PNHP

Aducanumab as a Lens on U.S. Health Care

Aducanumab as a Lens on U.S. Health Care

Summary: The June 2021 FDA approval of Aducanumab for Alzheimer’s, despite absent evidence of clinical benefit, and now a sharp increase in Medicare Part B premiums, reflects much of what’s wrong with our healthcare system: huge profits enabled by flawed medical care policies and extortionate prices, racism in clinical trial design, and financing burdens transferred to those who can least afford them.

‘Reckless’ FDA and Big Pharma Greed Blamed for Medicare Premium Hike, Common Dreams, November 16, 2021, by Jake Johnson

Medicare Part B recipients will soon be hit with one of the biggest premium increases in the history of the government program, a hike driven in large part by the Food and Drug Administration’s scandalous approval of a costly—and, according to many experts, dubious—Alzheimer’s drug.

“Medicare’s inability to negotiate lower drug prices means that Big Pharma companies can charge whatever they want.” Last week, the Centers for Medicare and Medicaid Services (CMS) announced that monthly Medicare Part B premiums will be raised to $170.10 in 2022, up from this year’s level of $148.50.

While CMS officials cited several factors in their explanation of the premium boost—including costs imposed by the coronavirus pandemic—they attributed roughly half of the increase to “additional contingency reserves due to the uncertainty regarding the potential use of the Alzheimer’s drug, Aduhelm™ (aducanumab), by people with Medicare.”

Medicare is currently in the process of deciding whether to cover the drug, which is priced at a staggering $56,000 per year.

A June analysis by the Kaiser Family Foundation estimated that if 500,000 Medicare recipients are prescribed Aduhelm, total spending on the drug in a single year would be close to $29 billion—”an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending.” 


The FDA’s accelerated approval of aducanumab sparked outrage among public health experts and prompted the resignations of several agency advisers, who said there was not enough evidence showing the drug actually works to slow Alzheimer’s-induced cognitive decline.

On top of concerns about the treatment’s lack of effectiveness as well as potentially unlawful coordination between the FDA and manufacturer Biogen throughout the approval process, advocacy groups warned the decision to greenlight the exorbitantly priced drug “threatens to bankrupt the Medicare program.”

Dr. Michael Carome, director of Public Citizen’s Health Research Group [said] “To protect the many Medicare beneficiaries who cannot afford the unacceptable 15% jump in Part B premiums, CMS must promptly announce that it will exclude aducanumab from coverage under the Medicare program until there is definitive evidence that the drug provides substantial evidence of cognitive benefit to Alzheimer’s disease patients.”

F.D.A. Approves Alzheimer’s Drug Despite Fierce Debate Over Whether It Works, New York Times, June 7, 2021, by Pam Belluck and Rebecca Robbins

Aducanumab, or Aduhelm, is the first new Alzheimer’s treatment in 18 years and the first to attack the disease process. But some experts say there’s not enough evidence it can address cognitive symptoms.

Nothing is right about the approval of aducanumab—and nothing’s new, The BMJ Opinion, November 4, 2021, by Nancy Olivieri

[ More on the science and on flawed FDA regulatory history ]

What the Aducanumab Approval Reveals About Alzheimer Disease Research, JAMA Neurol, October 4, 2021, by Jennifer Manly and Maria Glymour

FDA approval was based on trials that were not inclusive of the people who bear a disproportionate burden of disease. Only 0.6% of participants (ie, 19 individuals) identified as Black 
 Older Black adults are estimated to have AD incidence up to double the rates in older White people. Despite this, Biogen reported that only 6 Black people were randomized to the treatment dose approved by the FDA.

Instead of wasting money on aducanumab, pay for programs proven to help people living with dementia, J American Geriatrics Society, August 2021, by Lauren Hunt et al.

[W]e are heartbroken at the opportunity cost that may result from spending of limited resources on aducanumab versus the many ways we could help PLWD [persons living with dementia] 
 we expand on several specific approaches that we believe could have the highest yield in improving care for PLWD and their caregivers. Home-based Personal Care 
 Comprehensive Dementia Care 
 Community-Based Palliative Care.

Comment:

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

Here’s how health policy is supposed to function, IMHO: new interventions are demonstrated effective in relevant populations, and then added to the healthcare toolkit, with all efforts made to assure affordability for patients and the system.

Here’s what happened with aducanumab: the intervention doesn’t work (according to clinical trials), it wasn’t tested in high risk black populations, and it was approved by the FDA anyway, with undue manufacturer influence. The Medicare program is not permitted to negotiate prices, so the drug is sold at a massive price per patient per year (enriching the manufacturer Biogen), and the cost is passed along to Medicare enrollees, coming out of their social security income. Programs for PLWD that are known to work remain unfunded.

Note – these big price boosts are for traditional Medicare, thus enhancing the marketing position of private Medicare Advantage plans. The CMS officials in the thrall of private insurers didn’t mind that a bit, no doubt.

Under single payer, aducanumab would be reimbursed only once shown effective, and only once the price was negotiated down to an affordable level. Meantime, proven community programs would be funded.

http://healthjusticemonitor.org…

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We Cringe When Hospital “CMO” Means “Chief Marketing Officer”

Summary: Big academic hospitals like Harvard’s Mass General Brigham now mount huge marketing efforts, similar to those of consumer products corporations. The message is clear: big academic hospitals are big business. Many health care providers wince.

Mark Bohen, Chief Marketing Officer, Hired September 2020, Mass General Brigham, Website accessed Nov 15, 2021

Mark Bohen, MBA is the Chief Marketing Officer for Mass General Brigham. He is responsible for building and leading a world class marketing and communications organization and ensuring that people in the nation and around the globe know about the world class research, clinical care, innovations and education taking place throughout the Mass General Brigham system. Mark is also bringing classical marketing principles, science, and discipline to the organization. In addition, Mark is leading all marketing and communication functions, including brand management, data analytics, consumer research and insights, digital/social, service line and hospital marketing, marketing strategy, and internal and external system-wide communications.

Prior to joining Mass General Brigham in September 2020, Mark spent the previous four years at Beaumont Health, the largest health system in Michigan, where he led all marketing and communications strategies and tactics. While at Beaumont, Mark built and developed new marketing capabilities for better patient outreach while also focused on continued enhancement of Beaumont’s reputation and position in the state’s competitive health care marketplace. He also brought together three legacy marketing and communication departments and created system capabilities and roles that offered his team exciting growth opportunities. Mark led brand management at Beaumont after the merger of three health systems and built a new brand architecture. He has partnered with hospital, physician, and service line leaders to create marketing plans that drive growth.

Previously, Mark was the Senior Vice President of Marketing and Innovation at Assurant, Inc., and he spent more than ten years in the consumer-packaged goods industry, including time at Nabisco where he worked on some of the world’s best-known brands like Oreos and Ritz crackers. Mark earned his BS degree in Marketing from Syracuse University and his MBA from Duke University.

Comment:

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

Partners Health Care, the amalgamation of Boston’s Massachusetts General and Brigham and Women’s Hospitals – “non-profits” that are major teaching hospitals for Harvard Medical School – recently spent $100 million rebranding itself as “Mass General Brigham”.  Meanwhile, in the past 9 months the system’s two banner hospitals had “surpluses” (AKA profits) of $223 million (Brigham) and $147 million (Mass General).

We doubt that the hospitals’ patients or communities would see rebranding or marketing as priorities. But this otherwise grim story has a humorous twist. Toward the end of the CMO’s bio we learn of his previous experience marketing Ritz Crackers and Oreos.

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Medicare for All Explained Podcast: Episode 67

Interview with Dr. Judith Albert

November 15, 2021

PNHP national board member Dr. Judith Albert reminds us that health is lifelong concern for patients…which is why health coverage needs to be lifelong for everybody, with no gaps and no barriers that prevent people from seeking care.

“You can’t set a stop time for when you deserve to have health care and when you don’t.”

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

https://medicareforallexplained.podbean.com

Veterans Health Administration Under Attack

Summary: Veterans Day weekend is the perfect moment to contemplate actions from Washington that threaten the Veterans Health Administration, one of the finest elements of the US healthcare system. The VHA is government single payer, providing very high access to and quality of care. Or was until recent aggressive privatization started to undermine it. The VHA must be saved. Our veterans deserve nothing less.

Broken promises: Veteran health care is being replaced by the private sector, The Hill, November 5, 2021, by Russell B. Lemle and Suzanne Gordon

In 2018, Congress passed then-President Trump’s signature veterans’ legislation, the VA MISSION Act, which was designed to shift many more patients from the Veterans Health Administration (VHA) to the private sector through a newly formed Veterans Community Care Program (VCCP). Lawmakers assured wary stakeholders that the VCCP would “supplement, not supplant” the VHA. This law was about options, they were told, not privatization.

Three years on, it’s clear that those were empty promises. VHA services are being rapidly replaced by private-sector care, even as studies continue to confirm that non-VA care generally is of lower quality and higher costs.

A recent study reveals the situation has become dire. Between April 2019 and December 2020, VHA’s total monthly encounters shrank by 25 percent. Over that same period, VCCP continued its non-stop expansion, rising to 34 percent of all care delivered to veterans at taxpayer expense. 


The hollowing out of the VHA is a direct result of MISSION Act provisions that were then exploited by the Trump administration in developing eligibility regulations for private sector care. When the VCCP was implemented in 2019, one-third of all veteran patients suddenly became automatically eligible for non-VA care if driving to a VHA facility takes more than a half-hour. A referral is offered even if a VHA clinic/hospital is geographically closer than a non-VA one, which is often the case.

Although wait times in the VHA are typically shorter than those in the private sector, regulations nonetheless cause massive numbers of veterans to be sent to the private sector if the VHA cannot schedule an appointment within 20 or 28 days. 
 Once in the VCCP, which has no wait time requirement, veterans often languish for months to be seen.

VHA Caregivers Provide Privatization Reality Check, The American Prospect, September 30, 2021, by Suzanne Gordon

[J]ust as MISSION Act critics predicted, using private-sector contractors is no guarantee that veterans will get equivalent or better care in more timely fashion.

Two small but important surveys of well-informed VHA caregivers, along with interviews conducted by the Prospect itself, confirm that “community care” is neither quicker nor subject to effective federal oversight, despite its ballooning cost to the VHA. 


While some veterans haven’t experienced long delays to see a private-sector provider, most are waiting between one and four months for mental-health, medical, and surgical appointments, according to VHA nurses who answered the NOVA survey. When patients do end up going outside the VHA, nurses often don’t receive required progress reports from private-sector providers. 


Mental-health services are particularly at risk under the CCN. Some observers who have been following VA mental health are concerned by reports that, in some VA medical centers around the country, hundreds of veterans who were referred to private-sector mental-health professionals were waiting for up to three months for just a telehealth appointment. 


One nurse surveyed by NOVA reported that their teams may be spending from 10 to 60 hours a week trying to monitor private-sector care, which means they can’t provide direct care to veterans. In some facilities, one or two mental-health professionals may be shifted from taking care of veterans to chasing down information from private-sector providers.

Comment:

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

The Veterans Health Administration is a fine example of single payer, indeed of a national health service, like in the United Kingdom. It has a long history of high quality of care.

But Washington is eager to privatize, especially aggressively with Trump administration regulation manipulations. As reported by these two recent articles, the rules used to guide veterans to the private sector are irrational and biased. And the result is diverting critical resources – funding and staff time – from VHA clinical capacity. Care is shunted to inferior private sector providers; as we recently reported, clinical outcomes suffer.

There are efforts to protect the VHA. Suzanne Gordon, author of both reported articles today and Wounds of War: How the VA Delivers Health, Healing, and Hope to the Nation’s Veterans, is a senior analyst at the Veterans Healthcare Policy Institute (VHPI), which provides detailed analysis of legislation affecting VHA and studies the benefits provided by the nation’s largest government-run healthcare system. She also works with Save Our VA Project (SOVA), which issues Calls to Action (CTAs) — letters to Congress and the administration on issues crucial to halting and reversing the privatization of VHA.

In honor of the veterans, support the high quality VHA care.

http://healthjusticemonitor.org…

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Medicare is on the menu

By Robert S. Kiefner, M.D.
Concord (N.H.) Monitor, November 12, 2021

Since 1965, Medicare has been the foundation of medical care for millions of seniors and those with disabilities in this country. Now, however, it is on the dinner table, being served as an appetizer and main course to ravenous for-profit corporate entities as never before.

Once a relatively straightforward plan, publicly financed and privately delivered care with extremely low overhead, Medicare has become hopelessly complex and impossible to navigate, complements of health insurers, Big Pharma, enabling legislators, think tank “geniuses” and a great multitude of wealthy lobbyists.

For all of its shortcomings, traditional Medicare has provided reasonable security for those in need of patient-centered, comprehensive and affordable healthcare. Indeed, if we had simply followed the lead of other industrialized countries with a comprehensive not-for-profit model, we could have offered truly universal coverage (including all expenses related to inpatient and outpatient care, and complete benefits relating to drug costs, dental, vision, hearing, mental health and even paid family leave) at one half of the per capita costs which we now incur in this country. But a majority of legislators fed the rich and addictive diet of corporate contributions and, entertained by the seductive dance of lobbyists, will not let a publicly funded and not-for-profit program gain traction.

Medicare Advantage is, perhaps, the most blatant for-profit distortion of the traditional Medicare model. With the yearly Medicare enrollment window now being open, we are subject to the hyper-caffeinated cacophony of pitchmen like Joe Namath and J.J. Walker, who we perhaps thought were dead, only to return to after 30 years of irrelevance to grab a few bucks and to entice a clueless audience of Medicare-eligible folks with visions of free dental care, glasses, hearing aids, refund checks, free rides, groceries, the sun, moon and the stars.

Most of the major health insurance companies also hawk their own Medicare Advantage program with advertising dominated by entitled, perky and smart-appearing old people who annoyingly want you to know they’ve found a great deal. Here’s the real deal, though. The federal government seriously overcompensates private insurers offering this bounty of services, counting upon the astigmatism of seniors trying to read the fine print, the unchecked power of big business, and the inability of federal regulators to nail down the true cost of care.

Medicare Advantage plans have a simple business plan, which involves making bigger profits by actually paying for less care, jacking up co-pays, and restricting care to narrow networks of providers.

These plans tend to be very popular until you need them for an expensive illness.

And every fiscal conservative should be outraged by the unregulated flow of taxpayer dollars to private insurers who “control” costs by restricting care and channeling funds into their coffers.

A Wall Street Journal article on Sept. 23 by Anna Wilde Mathews highlighted the findings by the Office of the Inspector General, focusing upon the gaming of the system by the major insurers from 2016-2017.

This systematic deceit is costing taxpayers billions of dollars per year while undermining traditional Medicare.

In many cases, insurers clearly falsified the medical conditions of their clients or upcoded them relative to medical severity in order to gain higher payments to Medicare Advantage plans from the federal government. And because medical expenses may well be greater at the end of life, Medicare Advantage plans are finding ways to encourage the sickest patients to return to traditional Medicare, and thus weasel out of paying for expensive conditions. By exaggerating the severity of beneficiaries’ illnesses, Medicare Advantage plans have been able to surreptitiously increase their charges for the care of those patients, often to the tune of thousands of dollars per year per beneficiary.

According to former CMS Administrator Dr. Don Berwick, the Medicare Payment Advisory Committee (MedPAC) has documented $140 billion in overpayments to Medicare Advantage Plans over the past 12 years, and with risk adjustment overpayments on the rise, up to $355 billion will be overpaid to the plans in the next eight years. Simply put, Medicare Advantage has devised ways of signing up low-cost patients (cherry-picking) while dis-enrolling high-cost patients (lemon dropping) all while misrepresenting the severity of the illness to obtain higher payments. Recently, if you can believe it, we have become aware of an even more insidious threat to your traditional Medicare. In a scheme first floated by the Trump Administration, but still sanctioned by the Biden Administration and the Centers for Medicare Services (CMS), the creation of “Direct Contracting Entities” (DCEs) empowers middlemen (including venture capitalists) to actually manage the care of beneficiaries in traditional Medicare. DCEs will have many of the nasty features of Medicare Advantage Plans relative to the ability to inflate service codes and thereby deceitfully pad their revenues while operating with limited oversight.

Of the 53 DCEs now active in 43 states, 28 are investor-owned, six are insurer based and the rest are provider controlled (physician and hospital). Insurers control the majority of potential patients, some 57% of traditional Medicare fees for service patients.

Here’s the clincher — patients can be enrolled in a DCE without their knowledge or consent! Their doctors may end up participating in a DCE with a tempting 40% increase in provider Medicare reimbursement and a reduction in the need to comply with a set of core quality measures. Once doctors sign up with a DCE, their patients are automatically signed up. Patients may receive a letter, typically incomprehensible and quickly tossed in the trash.

While defending “Medicare for All” over many years, I was often met with the objection that “I don’t want government-controlled health care.” Well, now you will have health care decisions made by corporate types in the luxurious C-suites of health insurance companies or venture capitalists cruising the Bahamas in gigantic yachts who really want to sign you up on their plans, only to throw you overboard if you get too expensive.

Medicare Advantage may actually work well for some seniors for a period of time, before serious illness occurs and before the amassed bills exhaust the Medicare Trust Fund and bring about the collapse of traditional Medicare.

Well-funded lobbying organizations such as the Partnership for America’s Healthcare Future and the Better Medicare Alliance are spending millions of dollars daily to convince those in Congress and their constituents that a bunch of upfront freebies is more important than being able to choose your healthcare provider and to guarantee affordable healthcare in the future.

Before you dial the number for a Medicare Advantage Plan at the urging of a celebrity du jour, start a conversation with your congressional reps, your doctors and your hospital to find out just how fragile your healthcare coverage might be going forward.

Dr. Robert S. Kiefner is a retired family physician. He lives in Concord.

https://concordmonitor-nh-app.newsmemory.com…

ACA Private Plans Financial Barriers Rising

Summary: The Affordable Care Act uses private plan Marketplaces and tax subsidies to try to make insurance affordable for middle class families. New research shows that from 2015-2019, low cost Bronze plans increased in net cost, with combined premiums and deductibles reaching 26.6% of median income. ACA financial protections, already weak, are eroding.

ACA Marketplaces Became Less Affordable Over Time For Many Middle-Class Families, Especially The Near-Elderly, Health Affairs, November 2021, by Paul D. Jacobs and Steven C. Hill

From Abstract: As a measure of affordability, we calculated potential [Affordable Care Act] Marketplace premiums as a percentage of family income among families with incomes of 401– 600 percent of poverty. In 2015 half of this middle-class population would have paid at least 7.7 percent of their income for the lowest-cost bronze plan; in 2019 they would have paid at least 11.3 percent of their income. By 2019 half of the near-elderly ages 55–64 would have paid at least 18.9 percent of their income for the lowest-cost bronze plan in their area. The American Rescue Plan Act temporarily expanded tax credit eligibility for 2021 and 2022, but our results suggest that families with incomes of 401–600 percent of poverty will again face substantial financial burdens after the temporary subsidies expire.

Comment:

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

A major element of the Affordable Care Act (ACA) was to establish “Marketplaces” or “Exchanges” to facilitate access to regulated private insurance plans for the middle class – those earning too much to qualify for Medicaid, lacking workplace insurance, and not wealthy enough to go it alone.

This strategy has a number of problems. It’s inefficient, just like (even more than) all private health insurance, with administrative and profit costs. It’s a government hand-out to private insurers – after all, the subsidy is really to the insurers, passing through the insured. And the plan designs are flawed, with inconsistent coverage rules and for low-cost plans (Bronze especially) consistently high deductibles.

This new research shows that initially (2015) for families at 400-600% of the Federal Poverty Level (currently $69,680–$104,520 for a family of two), the premium represented 7.7% of income for a Bronze plan, and this reached 18.3% when including the deductible – potentially a significant financial burden and barrier to care. By 2019, these costs rose to 11.3% and 26.6% of income, respectively. For those 55-64 years old, the premium alone is now 18.9% of income.

Sorry for the deluge of geeky percentages. They reflect real financial barriers to insurance and to medical care. The fact that the portion of income is substantial and increasing should add to evidence that the ACA is a flawed overlay patch to our fundamentally dysfunctional health insurance system.

It’s time to end the overlay patches, and adopt a simple, direct, understandable, efficient, and equitable system, one that has been demonstrated to work in dozens of countries around the world. Single payer.

http://healthjusticemonitor.org…

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U.S. Ranks 36th Out of 37 Nations on COVID-19 Mortality

Summary: A new study quantifies the loss in life expectancy due to COVID-19 in nations around the world. The US is in the worst tier, with a drop of nearly two years. Blame lays at the feet of mishandling by Trump, but also long-term degradation of public health and primary care access. Both must be rebuilt.

Effects of covid-19 pandemic on life expectancy and premature mortality in 2020: time series analysis in 37 countries, BMJ, November 3, 2021, by Nazrul Islam et al.

From abstract: “Reduction in life expectancy was estimated as the difference between observed and expected life expectancy in 2020 using the Lee-Carter model. . . .

Results: Reduction in life expectancy in men and women was observed in all the countries studied except New Zealand, Taiwan, and Norway, where there was a gain in life expectancy in 2020. No evidence was found of a change in life expectancy in Denmark, Iceland, and South Korea. The highest reduction in life expectancy was observed in Russia (men: −2.33; women: −2.14), the United States (men: −2.27; women: −1.61), Bulgaria (men: −1.96; women: −1.37), Lithuania (men: −1.83; women: −1.25), Chile (men: −1.64; women: −0.88), and Spain (men: −1.35; women: −1.13)”

[Note: All figures are in years; confidence intervals deleted to enhance readability]

Comment and Graph:

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

These data provide further evidence of the criminal mishandling of the COVID-19 pandemic in the US.  By another measure – years of life lost per 100,000 population – the US was better only than Bulgaria, Russia and Lithuania. Donald Trump’s denialism and malfeasance bear much of the blame for the US’ sorry record on COVID-19. But the gutting of public health capacity, which occurred under both Democrats and Republicans, and our defective health care system, which obstructs access to care and discourages trusting relationships, were and remain major contributors.

6% of health spending should go for public health, double the current proportion. Further, we need to erase access barriers, and build a real and universal primary care infrastructure.

http://healthjusticemonitor.org…

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Biden moves forward with Trump Medicare privatization plan

By Chris Tomlinson
Houston Chronicle, November 8, 2021

No one should be surprised the Trump administration hatched a plan to put private insurance companies in charge of Medicare. What’s shocking is how President Joe Biden is moving forward with it.

The 50-year-old, government-operated health program for the elderly will slowly and irrevocably end up managed by for-profit insurers under the Global and Professional Direct Contracting Model. The Center for Medicare Services says the program will increase “access to innovative, affordable care while maintaining all original Medicare benefits.”

Wall Street expects it will generate billions in new dividends for health care companies. Critics warn seniors will find it harder to obtain care, and taxpayers will end up paying more than ever.

This is not the first effort to hand over Medicare patients to private companies in the name of cost-saving. Recently, I explained how Medicare Advantage programs were failing to save taxpayer money and leaving many enrollees disappointed. But while seniors can opt out of Medicare Advantage, Direct Contracting will involuntarily put them in the same boat or a potentially leakier one.

Anyone who’s dealt with Medicare has experienced its mind-numbing complexity. Personal experiences vary based on plan choice and health conditions. But the fundamental question is why politicians think private insurance companies using Direct Contracting will deliver a better experience while making a profit when so far, they’ve never succeeded at doing better than government-run Medicare.

Lobbying and campaign donations are the answers. Private companies promise to solve the fundamental problem of Medicare paying doctors and hospitals a fee for each service they perform rather than paying providers to keep people healthy.

Primary care doctors are paid very little to prevent chronic problems, such as obesity, diabetes and heart disease, the biggest financial burdens on the system. But the surgeons and specialists who treat these problems when they become life-threatening make fortunes.

A few years ago, I praised the Accountable Care Organization/Medicare Advantage model because it encouraged providers to form teams of primary care providers and specialists. Instead of paying fee-for-service, Medicare paid an annual rate for each patient. If the team saved money by keeping the patient healthy, it kept some of the windfalls.

Medicare Advantage, though, drove up costs to taxpayers instead of reducing them. Depending on the program, patients also ended up paying more in deductibles and co-payments than they would have under traditional Medicare.

Despite this track record, the Biden administration paid private companies to take over 30 million traditional Medicare patients in 38 states on Jan. 1 this year. Millions more will be transferred to Direct Contracting in 2022.

Most Direct Contracting companies are investor-backed, for-profit corporations, according to government data. Most have experience with Medicaid Advantage, and Medicare officials expect them to impose similar cost-cutting steps. But can they cut enough to cover their profits and save taxpayers’ money?

The business opportunity looks vast. Medicare spending is expected to rise from $800 billion in 2019 to $1.6 trillion in 2028 as Baby Boomers live longer. Wall Street considers Direct Contracting firms eight times more valuable per patient than Medicare Advantage firms, even though they are supposed to save money.

Medicare is also offering sweetheart deals that reduce these companies’ financial risk. In just 18 months, investor-backed funds seeking big profits have put $50 billion of new investment into health care firms involved in Direct Contracting, according to Health Affairs, a non-partisan research journal.

“This business model is distorting health care delivery, creating excessive costs for taxpayers and Medicare beneficiaries, draining the Medicare Trust Fund, obstructing the badly needed value transformation of American health care, and diverting the money needed to fund other social services and goods,” the Health Affairs researchers concluded.

Corporations, non-profits and practitioners have proven very successful at gaming our for-profit health care system. A recent example is UnitedHealth’s $100 million lawsuit against emergency physician staffing firm TeamHealth for allegedly exaggerating their patients’ conditions to generate larger bills.

Biden’s decision to move forward with Direct Contracting reflects for-profit health companies and investors’ power over both political parties. He’s rejected a single-payer system like those found in Europe, and he parrots the demonstrably-untrue premise that private enterprise can do a better job than well-managed government employees.

Direct Contracting is also likely to kill any chance for progressive Democrats to make Medicare an option for any American who wants to enroll. If the government puts private companies in charge of all Medicare patients, it will eliminate any opportunity to overhaul our health care system truly.

Next year, millions more Americans will find themselves in privatized Medicare, and most will never know what happened.

https://www.houstonchronicle.com…

When will we transform our deadly insurance system?

Summary: New research with vital statistics data finds that since 1990 overall US mortality has increasingly worsened compared with other OECD countries, in poorer and richer geographic areas alike. The differences attenuate after age 65, when Medicare eligibility begins. The toll for Black Americans is worse, despite gains. These findings suggest that insurance shortfalls lead to hundreds of thousands of excess deaths per year.

Inequality In Mortality Between Black and White Americans By Age, Place, and Cause, and In Comparison To Europe, 1990-2018, NBER Working Paper No. 29203, September 2021, by Hannes Schwandt et al.

From Abstract:

Inequalities in life expectancy are starker in the U.S. than in Europe. In 1990 White Americans and Europeans in rich areas had similar overall life expectancy, while life expectancy for White Americans in poor areas was lower. But since then even rich White Americans have lost ground relative to Europeans.

Life expectancy for both Black and White Americans plateaued or slightly declined after 2012, but this stalling was most evident among Black Americans even prior to the COVID-19 pandemic.

From Results:

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Insurers Avoid Loss Ratio Limits by Shifting Profits to Provider Subsidiaries

Summary: Insurers don’t appreciate limits on their profits. So, to circumvent federal “medical loss ratio” rules, they buy up medical providers and send the excess revenues there. Voila, huge profits retained.

Profits swell when insurers are also your doctors, Axios, July 16, 2021, by Bob Herman

The big picture: Federal law caps health insurance profits to 15-20% of collected premiums, depending on the type of market. But there are no limits to how much profit a provider can keep. So if an insurer can steer its members toward its own providers, the company is able to keep a lot more of those premium dollars.

The bottom line: Insurers keep more of the premiums they collect when they also own the medical providers that are paid those premium dollars. And no insurer has expanded as aggressively into care delivery over the years as UnitedHealth.

Comment and Graph:

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

UnitedHealth and other large health insurance firms have been buying up doctors’ practices and other health providers (e.g. Aetna’s merger with CVS). That lets insurers ship profits to their provider subsidiaries, skirting federal standards for medical loss ratios – the share of premiums they’re allowed to spend on administration and profit. In essence, allowing insurers to own providers is a loophole that makes loss ratio requirements meaningless.

As indicated in the graph below (based on the data Bob Herman reports), over the past decade – and especially since 2019 – UnitedHealth has greatly amped up its payments to itself.

For detail on the mechanics of how insurers’ double dipping is pushing up Medicare’s costs and accelerating its privatization see the September 30, 2021 HJM post on Medicare Advantage and DCEs.

http://healthjusticemonitor.org…

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Medicare for All Explained Podcast: Episode 66

Interview with Dr. Scott Goldberg

November 1, 2021

PNHP national board member Dr. Scott Goldberg describes the ways in which our public health programs have been privatized, and why we need to demand an improved version of Medicare as the basis for national health insurance.

“It’s important to say we want public Medicare for All.” he says. “We don’t want Medicare Advantage plans.”

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https://medicareforallexplained.podbean.com

Setting our sights for real health care reform

Summary: Build Back Better is falling short even on modest health reforms. Let’s focus on building the popular movement needed for truly progressive transformation of our health care system.

Locked Out of the Sausage Factory: Will Medicare Expansion Survive the Budget Reconciliation Debates?, Common Dreams, October 27, 2021, by Michael Lighty & Mark Dudzic

The Build Back Better Bill started out as a great, sprawling piece of legislation comprising the most ambitious set of social programs since the Johnson Administration.

But the fact that the Bill appears to be floundering is a reminder of the persistence of the forms of neoliberalism that exercised near hegemonic control over the policies and practices of the Democratic Party from the 1990s through the Obama administration (coupled, of course, with a generous amount of shameless corporate hucksterism.)

A big reason that we are in this fix is because we have not yet built the kind of popular movement strong enough to back up the resolve of our Progressive Caucus stalwarts in the House.  All too often, advocates and organizers get infatuated with the inside game when their real job is to build the kind of mass movement that can hold politicians accountable to real principles and real people.

They say that legislation is like sausage-making. The healthcare profiteers and their army of lobbyists all have their hands in the process together with all of the other monied interests with a stake in the Bill. Meanwhile the people whose lives will be most affected by the legislation have been locked out. And, as any trade unionist will tell you, the only way to break a lockout is to maintain unity, bring in new allies and shine the light of day on those who would deprive people of their livelihoods in order to keep the profits flowing.

Comment:

By Don McCanne, M.D.

Our healthcare system is the most expensive in the world yet fails in achieving the performance goals we should expect. What are some of the goals that would create a system of which we could be proud?

  • Universal – Everyone should be included
  • Comprehensive – All reasonable health care should be provided
  • Affordable – For each individual, and collectively for society
  • Equitable – Distribution of healthcare resources should be fair regardless of factors such as age, sex, race or ethnicity
  • Patient-oriented – Designed to serve patients rather than private corporate interests
  • Publicly funded – Using economic tools such as modern monetary theory and progressive taxes only available to the people’s government
  • Publicly administered – to provide efficiencies in administration available only through our government and not through the fragmented private corporate sector

Deprivatizing healthcare financing will eliminate the high costs, inefficiencies, and inequities of private corporate greed.

With our current president and current Congress that are debating the Build Back Better Bill, how many of these goals can be attained? Absolutely none. Not even close.

According to Michael Lighty and Mark Dudzic, astute observers of the healthcare political scene, we have not yet built a strong enough popular movement that can hold politicians accountable to real principles and real people. We have been spinning our wheels in excitement over the prospects of passing the Build Back Better Bill, while we are sliding into disappointment over how inadequate the surviving elements of the legislation will be. We are forgetting that at the most optimistic peak of the process we would have gained none of the features of a healthcare system that we should be striving for.

Regardless of the outcome of the current negotiations, we should pull all stops in our efforts to achieve health care justice for all through a single payer, improved Medicare for All program. Anything less will sentence us to an expensive, mediocre system that is designed primarily to serve the interests of the privatizers rather than the interests of the public – the nation’s patients, all of them.

http://healthjusticemonitor.org…

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