PNHP

For Big Pharma, profits come first, not patients

For Big Pharma, profits come first, not patients

By John Perryman, M.D.
Chicago Tribune, Letters, January 10, 2018

In an editorial celebrating “the genius that drives the development of…powerhouse drugs,” the Tribune Editorial Board continues to propagate the fallacy that high drug prices, driven by “market forces,” are a necessary cost to help fund further research. The drug in question this time is Luxturna, a treatment for a rare form of vision loss that comes at the whopping price of $850,000 per patient.

A few points need to be clarified.

First, most large drug companies spend more on sales and marketing than on research and development.

Second, since 1980 and the Bayh-Dole Act, drug companies can feed off research funded by the National Institutes of Health, which they acquire at late stages of development. As pointed out by former New England Journal of Medicine editor Dr. Marcia Angell, the big companies can either license the drugs or buy out small biotech companies carrying out NIH-funded research. In short, much of the research going into these products is funded by taxpayers, not pharmaceutical revenues.

Third, the pharmaceutical industry has a massive lobbying presence, consistently spending over $200 million a year, according to the Center for Responsive Politics. It has more than two lobbyists for every member of Congress and spends tens of thousands of dollars per election cycle. That type of investment is only undertaken when there is a significant return expected. For example, Congress placed a provision in the 2003 Medicare Prescription Drug Benefit that prohibits Medicare from negotiating with drug companies on pricing. Now that’s a return on lobbying costs!

I fully agree that there are many talented and dedicated people working at these companies. However, before we succumb to misty-eyed tributes to the role free markets play in providing miracle drugs, let’s be clear as to exactly what is going on. These companies profit from taxpayer-funded research. Also, as publicly traded for-profit entities, their primary goal is maximizing the wealth of their shareholders.

Those are the facts we need to remember when hearing about high drug prices.

http://www.chicagotribune.com…

Update on California single payer bill

Assembly Speaker Says Single-Payer Remains Shelved

By Ben Bradford
Capital Public Radio, January 8, 2018

“Absolutely nothing has happened with the bill,” Assembly Speaker Anthony Rendon, a Los Angeles-area Democrat, says of the high-profile Senate measure to establish single-payer health care.

Rendon shelved the bill last year, after it passed the Senate, calling it “woefully incomplete,” because it does not specify how the state would would seek federal approval, bypass constitutional spending limits and cover as much as a $400 billion cost.

Six months later, the speaker says the status of Senate Bill 562 remains the same.

“The sponsors of the bill have sat on their hands and done nothing for the past six months,” Rendon says. “None of the authors have made any significant amendments.”

Those pointed words about the sponsor refer to the California Nurses Association, the liberal union known for flashy and no-holds-barred advocacy of its causes.

The speaker says he’s more interested in developing a universal health care proposal, which could mix government and private coverage options, rather than focusing solely on a single-payer system.

An Assembly Committee is meeting again next week to discuss universal coverage legislation.

http://www.capradio.org…

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Nurses Catch Assembly Speaker in Lie About Healthy California Bill

RNs to Rendon: “No Excuses. We’ve Done Our Job; You Do Yours.”

California Nurses Association/National Nurses United, January 4, 2018

The nearly 100,000 registered nurses of the California Nurses Association (CNA)—co-sponsors of SB 562, the Healthy California Act, which would guarantee healthcare to all Californians—strongly condemn California Assembly Speaker Anthony Rendon’s statement this week that SB 562 sponsors have “sat on their hands and done nothing the past six months.”

“Perhaps Speaker Rendon is confusing his own inaction, after undemocratically parking SB 562, with the clear, loud stand thousands of Californians have taken for months, demanding Rendon unfreeze this lifesaving bill so it can move forward,” said CNA Associate Executive Director, Bonnie Castillo, RN. “Nurses have watched our patients suffer and die for far too long, and that’s why we are unrelenting in our demand for guaranteed healthcare. We expect our elected officials to work on the bill, not breach the public’s trust by halting the normal legislative process or waste time.”

The Healthy California Act, SB 562 passed the full Senate in June and was set for consideration in the Assembly when Speaker Rendon abruptly refused to let it out of the Rules Committee. In response, RNs and other backers of the bill have rallied, canvassed and organized in support of SB 562, in a grassroots movement across the state.

SB 562 sponsor and advocate actions in the past six months include:

* Published study by expert economists at UMass Amherst, setting forth a mechanism on how to pay for SB 562
* 17 amendments proposed
* 200 canvassing events held statewide, covering all 80 Assembly districts
* 15,000 supporters gathered at in-person events across California
* 6,000 doors knocked
* 1,500 new volunteers added to canvassing efforts
* 35 district office visits conducted
* Thousands of phone calls made
* 21 more canvasses are scheduled for January, 2018 alone

“SB 562 supporters don’t have time to sit on our hands, because our hands have been too busy knocking on doors, picking up phones, opening legislative office doors, and holding up ‘Medicare for All’ signs all over California,” said CNA co-president Deborah Burger, RN. “It’s beyond insulting that Speaker Rendon would tell working people, including the nurses who have spent countless hours standing up for our patients’ right to life saving care, that WE haven’t done enough. Allowing this bill to move forward is Rendon’s job, and he needs to stop shifting blame and get to work.”

“Every day that the Assembly members keep talking about it, people get sick and die. They’re inside [the state capitol] with their suits and ties and good health care, and every day people are dying,” said RN Cathy Kennedy. “We’ve done the research, and we know that in California there is money to provide health care for all. It’s time they stop talking about it and do something about it!”

A recent survey showed that a full 70 percent of Californians favor establishing a public, Medicare for all type system providing universal single-payer health coverage. CNA also sponsored the aforementioned study by expert economists at University of Massachusetts Amherst on how to pay for SB 562—revealing that enacting the bill would save Californians $37 billion off our current cost for healthcare.

With widespread public support and a funding mechanism, nurses say Rendon’s recent comments only reveal that elected officials need to stop standing in the way of what their constituents want: guaranteed healthcare.

http://www.nationalnursesunited.org…

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California State Assembly

Select Committee on Health Care Delivery Systems and Universal Coverage: Arambula, Wood, Chairs

Informational Hearing: Achieving Better Access and Greater Value in California’s Health Care System
Wednesday, January 17, 2018
1 p.m. to 5 p.m.
State Capitol, Room 4202

http://healthcare.assembly.ca.gov…

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SB-562: The Healthy California Act:
https://leginfo.legislature.ca.gov…

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Comment:

By Don McCanne, M.D.

The nature of the dispute between California Assembly Speaker Anthony Rendon and the California Nurses Association on the status of SB-562, The Healthy California Act, a single payer bill for California, can be gleaned from the reports above.

Probably the most significant statement is the following: “The speaker says he’s more interested in developing a universal health care proposal, which could mix government and private coverage options, rather than focusing solely on a single-payer system.”

A series of informational hearings on health care reform in general is taking place now, but the Select Committee will not be able to take any legislative action. It is difficult to see how these hearings could result in any meaningful legislation for this session of the state legislature. The hearings seem to be merely a diversionary tactic on the part of Rendon.

Why this update? If any state could enact a semblance of single payer legislation, it would be California. This demonstrates the barriers we have even with supposedly optimal political alignment.

The lesson? We need a large-scale social movement in support of greater Democracy. Read Page and Gilens, “Democracy in America?” and then act on it:

https://pnhp.org…

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

Political support for single payer still falls short of the threshold needed

On health care, Democrats are shifting to offense

By Ricardo Alonso-Zaldivar
Associated Press, January 8, 2018

Democrats are shifting to offense on health care, emboldened by successes in defending the Affordable Care Act. They say their ultimate goal is a government guarantee of affordable coverage for all.

With Republicans unable to agree on a vision for health care, Democrats are debating ideas that range from single-payer, government-run care for all, to new insurance options anchored in popular programs like Medicare or Medicaid.

Democrats are hoping to winnow down the options during the 2018 campaign season, providing clarity for their 2020 presidential candidate.

Obama’s former health secretary, Kathleen Sebelius, says she sees Democrats reclaiming a core belief that health care should be a right guaranteed under law.

Here’s a sample of ideas under debate by Democrats and others on the political left:

Medicare for All: Vermont Sen. Bernie Sanders made single-payer, government-run health care the cornerstone of his campaign for the 2016 Democratic presidential nomination. It remains the most talked-about health care idea on the left.

Medicare-X: The legislation from Sen. Tim Kaine, D-Va., and Sen. Michael Bennet, D-Col., would allow individuals in communities lacking insurer competition to buy into a new public plan built on Medicare’s provider network and reimbursement rates.

Medicare Part E: Yale University political scientist Jacob Hacker has proposed a new public health insurance plan based on Medicare, for people who don’t have access to job-based coverage meeting certain standards. He’s working with Democrats in Congress to turn the concept into legislation.

Medicaid Buy-In: Sen. Brian Schatz, D-Hawaii, and Rep. Ben Ray Lujan, D-N.M., have introduced legislation that would allow states to open their Medicaid programs up to people willing to pay premiums.

Expect more ideas as the year unfolds, said Neera Tanden, president of the Center for American Progress and a former top aide to Obama as well as Hillary Clinton. “Democrats are much more comfortable with an expansionist view,” said Tanden. “Almost every Democrat is talking about truly universal health care.”

But in Sanders’ home state of Vermont, primary care physician Dr. Deborah Richter says she believes it’s only a matter of time before the Unites States adopts single-payer. Activists who failed in an earlier attempt in the state are now focused on passing a plan that would cover just primary care.

“I think the next election will be a move to the left,” said Richter. “Whether Democrats will be willing to go for the whole system is pretty doubtful. I feel it might be possible for us to do it in phases.”

https://www.apnews.com…

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Comment:

By Don McCanne, M.D.

Single payer advocates can be encouraged by the improved understanding and greater support of the single payer Medicare for All concept engendered by the campaign of Sen. Bernie Sanders. The Republican politicians continue to reject the concept, but just how much support is there amongst the Democrats in office?

About one-third of the Democrats in the Senate have signed on as cosponsors of S. 1804, Sen. Sanders’ Medicare for All Act, but they did so knowing that it was a safe move – it could not possibly pass and be signed in the 115th Congress. Many of them actually support incremental measures that build on the current system as being more feasible politically (and less offensive to the campaign supporters of some of them – the insurers and pharmaceutical firms).

In spite of the national support for single payer, many of the Democrats in office are supporting, as their preference, incremental measures such as Medicare-X, Medicare Part E, and Medicaid Buy-In. Neera Tanden, who helped lead the forces that prevented single payer from being included in the last Democratic Party platform, is giving lip service to “an expansionist view,” but you can be sure that her view of expansion falls far short of single payer. Even some of the most respected single payer activists within our own camp have grown frustrated after a couple of decades of effort with no results and thus support phasing in single payer incrementally.

Why shouldn’t we go ahead and support the incremental proposals? Isn’t expanding coverage to include more individuals better than holding firm to a fight that we haven’t been able to win so far? The problem is that support for the golden standard of single payer reform is inversely proportional to the perceived need. If we continue to tweak the system so that it is at least barely tolerable for the majority, then we cannot meet the political threshold required to enact a bona fide single payer system.

You might say, “So what, if we’re most the way there, isn’t that good enough?” But limiting ourselves to the goal of providing nominal health care coverage for a large majority of U.S. residents not only leaves out those who do not qualify or can’t afford it, but it leaves in place all of the other deficiencies that would be corrected by a well-designed single payer system. Under single payer, people would have their choice of health care professionals and institutions. Financial barriers to care, such as high deductibles, would be eliminated. Separate planning and budgeting of capital improvements would improve access. A massive reduction in administrative waste along with adoption of the other efficiencies of a single payer system would redirect wasted funds to programs that we all support (such as health care for the currently underserved, education, infrastructure, etc.).

Medicare-X, Medicare Part E, Medicaid Buy-In, and a program limited to primary care might be nice improvements, but they alone do not scratch the surface of what we need to do.  We have just gone through another decade without real reform because we went along with the Affordable Care Act, and costs have continued to increase, financial barriers have increased, choices of providers have decreased, and waste has not been reduced.

We can do it, but we need greater democracy in America. Big business and the very wealthy now control our government. Benjamin Page and Martin Gilens in their book, “Democracy in America?,” explain what has gone wrong and what we can do about it. It will not be easy, but action is an imperative. The book is described in a recent Quote of the Day available at the following link:

https://pnhp.org…

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

The true problem and solution to high drug prices

By Elizabeth Carson
The Washington Post, Jan. 7, 2018

The Jan. 3 Economy & Business article “Under fire, pharma points finger” described the pharmaceutical industry’s campaign to shift blame for high drug prices to insurers and pharmacy benefit managers. While this may have been successful at causing confusion, it is not hard to comprehend the problem or the solution.

Our health-care system is a very complicated, for-profit industry with many middlemen who take our money but contribute nothing to our health care. A universal, single-payer health-care system would provide high-quality care while saving money. It would get rid of all the middlemen. It would have the power to negotiate with drug and medical-supply companies. And it would allow care decisions to be made by health-care providers and patients. All we need is the courage to make the change and treat health care as a human right, not a business.

Elizabeth Carson is a member of the Leadership Council of Healthcare is a Human Right Maryland and a retired psychiatric nurse.

https://www.washingtonpost.com…

It’s time for single-payer health care

By Russell Noblett, M.D.
The Roanoke (Va.) Times, Letters, January 7, 2018

In our insurance-based health care system, the patient is not the customer, the shareholder is. The product being sold is proficiency at declining payment to their captive benefactors (all of us), who have no other access to care. Forty-three percent of Americans have difficulty paying their deductible according to the Kaiser Foundation. This precious money goes to the shareholder.

The cost of health care in the U.S. is over twice the average of 35 other advanced countries, yet we rank 81st among 195 countries on mortality. The overhead cost of American practices averages 55 percent of their revenue, while Canada’s averages 28 percent. According to the Kaiser Foundation, Medicare administrative costs are 2 percent, that is one-sixth the rate of private insurance. Traditional Medicare has an overhead of 3 percent, while private-managed is 30 percent. That precious money comes from you, and goes straight to the shareholder.

According to the Economist ‘YouGov’ poll in April, 2017: Sixty percent of Americans favor expanding Medicare to everyone: breaking down to 75 percent of Democrats, 58 percent of Independents, and 46 percent of Republicans. Our current system is unfair, devastates spending capacity and mobility, and threatens well-being. This is not the meaning of health care.

The conservative Nobel-laureate economist, Angus Deaton, recently said, referring to our private insurance system, that we must “get this monster that we’ve created out of the economy and allow the rest of capitalism to flourish.” (Marketwatch, 3/6/2017)

U.S. House Bill HR 676 would expand Medicare to all citizens. It has 115 co-sponsors, with a majority of House Democrats signing on. It eliminates the insurance middleman, and would return $500 billion to the U.S. economy. It would be funded by payroll taxes, with elimination of premiums and out-of-pocket expenses (eliminating medical bankruptcy).

We need sane leadership returned to government.

https://www.roanoke.com…

David Blumenthal on life expectancy and the American health care system

Drop in U.S. life expectancy is an ‘indictment of the American health care system’

By David Blumenthal
STAT, January 4, 2018

The economy may be growing and the stock market booming, but Americans are dying younger — living shorter lives than previous generations and dying earlier than their counterparts around the world.

It is easy to place the blame squarely on our nation’s opioid epidemic, but if we do that we miss seeing the abysmal new life expectancy data from the Centers for Disease Control and Prevention for what they are — an indictment of the American health care system.

At first glance, substance abuse would seem more a social and economic problem than one of health care, and there is no question that socioeconomics are a major player in causing the so-called deaths of despair associated with substance abuse.

But, we cannot let our health care system off too easily.

The epidemic of drug abuse and overdose deaths has not affected other developed countries the way it has ours. With 4 percent of the world’s population, the U.S. accounts for 27 percent of the world’s overdose deaths. The European Union, with a population of 507 million, reported 6,800 overdose deaths in 2014, compared to 47,055 in the U.S.

Why has it been it so much worse here? One reason is that the U.S. doesn’t have strong social safety nets that buffer the effects of recessions and job loss as other nations do. Another reason is the way the U.S. health care system functions.

The profitability of drugs in the United States, a result of sky-high and skyrocketing drug prices, has made the aggressive marketing and sale of new prescription opioids an almost irresistible temptation for American pharmaceutical companies.

The opioid epidemic is not the only area in which the U.S. health system lags. In 2015, life expectancy at age 65 in the U.S. ranked 26th among the 37 members of the Organization for Economic Cooperation and Development, which includes most developed nations. It is widely accepted that the accessibility and quality of medical services strongly affect life expectancy among the elderly and elderly Americans fall behind their counterparts overseas when it comes to being able to get and afford the health care they need.

This may seem surprising given that Americans over 65 enjoy universal health insurance coverage under Medicare. But as valuable as Medicare is, it provides far less protection against the cost of illness, and far less access to services, than do most other Western countries. In a recent cross-national survey, U.S. seniors were more likely to report having three or more chronic illnesses than their counterparts in 10 other high-income countries. At the same time, they were four times more likely than seniors in countries such as Norway and England to skip care because of costs. Medicare, it turns out, is not very good insurance compared to what’s available in most of the western world.

We are the wealthiest nation on earth, but far from the healthiest, and things are getting worse, not better. The CDC report is yet another call to action for fundamental health system change that should include, among other things, reforming our pharmaceutical markets and making good health insurance available to all Americans. These need to be urgent priorities in 2018 for a government that should care as much about the health of Americans as their wealth.

David Blumenthal, M.D., is president of the Commonwealth Fund.

https://www.statnews.com…

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Comment:

By Don McCanne, M.D.

The excerpts from David Blumenthal’s article speak for themselves. Life expectancy in the United States is declining, partly due to the opioid epidemic, but deficiencies in our health care system and how we pay for it certainly contribute to the poor performance.

That includes our Medicare program. As Blumenthal states, “Medicare, it turns out, is not very good insurance compared to what’s available in most of the western world.”

So don’t be too urbane when speaking of Medicare for all, and don’t ever omit “improved,” as in Improved Medicare for All.

Now that “single payer” has become widely accepted terminology, don’t hesitate to use that term in advancing the PNHP golden standard of single payer:

https://pnhp.org/nhi

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

Trump is right: Negotiate for lower drug prices

By Rob Stone, M.D., Chris Stack, M.D., and Fran Quigley
Indianapolis Star, Jan. 4, 2018

All Hoosiers have seen the headlines about drug price increases, and too many of us see the struggle first-hand. A vial of insulin can cost a person with diabetes 10 times as much as it did in the late 1990s. The price of an EpiPen has risen 450%. Some new treatments for cancer and other diseases are priced as high as $750,000, even when taxpayers paid for the most critical research to develop those drugs.

One of every five Americans report either skipping medicine doses or failing to fill prescriptions each year due to cost. As physicians and a lawyer working on health-care access in Indiana, we have talked with people who have suffered strokes after they could not afford to fill their doctors’ prescription for blood pressure medicines. We have talked with mothers who have lost adult children who had been forced to ration their insulin.

Americans are outraged, and rightly so. In poll after poll, strong majorities of people across different political parties agree that our government needs to do more to rein in drug pricing abuse. President Trump has said that pharmaceutical companies are “getting away with murder,”  and promised that the U.S. government would start negotiating down the price we pay for our medicines.

Negotiation is the right prescription for curing out-of-control drug price increases. Thanks to benefitting from taxpayer-supported research and government-granted monopolies, the pharmaceutical industry enjoys some of the highest profit margins in modern history, even after spending more of its revenue on advertising than on research. That is why President Trump and a whopping 92% of Americans support allowing our Medicare program to negotiate down drug prices.

Negotiation would make a big difference, since other nations’ use of their bulk-purchaser negotiating power is the key reason why medicines cost far less overseas than they do here.

A recent study by researchers at Harvard Medical School and the University of British Columbia found that the countries that do the best job of keeping medicines prices affordable are the ones that have adopted single-payer health systems. When the government is the one paying for all medicines, it possesses the negotiating power to control costs.

The widespread frustration over our U.S. health-care system’s tragic flaws, where we pay the world’s highest costs for very poor coverage and health outcomes, is building momentum for a single-payer system here. Over half of Americans support single-payer, and more than 100 members of Congress have signed on in support of Medicare for All legislation. Businesses of all sizes are struggling with health-care costs, leading leaders like Warren Buffet to support a single-payer system.

A single-payer system will allow all of us to enjoy the security of health-care coverage even when we change or lose jobs, and no matter what our pre-existing conditions. It will save money for taxpayers and patients alike. And there is no better argument for single-payer than the guarantee that Hoosiers will no longer go without medicines due to unreasonable prices.

Dr. Rob Stone is the director of Hoosiers for a Commonsense Health Plan. Dr. Chris Stack and Fran Quigley are with People of Faith for Access to Medicines.

https://www.indystar.com…

NHS strains under flu epidemic

PM sorry for NHS chaos as thousands queue in ambulances

By Chris Smyth
The Times, January 4, 2018

Theresa May has apologised to patients hit by winter chaos in the NHS as figures showed that thousands of patients who arrived at hospital by ambulance struggled to get into A&E because hospitals were so full.

Long waits for ambulances to hand over patients doubled in a week as flu increased over Christmas.

NHS leaders say that so many patients arriving in A&E need admitting that they are running out of beds. Hospitals were well above the 85 per cent bed occupancy level considered safe, with a national average of 91.7 per cent last week.

Professor Derek Alderson, president of the Royal College of Surgeons, said: “That many hospitals have full wards, even after cancelling operations, shows that we simply don’t have sufficient numbers of beds in English hospitals.”

Sir Vince Cable, the Liberal Democrat leader, said: “Every day seems to bring yet more bad news about the state of the health service. The blame lies firmly at the government’s door. Ministers refused to provide the funding top NHS officials said was necessary and now patients are paying the price.”

Professor John Appleby of the Nuffield Trust think tank agreed that the NHS simply did not have enough money or staff to cope. “The sobering reality is that winter for the NHS has hardly started,” he said. “The service is likely to face another three months of exceptional need for care, and it is starting from a precarious position. There is an underlying mismatch between the capacity to deliver care and the level of care patients require.”

The NHS 111 urgent care helpline had its busiest week on record as almost half a million patients called for advice over the Christmas period, resulting in 58,000 ambulances being sent out.

https://www.thetimes.co.uk…

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Socialized medicine update: Britain cancels 50,000 surgeries as NHS hospitals face winter crisis

By Philip Klein
Washington Examiner, January 4, 2018

American liberals such as Sen. Bernie Sanders like to tout socialized healthcare systems such as Britain’s for spending less and covering everybody, but here’s a reality check you shouldn’t expect to hear in any of his fiery speeches: the British government-run National Health Service has abruptly canceled 50,000 nonemergency surgeries due to overcrowding at hospitals this winter.

Do we think Americans are going to stand for a system in which government officials cancel surgeries en masse based on bureaucratic judgments about what is urgent and go on TV to offer inadequate apologies?

http://www.washingtonexaminer.com…

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Comment:

By Don McCanne, M.D.

It is expected to be a bad year for influenza, and the United Kingdom is already experiencing an overload of its health care delivery system. Because of the overload, 50,000 nonemergency surgeries are being postponed. What lessons are there for the United States?

The capacity of the system is crucial, and that requires balance. If there is excess capacity then personnel and facilities are underused and that wastes money. Furthermore, excess capacity results in overutilization of services that may be of little value. When capacity is at the right balance, services of little or no value tend to be crowded out, while essential services are readily accommodated.

When capacity is inadequate, excessive queues for elective services tend to form, and acutely ill patients may be subjected to crowded conditions such as being admitted to hospital corridors, or, worse, being held in ambulances for hours. Though hospitals should not deliberately create excess capacity, they do need to have plans for surge capacity such as with epidemics or major catastrophes. Triage becomes even more important during times that the system is stressed.

At such times, postponing elective procedures in order to handle the surge in urgent problems may reflect appropriate planning. But if the system is running near capacity at times of less urgent demand, then the capacity may be deficient. The same can be said if excessive queues persist throughout the year, including times when no reasons for surges exist.

It appears that the conservative and neoliberal governments of recent decades may have underfunded the NHS resulting in deficient capacity. Certainly the opponents of single payer reform in the United States are going to attack the NHS for cancelling surgeries (see Philip Klein’s comment, above). Underfunding is a vulnerability of publicly financed systems during inevitable intervals of conservative control. But the counter to this is the popularity of public programs that drives political support for them.

Lessons? Support public planning of a balanced capacity in the system. Support public stewards who will fund the system adequately. Counter the naysayers by spreading the truth about a well designed single payer system that would work well for all of us in the United States.

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

Another gimmick to overpay private Medicare Advantage plans

2019 Medicare Advantage Part I Advance Notice – Risk Adjustment

CMS.gov, December 27, 2017

Today, the Centers for Medicare & Medicaid Services (CMS) released Part I of the 2019 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part D Payment Policies (the Advance Notice), which contains key information about proposed updates to the Part C Risk Adjustment Model and the use of encounter data.

2019 Part C Risk Adjustment Model proposal

The 21st Century Cures Act amended the Social Security Act by, in part, requiring CMS to make improvements to risk adjustment for 2019 and subsequent years. In response to these requirements, we are proposing changes to the CMS-HCC Risk Adjustment model that is used to pay for aged and disabled beneficiaries enrolled in Medicare Advantage plans. These proposals reflect changes to risk adjustment required by the 21st Century Cures Act, including an evaluation of adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model and making adjustments to take into account the number of conditions an individual beneficiary may have, as well as a variety of additional technical updates.

For 2019, CMS is proposing a model that includes additional mental health, substance use disorder, and chronic kidney disease conditions in the risk adjustment model.

With respect to taking into account the number of conditions an individual beneficiary has, in Part 1 of the Advance Notice we describe a proposed new risk adjustment model and discuss an alternative model. The model we are proposing – the “Payment Condition Count model” – takes into account the number of conditions that a beneficiary has, only among the conditions that are included in the payment model. The model discussed as an alternative – the “All Condition Count model” – takes into account all conditions that a beneficiary has, including both those in the payment model and those not in the model.

Overall, while the experience of individual plans would vary, the Payment Condition Count model is projected to increase MA risk scores by 1.1%, while the All Condition Count model would decrease MA risk scores by -0.28%. Under the Payment Condition Count model, the change in MA contracts’ risk scores is generally positive and less varied than the All Condition Count model. The change in MA contracts’ risk scores under the All Condition Count model is more varied, with both negative and positive changes.

https://www.cms.gov…

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CMS.gov

NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties

SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2019 for the Medicare Advantage (MA) CMS-HCC Risk Adjustment Model

https://www.cms.gov…

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CMS floats Medicare Advantage payment tweaks that would boost insurers’ risk scores

By Leslie Small
Fierce Healthcare, January 2, 2018

Over the holidays, Medicare Advantage insurers got a gift from the federal government.

That gift arrived on Dec. 27, when the Centers for Medicare & Medicaid Services released part one (PDF) of its 2019 advance notice of changes to MA capitation rates and Part D payment policies.

To comply with the Cures Act, CMS is proposing an MA risk adjustment model that includes additional mental health, substance use disorder and chronic kidney disease conditions. The agency uses risk adjustment models to adjust payments based on the characteristics and health conditions of each plan’s enrollees, with the goal of preventing insurers from enrolling only the healthiest patients.

The agency is also proposing a “Payment Condition Count model” for risk adjustment, which takes into account the number of conditions that a beneficiary has—but only among the conditions that are included in the payment model. This model is projected to increase MA risk scores by 1.1%, meaning more government reimbursement would be flowing toward health plans.

By comparison, the alternative “All Condition Count model”—which takes into account all conditions that a beneficiary has—would have decreased MA risk scores by 0.28%, CMS said.

The proposed methodological change to risk adjustment is “more industry friendly than the status quo,” Leerink Partners analysis Ana Gupte wrote in a research note (PDF). It’s the most positive for Humana, UnitedHealth and WellCare, she said, but also a good sign for the sector as a whole.

Such changes are consistent with the MA-friendly stance of the Trump administration.

https://www.fiercehealthcare.com…

***

Comment:

By Don McCanne, M.D.

The private Medicare Advantage plans have continued to be overpaid deliberately. Each year the administration, whether Democratic or Republican, uses quirky arcane rules to ensure an adequate revenue buffer so that private insurers can compete favorably with the traditional Medicare program by offering lower premiums and cost sharing and expanded benefits. This year’s gimmick is to use a “Payment Condition Count model” instead of an “All Condition Count model” which then increases Medicare Advantage risk scores by 1.1% and thus pads the margins for the private plans.

For those who need a reminder, this is intended to privatize Medicare, converting it to a premium support (voucher) model. Once a critical mass has enrolled in private plans, Congress will gradually reduce the relative value of the voucher-equivalent, reducing the government component of the funding of Medicare by shifting more costs to the Medicare beneficiaries.

It’s working. Medicare Advantage enrollment has increased each year and was at 33% as of 2017 (19 million enrollees). With continued coddling by Congress and the administration, we can anticipate further increases. The current House leadership now wishes to accelerate this change by reducing government expenditures in the traditional Medicare program (“we can’t afford it,” especially after the tax cuts).

Although we describe their sequential innovative chicanery each year, nobody seems to get excited about it. As disgusting as the analogy is, we seem to be the proverbial frog in the water being heated over the stove. Get out your health care justice thermometers or traditional Medicare will be cooked before we see the pot come to a boil.

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It’s the prices, but why are they high?

Why the U.S. Spends So Much More Than Other Nations on Health Care

By Austin Frakt and Aaron E. Carroll
The New York Times, January 2, 2018

The United States spends almost twice as much on health care, as a percentage of its economy, as other advanced industrialized countries — totaling $3.3 trillion, or 17.9 percent of gross domestic product in 2016.

But a few decades ago American health care spending was much closer to that of peer nations.

What happened?

A large part of the answer can be found in the title of a 2003 paper in Health Affairs by the  Princeton University health economist Uwe Reinhardt: “It’s the prices, stupid.”

The study, also written by Gerard Anderson, Peter Hussey and Varduhi Petrosyan, found that  people in the United States typically use about the same amount of health care as people  in other wealthy countries do, but pay a lot more for it.

Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute, studies how health systems from various countries compare in terms of prices and health care use. “What was true in 2003 remains so today,” he said. “The U.S. just isn’t that different from other developed countries in how much health care we use. It is very different in how much we pay for it.”

Did we do more for patients in each health visit or inpatient stay? Did we charge more? The JAMA study found that, together, these accounted for 63 percent of the increase in spending from 1996 to 2013. In other words, most of the explanation for American health spending growth — and why it has pulled away from health spending in other countries — is that more is done for patients during hospital stays and doctor visits, they’re charged more per service, or both.

Though the JAMA study could not separate care intensity and price, other research blames prices more.

There are ways to combat high health care prices. One is an all-payer system, like that seen in Maryland. This regulates prices so that all insurers and public programs pay the same amount. A single-payer system could also regulate prices. If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States.

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NYT Reader Comment:

By Don McCanne, M.D.

Our very high per capita health care spending certainly has been associated with high prices. So why hasn’t market competition (competing private health plans) or government price controls (Medicare and Medicaid) controlled prices? Simply it is what is built into those prices that is unique in the United States – our profoundly wasteful administrative excesses. Ratcheting down prices either through the market or through regulation would not change our fragmented, dysfunctional financing infrastructure with all of its waste and would result in intolerable underfunding of the actual health care delivery system.

Frakt and Carroll suggest that an all-payer system might work, but that would fall short since most of the dysfunctions of the current system would remain in place. On the other hand, a well-designed single payer system (an improved Medicare for all) would recover close to half a trillion dollars that is wasted on administration and other excesses.

It is likely that prices would be reduced for health care professionals and facilities, but only by the savings in administrative excesses that would no longer be required. The net income for the health care delivery system would remain about the same.

It has been about fifteen years since Anderson, Reinhardt and their colleagues told us, “It’s the prices, stupid.” We really are pretty stupid to have wasted trillions of dollars in administrative excesses since that time.

https://www.nytimes.com…

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The Leap to Single-Payer: What Taiwan Can Teach

How one nation transformed a health care system. Can America do big things anymore?

By Aaron E. Carroll and Austin Frakt
New York Times, December 26, 2017

Taiwan is proof that a country can make a swift and huge change to its health care system, even in the modern day.

The United States, in part because of political stalemate, in part because it has been hemmed in by its history, has been unable to be as bold.

Singapore, which we wrote about in October, tinkers with its health care system all the time. Taiwan, in contrast, revamped its top to bottom.

Less than 25 years ago, Taiwan had a patchwork system that included insurance provided for those who worked privately or for the government, or for trade associations involving farmers or fishermen. Out-of-pocket payments were high, and physicians practiced independently. In March 1995, all that changed.

After talking to experts from all over the world, Taiwan chose William Hsiao, a professor of economics at the Harvard T.H. Chan School of Public Health, to lead a task force to design a new system. Uwe Reinhardt, a longtime Princeton professor, also contributed significantly to the effort. (Mr. Reinhardt, who died last month, was a panelist on an Upshot article comparing international health systems in a tournament format.) The task force studied countries like the United States, Britain, France, Canada, Germany and Japan.

In the end, Taiwan chose to adopt a single-payer system like that found in Medicare or in Canada, not a government-run system like Britain’s. At first, things did not go as well as hoped. Although the country had been planning the change for years, it occurred quite quickly after democracy was established in the early 1990s. The system, including providers and hospitals, was caught somewhat off guard, and many felt that they had not been adequately prepared. The public, however, was much happier about the change.

Today, most hospitals in Taiwan remain privately owned, mostly nonprofit. Most physicians are still either salaried or self-employed in practices.

The health insurance Taiwan provides is comprehensive. Both inpatient and outpatient care are covered, as well as dental care, over-the-counter drugs and traditional Chinese medicine. It’s much more thorough than Medicare is in the United States.

Access is also quite impressive. Patients can choose from pretty much any provider or therapy. Wait times are short, and patients can go straight to specialty care without a referral.

Premiums are paid for by the government, employers and employees. The share paid by each depends on income, with the poor paying a much smaller percentage than the wealthy.

Taiwan’s cost of health care rose faster than inflation, as it has in other countries. In 2001, co-payments for care were increased, and in 2002, they went up again, along with premiums. In those years, the government also began to reduce reimbursement to providers after a “reasonable” number of patients was seen. It also began to pay less for drugs. Finally, it began to institute global budgets — caps on the total amount paid for all care — in the hope of squeezing providers into becoming more efficient.

Relative to the United States and some other countries, Taiwan devotes less of its economy to health care. In the early 2000s, it was spending 5.4 percent of G.D.P., and by 2014 that number had risen to 6.2 percent. By comparison, countries in the Organization for Economic Cooperation and Development spend on average more than 9 percent of G.D.P. on health care, and the United States spends about twice that.

After the most recent premium increase in 2010 (only the second in Taiwan’s history), the system began to run surpluses.
 
This is not to say the system is perfect. Taiwan has a growing physician shortage, and physicians complain about being paid too little to work too hard (although doctors in nearly every system complain about that). Taiwan has an aging population and a low birthrate, which will push the total costs of care upward with a smaller base from which to collect tax revenue.

Taiwan has done a great job at treating many communicable diseases, but more chronic conditions are on the rise. These include cancer and cardiovascular and cerebrovascular disease, all of which are expensive to treat.

The health system’s quality could also be better. Although O.E.C.D. data aren’t available for the usual comparisons, Taiwan’s internal data show that it has a lot of room for improvement, especially relating to cancer and many aspects of primary care. Taiwan could, perhaps, fix some of this by spending more.

As we showed in our battle of the health care systems, though, complaints can be made about every system, and the one in the United States is certainly no exception. For a country that spends relatively little on health care, Taiwan is accomplishing quite a lot.

Comparing Taiwan and the United States may appear to be like comparing apples and aardvarks. One is geographically small, with only 23 million citizens, while the other is vast and home to well above 300 million. But Taiwan is larger than most states, and a number of states — including Vermont, Colorado and California — have made pushes for single-payer systems in the last few years. These have not succeeded, however, perhaps because there is less tolerance for disruption in the United States than the Taiwanese were willing to accept.

Regardless of which health system you might prefer, Taiwan’s ambition showed what’s possible. It took five years of planning and two years of legislative efforts to accomplish its transformation. That’s less time than the United States has spent fighting over the Affordable Care Act, with much less to show for it.

Aaron E. Carroll is a professor of pediatrics at Indiana University School of Medicine who blogs on health research and policy at The Incidental Economist and makes videos at Healthcare Triage.

Austin Frakt is director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health. He blogs at The Incidental Economist.

https://www.nytimes.com…