PNHP

Medicare Advantage plans using ‘service-level selection’ to cheat the taxpayers

Medicare Advantage plans using ‘service-level selection’ to cheat the taxpayers

NBER Working Paper 24038; Service-level Selection: Strategic Risk Selection in Medicare Advantage in Response to Risk Adjustment

By Sungchul Park, Anirban Basu, Norma Coe, and Fahad Khalil
National Bureau of Economic Research, November 2017

Abstract

The Centers for Medicare and Medicaid Services (CMS) has phased in the Hierarchical Condition Categories (HCC) risk adjustment model during 2004-2006 to more accurately estimate capitated payments to Medicare Advantage (MA) plans to reflect each beneficiary’s health status. However, it is debatable whether the CMS-HCC model has led to strategic evolutions of risk selection. We examine the competing claims and analyze the risk selection behavior of MA plans in response to the CMS-HCC model. We find that the CMS-HCC model reduced the phenomenon that MA plans avoid high-cost beneficiaries in traditional Medicare plans, whereas it led to increased disenrollment of high-cost beneficiaries, conditional on illness severity, from MA plans. We explain this phenomenon in relation to service-level selection. First, we show that MA plans have incentives to effectuate risk selection via service-level selection, by lowering coverage levels for services that are more likely to be used by beneficiaries who could be unprofitable under the CMS-HCC model. Then, we empirically test our theoretical prediction that compared to the pre-implementation period (2001-2003), MA plans have raised copayments disproportionately more for services needed by unprofitable beneficiaries than for other services in the post-implementation period (2007-2009). This induced unprofitable beneficiaries to voluntarily dis-enroll from their MA plans. Further evidence supporting this selection mechanism is that those dissatisfied with out-of-pocket costs were more likely to dis-enroll from MA plans. We estimate that such strategic behavior led MA plans to save $5.2 billion by transferring the costs to the federal government.

From the Introduction

Recent health care reforms have facilitated the transition from volume- to value-based payment models in hopes of achieving cost control and enhancing the quality of care. One such example is that the Centers for Medicare and Medicaid Services (CMS) reimburses Medicare Advantage (MA) plans with a capitated amount per beneficiary to encourage coordinated care in managed care settings. It has been shown that MA plans save money without sacrificing quality. However, as an unintended consequence, MA plans have selectively enrolled healthier people to receive overpayments, known as favorable selection. It remains inconclusive whether cost savings are attributable to cost-effective care management or to risk selection. To reduce risk selection, CMS has adjusted payments to MA plans to reflect the health status of their enrollees, a process known as risk adjustment. To more accurately estimate capitated payments, in 2004, CMS introduced a new risk adjustment model—the CMS-Hierarchical Condition Categories (HCC) model—which uses extensive inpatient and outpatient diagnostic information from the prior year to generate risk scores.

It is debatable whether the CMS-HCC model has been effective in reducing risk selection or whether it has led to strategic evolutions of risk selection. On one hand, it has been shown that the CMS-HCC model considerably reduced the phenomenon of avoiding sicker beneficiaries (i.e., those with high-risk scores) in traditional Medicare (TM) plans. As risk adjustment leads to neutral payments for beneficiaries with conditions included in the risk adjustment formula, MA plans no longer have incentive to avoid those with high-risk scores if their conditions are included in the CMS-HCC model.

On the other hand, there is suggestive evidence showing that MA plans could strategically respond to the CMS-HCC model. Brown et al. (2014) argue that the HCC model merely shifted the profitable population from healthy people (i.e., those with low-risk scores) to sick ones who are over-compensated, within their risk-score. This can be achieved because, first, there is considerable variability in actual expenditures of beneficiaries around their risk-adjusted payments. For all beneficiaries with a given health condition, the CMS-HCC model is designed to adjust payments to MA plans by the same rate. However, the severity of the condition and thus the cost of treating it can vary within a given condition (Medicare Payment Advisory Commission). Second, the variability of the within-risk-score expenditures is larger for those with higher risk scores. Because the CMS-HCC model only accounts for about 100 major conditions, this generates underpayments for those whose conditions are not accurately measured by the model, who tend to have multiple chronic conditions.

We examine these competing claims and analyze the risk selection behavior of MA plans in response to the CMS-HCC model. Specifically, we hypothesize that MA plans engage in service-level selection, in which they provide relatively lower coverage levels for some services to discourage enrollment of certain beneficiaries. While the CMS-HCC model encouraged MA plans to accept TM beneficiaries with high-risk scores, we claim that MA plans strategically behave to avoid beneficiaries who could be unprofitable under the CMS-HCC model (i.e., those with higher expenditures than their risk-adjusted payments). Although there is a large literature on investigating service-level selection as a risk selection strategy, to the best of our knowledge, there is no research explaining mechanisms through which MA plans could engage in service-level selection as a strategic risk selection behavior in response to risk adjustment.

We find that the CMS-HCC model achieved the goal of reducing favorable selection based on health; however, we also find that it led to increased disenrollment of unprofitable beneficiaries from MA plans, leading MA plans to save costs of $5.2 billion in 2007-2009. We explain this phenomenon via service-level selection. Building upon Ellis and McGuire (2007), we theoretically show that MA plans have incentives to effectuate risk selection through service-level selection, as unprofitable beneficiaries are more likely to use services that are expensive and are thus more vulnerable to under provision by MA plans. Specifically, we show that those with higher expenditures than their risk-adjusted payments are more likely to use services that health plans would ration more tightly (i.e., services with higher service-level selection index). This phenomenon is more likely to be pronounced for those with higher risk scores. Then, we find evidence supporting our theoretical prediction that MA plans have actually raised copayments disproportionately more for services with higher service-level selection index (i.e., ambulance, home health service, partial hospitalization, and inpatient hospital service) than services with lower service-level selection index (i.e., outpatient substance abuse services, outpatient X-rays, and outpatient hospital services). Such disproportionate increases in copayment induced unprofitable beneficiaries to voluntarily disenroll from MA plans. In additional analyses, we find evidence supporting this selection mechanism that those with dissatisfaction with out-of-pocket costs were more likely to disenroll from MA plans. Consequently, the variation of total Medicare expenditures for MA enrollees with high-risk scores reduced over time. These findings indicate that service-level selection allowed MA plans to avoid the risk of enrolling unprofitable beneficiaries.

Service-level selection

By Law, MA plans are not allowed to deny coverage based on beneficiaries’ health status. However, MA plans might practice risk selection in subtle ways so that unprofitable beneficiaries voluntarily disenroll from MA plans. To achieve such risk selection, MA plans could risk-select through collecting additional data or advertising. However, because such selection mechanisms would lead to substantial screening costs, MA plans are likely to seek screening approaches with lowest costs. One such approach that generates relatively low screening costs is service-level selection because MA plans do not need to predict each beneficiary’s expenditures but rather only need to predict services more likely used by beneficiaries who could be unprofitable under the CMS-HCC model.

Service-level selection is one type of risk selection, which is based on the phenomenon that unprofitable individuals are more likely to use services that are expensive to health plans subject to capitated payments and are thus more vulnerable to under-provision by health plans. As with risk selection, service-level selection occurs due to asymmetric information between two parties, in which health plans do not know individuals’ private information about health status and preferences for health care. The health plan only knows the probability of using the service at the population level, while the individual knows her need, or probability of need, for each health care service and chooses the best health plan that can satisfy her need. Since rational individuals respond to health plan design when selecting plans, reducing coverage levels for services related to financial losses (i.e., services more likely used by unprofitable individuals) would induce unprofitable individuals to voluntarily disenroll from the plan. In this way, service-level selection would allow health plans to reduce the scope of enrolling those who could be costly to them. Although unprofitable individuals enroll in the plan, service-level selection would also enable health plans to reduce their financial loss as they shift the costs to the individual.

From the Discussion and Conclusion

The goal of this paper is to shed light on the competing claims on the effectiveness of the CMS-HCC model and to comprehensively understand strategic risk selection behaviors of MA plans. We find that the CMS-HCC model reduced the phenomenon that MA plans avoid beneficiaries with high-risk scores in TM plans, whereas it led to increased disenrollment of high-cost beneficiaries, conditional on risk score, in MA plans. We explain this phenomenon through service-level selection. Through theoretical and empirical analysis, we show that after the full phase-in period of the CMS-HCC model, MA plans have the incentive to and did increase copayments disproportionately more for services that appeal to beneficiaries who could be unprofitable under the CMS-HCC model than other services. The disproportionate changes in copayments led to voluntary disenrollment of beneficiaries with need for these services, who tend to incur higher expenditures than their risk-adjusted payments. We also find evidence supporting our hypothesis that those who were less satisfied with out-of-pocket costs were more likely to disenroll from MA plans. Such strategic behavior led to MA plans to save $5.2 billion in 2007-2009 by simply transferring the costs to the federal government, thereby placing significant financial burdens on the federal government.

Findings from this study indicate that the CMS-HCC model reduced the MA plans’ risk selection of avoiding TM beneficiaries with high-risk scores, whereas it induced MA plans to strategically behave in response to the CMS-HCC model via service-level selection. MA plans have raised copayments disproportionately more for services needed by high-need beneficiaries than for other services, thereby inducing unprofitable beneficiaries to voluntarily disenroll from their MA plans, mainly due to increased out-of-pocket costs. This allows MA plans to avoid the risk of enrolling unprofitable beneficiaries.

http://www.nber.org…

***

Comment:

By Don McCanne, M.D.

Since private Medicare Advantage plans initially were paid a flat capitation rate for each enrollee, they selectively marketed their plans to healthier Medicare beneficiaries and that was successful in increasing their profits since their patients were healthier than those enrolled in the traditional Medicare program. To counter this, the government established the Hierarchical Condition Categories (HCC) risk adjustment model so that capitation payments were were made based on the health status of each beneficiary.

To no surprise, the plans then upcoded their diagnoses so that they received capitation rates that were higher than the actual level of care required. It was suspected that the plans were also gaming the system through service-level selection, and this study confirms that they were. Specifically they determined which services would be used by high-cost beneficiaries, and then they disproportionately increased copayments for those services. The dissatisfaction caused by the high out-of-pocket costs for individuals using these services caused them to voluntarily disenroll from the Medicare Advantage plans.

Although the insurers had already been paid at higher capitation rates for this population, they were able to avoid paying for those individuals with costs even higher than the capitation payments, by this devious scheme of shifting more costs to these patients, thus causing them to disenroll. The authors calculated that this shifted $5.2 billion in costs from the insurers to the federal government, that is, to us the taxpayers.

Ironically the system of capitation payments supposedly represents a transition from volume- to value-based payments, yet the insurers have figured out ways to decrease value instead by selectively marketing to the healthy, by upcoding to qualify for higher risk-adjusted payments, and now by chasing away patients who need more care by penalizing them for accessing services normally used by patients with more serious disorders (service-level selection).

How much longer do we put up with this? Throwing these crooks out and replacing their plans with our own single payer national health program would fix this problem right now. What’s holding us back?

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

Heading in the wrong direction on Medicare

Older Americans Were Sicker And Faced More Financial Barriers To Health Care Than Counterparts In Other Countries

By Robin Osborn, Michelle M. Doty, Donald Moulds, Dana O. Sarnak, and Arnav Shah
Health Affairs, November 15, 2017

Abstract

High-income countries are grappling with the challenge of caring for aging populations, many of whose members have chronic illnesses and declining capacity to manage activities of daily living. The 2017 Commonwealth Fund International Health Policy Survey of Older Adults in eleven countries showed that US seniors were sicker than their counterparts in other countries and, despite universal coverage under Medicare, faced more financial barriers to health care. The survey’s findings also highlight economic hardship and mental health problems that may affect older adults’ health, use of care, and outcomes. They show that in some countries, one in five elderly people have unmet needs for social care services — a gap that can undermine health. New to the survey is a focus on the “high-need” elderly (those with multiple chronic conditions or functional limitations), who reported high rates of emergency department use and care coordination failures. Across all eleven countries, many high-need elderly people expressed dissatisfaction with the quality of health care they had received.

From the Discussion

The elderly US population is already sicker than similar populations in other countries. Part of the cause is likely to be gaps in coverage and preventive care during Americans’ working years, which results in an older population that ages into Medicare with unmanaged chronic illness.

The US elderly face a “triple whammy,” as they experience higher cost sharing, higher levels of economic vulnerability, and dramatically higher health care costs — with prescription drugs often two or three times as expensive in the United States as in the other countries studied.

The Social Safety Net

The economic vulnerability of older adults emerged from this study as a key concern. Research shows that poverty, food insecurity, unstable housing, social isolation, and mental health problems contribute to higher rates of chronic illness, poorer health and outcomes, higher utilization of the health care system, and greater costs. The United States stands out for disproportionately low spending on social care services compared to health. A previous analysis has shown that some countries in the Organization for Economic Cooperation and Development spend, on average, two dollars on social services for every one dollar on health care. In the United States, less than sixty cents is spent on social services for every health care dollar spent.

http://www.healthaffairs.org…

***

First, Republicans want tax cuts. Next, they’ll try gutting Medicare and Social Security.

By Bruce Bartlett
The Washington Post, November 16, 2017

For decades, conservative intellectuals have pushed for big tax cuts; less to grow the economy and more because they want to “starve the beast.” They want to force a major overall spending cut that would be a political non-starter without first passing a tax cut that creates a deficit so large, something must be done about it. Spending cuts must be enacted, then, as they would be presented as the only way to pay for the already passed tax cut’s lost revenue.

Once we can see the whole picture, Americans will have a clearer idea of the net benefit to them. The rich don’t need either Social Security or Medicare — it’s the middle class, which depends on both, that needs to know how tax cuts and spending cuts affect them. If Social Security and Medicare cuts follow tax cuts, on net, even those who would get a tiny tax cut will be much worse off when the spending cuts are factored in. This will give a true, complete picture of the distribution of pain and gain in the GOP program.

https://www.washingtonpost.com…

***

Comment:

By Don McCanne, M.D.

Medicare beneficiaries are sicker and face more financial barriers to care than do the elderly in other wealthy nations. Further, the U.S. spends far less proportionately on social services. Clearly we need to do more.

So where is Congress headed? At a time that we have intolerable levels of transfer of income and wealth to the very top, Congress is going to decrease taxes for the very wealthy which will only increase that dastardly transfer. The budget deficits that will be created will supposedly prove that the federal government will no longer be able to afford Social Security and Medicare and thus it will be necessary to slash their budgets as the systems are privatized.

Where we should be headed instead is that we need to improve the Medicare program and then expand it to cover everyone. Since too much income and wealth is at the top we need to increase taxes on that sector rather than reduce them. This is the opposite of what we are witnessing right now. Where is the outrage?

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

Single-Payer: A Reproductive Justice Value

By Katie Klabusich
Truthout, November 17, 2017

The reproductive justice movement focuses on expanding the ability of all people to access the full spectrum of reproductive health care — from contraception and cancer screenings to abortion and prenatal care. This priority is particularly urgent amid a recent onslaught of unconstitutional restrictive laws. However, reproductive justice activists know that availability means nothing if patients cannot afford to see their physicians. As Truthout has reported, a single-payer system is the only national health plan that would ensure no one falls through the cracks.

“Reproductive justice is focused on each and every person having the resources and tools to exercise agency over their sexual and reproductive lives,” Alexis Cole, policy manager at youth-focused reproductive justice organization URGE: Unite for Reproductive & Gender Equity, told Truthout.

“What we are really talking about is families — every single person must have the ability to determine what kind of family they choose to have and then be able to raise that family healthily,” Cole said. “The only way we do that is through a comprehensive, universal health plan that includes the full spectrum of reproductive health care, including abortion.”

The Medicare for All Act of 2017, introduced by Sen. Bernie Sanders, explicitly covers maternity, infant and abortion care — all of which would be huge wins for the reproductive justice movement.

This piece is part of Fighting for Our Lives: The Movement for Medicare for All, a Truthout original series. Continue reading at the link below.

http://www.truth-out.org…

Reduce Medicaid spending? Look at Puerto Rico

Capping Medicaid Funding — Lessons From Puerto Rico

By Krista M. Perreira PhD, David K. Jones PhD, and Jonathan Oberlander PhD
American Journal of Public Health, December 2017 (Online November 8, 2017)

The United States already has experience with the consequences of limiting Medicaid funding. The federal government’s contribution to the Medicaid program in Puerto Rico, a US territory with 3.5 million residents, 46% of whom are enrolled in Medicaid or CHIP, is capped and grows with the medical consumer price index. When introduced in 1968, the statutory cap was set to cover 50% of the program’s costs. By 2010, it covered only 18% of Puerto Rico’s Medicaid expenditures. If Puerto Rico’s federal Medicaid payments instead were based on per-person income, as is currently the case in the 50 states, then the federal government would pay 83% of the commonwealth’s Medicaid bill.

The erosion of federal funding for Medicaid in Puerto Rico reflects a fundamental problem with block grants and spending caps. Under such arrangements, payments typically are neither sufficiently indexed to account for rising medical costs nor adequately responsive to changing economic circumstances that can increase the number of poor individuals eligible for benefits. Consequently, the share of Medicaid costs paid by the federal government can decline substantially over time, as it has in Puerto Rico. Puerto Rican officials have responded by setting low income-eligibility levels, based on a commonwealth-specific poverty measure, that covers pregnant women and children only up to 50% of the federal poverty level. Additionally, Puerto Rico provides only 10 of the 17 federally mandated Medicaid benefits. It does not cover nonemergency medical transportation and lacks the infrastructure to cover and regulate long-term care and nurse midwife services.

Puerto Rico’s circumstances are especially dire, but its experiences with capped federal Medicaid funding highlight the quandaries that states would face under Republican proposals to cap spending. Such plans would dramatically curtail the federal government’s role in financing Medicaid. States cannot afford the steep cuts in federal Medicaid financing — about $800 billion over 10 years, amounting to a 24% reduction that would increase to 35% in the following decade — that House and Senate Republicans have proposed. Capped funding inevitably would force states to make painful decisions about reducing Medicaid eligibility and benefits. Medicaid funding caps would unravel the program in many states, leaving millions of low-income persons without any health insurance.

Although the ACA repeal campaign stalled in the Senate, proposals to cap Medicaid spending are likely to resurface. Efforts to limit the federal government’s role in financing Medicaid will not stop, regardless of the ACA’s future. Medicaid is an inviting ideological and fiscal target. Indeed, pressures to reduce the federal budget deficit and pay for tax cuts could soon lead Congressional Republicans to reconsider block grants. Puerto Rico’s experiences with capped Medicaid funding are a warning of the dangers that such plans hold for the states.

http://ajph.aphapublications.org…

***

Comment:

By Don McCanne, M.D.

The Republicans want to cap Medicaid spending. Some of their proposals for doing so already apply to Puerto Rico. As this report indicates, it has been a disaster.

The Democrats are not without blame since they have been content with leaving Medicaid as a chronically underfunded program. It’s just that the Republican proposals would make it much worse.

The most important touted success of the Affordable Care Act has been the expansion of Medicaid, but as long as it remains chronically underfunded and a target for budget cuts, care for low-income individuals and families is at risk of falling below a standard acceptable to most of us – a lower tier of care than what we are capable of providing.

It does not have to be that way. We are spending enough now to provide top-tier health care for everyone – a level in which optimal care becomes the standard. Yes, top-tier care is affordable because it includes eliminating administrative waste, reducing excessive prices, reducing excessive capacity that drives overuse, and reducing care that is of no value.

Rather than expanding to low-income populations the disastrous level of care being experienced in Puerto Rico, we should be bringing Puerto Rico up to the standard of a high performance system that we should all be experiencing. All we have to do is enact a well designed single payer national health program.

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

Uwe Reinhardt

Uwe Reinhardt

“The issue of universal coverage is not a matter of economics. Little more than 1 percent of GDP assigned to health could cover it all. It is a matter of soul.”

Uwe E. Reinhardt
September 24, 1937 – November 13, 2017


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

Kip Sullivan: Practicing medicine while black

Practicing Medicine While Black

By Kip Sullivan, J.D.
The Health Care Blog, November 9, 2017

The managed care movement thrives on misleading words and phrases. Perhaps the worst example is the incessant use of the word “quality” to characterize a problem that has multiple causes, only one of which might be inferior physician or hospital quality. To illustrate with a non-medical analogy, no one would blame auto repair mechanics if 50 percent of their customers failed to bring their cars in for regular oil changes. We would attribute the underuse of mechanics’ services to forces far beyond the mechanic’s control and would not, therefore, refer to the problem as a “quality” problem.

But over the last three decades it has become acceptable among American health policy experts and policy-makers to characterize any measurement of under- or over-use of medical care, or any measurement of a medical outcome, no matter how poorly adjusted to reflect factors outside provider control, as an indication of “quality.” The widespread, inappropriate use of “quality” long ago set off a vicious cycle. It helped spread the folklore that the quality of America’s doctors and hospitals is awful, and that in turn was used to justify taking even more crude measurements of quality, and so on.

In the early 1990s when the measurement craze was limited to a few “quality” report cards, and grades on those report cards were not used to punish or reward doctors and hospitals, the craze posed less risk to providers who treated a disproportionate share of the poor and the sick. But over the last 15 years, inaccurate “quality” grades on report cards have been linked with financial penalties and rewards. Payment schemes that link rewards and punishments to quality scores were dubbed “pay-for-performance” (P4P) circa 2003. Payment schemes that link rewards and punishments to both quality and cost scores, which began to materialize in the late 2000s, were dubbed “value-based purchasing” (VBP) schemes. (“Value” implies both quality and price have been taken into account). These VBP schemes go by various names, the most important being “accountable care organization” and “medical home.” MACRA is one big VBP scheme.

A growing body of research indicates P4P and VBP schemes (I will refer to both from now on as VBP schemes) pose a much greater threat to the health of poorer and sicker Americans than the old report cards did. They do so because they pose a much greater threat to the financial health of the providers who treat poorer and sicker Americans. Because minorities represent a disproportionate share of our nation’s sickest and poorest, and because the responsibility for treating minorities falls disproportionately on a few clinics and hospitals, many of them staffed by minority health care professionals, VBP schemes punish minority providers for no reason other than that they see more minority patients.

In this article I will document what I have just said by focusing on black doctors as well as hospitals and ACOs that serve a large number of black patients. I will argue that those who promote VBP are guilty of racial profiling – punishing black doctors and other providers who treat a high proportion of black patients and, ultimately, black patients. We will see that three intractable conditions guarantee that VBP penalizes black providers and their patients:

(1) Black physicians, and a small number of hospitals, treat a disproportionate share of black patients;

(2) black patients tend to be sicker and poorer than white patients, which means the clinics and hospitals that treat a disproportionate number of them have to spend more on them and yet have fewer resources to do that, and are therefore less likely to score well on cost and quality measures; and

(3) administrators of VBP schemes are incapable of adjusting quality and cost scores accurately to take into account factors outside provider control, including the lower health status, lower incomes, worse insurance, worse access to transportation, and greater exposure to stressors such as crime and food insecurity suffered by black Americans.

Note that I am not criticizing measurement per se. Measurement is essential to quality improvement in every field of human endeavor. I’m criticizing inaccurate measurement and the reckless use of inaccurate measurement.

You can continue reading this article at the following link:

http://thehealthcareblog.com…

***

Comment:

By Don McCanne, M.D.

There are many problems in our health care system. There are many problems in our nation. And they inevitably interact.

At PNHP we tend to focus on our health care financing system and the interaction it has with the delivery of health care. Application of solid health policy is important in correcting the deficiencies in these interactions. But today’s message suggests that health policy science may still be in its primitive stages, not so much because of the lack of intellect in the health policy community but rather because of lack of enlightenment that has been suppressed by the memes of the free market approach to our nation’s problems, expressed in the concept that the government’s legitimate role is merely to help the private marketplace work.

Of course the needs unmet by the marketplace could not be ignored and thus public programs such as Medicare for the elderly and Medicaid for the poor were enacted. Yet we are shoving the beneficiaries of these programs into market models such as private Medicare Advantage plans and private Medicaid managed care organizations. We are also inundating the delivery system with nebulous market concepts such as shifting from volume to value – an ill conceived concept with which we are moving rapidly forward with implementation when the policy science studies to date have failed to give much support for such concepts.

In the marketplace resources are allocated based on the prospect for optimal business success; health care is distributed based on ability to pay. In publicly administered health programs resources are distributed based on need. Public funds are already used to pay for 60 to 70 percent of health care in the United States, yet we place control of much of our resources in the private sector.

What does this have to do with practicing medicine while black? It should be obvious. The private sector is not inclined to direct its resources to endeavors that do not provide greater revenue opportunities, whereas publicly administered programs distribute based on need – not only for health care but for correction of all of the other social deficiencies that have resulted in worse outcomes for the poor, a sector disproportionately represented by minorities.

A quick look at the current tax proposals tell us where we are. The greatest economic problem we face today is the transfer of income and wealth from the struggling masses to the plutocrats at the top. Yet the proposals before Congress would increase that upward transfer when the need is for public policies to improve social justice. This need screams out for progressive public financing rather than the regressive policies proposed.

We need to get our public priorities in order. We should be rewarding black physicians who dedicate themselves to caring for black patients and other ill-served populations who are sicker and poorer and thus a greater challenge to care for. Instead we penalize these virtuous physicians through payment reductions based on quality scores designed for business models rather than patient service models. Yes, we punish them. That isn’t right.

Changing to a more equitable financing system – an improved Medicare for all – is crucial, but it is only a first step. Since it is imperative that we also address these other social and economic issues, we’ve got a lot more work to do.

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

Azar Nomination Draws Mixed Reactions from Health Groups

Some welcome an experienced hand, others worry about pharma ties

By Joyce Frieden
MedPage Today, November 14, 2017

Members of the organized medicine community had mixed reactions to President Trump’s nomination on Monday of Alex Azar, JD, to run the U.S. Department of Health and Human Services (HHS).

The American Medical Association (AMA) had a brief but positive response when asked for comment: “Alex Azar is a capable and proven administrator who has a deep understanding of the HHS portfolio based on his prior work as Deputy Secretary and General Counsel,” said AMA president David Barbe, MD, in a statement.

Azar, whose nomination must be confirmed by the Senate, would replace Tom Price, MD, who resigned in late September after he came under fire for his use of private charter jets as well as military aircraft for travel, sometimes to destinations as far flung as China, but also for trips as short as jaunts from Washington to Philadelphia.

Azar is the founder and chairman of Seraphim Strategies, a consulting firm in Indianapolis, according to his LinkedIn profile. He served as general counsel and then deputy secretary at HHS in the George W. Bush administration, and also was president of Eli Lilly’s U.S. business unit, Lilly USA, from 2012 to 2016. He received a bachelor’s degree in government and economics from Dartmouth University in Hanover, New Hampshire, and a law degree from Yale Law School in New Haven, Connecticut.

The Association of American Medical Colleges (AAMC) took a neutral approach. “We congratulate Alex Azar on his nomination as secretary of HHS,” AAMC president and CEO Darrell Kirch, MD, said in a statement Monday. “In this position, he will oversee many of the federal agencies that play a crucial role in how the nation’s medical schools and teaching hospitals are able to educate and train the next generation of doctors, care for the nation’s most vulnerable and complex patients, and conduct medical research that brings hope to countless Americans.

“Upon his confirmation, we look forward to working with Mr. Azar on improving the health of all through high-quality clinical care, groundbreaking medical research, and a robust, diverse physician workforce.”

The Medical Group Management Association (MGMA), which represents leaders of physician practices, also took a neutral stance. “MGMA is hopeful Azar will bring his business acumen to HHS and continue the department’s push to reduce the regulatory burden on physician practices,” Anders Gilberg, the group’s senior vice president for government affairs, said in a statement.

The Federation of American Hospitals (FAH) was both more lengthy and more positive. “We welcome and support the nomination of Alex Azar for HHS Secretary,” Chip Kahn, FAH’s president and CEO, said in a statement. “His years of experience in government service and the healthcare sector makes him uniquely qualified to confront the challenges facing patients, families and caregivers.”

“I have worked with Mr. Azar in the past and think he is the perfect pick for the times,” Kahn continued. “His steady hand of leadership will be critically important as the deliberations over health reform and the many healthcare quality and cost issues proceed. We encourage the Senate to confirm Mr. Azar quickly.”

Jeff Myers, president and CEO of Medicaid Health Plans of America, called Azar a “promising candidate” because of his previous work at HHS and the experience that it gives him. “Moreover, his experience in the pharmaceutical industry uniquely qualifies him to effectively tackle runaway drug prices, counterintuitive as it may seem, using market-based competition,” he said in a statement. “We’ll be following his nomination closely.”

On the other hand, several physician groups were unhappy with the nomination. “The National Physicians Alliance (NPA) opposes Alex Azar’s nomination to be the next Secretary of Health and Human Services (HHS) because we believe Mr. Azar’s deep ties to the pharmaceutical industry disqualify him from being an independent voice for our nation’s healthcare system,” the organization said in a statement. “Moreover, his previous work in industry and in the public sector show that he has no inclination to improve upon the gains we have made in the Affordable Care Act and continue to push toward real affordable, equitable and universal healthcare for all.”

NPA, which advocates for “high-quality and affordable healthcare for all“, “has prided itself on [representing] America’s ‘Unbranded Doctors’ by upholding the principle of patient-first, conflict-of-interest-free healthcare,” the statement continued. “Drug corporations already have undue influence over health policy in America, and to nominate a former drug company executive to lead the HHS further adds to our concerns that we will continue to have a lack of action on skyrocketing drug prices that are crippling our ability to provide the healthcare our patients need.”

Physicians for a National Health Program (PNHP), a group which supports single-payer healthcare, also wasn’t happy with Trump’s pick. “Trump talked really tough about taking on Big Pharma when he was on the campaign trail, but since his inauguration it’s clear that was all a sham,” Adam Gaffney, MD, PNHP’s secretary, said in a phone interview. “Azar is a previous Lilly executive and drug company lobbyist, so I don’t think there’s any reason to suggest he’s going to take on Big Pharma; I think we can expect that drug prices are going to continue to rise.”

In addition, “I’m very worried about the Trump agenda about healthcare in general — giving Medicaid waivers that might water down access, impose new requirements, and keep people out of Medicaid,” said Gaffney, who is also a pulmonary specialist at Cambridge Health Alliance and Harvard Medical School. “The fact that Azar is willing to take on this [job] is an indication that he’s willing to go with the Republican agenda, which is to get people off of Medicaid … There are already 28 million uninsured people in this country; we want to bring that number down.”

Several other physician organizations, including the American Congress of Obstetricians and Gynecologists, the American Academy of Family Physicians, and the American College of Physicians, said they had no comment on the Azar nomination.

https://www.medpagetoday.com…

PNHP leaders join Sen. Sanders in Canada

Shortly after introducing the “Medicare for All Act of 2017,” Sen. Bernie Sanders (I-Vt.) traveled to Canada to gain new insight about its single-payer health care system. He was accompanied by several medical professionals, including PNHP national coordinator Dr. Claudia Fegan and national board member Dr. Richard Bruno.

During this trip, Canadians expressed pride in a system that covers everybody while spending far less per capita than their neighbors in the U.S. Patients and doctors alike expressed dismay at the notion that Americans could be bankrupted by a serious illness, and that many uninsured and under-insured Americans forego care altogether.

Sen. Sanders concluded the trip with a rousing speech at the University of Toronto on Sunday, October 29, which can be viewed above. Footage of the event starts at 12:20, Sen. Sanders takes the stage at 28:40, and Sen. Sanders participates in a brief interview with noted Canadian activist Dr. Danielle Martin at 1:04:00.

PNHP press release:
https://pnhp.org…

“Lessons from Canada” videos:
https://www.facebook.com…

“Phantoms in the Snow” study debunking Canada myths:
http://www.healthaffairs.org…

***

Drs. Fegan and Bruno reflect on the trip

Fegan Canada Meme

Bruno Canada Meme

***

Photos from Toronto

Sanders Collage

Clockwise from upper-left: Sen. Bernie Sanders, Dr. Claudia Fegan & Dr. Danielle Martin tour Mt. Sinai Hospital in Toronto; Sen. Sanders & Dr. Fegan; Sen. Sanders addresses U.S. & Canadian press w/ Dr. Richard Bruno; Sen. Sanders & Ontario Premier Kathleen Wynne; Sen. Sanders speaks at the University of Toronto; Sen. Sanders & Dr. Martin. Photo credit: office of Sen. Bernie Sanders, Vox, and New York Times.

***

Media Coverage

What Did Bernie Sanders Learn in His Weekend in Canada?
By Margot Sanger-Katz
New York Times, November 2, 2017
As he tells it, Senator Bernie Sanders of Vermont fell in love with the Canadian health system 20 years ago when he brought a busload of his constituents across the border to buy cheaper prescription drugs. Now he wants to make Americans fall in love with his proposal to make the United States system a lot more like Canada’s. Continue reading…

What Canada taught Bernie Sanders about health care
By Sarah Kliff
Vox, October 31, 2017
In late October, Sen. Bernie Sanders (I-VT) took a flight from Washington, DC, to Toronto. He sat in a cramped seat in the 21st row of the small plane. “I’m here to learn about your health care system,” Sanders told a woman behind him who asked for a selfie, shortly after the plane touched down in Canada. Continue reading…

What Corporate Media Failed to Learn About Canadian Single-Payer
By Michael Corcoran
FAIR, November 10, 2017
When it was announced that several journalists would travel with Sen. Bernie Sanders in October for a hospital tour of Canada to learn about its single-payer system, one question immediately sprang to mind:  What would corporate media do to smear universal healthcare this time? Continue reading…

Bernie Sanders compares U.S. health-care struggles to rights movements
By Theresa Boyle and Alex McKeen
Toronto Star, October 29, 2017
American Senator Bernie Sanders says insurance and drug companies, and those with extreme wealth, are hurting health care in the United States and warned Canadians not to allow that to happen on this side of the border. Continue reading…

Bernie Sanders speaks at Con Hall
By Jack O. Denton
The Varsity, October 30, 2017
Convocation Hall buzzed with energy the morning of October 29. Senator from Vermont and former Democratic presidential nominee Bernie Sanders was in town to give a talk titled “What the U.S. Can Learn from Canadian Health Care” to a packed house at the University of Toronto. Continue reading…

We went with Bernie Sanders to a magical place
NowThisPolitics, November 11, 2017
We went to Canada with Bernie Sanders to learn how universal health care works for real people. After speaking with Canadian patients, Sen. Sanders concluded that the U.S. “should not be the only major country on earth not to guarantee health care to all people as a right.” View video…

Postcard From Canada: In The Land Of Single-Payer, Bernie Sanders Gets Hero’s Welcome
By Shefali Luthra
Kaiser Health News, October 30, 2017
Sen. Bernie Sanders (I-Vt.) wasn’t scheduled to come onstage to talk health care until after 11 a.m. But college students started lining up as early as 5 a.m. — the Sunday morning of Halloween weekend, no less — in the hopes of scoring what appeared to be the weekend’s hot ticket. Continue reading…

Bernie Sanders Enlists Canada To Make The Case For Universal Health Care
By Daniel Marans
HuffPost, October 30, 2017
When Sen. Bernie Sanders (I-Vt.) arrived at the University of Toronto’s Simcoe Hall around 10:40 am on Sunday ahead of his sold-out speech on health care and progressive politics, the college students who had lined up outside in the 45-degree weather for standby tickets began to holler with joy. Continue reading…

Narrow networks benefit insurers, not patients

Kept in the Dark About Doctors, but Having to Pick a Health Plan

By Austin Frakt
The New York Times, November 13, 2017

When you select a health care plan, you probably consider premiums, and maybe you check deductibles and other cost sharing. But you can’t easily scrutinize the plans’ networks and the quality of the doctors in them. That’s too bad, because you may be missing something important.

Many health insurance options offered by employers or sold on the Obamacare marketplace come with narrower networks — covering treatment from a limited slate of doctors and hospitals. (Though there’s no official definition of a “narrow network,” many studies classify networks as narrow when they include less than about 30 percent of doctors or hospitals in the area.)

It’s virtually impossible to thoroughly check the quality of doctors in each insurance plan. A typical plan, even a narrow one, may have a network of hundreds or thousands of physicians.

https://www.nytimes.com…

NYT Reader Comment:

By Don McCanne, M.D.

Narrow networks are a tool of private insurance companies designed to enhance their business model rather than to improve patient service. They add to the administrative waste that characterizes the private insurance model of health care financing.

A public insurance model, such as the traditional Medicare program, is designed to help patients receive the care that they need. Why should we pay private insurers more in administrative costs in order to prevent us from having access to 70 percent of the physicians and hospitals in the community?

Not only is the traditional Medicare program more efficient administratively, and gives us greater choice in our health care providers, Medicare also has been more effective than private insurers in controlling health care prices.

We really do need to replace the intrusive, superfluous private insurers with an improved Medicare that covers everyone.

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

Some myths about Medicare-for-all

By Jack Bernard
Charleston (W.V.) Gazette-Mail, November 11, 2017

Gallup surveys indicate that Americans view health care as a major national priority. But, they are confused about our health care system. In my opinion, this situation is largely due to brainwashing by the health insurance industry and their political allies that they finance via campaign contributions.

In the 1980s, I headed a team for NME (now Tenet) that was trying to acquire hospitals in Texas and the southwest. I had mixed emotions about the task. I knew management and purchasing would improve. But, I also had concerns as to what would happen to indigents with a private company running what had been a governmentally owned or nonprofit facility.

I still have these concerns, but not only about for-profit chains. Many not-for-profits, experiencing financial pressures, are now hesitant to serve indigents. With recent moves by the Trump administration, these pressures will only increase.

There is a way for us to resolve the problem of the underserved while containing costs — Medicare for All, or single-payer.

But, as the tobacco industry once deceived Americans, self-interested forces in the insurance and pharmaceutical industry now propagate single-payer misconceptions. Here are the top six:

Myth: Single-payer insurance is socialized medicine.

Fact: Single-payer just expands current Medicare to cover all age groups. Doctors and hospitals continue to be independent. Socialized medicine means care by government doctors and hospitals (such as England or the VA).

Myth: You cannot choose your own doctor under single-payer.

Fact: With Medicare, the patient chooses the physician. This would continue.

Myth: You are restricted from receiving medical services under single-payer.

Fact: As is true today with all insurance, patients can opt to pay out of their own pocket for any medical service that insurance (Medicare) will not cover.

Myth: We have the best health care in the world.

Fact: We are far behind other countries in many categories, such as infant mortality and longevity. Hospital patients in developed countries are more satisfied with their care than patients are here. Per capita costs here are double or triple those in other developed nations.

Myth: Uninsured sick people can just go to the emergency room.

Fact: Emergency room care is the most costly form of primary care. When the uninsured are treated, the costs are passed on either to taxpayers or to other patients through higher hospital bills. Often, patients who delay care become more ill and treating them costs much more than primary care would have.

Myth: It is the same irresponsible people, year in year out, who do not have health insurance.

Fact: The pool of uninsured is constantly changing due to economic circumstances. Family coverage premiums are over $18,000 a year, more than double what it was a decade ago and still rising. The national percentage of uninsured rose dramatically over time until the Affordable Care Act was passed. Many of the 30 million still uninsured are the working poor who are not poor enough to qualify for Medicaid, especially in the 19 red states which chose not to expand Medicaid.

For many years, the tobacco industry told the American public that cigarettes did not cause cancer. Eventually, citizens figured out that they were being lied to on a regular basis and bipartisan legislation passed.

Our current health care financing system is broken, but fixable. Obviously, Trumpcare was not the answer.

House Bill 676, single-payer, currently has over 100 Democrat sponsors. A similar bill has been introduced in the Senate by Bernie Sanders and has 16 co-sponsors.

Other developed nations with single-payer or the like spend much less on health care than we do and have better mortality/morbidity. The day will come, hopefully sooner rather than later, when Americans will discover the truth about Medicare for All and demand that Congress, both Republicans and Democrats, enact it.

Jack Bernard, of Peachtree City, Georgia, was a for-profit corporate executive with several hospital systems in Charleston and elsewhere.

https://www.wvgazettemail.com…

Koch brothers’ ideology trumps veterans

With Obamacare Fight Lost, Conservatives Turn to Veterans’ Care

By Nicholas Fandos
The New York Times, November 9, 2017

With their hopes of repealing the Affordable Care Act dashed for now, deep-pocketed conservative activists have turned their attention to a smaller but still potent new effort: allowing private health care to compete with Veterans Affairs hospitals for the patronage of the nation’s veterans.

Concerned Veterans for America, a little-known advocacy group backed by the conservative billionaire industrialists Charles G. and David H. Koch, is pressing Republicans to make it easier for veterans to see private doctors at government expense. The group’s voice had been lonely until recently, when a raft of Koch-connected advocacy organizations and other conservative allies joined the effort.

The relative newcomers to the world of veterans policy see in the debate an opportunity to advance their campaign against government-provided medical care. Together, they have pledged millions of dollars for advertising and outreach, and have unleashed a small army of lobbyists and donors to pressure the Trump administration and Republican lawmakers.

Republicans and conservative groups would prefer new spending be at least partly offset by cost savings and other cuts to the Department of Veterans Affairs. Democrats and the old-line veterans groups say they are unlikely to support a plan unless it makes simultaneous investments in the agency’s own capacity. Without it, they argue, the problems that have necessitated private care in the first place will only fester.

“This is starve the beast to the point that it can’t function situation,” (Representative Tim) Walz said of the latter plan, “because if you don’t do this, the complaints against the V.A. are going to increase exponentially. The wait lists are going to increase. And then they are going to say, ‘See, we need more outside care.’”

https://www.nytimes.com…

***

Battle over veterans’ health care comes down to VA Choice

By Michael Blecker
San Francisco Chronicle, November 8, 2017

Kevin Miller is a U.S. Marine Corps Iraq combat veteran who came home with a wide range of chronic health issues, including post-traumatic stress disorder, traumatic brain injury and injuries to his neck, spine and shoulders. Thanks to the U.S. Department of Veterans Affairs’ model of integrated care, Miller can coordinate and receive all his care at the VA hospital in San Francisco.

There he can see specialists for his physical injuries, as well as mental health practitioners who understand the unique experience of veterans. If we send veterans like Miller to private doctors for their specialty care, however, then their care would be fragmented and medical appointments scattered at facilities miles apart.

Yet that is what the federal government tried to do, setting off a battle for health care for weary warriors to wage with policymakers and a well-funded special interest over the VA and its future.

To address problems of long wait times at Veterans Health Administration hospitals, in 2014 Congress established the Veterans Choice Program, which provides private health care options for eligible veterans at government expense.

In their war against the VA, our nation’s only truly universal health care system, special interest groups such as Concerned Veterans of America backed by the Koch brothers led the federal government to adopt VA Choice. In their larger efforts to attack all government-funded programs and services, the Koch brothers led a misinformation campaign claiming the VA system — one of the largest government agencies with 320,000 public employees — is broken.

Advocates, however, had long warned that private-sector options increase the cost of veterans’ health care.

Because health care dollars follow the veteran, the migration of dollars out of the system affected the operating budgets at the VA facility programs. VA medical and regional directors wrote in an internal VA memo that the costs of outsourcing veterans’ care to the private sector has been a “major driver, in budget shortfalls for Veterans Health Administration facilities across the country.”

The VA is a system worth saving. If we continue to divert precious taxpayer dollars to private care, we risk dismantling a veteran-centered health care system designed for their special needs.

House and Senate veterans committees are drafting legislation due for action this week to determine how much the VA outsources care. The Koch brothers and their network are pushing for a multimillion-dollar campaign to include loopholes in the legislation that will move us closer to dismantling the VA.

Write your members of Congress and urge them to keep the Koch network out of our VA.

Michael Blecker is executive director of Swords to Plowshares.

http://www.sfchronicle.com…

***

Comment:

By Don McCanne, M.D.

All health care systems have problems, including the Veterans Health Administration. It is not difficult to come to the conclusion that when problems exist you try to fix them. Yet Charles and David Koch, in their anti-government fervor, would destroy the government-run VA Health system by privatizing it since effectuating their libertarian ideology is vastly more important to them than fulfilling, in the very best way we can, our fundamental moral obligation to support the health of our veterans.

Although you might think that the conservatives believe they own the copyright for the American flag, they don’t. It belongs to all of us. Tomorrow, Veterans Day, I will mount the flag on my front lawn. I will salute the flag and then kneel before it as I pay respect for not only what it stands for but also for what it should stand for.

Peace.

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

Sluggish savings under accountable care organizations

Explaining Sluggish Savings under Accountable Care

By Valerie A. Lewis, Ph.D., Elliott S. Fisher, M.D., M.P.H., and Carrie H. Colla, Ph.D.
The New England Journal of Medicine, November 9, 2017

Despite aggressive targets set by Medicare for the spread of value-based payment arrangements and widespread agreement on the importance of delivery-system reform, progress toward lower spending growth and a transformed delivery system has been slow. Accountable care organizations (ACOs) are a prime example: nearly 1000 organizations operate as ACOs, but they have generated limited savings.

Myriad context-specific factors affect the performance of individual ACOs, but few characteristics have been shown to systematically explain ACO performance. We identified four cross-cutting explanations for the failure of ACOs to achieve savings right away (or at all) — two economic and two organizational. Economic explanations emphasize the breadth and depth of financial incentives in ACO programs, whereas organizational explanations emphasize organizational processes and complexity.

Economists worry about weak incentives. In the Medicare Shared Savings Program, nearly all participants opted to receive a bonus if they generate savings but bear no financial responsibility for losses. Transitioning providers to sharing in downside risk may result in greater behavior change and savings, although the literature on this subject is mixed. A second explanation suggests that having more patients covered by ACO-like contracts may strengthen incentives. Providers with few patients covered by ACO-like contracts face a problem colloquially described as “having a foot in two canoes.” Initiatives that generate savings in the care of a provider’s ACO patients will reduce income from its fee-for-service patients — an effect that led some integrated networks to fail during the managed care era. Until providers reach a tipping point in the number of patients covered by risk-based contracts, it will be hard for organizations to generate substantial savings.

We believe that all ACOs would benefit from having more patients covered by ACO-like contracts, something we routinely hear from providers. Lack of downside risk may help explain the performance of integrated delivery systems: complex existing systems might require stronger financial incentives to change their behavior. In contrast, the increasing proportion of physician-group and hospital-coalition ACOs achieving savings over time suggests that sharing in downside risk may not be necessary for these types of ACOs to generate cost savings if they are given enough lead time.

Economic explanations suggest that the key issue is motivation: providers know how to save money, but they need financial motivation to change their behavior. An alternative set of explanations draws on organizational theory and literature and suggests that providers either don’t know how to achieve savings (at least initially) or that they have to focus on other things — such as organizational, start-up, and compliance work — before they can implement the changes necessary to save money.

One organizational explanation for the progress that different kinds of ACOs have made toward generating savings relates to knowledge: when joining an ACO, independent physician practices with little knowledge of new care models may have ideas about how to save money, but they may need time to work out what to do and how to do it. Such groups may need to explore care management models or learn how to improve care transitions. This explanation may be particularly apt for outpatient-physician–practice ACOs and some hospital-coalition ACOs that are new to the game.

Another organizational explanation is that the complexity of ACOs affects their performance. First, most ACOs are not preexisting organizations; they are collections of independent providers, such as a community hospital and local private-practice physicians who decided to pursue an ACO contract together. These new organizations must accomplish a great deal of foundational work, such as forming a board; determining how to share bonuses; and completing tasks that require internal coordination, such as reporting quality measures. Then they must agree on and implement a joint strategy for pursuing cost savings. In these ACOs, we expect that progress toward generating savings may be delayed, because setting up a functional ACO will initially require attention and effort.

Second, organizational complexity probably challenges integrated systems. Although all ACOs must learn how to change ingrained practices among clinicians, the large, complex, and diverse networks of providers in an integrated delivery system present an added challenge for clinical transformation. Overcoming the inertia in these systems may be like trying to turn a large battleship. In contrast, outpatient-physician–practice ACOs are small and have a simple organizational structure, which probably makes them more nimble and able to more quickly implement (or discard) new initiatives — and generate savings. Newly formed coalition ACOs must spend time developing organizational infrastructure, but these groups aren’t encumbered by existing organizational processes.

We believe these explanations support taking a nuanced approach to encouraging, motivating, and rewarding providers. For all providers, moving a greater share of patients to value-based payment arrangements may support efforts to transform care and remove the barrier of conflicting incentives. Larger, integrated systems may benefit from a wider breadth of incentives and from stronger incentives that include sharing in downside risk. Shifting too quickly to risk sharing for newly formed ACOs, however, could backfire: among a subset of ACOs, it may be critical to allow providers enough time to settle into new organizational forms and develop and implement strategies in a deliberate and thoughtful manner. ACOs are as diverse as the U.S. health care system, and saving money in health care is notoriously hard. Developing policy approaches that accommodate this diversity will be important for payment and delivery reform to achieve its potential.

http://www.nejm.org…

***

Comment:

By Don McCanne, M.D.

Elliott Fisher developed the concept of “accountable care organization,” proposing that health care providers across a continuum could improve quality and more effectively control costs by sharing accountability for patient care. It sounded like a reasonable approach and it rapidly gained traction as various entities, with public and private support, implemented them even though there was little understanding as to exactly what they were.

There are now a plethora of reports, including this one, that confirm that, whatever they are, they are smoldering along and really not delivering on their promise of higher quality at lower cost. Most of these reports also suggest that the grand experiment should continue because “there must be a pony in there somewhere.” Unfortunately, they are largely ignoring the diversion of effort and resources to these entities while not accounting for the greater economic losses from the administrative excesses nor for the impairment resulting from an increase in physician burnout.

This certainly does not mean that we should discontinue efforts to improve quality and reduce wasteful spending, but there are more effective ways to do this. One of the more important measures would be to enact a well designed single payer national health program. The administrative savings alone is far more than ever could be achieved through any iteration of an accountable care organization. Also, establishing a health care financing system that places the patient first creates a financing infrastructure that automatically drives quality.

Dr. Fisher and his colleagues deserve credit for their ongoing efforts to encourage changes that would improve value in health care through higher quality while reducing wasteful services. But we have enough experimental data now that we should no longer defer enactment of single payer merely because we hope that accountable care organizations will fix our system. They will not. Enough minds have cranked out enough ideas that we know that there is no magical accountable care infrastructure in our future that will produce the dramatic changes we all wish would occur.

Let’s get on with enacting an improved Medicare program that covers everyone. Under such a system we can continue to strive for higher quality and reduce care that is not beneficial, but in a system that brings greater satisfaction to patients and to their health care professionals.

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