Proposed Iowa Medicaid change would eliminate months of retroactive benefits

By Clark Kauffman
The Des Moines Register, August 30, 2017

Currently, Medicaid has a retroactive-eligibility provision that provides payment for health care services that were delivered in the three months leading up to a person being formally declared eligible for Medicaid.

It’s intended to ensure that health care providers accept patients even when those individuals have yet to apply for Medicaid. It often comes into play when people are hit with an unexpected health crisis and need immediate admission to a care facility. With retroactive payment, the facilities have some assurance that Medicaid will eventually pay for the care that pre-dates the decision on eligibility.

The Iowa Department of Human Services has asked the federal Centers for Medicare and Medicaid Services for permission to eliminate the three-month time-frame and have Medicaid pay only for the care that’s delivered from the first day of the month in which the patient applies for eligibility. The state says the move would save Iowa Medicaid, which serves more than 600,000 people and is funded by both the state and federal government, $36.7 million. The state’s share of the savings would be $9.7 million.

If approved, Iowa would become one of the first states in the nation to deny Medicaid beneficiaries three months of retroactive coverage. With more than 3,300 individuals enrolling in Iowa Medicaid each month, 40,000 Iowans would be affected by the change, which DHS hopes to implement in just four weeks, on Oct. 1.

The proposal is the result of actions taken by the Iowa Legislature during the 2017 session. Lawmakers approved a Human Services appropriations bill that specified several mandated cost-containment measures, one of which directed DHS to eliminate retroactive benefits for all Iowa Medicaid applicants. To do that, Iowa first needs the approval of CMS.

In its formal request to the federal agency, DHS says the change would “encourage individuals to obtain and maintain health insurance coverage, even when healthy.” It also says the change would make Medicaid more “closely aligned with the commercial market,” which doesn’t provide retroactive coverage to its customers.

http://www.desmoinesregister.com…

***

Comment:

By Don McCanne, M.D.

The need for retroactive qualification for Medicaid is obvious. Healthy individuals who otherwise would qualify for Medicaid on an income basis frequently do not want to bother signing up when they think they would have little use for the program. But unexpected, serious medical problems do occur, and retroactive qualification would cover care provided before enrollment could be completed.

It is not clear why the Iowa state government would want to deny that coverage when, in fact, it does fulfill the intent of the Medicaid program to cover health care for those individuals who otherwise cannot afford it. It seems to represent just plain meanness on the part of the legislators and state administrators who are pushing for denial of this important coverage. The savings to the Iowa government would be less than $10 million – a pittance relative to the importance of this program.

This perverse behavior on the part of Iowa’s stewards reinforces some important principles:

* Above all, lifelong coverage for everyone should be automatic. Coverage should not be dependent on ever-changing personal circumstances.

* Coverage should not be based on ability to pay, but rather should always be automatic. Each individual’s contribution to the national health program should be based on ability to pay, but that is entirely separate from the principle that each person receives health care based on need for that care, regardless of what has been paid.

* Payment to the providers of health care should not depend on whether or not the patient has the resources or coverage to pay for that care, but rather it should be made automatic through public administration of the funds in a universal risk pool.

* The Iowa state administrators say that slashing retroactive coverage would align the state more closely with the commercial insurance market. Our outrageous costs in an underperforming system are due in a large part to reliance on the commercial market. Using the private insurers as a model is the opposite of what we should be doing.

* Perhaps the most important lesson is that we should reject the calls to turn over the health care financing of federal health programs to the states since too many of them are proving to us that their preferred policies are heartless. The federal government has a duty to ensure that every individual receives the health care that he or she needs. We cannot turn that responsibility over to state bureaucrats who have already proven to us that they do not care about the health and welfare of their people.

We all should care, and an improved Medicare for all would make it automatic so that we do not have to give another thought about administrative excesses designed to interfere with care, like the denial of retroactive authorization – a concept totally foreign to a financing system specifically designed to advance health care justice.

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

By Andy Slavitt
JAMA Forum, August 30, 2017

This current debate isn’t over as long as the administration clings to talk of repealing the ACA. Still, the movement toward a single-payer system or another variant is beginning. There will be much written about the ideas that will shape our future. Whatever those ideas are, if we want them to succeed, we must begin now to create the ingredients for successful legislation finally worthy of our country.

https://newsatjama.jama.com…

***

Democrats Should Negotiate with the GOP on Health Care

By James C. Capretta
RealClear Health, August 30, 2017

While in office, President Obama often remarked that the ACA relies, at least in theory and to a degree, on the Republican principles of markets and private insurance. He was right, even if he failed to note that the ACA also includes levels of governmental control and federal spending that Republicans were never going to support. If Democrats are willing to abandon dreams of single-payer and stick with a framework that features competition and consumer choice, it should be possible to find common ground with Republicans while moving even closer to the enrollment of all Americans in a health insurance plan.

http://www.realclearhealth.com…

***

Comment:

By Don McCanne, M.D.

Andy Slavitt and James Capretta both support moving forward with health care reform, though one might be considered center-left and the other center-right. So where are we headed?

Republicans support less government and more markets and competition. In contrast, there has been a surge of Democrats voicing support for a government single payer program. But what is the actual record of Democrats?

Since the neoliberals assumed control of the Democratic Party, they have supported market solutions – first with the failed Clinton effort, and then with the Affordable Care Act and their marketplace insurance exchanges of private plans. Even well established government programs are shifting to the private sector with an expansion of private Medicare Advantage plans in the Medicare program, a massive transfer of Medicaid to private Medicaid managed care organizations, and even transferring care of VA patients into the private sector through the Veterans Choice Program.

In his full article (link above), Slavitt states, “Our goal should be to develop policies that we have real-world experience with, so we can avoid think-tank fantasies that either overstate the power of free markets or fail to see the unintended consequences of government intervention.” That’s very neoliberal of him.

Capretta states, “If Democrats are willing to abandon dreams of single-payer and stick with a framework that features competition and consumer choice, it should be possible to find common ground with Republicans while moving even closer to the enrollment of all Americans in a health insurance plan.” That’s very conservative of him.

The pro-market, pro-corporate views of the neoliberals place them in the same camp as the conservatives in regard to financing health care. Many Democratic politicians have given token tribute to single payer, even to the extent of signing on as co-sponsors of Conyers’ single payer bill – HR 676. But several of them qualify their support by describing single payer as being merely an “aspiration” but not a practical consideration at this time when we need to be supportive of the Affordable Care Act. More private Medicaid managed care. More private Medicare Advantage plans. More private VA care. More private plans in the ACA marketplaces. Introducing a public option that is public in name only since it would be designed along the model of private plans while being prohibited from competing “unfairly” and would be financed without government funds – crapola insurance.

There is a night and day difference between financing health care in the marketplace through private insurance and financing it through a government national health program. One is framed around businesses and the other is framed around patients. Today the conservatives and neoliberals are offering us only the business approach supervised by the medical-industrial complex.

Harold Pollack is a highly respected health policy expert from the University of Chicago who sometimes drives us at PNHP a little bit crazy with the legitimate concerns he expresses about the politics and logistics of single payer, even if none of it is insurmountable. But he said something interesting the other day: “Republicans’ failed repeal-and-replace effort has solidified the consensus around universal coverage and provided an exemplar process for radical policy change. A lot of Democrats are saying: ‘If they can try doing this with something so unpopular that would hurt tens of millions of people, why can’t we do something on that order that would be popular and help tens of millions of people?’”

Yes, why can’t we? Not just the Democrats, but all of us. Like maybe single payer.

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

Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, January – March 2017

By Robin A. Cohen, Ph.D., Michael E. Martinez, M.P.H., M.H.S.A., and Emily P. Zammitti, M.P.H.
National Center for Health Statistics, August 2017

This report provides health insurance estimates from the first quarter of the 2017 National Health Interview Survey.

In the first 3 months of 2017, 28.1 million (8.8%) persons of all ages were uninsured at the time of interview — 0.5 million fewer persons than in 2016 (a nonsignificant difference) and 20.5 million fewer persons than in 2010.

In the first 3 months of 2017, among adults aged 18–64, 12.1% were uninsured at the time of interview, 18.9% had public coverage, and 70.5% had private health insurance coverage.

Among adults aged 18-64, 70.5% (138.8 million) were covered by private health insurance plans at the time of interview in the first 3 months of 2017. This includes 4.8% (9.4 million) covered by private health insurance plans obtained through the Health Insurance Marketplace or state-based exchanges.

The percentage of adults who were uninsured for at least part of the past year decreased, from 26.7% (51.0 million) in 2010 to 16.7% (33.0 million) in the first 3 months of 2017. There were no significant changes from 2016 through the first 3 months of 2017.

In the first 3 months of 2017, 42.3% of persons under age 65 with private health insurance were enrolled in an HDHP, including 16.9% who were enrolled in a CDHP (an HDHP with a health savings account [HSA]) and 25.3% who were enrolled in an HDHP without an HSA. The percentage of persons enrolled in an HDHP increased 17 percentage points, from 25.3% in 2010 to 42.3% in the first 3 months of 2017. More recently, the percentage of those enrolled in an HDHP increased, from 39.4% in 2016 to 42.3% in the first 3 months of 2017.

https://www.cdc.gov…

***

Comment:

By Don McCanne, M.D.

There are some important observations here on where we stand with insurance coverage in the United States.

* Coverage has stabilized with about 28 million people (8.8%) remaining uninsured. Under our current system of financing health care, those remaining uninsured will be very difficult to cover, even with tweaks to the Affordable Care Act.

* Among adults aged 18–64, 12.1% remain uninsured. That is a particularly difficult population to insure under our current system.

* There has been no significant further improvement in the numbers of individuals who remain uninsured for part of the year – 33 million (16.7%). Intermittent coverage is hazardous to both health and personal finances.

* The percent of individuals under 65 enrolled in a high deductible health plan (HDHP) continues to increase – now at 42.3%, an additional 2.9% increase in the last year alone, and 60% of individuals with an HDHP did not have a health savings account to back them up. This trend has continued to increase exposure to medical debt, already a major problem in the United States.

There will be those celebrating the success that these numbers represent when compared to 2010, but there should be no celebration when tens of millions remain exposed to physical suffering and personal debt – problems that could be ameliorated by simply enacting and implementing a single payer national health program.

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

Bending The Spending Curve By Altering Care Delivery Patterns: The Role Of Care Management Within A Pioneer ACO

By John Hsu, Mary Price, Christine Vogeli, Richard Brand, Michael E. Chernew, Sreekanth K. Chaguturu, Eric Weil and Timothy G. Ferris
Health Affairs, May 2017

We examined the impact of patient participation in a Pioneer ACO and its care management program on rates of emergency department (ED) visits and hospitalizations and on Medicare spending.

From the Study Results

Overall participation in the ACO was associated with a reduction in Medicare spending of $14 per participant per month, a decline of 2 percent. This association was not significantly different from no change, but the magnitude of the decline was comparable to estimates in previous studies.

From the Limitations

The analyses also focused on Medicare spending but did not assess total spending, including program costs. To our knowledge, no other study of ACOs has included program costs in its analysis.

From the Discussion

There were modest overall ACO spending reductions, with magnitudes comparable to those of all ACOs as described in other published reports and generally consistent with the assessment of the Partners ACO by CMS.

http://content.healthaffairs.org…

***

On the Ethics of Accountable Care Research

By Kip Sullivan, J.D.
The Health Care Blog, August 25, 2017

The paper I am examining is the third that Hsu et al. have published in Health Affairs about Partners’ Pioneer ACO, the second largest of the 32 ACOs that entered Medicare’s Pioneer ACO program in 2012.

They found that Partners’ ACO cut Medicare’s costs by a statistically insignificant 2 percent. This outcome is consistent with CMS’s data on the performance of Medicare ACOs, as well as the extremely rare studies of total spending by private-sector ACOs. The only papers seeming to contradict this bad news are two “studies” of simulated ACOs . We may infer from the literature that if ACO start-up and operating costs, including the costs of disease management programs, are taken into account, ACOs are raising total health spending.

However, in this third paper, Hsu et al. did not convey to their readers the impression I have just conveyed: Despite their insignificant results, they claimed Partners’ ACO is cutting costs. “Our major overall finding is that participating in an ACO and a care management program lowered utilization and spending,” they concluded.

Hsu et al. employed two tactics that lulled readers into thinking their data supported their claim that Partners’ ACO “lowered spending.” The first was to treat the statistically insignificant reduction in Medicare spending as if it were statistically significant. The second was to ignore the overhead costs incurred by CMS and Partners’ ACO, a problem that occurs so frequently I have proposed giving it a name – the “free-lunch syndrome.”

Hsu et al. reported that Partners’ ACO cut Medicare spending on beneficiaries attributed to the ACO by CMS during 2012 and 2013 by a statistically insignificant 2 percent. As the authors put it, “this association was not significantly different from no change” (p. 880). Yet the authors treated this 2 percent difference as if it were significant. Throughout the paper they claimed Partners’ ACO had lowered “Medicare spending.” They did so in the title (“Bending the spending curve….”), the abstract (“ACO participation had a modest effect on spending”), and in the text (see the quote above, as well as, “There were modest overall ACO spending reductions….” and, “This study provides some evidence of how one large … ACO appears to have achieved its stated savings….”).

Even if the 2-percent savings had been statistically significant, the authors should have subtracted from the claimed savings the cost of the interventions that led to the savings. These costs fall into two categories: Those CMS incurred to run the Pioneer program and those Partners’ ACO incurred attempting to achieve savings. Not reporting these offsetting costs made it easier for Hsu et al. to mislead readers into accepting their statement that Partners’ ACO “bent the cost curve.”

Hsu and his co-authors in fact warned readers that they intended to ignore all “program costs” incurred by the ACO, CMS or any other entity, that is, all costs that didn’t require reimbursement by Medicare under Parts A, B or D. They didn’t say why. The only explanation they offered was, “To our knowledge, no other study of ACOs has included program costs in its analysis.” This is true. The vast majority of American health policy researchers think it’s totally appropriate to ignore program costs when analyzing the impact of ACOs. Moreover, they think that if their limited analysis shows the ACO cut Medicare’s gross spending it’s ok to state repeatedly the ACO “bent the cost curve” or “lowered spending.”

The data in Hsu et al.’ paper is useful even if it is incomplete. It contributes to a growing body of evidence indicating that ACOs cannot cut total spending, in part because ACOs cannot focus. They are measured on their ability to cut the cost of an entire population by unspecified means rather than on their ability to cut the cost of a clearly defined slice of their sickest “attributees” by clearly defined methods.

My criticism of Hsu et al. is their misuse of their data. They implied statistically insignificant results were significant, and by stating over and over that Partners’ ACO cut “spending” they misled readers into thinking they had measured total costs when they hadn’t.

Footnote 8:

I encourage readers to peruse RTI’s evaluation of the CMP (care management program) to get a clearer view of the complexity and expense of Partners’ CMP program. To give you just a taste of the resources Partners is investing now for the 4,000 CMP enrollees examined by Hsu et al., consider these excerpts from RTI’s report describing elements of the program for the 2,000 CMP enrollees during 2006-2009:

*  “Eleven nurse case managers [each of whom worked with about 200 patients] who received guidance from the program leadership and support from the project manager, an administrative assistant, and a community resources specialist” (p. 7);

*  “a social worker to assess the mental health needs of CMP participants” (p. 6);

*  “a mental health team director, clinical social worker, two psychiatric social workers, and a forensic clinical specialist (M.D./J.D.), who follows highly complex patients with issues such as legal issues, guardianship and substance abuse” (p. 10);

*  “a pharmacist to review the appropriateness of medication regimens” (p. 6);

*  “home delivery of medications five days per week” (p. 7);

*  “a nurse who specialized in end-of-life-care issues” (p. 7);

*  “a patient financial counselor who provided support for all insurance related issues” (p. 7);

*  “The clinical team leader provided oversight and supervision of case managers” (p. 8);

*  “The medical director provided oversight and day to day management of MGH’s CMP….” (p. 8);

*  “MGH developed a series of clinical dashboards using data from the MGH electronic medical record …, claims data, and its enrollment tracking database” (p. 8);

*  “MGH provided [200] physicians with a $150 financial incentive per patient per year to help cover the cost of physician time for [CMP-related] activities” (p. 8);

*  “a designated case manager position to work specifically on post discharge assessments to enhance transitional care monitoring” (p. 9);“ and

*  “a data analytics team to develop and strengthen program’s reporting capabilities” (p. 10).

http://thehealthcareblog.com…

***

Comment:

By Don McCanne, M.D.

Everywhere you turn these days you see articles stating that we need to shift from paying for volume of health care and pay for value instead. They contend that new payment models, such as accountable care organizations, are doing precisely that. Yet evidence for increased value – lower costs and higher quality – is lacking.

The Hsu et al. article from Health Affairs (above) has been cited extensively for demonstrating that this approach is resulting in savings. Yet in the article the authors state, regarding the reduction in Medicare spending, “This association was not significantly different from no change.” Kip Sullivan’s critique details the problems with the conclusions and is well worth reading if you want to better understand health policy chicanery, or at least unrealized health policy wishes camouflaged as health policy science.

This is more than an annoyance. In the past month a multitude of articles have called for rejecting the lure of single payer and instead moving ahead with improving the Affordable Care Act. Many of these articles contend that new payment models are bringing us the cost efficiencies that we need, and so we do not need to resort to the disruptive changes of transitioning to single payer. “There are many ways we can get to a universal system,” they keep telling us.

If you read the health policy literature extensively and carefully you will find that many noted policy experts who have been working on these financing concepts from the beginning have been disappointed with the results. The models are not reducing costs significantly and the improvements in quality are negligible. Nevertheless, the attitude amongst them seems to be that we should continue with these studies, perhaps trying various modifications of the models to see if maybe something will eventually come of it.

But the lay media have not picked up on this. The reporting fad of the day is that we can get to a universal system that is affordable without having to resort to Medicare for all.

From the experience of other nations we already know that single payer would save us hundreds of billions of dollars by reducing administrative waste while using other single payer tools to achieve greater value and equity in our health care system.

In his full article, available at the link above, Kip Sullivan asks a series of questions regarding the ethics of this particular health policy assessment. When the policy community, supported by the lay press, advocates for health care reform that has not held up to scrutiny while rejecting a proven model that does work – single payer – they are indeed compromising ethics, even if some don’t quite understand that.

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

By Speaker Anthony Rendon
California State Assembly, August 24, 2017

Assembly Speaker Anthony Rendon (D-Lakewood) today announced that Dr. Joaquin Arambula (D-Fresno) and Dr. Jim Wood (D-Healdsburg), the chairs of the Assembly Select Committee on Health Care Delivery Systems and Universal Coverage, will hold ongoing hearings beginning in the legislative interim so the committee can develop plans for achieving universal health care in California.

“The fight to protect the Affordable Care Act helped galvanize the principle that health care is a basic right,” Rendon said. “There are several different approaches being proposed, including Medicare for all, single payer, hybrid systems and ACA expansion. I have called for these hearings to determine what approach best gets us there – what gets us to ‘yes’ when it comes to health care for all.”

Speaker Rendon stressed that the hearings would not simply go back over information covered in the past, but will provide a new opportunity to determine the best and quickest path forward toward universal health care. Overcoming potential federal and constitutional obstacles, ensuring delivery of care, and examining funding mechanisms will all be part of the committee’s purview.

“It’s not a question of debating whether we move toward health care for all – it’s a matter of choosing how best and how soon,” Rendon said. “The committee’s work will help fill the void of due diligence that should have been done on SB 562 or any universal health care bill that so profoundly affects so many Californians.”

“It is my direction that these hearings be focused and thorough, and produce real results,” Rendon said. “In addition to the oaths they took as legislators, Dr. Wood and Dr. Arambula have also taken oaths to protect and defend patients’ health, so I know they will take a vigorous approach to this challenge, and the committee will begin the heavy lifting needed to advance serious proposals for health care for all.”

https://speaker.asmdc.org…

***

Close to Home: The path to universal health care

By Jim Wood, Chairman of the Assembly Health Committee
The Press Democrat, August 25, 2017

Readers of The Press Democrat have seen opinion pieces on Senate Bill 562, the “Healthy California Act.” That bill, often called single-payer or Medicare for all, is being held in the state Assembly, and I have been criticized for not doing more to overturn that decision.

Let me be clear, I have always supported health care for all. I am a health care provider, chairman of the Assembly Health Committee and strongly believe that health care is a right.

Medicare for all has been a term used to describe the bill, and it is a concept I can actually support, but that’s not what SB 562 is. Medicare recipients have the option to purchase a supplemental policy that provides prescription coverage and may reduce or eliminate co-pays and shared cost. What would seniors think of folding their well-liked program into a state program?

As a legislator, I am doing whatever I can to protect the progress we have made with the Affordable Care Act. In addition, Assembly Speaker Anthony Rendon announced this week that I will join Assemblyman Joaquin Arambula, who is a physician, to co-chair the Assembly Select Committee on Health Care Delivery Systems and Universal Coverage, which will hold hearings beginning in the legislative interim so the committee can develop plans for achieving universal health care in California. My priority will be to ensure that whatever system is proposed is sustainable.

It is my responsibility to endure whatever criticism is sent my way and to persevere, for as long as it takes to ensure that the end result is a sustainable and comprehensive health care system and not something that might sound good, but end up being an empty promise.

http://www.pressdemocrat.com…

***

Comment:

By Don McCanne, M.D.

California Assembly Speaker Anthony Rendon received quite a push-back when he decided to withhold SB 562 – the “Healthy California Act,” a single payer bill for California. Under threat of recall, he has now established a special committee during the legislative interim that will “develop plans for achieving universal health care in California.”

Of concern is the fact that the committee is not being charged with the task of expanding SB 562 into a comprehensive, single payer package, as was the original legislative intent. Rather the committee is being instructed to look at “several different approaches being proposed, including Medicare for all, single payer, hybrid systems and ACA expansion.”

The California legislature already authorized a comprehensive study of various models of health care financing – The California Health Care Options Project. According to the study, single payer is vastly superior to other models, except for a government health service. The results were used to craft other single payer bills, including the two Kuehl bills that were passed by the California legislature only to be vetoed by Gov. Schwarzenegger.

ACA expansion or hybrid systems would perpetuate the profound administrative excesses that characterize the U.S. system. They would also fall short on universality, equity, access, and affordability. We do not need more study of those deficient models.

Jim Wood, the chairman of the Assembly Health Committee and co-chair of the Assembly Select Committee on Health Care Delivery Systems and Universal Coverage, calls himself a health care provider, though he is a dentist – a member of a health care sector not noted for its single payer advocacy. He states that he has directed his attention to protecting ACA.

Chairman Wood also states that it is his “responsibility to endure whatever criticism is sent my way and to persevere, for as long as it takes to ensure that the end result is a sustainable and comprehensive health care system and not something that might sound good, but end up being an empty promise.” It sounds like he is bracing himself to endure the criticism he will receive when he opposes the “empty promise” of single payer. Let’s hope that is not what he means.

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

We asked 7 experts about Sen. Brian Schatz’s big new Medicaid buy-in plan

By Jeff Stein and Dylan Scott
Vox, August 23, 2017

In a recent interview, Sen. Brian Schatz (D-HI) laid out his plan to allow every American to buy into Medicaid if their state allows it. It could be a significant expansion of the program, at the least as a public option for Obamacare’s marketplace. At the most, it could set up a road that leads to Medicaid as the vehicle for single-payer health care.

But it also raises a bunch of questions, about both the plan’s ideological goals and its policy mechanics.

We asked seven health policy experts, in the middle and on the left and right, what they thought.

Adam Gaffney, Harvard University:

Though the Affordable Care Act has so far withstood the Trumpcare battering ram, 28 million remain uninsured in the United States, an entirely unacceptable state of affairs. Might a Medicaid-based “public option,” as proposed by Sen. Brian Schatz (D-HI), be the answer?

Unfortunately, the bill would not rectify our nation’s serious health care woes. While it could potentially expand coverage, its impact would probably be modest, or even marginal: After all, in 2013 the Congressional Budget Office scored a somewhat similar public option and found that it would have no significant impact on the number of the uninsured. Moreover, Schatz’s bill would be optional for states and so would likely be declined by many, further limiting its impact. It is also probable that even with subsidies, some will find the premiums and deductibles of this plan unaffordable, as they have under the ACA.

Just as importantly, the bill would not solve the issues faced by Americans with insurance: narrow networks of doctors and hospitals, unaffordable drug prices, paltry access to dental and long-term care, and rising out-of-pocket costs (e.g., copayments and deductibles) that are squeezing household finances and creating an epidemic of “underinsurance” in America. And finally, it would not create the greater administrative efficiencies of a single-payer system, which by one estimate would be greater than $500 billion a year.

The only answer to those myriad issues is a universal single-payer “Medicare-for-all” system, which would ensure equitable access to comprehensive health for everyone in the nation. Medicare-for-all should thus remain the Democrats’ central health care goal in the coming months and years.

Robert Frank, Cornell University:

Anything you can do in this direction is a step forward.

Larry Levitt, Kaiser Family Foundation:

I read this as basically a public option delivered through Medicaid.

Loren Adler, Brookings Institution:

To me, the fundamental question here is whether you intend to create a level playing field or not.

Matt Bruenig, People’s Policy Project:

Up to this point, the liberal establishment, including Barack Obama and [the] Center for American Progress, has only endorsed what I would call the Loser Public Option.

David Anderson, Duke University:

I need to see the details.

Avik Roy, Foundation for Research on Equal Opportunity:

It’s completely unworkable.

https://www.vox.com…

***

Comment:

By Don McCanne, M.D.

Sen. Brian Schatz (D-HI) is currently drafting legislation that would allow Americans to buy into the Medicaid program, supposedly providing them with a “public option” and perhaps a path toward a single payer system in the United States. Vox has published the responses of seven “experts.”

Comments varied from those who approve based on the fact that any incremental improvement should be supported, to those opposed primarily based on conservative ideology. Those responses are recorded above with cryptic excerpts.

The response of Adam Gaffney is reproduced in its entirety since it is exceptional in that it clarifies how far off topic the current debate on reform has become. We should be discussing reform that corrects the serious defects in our overpriced and underperforming health care system. Instead the conversation has turned to disturbingly inadequate proposals such as the public option or buying into a public program.

It is not that even minimally beneficial measures should be opposed, rather we should not be burning up our resources for advocacy on these lesser measures when a single payer national health program – an improved Medicare for all – is an absolute imperative that requires urgent action. The crime is that it has required urgent action for decades while we have diddled around with deficient measures that have unnecessarily perpetuated financial hardship, physical suffering and even death.

Suppose we pass a public option or a buy-in. Those in support will celebrate success and then walk away. But what about the promise that this would lead to single payer? “Are you kidding? I support single payer, but that’s not feasible. I’m tired of you Bernie people trying to tell us liberals what to do. Get lost!”

Well, we’re more than just the Bernie people. We are a majority of the nation. We did get lost when they gave us ACA, and that didn’t lead to single payer. We can’t make that mistake again.

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

NBER Working Paper No. 23530: The Role of Hospital and Market Characteristics in Invasive Cardiac Service Diffusion

By Jill R. Horwitz, Charleen Hsuan, Austin Nichols
National Bureau of Economic Research, June 2017

Abstract

Little is known about how the adoption and diffusion of medical innovation is related to and influenced by market characteristics such as competition. The particular complications involved in investigating these relationships in the health care sector may explain the dearth of research. We examine diagnostic angiography, percutaneous coronary interventions (PCI), and coronary artery bypass grafting (CABG), three invasive cardiac services. We document the relationship between the adoption by hospitals of these three invasive cardiac services and the characteristics of hospitals, their markets, and the interactions among them, from 1996-2014. The results show that the probability of hospitals adopting a new cardiac service depends on competition in two distinct ways: 1) hospitals are substantially more likely to adopt an invasive cardiac service if competitor hospitals also adopt new services; 2) hospitals are less likely to adopt a new service if a larger fraction of the nearby population already has geographic access to the service at a nearby hospital. The first effect is stronger, leading to the net effect of hospitals duplicating access rather than expanding access to care. In addition, for-profit hospitals are considerably more likely to adopt these cardiac services than either nonprofit or government-owned hospitals. Nonprofit hospitals in high for-profit markets are also more likely to adopt them relative to other nonprofits. These results suggest that factors other than medical need, such as a medical arms race, partially explain technological adoption.

From the Discussion

Between 1996 and 2014, hospitals have continued to adopt new invasive cardiac services, although the rate of adoption slowed over the study period. Larger hospitals are more likely to adopt new services than are smaller hospitals. For-profit hospitals are more likely to adopt new services than are nonprofit hospitals, which, in turn, are more likely than government hospitals to adopt new services. On average, hospitals appear to make decisions regarding the adoption of new services based on the behavior of competitors in the markets in which they operate, controlling for population size and other characteristics.

The welfare effects of our findings regarding cardiac technology diffusion are uncertain. Although the spread of technology is generally good for social welfare, this has not always been the case with health care technology. Large geographic differences in the provision of care and in spending on care cannot be explained by differences in the population treated and have not led to differences in health outcomes, suggesting that there is a great deal of waste. Cardiac treatments are typically quite profitable services for hospitals, and oversupply is a particular worry for the provision of services that tend to be profitable for providers. In fact, at the extreme, there have been distressing cases of hospitals and physician providing services, particularly profitable services such as cardiac treatments, to patients who did not need the intervention.

Although our study does not measure social welfare directly, the results suggest that current patterns of cardiac technology diffusion can either increase or decrease social welfare, depending on conditions of a health care market. Social welfare is enhanced if hospitals base their decisions to adopt on the existence of unmet medical need in their markets. And, there is some evidence that they are doing so. They are less likely to adopt a new service if the patients in their markets already have geographic access to a service at another hospital.

However, previous research finding little increase in geographic access to care suggests that adoption decisions are in fact driven by a competitor’s decision to adopt. Our results strongly support this finding. Although hospitals respond to the needs of potential patients to be within sixty minutes driving time of an invasive cardiac service, they also respond to the behavior of their competitors and adopt even if doing so duplicates existing services, failing to increase geographic access.

http://www.nber.org…

***

Comment:

By Don McCanne, M.D.

Single payer reform, as envisioned by Physicians for a National Health Program, is much more transformative than merely changing the payment process. One of the more important recommended changes is to convert for-profit entities, such as hospitals, into nonprofit status. Why should that matter?

For-profit business entities must place the interests of their investors first. Nonprofit health care entities place the interests of their patients first. Greedy business decisions are fundamental in the for-profit model which often detracts from optimal patient care, whereas the nonprofit grapples with budget problems in order to make decisions that work best for the patients.

This NBER study is an excellent example of that difference. The authors looked at crucial cardiac interventions – technical innovations that save lives. For-profit hospitals introduced these interventions as part of their competitive involvement in the medical arms race. It did not matter that the community was already being served with these technological advances; they introduced them to increase profits. After all, they are for-profit entities.

In contrast, nonprofit hospitals were less likely to duplicate these technologies if the patient needs were already being served in the community. An exception is that nonprofit hospitals in high for-profit markets were more likely to adopt the for-profit culture and duplicate the services. If the for-profit culture did not exist, it is much more likely that the nonprofits would select technology based on community need rather than profit potentials.

Greed, wasteful duplication of services, and diversion of health care dollars to passive investors are characteristics of the market-driven medical-industrial complex. We do not need nor want that in our health care system. A well designed single payer system includes regional planning and separate budgeting of capital improvements. Efficient and economical uses of resources serve the patients well.

Although we have had a surge of interest in single payer reform, we are now seeing a plethora of opinions, especially from supposedly progressive sources, that the disruption of single payer is not necessary and that we can get to an ideal system merely by simple adjustments such as adding a public option or allowing citizens to purchase Medicare or Medicaid coverage. But this approach would leave in place our fundamentally flawed health care financing infrastructure – by far the most expensive and least efficient model of financing health care. It would accomplish very little of what the PNHP model would.

Individuals touting these incremental steps need to take another look at the PNHP proposal and then explain to us just how their baby steps would ever get us to health care justice for all. Just as the touted gains of the Republican proposals proved to be hallucinatory, these touted gains of the progressives will never fill the vast void that a high performance health care system should be filling.

“Beyond the Affordable Care Act: A Physicians’ Proposal for Single-Payer Health Care Reform”:
https://www.pnhp.org/nhi

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

To: The Honorable Mitch McConnell, Majority Leader and The Honorable Charles Schumer, Minority Leader, United States Senate

From: Wanda D. Filer, MD, MBA, FAAFP, AAFP Board Chair

American Academy of Family Physicians, Letter, July 17, 2017

The American Academy of Family Physicians (AAFP), which represents 129,000 physicians and medical students, believes it is time to move beyond our current health care debate that is focused on repealing major portions of current law and seek bipartisan policies that build on our collective successes, address ongoing challenges, and improve our health care system for current and future citizens.

To this end, we offer the following policy recommendations for your consideration.

I. Make health care coverage more accessible and affordable

a. Provide an opportunity for individuals between 55 and 64 years of age, who purchase their insurance in the individual market, to purchase their health care coverage through a Medicare Advantage plan.

(Continues with recommendations to prioritize and promote primary care, to stabilize markets, and other recommendations)

http://www.aafp.org…

***

Comment:

By Don McCanne, M.D.

The inadequacies of the Affordable Care Act, followed by the failure of the Republicans to advance any semblance of a better health care system that they promised us, led a majority of Americans to support single payer reform. Opponents have inundated us with their non-substantive arguments against single payer, whereas many of the supposed proponents have reverted to advocacy of the “politically feasible” approach of incrementalism – particularly protecting and expanding the existing, fragmented system of private and public coverage.

In a couple of months, we have gone from calls for “single payer,” to calls for “single payer, but not now,” and now on to calls reverting to “anything but single payer.” In deflecting single payer, we are again seeing proposals to expand the market of private plans through the addition of a “public option,” or by allowing private purchase of Medicare or perhaps Medicaid. What is left unsaid is that these approaches are public in name only since the insurers will be there to be certain that the design features will make them non-competitive – products that are worse than their own private plans. (This already happened with the public option in ACA before it was completely eliminated after Sen. Joe Lieberman’s tantrum.)

The Board of Directors of The American Academy of Family Physicians (AAFP) is now asking the U.S. Senate to support the private insurance markets by adding a choice of private Medicare Advantage plans for individuals over 55. They have not suggested an option of purchasing coverage under the traditional Medicare program. These are private plans with limited provider networks. Worse, they are overpriced because of favorable selection and gaming of risk adjustment – characteristics of private markets.

This may not seem like a very big deal, but it is, and here’s why.

Last year the AAFP Congress of Delegates passed a resolution calling for a study of “a national publicly-financed, privately-delivered health care system for all Americans” and asking that a report be presented to the 2017 Congress of Delegates meeting to be held mid-September in San Antonio, Texas. The report has been prepared, though access is restricted.

Based on the letter to the United States Senate, it can be surmised that the Board and its MD, MBA Chair likely will not be recommending to the Congress of Delegates that AAFP go on record as supporting single payer reform. The Board’s advocacy for using privatized Medicare to expand coverage does not seem to be consistent with an incremental step towards single payer Medicare for all.

Also to be presented to the Congress of Delegates is a resolution from the New York chapter calling for the American Academy of Family Physicians to endorse a national single payer health care system. Considering that the AAFP leadership has already departed on a different route, we should be concerned about whether this resolution can clear the political barriers in the Congress of Delegates.

AAFP members may want to let their delegates know if they are in favor of AAFP officially supporting single payer reform. AAFP members can also access the restricted report on the study of single payer, which includes the assessment of the Board. They may wish to send a message on the Board’s conclusions. Finally, AAFP members may also want to express their views as to the Board’s proposal to the U.S. Senate to introduce Medicare Advantage private plans as a “public option” – an obvious redirection away from a public single payer system.

AAFP Board of Directors Report F to the 2017 Congress of Delegates: Single Payer Health Care System (restricted access):
http://www.aafp.org…

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