PNHP

‘Out in the Cold:’ America’s deadly un-insurance problem

‘Out in the Cold:’ America’s deadly un-insurance problem

By Brenda Gazzar
Code Wack Podcast, September 19, 2022

How do we know that nearly 340,000 Americans died during the pandemic because they did not have health insurance? How does this compare to American deaths related to un-insurance during a non-COVID year? How could the U.S. have saved $5 billion or more in healthcare costs during the pandemic? 

To find out, we spoke to James G. Kahn, MD/MPH, a professor emeritus of health policy, epidemiology, and global health at the University of California, San Francisco. An expert in health policy and economics, he’s an advisor for Code WACK! as well as editor and primary blogger for Health Justice Monitor.

Transcript

Dispatcher: 911, what’s your emergency?

Caller: America’s healthcare system is broken and people are dying!

(ambulance siren)

Welcome to Code WACK!, where we shine a light on America’s callous healthcare system, how it hurts us and what we can do about it. I’m your host, Brenda Gazzar.

This time on Code WACK! How many COVID 19 deaths could have been prevented with a single payer healthcare system in America, and how much money would America have saved during the pandemic with Medicare for All? To find out, we spoke to Dr. James G. Kahn, a professor emeritus of health policy, epidemiology, and global health at the University of California, San Francisco. An expert in health policy and economics, he’s an advisor for Code WACK! as well as editor and primary blogger for Health Justice Monitor.

Welcome back to Code WACK! Dr. Kahn.

Q: A peer reviewed journal of the National Academy of Sciences that you co-authored and that was published in June found that more than one quarter of all COVID deaths – some 339,000 – are due to the absence of universal insurance. That is a shocking number. How did you and your colleagues determine that figure?

Kahn: So we estimated that number in two steps. The first step was empirical. My colleagues did an analysis of COVID case rates, hospitalization rates, and deaths by geographic area, and used as a predictor in that analysis, the percentage of the population that was uninsured. And what they found is that lack of insurance explained 26% of COVID deaths. In other words, they were able to determine using, again, empirical data that if everyone had been universally insured, we would have seen 26% fewer COVID deaths. And that reflects the fact that when people are insured, they’re more likely to get care early, they’re more likely to see the doctor who can then say to them, ‘you might have COVID, you should really protect your friends and family and coworkers by staying home for a few days.’

So there are a variety of ways in which medical care access helps reduce COVID. Of course it definitely helps when you start to get really sick and, and need care, which may be expensive. We then took that empirical estimate and applied it to the estimated death rates that have been observed for COVID, which include both the documented deaths and the fact that the number of deaths is an underestimate because there are COVID deaths that are not well documented. When we put all that together, that’s how we came up with 339,000 deaths up to the time that the article was submitted beyond what would otherwise happen in COVID if everyone were universally insured.

Q: Got it. So basically the figure, the 339,000, is it entirely due to inadequate health insurance coverage?

Kahn: It’s not about inadequate health insurance coverage. It’s about being uninsured. We did not look at the question. We did not look at the question of what if people say had high deductibles – they were insured, but had high deductibles – that would add to the total, but we were not in a position to look at that. So this is kind of a bare minimum and the consequences of our inadequate insurance would add to that.

Q: Wow. So that’s interesting. Is there any sense of how much it would add?

Kahn: It’s really hard to say. We’ve been doing some work, not COVID specific, but for other conditions like hypertension and diabetes, and it’s pretty hard to pin down. I mean, I like to think about it. There’s another way to look at it, which is to look at the excess deaths in the United States compared to other countries and how that changes when people turn 65, because when people turn 65, they become Medicare eligible and while Medicare isn’t perfect, it does mean that very few seniors are uninsured. Very few. So if you compare the excess death in the United States before 65 to the lower level of excess deaths after 65, you can get an estimate of how many deaths in the United States are due to this constellation of a lack of insurance and inadequate employment based insurance and so on. And by using that method, I’ve estimated in the past that there are approximately 150,000 excess deaths per year in a non-COVID year – any year.

So what we saw in a COVID year is that that went way up even further because of the huge health threat posed by COVID. So what we’re talking about in a, you know, in a normal year is something on the order of 150,000 people dying because of the inadequacies of our health insurance system. Now in my field, when I’m on full geek mode, I do something called cost effectiveness analysis, which tries to answer the question ‘if we spent more on health care, how much would it improve health and is it worth it?’ And sometimes we find that you can add a year of healthy life for $10,000. That’s no question, that’s definitely worth it. Or maybe $10 million dollars. . Maybe not, maybe that’s not something society wants to invest in. That’s cost effectiveness analysis. But what’s interesting here, as I said earlier, is you don’t need to use that kind of trade off calculation because you can save those lives and save money and that is what we in the biz call a dominant solution. It dominates because it’s cheaper and it’s better and so that’s what covering everyone with universal health insurance would do. And that’s how we can avoid those 150,000 excess deaths per year, and the 339,000 excess COVID deaths due to lack of insurance.

Q: Mm-Hmm . Wow. Are there other ways that universal health care would’ve prevented deaths during the pandemic?

Kahn: Well, again, I think there are several things going on here. One is people when they’re just a little sick or maybe they’re just exposed to the virus or might have been exposed, they are reluctance to go to the doctor because they don’t want to pay a hundred bucks to see the doctor. And then if they do get sick, they may think, ‘ah, I really don’t want to go to the emergency department. That’s going to cost me literally thousands of dollars. I’ll be fine. I’ll just wait it out at home.’ And when that happens, you know, they’re two risks, first of all, they’re more likely to expose other people, but more importantly, to the risks of death for themselves, they’re more likely to get sick in ways that are much harder to treat. So all of those dynamics come into play.

Q: Wow. How much of a role did the loss of employer-sponsored health insurance play into this?

Kahn: You know, it’s interesting when the pandemic hit, and we saw tens of millions of people losing their jobs, laid off from their jobs. We thought, including the Kaiser Family Foundation, that there would be a big drop in insurance coverage as a result. It turned out that part of the problem was not as bad as we expected. Partly, some employers paid for insurance just to help out their employees. Some employees use something called a COBRA extension of insurance that can, after you’re laid off, you can pay to keep your insurance. Medicaid programs added some people so that helped and then some people had another family member, who was insured and they could be added to that other person’s insurance. So definitely a lot of people lost job based insurance, but that was substantially corrected. The numbers are in the article. That’s not really the reason we had that terrible problem. The reason we had the terrible problem is that our baseline level of people being uninsured is too high.

Q: Right. And I remember the government tried to encourage people to see the doctor, you know, especially during the beginning of the pandemic, by getting insurance companies to promise coverage for COVID. How did these promises fall short?

Kahn: Well, that’s a great question. Indeed. Some COVID care was covered by insurers under this promise to the government, but it was based on good faith of the insurance companies and on evidence that the care provided was due to COVID and that gets really complicated. Number one, if you are just a regular person and you are a little bit sick, and you’re wondering whether to go to the doctor, maybe you don’t know that your insurance company has promised to pay for COVID related care and even if you know that, and even if you go, what happens if the doctor says ‘this isn’t COVID, this is … you have a cold, or you have the flu’. Now the care is not covered. So now instead of a free visit, you now have to pay $200 to the doctor. Well, that doesn’t work. And then if you have significant comorbidities, that means you have health conditions that can exacerbate COVID, let’s say diabetes or congestive heart failure.

And you go to the emergency department and you do have COVID, but the way the emergency department codes your diagnoses in the medical record, they happen to put congestive heart failure first. That may mean that your care is not covered. So it’s this unbelievably complex overlay to our insurance system, which did help a lot of people, but left a lot of other people, you know, out in the cold with huge medical bills that were in fact COVID related. Wouldn’t it be simpler to cover everyone with good health insurance and save money in the process? Sorry, if I sound like a broken record. Do we all remember what records are? Anyway, it’s a refrain that I keep repeating that we can do better and save money at the same time instead of having this ridiculously extraordinarily complex system that makes no sense to anyone except to the people who make lots of profits.

Q: Except to the people who make lots of profit. Exactly. You and your team also calculated that U.S. 5 or 6 billion in medical expenses associated with COVID 19 hospitalization could have been averted by a single payer universal healthcare system over the course of the pandemic. How so?

Kahn: It’s avoiding the 26% of COVID cases, COVID hospitalizations. The number for hospitalizations is a little different, but the same basic idea – that a large portion of the costs that we incurred for hospitalization would go away. If you had fewer cases and fewer hospitalizations and fewer serious cases that lead to deaths. We should have had a smaller pandemic. Now, there are other things we could’ve done to better control the pandemic that are beyond the scope of today’s discussion, like a better public health infrastructure, to have better monitoring, to have better, better testing, clearer and quicker policies to control spread all sorts of things. But just on the side of getting prompt medical care, we could have averted a very substantial portion of the cases, and that includes avoiding all these excess hospitalizations. By the way, one of the big challenges in the pandemic was that healthcare workers, doctors, and nurses and others were overwhelmed because the capacity of the hospitals, including especially the intensive care units was challenged and that huge struggle to maintain capacity, would’ve been really greatly relieved if we’d had a quarter fewer cases.

Q: As animal to human infections increase, what does this mean for America’s future if we don’t have single payer?

Kahn: <Laugh> Well, again seeing a doctor, going to an emergency department has the potential to help control pandemics. If that animal to person transmission can also then be person to person, people need to isolate themselves. If there’s an infected animal vector near someone, you can’t go and catch that animal and remove it as a vector unless you know that someone’s been infected. So it is a really important means to monitor this situation and to prevent person-to-person spread. The country which did the best in the pandemic is Taiwan. They have universal health insurance and also a really good public health data infrastructure so they were able to use the fact that everyone had universal access to care plus really good data systems to track and intervene in the pandemic and they had a very mild pandemic compared to other countries.

And that’s what we should be doing in the United States. We have world leading technology. Silicon Valley is a global leader in developing data systems. So we’re best in the world in certain things, but worst in the world, certainly worst in the wealthy world on health insurance. If we could put those together that would really be terrific. Another one of my geeky ventures is thinking about how having a unified data system under single payer would facilitate clinical research and public health efforts. Right now, every insurance company has its own data system. Public programs have systems and it’s a massive effort to put it all together and make sense of it. And it can take years to put together data before you… and then by the time you look at it, the situation has passed. If instead we had a single data system with instant reporting we could within days spot a hotspot, for example. So the value of single payer for public health monitoring, hotspot identification would be tremendous.

(5-second music stinger)

Thank you, Dr. James G. Kahn.

Do you have a personal story you’d like to share about our ‘wack’ healthcare system? Contact us through our website at heal-ca.org.

Find more Code WACK! episodes on ProgressiveVoices.com and on Nurse Talk Media. You can also subscribe to Code WACK! wherever you find your podcasts.

This podcast is powered by HEAL California, uplifting the voices of those fighting for healthcare reform around the country. I’m Brenda Gazzar.

https://heal-ca.org…

Medical Debt Prevalence, Risk Factors, & Effects on Social Determinants of Health

Summary: A representative multi-year survey of US adults found medical debt in 18% of households, with higher risk for those with no insurance, high deductible private insurance, or Medicare Advantage. Medical debt worsened social determinants of health: more food insecurity, inability to pay for housing and utilities, and eviction or foreclosure.

Prevalence and Risk Factors for Medical Debt and Subsequent Changes in Social Determinants of Health in the US, JAMA Network Open, September 16, 2022, by David Himmelstein, et al.

From the Abstract:

Among 51 872 adults surveyed regarding 2017, 40 784 regarding 2018 and 43 220 regarding 2019, … 10.8% (95% CI, 10.6-11.0) of individuals and approximately 18.1% of households carried medical debt. Persons with low and middle incomes had similar rates; 15.3% (95% CI,14.4-16.2) of uninsured persons had debt, as did 10.5% (95% CI, 10.2-18.8) of the privately-insured. In 2018 the mean medical debt was $21 687/debtor (median $2000 [IQR, $597-$5000]) … hospitalization, disability, and having private high-deductible, Medicare Advantage, or no coverage were risk factors associated with medical indebtedness …

Acquiring medical debt between 2017 and 2019 was a risk factor associated with worsening social determinants of health, with odds ratios (ORs) of 2.20 (95% CI,1.58-3.05) for becoming food insecure; 2.29 (95% CI, 1.73-3.03) for losing ability to pay rent or mortgage; 2.37 (95% CI, 1.75-3.23) for losing ability to pay utilities; and 2.95 (95% CI, 1.38-6.31) for eviction or foreclosure in 2019.

Comment:

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.

A raft of previous studies have established that each year millions of Americans suffer catastrophic financial harm from medical debt, and it’s no surprise that people needing hospitalization, the uninsured, and those with disabilities are at highest risk.  So what’s new here? (Disclosure: we’re study authors)

Two findings stand out.  Individuals with Medicare Advantage coverage are, like the uninsured, at high risk of running up medical debts.  And second, that incurring medical debts causes housing and food insecurity – key social determinants of health.

Health system leaders and policy wonks often point to poor housing and nutrition as root causes of ill health, and they’re right.  But they conveniently avoid noting that the health care system itself is a big contributor to housing problems and food insecurity.  As we note in this article, “Unaffordable medical bills … contribute to a downward spiral of ill-health and financial precarity.”

Practicing medicine in American is akin to bailing a boat as the ship’s owners – i.e. the people who make health policy and run our medical institutions – continually drill holes in the hull.

Our patients desperately need national health insurance.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Universal healthcare needed to stem high costs, hospital closures

By Henry Kahn, M.D.
Atlanta Journal-Constitution, September 18, 2022

In a country spending so much on health care, how could it be that Georgia is closing essential hospitals? Other wealthy countries spend less than half what we do per capita but provide comprehensive care to everybody with better health outcomes. Healthcare coverage in Georgia, often requiring large deductibles and co-payments, is available for less than 87% of our people.

Where do our health-care dollars go? During my career, doctors I trusted and admired were regularly frustrated by hostile interactions with investor-driven private insurance plans. They resented the marketing tactics of companies charging outrageous prices for drugs and fancy equipment. Caring physicians suffered (call it professional “burnout”) when their patients were denied the necessary health interventions.

Health care should not be a business. Too many of our health-care dollars go into unjustifiable profits for private insurance, pharmaceutical and equipment corporations. To stem the disappearance of health-care dollars – and the hospital closures – we’ll need a simplified system of universal, comprehensive healthcare coverage supported by progressive taxation.

https://www.ajc.com…

On the Shambles of the American Health Care System and the Need for Medicare-for-All

By Sen. Bernie Sanders
Counter Punch, September 16, 2022

This article is adapted from Senator Sanders’ senate floor speech on September 13, 2022.

I understand that there is a lot that is going on in this world today. We’re worried about climate change. We’re worried about the terrible war in Ukraine. We’re worried about inflation and the fact that wages are not keeping up with prices.

We’re worried about massive income and wealth inequality and the increased concentration of ownership that we see in our country – among many other things.

But the American people remain deeply concerned about an issue that by definition touches every single one of us – and that is our collapsing and dysfunctional healthcare system.

While it is not discussed much in the corporate media or here in the halls of Congress, we have today in the United States the most inefficient, bureaucratic and expensive health care system in the world. That’s not just what I believe. That’s what the American people know to be true because of their lived experience with that system.

I would hope that all Members of Congress take a hard look at a poll that was published yesterday by the Associated Press-NORC Center for Public Affairs Research. And this is some of what the poll disclosed:

At a time when I hear some of my colleagues tell us that we have the best healthcare system in the world, just 12% of the American people believe that health care in general is handled very well or extremely well in the United States. 12 percent.

At a time when we pay the highest prices in the world for prescription drugs, only 6% of the American people believe that prescription drug costs in the United States are being handled very well or extremely well. Six percent.

At a time when COVID has exacerbated the crisis, only 5% of the American people believe that the mental healthcare system in the United States is being handled well or extremely well. 5 percent.

And when so many older Americans have died unnecessarily in nursing homes, and when so many cannot even find nursing home beds, just 6% of Americans believe that the quality of care at nursing homes in the United States is very good or exceptional. Six percent.

The American people increasingly understand, as I do, that health care is a human right, not a privilege and that we must end the international embarrassment of the United States being the only major country on earth that does not guarantee health care to all of its citizens.

Again, that is not just Bernie Sanders talking. That is what the overwhelming majority of the American people believe.

According to this week’s AP poll: 66% of the American people believe it is the federal government’s responsibility to make sure all Americans have health insurance coverage. 66 percent.

Over 86% of the American people understand that it is absurd that millions of seniors lack dental care, hearing aids and vision care and they believe that Medicare should be expanded to cover these basic healthcare needs. 86 percent.

At a time when our long-term healthcare system is in shambles, 81% of the American people believe that Medicare should cover the outrageous cost of long-term healthcare for senior citizens and people with disabilities. 81 percent.

It is hard for me to imagine how anyone could defend a system in which over 70 million people today are either uninsured or underinsured. As we speak, there are millions of people who would like to go to a doctor but cannot afford to go to a doctor because they cannot afford the outrageous cost of a doctor’s visit or a stay in a hospital.

Frankly, I am tired of talking to doctors who tell me about the patients who died because they were uninsured or underinsured, and walked into the doctor’s office when it was too late. And we are talking about some 68,000 Americans who die every year because they are uninsured or under-insured. This is America. This is truly beyond comprehension.

I am tired of seeing working class families and small businesses pay far more for healthcare than they can afford which forces more than 500,000 Americans to declare bankruptcy each year because of medically related expenses. Families should not be driven into financial ruin because someone became seriously ill. How insane is that?

I am tired of hearing from Americans who lost loved ones because they could not afford the unbelievably high cost of prescription drugs, or hearing from constituents who are forced to cut their pills in half due to the cost. Today, almost 1 out of 4 patients cannot afford the prescription drugs their doctors prescribe.

You want to hear about crazy? Crazy is that people get sick. They go to the doctor. They get diagnosed and medicine is prescribed. But they can’t afford to buy the medicine. So they end up in an emergency room or a hospital at great expense to the system. That is crazy.

I am tired of talking with people who are struggling with mental illness but cannot afford the mental health counseling they desperately need. Last year, a record-breaking 100,000 people died of drug overdoses and I will tell you that in my office we get desperate calls from family members looking for affordable mental health counseling and, far too often, that help is not there.

It’s not there because in this system, geared toward the profits of the insurance companies rather than to the needs of the American people, we don’t have enough psychologists, counselors or social workers.

Unbelievable, despite spending far more per capita on healthcare than any other nation, we don’t have enough doctors. We don’t have enough nurses. We don’t have enough dentists. We do not have enough medical providers in general. We have more than enough people who bill us, and more than enough debt collectors who hound us to pay for a bill we cannot afford, but we just don’t have enough people to provide the healthcare that we desperately need. And, by the way, that crisis is only going to become worse as our society continues to age.

At a time of declining life expectancy, in the wealthiest country on earth, your health and your longevity should not be dependent on the amount of money that you have. It is an absolute outrage and grossly un-American that the number of years you live in this country is dependent upon your income. Studies have shown that the top one percent of Americans live 15 years longer than the poorest people in our society.

Healthcare is a human right that all Americans, regardless of income, are entitled to and all Americans deserve the best healthcare that our country can provide.

As Chairman of the Budget Committee, it is not acceptable to me that we end up spending over twice as much as virtually any other major country on health care, while our life expectancy and other healthcare outcomes lag behind most other countries.

Unbelievably, according to the Center for Medicare and Medicaid Services (CMS), we are now spending $12,530 per capita on healthcare. This is an outrageous and unsustainable sum of money.

In comparison, the United Kingdom spends just $5,387 per capita on healthcare while France spends $5,468, Canada spends $5,905, and Germany spends $7,382 while providing universal care to everyone.

The question that we should be asking is how does it happen that we spend so much money for healthcare, but get so little in return.

Let’s be clear. The current debate over healthcare in the United States really has nothing to do with healthcare. Frankly, it is hard to defend this dysfunctional system.

This debate has everything to do with the unquenchable greed of the healthcare industry and their desire to maintain a system which fails the average American, but which makes the industry huge profits every single year.

While ordinary Americans struggled to pay for healthcare during the pandemic, the six largest health insurance companies in our country made over $60 billion in profits last year, led by the UnitedHealth Group, which made $24 billion in 2021.

While millions of Americans cannot afford soaring healthcare costs, the top executives in the insurance industry receive huge amounts of compensation.

In 2020, the CEOs of 178 major health care companies collectively made $3.2 billion in total compensation – up 31% from 2019 – all in the midst of the pandemic.

According to Axios, in 2020, the CEO of Cigna, David Cordani, took home $79 million; the CEO of Centene, Michael Neidorff, made $59 million; and the CEO of UnitedHealth Group, Dave Wichmann, received $42 million in total compensation.

In terms of the pharmaceutical industry, last year Pfizer, Johnson & Johnson and AbbVie – three giant pharmaceutical companies – increased their profits by over 90 percent to $54 billion.

Meanwhile, the CEO of Moderna got a $926 million golden parachute after his company received $2.5 billion in taxpayer dollars from the Trump Administration to develop its COVID vaccine.

And, while over 330,000 Americans died during the pandemic because they could not afford to go to a doctor on time, the CEO of Regeneron Pharmaceuticals made over $450 million in total compensation last year.

The current system is failing the American people. And the American people want change, real change.

In March, I was proud to introduce Medicare for All legislation with 15 Senate co-sponsors. Companion legislation in the House now has 122 co-sponsors.

This legislation would improve and expand Medicare to cover, over a 4-year period, healthcare to every man, woman and child in this country.

That comprehensive health care coverage would end out-of-pocket expenses and, unlike the current system, it would provide full freedom of choice regarding health care providers.

No more insurance premiums, deductibles or co-payments. No more “networks” which deny you your choice of doctors.

And when I talk about Medicare for All being comprehensive it would cover dental care, vision, hearing aids, prescription drugs and home and community-based care. In other words, M. President, it would do precisely what the American people want us to do.

Would a Medicare-for-all health care system be expensive? Yes. But, while providing comprehensive health care for all, it would be significantly LESS expensive than our current dysfunctional system because it would eliminate an enormous amount of the bureaucracy, profiteering, administrative costs and misplaced priorities inherent in our current for-profit system.

Remember: We currently pay twice as much for healthcare as do the people of virtually any other country – all of which provide universal healthcare. So, yes, we can provide quality of care for all at a much lower cost per person.

Under Medicare for All there would no longer be armies of people billing us, telling us what is covered and what is not covered and hounding us to pay our hospital bills. This not only saves substantial sums of money but will make life a lot easier for the American people who would never again have to fight their way through the nightmare of insurance company bureaucracy.

In fact, the Congressional Budget Office estimated that Medicare for All would save Americans $650 billion a year.

Now, trust me. I know the 30-second ads from the insurance and drug companies have told us that if Medicare for All becomes law, your taxes will go up. But what they won’t tell you is that under Medicare for All, you will no longer be paying premiums, deductibles and co-payments to private health insurance companies.

And what they certainly won’t tell you is that Medicare for All will save the average family thousands of dollars a year. In fact, a study by RAND found that moving to a Medicare-for-all system would save a family with an income of less than $185,000 about $3,000 a year, on average.

Now, if Medicare for All was so great, you might ask, why hasn’t it been enacted by now? Why hasn’t the United States joined every major country on earth in guaranteeing health care for all?

Well, the answer is pretty simple. Follow the money. Since 1998, in our corrupt political system, the private health care sector has spent more than $10.6 billion on lobbying and over the last 30 years it has spent more than $1.7 billion on campaign contributions to maintain the status quo. And, by the way, they are “bi-partisan.” In fact, their contributions go to many members of both the Democratic and Republican parties.

But, you know what I believe, M. President?

Maybe, just maybe, now is the time for Congress to stand with the American people and take on the powerful special interests that dominate health care in the United States. Now is the time to improve and extend Medicare to everyone.

Bernie Sanders (I-Vt.) is a U.S. Senator, the ranking member of the Senate Budget Committee, and the lead sponsor of S.4204, the Medicare for All Act of 2022.

https://counterpunch.org…

Prevalence and Risk Factors for Medical Debt and Subsequent Changes in Social Determinants of Health in the US

By David U. Himmelstein, M.D.; Samuel L. Dickman, M.D.; Danny McCormick, M.D., M.P.H.; David H. Bor, M.D.; Adam Gaffney, M.D., M.P.H.; and Steffie Woolhandler, M.D., M.P.H.
JAMA Network Open, September 16, 2022

Abstract

Importance: Cost barriers discourage many US residents from seeking medical care and many who obtain it experience financial hardship. However, little is known about the association between medical debt and social determinants of health (SDOH).

Objective: To determine the prevalence of and risk factors associated with medical debt and the association of medical debt with subsequent changes in the key SDOH of food and housing security.

Design, Setting, and Participants: Cross-sectional analyses using multivariable logistic regression models controlled for demographic, financial, insurance, and health-related factors, and prospective cohort analyses assessing changes over time using the 2018, 2019, and 2020 Surveys of Income and Program Participation. Participants were nationally representative samples of US adults surveyed for 1 to 3 years.

Exposures: Insurance-related and health-related characteristics as risk factors for medical debt; Newly incurred medical debt as a risk factor for deterioration in SDOHs.

Main Outcomes and Measures: Prevalence and amounts of medical debt; 4 SDOHs: inability to pay rent or mortgage or utilities; eviction or foreclosure; and food insecurity.

Results: Among 51 872 adults surveyed regarding 2017, 40 784 regarding 2018 and 43 220 regarding 2019, 51.6% were female, 16.8% Hispanic, 6.0% were non-Hispanic Asian, 11.9% non-Hispanic Black, 62.6% non-Hispanic White, and 2.18% other non-Hispanic. A total of 10.8% (95% CI, 10.6-11.0) of individuals and approximately 18.1% of households carried medical debt. Persons with low and middle incomes had similar rates: 15.3%; (95% CI,14.4-16.2) of uninsured persons had debt, as did 10.5% (95% CI, 10.2-18.8) of the privately-insured. In 2018 the mean medical debt was $21 687/debtor (median $2000 [IQR, $597-$5000]). In cross-sectional analyses, hospitalization, disability, and having private high-deductible, Medicare Advantage, or no coverage were risk factors associated with medical indebtedness; residing in a Medicaid-expansion state was protective (2019 odds ratio [OR], 0.76; 95% CI, 0.70-0.83). Prospective findings were similar, eg, losing insurance coverage between 2017 and 2019 was associated with acquiring medical debt by 2019 (OR, 1.63; 95% CI, 1.23-2.14), as was becoming newly disabled (OR, 2.42; 95% CI, 1.95-3.00) or newly hospitalized (OR, 2.95; 95% CI, 2.40-3.62). Acquiring medical debt between 2017 and 2019 was a risk factor associated with worsening SDOHs, with ORs of 2.20 (95% CI,1.58-3.05) for becoming food insecure; 2.29 (95% CI, 1.73-3.03) for losing ability to pay rent or mortgage; 2.37 (95% CI, 1.75-3.23) for losing ability to pay utilities; and 2.95 (95% CI, 1.38-6.31) for eviction or foreclosure in 2019.

Conclusions and Relevance: In this cross-sectional and cohort study, medical indebtedness was common, even among insured individuals. Acquiring such debt may worsen SDOHs. Expanded and improved health coverage could ameliorate financial distress, and improve housing and food security.

full study:
https://jamanetwork.com…

Pervasive Contamination of US Health System By Corporate Myths & Models

Summary: Two recent articles characterize systemic trends and illustrate one patient’s struggles with corporate goals, values, and tactics permeating health insurance.

Value-Based Payment Is the New For-Profit Health Care Industry, Truthout, September 8, 2022, by Kip Sullivan, Kay Tillow, and Ana Malinow

Like the insurance industry, the VBP industry hovers over doctors and patients and seeks to influence (and in some cases, dictate) doctor-patient decision-making, and in the process diverts resources away from medical care. Unlike the insurance industry, the VBP industry is almost invisible to the public. It consists of a heterogeneous mix of corporations that own, contract with, manage, consult with, or sell services to providers (doctors and hospitals). Some, such as “accountable care organizations,” mimic insurance companies. Others are consultants, such as Privia, venture capitalists like General Catalyst, or firms selling management services, such as agilon health. Large pieces of this new industry are being bought out by companies like Walgreens and Amazon. …

The phrase “value-based payment” emerged in the 2000s as the label for all methods of payment that shift insurance risk from insurance companies and public programs like Medicare onto health care providers. Risk is shifted by paying providers a set fee per patient per year (usually called “capitation”) rather than a fee for each service providers render (known as “fee-for-service”), or by tying provider payment to the profits and losses of organizations they contract with. VBP advocates claim, without evidence, that fee-for-service (FFS) induces doctors to order services patients don’t need and that shifting risk to providers will induce them to improve both components of value — cost and quality. …

The speakers at the [National Primary Care] “summit,” who included virtually every prominent advocate of VBP from the public and private sectors, studiously avoided discussion of VBP’s underwhelming effect on the cost and quality of health care, and rarely mentioned its worst side effects. A few speakers expressed frustration at how long VBP was taking to prove it can work, but even these speakers refused to discuss the research. Rather than acknowledge failure and use their time together to analyze the reasons for failure, the 150 speakers concentrated instead on repeating VBP folklore (fee-for-service is the problem and VBP schemes are the answer) and reporting cherry-picked anecdotes.

Tackling cancer while battling the insurance system, The Washington Post, September 9, 2022, by Annabelle Gurwitch

Even plans that are supposed to save patients money can end up costing them dearly

“You’ll receive a bill, but don’t pay it,” my caller [from SavOnSP Specialty Pharmacy] said. “Working with us ensures that you have a zero co-pay.”

[A[ few weeks later my monthly shipment of medication arrived along with an invoice from Express Scripts for $4,445. It noted that I might not owe this amount; nevertheless, it had a detachable payment slip, and a return envelope was provided. Remembering the caller’s assurances, I tossed the bill into my ever-expanding, supersize file I’ve labeled “insurance gobbledygook.” But when I visited an ATM the next day, my balance was significantly lower than I expected. $4,445 had been deducted by Express Scripts….

I’d been entangled in an increasingly exploitative scheme. In what’s become a standard industry practice, pharmacy benefit managers (PBMs) contract with secretive third-party adjusters commonly called co-pay accumulators and maximizer programs to process “specialty medication” prescriptions, including biomarker-targeted therapies for lung cancer and other chronic and deadly diseases. Once a plan engages a co-pay accumulator or maximizer, these entities reclassify these medications (some of the priciest on the market) as “nonessential.” This allows plans to exploit a loophole in the Affordable Care Act: Coverage can be denied for therapies that a plan labels “nonessential,” and a plan can reset the member’s pharmaceutical benefit deductible and out-of-pocket maximum to any amount of their choosing.

Comment:

By Jim Kahn, M.D., M.P.H.

Sadly, US healthcare is increasingly distorted by a rising corporate presence, most of all for insurance but also for care. Corporations create a mythology of benefit for patients and apply aggressive business models and tactics to extract maximum profits, to the detriment of the rest of us.

The first article describes the feverish expansion of value-based payment, an array of funding mechanisms focused on capitation (named as such and de facto), with only one clear and consistent benefit: profits for corporate intermediaries. We’ve written often in HJM about the most egregious examples – Medicare Advantage, DCEs, and ACO reach (just search your emails or the HJM website). Traditional standards of evidence in medicine are routinely ignored. Instead, if a strategy is profitable we hear mindless and mind-numbing assurances that it’s beneficial. Yet often there is evidence of harm. And often there is no evidence at all, due in part to withholding of proper evaluation data by corporate interests resisting scrutiny.

The second article brings home how this ethic affects the individual, with a startling example of a women with cancer caught in a thoroughly confusing web of drug insurance entities. These layered intermediaries are proliferating out of control (pharmacy benefit managers, adjusters, accumulators, maximizers). Each complexity and inadequacy of drug insurance represents another business opportunity, a 3rd and 4th layer “remedy”. It’s a daunting challenge for anyone to understand the myriad drug insurance entities and the sequence of events described in the article. Perhaps the slimiest aspect is reclassifying a drug for cancer treatment as “nonessential” in order to burden the patient with costs far in excess of the deductible.

When will we transform our health insurance to elevate people over profits? And society over shareholders?

Single payer.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Medicare for All Explained Podcast: Episode 85

Interview with Dr. Gilbert Simon

September 14, 2022

Sacramento Family Medical Clinics founder and author Dr. Gilbert Simon describes the forces that transformed U.S. medicine “from a noble profession into a profit-driven Medical Industrial Complex.”

“It all happened when the third-party payers got into the medical examination room,” he says. “We’ve got to get rid of those corporations. We’ve got to get rid of all those middlemen.”

Additional episodes will be uploaded twice monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Adequacy of Medicare Physician Fee-for-Service Payments

Summary: A survey of California physicians finds that Medicare fee-for-service payments, not keeping pace with inflation, don’t cover their costs to provide care. Big caveat: biased sampling — 88% of respondents don’t participate in FFS Medicare. Under single payer, payment rates would be negotiated with physicians, and fair for them.

Medicare / Physician Payment and Access to Care Survey, California Medical Association, August 29, 2022

Deeply alarmed about the growing financial instability of the Medicare physician payment system, the California Medical Association (CMA) recently surveyed physicians about the financial health of their practices and how Medicare payment rates are impacting access to care in their communities.

Since 2001, inflation has increased by 40%, yet physician Medicare payments have only increased by 7%. Today’s Medicare payments on average lag 40% behind the cost of providing care, while hospital and nursing home payments are indexed to inflation (and as a result have increased by 60% since 2001).

According to the CMA survey results, 76% of physicians report that Medicare fee-for-service payments do not cover their costs to provide care, with 61% reporting average revenue losses between 11-50%. And, 13% of physicians even report average revenue losses over 50%.

Forty-one percent of physicians report they are considering closing their practices to new Medicare patients. And, 87% report that low Medicare reimbursement rates coupled with the high costs to practice in California are negatively affecting the ability to recruit and retain physicians in their communities.

Comment:

By Don McCanne, M.D.

It is important to realize that of the 843 physician practices surveyed, 88% reported that they did not participate in the Medicare fee-for-service program, presumably traditional Medicare. No mention was made of private Medicare Advantage participation. Might one suspect that there was an element of bias?

Regardless, the Medicare program does have some very major deficiencies that would require more than a nominal overhaul, especially now that it has been severely damaged through the CMS push for privatization.  In contrast, a well-designed single payer system is a vastly superior system of financing health care for all, and it should have the support of the medical profession. This survey would suggest that “Medicare for All” might be a poor choice for a label, especially if we want the support of organized medicine. But everyone needs to understand the policies behind single payer and how they would work so well for each and every one of us as individuals, including the physicians. Then we would have to join together to make sure that is the system that the government implements.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

PNHP to CMS: End Medicare Advantage

Summary: Medicare Advantage has overwhelming problems, progressive health policy organizations agree. Can it be fixed with a comprehensive set of far-reaching reforms? Physicians for a National Health Program says no – it must be replaced.

Letter to CMS about Medicare Advantage, August 25, 2022, from Susan Rogers, President, PNHP

Administrator Chiquita Brooks-LaSure
Centers for Medicare & Medicaid Services

… Medicare Advantage plans have achieved profitability largely by gaming their risk pools, up-coding, and blunt restrictions on care including issuing millions of inappropriate denials for care that met Medicare coverage rules,14 and minimally if at all by improving care. 15,16 Typical administrative costs for Medicare Advantage plans, including profits, have been in the 15-20% range1,17, compared to around 2% for Traditional Medicare prior to the Affordable Care Act.2

It would be far more cost-effective for CMS to improve traditional Medicare by capping out-of-pocket costs and adding improved benefits within the Medicare fee-for-service system than to try to indirectly offer these improvements through private plans that require much higher overhead and introduce profiteers and perverse incentives into Medicare, enabling corporate fraud and abuse, raising cost to the Medicare Trust Fund, and worsening disparities in care.

These problems are not correctible within the competitive insurance business model, and the Medicare Advantage program should be terminated.

Sincerely,

Susan Rogers, M.D.
President, Physicians for a National Health Program

Comment:

By Susan Rogers, M.D. and Stephen Kemble, M.D.

CMS asked for public comments on how to improve Medicare Advantage. As described last week in HJM, one approach is to list the program’s serious problems, and recommend a broad set of reforms that together are so fundamental and pervasive as to constitute replacing MA.

Yet this may leave CMS with the idea that MA is salvageable, that implementing selected reforms from the list can result in an adequately functioning program. That’s wrong – MA is structurally flawed. Also, excellent reforms even if well-articulated will be weakened or undermined in practice.

Thus, PNHP in its letter to CMS calls for the end of Medicare Advantage. No reforms, no tweaks, instead a new program.

The PNHP letter documents widespread profiteering and abuse by MA plans (read it!), and concludes that these problems cannot be fixed. MA must be replaced.

What’s more likely to work: ambitious reforms, or a clean slate?

But let’s go further. It’s a mistake to isolate the privatization of Medicare (MA and ACO REACH for traditional Medicare) from the exact same issues that affect private health insurance and Medicaid. Removing voracious for-profit entities from Medicare does not advance us to single payer unless we remove them from all health insurance. And saving Medicare does not prevent worsening destruction of other components of our so-called healthcare system. Private equity, venture capitalists and others involved in Medicare are also involved in hospitals, job-based insurance, pharmacy benefit management, and so on. The problem with Medicare is just one metastatic lesion in an entire industry riddled with this cancer. Removing one lesion does not cure the cancer.

That’s why we need single payer.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Even the rich suffer from America’s wack healthcare system

By Brenda Gazzar
Code Wack Podcast, September 12, 2022

Why are nearly half of all U.S. residents burdened with medical debt? Does medical debt simply result from people making poor personal choices, or is it a symptom of a deeper, systemic problem with our healthcare system? What are the scary implications of this and what can we do about it?

To find out, we spoke to James G. Kahn, MD/MPH, a professor emeritus of health policy, epidemiology, and global health at the University of California, San Francisco. An expert in health policy and economics, he’s an advisor for Code WACK! as well as editor and primary blogger for Health Justice Monitor.

Transcript

Dispatcher: 911, what’s your emergency?

Caller: America’s healthcare system is broken and people are dying!

(ambulance siren)

Welcome to Code WACK!, where we shine a light on America’s callous healthcare system, how it hurts us and what we can do about it. I’m your host, Brenda Gazzar.

This time on Code WACK! Why do nearly half of U.S. residents have some form of healthcare debt? What are the scary implications of this and what can we do about it? To find out, we spoke to Dr. James G. Kahn, a professor emeritus of health policy, epidemiology, and global health at the University of California, San Francisco. An expert in health policy and economics, he is a health policy advisor for Code WACK! as well as editor and primary blogger for Health Justice Monitor, a health policy blog focused on a progressive agenda.

Welcome back to Code WACK! Dr. Kahn.

Kahn: Thanks for having me on.

Q: So a recent survey by the Kaiser Family Foundation found that 4 in 10 adults in America have some form of healthcare debt. That’s nearly half of all Americans. Why do you think this is?

Kahn: Well it’s because of the huge holes in health insurance. Over the past 10 years or so, our health insurance has gone from moderate cost sharing, things like deductibles and copays, to extensive cost sharing and in particular, the prevalence and size of deductibles is much higher. Deductibles are the money that the beneficiary is responsible for before the health insurance kicks in and this is often in the range of $2,000- $5,000. That’s not a trivial amount. So in the beginning of the calendar year, typically the insurance doesn’t pay anything until people have paid down the deductible and the problem is when people pay the deductible that’s coming out of their financial reserves, which may be quite limited and they may have to take on medical debt. So that’s the single biggest cause of the medical debt. There are other reasons too, such as care that is out of network and therefore not covered or care that is denied.

Or of course there are many people who are simply uninsured all together. All of those things contribute, but taken together the astounding number that four in 10 adults has medical debt, half of them debt is more than $2,500, it’s really scary and should open some eyes. The other thing that Kaiser did really well is they asked respondents how this medical debt affects other spending and what they found is a wide variety of important household spending was affected by the medical debt. So for example, people had trouble paying rent. They may have decided to double up on living together, cuz they couldn’t afford the rent. Some people reported that they postponed or gave up on higher education because they couldn’t afford it because of the medical debt. So these medical debts are not only anxiety provoking, but they have real damaging consequences for how people live their lives.

You know, I like to say that understanding the healthcare system in its details is really hard because the system is extraordinarily complex. Indeed, I think the complexity is a feature, not a bug. It’s a way for people who thrive on the system financially to hide what’s really going on. Both Kaiser and the Commonwealth Fund have done important research over the years documenting the problem that people will skip or delay medical care because of financial barriers so they have you whichever way you go.If you get the care, then you’re medically indebted. And if you don’t get the care, well, then you might well get sicker. There’s no other wealthy country that imposes this kind of terrible choice on its people.

Q: A terrible choice. Indeed. The survey also noted that uninsured adults, women, Black and Hispanic adults, and those with lower incomes are disproportionately impacted. How does it affect people when they can’t get a fair shake when it comes to health care?

Kahn: Well, our way of paying for health care is a huge contributor to inequity in our society. Again, both financial and health. We know as, as the Kaiser Family Foundation, you know, reconfirmed that the people who suffer most with these problems are poor, people of color and other disadvantaged groups and this is structurally a predictable consequence. For example, Medicaid is health insurance for the poor. Why should we have separate health insurance for the poor? Other countries don’t. They just have health insurance or health coverage and I think it’s time for us to recognize that we can provide equal healthcare – equally comprehensive, equally high quality to everyone and in the process actually save money. You know, there’s an expression in economics that there’s no such thing as a free lunch. That’s supposed to mean that you don’t get anything without paying for it somehow. But I actually argue that real health insurance reform like single payer is a free lunch because you do better at covering everyone and by simplifying the system, you actually save money. That was a long roundabout answer to your question.

Q: It seems like the poor are already impacted negatively because they’re more likely to have chronic health conditions and it’s a double whammy when they have medical debt, because it’s further setting them back financially.

Kahn: Right, it’s sort of a vicious cycle as you point out. The poor are more likely to be sick. They’re less likely to be able to get care. That exacerbates their illness and in the process, depending on their insurance situation, they may become more indebted, which adds to their stress, which worsens their illness. It is unsurprising when you look at the terrible mortality numbers in the United States, how many years fewer poor populations live than rich populations. There’s a huge longevity gap. It’s absolutely something that we can and should address. But there’s another interesting fact here and that is if you compare the longevity of people who live in wealthy U.S. geographic areas and compare that to the longevity of people who live in other wealthy countries, even in wealthy areas in the United States, we do worse than the overall average longevity in the other countries. So the people who are suffering most are absolutely the poor and there are huge inequities there, but even the wealthy are suffering from the failings of our system and I’m hoping that that will help us unite around a real solution – single payer.

Q: Right. Good point. Most adults with healthcare debt say the bills that led them into debt were from unexpected medical expenses and about half of them would be unable to pay a $500 unexpected medical bill without borrowing money.

Kahn: Well, I think it’s important to recognize that wealth differences, that is how much money people have in the bank, are far greater than income differences. So when we talk about the poor, the working poor, you know, someone maybe making $25,000 or $30,000 a year, it’s impossible to support a family on that. Maybe they’re up to $40,000 a year. Someone who’s doing well, a computer programmer or a lawyer may be making $150,000 or $200,000. So that’s a big difference. That’s a difference of fivefold. But if you look at wealth differences, they’re much, much greater and that is a variety of things. First of all, the people who are making less, just don’t have the opportunity to save and then there’s a long history of racist decisions which have exacerbated wealth differences. For example, Black Americans were not able to participate in post World War II mortgage insurance programs offered by the federal government.

So they were much less likely to buy homes. Well, homes are the basis for building family wealth and so now you have people of color, poor, no financial reserves and yes, a health expenditure comes along that’s unexpected. I must say, you know, how often do we expect health expenditures? Aren’t health expenditures mostly about dealing with medical problems as they arise. I don’t plan to get an infection or plan to get an asthma exacerbation. I may know that there’s some risk or I may not. It may be completely out of the blue. So I’m not at all surprised that there are a lot of people who don’t have the financial reserves and who are surprised by turns in their health and the need for care. That’s just the way life works. It doesn’t need to be this way. Again, free lunch. I’m just going to use that as my shorthand, we have a free lunch.

We have a buffet that’s laid out in front of us that we could have all of the health care we need and still save money and why are we not doing that? Well, it’s because of all of the organizations and people who profit hugely by this complex system, which is completely nonfunctional, the insurance companies, many provider groups, the drug companies. They make massive amounts of money and if I may just talk about COVID for one second.

In Health Justice Monitor, we recently covered this phenomenon, which is just stunning. In 2020, when the pandemic hit, healthcare utilization actually dropped. There was some more COVID care, but many people delayed non-urgent care because they didn’t want to go to a doctor’s office or hospital and get sick from people with COVID. Makes sense. So the claims that were submitted to insurance companies, including in Medicare Advantage, the private insurer part of Medicare, they went down, the claims went down. So the insurance companies didn’t have to pay out as much so the profits went way up, but the providers in order to survive needed federal government help to cover those services that weren’t required and so the federal government paid the insurance companies to administer Medicare Advantage and the insurance companies kept all of these excess profits and the federal government also paid the providers to keep them financially solvent. So we, the taxpayers, paid twice for health care that no one received because they were avoiding hospitals and doctor’s offices. How insane is that?

Q: That is insane. And I understand that some are even denied medical care because of their debt. Welcome to America’s for-profit healthcare system. So how would things be different, Dr. Kahn, if we had Medicare for All. Would people just not get medical bills at all anymore?

Kahn: Thank you for putting it so simply, but that’s exactly right. So basically the government, it could be the federal government, it could be a state-level government agency, would pay for all care. There might be very small income adjusted copays for certain kinds of care, or there might not be. There would be no deductibles. People wouldn’t face a cliff of $2,000 to $5,000 that they have to pay before they can even get care and the providers would have one insurer to deal with – that’s the single government payer. So their life in the doctor’s office to arrange for payment would be far simpler. Right now doctors spend about 13% of revenue just to get paid and that would drop to 2% to 3% so they would instantly have a 10% savings. That’s the secret to this free lunch. That is you reduce that complexity in the provider offices.

You similarly get rid of private insurance intermediaries who are taking – depending which part of the system you’re looking at – at least 10% and maybe 15% in profits and administrative bloat and you get rid of all of that waste and now you can afford to pay every medical bill. You can eliminate financial barriers to care, and everyone is covered again – efficient, generous, equitable. In medicine, there’s been a movement for a couple of decades called evidence-based medicine, where we do our very best in clinical medicine to conduct and then rely on the results of clinical trials. The idea is to learn from careful study how to best treat patients. Well, in the world of health policy, we were really bad at that. We make a lot of efforts to improve things where we really don’t have evidence. For me, one example of that is value-based care or ACOs, accountable care organizations.

It’s a real favorite of some people in health policy because it doesn’t disturb the dynamics of the current health insurance system, which benefits so many people. They claim that it will lead to cheaper and better care. It doesn’t. It’s not evidence based. What would be evidence based is learning from more than three dozen countries around the world, wealthy countries, who all have the same kind of arrangement. They universally cover everyone with a standardized health insurance benefit package. That means that doctors have to deal with only one.payer, doctors only have to deal with one formulary, which is the list of medicines that they can prescribe. Drug prices can be negotiated. But the fundamental thing is that everyone’s covered with exactly the same package. Now, some countries use a single government payer, some countries use private insurers, but they’re nothing like private insurers here. They are not for profit, highly regulated insurers who all sell exactly the same product.

It would be kind of like if everyone in the neighborhood drove a blue Prius and that standardization in simplicity is what has been proven to work time and time again. So my plea is that we do our health policy based on the extensive evidence there is in the world. Our system not only is failing on health and financial measures, but is getting worse. We do worse today in 2022 than we did in 2012. So Obamacare resolved a few problems. There are more people insured than there were before Obamacare, a lower rate of uninsurance, but the insurance is now much less helpful because of the rapid rise in deductibles.

(5-second music stinger)

Thank you, Dr. James G. Kahn. Stay tuned for our next episode with Dr. Kahn as we talk about avoidable deaths and the COVID pandemic.

Do you have a personal story you’d like to share about our ‘wack’ healthcare system? Contact us through our website at heal-ca.org.

Find more Code WACK! episodes on ProgressiveVoices.com and on Nurse Talk Media. You can also subscribe to Code WACK! wherever you find your podcasts.

This podcast is powered by HEAL California, uplifting the voices of those fighting for healthcare reform around the country. I’m Brenda Gazzar.

https://heal-ca.org…

Letter to Feds: How to Fix Broken Medicare Advantage

Summary: Recently three leading progressive organizations (Just Care USA, Social Security Works, and Center for Health and Democracy) wrote to two federal health agency leads, offering an incisive litany of major flaws with Medicare Advantage. They proposed a 10-point reform plan, which would remove insurer profiteering, assure access, and improve quality of care. The plan would make Medicare a lot like its inevitable successor, single payer.

Letter to HHS & CMS on Reforming Medicare Advantage, August 31, 2022, by Diane Archer, Alex Lawson, and Wendell Potter

Dear Secretary Becerra and Administrator Brooks-LaSure:

… We agree with the HHS Office of the Inspector General, Government Accountability Office and MedPac that Medicare Advantage is in need of major reform to ensure the health and well-being of enrollees, promote health equity, and minimize legal violations, Including overpayments. As GAO reported: “The Medicare program, which includes MA, is on GAO’s High Risk List, because of its size, complexity, and susceptibility to mismanagement and improper payments. …

People from racial and ethnic minority groups, people with disabilities and serious health conditions, people of disadvantaged socioeconomic status, people with limited English proficiency, and people from rural communities disproportionately choose Medicare Advantage because of its low upfront cost. They are, however, at greater risk in Medicare Advantage than in traditional Medicare for two key reasons:

Fundamental problems with the current Medicare Advantage model drive health inequities and poor health outcomes for people with complex conditions. The biggest problem is the risk-adjusted capitated payment model. Medicare Advantage plans that: 1. Attract a disproportionate number of enrollees in relatively good health and/or 2. Delay and deny care inappropriately and/or 3. Do not include high quality specialists and specialty hospitals in their networks, can be sure to profit handsomely. …

We propose a suite of ten changes to improve health equity, reduce Medicare Advantage threats, enable appropriate CMS oversight, and minimize health insurer violations in Medicare Advantage.

1. Change the way the government pays Medicare Advantage plans.

The government should pay MA plans so that they do not have a financial disincentive to cover care for people with costly and complex conditions. Prospective payments, unrelated to actual medical claims, create a powerful financial incentive for MA plans to impede access to high-value care for enrollees with complex conditions in order to maximize profits.

2. Base payments to MA plans on the cost of services MA plans cover plus a reasonable fee for administration and a global cap.

3. Require Medicare Advantage plans that pay providers on a fee-for-service basis to use traditional Medicare’s fee schedule.

4. Require MA plans to include all centers of excellence in their networks and disclose out-of-pocket costs for people with complex conditions.

5. Standardize MA coverage rules and cost-sharing design.

6. Ensure appropriate oversight of MA.

The GAO has found that CMS has not validated MA patient encounter data as needed and recommended. In a recent House Ways and Means Subcommittee on Oversight and Investigations hearing, MedPAC reported that “After a decade, MA plans are “not producing complete and accurate enough records needed for MedPAC to conduct oversight activities

7. Do not assume value in MA, since it cannot be measured.

MedPAC has said repeatedly that MA quality cannot be measured.

8. Rethink Medicare Advantage networks.

CMS should stop allowing Medicare Advantage plans, except those that are fully integrated health systems, to design their own provider networks and require them to cover care from all Medicare providers.

9. Rethink key consumer information regarding Medicare Advantage and overhaul MA marketing to minimize deception.

10. Level the playing field with traditional Medicare and ensure health equity in MA.

We urge the government to put an out-of-pocket cap in traditional Medicare so that traditional Medicare is a meaningful choice for everyone with Medicare, including people with low incomes, people in rural communities, people from racial and ethnic minority groups, and people with complex conditions. Without that out-of-pocket cap, the hundreds of thousands of people who face inappropriate delays and denials of care in Medicare Advantage too often are deprived a meaningful choice of traditional Medicare.

Comment:

By Jim Kahn, M.D., M.P.H.

This impressive letter assembles key evidence on the failings of Medicare Advantage – how it costs too much, imposes barriers to care access, and fails to assure quality. The problems are structural and thus require aggressive reforms, such as changing how plans are paid.

The proposed changes would move Medicare Advantage (and Medicare) much close to single payer, by removing excessive profit-taking by insurers, standardizing coverage and provider payments, and collecting clinical data to measure and improve quality. The major difference is that even an improved Medicare for seniors and the long-term disabled would not create the fairness, efficiency, and simplicity of an improved Medicare *for all*. That’s single payer.

For those interested in the numbers on Medicare finances, see HJM pieces on how Medicare Advantage plans plunder government funds here and here, and on the financial barriers faced by sick beneficiaries here.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.