PNHP

America cannot be a superpower with a substandard health care system

America cannot be a superpower with a substandard health care system

By Ahmed Kutty, M.D.
Monadnock Ledger-Transcript (Peterborough, N.H.), Aug. 16, 2016

In July 1965, President Lyndon Johnson had to settle for half a loaf, in lieu of the full loaf that three predecessors in The White House (Teddy Roosevelt in 1912, FDR in 1935 and Harry Truman in 1948) had proposed or attempted to legislate: a national health plan. The compromise reached, accommodating powerful opposing interest groups, gave us the Social Security Title XVIII Act, better known as Medicare, which went into effect 50 years ago this July.

Now in its “middle age,” the program has a proven track record of success in its mission of providing publicly financed health care for America’s seniors. Given its enduring popularity, it is time to review the stance of our two major political parties on health care security in general and Medicare in particular.

The Republicans in their long-awaited plan, recently authored by House Speaker Paul Ryan and offered after acrimonious and divisive attempts at a “repeal and replace” campaign launched in response to the Affordable Care Act (Obamacare) of 2010, seek to gut most of the significant gains achieved by the ACA. Their plan calls for slow, steady and subtle attempts to privatize and eventually kill the Medicare program as we know it today.

Starving by funding cuts to traditional Medicare, generous funding of the part-privatized Medicare Advantage plans and granting rule-making discretion to compliant federal agencies are some of their tools to bring about the demise of the social insurance program for the health care of seniors, who would then be on the hook for huge medical bills when a major or catastrophic illness strikes.

Then “you are on your own,” which is consistent with the zeitgeist as perceived by the Republican Party.

No surprise there!

The Democrats are saying that we have delivered the best reform in 2010 and are now on to other priorities. The fact that about 27 million Americans will remain uninsured and about 30 million underinsured after full implementation of the ACA in 2018, remain just numbers in the political calculus of the party elite. Martin Luther King’s words, “Of all forms of inequality, injustice in health care is the most shocking and inhuman,” fall on deaf ears within today’s Democratic Party. Any party in America that will heed King’s call appeared destined for political extinction until recently.

Among the major party presidential candidates, Sen. Bernie Sanders provided the most powerful, galvanizing and unwavering support for “Medicare for All”: a bold move to establish a national health care plan. Negotiations in July between the campaigns of Clinton and Sanders led to compromise, and the Democratic Party platform now promises (1) to lower the eligibility age for Medicare to 55, (2) to offer a public option in the ACA exchanges, (3) to lift the ban on Medicare from negotiating drug pricing and (4) to increase funding for qualified Community Health Centers. Alas, platform promises are non-binding.

While welcome, the incremental approach of the Democratic establishment, including Obama and Clinton, is a far cry from the much-needed basic structural reform of financing our health care system, as advocated by Sanders and others, and embedded in the bills before Congress: S. 1782 in the Senate by Sanders (and Rep. Jim McDermott’s companion bill on the House side) and H.R. 676, sponsored by Rep. John Conyers of Michigan.

The details in these bills show the plans’ financial viability and fiscal soundness, to cover all 320 million Americans under a universal, comprehensive, publicly funded program for financing health care at a cost to the nation that would be less, by a half a billion dollars, than we spend currently.

A majority of health care economists agree that that our health care costs of $3 trillion a year, amounting to 18 percent of our GDP, are unsustainable. All other major advanced economies spend an average of 9 to 10 percent of their GDP and secure coverage for all their residents. Per capita we expend $18,000 per year while Canada, the EU countries, Japan, Taiwan and Australia, among others, get all necessary health care for their citizens at approximately $9,000 per capita annually.

An average family with an annual household income of $55,000, currently paying about $11,000, including premiums and out-of-pocket deductibles, would pay $4,000 a year as taxes under the national plan and get far better, comprehensive coverage with no premiums, deductibles or copays. For about $5,000 to $6,000 – and by some estimates no more than $9,000 a year per household – we could have a publicly funded, privately delivered (as we do now) program in which everybody is in and nobody out. We must agree with President Truman, who said in 1948, that “We as a nation can afford this.”

A century ago, Lloyd George, the British prime minister during World War I, said: “You cannot run an A1 empire with a C3 population.”

We, the people, must send a message, loud and clear, to our elected leaders and candidates for offices from president on down, that America cannot build an A1 21st-century economy, and remain a superpower, with a C3 health care system. For the law stating that the arc of the moral universe bends toward justice to be operational, people must do the bending.

Dr. Ahmed Kutty is a retired physician who lives in Peterborough.

http://www.ledgertranscript.com/

PNHP note: Physicians for a National Health Program is a nonpartisan educational organization. It neither supports nor opposes any candidate for public office.

Dr. Steffie Woolhandler on ‘The Real News Network’

PNHP co-founder Dr. Steffie Woolhandler appeared on “The Real News Network” on Aug. 19, 2016, to discuss Aetna’s decision to withdraw from the Affordable Care Act marketplace in most of the states where it currently operates. A transcript of her interview with host Jaisal Noor is available on The Real News Network website, here.

CMS response to steering dialysis patients to private plans

CMS examines inappropriate steering of people eligible for Medicare or Medicaid into Marketplace plans

Centers for Medicare and Medicaid Services, August 18, 2016

The Centers for Medicare & Medicaid Services (CMS) today issued a request for information seeking public comment on concerns that some health care providers and provider-affiliated organizations may be steering people eligible for, or receiving, Medicare and/or Medicaid benefits into Affordable Care Act-compliant individual market plans, including Health Insurance Marketplace plans, for the purpose of obtaining higher reimbursement rates. CMS also sent letters to all Medicare-enrolled dialysis facilities and centers informing them of this announcement.

The request for information and letters to providers focus on situations where patients may be steered away from Medicare or Medicaid benefits, which can among other concerns, result in beneficiaries experiencing a disruption in the continuity and coordination of their care as a result of changes to their network of providers.

In addition to asking for more information on instances of problematic steering of consumers to individual market plans, CMS is also considering potential regulatory and operational options to prohibit or limit premium payments and routine waiver of cost-sharing for qualified health plans by health care providers, revisions to Medicare and Medicaid provider enrollment rules, the imposition of civil monetary penalties for individuals that fail to provide correct information about consumers enrolling in a plan, and potential changes that would allow issuers to limit their payment to health care providers to Medicare-based amounts for particular services and items of care.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-08-18-2.html

***

Comment:

By Don McCanne, M.D.

In a previous message we described how some dialysis centers were steering patients away from Medicare and Medicaid and into private plans which have much higher payment rates. CMS is now assessing this problem and considering various measures to address it.

CMS’s primary concern seems to be that they want to protect the private insurers from high cost patients, especially in light of the fact that the nation’s largest private insurers are withdrawing from the ACA exchanges because of their exposure to high needs patients. The punitive interventions they suggest are aimed at the providers rather than the insurers. Particularly noteworthy is the recommendation to allow private insurers to reduce their provider payments down to Medicare rates.

If CMS established the principle that they can have recourse to price controls for privately insured patients, then why should we have to continue to pay the private plans extra for their superfluous administrative excesses and investor returns?  For that matter, why should we continue with an inefficient, fragmented health care financing system wherein our public administrators are bending over backwards to cater to the private insurers at an extra cost to those of us paying the bills?

In these thousands of daily messages on the heaps of rotten policies in health care financing it seems like there must be a pony in here somewhere. Single payer, perhaps?

CMS response to steering dialysis patients to private plans

CMS examines inappropriate steering of people eligible for Medicare or Medicaid into Marketplace plans

Centers for Medicare and Medicaid Services, August 18, 2016

The Centers for Medicare & Medicaid Services (CMS) today issued a request for information seeking public comment on concerns that some health care providers and provider-affiliated organizations may be steering people eligible for, or receiving, Medicare and/or Medicaid benefits into Affordable Care Act-compliant individual market plans, including Health Insurance Marketplace plans, for the purpose of obtaining higher reimbursement rates. CMS also sent letters to all Medicare-enrolled dialysis facilities and centers informing them of this announcement.

The request for information and letters to providers focus on situations where patients may be steered away from Medicare or Medicaid benefits, which can among other concerns, result in beneficiaries experiencing a disruption in the continuity and coordination of their care as a result of changes to their network of providers.

In addition to asking for more information on instances of problematic steering of consumers to individual market plans, CMS is also considering potential regulatory and operational options to prohibit or limit premium payments and routine waiver of cost-sharing for qualified health plans by health care providers, revisions to Medicare and Medicaid provider enrollment rules, the imposition of civil monetary penalties for individuals that fail to provide correct information about consumers enrolling in a plan, and potential changes that would allow issuers to limit their payment to health care providers to Medicare-based amounts for particular services and items of care.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-08-18-2.html

In a previous message we described how some dialysis centers were steering patients away from Medicare and Medicaid and into private plans which have much higher payment rates. CMS is now assessing this problem and considering various measures to address it.

CMS’s primary concern seems to be that they want to protect the private insurers from high cost patients, especially in light of the fact that the nation’s largest private insurers are withdrawing from the ACA exchanges because of their exposure to high needs patients. The punitive interventions they suggest are aimed at the providers rather than the insurers. Particularly noteworthy is the recommendation to allow private insurers to reduce their provider payments down to Medicare rates.

If CMS established the principle that they can have recourse to price controls for privately insured patients, then why should we have to continue to pay the private plans extra for their superfluous administrative excesses and investor returns?  For that matter, why should we continue with an inefficient, fragmented health care financing system wherein our public administrators are bending over backwards to cater to the private insurers at an extra cost to those of us paying the bills?

In these thousands of daily messages on the heaps of rotten policies in health care financing it seems like there must be a pony in here somewhere. Single payer, perhaps?

Medicare Advantage plans pay hospitals less than does traditional Medicare

By Laurence C. Baker, M. Kate Bundorf, Aileen M. Devlin and Daniel P. Kessler
Health Affairs, August 2016

Abstract

There is ongoing debate about how prices paid to providers by Medicare Advantage plans compare to prices paid by fee-for-service Medicare. We used data from Medicare and the Health Care Cost Institute to identify the prices paid for hospital services by fee-for-service (FFS) Medicare, Medicare Advantage plans, and commercial insurers in 2009 and 2012. We calculated the average price per admission, and its trend over time, in each of the three types of insurance for fixed baskets of hospital admissions across metropolitan areas. After accounting for differences in hospital networks, geographic areas, and case-mix between Medicare Advantage and FFS Medicare, we found that Medicare Advantage plans paid 5.6 percent less for hospital services than FFS Medicare did. Without taking into account the narrower networks of Medicare Advantage, the program paid 8.0 percent less than FFS Medicare. We also found that the rates paid by commercial plans were much higher than those of either Medicare Advantage or FFS Medicare, and growing. At least some of this difference comes from the much higher prices that commercial plans pay for profitable service lines.

From the Discussion

Knowing how Medicare Advantage prices compare to those of FFS Medicare is important for public policy. Health spending is the product of price and quantity. If Medicare Advantage prices are lower than those of FFS Medicare, then Medicare can obtain the same quantity of services for less money through Medicare Advantage than through FFS Medicare.

Contrary to conventional wisdom, we found that Medicare Advantage plans paid lower prices for hospital services than FFS Medicare — around 8 percent lower in both 2009 and 2012 — once the DRG and geographic-area mix of FFS Medicare was made comparable to those of Medicare Advantage.

If differences in hospital mix are also accounted for, Medicare Advantage’s hospital prices are about 5.6 percent less than those of FFS Medicare. Thus, about a third of the 8 percent difference is attributable to the narrower hospital networks in Medicare Advantage, compared to FFS Medicare.

Our results also show how Medicare Advantage can be used to get a better deal (at least from hospitals) for the Medicare program as a whole, by adjusting administered prices across geographic areas and DRGs to better reflect the market.

Finally, consistent with previous research, we found that the rates commercial plans pay to hospitals are significantly higher than those of either Medicare Advantage or FFS Medicare and that they are rising.

http://content.healthaffairs.org/content/35/8/1444.abstract

The pro-market authors of this study have shown that the private Medicare Advantage plans pay hospitals less than traditional Medicare pays, concluding that the private plans “get a better deal for the Medicare program.” But that conclusion is not true if you look at the whole picture.

Because the private Medicare Advantage plans were being paid more than what was being paid for comparable care in the traditional Medicare program, Congress included in the Affordable Care Act adjustments to reduce the overpayments. However, the private plans have continued with their mastery of gaming the system to increase their payment rates, such as selective marketing to healthier populations and upcoding to receive greater payments through risk adjustment. This has been with the complicity of the people in HHS who have used innovative administrative tools and creative accounting to more than offset the required reductions. The private plans are still receiving greater payments than are being made for comparable patients in the traditional Medicare program.

Since the private plans are receiving larger payments, and, according to this study, are paying less for health care, the Medicare program is getting a worse deal, and it is the private insurers themselves who are getting a great deal, at a cost to taxpayers. This extra money that the insurers are siphoning out of the system is going to overpriced administrative services and, yes, to extra profits.

Although the private insurers are pulling out of the ACA exchanges because they cannot make their business model work there, they boast to their investors that their commercial accounts are highly profitable (employer-sponsored plans) and that their government accounts – especially the Medicare Advantage plans – are producing extraordinary returns for the investors (and humongous compensation packages for the corporate executives). We are paying for this through higher premiums for private plans and greater taxes for privately-managed government programs. A well designed single payer system should fix that.

Dr. Andy Coates: Single payer will enhance our lives across the board

The following is a lightly edited, unofficial transcript of the second half of an interview that Dr. Andrew D. Coates gave to Ed “Flash” Ferenc, host of the labor-oriented, Cleveland-based America’s Work Force Radio, WERE AM 1490, on March 30, 2016. Dr. Coates is immediate past president of Physicians for a National Health Program.

In this segment of the interview, Dr. Coates talks about how a single-payer, improved-Medicare-for-All system would benefit everyone who lives in the United States. In the first half of the interview (not transcribed here), Dr. Coates describes how he came to support single payer, how a majority of physicians now support it, and how the Affordable Care Act, despite the gains it has achieved, has failed to resolve the health care crisis in the U.S. and has actually strengthened the hand of the for-profit sectors of health care, whose interests run counter to the nation’s health.

The audio of the entire program is available at http://awfradio.com/todays-show-3-30-16/. The first segment of the interview with Dr. Coates runs from the 17:20-minute mark to 27:30; the second segment, transcribed below, runs from the 30-minute mark to 54:38.

HOST ED ‘FLASH’ FERENC: [We’re speaking with] Dr. Andy Coates, Physicians for a National Health Program. He’s a professor of medicine at Albany Medical College. We’re here to talk about taking Medicare as you know it and expanding it to everybody in America. Now this is not a new system. Other countries have used this system that you’re talking about, that you’re supporting, and it’s working, right?

Dr. Andy CoatesANDREW COATES, M.D.: Indeed. Every other industrialized nation has some version of this system. We could talk about a program where the government owns all of the health care infrastructure and pays the caregivers – nurses, doctors, pharmacists, and so on – directly; that would be like the National Health Service in Scotland now or as it used to be in England. There are some other examples.

And there are systems like the Canadian, Taiwanese, New Zealand systems, where the government pays the bills but where the health care infrastructure remains privately owned and operated, but operated on a not-for-profit basis.

Then there are some hybrid models that came from the 19th century, where there is some version of “private insurance,” but the private insurance is usually – as in Germany or other European nations – where the private insurance doesn’t correspond to UnitedHealthcare, Aetna or the kind of insurers in the United States. It’s an insurance fund that came through religious health organizations or through the labor movement, unions, or from communities. These are heavily regulated and controlled by the government to make sure that everybody’s in, and nobody’s out. So to call those systems private insurance systems is really a misnomer.

So the way of organizing the payment of care is, in my view, the beginning of the way to organize the delivery of care. If you don’t have control over the elements that go into the system, then how can you make the system serve the people in the right way? It seems to me that in a modern democracy, health care being so essential to our lives, that we absolutely would have to have control over how everyone in the country has access to the best possible care. That would be a key responsibility of a truly democratic government.

HOST: So the plan that’s on the table right now, this is a piece of legislation that has been introduced, it’s House Resolution 676, it’s called the Expanded and Improved Medicare for All Act: I know it’s been introduced and reintroduced a number of times. John Conyers of Michigan is supporting it. It’s my understanding that there are about 60, maybe 70 members of the Congress that are behind it. It’s just a fraction – you’d need a whole lot more support. But you’re in favor of that bill, which would take essentially Medicare, the way we have it right now, and expand it to everybody – every man, woman and child in the United States – is that right?

COATES: Yes. The Medicare for All Act, or H.R. 676, is a very, very useful document. Listeners should look it up. It’s short; if you print it out, it’s about 30 pages – easy to read. It’s a blueprint of a system that we know, — from the great deal of health policy evidence, — would absolutely work. It would cover all necessary care, there would be no copays or deductibles.

By all necessary care, I’m taking about all prescription drugs – here, I’ll just read it to you: primary care and prevention, dietary and nutritional therapies, inpatient care, outpatient care, emergency care, prescription drugs, durable medical equipment, long-term care, palliative care, mental health services, the whole scope of dental services, including periodontics, oral surgery, and endodontics, but excluding cosmetic dentistry, substance abuse treatments, chiropractic services, not including electrical stimulation, basic vision care and vision correction (other than laser vision correction), hearing services, including coverage of hearing aids, and podiatric care.

So all necessary care. Many of these things are not presently covered by Medicare, so it would expand and improve Medicare.

And this idea would exclude charges due at the point of service by patients. And that’s very important. It’s been very popular for the last decade or so to talk about “skin in the game” – you know, making patients go shopping for care when they’re sick, as the way to drive down prices. This has become a talking point, and this is very much the kind of neoliberal nuttiness that led to the Affordable Care Act, which has the taxpayers subsidizing the private insurance companies. You know, the idea is that if people don’t pay for their care when they’re sick, then they won’t understand how things work. But it turns out that if people are asked to pay charges for necessary care, they will avoid necessary care. There’s a wealth of evidence that will show that, in all kinds of different ways.

So this bill, H.R. 676, will actually work for the patients, and it will take us in the direction that we need to go. On the one hand there’s a big question about how it would be paid for and I’d be glad to talk with you about that. But the other thing that I’d really like to talk to your listeners about is to think about what it would mean for our daily lives if we had a system like this.

HOST: Let’s start with No. 1, how we’re going to pay for it. Because you know the conservatives are going to say, “Oh, we can’t afford it.”

COATES: Well, it’s not just the conservatives. That’s what Hillary Clinton’s advisers have been yelling to the public too. I think that Hillary Clinton’s campaign has come out attacking this idea that we should have a national health program. Look – all of the existing – if you look at the taxpayer money in the United States that is funding health care right now – all of this calculated on a per-person cost basis, a majority of the care is already funded by taxpayers in the U.S. And if you compare the U.S. level of spending with all the other nations on the planet, the United States spends more taxpayer money on health care per person than any other nation spends in total. It’s an astonishing thing. On a per-person basis, we have more taxpayer money spent on health care than any other nation spends in total on health care.

So there’s plenty of money in the U.S. system already, plenty of taxpayer money. If the existing sources in our employer-based system – you know, the employers pay huge amounts into the insurance companies to cover their employees – I’m taking about the big employers that have the big plans, if that money were put into the system, there would be plenty of resources to cover everyone.

But more, there would be enormous savings of hundreds of billions of dollars because there’s an enormous amount of waste in having a myriad, a great big pile of insurance companies fighting over every penny – with the hospitals and doctors’ offices having many people, whole departments to fight for the money. Hospitals might have hundreds of coders and billers trying to fight for the money. There’s this incredible administrative waste, waste that comes down to chasing money in the system.  That would be eliminated, and so there would be hundreds of billions of dollars in savings there.

In addition, in the Conyers bill, H.R. 676, would convert the system to a not-for-profit basis. There’s a spectacular amount of waste in profits and profit-seeking. It might be difficult to make a hefty profit off the care of a sick person, but the effort to do so brings with it a great deal of administration. So when it comes to pharmaceutical prices and medical equipment, all kinds of efficiencies could be found in the system if there were only one payer – in other words, the pharma companies would have to bargain with the people over prices. So the savings in the single-payer system would be spectacular from that point of view, and could liberate all of those resources so we could cover everyone.

There’s also a myth that some of the uninsured and sick patients would come flocking into the system and that would burden the system unduly. It turns out that, for example, when Medicare was built, and that was when the elderly in the United States had no one to pay for their care, it wasn’t the case that patients overwhelmed the system.

Furthermore, the single payer, because now we’d have a way for every patient’s care to be compensated, we could plan to expand our health system – I think of some of the rural counties here in upstate New York that don’t really have hospitals or adequate clinics. Those places could now afford to have them. And so the expansion of care could take place could take place in a planned way.

HOST: If you think back to when Medicare was debated back in the ’60s – Medicare was instituted in 1965 under Lyndon Baines Johnson – the same arguments that you’re hearing today, “Oh, you can’t do that!” In fact, Ronald Reagan, as I recall, was one of the big opponents of Medicare. “It’s socialistic, they do that in communist countries, we can’t do that!” Now, if you ask a senior today what they thought of Medicare, they’d say it’s the best thing since sliced bread. So this would basically take Medicare and expand it to everybody. I tell you, we have a long way to go. We need to educate people on this. Let me ask you one more question before you go. Do you feel, as a doctor, as a medical professional, that eventually this is going to happen – because of the high cost of health care under the Affordable Care Act, that this is the only way to solve the situation of getting access to health care in America? What are your thoughts on that?

COATES: If the goal is to cover absolutely everybody, to make sure that all necessary care is attainable, so we don’t have the undesirable situation where many people are completely left out, lost to medical follow-up, not able to access the clinic … if the goal is to do that, and also to keep the costs from spiraling completely out of control, and to help control costs overall, then, this is the only system that’s going to work.

The other thing I’ve learned though, in my travels around over the last 10 years or so, talking to many different audiences – way beyond some kind of FOX News feature where there’s a phony debate about whether some people “deserve to die” of illnesses that they never asked for – I think virtually everyone believes that if you’re sick, you should be able to get the best possible care. It doesn’t matter if you live in the city or the countryside, if you’re wealthy or poor, in an African American community, Latino – it doesn’t matter.

HOST: Right.

COATES: Because that’s the way it should be. That’s what everyone understands, in some way. I hope what will happen, and I think what will happen, is what we’ll start to understand is how liberating it would be if we didn’t have to get health care through our employer, or through our spouse, or through our parents.

What it would mean to us if we didn’t have to worry about our children being unsafe, meaning without health care – getting out of high school and looking for work – at time of stress and insecurity for them, as they find their way? Imagine how liberating it would be for them not to have to worry about health care.

Imagine what it would mean for the union movement. It’s very hard to organize unions when the thought of a strike means they’ll discontinue your health insurance, and that means that your wife won’t have access, or for a working woman to keep her job because her husband ended up getting multiple sclerosis and she is afraid to leave, the “job lock” phenomenon.

Really, when it comes to health care, there are so many insecurities in our personal lives – for instance with a parent has to transition to nursing home because of a devastating stroke. This should not be a time when the whole family, I mean the expanded family, should have its finances decimated, with brothers and sisters, cousins all drawn into it because of one person’s health care crisis. This is really a terrible situation and undignified and all too common in the United States. 

But if you look at it the other way, how liberating it would be, how proud people would be of this country, if that were not an issue. Proud to know that the system would be there, ready for us, and the system was designed around the patients. I really think that’s completely attainable. I don’t think it’s that radical. I think it’s a very modest reform, if you will. It wouldn’t threaten anything – it would actually enhance life across the board. It would not only work but be a great thing for public pride.

HOST: There you go. Well said. If you want more information on this, here’s the website: pnhp.org, Physicians for a National Health Program. Dr. Coates, we love having you on the show. Let’s keep this conversation going. So maybe one of these days Congress will move forward and do the right thing.

COATES: Also, there are hundreds of unions that have endorsed H.R. 676 and it continues to be a great campaign. Let’s build the word of mouth about it in the union movement. We’re hopeful that the unions can show us the way forward.

HOST: So you keep up the fight, OK?

COATES: Thanks.

http://awfradio.com/todays-show-3-30-16/

Why I’m at odds with my party on health care

By Jack Bernard
Georgia Health News, Aug. 18, 2016

“Not everything that is faced can be changed, but nothing can be changed until it is faced.” (James Baldwin)

With a proven record of cutting waste and reducing spending, I am a fiscally conservative Republican, as well as a health care professional. But the Georgia GOP legislative leadership and I have reached very different conclusions about Medicaid expansion and the Affordable Care Act (ACA).

Nationally, my party has passed legislation in the House more than 50 times to repeal the ACA, also known as Obamacare. The ACA was implemented anyway and shows no sign of going away. So, is the ACA working? And what about Medicaid expansion here?

I was a senior corporate and government planner. Planners evaluate programs in one of two ways, based on: 1) history, or 2) the ideal.

I will address the historical method first.

According to both federal officials and a 2014 Gallup report, there has been a precipitous drop in the number of uninsured people under the ACA. The U.S. Department of Health and Human Services states that the national rate of uninsured is 9 percent for the overall population and 12 percent for those under 65. According to HHS, the ACA has been responsible for covering 20 million more Americans since it was enacted.

Medicaid expansion was a key factor in realizing this drop in most states, although not here. Republicans, like other Georgians, should be concerned that Georgia now has the third-highest rate of uninsured in the nation.

Demographically, the national decrease is uneven. The rate dropped much more for Hispanics (from 42 percent down to 21 percent) and blacks (from 22 percent to 10 percent) than for whites (from 14 percent to 7 percent). It should be no surprise that, according to surveys, the ACA is more popular among Hispanics and African-Americans.

Likewise, according to Gallup, the drop in the rate of uninsured was greatest in those under $36,000 in household income (from 31 down to 25 percent). Among higher-income households, the drop was much less.

In Georgia, 74 percent of those in the “coverage gap” are minorities.

I do not know exactly what influences the thinking of the Georgia GOP leadership when it comes to expanding coverage. But I am very concerned when key legislators make unsubstantiated — and factually incorrect — statements, such as saying that Medicaid expansion would cover “Georgians who are fully capable of getting a job that would provide them with private health insurance.”

Of Georgians in the coverage gap (low-income people who don’t qualify for either Medicaid or ACA exchange discounts), 57 percent are in working families. Surely our GOP legislative leaders know some low-income working people. Do they seriously believe that these men and women do not want good jobs that provide them with health insurance?

Regarding the second evaluation method, comparing the ACA to the ideal is much more difficult. When researching the developed world for other insurance models, we find that there is no need for something like Medicaid expansion (or weird “waivers”). All of these nations cover everyone under a coordinated, comprehensive system.

There is the direct government delivery model. Britain has had a National Health Service since the end of World War II. Our experience with this format has not been as positive, as shown by the VA scandals.

Another system used in some European nations is to have a small number of highly regulated private insurance carriers, where everyone gets coverage. These nations all have lower costs and better outcomes than here.

Finally, there is the model in which the government provides insurance covering to all citizens. The Canadian system can be likened to a “Medicare for All” program here, where it would cover every citizen. Surveys have shown a high level of satisfaction among Canadians with their system.

But what about cost? Let’s look at a 2013 report from the Organization for Economic Cooperation and Development (OECD), which includes all the developed nations worldwide.

With our fragmented system, we spend 17.7 percent of our GDP on health care. Canada spends only 11.2 percent and covers everyone. Many other nations spend much less. Australia, for instance, spends just 8.9 percent. The average OECD nation spends only 9 percent.

Per capita, we spent $8,508 for health care in 2011. Canada came in at $4,522. The average OECD (developed nation) spent only $3,339 per capita!

Oddly, we spent more tax dollars on health care (VA, Medicare, Champus, Medicaid, etc.) than almost any other developed nation. We just do not spend our money as wisely. Pandora’s box regarding cost escalation was opened here a long time ago by Big Pharma and private insurance companies.

And, according to a 2013 report by the Institute of Medicine, of 17 high-income countries examined, we are at the bottom in many health indicators.

In 1960, life expectancy in the United States was 1.5 years above the OECD average. In 2011, our nation was 1.5 years below the other OECD nations.

So, what can we conclude about the ACA? First, it is much better than what we had before, regarding health care access and coverage.

Secondly, a Canadian-style “Medicare for All” system would cover everyone — and at less cost — clearly a better option than the current ACA and its Medicaid expansion provisions.

I agree with our state GOP leaders that the ACA is imperfect, but it is what we have in the short term to provide coverage to the uninsured. My question to these leaders is: “Why aren’t you advocating for Medicaid expansion instead of for depriving the working poor of insurance coverage?”

Jack Bernard is a former Director of Health Planning for the state of Georgia. He retired as an executive with a national health care corporation.

http://www.georgiahealthnews.com/2016/08/odds-party-health-care/

Medicare Advantage plans pay hospitals less than does traditional Medicare

By Laurence C. Baker, M. Kate Bundorf, Aileen M. Devlin and Daniel P. Kessler
Health Affairs, August 2016

Abstract

There is ongoing debate about how prices paid to providers by Medicare Advantage plans compare to prices paid by fee-for-service Medicare. We used data from Medicare and the Health Care Cost Institute to identify the prices paid for hospital services by fee-for-service (FFS) Medicare, Medicare Advantage plans, and commercial insurers in 2009 and 2012. We calculated the average price per admission, and its trend over time, in each of the three types of insurance for fixed baskets of hospital admissions across metropolitan areas. After accounting for differences in hospital networks, geographic areas, and case-mix between Medicare Advantage and FFS Medicare, we found that Medicare Advantage plans paid 5.6 percent less for hospital services than FFS Medicare did. Without taking into account the narrower networks of Medicare Advantage, the program paid 8.0 percent less than FFS Medicare. We also found that the rates paid by commercial plans were much higher than those of either Medicare Advantage or FFS Medicare, and growing. At least some of this difference comes from the much higher prices that commercial plans pay for profitable service lines.

From the Discussion

Knowing how Medicare Advantage prices compare to those of FFS Medicare is important for public policy. Health spending is the product of price and quantity. If Medicare Advantage prices are lower than those of FFS Medicare, then Medicare can obtain the same quantity of services for less money through Medicare Advantage than through FFS Medicare.

Contrary to conventional wisdom, we found that Medicare Advantage plans paid lower prices for hospital services than FFS Medicare — around 8 percent lower in both 2009 and 2012 — once the DRG and geographic-area mix of FFS Medicare was made comparable to those of Medicare Advantage.

If differences in hospital mix are also accounted for, Medicare Advantage’s hospital prices are about 5.6 percent less than those of FFS Medicare. Thus, about a third of the 8 percent difference is attributable to the narrower hospital networks in Medicare Advantage, compared to FFS Medicare.

Our results also show how Medicare Advantage can be used to get a better deal (at least from hospitals) for the Medicare program as a whole, by adjusting administered prices across geographic areas and DRGs to better reflect the market.

Finally, consistent with previous research, we found that the rates commercial plans pay to hospitals are significantly higher than those of either Medicare Advantage or FFS Medicare and that they are rising.

http://content.healthaffairs.org/content/35/8/1444.abstract

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Comment:

By Don McCanne, M.D.

The pro-market authors of this study have shown that the private Medicare Advantage plans pay hospitals less than traditional Medicare pays, concluding that the private plans “get a better deal for the Medicare program.” But that conclusion is not true if you look at the whole picture.

Because the private Medicare Advantage plans were being paid more than what was being paid for comparable care in the traditional Medicare program, Congress included in the Affordable Care Act adjustments to reduce the overpayments. However, the private plans have continued with their mastery of gaming the system to increase their payment rates, such as selective marketing to healthier populations and upcoding to receive greater payments through risk adjustment. This has been with the complicity of the people in HHS who have used innovative administrative tools and creative accounting to more than offset the required reductions. The private plans are still receiving greater payments than are being made for comparable patients in the traditional Medicare program.

Since the private plans are receiving larger payments, and, according to this study, are paying less for health care, the Medicare program is getting a worse deal, and it is the private insurers themselves who are getting a great deal, at a cost to taxpayers. This extra money that the insurers are siphoning out of the system is going to overpriced administrative services and, yes, to extra profits.

Although the private insurers are pulling out of the ACA exchanges because they cannot make their business model work there, they boast to their investors that their commercial accounts are highly profitable (employer-sponsored plans) and that their government accounts – especially the Medicare Advantage plans – are producing extraordinary returns for the investors (and humongous compensation packages for the corporate executives). We are paying for this through higher premiums for private plans and greater taxes for privately-managed government programs. A well designed single payer system should fix that.

To Sanders, Aetna’s Pull-Back from Affordable Care Act Markets Shows Need for Overhaul

By Laura Meckler
The Wall Street Journal, Aug. 16, 2016

Sen. Bernie Sanders, who mounted a strong challenge for the Democratic presidential nomination, said Tuesday that news that a major health insurer was pulling back its participation in the Affordable Care Act exchanges affirms the need for his single-payer, government-run program. He promised to introduce legislation creating “Medicare for all” again next year.

This week, Aetna Inc. said it will withdraw from 11 of the 15 states where it currently offers plans, the latest major national insurer to sharply pull back its participation.

Rather than minimizing the problem, Mr. Sanders cast Aetna’s decision is part of a trend.

“It is disappointing that Aetna has joined other large for-profit health insurance companies in pulling out of the insurance marketplace,” he said in a statement. “Despite the Affordable Care Act bringing them millions more paying customers than ever before, these companies are more concerned with making huge profits then ensuring access to health care for all Americans.”

He added: “The provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible.”

The statement makes clear that he intends to continue fighting for his agenda from the Senate, possibly in opposition to a future President Hillary Clinton.

The health exchanges have been attacked from the political right as too much government, but also criticized from the left as not going far enough. Throughout the Democratic presidential primary, Mr. Sanders argued that only a government-run system can guarantee affordable coverage for all. Former Secretary of State Hillary Clinton, who won the nomination, says more modest tweaks to the Affordable Care Act can address its shortcomings.

To win his endorsement, Mrs. Clinton also reiterated her support for a government-run insurance plan to compete with private insurers, but she has said little about that plan on the campaign trail.

http://blogs.wsj.com/washwire/2016/08/16/to-sanders-aetnas-pull-back-from-affordable-care-act-markets-shows-need-for-overhaul/

Bernie Sanders is not giving up on Medicare for all

Sanders Statement on Aetna’s Decision to Withdraw from Health Insurance Exchanges

By Senator Bernie Sanders
August 16, 2016

U.S. Sen. Bernie Sanders (I-Vt.) issued the following statement Tuesday after Aetna announced plans to withdraw from Affordable Care Act health exchanges in 11 of 15 states where it currently operates:

“It is disappointing that Aetna has joined other large for-profit health insurance companies in pulling out of the insurance marketplace. Despite the Affordable Care Act bringing them millions more paying customers than ever before, these companies are more concerned with making huge profits than ensuring access to health care for all Americans. 

“In my view, the provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible. That is why we need to join every other major country on earth and guarantee health care to all as a right, not a privilege. That is also why we need to pass a Medicare-for-all single-payer system. I will reintroduce legislation to do that in the next session of Congress, hopefully as part of the Democratic Senate majority.”

http://www.sanders.senate.gov/newsroom/press-releases/sanders-statement-on-aetnas-decision-to-withdraw-from-health-insurance-exchanges

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Comment:

By Don McCanne, M.D.

Since the Clinton Camp was successful in keeping single payer out of the Democratic Party platform, much of the media seems to believe that it has completely gone away as an issue. The good news is that Bernie Sanders assures us that it hasn’t. We need to do our part to be sure that the nation knows that.