanation as to why cost sharing should be rejected – why individuals should be approached as patients rather than as consumers.

Their letter also demonstrates that it is imperative that we all continue to speak up with the truth about health care reform. Important people are listening.

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

Down With the Copay

We can’t eliminate the profit motive in health care without eliminating copays.

By Natalie Shure
Jacobin, October 6, 2017

In the week preceding the release of Bernie Sanders’s Medicare for All bill, the Vermont senator’s office was flooded with calls — so many, in fact, that the legislative aides on the other line often guessed callers’ purpose before being prompted. At issue was whether the single-payer health care system Sanders’s bill envisions should include copayments, out-of-pocket payments for health services at the point of care.

For the single-payer advocacy group Physicians for a National Health Program (PNHP), the answer was a resounding “no.” So upon discovering that copays remained in Sanders’s penultimate draft, they sprang into action. After a week of open letters, tweets and appeals from like-minded organizations, Sanders ultimately struck copays from the bill’s final version.

Earlier versions of Sanders’s bill probably included copays for doctors visits and prescription drugs for the same reason that economists like them: they drive down health care usage and costs. After all the attacks branding Sanders’s relatively pedestrian social-democratic platform as fantastical promises of ponies for all, perhaps Sanders’s legislative aides believed meager copays gave their proposal an air of seriousness.

But the obliteration of copays isn’t a bug in the thinking behind Medicare for All — it’s the feature.

“Cost-sharing” features like copays, coinsurance, and deductibles are major manifestations of market logic in the US health-care system. If we want to overturn for-profit health care’s rebranding of “patients” as “consumers,” we have to eliminate financial barriers at the point of care.

“Medical Loss”

There’s a contradiction at the heart of American health care: the insurance companies that are supposed help us access care actually have a vested interest in us receiving as little treatment as possible. The history of the American health-care system is the story of a private sector incapable of doing the thing it supposedly exists to do, while the public sector steps in try to fill the gaps but is far too underresourced to do so. The introduction of copays into the American system is rooted in that contradiction.

As health-care quality and costs began to rise in the early twentieth century, FDR quickly dropped health insurance from his New Deal wish list, apparently out of concern too ambitious a program could kill the whole thing on arrival. Meanwhile, to stay afloat during the Great Depression, conglomerations of hospitals and physicians tried to ensure their communities could still get medical care through a nonprofit monthly “subscription fee.” As these community plans expanded in scope, their rising monthly premiums were eventually undercut by profit-seeking competitors playing by different rules. These private plans drove down fees by only accepting healthy, desirable enrollees — while the nonprofit model struggled to extend coverage to everyone.

The tight labor markets of World War II gave for-profit plans an additional boost. In the midst of frozen wages and mass overseas deployment, skittish employers saw the plans as a way to entice workers. Before long, these private plans served employers in other ways: by making health care contingent on employment, they disempowered workers while undercutting the nonprofit insurers’ ability to bargain with hospitals and providers.

Once the postwar push for national health insurance collapsed for good in 1948, we were stuck with a workplace-tethered insurance system dominated by commercial players that no one (save for those looking to get rich off of health care) would have purposefully designed. But the nonprofit and commercial plans differed in one more crucial way: while the nonprofit setup covered costs from the first dollar of care, commercial benefits generally kicked in only after patients forked over deductibles or copayments — dissuading them from seeking care to begin with, and limiting companies’ liability for it when they did.

This wasn’t some minor semantic difference. It reflected completely different reasons for existing.

While the nonprofit plans aimed to generate New Deal–style collective security, the commercial plans just wanted to make money. The best way to do that was to get people to pay for their plans while avoiding having to pay for people’s treatment. For private insurance companies, a client going to the doctor and receiving care was not a good thing — it was “medical loss” and needed to be prevented.

The health insurance companies parroted the logic of property insurers, who saw all their customers as potential vandals willing to damage their cars and houses in order to defraud the insurance company. If an auto insurance policy holder has dirty car windows, they asked, what’s to stop them from smashing up the windows to get shiny new ones?

In 1921, Aetna — the same company that, nearly one hundred years later, would exit a struggling ACA exchange market in retaliation against the federal government for blocking its megamerger — devised an innovative method to hedge against the would-be dirty window scammers. Enrollees would pay a deductible before the rest of the coverage kicked in, which would incentivize them to protect their “property,” giving health insurance users “skin in the game.”

The idea that patients are apt to sabotage their own health to get brand new, upgraded body parts is as condescending as it is gruesome, and the idea that deductibles give people a reason to stay healthy and minimize medical needs is a paternalistic misreading of the dynamics that affect health. It’s no wonder this patchwork of private plans failed to engineer a system of universal care; it’s not what they were designed to do.

A Better Way

By the early 1960s, it was glaringly obvious that the private insurance sector was incapable of funneling elderly, poor, and disabled patients into the health care system. The fact that these companies’ business model was incompatible with supporting those who most needed it ought to have been a decisive repudiation against private insurers’ right to be doing this in the first place.

Instead, the US government enacted Medicare and Medicaid in 1965, shifting the care of vulnerable populations to the public sector and leaving the easiest and cheapest patients in the same private market whose failures the government had just stepped in to alleviate. Even worse, these new federal programs eventually adapted one of the private sector’s cost-reduction tricks: the copayment.

The cliched justification for charging copays is to relieve doctors’ offices of the burden of patients showing up at the first sign of a sniffle. (Never mind that we observe no such behavior among the wealthy, for whom copays are no barrier.) But we do know that even meager copays make people seek less care, and that the poor suffer worse health outcomes as a result.

“I spent my entire career taking care of low-income people, and trust me — a copayment will keep people away from a doctor. I’ve seen it again and again in my practice,” Dr. Steffie Woolhandler, the co-founder of PNHP, told me over the phone. “It’s a huge amount of money for a low-income person.”

While several countries with universal health care systems do charge copayments at the point of use, they don’t tolerate the amount of poverty that we do in the United States. No other wealthy country does. In a grotesquely unequal society, a copayment doesn’t create “better consumers” of care — it helps us scrimp by shoving the most powerless out of the system.

Once state Medicaid programs began charging copays in the 1970s, the new fees were associated with patients dropping out of health care plans. In some cases, there was a demonstrable impact on health: in 1975, California’s MediCal program reduced doctors’ visits with copays, only to have those savings offset by higher hospitalization rates.

Meanwhile, cost-sharing arrangements have continued in the private insurance market, shifting responsibility for systemic dysfunction onto individuals — as if soaring health care costs are caused by patients unnecessarily demanding CAT scans and blood tests like a spiteful customer at the Old Country Buffet piling their plate high in an effort to make the restaurant take a loss.

The burden of high-deductibles and copays continues to spawn new profit centers for the industry that imposed them: private Medigap insurance offsets costs not covered by Medicare, and Health Savings Accounts siphon off the public tax base to help holders save cash to cover costs like high deductibles. Insurance regulations, like those introduced by the Affordable Care Act, have left companies once again searching for savings through cost-sharing: in 2016, over 39 percent of Americans from ages eighteen to sixty-four held high-deductible health plans, up from 26 percent in 2011. In the past decade, cost-sharing payments have risen at more than twice the rate of wages.

The persistence of cost-sharing isn’t prudent health policy; it’s an indictment of a system whose basic functionality depends on making it as difficult as possible for us to participate in. No matter how many people in #StillWithHer shirts beseech legislators to “improve the Affordable Care Act” rather than back “Medicare for All,” the for-profit framework that the ACA uses does little to challenge is fundamentally incapable of delivering universal care.

Over decades of bending over backwards to accommodate the internal contradictions of the private health insurance industry, few made the one point that really mattered: we never built an insurance system that strove to guarantee universal health care; we built one that strove to protect capitalists’ profits. We can build one based on addressing all people’s health care needs right now.

Medicare for All could create a universal health-care system designed to provide health care for everyone. The logic of the market has no place in such a system. Winning a truly universal system means zero deductibles and zero copays.

https://www.jacobinmag.com…

MedPAC will recommend repeal of MIPS

MIPS Takes a Beating at MedPAC

By Shannon Firth
MedPage Today, October 5, 2017

The Merit-based Incentive Payment System (MIPS) should be spiked, virtually all members of the Medicare Payment Advisory Commission (MedPAC) said during a meeting on Thursday morning.

MedPAC, whose members include physicians, healthcare executives, and other policy experts charged with advising the Department of Health and Human Services on Medicare policy issues, has been set on defeating MIPS for a long time; but whether the program should be simply “repealed” or “repealed and replaced” wasn’t clear at Thursday’s meeting.

The MIPS program is one of two payment vehicles created as a result of the the Medicare Access and CHIP Reauthorization Act (MACRA) — which replaced the almost universally despised Sustainable Growth Rate (SGR) formula. The other payment pathway consists of an array of advanced Alternative Payment Models (APMs), which weren’t discussed in any detail at the meeting.

The main problem with the MIPS program, as MedPAC’s analysts see it, is that MIPS won’t achieve the policy goals that it’s designed to achieve.

“Our most basic concern is that the measures in MIPS have not been proven to be associated with high-value care,” said (David Glass, a principal policy analyst for MedPAC).

Alternative Proposed

Glass and MedPAC senior analyst Kate Bloniarz suggested an alternative policy approach that leverages population-based measures.

The Voluntary Value Program, as they’ve dubbed the alternative, would get rid of the MIPS program and all three types of reporting requirements — Advancing Care Information (ACI), Clinical Practice Improvement Activities (CPIA), and quality measures — and scrap CMS support for Electronic Health Records reporting.

In the new model, all clinicians would see a portion of their fee schedule dollars withheld, which would be lumped into a pool — for example 2%, though analysts stressed the percent amount had not been decided.

Clinicians would then have three options:

* Choose to be measured with a “sufficiently large entity” of clinicians and be eligible for value payments

* Choose to participate in an advanced APM model

* Lose the withheld fee schedule dollars

In the end, (Commission Chairman Francis J. Crosson, MD) determined that MedPAC’s technical team would return to the group with draft recommendations for repealing the MIPS program and offer two options: a voluntary replacement program similar to the one discussed at Thursday’s meeting with some revisions, and suggestions on how to make the advanced Alternative Payment Models more accessible for physicians.

The commission could then decide whether to recommend one or both options to HHS.

https://www.medpagetoday.com…

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URGENT: Explaining MIPS; Action required

Comment by Don McCanne, M.D.
PNHP Quote of the Day, March 21, 2015

Yesterday’s Quote of the Day message (March 20, 2015) sounded the alarm on legislation that would replace the flawed Sustainable Growth Rate formula (SGR) for updating Medicare payments with a new Merit-based Incentive Payment System (MIPS) – legislation with strong bipartisan support that will be taken up in Congress this week and is expected to pass.

The SGR formula is considered to be flawed primarily because economic factors considered in the formula would result in inappropriate payment reductions in many of the yearly adjustments. Thus there is consensus that the formula should be repealed.

The concern is over its replacement: MIPS. On reading the summary of the “SGR Repeal and Medicare Provider Payment Modernization Act,” you will see that MIPS places a tremendous administrative burden on health care professionals in a health care system that is already overwhelmingly overburdened with administrative excesses. The only way to escape this additional burden is to participate in Alternative Payment Models (APMs) which, in themselves, create further significant administrative burdens (ACOs, PCMHs, etc.). MIPS is an administrative nightmare.

The problem is that those who do not game the system, and especially those with practice situations and patient populations that make it very difficult to score higher points, will almost automatically receive performance scores below the threshold since their performances will be compared with the gamers. This will result in negative payment adjustments – reducing payments by up to nine percent. If you think SGR is unfair, MIPS robs from these hard-working professionals who are just trying to make the system work for their patients, and gives the spoils to those who likely have consultants to show them how to game the system.

https://pnhp.org…

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Comment:

By Don McCanne, M.D.

Lost in the celebration two years ago over ending the highly flawed SGR method of updating Medicare payments was the fact that its replacement, the Merit-based Incentive Payment System (MIPS), would create an administrative nightmare while failing to achieve its goal of higher quality care at lower cost.

It’s not that the problem wasn’t recognized (see the March 2015 comment), but the policy community and the politicians just don’t get it. They make up theory, knowing that with their genius, these proposals will be phenomenal. Then they do the policy research. Well, MIPS is not working.

So what do they recommend? Let’s push physicians into the other part of the MACRA legislation, the Alternative Payment Models (APMs) – accountable care organizations and the like. After all, they have been under study for several years now and they say that they are just beginning to show slight improvements in a couple of quality measurements, and they also say that they are beginning to show a very slight downward trend in costs in some instances, unless you look at the details. In truth, they are adding to the administrative complexity with higher administrative costs that they are deliberately leaving out of their calculations, and, worse, they are increasing physician burnout.

In spite of the pessimism, they defend their position by saying that we can’t go back to the way things were. We have to start paying for value instead of volume. Yet they have failed to demonstrate two things: how you do that, and, more importantly, how a system using fee-for-service, capitation, salary, global budgeting, and rate negotiation, as appropriate, is somehow inferior to their screwball theories of value-based financing.

Of course, we offer up a well-designed single payer system as a much better alternative. And what is their response?  Single payer might be a consideration for some time in the distant future, but not now. We have to build on what is working – our administratively complex, dysfunctional, overpriced system that leaves tens of millions without appropriate care and often destitute. But they say they can fix those things by adding a public option or a Medicare buy-in, except that we will still be faced with even more administrative complexity, higher costs, too many uninsured and even greater numbers who face intolerable medical debt as the insurers place even more risk on the health care consumers (formerly known as patients).

The good news is that MIPS is going away. The bad news is that the rest of the crap stays in place and will get worse simply because we need to postpone single payer and instead build on the Affordable Care Act and its offshoots like MACRA and APMs.

Time to take a knee for single payer, or is that still a fantasy?

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

California Game Changers: Birthing a Single-Payer Health Care System

Healthy California’s single-payer plan could deliver coverage to every Californian for about $331 billion, vs. the $370 billion the state currently spends.

By Bill Raden
Capital & Main, October 6, 2017

This autumn could prove decisive for the question of whether California may again be on track to enjoy what the rest of the industrialized world has long taken for granted — universal, government-provided health insurance, a dream that dates back to the Truman administration. Although the Affordable Care Act was spectacularly successful in lowering the state’s uninsured rate from 17.2 percent to 7.3 percent, according to the latest census data, that still represents a roughly 2.8 million-person gap in California’s health coverage. And health care advocates argue that too many with private insurance continue to fall victim to the catastrophic failure of a for-profit health care model plagued by extraordinary complexity and costly administrative inefficiency.

Paul Y. Song, an oncologist who sits on the board of Physicians for a National Health Program, told Capital & Main that with or without a GOP repeal, the withering Republican assault on the ACA has exacerbated the financial hardships of many recently insured Californians struggling simply to maintain their coverage. Song is also the co-chair of Healthy California, a campaign that supports passage of state Senate Bill 562, a single-payer measure that stalled in Sacramento when Assembly Speaker Anthony Rendon (D-Lakewood) tabled it in June.

“The number of people reporting difficulty paying monthly premiums has gone up to nearly 37 percent,” Song noted. “California ranks third from the bottom in terms of narrow networks, which means that if you have an emergency and you need to see a doctor, chances are the majority of the time a doctor will not be in your network and you’ll get charged all of these out-of-network prices. … Anthem announced earlier this year that they were going to raise rates. They were either going to pull out of the exchange in California in certain areas, or raise rates 35 percent. People are now waking up and saying enough is enough.”

California Democratic leaders, state labor and health care advocates have never seemed more galvanized around the principle that quality health care is a fundamental right for all Californians. The divisive question of how to best achieve it is set to be taken up in a series of hearings over the next several months by the Assembly Select Committee on Health Care Delivery Systems and Universal Coverage, announced in March by Speaker Rendon. The hearings begin October 23-24.

For both single-payer advocates and opponents in Sacramento, as well as Washington, the debate is ultimately about far more than health care. Battle lines have formed around bedrock questions of who we want to be as a people: Should suspicion of “big government” take priority over the broader welfare of the population? Will the cruelties of the unfettered marketplace be tolerated in the name of American individualism?

In the meantime, experiencing the harrowing contradictions of California’s health care system continues to be the day-to-day reality of front-line caregivers. Melissa Johnson-Camacho, an oncology nurse in Davis who has also spoken in favor of single payer before the U.S. Senate, told Capital & Main how she remains haunted by the experience of caring for a young woman riddled with metastasized cancer.

Because the girl’s cancer had spread to her lungs, she was at risk of drowning in her own pleural fluid and her life now hinged on a daily supply of pharmaceutical-grade catheter bags to safely drain the lungs.

“Her mom was with her as a caregiver, so she starts telling me about the drains and that she would change them more often, but they couldn’t afford it,” Johnson-Camacho said. “It was unspoken, but I know her mom was [thinking], ‘How much supplies am I going to need when I know she’s not going to be here much longer?’”

Facing renewal of the girl’s crippling annual deductible of her private insurance plan, the family was trying to stockpile her supply of bags, which can list for around $5,000 per day, by exceeding their recommended capacity.

“Nobody should ever have to make a decision like this,” said Johnson-Camacho. “Especially when you’re paying into a system. It was just angering. It was sobering. It was tragic. That was one of many times that I thought, ‘We’ve got to change this.’”

That’s why, Johnson-Camacho offered, she’ll be joining in the Healthy California campaign’s Medicare-for-All October Weekend of Action, in which she and fellow activists hope to canvass all 80 Assembly districts across the state to urge voters to flood Sacramento with letters demanding action on SB 562.

“There’s a lot of different forces out there that don’t want to see this bill move forward,” explained Don Nielsen, chief lobbyist for the California Nurses Association (CNA), which is a sponsor of the bill (and a financial supporter of this website). “Select committees can’t do anything other than take testimony. They can’t move our bill. And we’re concerned that the process is more about slowing down the momentum of the incredible public support for Medicare for All, single payer and SB 562. People know that the system is broken. They want to see it fixed.”

Rendon’s press spokesperson, Kevin Liao, countered that far from being a stalling maneuver, the Select Committee was designed to allow a broader discussion on getting to health care for all, and that nothing was stopping SB 562’s authors from redressing the bill’s “potentially fatal flaws”: “Speaker Rendon laid out a clear path for SB 562 — the Senate can send to the Assembly workable legislation that includes financing, delivery of care and cost control.”

But Healthy California’s timetable to iron out those critical details and then get the bill through committee and floor votes, and finally to the desk of a less-than-enthusiastic Governor Jerry Brown by the end of the 2018 session is ambitious, reflected Anthony Wright, executive director of Health Access California. The veteran consumer health advocate, who has lobbied on behalf of universal, single-payer health care bills and initiatives dating back to Proposition 186’s Medicare for All-type ballot initiative in 1994, said that the coalition has its work cut out.

“A health system can be very complex and confusing,” said Wright. “The same obstacles that prevented us in previous attempts still remain, and in fact loom even larger. Vermont had an Obama administration that was willing to work with them to figure out the various financing and other issues. For the next three, four years, we’ll have a Trump administration in that same role, which will probably not be helpful.”

The executive director of the California School Employees Association, Dave Low, concurred. “We need federal waivers to a California single-payer bill,” he explained. “We know that there is a heavy lift. Just the poll that recently came out showing that we don’t even have a majority support on the single-payer issue shows that we have work to do, and we want to do that work.” (Disclosure: CSEA is a financial supporter of this website.)

Trump aside, it turns out that there’s little economic reason why California couldn’t go it alone with single payer, and a host of reasons why it should. A CNA-commissioned study found that by lowering administrative costs, controlling the prices of pharmaceuticals and fees for physicians and hospitals, reducing unnecessary treatments and expanding preventive care, Healthy California’s single payer could deliver coverage to every California resident for about $331 billion, or 10 percent less than the $370 billion the state currently spends.

And California has size in its favor. The state’s $2.4 trillion annual gross domestic product ranks neck-and-neck with France’s GDP, and California’s population of 39 million puts it above Canada’s. Yet at $7,549 per person, the state spends considerably more on health care with its market-based system than both countries — $5,292 for Canada; $4,959 for France — do with their universal single-payer systems, while getting substantially less bang for its buck. According to the Commonwealth Fund, while California ranks 14th in the nation on health care access, efficiency and equity, the U.S. consistently comes in last or near last on those measures relative to its industrialized peers. In terms of infant mortality, the state’s 4.7 deaths per 1,000 births places it just behind Cuba (4.51), Canada (4.53) and Greece (4.58), and 40 places behind Japan.

“What I see daily on my job is that many children who have serious illnesses, their families have delayed care because they couldn’t afford access to care early on,” observed Martha Kuhl, a pediatrics oncology nurse at UCSF Benioff Children’s Hospital in Oakland, who has been in the field for 36 years. “Even when they had insurance, they couldn’t afford the point-of-care copays. They were having trouble with deductibles, so they would delay care until it felt absolutely necessary. In a child with cancer, that can seriously affect the outcome and the treatment protocol, and actually whether or not your child survives.”

Although Dickensian accounts of parents being forced to choose between losing their home or losing a sick child are common, Kuhl attributes much of the system failure to the nightmarish administrative labyrinth imposed by the private insurance marketplace.

“It’s tragic,” Johnson-Camacho agreed. “I went to school to help people, not to follow up with the pharmacy to make sure my patients’ meds are going to be covered.”

For the private insurance and pharmaceutical industries, the single-payer fight in California, which has historically been a national political bellwether, represents a struggle for their very survival. Not surprisingly, groups opposing SB 562 have given more than $1.5 million to the Assembly’s Democratic caucus since the 2012 election cycle. In just the last three election cycles, the International Business Times recently reported, Assembly Democrats have received more than $2.7 million in pharmaceutical and health insurance industries contributions.

“I’ve been a nurse for a long time, and I have watched the system change,” Kuhl reflected ruefully. “There were always people who didn’t have health insurance or couldn’t afford the care that they needed, but it felt like a nicer system in some way. These days, business is the first priority. Insurance companies’ primary goal is to make money, and they do that by denying care.”

https://capitalandmain.com…

Paying for CHIP with means-tested Medicare Parts B and D premiums

Bill to Rescue Children’s Health Program Hits Snag in House

By Robert Pear
The New York Times, October 4, 2017

Legislation to rescue the Children’s Health Insurance Program sailed through a Senate committee on Wednesday, but touched off a partisan conflict in the House, diminishing hopes that the popular program would be quickly refinanced.

By voice vote, the Senate Finance Committee approved a bill on Wednesday that would provide more than $100 billion over five years for the program, which insures nearly nine million children.

The Senate bill does not specify how the government would pay for extending the children’s health program.

But in the House Energy and Commerce Committee, lawmakers brawled Wednesday over a similar bill to provide money for the children’s health program. Democrats strongly support the program, but complained that Republicans would take money from Medicare and the Affordable Care Act to offset the cost.

The House committee eventually approved the bill, by a vote of 28 to 23, with all of the opposition coming from Democrats.

One provision of the House Republican bill would require older Americans with income of more than $500,000 a year to pay higher Medicare premiums.

“Folks that earn a half-million dollars a year and are over 65, they can pay a little bit more for Medicare,” said Representative Fred Upton, Republican of Michigan. “And you know what? If they don’t want to pay, they don’t have to enroll. That’s a choice they will have.”

https://www.nytimes.com…

“Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable Act of 2017” – See Sec. 203:
http://docs.house.gov…

Modifies Section 1839(i)(3)(C)(i)(II) of the Social Security Act:
https://www.ssa.gov…

***

Means testing Medicare

Comment by Don McCanne, M.D.
PNHP Quote of the Day, December 11, 2012

Now that health care costs are unbearably high, Medicare must be progressively financed since moderate- and low-income individuals can no longer bear the full costs. A major step forward was the removal of the cap on wages subject to Medicare taxes, so higher income individuals pay more. The Affordable Care Act also added a new 0.9% Medicare tax for incomes over $200,000/$250,000.

In addition, in order to help cover Medicaid expansion and subsidies for the exchange plans, the Affordable Care Act also added a 3.8% tax on investment income, again for those with incomes over $200,000/$250,000. So we have already embarked on policies that make health care financing progressive, though we need to do more, but only on the financing end.

Medicare benefits should be the same for everyone. We should eliminate premiums and cost sharing, and we should expand benefits so that administratively wasteful Medigap and retiree health benefit programs are no longer necessary. Low income individuals should receive the same standard of care as the wealthy, just as was the intent in enacting the traditional Medicare program.

Introducing means testing, which we have already begun with Part B and Part D premiums, reduces support of wealthier beneficiaries who are annoyed by these additional charges. Once the principle of means testing is established, the budget hawks ratchet it up, driving wealthier individuals to look for private options, currently available as the Medicare Advantage plans. It is only one small additional step to introduce premium support – vouchers – where the wealthy will take their money and run. Once you lose support of wealthier individuals who have a strong political voice, then Medicare will descend down the path toward becoming a welfare program.

https://pnhp.org…

***

Comment:

By Don McCanne, M.D.

There seems to be consensus that the Children’s Health Insurance Program (CHIP) should be renewed but there is considerable disagreement on how to pay for it. One proposal is to increase Medicare premiums for those with incomes over $500,000, making them pay the full Medicare Part B and D premiums with no contribution from the government. They can certainly afford it, so why shouldn’t we do that?

Because of the high costs of health care and the modest incomes of most beneficiaries, the funding of Medicare must be progressive. We are already doing that to a limited extent through the taxes that fund the Medicare program. But it is imperative that we limit progressive funding to the revenue side of the ledger while keeping benefits uniform for everyone on the spending side. Why?

Medicare is an egalitarian program designed to provide everyone who is eligible with the health care that they need regardless of ability to pay. Everyone has the same health care benefits. But the Part B and D premiums are means-tested – higher-income individuals pay larger premiums. The extra premiums paid can be considered to be a net reduction of the Medicare benefits. When the government contribution is reduced by 100 percent, then the individual is paying the full costs for Parts B and D in addition to what has been paid through payroll taxes and general revenues.

Inevitably this would cause high-income individuals to look for other options in the private sector. Since this is the Medicare segment with the strongest political voice, support for the program would decline, converting Medicare into a chronically underfunded welfare program.

Of course, the politicians are fully aware of this. As Representative Fred Upton says, “And you know what? If they don’t want to pay, they don’t have to enroll. That’s a choice they will have.”  Obviously this advances the efforts to privatize Medicare, opening the door for premium support (vouchers).

Medicare premiums, deductibles, and coinsurance are unnecessary and should be eliminated. The entire program can be funded much more equitably through the tax system, which is the way it should be when we convert it to an improved Medicare for all.

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Taking a knee for single payer – a fantasy

The Choice Between Kneeling and Winning

By David Leonhardt
The New York Times, October 2, 2017

Symbols matter in politics. They often matter more than the detailed arguments that opposing sides make. Symbols are a shortcut that help persuadable outsiders figure out where to line up.

The professional athletes doing political battle with President Trump are heirs to the civil-rights movement. They are protesting government-sanctioned violence against African-Americans. Risking popularity for principle, they have shown a courage frequently lacking among the affluent and famous.

From a moral standpoint, this issue is clear. The athletes are right — and have every right to protest as they have. Trump is wrong, about the scourge of police violence and about freedom of speech.

But righteousness does not automatically bring effectiveness.

The kneeling argument needlessly alienates persuadable people, and it’s one the athletes don’t need.

Why? Because most Americans respect the country’s symbols and because standing is a simple sign of respect.

Beyond the athletes, there is a bigger question: Do Trump’s opponents want to oppose him in ways that are merely just and satisfying? Or do they want to beat him? “You can’t get angry,” as the longtime activist Vernon Jordan has said, describing a different civil-rights battle, in the 1950s. “You have to get smart.”

Getting smart means nominating progressive candidates who can win, even if they aren’t progressive on every issue. Getting smart means delaying internal fights (like single-payer health care) and unifying against Trump’s agenda (as Democrats in Congress have).

https://www.nytimes.com…

***

Responding to Ta-Nehisi Coates

By David Leonhardt
The New York Times, October 4, 2017

Ta-Nehisi Coates has criticized my column on kneeling athletes, and several readers also made a version of his point, in emails.

Here is part of what he said:

“And David says, ‘While I’m in sympathy with these players, they need to look at the past and learn that it’s possible to appeal to the masses of Americans, that you can get Americans on your side if you can find something that bridges the gap, that brings us all together. And kneeling doesn’t do that.’

“And he shows some polling data to show that. I read that, and I almost threw my computer across the room. Because in fact there is polling data about what Americans thought of Martin Luther King, and the Freedom Riders, and the March on Washington. It wasn’t a high opinion at all.”

I understand why many Americans feel despair today and why many on the political left aren’t in a patriotic mood. Racial inequities remain shameful. Gun violence continues unabated. The planet warms. And Trump creates one new crisis after another.

I also understand that protest movements need both radicals and pragmatists to succeed. The civil rights movement had both, and today’s athletes deserve credit for the stir they’ve created. But if progressives choose to reject pragmatism, optimism and, yes, patriotism, I suspect they will spend many years protesting the country’s direction instead of setting it.

https://www.nytimes.com…

***

Civil-Rights Protests Have Never Been Popular

By Ta-Nehisi Coates
The Atlantc, October 3, 2017

The idea here is that kneeling NFL players are committing an act of such blatant disrespect that they hand Trump an easy image with which to demagogue.

(David) Leonhardt goes on to contrast this species of activism, which aligned “the civil-rights movement with the symbols and ideals of America,” with kneeling during the national anthem, which presumably signals opposition to those same symbols. Leonhardt is sympathetic to the aims of Kaepernick’s protest but he contrasts this “angry” approach with the “smart” approach of the civil-rights movement.

The trajectory of Leonhardt’s argument is doomed by the defective pad from which it was launched. The problem here is not just a just-so chain of events, but the actual effects of the events. Implicit in Leonhardt’s critique is the idea that Martin Luther King and other civil-rights pioneers, and their protests, were better able to appeal to the hearts of white Americans than Kaepernick and his allies.

As The Washington Post noted last year, only 22 percent of all Americans approved of the Freedom Rides, and only 28 percent approved of the sit-ins. The vast majority of Americans—60 percent—had “unfavorable” feelings about the March on Washington. As FiveThirtyEight notes, in 1966, 63 percent of Americans had a negative opinion of Martin Luther King. The popular hostility toward King extended to the very government he tried to embrace—King was bugged and harassed by the FBI until the end of his life. His assassination sprang from the deep hostility with which he was viewed, not by a fringe radical minority, but by the majority of the American citizenry.

Leonhardt is a smart and knowledgeable columnist. It is thus surprising to see him embrace a mythical rendition of the civil-rights movement that runs counter to the the facts and figures of the time. But Leonhardt’s column seems less interested in offering an accurate apprehension of the civil-rights movement than in employing the civil-rights movement as a club against radicalism in general, and the Bernie Sanders-wing of the left in particular:

“Getting smart means nominating progressive candidates who can win, even if they aren’t progressive on every issue. Getting smart means delaying internal fights (like single-payer health care) and unifying against Trump’s agenda (as Democrats in Congress have). Getting smart means understanding, as civil-rights leaders did, that American symbols are a worthy ally.”

Kaepernick did not inaugurate his protest in hopes of helping elect more centrist Democrats, or any kind of Democrat. That said, he was not immune to compromise. When his initial efforts were met with disdain and deemed disrespectful, he actually consulted a group of veterans to see how he might better pursue a protest. That is the origin of Kaepernick kneeling, and the fact that it too has been met with scoffs points to deeper problem. If young people attempting to board a bus are unacceptable, if gathering on the National Mall is verboten, if preaching nonviolence gets you harassed by your own government and then killed, if a protest founded in consultation with military veterans is offensive, then what specific manner of protest is white America willing to endure?

It’s almost as if the manner of protest isn’t the real problem.

https://www.theatlantic.com…

***

Comment:

By Don McCanne, M.D.

Pragmatism means getting smart. It means respecting our national symbols. It means not offending football fans by protesting injustice through the act of kneeling before the playing of the national anthem. It means “delaying internal fights (like single-payer health care).” Some would say it even means praising the second amendment with fervor regardless… (I can’t go there right now).

How can a nation become incensed at symbolic gestures while ignoring and walking away from the horrendous injustices that provoke those gestures?

David Leonhardt, in advising us essentially to walk away from an internal fight over single payer is merely expressing the view of the smart pragmatists on the left who have been repeatedly telling us that we need to forget single payer and patch ACA with a public option or Medicare buy-in – an approach that would extinguish the fire under the single payer movement.

If a knee were my choice for a symbol, I don’t think I’d place it on the ground; I fantasize about lodging it in a spot where it would really get the attention of these smart pragmatists.

“What’s that for?”

“It’s about social justice and health care justice, you dumb pragmatist. Instead of worrying about where some person’s knee is, you need to help lead the movement to end the massive suffering, hardship and even death that plague our nation.”

Smart pragmatism, my foot. Or is it my knee?

(Please excuse my anger, but I’m really having trouble with this.)

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

The public judges health care by the ‘medical bill score’

The medical bill score: How the public judges health care

By Drew Altman
Axios, October 3, 2017

We track a lot of numbers in health care: how much we spend on health as a share of our economy; the number of uninsured; and the share of the federal budget allocated to health programs. What we don’t track — and a number the Congressional Budget Office cannot score — is the statistic that means the most to the American people: the share of the public having problems paying their health care bills.

Percent saying they have taken action in order to pay medical bills:

72% – Put off vacations, household purchases

70% – Cut back on food, clothing, basic items

59% – Used up all or most of savings

41% – Taken an extra job or worked more hours

37% – Borrowed money from friends or family

34% – Increased credit card debt

26% – Taken money out of long-term savings

17% – Changed your living situation

15% – Taken out another type of loan

13% – Borrowed from a payday lender

12% – Sought aid of a charity or non-profit

02% – Taken out another mortgage

15% – Made other significant changes

The bottom line:

The “medical bills score” is the single most important measure of how we are doing in health care from the public’s perspective. And ultimately, if Congress ever passes a new health care bill, it is how the public will evaluate that plan — from Graham-Cassidy to Medicare for All and everything in between.

The numbers that matter:

As we found in a Kaiser Family Foundation poll in February:

* 31% of Americans age 18-64 report they or a family member face problems paying their health care bills.

* But that number shoots up to 57% for people who are sick.

It makes sense that people who use more care have more health care bills, but it also reveals how poorly our system performs from a consumer perspective when people who need care the most are protected the least by insurance coverage.

The impact:

Not surprisingly, the uninsured (41%) are more likely to have problems paying medical bills. But this is not a problem limited to the uninsured: 30% of the insured – think voters — have problems with medical bills.

The back story:

The share of the public reporting problems paying their medical bills has not moved much in recent years. The Affordable Care Act has extended coverage and better financial protection to tens of millions, but it doesn’t have much of an impact on affordability beyond people covered by the Medicaid expansion and the marketplaces.

In the far larger employer-based health insurance sector, deductibles and other forms of cost sharing have been growing about five times faster than wages, and deductibles have been growing especially sharply for people who work for smaller employers.

What to watch:

Health care is a pocketbook issue for most of the public and the American people have their own scoring system. They may give this or that mostly partisan response about a health reform idea on a poll, but until they see how they’ll get help paying their health care bills, they will ultimately be disappointed by every health reform plan.

https://www.axios.com…

***

Comment:

By Don McCanne, M.D.

“Yes, but how will health care reform affect me?” For most people that means, how much will I have to pay for my insurance, and how much will I have to pay out of pocket for my health care?

Except for low-income individuals with heavily subsidized insurance, members of the work force are paying too much for their insurance, either directly or through forgone wages, and they are paying too much when they need to access health care, especially through high deductibles.

Under the Physicians’ Proposal – a single payer model advocated for by Physicians for a National Health Program – insurance premiums would be eliminated and replaced by equitable funding  of a universal risk pool that would be affordable for each of us, and deductibles and other cost sharing would be eliminated for all essential health care services since other, more patient-friendly methods of cost containment would allow the removal of financial barriers to care.

As Drew Altman states, “until they see how they’ll get help paying their health care bills, they will ultimately be disappointed by every health reform plan.” The obvious lesson is that we need to show the public how a single payer, improved Medicare for all program will give them the “medical bill score” they have been looking for, and thus end the scourge of medical debt.

A Physicians’ Proposal for Single-Payer Health Care Reform:
https://pnhp.org/nhi

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Multispecialty consolidation drives prices up

NBER Working Paper 23871: Does Multispecialty Practice Enhance Physician Market Power?

By Laurence C. Baker, M. Kate Bundorf, and Daniel P. Kessler
National Bureau of Economic Research, September 2017

Abstract

In markets for health services, vertical integration – common ownership of producers of complementary services – may have both pro- and anti-competitive effects. Despite this, no empirical research has examined the consequences of multispecialty physician practice – a common and increasing form of vertical integration – for physician prices. We use data on 40 million commercially insured individuals from the Health Care Cost Institute to construct indices of the price of a standard office visit to general-practice and specialist physicians for the years 2008-2012. We match this to measures of the characteristics of physician practices and physician markets based on Medicare Part B claims, aggregating physicians into practices based on their receipt of payments under a common Taxpayer Identification Number. Holding fixed the degree of competition in their own specialty, we find that generalist physicians charge higher prices when they are integrated with specialist physicians, and that the effect of integration is larger in uncompetitive specialist markets. We find the same thing in the reciprocal setting – specialist prices are higher when they are integrated with generalists, and the effect is stronger in uncompetitive generalist markets. Our results suggest that multispecialty practice has anticompetitive effects.

http://www.nber.org…

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Comment:

By Don McCanne, M.D.

Advocates of consolidation in health care tell us that both horizontal and vertical integration improve efficiency and improve the services delivered, thus improving quality and reducing costs. The secret, they say, is to allow the markets to work. But what does this study tell us?

Integration of generalist and multispecialty practices drives up prices of both the generalists and the specialists, which the authors attribute to the anticompetitive nature of multispecialty practices.

Of significance is that this study did not use Medicare data but rather used data from the Health Care Cost Institute which compiles data on commercially insured individuals – the private sector. This study shows, once again, that the U.S. system is unique in relying heavily on the medical-industrial complex, and we are paying dearly for that.

This trend in consolidation has been increasing, and yet where is the government when we need it? Does Medicare do any better? Well, yes. Prices are lower under Medicare than under the private insurance plans, except for the private Medicare Advantage plans (though more is paid to the insurers for administration and profits).

What would happen under an Improved Medicare for All program? Prices would be negotiated to cover legitimate costs and fair margins. That might mean that some Medicare fees would be adjusted upward, especially for primary care, but the chicanery of the private insurers in partnership with their contracted providers would no longer be a factor since they would be replaced by the single payer system.

No doubt progressive members of the policy community will say, “There goes PNHP again with their pipe dreams about single payer nirvana.” But other wealthy nations cover everyone at an average of half of our per capita costs, precisely because they rely on greater government oversight. “Only in America” do we put up with this – American exceptionalism that bites us.

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Single-payer in Penn. and beyond

Panel featuring Dr. William Davidson

WITF, Smart Talk, October 2, 2017

The Senate’s third attempt to repeal and replace the Affordable Care Act, or Obamacare, failed last week before the vote made it to the floor. It was the third attempt since the inauguration of Donald Trump, who campaigned with the promise to overturn the ACA, saying on many occasions the plan “…is unaffordable and it’s a disaster.”

Earlier in September, Vermont Senator Bernie Sanders proposed a “Medicare-for-all” bill that, according to Sanders’ own website, would “…create a federally administered single-payer health care program.” The plan would cover all aspects of healthcare; preventative and emergency care, primary, specialized, vision, dental, mental – everything for everyone. People could choose any doctor and prescriptions would be covered.

Supporters of universal single-payer healthcare are thrilled that the bill brings the topic to the national narrative, though it has little chance of passing the Republican-controlled congress. Critics contend that further government involvement in the healthcare process would only take choices away from consumers and cost would skyrocket.

On the Monday edition of Smart Talk, we will spend the hour discussing the merits and drawbacks of a single-payer healthcare system.  Pennsylvania State Representative Pamela DeLissio (D – 194th) will discuss her proposal – the Pennsylvania Health Care Plan – a single payer plan administered by the state.

We’ll also speak with Dr. William Davidson, a cardiologist who has served Central Pennsylvania for 30 years and is a member of Physicians for a National Health Program, an organization of doctors advocating for a universal single-payer system.

We’ll also speak with critics of the single-payer concept; Vince Phillips is a retired lobbyist who advocated for the Pennsylvania Association of Health Underwriters and Eric Beittel, a financial planner and the former President of the Board of the Central Pennsylvania Association of Health Underwriters. We’ll also hear from Elizabeth Stelle, the Director of Policy Analysis for the Commonwealth Foundation.

http://www.witf.org…