National Health Expenditure Projections, 2015–25: Economy, Prices, And Aging Expected To Shape Spending And Enrollment

By Sean P. Keehan, John A. Poisal, Gigi A. Cuckler, Andrea M. Sisko, Sheila D. Smith, Andrew J. Madison, Devin A. Stone, Christian J. Wolfe and Joseph M. Lizonitz (all from CMS Office of the Actuary)
Health Affairs, July 13, 2016 (Online before print)

Abstract

Health spending growth in the United States for 2015–25 is projected to average 5.8 percent — 1.3 percentage points faster than growth in the gross domestic product — and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act’s coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.

National Health Expenditures (NHE) 2016

NHE  $3.3507 trillion
NHE as percent of GDP  18.1%
Government proportion of NHE  46%
NHE per capita  $10,345.5

Conclusion

The health sector is in the midst of a unique period, in which various forces are exerting differential pressures on health spending growth. Economywide and medical-specific price growth have been very low, helping restrain inflation’s impact on health spending, and the Medicare program is experimenting with various alternative payment approaches. Meanwhile, many Americans are gaining access to health coverage for the first time, aging into Medicare, or finding that a greater share of their health expenses needs to be paid out of pocket. And the Medicaid program is evolving: Its population mix is increasingly likely to be covered through private plans.

For the period 2015–25, growth in health spending is projected to average 5.8 percent, influenced in part by an expectation of higher economywide and medical prices. By 2025, as economic, legislative, and demographic influences play out, the health spending share of the economy is projected to reach 20.1 percent, up from 17.5 percent in 2014, and governments are anticipated to sponsor 47 percent of health spending, up from 45 percent in 2014. The percentage of the US population that is uninsured is expected to be 8 percent in 2025, down from about 11 percent in 2014.

http://content.healthaffairs.org/content/early/2016/07/12/hlthaff.2016.0459.abstract

CMS National Health Expenditure Projections 2015-2025:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2015.pdf

The Great Recession has contributed to slowing of the growth in health care spending in recent years, but the future changes are predicted to be more closely related to various demographic related coverage changes plus certain payment trends including the increase in cost sharing in private insurance plans. Also the increase in the government contribution to our national health expenditures deserves special mention.

Regarding increases in patient cost sharing, it is no secret that this has been a blunt instrument to control spending, resulting in a decline in use of beneficial health care services. As has been stated repeatedly, we need more patient-friendly methods of slowing the increase in spending such as fairer publicly-administered pricing through a single payer national health program.

The government contribution to our national health expenditures has increased to 46 percent, but that does not include two large components of taxpayer-funded government spending on health care: 1) The government contribution to employee health insurance on the federal, state and local levels, and 2) the massive tax expenditures for employer-sponsored health plans (i.e., the health insurance component of the employee benefit package is not subject to income taxes, reducing revenue for the government which must be made up by other taxpayers).

The irony is that we already pay in taxes devoted to health care alone more than almost every other nation pays in public and private health care spending combined. Without increasing our current level of spending we could pay for a comprehensive, government-financed, single payer national health program. Yet we continue to support our dysfunctional financing system that wastes so much on administrative excesses while perpetuating injustices by misallocating distribution of our health care resources.

We can and must do better.

By The Times Editorial Board
Los Angeles Times, July 12, 2016

California lawmakers have been trying for more than a decade to protect hospital patients from being hit with huge bills from doctors who aren’t part of their health insurer’s network. They have another opportunity to do so this year, and they should seize it.

The problem arises when patients go to an in-network hospital or clinic to be treated by an in-network surgeon or other physician, but wind up receiving care (often without their knowledge) from an anesthesiologist, pathologist, radiologist or other specialist who’s not in the network. A nasty surprise arrives weeks later, when the out-of-network specialists bill them for the portion of their fee that the insurer wouldn’t cover — an amount that can be in the thousands of dollars. According to a survey by the Kaiser Family Foundation, 70% of the patients struggling to pay out-of-network doctors had not known they were going to be treated by someone who didn’t accept their insurance.

Physicians’ trade groups insist that they don’t like surprise medical bills either. The challenge has been figuring out how to create a system that encourages insurers, hospitals and doctors to avoid these situations while still providing a fair payment to the out-of-network physicians who provide treatment.

Congress provided a measure of help in the Affordable Care Act for patients receiving emergency care from out-of-network doctors by requiring insurers to cover the same percentage of the costs as they would have if the doctors had been in network. California law goes further, barring out-of-network doctors who deliver emergency care from billing patients for the amount the insurer doesn’t cover. But that still leaves patients vulnerable for non-emergency care.

Having hospitals and clinics make sure that each patient is treated only by specialists in the patient’s provider network would be one way to end surprise bills, but it would require them to manage doctors more directly than they do today. And there’s no guarantee today that the necessary specialists would be available in a patient’s network.

Assemblyman Rob Bonta (D-Alameda) and a bipartisan group of cosponsors have taken a more pragmatic approach. Their bill, AB 72, would require out-of-network doctors to obtain a patient’s permission at least a day before providing non-emergency treatment at an in-network hospital or clinic. If the patient doesn’t voluntarily agree to be treated by a specific out-of-network doctor and pay the extra charges, he or she couldn’t be billed for more than an in-network provider would have cost — even if out-of-network doctors are brought in. Any participating out-of-network doctor, meanwhile, would have to accept the average amount paid to in-network doctors or go to arbitration with the insurer.

The risk here is that too many of the physicians that don’t want to join insurance networks will simply refuse to see patients who won’t pay their full rate. The bill takes a reasonable approach to the core problem, which is the fact that patients are being hit with huge bills they hadn’t anticipated and had no say in. Lawmakers still have to iron out some details, however, to make sure the system works fairly for everyone. For example, the bill needs to give insurers an incentive to bring into their networks a full complement of specialists at every in-network hospital, rather than counting on out-of-network doctors being willing to treat patients at a discount.

There will always be tension between what insurers want to pay and what providers want to be paid for their services, especially in regions where one or the other faces limited competition. So there will inevitably be fights over how much a provider’s service is worth to an insurer, and vice versa. But there’s no reason patients should be caught by surprise in the middle of that fight.

http://www.latimes.com/opinion/editorials/la-ed-surprise-medical-bills-20160711-snap-story.html

***

Comment:

By Don McCanne, M.D.

There are many injustices inherent in our dysfunctional, fragmented system of financing health care, and surprise medical bills from out-of-network physicians is one of them. Patients who have health insurance should not have to face these bills that otherwise would have been covered by their insurance. So what is the solution?

First we have to understand the problem. Surprise medical bills pop up because the insurer has not contracted with all of the members of the team that provides care for the patient. In-network physicians have their fees set by the contract they have signed with the insurer. Out-of-network physicians have no such contract and thus feel free to set their own fees.

The patient has selected an insurance plan – a contract – which provides coverage for in-network physicians. Some plans may provide partial coverage for out-of-network physicians but usually only at rates that are even lower than in-network physicians would be paid. Because the insurer has no contract with the out-of-network physician, the patient must pay not only the difference between the contracted rate and the lower out-of-network rate but also must pay the entire balance of the full fee charged by the out-of-network physician.

Various legislative solutions have been considered to protect the patient from these charges that most consider to be unfair when the patients have fulfilled their responsibility of obtaining adequate insurance coverage. Some have suggested that the insurers should be required to pay the full fee of the out-of-network physician. But then why would any physician sign a contract with the insurer if by remaining out-of-network they can receive their full list fee instead of the discounted contract fee? That would destroy the concept behind the contracted physician networks and result in intolerable fee inflation.

Most legislative solutions then turn to the physicians to demand that they accept the fee determined by the insurer even though no contract exists with these out-of-network physicians. In this instance, why would the insurer make an effort to be sure that they have a full complement of physicians available so that patients would not be inadvertently provided care by an out-of-network physician. Under such a requirement, if the insurer establishes only a narrow network of physicians then they could limit payments to the level of their contracted rates for all other out-of-network physicians without contracts. This gives private insurers the right to set rates outside of their plans, even if unreasonably low – hardly a free market solution.

So who is to blame? The patient for not selecting a plan that contracts with all physicians that might be needed in the future, even if that is impossible to know? The physician who the insurer has not included in their deliberately restricted networks? The insurer who has created restricted networks to control fees at the cost of limiting coverage for often unavoidable services provided by out-of-network physicians?

By now it should be obvious that the real problem is with the defective design of our dysfunctional health care financing infrastructure. Solutions should be directed at correcting the defects in the infrastructure.

In a single payer system that prohibits private insurance coverage for benefits provided by the public system, essentially all physicians are covered – the equivalent of all physicians being “in-network.” Fees are fair since they are publicly administered, paying enough to support the system and provide fair margins, yet not paying so much that it would be an excessive burden on the taxpayers who finance the system. An ideal single payer system provides first dollar coverage for all essential benefits, thus the patient is not exposed to surprise bills, whether in- or out-of-network, nor to deductibles and coinsurance which can be unaffordable under our current financing system.

Private insurers are providing us services that we do not want: costly, excessive administrative services that serve the insurers rather than the patients, excessive patient cost-sharing that can make health care access unaffordable, and narrow provider networks that take health care choices away from patients. Instead of narrowly confining their considerations to surprise bills, our legislators should get to the root of the problem and eliminate the private insurer intermediaries who are screwing up the system.

It is long past time to enact a just system that works: a single payer national program, aka an improved Medicare for all.

By The Times Editorial Board
Los Angeles Times, July 12, 2016

California lawmakers have been trying for more than a decade to protect hospital patients from being hit with huge bills from doctors who aren’t part of their health insurer’s network. They have another opportunity to do so this year, and they should seize it.

The problem arises when patients go to an in-network hospital or clinic to be treated by an in-network surgeon or other physician, but wind up receiving care (often without their knowledge) from an anesthesiologist, pathologist, radiologist or other specialist who’s not in the network. A nasty surprise arrives weeks later, when the out-of-network specialists bill them for the portion of their fee that the insurer wouldn’t cover — an amount that can be in the thousands of dollars. According to a survey by the Kaiser Family Foundation, 70% of the patients struggling to pay out-of-network doctors had not known they were going to be treated by someone who didn’t accept their insurance.

Physicians’ trade groups insist that they don’t like surprise medical bills either. The challenge has been figuring out how to create a system that encourages insurers, hospitals and doctors to avoid these situations while still providing a fair payment to the out-of-network physicians who provide treatment.

Congress provided a measure of help in the Affordable Care Act for patients receiving emergency care from out-of-network doctors by requiring insurers to cover the same percentage of the costs as they would have if the doctors had been in network. California law goes further, barring out-of-network doctors who deliver emergency care from billing patients for the amount the insurer doesn’t cover. But that still leaves patients vulnerable for non-emergency care.

Having hospitals and clinics make sure that each patient is treated only by specialists in the patient’s provider network would be one way to end surprise bills, but it would require them to manage doctors more directly than they do today. And there’s no guarantee today that the necessary specialists would be available in a patient’s network.

Assemblyman Rob Bonta (D-Alameda) and a bipartisan group of cosponsors have taken a more pragmatic approach. Their bill, AB 72, would require out-of-network doctors to obtain a patient’s permission at least a day before providing non-emergency treatment at an in-network hospital or clinic. If the patient doesn’t voluntarily agree to be treated by a specific out-of-network doctor and pay the extra charges, he or she couldn’t be billed for more than an in-network provider would have cost — even if out-of-network doctors are brought in. Any participating out-of-network doctor, meanwhile, would have to accept the average amount paid to in-network doctors or go to arbitration with the insurer.

The risk here is that too many of the physicians that don’t want to join insurance networks will simply refuse to see patients who won’t pay their full rate. The bill takes a reasonable approach to the core problem, which is the fact that patients are being hit with huge bills they hadn’t anticipated and had no say in. Lawmakers still have to iron out some details, however, to make sure the system works fairly for everyone. For example, the bill needs to give insurers an incentive to bring into their networks a full complement of specialists at every in-network hospital, rather than counting on out-of-network doctors being willing to treat patients at a discount.

There will always be tension between what insurers want to pay and what providers want to be paid for their services, especially in regions where one or the other faces limited competition. So there will inevitably be fights over how much a provider’s service is worth to an insurer, and vice versa. But there’s no reason patients should be caught by surprise in the middle of that fight.

http://www.latimes.com/opinion/editorials/la-ed-surprise-medical-bills-20160711-snap-story.html

There are many injustices inherent in our dysfunctional, fragmented system of financing health care, and surprise medical bills from out-of-network physicians is one of them. Patients who have health insurance should not have to face these bills that otherwise would have been covered by their insurance. So what is the solution?

First we have to understand the problem. Surprise medical bills pop up because the insurer has not contracted with all of the members of the team that provides care for the patient. In-network physicians have their fees set by the contract they have signed with the insurer. Out-of-network physicians have no such contract and thus feel free to set their own fees.

The patient has selected an insurance plan – a contract – which provides coverage for in-network physicians. Some plans may provide partial coverage for out-of-network physicians but usually only at rates that are even lower than in-network physicians would be paid. Because the insurer has no contract with the out-of-network physician, the patient must pay not only the difference between the contracted rate and the lower out-of-network rate but also must pay the entire balance of the full fee charged by the out-of-network physician.

Various legislative solutions have been considered to protect the patient from these charges that most consider to be unfair when the patients have fulfilled their responsibility of obtaining adequate insurance coverage. Some have suggested that the insurers should be required to pay the full fee of the out-of-network physician. But then why would any physician sign a contract with the insurer if by remaining out-of-network they can receive their full list fee instead of the discounted contract fee? That would destroy the concept behind the contracted physician networks and result in intolerable fee inflation.

Most legislative solutions then turn to the physicians to demand that they accept the fee determined by the insurer even though no contract exists with these out-of-network physicians. In this instance, why would the insurer make an effort to be sure that they have a full complement of physicians available so that patients would not be inadvertently provided care by an out-of-network physician. Under such a requirement, if the insurer establishes only a narrow network of physicians then they could limit payments to the level of their contracted rates for all other out-of-network physicians without contracts. This gives private insurers the right to set rates outside of their plans, even if unreasonably low – hardly a free market solution.

So who is to blame? The patient for not selecting a plan that contracts with all physicians that might be needed in the future, even if that is impossible to know? The physician who the insurer has not included in their deliberately restricted networks? The insurer who has created restricted networks to control fees at the cost of limiting coverage for often unavoidable services provided by out-of-network physicians?

By now it should be obvious that the real problem is with the defective design of our dysfunctional health care financing infrastructure. Solutions should be directed at correcting the defects in the infrastructure.

In a single payer system that prohibits private insurance coverage for benefits provided by the public system, essentially all physicians are covered – the equivalent of all physicians being “in-network.” Fees are fair since they are publicly administered, paying enough to support the system and provide fair margins, yet not paying so much that it would be an excessive burden on the taxpayers who finance the system. An ideal single payer system provides first dollar coverage for all essential benefits, thus the patient is not exposed to surprise bills, whether in- or out-of-network, nor to deductibles and coinsurance which can be unaffordable under our current financing system.

Private insurers are providing us services that we do not want: costly, excessive administrative services that serve the insurers rather than the patients, excessive patient cost-sharing that can make health care access unaffordable, and narrow provider networks that take health care choices away from patients. Instead of narrowly confining their considerations to surprise bills, our legislators should get to the root of the problem and eliminate the private insurer intermediaries who are screwing up the system.

It is long past time to enact a just system that works: a single payer national program, aka an improved Medicare for all.

United States Health Care Reform: Progress to Date and Next Steps

By Barack Obama, JD
JAMA, July 11, 2016 (Online)

Abstract

Importance: The Affordable Care Act is the most important health care legislation enacted in the United States since the creation of Medicare and Medicaid in 1965. The law implemented comprehensive reforms designed to improve the accessibility, affordability, and quality of health care.

Objectives: To review the factors influencing the decision to pursue health reform, summarize evidence on the effects of the law to date, recommend actions that could improve the health care system, and identify general lessons for public policy from the Affordable Care Act.

Evidence: Analysis of publicly available data, data obtained from government agencies, and published research findings. The period examined extends from 1963 to early 2016.

Findings: The Affordable Care Act has made significant progress toward solving long-standing challenges facing the US health care system related to access, affordability, and quality of care. Since the Affordable Care Act became law, the uninsured rate has declined by 43%, from 16.0% in 2010 to 9.1% in 2015, primarily because of the law’s reforms. Research has documented accompanying improvements in access to care (for example, an estimated reduction in the share of nonelderly adults unable to afford care of 5.5 percentage points), financial security (for example, an estimated reduction in debts sent to collection of $600-$1000 per person gaining Medicaid coverage), and health (for example, an estimated reduction in the share of nonelderly adults reporting fair or poor health of 3.4 percentage points). The law has also begun the process of transforming health care payment systems, with an estimated 30% of traditional Medicare payments now flowing through alternative payment models like bundled payments or accountable care organizations. These and related reforms have contributed to a sustained period of slow growth in per-enrollee health care spending and improvements in health care quality. Despite this progress, major opportunities to improve the health care system remain.

Conclusions and Relevance: Policy makers should build on progress made by the Affordable Care Act by continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees, introducing a public plan option in areas lacking individual market competition, and taking actions to reduce prescription drug costs. Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.

Building on Progress to Date (excerpt)

Third, more can and should be done to enhance competition in the Marketplaces. For most Americans in most places, the Marketplaces are working. The ACA supports competition and has encouraged the entry of hospital-based plans, Medicaid managed care plans, and other plans into new areas. As a result, the majority of the country has benefited from competition in the Marketplaces, with 88% of enrollees living in counties with at least 3 issuers in 2016, which helps keep costs in these areas low. However, the remaining 12% of enrollees live in areas with only 1 or 2 issuers. Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan. Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers. The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited. Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.

Lessons for Future Policy Makers (excerpt)

The third lesson is the importance of pragmatism in both legislation and implementation. Simpler approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all. Yet the nation typically reaches its greatest heights when we find common ground between the public and private good and adjust along the way. That was my approach with the ACA. We engaged with Congress to identify the combination of proven health reform ideas that could pass and have continued to adapt them since.

As this progress with health care reform in the United States demonstrates, faith in responsibility, belief in opportunity, and ability to unite around common values are what makes this nation great.

The full article can be downloaded for free at the JAMA website:

http://jama.jamanetwork.com/article.aspx?articleid=2533698

***

Comment:

By Don McCanne, M.D.

In this JAMA article, President Obama understandably touts the benefits of his Affordable Care Act (ACA) and describes some of the problems that remain that need to be addressed. Two serious deficiencies of his article are that he fails to acknowledge the fact that some of the changes taking place are actually detrimental, and his proposals for the way forward are grossly inadequate when considering the need.

A few examples of where changes have been detrimental include the expansion of intolerably high deductibles creating financial barriers to care, increased use of narrow provider networks impairing access to care, and expansion of administrative excesses including the Marketplaces (ACA insurance exchanges) and the new models of paying for care (APMs, ACOs, and MACRA models).

The President touts enhanced competition in the Marketplaces as a way forward when the prevailing evidence indicates that competition in private insurance markets is ineffective in improving quality and reducing costs. It is predicted that insurance premium increases for 2017 will confirm that the ACA exchanges have not been effective in controlling costs. Not only are insurance premiums going up, but more costs are being shifted to patients in the form of higher out-of-pocket spending.

The media are reporting the President’s recommendation for a “Medicare-like public plan,” yet the hope that a public option will open the door for single payer cannot be realized when it is offered only as another option in our fragmented system of financing health care. The failure of the co-ops should signal to us the deficiencies of a public or quasi-public option which is designed to protect the markets of the private insurers. The private Medicare Advantage plans are continuing to displace the traditional Medicare program because the politicians have provided the private plans with extra funds and regulatory freedom that allow them to “compete” unfairly with Medicare.

Finally, the President presents single payer and government vouchers for private plans as being the two extremes of health care financing reform, whereas ACA represents the “common ground between the public and private good.” Placing ideologically-driven health care reform policies along a linear political spectrum and then choosing the middle is an extremely simplistic and highly flawed approach to health policy. Health policies should be placed along a spectrum of effectiveness of those policies in achieving health reform goals of universality, efficiency, equity, comprehensiveness, accessibility, and affordability. Then the extreme that achieves those goals should be accepted as the ideal model for reform while rejecting those policies at the other end. To no surprise, using a spectrum based on optimal health policy leads us logically to single payer.

The President ends with the statement, “As this progress with health care reform in the United States demonstrates, faith in responsibility, belief in opportunity, and ability to unite around common values are what makes this nation great.” With the majority of the nation now supporting a federally funded health care system, isn’t that a call for uniting around health care reform that really works: a single payer national health program?

United States Health Care Reform: Progress to Date and Next Steps

By Barack Obama, JD
JAMA, July 11, 2016 (Online)

Abstract

Importance: The Affordable Care Act is the most important health care legislation enacted in the United States since the creation of Medicare and Medicaid in 1965. The law implemented comprehensive reforms designed to improve the accessibility, affordability, and quality of health care.

Objectives: To review the factors influencing the decision to pursue health reform, summarize evidence on the effects of the law to date, recommend actions that could improve the health care system, and identify general lessons for public policy from the Affordable Care Act.

Evidence: Analysis of publicly available data, data obtained from government agencies, and published research findings. The period examined extends from 1963 to early 2016.

Findings: The Affordable Care Act has made significant progress toward solving long-standing challenges facing the US health care system related to access, affordability, and quality of care. Since the Affordable Care Act became law, the uninsured rate has declined by 43%, from 16.0% in 2010 to 9.1% in 2015, primarily because of the law’s reforms. Research has documented accompanying improvements in access to care (for example, an estimated reduction in the share of nonelderly adults unable to afford care of 5.5 percentage points), financial security (for example, an estimated reduction in debts sent to collection of $600-$1000 per person gaining Medicaid coverage), and health (for example, an estimated reduction in the share of nonelderly adults reporting fair or poor health of 3.4 percentage points). The law has also begun the process of transforming health care payment systems, with an estimated 30% of traditional Medicare payments now flowing through alternative payment models like bundled payments or accountable care organizations. These and related reforms have contributed to a sustained period of slow growth in per-enrollee health care spending and improvements in health care quality. Despite this progress, major opportunities to improve the health care system remain.

Conclusions and Relevance: Policy makers should build on progress made by the Affordable Care Act by continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees, introducing a public plan option in areas lacking individual market competition, and taking actions to reduce prescription drug costs. Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.

Building on Progress to Date (excerpt)

Third, more can and should be done to enhance competition in the Marketplaces. For most Americans in most places, the Marketplaces are working. The ACA supports competition and has encouraged the entry of hospital-based plans, Medicaid managed care plans, and other plans into new areas. As a result, the majority of the country has benefited from competition in the Marketplaces, with 88% of enrollees living in counties with at least 3 issuers in 2016, which helps keep costs in these areas low. However, the remaining 12% of enrollees live in areas with only 1 or 2 issuers. Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan. Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers. The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited. Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.

Lessons for Future Policy Makers (excerpt)

The third lesson is the importance of pragmatism in both legislation and implementation. Simpler approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all. Yet the nation typically reaches its greatest heights when we find common ground between the public and private good and adjust along the way. That was my approach with the ACA. We engaged with Congress to identify the combination of proven health reform ideas that could pass and have continued to adapt them since.

As this progress with health care reform in the United States demonstrates, faith in responsibility, belief in opportunity, and ability to unite around common values are what makes this nation great.

The full article can be downloaded for free at the JAMA website:

http://jama.jamanetwork.com/article.aspx?articleid=2533698

In this JAMA article, President Obama understandably touts the benefits of his Affordable Care Act (ACA) and describes some of the problems that remain that need to be addressed. Two serious deficiencies of his article are that he fails to acknowledge the fact that some of the changes taking place are actually detrimental, and his proposals for the way forward are grossly inadequate when considering the need.

A few examples of where changes have been detrimental include the expansion of intolerably high deductibles creating financial barriers to care, increased use of narrow provider networks impairing access to care, and expansion of administrative excesses including the Marketplaces (ACA insurance exchanges) and the new models of paying for care (APMs, ACOs, and MACRA models).

The President touts enhanced competition in the Marketplaces as a way forward when the prevailing evidence indicates that competition in private insurance markets is ineffective in improving quality and reducing costs. It is predicted that insurance premium increases for 2017 will confirm that the ACA exchanges have not been effective in controlling costs. Not only are insurance premiums going up, but more costs are being shifted to patients in the form of higher out-of-pocket spending.

The media are reporting the President’s recommendation for a “Medicare-like public plan,” yet the hope that a public option will open the door for single payer cannot be realized when it is offered only as another option in our fragmented system of financing health care. The failure of the co-ops should signal to us the deficiencies of a public or quasi-public option which is designed to protect the markets of the private insurers. The private Medicare Advantage plans are continuing to displace the traditional Medicare program because the politicians have provided the private plans with extra funds and regulatory freedom that allow them to “compete” unfairly with Medicare.

Finally, the President presents single payer and government vouchers for private plans as being the two extremes of health care financing reform, whereas ACA represents the “common ground between the public and private good.” Placing ideologically-driven health care reform policies along a linear political spectrum and then choosing the middle is an extremely simplistic and highly flawed approach to health policy. Health policies should be placed along a spectrum of effectiveness of those policies in achieving health reform goals of universality, efficiency, equity, comprehensiveness, accessibility, and affordability. Then the extreme that achieves those goals should be accepted as the ideal model for reform while rejecting those policies at the other end. To no surprise, using a spectrum based on optimal health policy leads us logically to single payer.

The President ends with the statement, “As this progress with health care reform in the United States demonstrates, faith in responsibility, belief in opportunity, and ability to unite around common values are what makes this nation great.” With the majority of the nation now supporting a federally funded health care system, isn’t that a call for uniting around health care reform that really works: a single payer national health program?

Secret Shoppers Find Access To Providers And Network Accuracy Lacking For Those In Marketplace And Commercial Plans

By Simon F. Haeder, David L. Weimer and Dana B. Mukamel
Health Affairs, July 2016

Abstract

The adequacy of provider networks for plans sold through insurance Marketplaces established under the Affordable Care Act has received much scrutiny recently. Various studies have established that networks are generally narrow. To learn more about network adequacy and access to care, we investigated two questions. First, no matter the nominal size of a network, can patients gain access to primary care services from providers of their choice in a timely manner? Second, how does access compare to plans sold outside insurance Marketplaces? We conducted a “secret shopper” survey of 743 primary care providers from five of California’s nineteen insurance Marketplace pricing regions in the summer of 2015. Our findings indicate that obtaining access to primary care providers was generally equally challenging both inside and outside insurance Marketplaces. In less than 30 percent of cases were consumers able to schedule an appointment with an initially selected physician provider. Information about provider networks was often inaccurate. Problems accessing services for patients with acute conditions were particularly troubling. Effectively addressing issues of network adequacy requires more accurate provider information.

From the Discussion

Two patterns emerged from our survey. First, and most striking, new patients in either Covered California or the comparable commercial plan had very low prospects—less than 30 percent—of securing an appointment with any randomly chosen provider. The odds got only slightly better in terms of getting an appointment with any provider in the practice. The results were particularly disheartening in the case of patients presenting with acute conditions. Although the average wait time was reduced by about half when compared to physical exams, it nonetheless took eight to twelve days to get an appointment with a physician or physician extender. Moreover, only a handful of providers suggested that patients seek care at an urgent care center. These findings suggest that the third step in health care access, scheduling an appointment with a physician, has much room for improvement. At least accurate lists of providers, including whether the provider is accepting new patients, should be available for patients when they make choices about health plans.

Second, patients in commercial plans tended to fare somewhat better than their counterparts in Covered California plans, in terms of both getting appointments and the time to appointment. However, not only were these differences relatively small and often statistically insignificant, they were dwarfed by the overall difficulty of getting appointments with the desired provider. So, although it was marginally more difficult to get timely care in Covered California plans than their commercial counterparts, substantially increasing access requires more than just equalizing access in the two types of insurance coverage.

Conclusion

Improving access to care by improving access to affordable health insurance is one of the main goals of the Affordable Care Act. However, as our analysis has shown, access to health insurance is not necessarily synonymous with access to health care services. Network accuracy is an important, albeit heretofore largely overlooked, component of access for patients. At the same time, as earlier reforms in Massachusetts have shown, increasing the number of insured people without a commensurate increase in capacity further exacerbates the situation. The more frustrated people become as they are trying to access care, the more likely they are to defer or forgo care, or to choose more expensive options such as emergency departments.

http://content.healthaffairs.org/content/35/7/1160.abstract

***

Comment:

By Don McCanne, M.D.

Covered California is one of the best functioning health insurance exchanges established under the Affordable Care Act (ACA), yet 70 percent of patients enrolled were not able to schedule an appointment with an initially selected physician from the provider list. This was not a problem unique to the ACA exchanges since the same was essentially true for individual insurance plans offered outside of the exchanges.

The fundamental defect is in having selected a health care financing system dependent on private insurance plans. Private plans use innovations such as narrow provider networks and high deductibles which improve the business outcome for the insurer at a cost of impairing health care access for the patient.

It is obvious that we would all benefit by replacing our current dysfunctional health care financing system with a single payer national health program – an Improved Medicare for All. Yet the political outlook seems quite dim right now. The leading advocate for single payer reform, Bernie Sanders, having failed to gain enough support for the Democratic nomination for president, is currently in negotiations with Hillary Clinton, an avowed opponent of single payer, in which he will withdraw his demand for Medicare for All in exchange for other beneficial health care policies such as the expansion of federally qualified community health centers.

We have a formidable task before us. The majority of the nation does want Medicare to be expanded to cover everyone, yet the two dominant political parties are controlled by conservatives and neoliberals, both supporting the private insurance industry. We must continue with our efforts to inform the public on the superiority of the single payer model, but we also have to step up our efforts in coalition and grassroots organizing. We may have majority support for the concept of Medicare for All, but we do not yet have a critical mass for political action.

We need to keep in mind that our mission is not to assuage our own egos by gaining a political victory, but it is the much more noble goal of improving the health care of the nation. That should make us want to continue to carry the torch in spite of the unfavorable political climate. We have a lot of work to do.

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

Secret Shoppers Find Access To Providers And Network Accuracy Lacking For Those In Marketplace And Commercial Plans

By Simon F. Haeder, David L. Weimer and Dana B. Mukamel
Health Affairs, July 2016

Abstract

The adequacy of provider networks for plans sold through insurance Marketplaces established under the Affordable Care Act has received much scrutiny recently. Various studies have established that networks are generally narrow. To learn more about network adequacy and access to care, we investigated two questions. First, no matter the nominal size of a network, can patients gain access to primary care services from providers of their choice in a timely manner? Second, how does access compare to plans sold outside insurance Marketplaces? We conducted a “secret shopper” survey of 743 primary care providers from five of California’s nineteen insurance Marketplace pricing regions in the summer of 2015. Our findings indicate that obtaining access to primary care providers was generally equally challenging both inside and outside insurance Marketplaces. In less than 30 percent of cases were consumers able to schedule an appointment with an initially selected physician provider. Information about provider networks was often inaccurate. Problems accessing services for patients with acute conditions were particularly troubling. Effectively addressing issues of network adequacy requires more accurate provider information.

From the Discussion

Two patterns emerged from our survey. First, and most striking, new patients in either Covered California or the comparable commercial plan had very low prospects—less than 30 percent—of securing an appointment with any randomly chosen provider. The odds got only slightly better in terms of getting an appointment with any provider in the practice. The results were particularly disheartening in the case of patients presenting with acute conditions. Although the average wait time was reduced by about half when compared to physical exams, it nonetheless took eight to twelve days to get an appointment with a physician or physician extender. Moreover, only a handful of providers suggested that patients seek care at an urgent care center. These findings suggest that the third step in health care access, scheduling an appointment with a physician, has much room for improvement. At least accurate lists of providers, including whether the provider is accepting new patients, should be available for patients when they make choices about health plans.

Second, patients in commercial plans tended to fare somewhat better than their counterparts in Covered California plans, in terms of both getting appointments and the time to appointment. However, not only were these differences relatively small and often statistically insignificant, they were dwarfed by the overall difficulty of getting appointments with the desired provider. So, although it was marginally more difficult to get timely care in Covered California plans than their commercial counterparts, substantially increasing access requires more than just equalizing access in the two types of insurance coverage.

Conclusion

Improving access to care by improving access to affordable health insurance is one of the main goals of the Affordable Care Act. However, as our analysis has shown, access to health insurance is not necessarily synonymous with access to health care services. Network accuracy is an important, albeit heretofore largely overlooked, component of access for patients. At the same time, as earlier reforms in Massachusetts have shown, increasing the number of insured people without a commensurate increase in capacity further exacerbates the situation. The more frustrated people become as they are trying to access care, the more likely they are to defer or forgo care, or to choose more expensive options such as emergency departments.

http://content.healthaffairs.org/content/35/7/1160.abstract

Covered California is one of the best functioning health insurance exchanges established under the Affordable Care Act (ACA), yet 70 percent of patients enrolled were not able to schedule an appointment with an initially selected physician from the provider list. This was not a problem unique to the ACA exchanges since the same was essentially true for individual insurance plans offered outside of the exchanges.

The fundamental defect is in having selected a health care financing system dependent on private insurance plans. Private plans use innovations such as narrow provider networks and high deductibles which improve the business outcome for the insurer at a cost of impairing health care access for the patient.

It is obvious that we would all benefit by replacing our current dysfunctional health care financing system with a single payer national health program – an Improved Medicare for All. Yet the political outlook seems quite dim right now. The leading advocate for single payer reform, Bernie Sanders, having failed to gain enough support for the Democratic nomination for president, is currently in negotiations with Hillary Clinton, an avowed opponent of single payer, in which he will withdraw his demand for Medicare for All in exchange for other beneficial health care policies such as the expansion of federally qualified community health centers.

We have a formidable task before us. The majority of the nation does want Medicare to be expanded to cover everyone, yet the two dominant political parties are controlled by conservatives and neoliberals, both supporting the private insurance industry. We must continue with our efforts to inform the public on the superiority of the single payer model, but we also have to step up our efforts in coalition and grassroots organizing. We may have majority support for the concept of Medicare for All, but we do not yet have a critical mass for political action.

We need to keep in mind that our mission is not to assuage our own egos by gaining a political victory, but it is the much more noble goal of improving the health care of the nation. That should make us want to continue to carry the torch in spite of the unfavorable political climate. We have a lot of work to do.

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