PNHP

Health care reform driven by health plans, not physicians

Health care reform driven by health plans, not physicians

By Stephen B. Kemble, M.D.
Honolulu Star Advertiser, Jan. 24, 2018

At the “2018 Hawaii State of Reform” health policy conference on Jan. 10, I saw only a handful of physicians in the audience of about 300, but plenty of participants representing health plans and their contractors and subcontractors. The conference featured updates on our physician workforce shortage, and the effects of homelessness and social determinants on health.

The only policy solutions offered were new payment models that reward “value,” not volume, and shift insurance risk onto doctors and hospitals. I did not hear anything about the adverse effects of new payment models on physicians, or on the rapidly worsening problems we are seeing with access to care due to physicians leaving practice or refusing new patients with Medicare and Medicaid (MedQUEST).

For psychiatry, the latest workforce data shows an adequate number of psychiatrists on Oahu. However, I recently retired from the private practice of psychiatry, and we could find only two Oahu private- practice psychiatrists still accepting MedQUEST or Medicare patients, and both are completely overloaded. I still work part-time in Queen Emma Clinic, seeing mostly Medicaid patients and doing collaborative care, but the need there is also far greater than I can meet.

My patients report similar problems finding primary care doctors who will accept new Medicare or MedQUEST patients. I strongly suspect this has a lot to do with increasingly burdensome prior authorization policies and the administrative demands and staffing required by new payment models being imposed by Medicare and HMSA.

I have been experiencing much more frequent, gratuitous and absurd formulary restrictions and prior authorization policies by the plans’ pharmacy benefits managers in the past year or two, worst for the MedQUEST plans.

Now MedQUEST wants to follow HMSA and Medicare and move to “value- based” payment models. These were designed to discourage unnecessary care driven by fee-for-service incentives, which has never been much of a problem in Hawaii’s Medicaid program anyhow.

These payment models also happen to discourage taking on sicker, more complex patients with a lot of social problems, which means the Medicaid population. What good are pay-for-performance incentives if almost no doctors are willing to see the patients in the first place?

Hawaii’s health reform initiatives have been driven by the health plans, and skeptical doctors have been ignored or excluded from planning. If those driving policy remain unconcerned with the reasons why almost no psychiatrists and fewer primary care doctors are accepting new Medicare or Medicaid patients, we will end up with a shrinking pool of doctors caring for increasingly restricted patient panels and doing well on quality metrics, while those who need care the most are unable to find any available doctor, leaving them with no access to care except the emergency rooms and urgent care clinics.

This has already happened with psychiatry, and it is a direct result of policies that ignore effects on front-line patient care. We used to have broad acceptance of Medicaid among both private practice psychiatrists and primary care doctors, but psychiatrists have been effectively driven out of MedQUEST, and primary care is not far behind.

This clearly is not good for quality care, or for the total cost of care in the community, regardless of the performance of the limited number of doctors who have invested in the computerization and staffing required for success under new payment models.

We urgently need a dialogue between policy makers — health plan leadership, the Ige administration and legislators — and practicing doctors, or we will soon face a catastrophic collapse of our once exemplary health care delivery system, starting with Medicaid.

Any new Medicaid waiver requests should be delayed until we can find policies that will not continue to drive doctors out of MedQUEST.

Health care reform without doctors is doomed to failure.

www.staradvertiser.com…

Micromanaging medical care contributes to physician burnout

By Arcelita Imasa and Seiji Yamada
Honolulu Star Advertiser, Jan. 24, 2018

Projected increases in health costs in Hawaii are growing public concerns.

The Star-Advertiser published a Jan. 14 editorial and a Jan. 21 story on the rising-cost drivers, identified as “an aging population, prescription drugs, expensive technology and procedures, as well as unhealthy lifestyles that lead to costly chronic illnesses.”

Just this past Saturday, at the medical student-organized “Doctors Create Local Solutions” event, physicians gathered to propose medically informed solutions to Hawaii’s health care crisis. As Dr. Stephen Kemble pointed out: Until 2017, the United Health Foundation’s annual ranking had placed Hawaii as the healthiest state for five years. Furthermore, prior to the Affordable Care Act, Hawaii had among the lowest commercial health insurance costs, and our Medicare costs were the lowest in the country.

That is, Hawaii’s medical community had not been guilty of resource overutilization. Nonetheless, administrative oversight to micromanage physicians has burgeoned in recent decades. Insurance requirements, including prior authorization for tests or therapies and increasing documentation requirements, force physicians to spend two additional hours on electronic health records and desk work for every hour with patients, plus an hour or two in the evenings.

Perhaps you have noticed that your doctor has her eyes glued to her computer screen. Sadly, much of what she is documenting has more to do with coding and billing requirements than with caring for you.

None of us went into medicine in order to stare at a computer screen. We are now forced to. This contributes to physician burnout. Dr. Kelley Withy noted that over 50 percent of physicians admit to burnout, and 15-30 percent of practicing doctors and 29 percent of resident doctors are depressed. Yearly, approximately 400 U.S. physicians commit suicide.

Kemble suggested that elimination of pay-for-documentation would help restore professional autonomy and morale, and that a physician payment system based on time spent would help eliminate the perverse incentive to avoid caring for the sickest patients.

Particularly on the neighbor islands, doctors are acutely aware of the physician shortage. Although Withy noted that the state is short 769 physicians, there are only 121 job openings. Big Island pediatrician Wesley Sugai, for one, listed the variety of management tasks that private practitioners perform. Many will be retiring soon, but most young medical graduates prefer a salaried position.

While it is undeniable that “unhealthy lifestyles” contribute to health care costs, a minority of patients drives those costs. Of Hawaii’s 1.4 million people, 365,000 are covered by Medicaid (MedQUEST). As noted by physician and state Sen. Josh Green, of the $2 billion annual expenditure on Medicaid, $1.2 billion is spent on the 15,000 sickest patients.

To bend the cost curve, we need to identify the sickest and make them healthier, so that they won’t need the emergency department or hospital admission. Dr. Jeffrey Brenner, who applied “hotspotting” to Camden, N.J., suggested strengthening primary care and supportive services. This is, in fact, the mission of federally qualified health centers.

The Jan. 21 Star-Advertiser article (“Health care costs heading for eventual catastrophe”) quoted the owner of Nii Superette as saying that if Hawaii’s employer mandate for health insurance collapses, we may need “a model like universal health care.” After the end of our program Saturday, Dr. Leslie Gise urged the newly formed Hawaii chapter of the Students for a National Health Program to work for “Medicare for all” —and led the students in the cheer, “Everybody in, nobody out!”

Arcelita Imasa, of Honolulu, is a medical student; Seiji Yamada, of Milillani, is a family physician.

http://www.staradvertiser.com…

Dr. Claudia Fegan ‘Medicare for All’ town hall

PNHP national coordinator Dr. Claudia Fegan participated in a “Medicare for All” town hall on Jan. 23, 2018. The first of its kind town hall was hosted by Sen. Bernie Sanders (I-Vt.) in partnership with leading digital media outlets NowThis, ATTN: and The Young Turks. Dr. Fegan’s segment starts at the 11:25 mark below.

Lower out-of-pocket spending after ACA, but much more needed

Out-of-pocket Spending and Premium Contributions After Implementation of the Affordable Care Act

By Anna L. Goldman, MD, MPA; Steffie Woolhandler, MD, MPH; David U. Himmelstein, MD; David H. Bor, MD; Danny McCormick, MD, MPH
JAMA Internal Medicine, January 22, 2018

Key Points

Question: Was implementation of the Affordable Care Act associated with reduced spending on out-of-pocket medical expenses and household premium contributions among nonelderly adults?

Findings: In this nationally representative survey of validated spending data from 83 431 US adults, mean out-of-pocket spending decreased by 11.9% in the first 2 years after the insurance expansions, driven by reductions among persons eligible for the Medicaid expansion and those eligible for cost-sharing and premium subsidies on health insurance exchanges. Premium contributions increased by 12.1%, mainly owing to large increases in the higher-income group, whereas total health spending by households decreased in the Medicaid-eligible (lowest-income) group by 16.0%.

Meaning: Implementation of the Affordable Care Act was associated with reduced out-of-pocket spending for US medical care, particularly among those with lower incomes, but not with reduced premiums.

From the Discussion

In the first 2 years of implementation, the ACA was associated with a decrease in mean out-of-pocket spending for the overall population, driven by decreases among the lowest- and low-income groups and a reduction in high-burden out-of-pocket spending overall and among the lowest-income group. Mean premium payments increased moderately, whereas the prevalence of high-burden combined health spending and income-based inequalities in high-burden spending did not change.

The ACA’s Medicaid expansion, which generally required enrollees to pay neither premiums nor co-payments, likely accounts for our finding that out-of-pocket spending decreased among the lowest-income group after the law’s implementation. This consequence might have been greater if all states had accepted the ACA’s Medicaid expansion. In the analysis of high-burden spending in this group, controlling for use of health care services slightly attenuated the decrease but did not substantially alter our findings. The differences noted for the lowest-income group in our placebo test in the pre-ACA period suggests that our results for this group may also have been influenced by secular trends or early expansions of Medicaid in some states. Because only 17.8% of adults in the lowest-income group paid insurance premiums before the ACA, we are not surprised that the legislation had little effect on premiums in this group.

The reduction in out-of-pocket spending for low-income individuals (139%-250% of FPL) that we observed suggests that the ACA’s exchange plans and cost-sharing subsidies were associated with a decreased burden of health care costs for this population. Our finding from models controlling for use of health care services suggests that decreased use of medical services and drugs did not drive this decrease.

The decrease in mean out-of-pocket expenditures by the middle-income group may reflect the modest 5.1% increase in coverage gained in this group under the ACA. Although individuals in this income group were not eligible for subsidized cost-sharing on the exchange, the ACA’s provision that eliminated cost-sharing for preventive services may have decreased out-of-pocket spending. Although many individuals in this group were eligible for premium assistance through the ACA exchanges, the subsidies were apparently insufficient to prevent growth of premium contributions for this group or to reduce their total health spending.

Previous studies have highlighted the ACA’s successes. About half of the previously uninsured population gained coverage. Several other indicators also improved, such as the likelihood of having access to affordable care and self-reported health status.

The ACA did not have a greater effect on out-of-pocket spending for several reasons. First, only a small proportion of Americans—6.5% according to our data—became newly insured after the ACA. Second, about 28 million Americans remain uninsured. Third, many of those with coverage continued to incur high costs; in 2016, individual deductibles were a mean of $3064 in exchange Silver plans (the metal tier chosen by most exchange enrollees) compared with $1478 in employer-sponsored plans.

Conclusions

Repeal of the ACA was under consideration in Congress several times in the past year, and the future of the ACA remains uncertain. Our findings carry several implications for the health reform debate. First, the ACA was associated with moderate reductions in the cost burden for lowest-, low-, and middle-income households, which represents incremental but important progress. Repealing or otherwise dismantling the legislation without a suitable replacement could cause financial harm to many lower-income families. As of this writing, the Senate tax bill includes a repeal of the individual mandate. If enacted, the numbers of uninsured persons will increase, along with their out-of-pocket costs. Premiums will likely increase because healthier people will exit the insurance pool.

Second, medical expenses currently consume a large share of many families’ incomes and compound income inequalities. Reforms to the ACA that could improve household spending burdens include expanding Medicaid in all states, increasing the generosity of cost-sharing and premium subsidies, and increasing the actuarial values of standard exchange plans. International experience suggests that a universal, comprehensive national health insurance program would most effectively reduce household spending and ameliorate disparities.

https://jamanetwork.com…

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Comment:

By Don McCanne, M.D.

This well documented analysis confirms that “implementation of the Affordable Care Act was associated with reduced out-of-pocket spending for US medical care, particularly among those with lower incomes, but not with reduced premiums.”

But ACA still falls far short of the reform that we need. The bottom line, as stated in their conclusion: “International experience suggests that a universal, comprehensive national health insurance program would most effectively reduce household spending and ameliorate disparities.” ACA isn’t that.

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Is Seema Verma violating her ethics pledge?

Excerpts of letter to the Honorable Robert Charrow, General Counsel, U.S. Department of Health and Human Services

From: Senator Ron Wyden, Ranking Member, U.S. Senate Committee on Finance

United States Senate, January 19, 2018

I am writing concerning possible violations by Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma of her ethics agreements. Recent statements by governors representing multiple states indicate that Administrator Verma has personally and substantially participated in waivers submitted to CMS by states that were clients of her previous consulting business. Such participation appears to violate Administrator Verma’s ethics agreement, absent the issuance of written waivers for each of her interactions on a case-by-case basis. Administrator Verma’s actions also appear to violate self-imposed ethics pledge that the Trump Administration requires its appointees to sign pursuant to Executive Order 13770.

I request that you immediately investigate whether Administrator Verma’s actions comply with her agreements as well as applicable federal laws and regulations.

Prior to being confirmed to her current position, Administrator Verma headed a consulting firm, SVC, Inc., a role in which she provided services to the states of Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina and Virginia. Federal ethics officials deemed her consulting work with these seven states as significant, and included a provision in her Ethics Agreement requiring special review of future matters involving those seven States. Specifically, pursuant to 5C.F.R.2635.502(d), Administrator Verma agreed to “seek a written authorization to participate personally and substantially in particular matters involving specific parties” in which those states would be “a party or represents a party.” Furthermore, the Trump Administration’s self-imposed ethics pledge provides that a nominee “will not for a period of 2 years from the date of [their] appointment participate in any particular manner involving specific parties that is directly and substantially related to [their] former employer or former clients, including regulations and contracts.”

Recent statements by the governors of three states specifically designated in Administrator Verma’s ethics agreement – Arkansas, Kentucky, and Iowa – strongly suggest she was personally and substantially involved in matters those states brought before CMS. Two of the governors represent states that have submitted Section 1115 waivers seeking to impose work requirements on Medicaid recipients – Arkansas and Kentucky. The third relates to a separate Section 1332 waiver submitted by the State of Iowa.

Administrator Verma’s commitment to recuse herself from work with former clients appears to have fallen short of the mark thus far, which is extremely concerning given that many of her former clients have sought – or plan to seek – waivers to impose unprecedented work requirements in state Medicaid programs.

https://www.finance.senate.gov…

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Kentucky’s new obstacles to Medicaid coverage are crueler than you could imagine

By Michael Hiltzik
Los Angeles Times, January 16, 2018

One can say this about the hoops Kentucky will require low-income residents to jump through to become eligible for Medicaid: If you were deliberately trying to come up with ways to throw people off the program, you couldn’t do better.

It’s been widely reported that the “waiver” of Medicaid rules approved for the state by federal officials last week includes a first-in-the-nation work requirement. But there’s much more to it, none of it good if you are a Medicaid enrollee or someone who believes that the purpose of government healthcare programs is to provide people with healthcare.

“Coverage is at risk for large numbers of low-income adults and families,” says Judith Solomon, a health policy expert at the Center on Budget and Policy Priorities.

Kentucky’s program bristles with paperwork requirements and Catch-22s that could easily lead even those who meet the work requirements to “trip up and become uncovered,” Solomon says. That’s because the program includes a “lockout” if enrollees fail to revalidate their eligibility every year or miss one or another deadline for paperwork: In those cases, they could be denied benefits for as long as six months.

As we reported earlier, Kentucky’s tea-party Gov. Matt Bevin, who took over from Democrat Steve Beshear in 2015, is inordinately proud of this outcome. He calls the changes “transformational.”

Another person who should be ashamed, not proud, of the program is Seema Verma, who oversees Medicaid as administrator of the Centers for Medicare and Medicaid Services. Verma’s department issued the guidelines last week under which Kentucky’s work and other requirements were approved the very next day. More to the point, as a private consultant prior to becoming head of the centers, she helped Kentucky draft the waiver application that her underlings approved. (Verma said she recused herself from ruling on the Kentucky application, which deserves a response of: Pu-leeze.)

http://www.latimes.com…

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Medicaid recipients to get work requirements

By Ricardo Alonso-Zaldivar
ABC News, January 12, 2018

Rewriting the rules on health care for the poor, the Trump administration said Thursday it will allow states to require “able-bodied” Medicaid recipients to work, a hotly debated first in the program’s half-century history.

Seema Verma, head of the Centers for Medicare and Medicaid Services, said requiring work or community involvement can make a positive difference in people’s lives and in their health. The goal is to help people move from public assistance into jobs that provide health insurance. “We see people moving off of Medicaid as a good outcome,” she said.

http://abcnews.go.com…

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Comment:

By Don McCanne, M.D.

CMS Administrator Seema Verma is ideologically driven to make health care an individual responsibility rather than a collective good in which we can all be ensured of health care access and affordability. She made her reputation by recommending to states policies that impair access to health care for the poorest amongst us by erecting barriers to care for their Medicaid populations.

As CMS Administrator she has expanded and accelerated policies that further impair access for the poor, policies that are now being adopted by states for which she served as a consultant. Many of these waiver requests were rejected by the Obama administration, but when Verma first took office, she encouraged her (former) clients and all other states to submit Section 1115 Medicaid waiver applications and assured them that they would be favorably considered.

Whether or not Verma has technically violated her ethics pledge by this conflict of interest is a relatively moot point compared to her efforts to sabotage a program that was designed to help poor people get the health care that they need. That she has orchestrated the process is enough to confirm her ethical lapses. As she says, “We see people moving off of Medicaid as a good outcome.”

As Michael Hiltzik says about her recusing herself, “Pu-leeze.”

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Has ACA Made Health Care More Affordable?

Yes for some, no for others -- but affordability wasn't the law's only goal.

By F. Perry Wilson, M.D., M.S.C.E.
MedPage Today, Jan. 22, 2018

The Affordable Care Act. We often discuss its impact on reducing the uninsured rate in the US healthcare system, but there’s another salient question. Did the Affordable Care Act make care more affordable?

A new analysis, appearing in JAMA Internal Medicine, is the first to really quantify what has happened to individual health care spending since the ACA was put into effect.

Drawing on data from the Medical Expenditure Panel Survey, a nationally representative sample of more than 83,000 US adults, researchers led by Dr. Anna Goldman (in her first peer-reviewed publication, congratulations Dr. Goldman), determined how much individual expenses changed from the pre-ACA to the post-ACA era.

The study looked at out-of-pocket expenses and premiums and the two combined. But in a conversation with Dr. Goldman, she pointed out to me that out-of-pocket expenses might be more important when it comes to healthcare access:

“Out of pocket spending really can be – in a different way then premiums – a real barrier to care. Since it saves at the point of care.”

So what happened when the ACA was introduced?

Overall, premiums went up and out-of-pocket costs went down. The net effect was that the average American family spent $28.71 less on healthcare in the two years after the ACA compared to the two-years before.

Table 1

But the benefits were not evenly distributed. Families making up to 138% of the federal poverty level spent, on average $160 less on healthcare after the ACA. Families making more than 400% of the poverty level spent around $281 dollars more per year. I should note that this doesn’t include the added cost of some ACA-associated taxes that affected higher income earners.

These numbers may not seem that impressive, but consider two factors. First, healthcare expenditures had been increasing in the run-up to the ACA, so even a modest decrease is somewhat encouraging. Second, even if there were no changes in healthcare spending, 6.5% more of the US population became insured in the two years after the ACA.

So did the Affordable Care Act make care more affordable? For some people, yes, but perhaps that’s not the main point.

Dr. Goldman again:

“Even though it was called the Affordable Care Act, its major intervention was to expand insurance coverage. Experts in the field who I’ve spoken to about this take issue with the idea that it should even be expected to make care more affordable.”

Is “affordability” even the right metric for healthcare? I’m not sure. The effect of the ACA should be measured not in terms of cost, but value – the outcomes achieved for the cost. In other words, this paper gives us the denominator. We’ll need more time before Information on the numerator, particularly any long-term health outcomes, can be put into the equation.

F. Perry Wilson, M.D., M.S.C.E., is an assistant professor of medicine at the Yale School of Medicine. He is a MedPage Today reviewer, and in addition to his video analyses, he authors a blog, The Methods Man. You can follow @methodsmanmd on Twitter.

https://www.medpagetoday.com…

Families’ out-of-pocket medical costs fell after the Affordable Care Act, but not their premiums: Harvard researchers

New study is the first to estimate nationwide changes in household medical spending after the ACA, finds cost burden shifted slightly from poorer to richer Americans

FOR IMMEDIATE RELEASE: Monday, January 22, 2018 at 11:00 a.m. EST

Contact: Clare Fauke, clare@pnhp.org, 312-782-6006

Families’ out-of-pocket medical expenses decreased in the first two years after the Affordable Care Act was implemented, but their premium payments rose, according to a new study by researchers at Harvard Medical School and the City University of New York at Hunter College published today in JAMA Internal Medicine. The savings on annual out-of-pocket expenses averaged $74 (12 percent), with poorer individuals seeing the biggest drop (21.4 percent) while those with higher incomes saw no change. In contrast, higher-income households bore the brunt of premium increases (23 percent), while premiums for other income groups didn’t change significantly. Overall, households’ premiums rose by an average of $232 (or 12 percent). The findings indicate that the ACA shifted the spending burden from low- to higher-income households, and from out-of-pocket spending to spending on premiums.

The study analyzed national data on 83,431 non-elderly adults. The researchers compared households’ medical spending during the two years before and after the full implementation of the ACA in 2014. They assessed out-of-pocket outlays (any medical spending not covered by insurance) and premium contributions made by household members. In addition to analyzing how much families spent, the study examined “high-burden spending,” such as paying more than 10 percent of income (or 5 percent for low-income households) for out-of-pocket expenses. Premiums were considered “high-burden” if they exceeded 9.5 percent of income (the affordability threshold specified in the ACA).

High-burden out-of-pocket spending fell by 20 percent overall, with the most substantial decrease seen among poorer individuals. In contrast, middle-income households (those with incomes between 250-400 percent of poverty) saw a 28 percent increase in high-burden premium spending, while other income groups experienced little change in this measure.

“Our findings suggest that the Affordable Care Act reduced out-of-pocket costs for many Americans,” said the study’s lead author, Dr. Anna Goldman, a primary care doctor at Cambridge Health Alliance and fellow at Harvard Medical School. “But the ACA didn’t stem the steady rise in families’ premiums. Overall, the law helped ease families’ medical cost burden, but there is plenty of room for progress.”

“It’s not surprising that the ACA’s effects were modest,” continued Dr. Goldman. “Only 6.5 percent of Americans gained coverage through the ACA, while about 28 million remained uninsured. Moreover, efforts to make the ACA’s financing budget-neutral limited the generosity of subsidies and may have reduced the law’s potential to reduce medical spending.”

Dr. Steffie Woolhandler, a distinguished professor of public health at CUNY’s Hunter College and lecturer in medicine at Harvard Medical School noted: “The ACA helped smooth out spending, and made it more predictable. Fewer families were left with high out-of-pocket costs when they were sick, but paid more in upfront premiums. But the law fell far short of what many nations with single-payer systems have achieved: universal, comprehensive, and affordable coverage.”

“We’re worried that recent moves by the administration and Congress to undermine the ACA will erase the gains we observed, or worse,” said senior study author Dr. Danny McCormick, an associate professor of medicine at Harvard Medical School and primary care physician at Cambridge Health Alliance. “The repeal of the ACA mandate, weakening of insurance standards, and erosion of Medicaid will punish many lower-income Americans,” concluded Dr. McCormick.

“Out-of-Pocket Spending and Premium Contributions after Implementation of the Affordable Care Act” by Anna L. Goldman, M.D., M.P.A., Steffie Woolhandler, M.D., M.P.H., David U. Himmelstein, M.D., David H. Bor, M.D., and Danny McCormick, M.D., M.P.H., JAMA Internal Medicine, published online ahead of print January 22, 2018.

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Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

Massachusetts lesson on instability of coverage

Major Mass. Insurers Dropped From State Employee Health System

By Martha Bebinger
WBUR, January 18, 2018

A decision about health coverage for state employees and retirees is shaking the Massachusetts health insurance industry. Harvard Pilgrim Health Care, Tufts Health Plan and Fallon Health, which are the second-, third- and fourth-largest insurers in the state, have been dropped by the state Group Insurance Commission (GIC), which manages coverage for 442,000 members.

The GIC says it’s been talking to insurers about the need to simplify, streamline and save money for more than a year, so Thursday’s 8-5 commission vote should not be a surprise. But dropping three prominent, nonprofit Massachusetts insurers is a major blow.

“Time and again, the Group Insurance Commission has voted to make workers bear the brunt of out of control health care costs, instead of tackling the crisis with providers,” said Peter MacKinnon, president of SEIU Local 509. “It is evident that the GIC has taken a bad situation and made it far worse with this anti-consumer vote.”

http://www.wbur.org…

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Comment:

By Don McCanne, M.D.

We keep hearing that most people are pleased with their current health care coverage so we should reject the disruption that would be caused by changing to a single payer system. What better coverage could there be than that of public employees in Massachusetts whose options include three of the largest nonprofit carriers in the state? Until now that is.

This is the best there is and yet it results in instability, especially in the choice of their health care professionals and institutions. And the reason given for the disruption is that the costs are too high.

This would not occur under a well designed single payer system. Individuals would have permanent free choice of their health care and costs would be contained through patient-friendly policies.

Think of the health care coverage you had twenty years ago. Ten years ago. Even perhaps five years ago. And they say that single payer would be disruptive? It is single payer that finally would bring us stability of coverage – for life!

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The American Health-Care System Increases Income Inequality

Even with the Affordable Care Act, the premium and payment structure of insurance increases the relative income gap between rich and poor.

By Vann R. Newkirk II
The Atlantic, Jan. 19, 2018

For most people, a single doctor’s visit can be a financial obstacle course.

Many patients throughout the year pay hundreds or thousands of dollars in premiums, most often through workplace contributions. Then, at the doctor’s office, they are faced with a deductible, and they may need to pay coinsurance or make a copayment. If they have prescriptions, they’ll likely fork over cash for those, too.

And that’s just for basic primary care for one person. Repeat that process for an entire family; add in any labs, referrals, specialists, emergency-room visits, and surgeries; and the result for even healthy families is dozens and dozens of payments, and often thousands of dollars. This series of expenditures before, during, and after care is euphemistically called having “skin in the game.” But the reality is, the American insurance system is designed to make health care financially unpleasant, often to the point where patients forego necessary care.

A new study in the forthcoming March issue of the American Journal of Public Health sheds light on just how all that “skin in the game” affects the material conditions of patients. The research—by Andrea Christopher at the Boise Veterans Affairs Medical Center, David Himmelstein and Steffie Woolhandler at the City University of New York at Hunter College, and Danny McCormick at Harvard Medical School—indicates that household spending on health care is a significant contributor to income inequality in the United States. It also indicates that medical expenses push millions of Americans below the federal poverty line, including 7 million people who make more than 150 percent of the poverty level. Four million of those Americans are pushed into the ranks of extreme poverty.

That health-care costs in the country are expensive—often, prohibitively so—is well known. As Vox’s Sarah Kliff notes, the first reason why is the exorbitantly high cost of care, which doesn’t always correspond with measurable increases in quality or demand. Even for routine procedures or precautionary visits, hospital bills can run over $400, an expense that almost half of American households can’t meet without dipping into credit. Additionally, billing is famously opaque, incoherent, and fragmented, creating major barriers to informed care decisions and often resulting in bills going into collections.

Health insurance is supposed to mitigate those cost and information barriers. A 2016 Kaiser Family Foundation analysis found that while significant numbers of Americans have trouble paying medical bills, only 20 percent of insured people had difficulty versus half of all uninsured people. Most of that difficulty for both groups comes from sudden medical events or accidents, or sudden life events like the loss of a job. Medical debt is also a major contributor to bankruptcy in the United States. One of the major arguments for the Affordable Care Act was in its name: a promise to help shield people from the worst financial effects of medical catastrophe or chronic illness.

New avenues of subsidized or free health insurance that sprang from Obamacare—including private insurance offered on the exchanges and expanded Medicaid rolls in many states—have been able to do some shielding. The ACA helped reduce total bankruptcies by as many as 1.5 million between 2010 and 2017. The Centers for Disease Control and Prevention reports that, between 2011 and 2016, the percentage of Americans with trouble paying medical bills dropped precipitously. And a 2017 study by the Urban Institute’s Kyle Caswell and Timothy Waidmann found “improved credit scores, reduced balances past due as a percent of total debt, reduced probability of a medical collection balance of $1,000 or more, … and a reduction in the probability of a new bankruptcy filing” for people in Medicaid-expansion states.

But the new AJPH study complicates some of that rosy analysis. The researchers didn’t split the survey population up based on insurance status; they instead measured income inequality across the population, both before medical expenses were taken into account and after. They found that income inequality in 2014 actually increased by 1.5 points after medical expenses were subtracted from income. Put another way, poor people spent much more of their income on health care than the richest people did, and as a result around 1.5 percent of all relative income shifted toward the higher earners.

The researchers also found that medical spending sent millions of people effectively into poverty or into deeper rungs of poverty. Seven million Americans making more than 150 percent of the federal poverty line—$31,000 for a family of three—dropped below that line if medical expenses were subtracted from their income. That meant that these families spent something like a third or more of all their income on health care. Of the 7 million, 4 million found their post-health-care income reduced below 50 percent of the poverty line, meaning they spent about two-thirds of their total income on health care. The study also found that the ACA decreased the amount of inequality caused by health-care expenses, but only slightly.

There are some limitations to how far these results can be interpreted. It’s possible that, since 2014, continued gains in insurance coverage—at least until the uninsured rate rose in 2017—combined with additional states expanding Medicaid, decreased coverage costs; a more recent study would be needed to say for sure. Also, without insurance-enrollment breakdowns, it’s impossible to see where and why the biggest gaps in income inequality emerge, and the exact role the ACA may have played in fixing them.

Still, the study adds to the body of evidence on the dramatic impact of health-care costs. Even with Medicaid as a safety net, health care is a major burden for low-income people—so much so that it deeply exacerbates differences in income and wealth.

One major reason for this burden, perhaps even especially under the ACA, is deductibles. While almost the whole of the national health-care debate has centered on how to lower premiums, the ACA and other health policies have in many cases purposefully driven deductibles upward. More Americans say they have trouble affording their deductibles than they do affording their premiums. Between 2006 and 2017, the Kaiser Family Foundation found that deductibles for people with employer-sponsored insurance increased fourfold. The out-of-pocket maximums on many of these plans also increased sharply. Many of these hikes came from an across-the-board embrace of so-called high-deductible plans, which have been theorized to limit both utilization of health care and the burden of premiums. The tradeoff for those lower premiums is that those who use their insurance have to pay a lot more to do so.

As a 2017 Atlantic investigation showed, this theory can often create two kinds of adverse outcomes when put into practice. Many people simply spend what they need to to cover health-care costs, draining their savings and income as they go. And many who don’t turn to crowdfunding to pay their bills, or go without care in the first place. Technically, these outcomes reduce the number of medical bankruptcies—a victory for policymakers—because even high-deductible plans place a hard cap on medical expenditures.

Yet even as Americans are better protected from the worst consequences of catastrophic illness, routine care continues to hurt low-income people’s finances.

The ACA isn’t really designed to combat that particular paradox. In fact, the law at times embraces it. It juiced up the comprehensiveness of most plans, and it shields people from the true cost of premiums through a number of mechanisms. But in exchange, the structure of the high-deductible plan was accepted as a basic mechanism for both rationing and budgeting. While cost-sharing reductions were introduced to put a cap on the burden that deductibles, copayments, and coinsurance place on low-income Americans, 90 percent of all people on the exchanges still pay deductibles in excess of $1,300 individually or $2,600 per family, amounts that are often difficult to afford even for middle-class families.

Republican plans to create a new health-care regime would, for the most part, only increase that difficulty, because both the Senate and House bills to repeal Obamacare increased deductibles even further. President Trump, meanwhile, has stopped paying cost-sharing reduction payments and signed a tax law that repealed the individual mandate to purchase insurance. Both of these actions could increase premiums, thus giving some patients yet another financial burden to worry about.

The new study functions as a reminder that policymakers seeking to address income and wealth inequality cannot do so without continuing to address health care, still one of the most constant sources of financial woe in American life. That includes both the absolute cost of health care and the myriad ways the cost is passed onto people with insurance. Until those problems are mitigated, having “skin in the game” for the poorest Americans translates to losing financial ground.

https://www.theatlantic.com…

Household medical expenditures worsen income inequality

The Effects of Household Medical Expenditures on Income Inequality in the United States

By Andrea S. Christopher, MD, MPH, David U. Himmelstein, MD, Steffie Woolhandler, MD, MPH, and Danny McCormick, MD, MPH
American Journal of Public Health, January 18, 2018 (online ahead of print)

Objectives. To assess the effect of households’ outlays for medical expenditures on income inequality and changes since the implementation of the Affordable Care Act (ACA).

Methods. We analyzed data from the US Current Population Surveys for calendar years 2010 through 2014. We calculated the Gini index of income inequality before and after subtracting households’ medical outlays (including insurance premiums and out-of- pocket costs) from income, the financial burden of medical outlays for each income decile, and the number of individuals pushed below poverty by medical outlays.

Results. In 2014, the Gini index was 47.84, which rose to 49.21 after medical outlays were subtracted, indicating that medical outlays effectively redistributed about 1.37% of total income from poorer to richer individuals, a slightly smaller redistribution compared with the years before the ACA. Medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty.

Conclusions. The way we finance medical care exacerbates income inequality and impoverishes millions of Americans. This regressive financing pattern improved minimally in the wake of the ACA.

From the Results

In 2013, medical outlays lowered the median income (calculated after subtracting medical expenditures) for the poorest decile by 49.2% and by 10.7% for the next poorest group versus 2.5% for the wealthiest decile, a markedly regressive pat- tern. This unequal pattern improved only slightly in 2014. In that year, medical outlays lowered median income in the lowest income decile by 47.6% versus 2.7% in the top decile. For those in the top 1.0% of income, medical outlays decreased income by only 1.3%.

In 2014, 9.28 million Americans whose incomes before their medical outlays were above poverty were pushed into near poverty (150% of FPL) when medical outlays were subtracted from their family incomes. Similarly, 7.013 million were lowered into poverty (below 100% of the FPL), and for 3.946 million, medical outlays reduced their incomes into the extreme poverty range (below 50% of the FPL). These numbers were little changed from 2013 (before the main provisions of the ACA took effect), when medical outlays pushed 7.263 million people below the poverty line, 3.809 million into extreme poverty, and 9.576 million below the near-poverty threshold.

From the Discussion

In the United States, most insured families pay premiums, deductibles, and copayments that are not scaled to income. As a result, medical care expenses exacerbate poverty and income inequality, which are key social determinants of health. Although access to high-quality care might narrow the health disparities caused by social inequality, the ways we pay for care—notably, the failure of most insurance programs to scale premiums and deductibles to income—may widen them.

Out-of-pocket health care expenditures are likely to continue increasing under the ACA, as well as under Republicans’ proposed alternatives. The proportion of privately insured employees whose individual coverage carries an annual deductible of $2000 or more has increased 6-fold since 2006. Most of the new private coverage offered on the ACA exchanges carries high deductibles. These could drive many families into poverty despite cost-sharing subsidies that reduce copayments and deductibles for those with incomes below 250% of the FPL.

Equally worrisome, Centers for Medicare & Medicaid Services has allowed several states to impose cost sharing on Medicaid recipients, reversing a long-standing rule against such policies.

In some nations the wealthy pay a larger share of their incomes toward health care than do the poor. In others, health expenditures account for a similar share of incomes for the poor and rich. In the United States, health expenses exact a higher toll from the poor, whereas the wealthy pay relatively little. This regressive financing pattern—which redistributes as much as 1.7% of total income from poorer to richer Americans—lies largely hidden in a complex web of private and public insurance arrangements. We suspect that the opacity of US funding streams helps shield the wealthy from demands for a fairer health-financing pattern.

http://ajph.aphapublications.org…

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Comment:

By Don McCanne, M.D.

The way we pay for health care in the United States is egregiously regressive. In spite of ACA, “medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty.”

Income inequality has reached intolerable levels in the United States bringing ever more riches to the wealthy (how much wine and cheese do they need?) while leaving workers with relatively stagnant wages and leaving the poor without much hope for ever moving up to at least a minimally acceptable standard of living. This astonishing study shows that medical expenditures have worsened this inequity and have shoved another 7 million people into poverty (4 million into extreme poverty!). What a penalty to pay for having the misfortune of needing health care.

Considering the recent tax bill signed into law by President Trump, the nation is moving in the wrong direction in addressing the problem of income inequality. We need new policies, and one of the easiest and most beneficial would be to enact a well designed single payer national health program, funded equitably through the tax system. That way we would ensure that everyone would have health care while shifting from a regressive to a progressive pattern of financing. It would be good for our health and good for our personal finances.

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Health care financing system deepens poverty and income inequality: New study

Researchers from Harvard University and Hunter College find that paying for health care pushed millions below the poverty level

FOR IMMEDIATE RELEASE: January 18, 2018
Contact: Clare Fauke, 312-782-6006, clare@pnhp.org

Researchers from Harvard University and Hunter College find that paying for health care pushed millions below the poverty level

Households’ payments for medical premiums, copayments and deductibles pushed more than 7 million Americans into poverty in 2014, according to a study appearing in the American Journal of Public Health. Such payments also dramatically worsened overall income inequality.

The researchers analyzed data on household medical payments from the Census Bureau’s 2010-2015 Current Population Survey, the standard source for estimating income and poverty.  First, the researchers calculated the number of people who were below the poverty level before taking into account their medical expenses. Then they compared that to the number whose income fell below the poverty level after subtracting payments for health insurance and out-of-pocket medical expenses.

After taking account of households’ medical payments, the incomes of the poorest 10% of the population fell by 47.6 percent. In addition, the burden of health care spending fell steadily as income rose. Such spending cut the incomes of households at the median income by about 8 percent, while it reduced the income of the wealthiest 1 percent by only 1.3 percent.

In their analysis, the researchers found that families’ health care spending markedly increased overall income inequality. Using economists’ standard measure of income inequality, the Gini index, they found that the index worsened by 1.37 points after taking account of health care expenditures. If employer-paid premiums were considered part of an employee’s compensation (a standard assumption in economics), the effect of medical payments on income inequality was even greater, a worsening of 1.70 points. These health spending impacts on incomes were equivalent to transferring between $149.6 billion (1.37 percent) and $185.6 billion (1.70 percent) from households with incomes below $75,738 to wealthier households in 2014.

The study also found that the Affordable Care Act slightly improved this pattern (by 0.10 points) even before considering the effects of its $22 billion increase in Medicare taxes on the top 2 percent of earners.

Dr. Steffie Woolhandler, a study author who is a distinguished professor of public health at the City University of New York at Hunter College (CUNY/Hunter) and lecturer in medicine at Harvard Medical School commented: “In many other countries, health care helps cushion the effects of poverty. But our health care financing system drives millions of Americans into poverty and worsens inequality. That’s not just a financial problem, it’s a medical one because poverty breeds ill-health.”

According to Dr. David Himmelstein, a distinguished professor at CUNY/Hunter and staff physician at Montefiore Medical Center in the Bronx: “In recent years, the gaps between rich and poor in both income and life expectancy have widened. Today, the richest Americans live 10 to 15 years longer than the poorest. A national health insurance program funded from progressive taxes instead of premiums and out-of-pocket payments would shift the financing burden to those who can afford it, and improve the health of our nation.”

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“The Effects of Household Medical Expenditures on Income Inequality in the United States”by Andrea Christopher, M.D., M.P.H., David U. Himmelstein, M.D., Steffie Woolhandler, M.D.,  M.P.H., and Danny McCormick, M.D. American Journal of Public Health, published online ahead of print January 18, 2018.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.