PNHP

Medicare for all is a matter of justice – and healthcare savings

Medicare for all is a matter of justice – and healthcare savings

By Johnathon Ross, M.D., M.P.H.
Cleveland Plain Dealer, October 3, 2021

Many physicians and nurses have experienced the increasing complexity, waste and injustice of our current healthcare system. Many, including myself, have long worked for reform by supporting an improved and expanded Medicare for all.

For decades, the Commonwealth Fund has tracked U.S. healthcare system performance vs. other rich nations. In 2021, we are again ranked last in performance and highest in cost. With Medicare for all, we can do better.

In December 2020, after congressional hearings, the nonpartisan Congressional Budget Office (CBO) published a working paper that estimates that Medicare for all would save over $400 billion in administrative waste annually — dollars that could be applied to universal coverage and care.

Even eliminating copayments for patients while maintaining current average payments for doctors and hospitals, national health expenditures would still fall by $40 billion annually. Compare this to our current system, which leaves 31 million uninsured and half of Americans fearful they cannot afford an unexpected medical bill.

Surveys of U.S. physicians find that 80 percent spend more than five hours weekly on administrative tasks; 30 percent spend more than 20 hours. The simplicity of universal coverage and a single fee schedule without copays would slash billing- and insurance-related costs, while increasing caregivers’ time for patient care.

The CBO estimates annual administrative savings of about $10,000 per physician and $20,000 per nurse. The cost of malpractice and workers’ compensation premiums, half of which cover care for injured parties, should be substantially lowered with universal coverage.

Patients gain comprehensive coverage without deductibles or copays, complete choice of provider, elimination of surprise bills and reduced fear that care will be unaffordable. Modestly reduced provider payments would allow universal long-term care coverage without increasing national health expenditures.

Public opinion shows about 60 percent support for Medicare for all, increasing to 70 percent when people understand that health care would become a right and commercial insurers’ administrative waste would be eliminated. Ninety-three percent of Americans feel patients should be treated equally but only 16 percent believe this is currently the case.

Physicians and patients have similar goals for reform: Everybody covered, better cost control, improved quality of care and a reduction in the burgeoning healthcare administrative bureaucracy.

Half of physicians already support Medicare for all, but many fear reduced compensation, which CBO suggests is unlikely with universal coverage, all-payer rates and office administrative savings.

In 2020, the American College of Physicians and the Society for General Internal Medicine announced support for improved expanded Medicare for all as a possible solution. Physicians for a National Health Program, Students for a National Health Program, the American Medical Students Association and National Nurses United, along with a dozen other healthcare organizations, support Medicare for all — and support is growing.

Medicare for all will save lives and improve caregivers’ and patients’ satisfaction by eliminating administrative waste and hassles. Public financing also would bring needed public accountability and transparency to our underperforming healthcare system.

In 1857, abolitionist Frederick Douglass said, “If there is no struggle, there is no progress” and that “power concedes nothing without a demand.”

If we want healthcare progress, it will be a struggle against vested interests and their profit-seeking behavior. If we want healthcare justice, we must demand it. It is not affordability but injustice that stands in our way.

Guest columnist Dr. Johnathon Ross is a past president of Physicians for a National Health Program. He has practiced and taught primary care in poor rural and urban communities, but it was his experience inside the health insurance industry that convinced him of the logic and need for a national health insurance program.

https://www.cleveland.com…

No relief from private insurance market concentration

Summary: The American Medical Association finds rising health insurer concentration. That’s bad, because powerful private insurers undermine the healthcare experience. What we need is fully concentrated insurance: a single payer, committed to the public good.

AMA publishes new study monitoring competition in U.S. health insurance markets, AMA press release, September 28, 2021

The American Medical Association (AMA) today published the newest annual edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets with findings demonstrating the rise of highly concentrated markets for health insurance.

The study’s findings show most health insurance markets in the U.S. are highly concentrated leaving millions of Americans with more limited health insurer options.

Between 2014 and 2020, the share of highly concentrated markets rose from 71% to 73%.

[This report] is a vital element of AMA’s continued antitrust advocacy to protect patients and physicians from competitive harm.

Comment:

By Don McCanne, M.D.

For two decades, the AMA has been publishing these annual reports on highly concentrated markets for health insurance, indicating that “consolidation involving health insurers may cause competitive harm to consumers and providers of care.”

With all of the problems in health care today, you would think that these reports would have led to interventions reducing the concentration. Instead, concentration actually rose from 71% to 73%. This demonstrates the ineffectiveness of current legislative, administrative, and private market sector control over private insurance abuses.

It is true that a single payer Medicare for All would maximally concentrate insurer function, but it would do that with a program that would operate on behalf of the public good for all of us rather than what we have now – a system that operates on behalf of a private sector that is draining funds for its own benefit rather than for the health of us all.

For those waiting for the AMA to do something, two decades of inertia is enough. We claim we have a democracy. It’s high time that we invoke its power to change policy for the public good. We can begin by electing legislators who understand and support policies that will lead to health care justice for all. No more delay!

http://healthjusticemonitor.org…

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

Medicare Direct Contracting call-in

Interview with Dr. Ana Malinow

Redwood Community Radio, KMUD, October 1, 2021

PNHP past president Dr. Ana Malinow encouraged seniors, health justice advocates, and anybody concerned about the future of Medicare to demand an end to the Direct Contracting program, an under-the-radar initiative that threatens to privatize the whole of Traditional Medicare.

“We need thousands of people telling [Dept. of Health and Human Services] Sec. [Xavier] Becerra that we know what’s up and we won’t stand for it,” she said. “If we organize, and if we push, we have a chance to end this thing for good.”

For more information on Medicare Direct Contracting, visit https://pnhp.org/StopDCEs.

https://kmud.org

Medicare for All Explained Podcast: Episode 65

Our Healthcare Mess and Why We Need Medicare for All

October 1, 2021

Podcast host Joe Sparks outlines the woeful inadequacies of U.S. health insurance, including the large number of people who have commercial insurance but cannot afford the outrageous out-of-pocket costs.

“Having health insurance doesn’t necessarily mean squat,” he says. “To solve the health care crisis in this country, we need to make sure that everyone can get the medical care they need and medications they need, when they need them, without worrying about cost.”

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

https://medicareforallexplained.podbean.com

Medicare Advantage & DCEs: How Corporate Investors Deplete Medicare

Summary: Private investors have devised and exploit clever mechanisms to obtain massive payments and outlandish profits from Medicare. These manipulations started with Medicare Advantage, and now threaten traditional Medicare via Direct Contracting Entities. DCEs must be stopped.

Medicare Advantage, Direct Contracting, and The Medicare ‘Money Machine’ Part 1 & Part 2, Health Affairs Blog, September 27 & 28, 2021, by Richard Gilfillan Donald M. Berwick

In this two-part post, we … explain the perverse MA business model that underlies this elevated level of investment, and we will explore its connection to the Direct Contracting model now being tested by CMS. The story is complex, but we think it is worth telling because the stakes for beneficiaries, the public treasury, and our health care system are very high. 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 Medicare Payment Advisory Committee (MedPAC) has documented approximately $140 billion in MA overpayments over the past 12 years. MedPAC further concludes that risk adjustment overpayments are currently increasing [and may rise to $355 billion over the next eight years]. …

Given an Orwellian title, Direct Contracting, launched by Center for Medicare and Medicaid Innovation (CMMI), was anything but direct. “Indirect Contracting” would have been a far more accurate name, since the cornerstone of the program was CMS’s opening the door to non-provider-controlled “Direct Contracting Entities (DCEs)” to become the fiscal intermediaries between patients and providers.

Comment:

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

Why are investors paying $87,000 per “covered life” for Medicare-focused health companies? That’s more than seven years of care costs for one beneficiary. Where’s the profit to justify those prices?

That’s the question that this very important Health Affairs blog addresses. It lays out in gory detail just how cleverly corporate investors have refined techniques to influence and manipulate Medicare rules to massively profit, thereby threatening the principles and finances of this valued program. My comment today is long, to provide a proper tour of the blog’s major points.

Part 1 focuses on Medicare Advantage. That’s the part of Medicare in which private insurance companies set up care networks and serve as financial intermediaries.

“Upcoding” is the name of the game. The secret to high profits is to exploit the diagnostic coding system set up to adjust for differences in clinical severity (and costs) between traditional fee-for-service Medicare and Medicare Advantage. The diagnosis codes used to design this system years ago relied on sparse coding practices, mainly of more severe disease instances. Now codes have multiplied. Medicare Advantage companies actively seek and add diagnoses – even minor or equivocal ones – to gain the high payments. And thus they earn much higher premium payments from Medicare, even several times higher.

This strategy has three versions: (1) Pay Providers for Submitting More Codes, (2) Share the Risk Premium with Providers, and (3) Own the Providers. Option 3 is the most profitable, but requires buying up providers. That’s exactly what’s happening. And that’s why the valuations are so high.

Part 2 focuses on “Direct Contracting Entities” or DCEs. DCEs are the mechanism devised by the Center for Medicare and Medicaid Services (CMS) to bring private insurers and investor-controlled provider firms – those driving Medicare Advantage profiteering – into traditional Medicare. CMS structured DCEs very similarly to Medicare Advantage, to ease the transition.

And, indeed, DCEs provide several routes for participating companies to manipulate clinical severity coding to raise payments and profits. These include changing the codes prior to DCE entry and allowing re-coding for several years for a large category of DCE entrants.

The scope is huge. Initial DCE contracts with investor (not provider) owners will reach 60% of traditional Medicare beneficiaries.

The effects for beneficiaries will be hassles. Payment arrangements will be more complicated, with a role for the DCE, CMS, and Medigap.

Thus, magically, seniors who chose traditional Medicare will find themselves in a Medicare Advantage-like situation.

And maybe headed to Medicare Advantage. DCE enrollees may be recruited into Medicare Advantage owned by the same company. The company has a huge incentive to make life in the DCE less attractive.

All of these contractual details are complicated and confusing. I’m confused, and I think about this for a living. The complexity is not a bug, it’s a feature – provide lots of room to maneuver, and obscure what’s really going on.

Who wins? Investors. “From early April, 2010 through the end of August, 2021, the average stock price for five MA-focused insurers—United Health, Humana, Cigna, Anthem, and CVS/Aetna—increased 825 percent (compared to 280 percent for the entire S&P 500).”

The authors offer a long list of policy solutions. As readers of HJM know, I’m not a big fan of ACOs. But their other suggestions resonate. For example:

  • Replace the defective risk adjustment system, so that it can’t be manipulated through upcoding to shift tens of billions of dollars in profits to investors and deplete the Medicare Trust Fund. There are alternatives, such as the Medicare Beneficiary Survey.
  • End DCEs. Or, if they must continue, drastically lower the scale to just enough for testing, and then use the results to decide what to do. And limit DCEs to provider-owned, not insurer-owned, companies.

The huge Medicare health insurance ship is headed in the wrong direction. Let’s turn the rudder toward traditional Medicare, traditionally implemented, and then on to an improved Medicare for All.

http://healthjusticemonitor.org…

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

Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 2: Building On The ACO Model

By Richard Gilfillan and Donald M. Berwick
Health Affairs Blog, September 30, 2021

Excerpt:

Given an Orwellian title, Direct Contracting, launched by Center for Medicare and Medicaid Innovation (CMMI), was anything but direct. “Indirect Contracting” would have been a far more accurate name, since the cornerstone of the program was CMS’s opening the door to non-provider-controlled “Direct Contracting Entities (DCEs)” to become the fiscal intermediaries between patients and providers.

Originally CMS proposed three Direct Contracting Models: Professional, Global, and Geographic (GEO). The GEO Direct Contracting model was the most extreme, proposing to auto-assign every fee-for-service (FFS) beneficiary in a number of large geographic regions into a fully capitated MA-like “Geo DCE.” Beneficiaries were not given the right to opt out. GEO DCEs were expected to assume total responsibility for all FFS beneficiaries in their region. This responsibility included beneficiaries in any accountable care organizations (ACOs) or other Alternative Payment Models (APMs), except those assigned to other types of DCEs. With full capitation, as with MA, GEO DCEs would be responsible for most claims payments as well as medical management. This was, therefore, straightforward privatization of traditional Medicare, differing from MA only in that GEO Direct Contracting beneficiaries retained the right to see any Medicare provider under standard Medicare coverage.

The Global and Professional Direct Contracting models, combined as GPDC, offered alongside GEO DC, look like an extension of the ACO approach. Like ACOs, DCEs create a defined provider network. Beneficiaries are either auto-aligned via claims history or voluntarily enrolled. Members maintain access to all Medicare providers under standard benefits. Benchmarks or capitation rates will include a defined discount to CMS. But GPDC DCEs differ in important ways from ACOs. GPDC DCEs can select varying degrees of capitation up to and including full capitation. Full capitation would require them to pay DCE preferred provider claims. Although beneficiaries do have the right to opt out of CMS data sharing, they remain aligned with the DCE for purposes of capitation payments and ultimate financial reconciliation.

The ACO model was built as a direct contracting relationship between CMS and providers. ACOs were required to have 75 percent provider governance control. In Direct Contracting, CMS established a stated aim of bringing “organizations that currently operate exclusively in Medicare Advantage” into traditional Medicare, targeting the very MA insurers and investor-controlled provider firms that are driving the MA overpayments explored in Part One of this post. To help accomplish this, CMS decreased the provider governance requirement to just 25 percent.

Full article:

https://www.healthaffairs.org…

Authors’ note:

Dr. Gilfillan was the CEO of Trinity Health System from 2013 until 2019. He is a Trustee for United States Pharmacopeia; a Director for the Health Care Transformation Task Force; a member of Advisory Committees for the Institute for Exceptional Care and several Robert Wood Johnson Foundation programs addressing health equity and SDOH (all uncompensated). Dr. Gilfillan also recently consulted for an integrated health system (compensated). Dr. Gilfillan was the Director of CMMI during the roll-out of several ACO Models and was involved in the development of CMS ACO regulations. He has also been a leader and member of teams that managed multiple ACOs and Medicare Advantage plans.

Dr. Berwick served as Administrator of the Centers for Medicare and Medicaid Services from July, 2010, to December, 2011, during which he oversaw the issuing of the initial CMS regulations for Accountable Care Organizations, as well as numerous other regulations devolving from the Affordable Care Act. He serves on the boards of LumiraDx (stock option compensation); Virta Health (stock option compensation); NRC Health (stipend and stock option compensation); Institute for Exceptional Care (uncompensated); CareVisor (stipend) Partners in Health (uncompensated); Results for Development (uncompensated). He also serves on Advisory Boards for the National Institute for Health Care Management Foundation, Datavant, and the Institute for Accountable Care, and on the American Medical Association Journal Oversight Committee. Dr. Berwick occupies multiple committee positions with the National Academies of Sciences, Engineering, and Medicine.

When your doctor leaves a practice, you shouldn’t have to play hide and seek

By Jessica Schorr Saxe, M.D.
The Charlotte Observer, September 30, 2021

A few friends recently received letters informing them that their doctors were leaving their practices. The letters were perfunctory, acknowledging the doctor’s service and telling the patients that they could see other providers in the office.

In no case did the letters discuss the departing doctors’ plans — notably that they will still be practicing in Charlotte — nor tell the patients how they could continue care with their primary physicians.

I am both shocked and not surprised. This is one more example of the encroachment of business decisions on the practice of medicine, of the primacy of institutional profit over the doctor-patient relationship.

As a physician, I took the Hippocratic oath to work “only for the good of my patients keeping myself far from all intentional ill-doing” and to “safeguard the rights of my patients,” keeping their secrets and never revealing them. When I was in practice, I noted that the longer I knew patients, the more they trusted me, and the more they confided in me.

Patients told me their hopes, their fears, and their concerns about and dreams for their children, who were often also my patients. Sometimes, only after years, did they reveal histories of abuse that they had told no one. And, once I knew, I could help.

As far as I know, healthcare systems have not sworn to put your interests first, nor been educated to respond to your innermost fears. Their decisions, as well as those of insurance companies and drug and device companies, often prioritize market share over patient care.

Trust is a fundamental, if underrated, ingredient in the success of medical care. We have seen this only too painfully in vaccine resistance during the pandemic. Trusted primary care physicians can play a crucial role in vaccine acceptance. And during this pandemic, patients need trusted physicians to help them with illness, fear and loss.

When doctors are treated as interchangeable parts in someone else’s machine, we are not in positions to establish that trust. Patients suffer, and doctors suffer as forces distance us from the sanctity of the relationships with patients that called many of us into medicine.

None of us should give in to this.

Patients: Be vigilant and watch out for financial decisions taking precedence over your care. If your healthcare system claims to be patient-centered yet is willing to sever the doctor-patient relationship, let them know that violates your trust.

Fellow physicians: Don’t stand for it. We took oaths, we belong to a venerable profession, we walk— or should be walking — in the footsteps of giants: Hippocrates, Rebecca Crumpler, Sir William Osler, Arnold Relman, to name a few.

Medical practices: Have respect for the doctor-patient relationship and let patients know if their doctor can be seen elsewhere. Forego a short-term business advantage for the long-term welfare of patients.

Medicine has changed. Our forebears would be fascinated with the worlds opened by MRIs and genetic testing. I would hope they would recognize the benefits of the gender and ethnic diversity they would see in the faces on hospital rounds. But they would undoubtedly be appalled by the idea of the business of medicine. In fact, Osler, the father of modern medicine, said so explicitly:” The practice of medicine is an art, not a trade; a calling, not a business.”

Nearly 30 years ago, I wrote in the Charlotte Observer about “Musical Doctors,” when, as though they were children playing musical chairs, patients were abruptly forced to change doctors because of changes in insurance. I decried the interference in the doctor-patient relationship. I quoted Hippocrates, who said “. . .some patients, though conscious that their condition is perilous, recover their health simply through their contentment with the goodness of the physician.”

Instead of nurturing the relationship between doctors and patients, we have moved in the opposite direction. If we want to recapture the benefits to all of us, we need to let our institutions know how important those relationships are to us.

Dr. Jessica Schorr Saxe is a retired family physician in Charlotte. She is chair of Health Care Justice North Carolina.

https://www.charlotteobserver.com…

Prevent Medicare privatization

By Lisa Savage
Bangor (Maine) Daily News, Letters, September 30, 2021

Would people be shocked to find that an attempt to privatize Medicare in order to funnel profits to Wall Street investors is underway?

Direct contracting entities were created in 2020 during the Trump administration and continued under the Biden administration. Medicare patients are enrolled in direct contracting entities without their consent or even knowledge when and if their doctor or other provider signs up. Doctors are enticed to do so by promises that their fees will go up, but patients experience fewer benefits and are restricted from receiving care they need, all to profit the new direct contracting entity middleman.

There is already one direct contracting entity in Maine, which incorporated in early 2021. Most of the other states have direct contracting entities in them by now also.

What can Medicare recipients do? Ask health care providers if they’re using direct contracting entities. People can opt out by changing providers — but only if they know about it.

People can also sign a petition on Physicians for a National Health Program to stop this sneaky, back door attempt at privatizing Medicare: https://pnhp.salsalabs.org/DCEpetition…

https://bangordailynews.com…

Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 1: The Risk-Score Game

By Richard Gilfillan and Donald M. Berwick
Health Affairs Blog, September 29, 2021

Excerpt:

While the COVID-19 pandemic rages, the past two years have seen another epidemic of a far different type—in financing and acquisitions of firms focused on serving Medicare beneficiaries. These firms include physician practices, notably primary care practices (PCPs); management services organizations (MSOs) that aggregate practices; and Medicare Advantage (MA) insurers. In this arena, the combined activity of private equity and venture capital firms, initial public offerings, special purpose acquisition companies (SPACs), and insurance company purchases of MA-focused firms has soared: more than $50 billion in valuation has been created in the past 18 months, dwarfing the speculative bubble for physician practice management companies in the 1990s.

One indicator of the exuberance underlying this “Medicare Gold Rush” is the amount per covered life implicit in a firm’s overall valuation. Historically, per-life valuations in MA have ranged from $4,000 to $10,500. Exhibit 1 shows per-life valuations for a sample of recent transactions. The average is $87,000 per beneficiary. Most of the firms acquired or financed are PCPs or MSOs that typically produce no margins—just an average take-home income of $240,000 per physician. The first six are participants in the Centers for Medicare and Medicaid Services’ (CMS) new Direct Contracting Model, which we shall discuss further in Part Two of this post.

Full article:

https://www.healthaffairs.org…

Authors’ note:

Dr. Gilfillan was the CEO of Trinity Health System from 2013 until 2019. He is a Trustee for United States Pharmacopeia; a Director for the Health Care Transformation Task Force; a member of Advisory Committees for the Institute for Exceptional Care and several Robert Wood Johnson Foundation programs addressing health equity and SDOH (all uncompensated). Dr. Gilfillan also recently consulted for an integrated health system (compensated). Dr. Gilfillan was the Director of CMMI during the roll-out of several ACO Models and was involved in the development of CMS ACO regulations. He has also been a leader and member of teams that managed multiple ACOs and Medicare Advantage plans.

Dr. Berwick served as Administrator of the Centers for Medicare and Medicaid Services from July, 2010, to December, 2011, during which he oversaw the issuing of the initial CMS regulations for Accountable Care Organizations, as well as numerous other regulations devolving from the Affordable Care Act. He serves on the boards of LumiraDx (stock option compensation); Virta Health (stock option compensation); NRC Health (stipend and stock option compensation); Institute for Exceptional Care (uncompensated); CareVisor (stipend) Partners in Health (uncompensated); Results for Development (uncompensated). He also serves on Advisory Boards for the National Institute for Health Care Management Foundation, Datavant, and the Institute for Accountable Care, and on the American Medical Association Journal Oversight Committee. Dr. Berwick occupies multiple committee positions with the National Academies of Sciences, Engineering, and Medicine.

NYT: The multifaceted failings of US health insurance

Summary: The New York Times, the most respected US daily newspaper, over the last week prominently published three stories about startling failings in our health insurance system. Are the reporters and editors sending us a message – time to change health insurance system?

Their Baby Died in the Hospital. Then Came the $257,000 Bill, New York Times, September 21, 2021, by Sarah Kliff

Last summer, Ms. Lane started receiving debt collection notices. The letters, sent by the health plan Cigna, said she owed the insurer over $257,000 for the bills it accidentally covered for Alexandra’s care after Ms. Lane switched health insurers.

Ms. Lane was flummoxed: It was Cigna that had received the initial bill for care and had paid Mount Sinai West. Now, Cigna was seeking the money it had overpaid the hospital by turning to the patient.

“For them, it’s just business, but for us it means constantly going through the trauma of reliving our daughter’s death,” said Clayton Lane, Alexandra’s father and Ms. Lane’s husband. “It means facing threats of financial ruin. It’s so unjust and infuriating.”

Medicare Expansion Clashes with Health Care for the Poor as Budget Bill Shrinks, New York Times, September 20, 2021, by Jonathan Weisman & Sheryl Gay Stolberg

Democrats are facing tough moral and political decisions over how to pursue their century-old dream of universal health care now that their ambitious $3.5 trillion social safety net bill will almost certainly have to be trimmed back.

As they try to reduce the bill’s cost, members of the party disagree over whether to prioritize expanding coverage to more poor adults in states whose leaders have refused to do so or to give new Medicare benefits to older people across income levels.

This Lab Charges $380 for a Covid Test. Is That What Congress Had in Mind?, New York Times, September 26, 2021, by Sarah Kliff

At the drugstore, a rapid Covid test usually costs less than $20.

Across the country, over a dozen testing sites owned by the start-up company GS Labs regularly bill $380.

There’s a reason they can. When Congress tried to ensure that Americans wouldn’t have to pay for coronavirus testing, it required insurers to pay certain laboratories whatever “cash price” they listed online for the tests, with no limit on what that might be.

Comment:

By Isabel Ostrer, M.D.

Three stories in one week on the front page of the preeminent US newspaper. Three stark examples of just how diversely broken the American health insurance system is.

  1. A family being harassed by an insurer who accidentally paid for a hospital bill after the family had already switched insurance providers. Now the family relives the tragedy of their infant daughter dying each time they contend with these outrageous and illegitimate bills.
  2. Congress debating whether to expand coverage to low-income adults who were left out during the piecemeal expansion offered by the Affordable Care Act or to give seniors more comprehensive health coverage. A terrible choice.
  3. A lab gaming the system to change exorbitantly high prices for Covid tests, which is only possible because the US government refuses to take an active role in controlling such prices.

Together, these very different stories offer a glimpse of the myriad ways that American health care fails the American people. Single payer could fix all these problems. A unified insurer would mean the Lane family would not have to contend with multiple for-profit insurers debating which bills they covered. A unified insurer would cover all Americans instead of leaving poor individuals in ACA-non-expansion states by the wayside, and provide comprehensive coverage. A unified insurer would regulate prices and eliminate price-gouging, and control the unhinged growth of American health spending.

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

Direct Contracting Entities: The Latest Scam to Privatize Medicare

By Lambert Strether of Corrente
Naked Capitalism, September 27, 2021

Alert reader Carla brought Direct Contracting Entities (DCEs) to my attention in comments here. She in turn had been informed by a webinar from PNHP, the long-time single payer advocates. As it turns out, DCEs grow in the same polluted soil as the Democrats’ previous privatization attempt, the Geographic Contracting model, now on hold, after a public outcry. However, DCEs are complicated to explain, because our health care system is run by greedy sociopathic members of the professional managerial class, who complicate matters deliberately, partly for fun, but mostly for profit [1].

Because personnel is policy, I’m going to start with Liz Fowler who, at least nominally animated by an ideology called Value-Based Care (VBC), is using her position as Director of the Center for Medicare and Medicaid Innovation (CMMI) in the Centers for Medicare & Medicaid Service (CMS) within the Department of Health and Human Services (HHS), to impose a “payment model” called “Direct Contracting Entities” on the majority of “traditional” Medicare recipients, thereby privatizing it. (Medicare Advantage is already privatized.) Each of those italicized topics will get its own heading, below. I’ll use a simple Q&A format, where the questions are in the form “Who is Liz Fowler?” and answers are in the form “Liz Fowler [family blog]s.” The simple structure works because the entire CMMI structure should be razed and the ground salted, so nothing like it ever happens again. It won’t be, so I’m going into detail so that when CMMI comes up with its next privatization scam, you’ll be able to recognize the moving parts. So to Liz Fowler.

Liz Fowler

Who is Liz Fowler? Here is Fowler’s official biography:

Elizabeth Fowler, J.D., Ph.D., is the director of the Center for Medicare and Medicaid Innovation (CMMI) and deputy administrator of the Centers for Medicare and Medicaid Services at the U.S. Department of Health and Human Services. Prior to joining the Biden administration, she was Executive Vice President for Programs at the Commonwealth Fund. Before joining the Fund, Dr. Fowler served as Vice President for Global Health Policy at Johnson & Johnson. In that role, she focused on health care delivery system and payment reform in the U.S. and health care systems and reform in emerging markets. Prior to that position, she was a special assistant to President Barack Obama on health care and economic policy at the National Economic Council, and occupied key positions at the U.S. Department of Health and Human Services, where she assisted with implementation of the Affordable Care Act. Prior to her work in the administration, Dr. Fowler was Chief Health Counsel to former Senate Finance Committee Chair, Senator Max Baucus, served as Vice President of Public Policy and External Affairs for WellPoint, Inc. (now Anthem).

Liz Fowler [family blog]s. As we wrote earlier this year, unknowingly translating the above:

Ah, Liz Fowler. An old friend and an especially scaly Flexian who makes Jon Gruber look like a cute little gecko:

When the legislation that became known as “Obamacare” was first drafted, the key legislator was the Democratic Chairman of the Senate Finance Committee, Max Baucus, whose committee took the lead in drafting the legislation. As Baucus himself repeatedly boasted, the architect of that legislation was Elizabeth Folwer, his chief health policy counsel; indeed, as Marcy Wheeler discovered, it was Fowler who actually drafted it… What was most amazing about all of that [or not] was that, before joining Baucus’ office as the point person for the health care bill, Fowler was the Vice President for Public Policy and External Affairs (i.e. informal lobbying) at WellPoint, the nation’s largest health insurance provider (before going to WellPoint, as well as after, Fowler had worked as Baucus’ top health care aide). … More amazingly still, when the Obama White House needed someone to oversee implementation of Obamacare after the bill passed, it chose . . . Liz Fowler. Now, as Politico’s “Influence” column briefly noted on Tuesday, Fowler is once again passing through the deeply corrupting revolving door as she leaves the Obama administration to return to the loving and lucrative arms of the private health care industry: “Elizabeth Fowler is leaving the White House for a senior-level position leading ‘global health policy’ at Johnson & Johnson’s government affairs and policy group.”

Having Fowler involved in anything is a terrible sign; she’s as corrupt as they come [2]. One of the things she’s enmeshed in at CMMI is Value-Based Care, to which we now turn.

Value-Based Care

What is Value-Based Care?. The concept seems to have gained its first prominence at Harvard Business School in 2006, but here is how the New England Journal of Medicine defined it in 2017:

Value-based healthcare is a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.

Value-based care differs from a fee-for-service or capitated approach, in which providers are paid based on the amount of healthcare services they deliver. The “value” in value-based healthcare is derived from measuring health outcomes against the cost of delivering the outcomes.

Which sounds reasonable enough, even if you know how slippery the word “value” can be. The key point is that “fee for service” (FFS) is not the payment model under VBC. Value is. However–

Value-Based Care [family blog]s. Ask yourself: How will determining value be operationalized within a payments system? The answer will be to develop a taxonomy of what is valued, and then code for it and bill on the coding, case by case. Hold onto that thought for when we get to DCEs. Meanwhile, Liz Fowler’s ideology is Value-Based Care:

During her opening plenary at the National Association of ACOs Spring 2021 Conference, Liz Fowler, PhD, JD, deputy administrator and director of the Center for Medicare and Medicaid Innovation, highlighted how the center is taking a pause to reassess its models and determine what is coming next.

“I want to make clear that our commitment to value-based care has never been stronger,” Fowler said.

This brings us to the CMMI, the institutional setting in which Value-Based Care is being pursued.

Center for Medicare and Medicaid Innovation

What is the CMMI? To begin with, people at Fowler’s level believe that ObamaCare was passed to deliver not merely “access” to health care, but access to value-based health care, and that CMMI was to be the instrument for this. Once more from Fowler’s ACO plenary:

In addition to providing insurance for the uninsured, the goal of the Affordable Care Act was to move away from fee-for-service to value-based care. Although strides have been made, the Center for Medicare and Medicaid Innovation (CMMI) is taking time to reassess its portfolio of payment models.

Expanding on the concept of “payment models,” from Kaiser Family Foundation’s CMMI FAQ:

The Center for Medicare and Medicaid Innovation (CMMI), also known as the “Innovation Center,” was authorized under the Affordable Care Act (ACA) and tasked with designing, implementing, and testing new health care payment models to address growing concerns about rising costs, quality of care, and inefficient spending. Congress specifically directed CMMI to focus on models that could potentially lower health care spending for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) while maintaining or enhancing the quality of care furnished under these programs. CMMI is part of the U.S. Department of Health and Human Services and is managed by the Centers for Medicare and Medicaid Services (CMS).

In other words, “because markets“; there is no alternative to them. CMMI is “taking time” to “reassess” its models because, well–

The CMMI [family blog]s. The GAO reported on the CMMI’s efforts in 2018. As we wrote:

Beyond noting that only 2 of the 37 “Innovation” Center models were worth expanding, GAO assessed the Center by the three goals it had set up for itself. Page 54 et seq:

Goal 1: Reduce the growth of healthcare costs while promoting better health and health care quality through delivery system reform This goal has three performance measures that focus on ACOs. As shown in table 3, the Innovation Center has reported mixed results in achieving the targets set. For the remaining measure—the percentage of ACOs that shared in savings—the center did not meet its target during either of the two years for which data were available. …

Goal 2: Identify, test, and improve payment and service delivery models. This goal has one performance measure, which identifies the number of models that currently indicate (1) cost savings while maintaining or improving quality or (2) improving quality while maintaining or reducing cost. As of September 30, 2016, the Innovation Center reported that four [of 37] section 1115A model tests have met these criteria (see table 4).

Goal 3: Accelerate the spread of successful practices and models. For this goal, the first performance measure focuses on the number of states developing and implementing a health system transformation and payment reform plan. The second measure focuses on increasing the percentage of active model participants who are involved in Innovation Center or related learning activities. As shown in table 5, the Innovation Center reported meeting its target for the first measure for both fiscal years 2015 and 2016, but not meeting its target for the second measure.

And concluding, with the woo-woo noises at last becoming audible:

Looking forward, officials told us that the Innovation Center has developed a methodology to estimate a forecasted return on investment for the model portfolio, and is in the early stages of refining the methodology and applying it broadly across the portfolio in 2018. As part of the development efforts, the Innovation Center expects to utilize standard investment measures used in the public and private sectors.

Whatever that means. Since we don’t know what a model is, what on earth is the use of creating a portfolio of them?

The situation has not improved since then, as Bill Frist (!!) writes (“only five of the 54 models delivered substantial financial savings. The majority have not saved money, and several are on pace to lose billions of dollars”) and as Fowler in her plenary admits:

Fowler worries that over the past decade since CMMI was established, the stakeholders have reached no consensus about what, specifically, the center should be achieving. Some of the questions that need to be answered are as follows:

  • Are cost savings the most important measure of success, or is quality improvement just as important?
  • Is risk bearing among providers the key to unlocking value?
  • Should CMMI’s goal be to expand a model so it becomes a permanent part of Medicare, or is health care transformation the ultimate goal?

The ACA funded CMMI $10 billion from 2011 through 2019, and another $10 billion for each decade after that. These funds were not subject to the appropriations process. For that amount of money, we’re still asking questions like that?

Nevertheless, the CMMI wields enormous power, because through it, HHS can implement payment models without Congressional authorization. One such payment model is the “Direct Contracting Entity,” to which we now turn.

Direct Contracting Entities

What are Direct Contracting Entities? As defined by one DCE player, Pearl Health:

DCEs enable participants to transition their Traditional Medicare populations to value-based care via a capitated reimbursement model, creating a predictable flow of revenue, and the opportunity to generate shared savings, creating incentives for providing more efficient care.

Seems reasonable enough. Venture capitalists Andreessen Horowitz are a bit more expansive:

One of the hallmarks of value-based care is a shift away from reactive, fee-for-service models and toward prospective payment models. Direct contracting is a model where large holders of risk — like self-funded employers and health plans — contract directly with a narrow set of provider groups and health systems [3] for a specific population and a defined set of services [4]. This can look as simple as contracting with a handful of health systems to provide all-inclusive care bundles for joint surgery, to something as broad-reaching as establishing an Accountable Care Organization (ACO) for the comprehensive care of a patient population in a given region. Because both parties share in accountability and responsibilities across cost, care coordination, and outcomes, models like these represent a major step in the transition toward value-based care.

These CMS Direct Contracting programs represent a key step forward by driving increased access to value-based care for the Medicare Fee-for-Service group of beneficiaries. And importantly, they create a range of new opportunities for new entrants by 1) substantially broadening the range of care organizations that can participate in these models (including new entrants that previously would have been ineligible) and 2) granting increased flexibility on the benefits design and patient care initiatives that can be offered, thus creating unique opportunities for new entrants that offer care solutions that can ultimately drive higher-value care (but would have not been within scope or incentivized with traditional Medicare Fee-For-Service).

Translating: “[D]riving increased access to value-based care” means the elimination of fee-for-service care. More importantly, “new entrants that previously would have been ineligible” means, for example, private equity or “big tech,” Presumably why Andreessen Horowitz is taking a look at the field of play. I shudder to think what “unique opportunities for new entrants” could mean. Uber for kidneys? Unfortunately for us all–

DCEs [family blog]. Let’s work through the “unique opportunities.” First, from PNHP, today there are 53 DCEs (with new openings temporary closed). 28 are investor-owned. 6 are insurer-based. The 6 insurer-based DCEs “operate in 19 states that have 57% of the entire national FFS population.” If DCEs can move those all those FFS patients customers to VBC, that would mean 57% of $660 billion in Medicare spending by 2025 ($330 billion in 2019). How would the DCEs do that? They would sign up doctors, and that would bring the del>patients customers along. Again PNHP:

Doctors are lured to participate in a DCE by promises of up to a 40% increase in provider Medicare reimbursement

and a reduced set of core quality measures they have to meet. Once doctors sign up, their patients are automatically “aligned” to the DCE without patients’ knowledge or consent; patients are sent a letter, which they are not likely to read or understand.

And you can bet the DCE won’t help them understand. But wait! There’s more! The DCEs are money machines, and not just because of revenues from patient care. They are money machines because — this is why I asked you to hold that thought on coding — value-based care is a phishing equilibrium for upcoding. (In the vulgate: If fraud can occur, it will already have occurred. See NC here and here on medical upcoding.) Here is a worked example from Ed Weisbart of PNHP:

Note how the different codes — all for the same patient! — drive the bottom line; see at “CMS pays.” In fact, there’s an entire industry line of business devoted to gaming medical codes for profit:

(It’s really beautiful that AI is being used for fraud. But indeed, why not?) So, to review, DCEs allow insurance companies and investor-owned entities to put the entire Medicare fee-for-service system in their crosshairs, capturing 67% of the existing “traditional Medicare population,” most of them without informed consent, using them as human fodder for upcoding fraud, and all without congressional authorization or review of any kind. If that’s not privatization I don’t know what is. I guess this is sort of thing is why Hillary Clinton said single payer would “never, ever” come to pass [5]. Whaddaya know. Thanks, Liz!

Conclusion

Obviously, there are a great many layers of obfuscation to the DCE privatization scam, and I hope I got them right. Please correct me where I have gone wrong. (Here is Weisbart’s PowerPoint presenation; medical back office mavens will be able to understand it better than I can.)

Finally, there is a petition: Consider signing it. The Geographic Contracting model was stopped; DCEs can be stopped.

https://www.nakedcapitalism.com…

Notes

  1. In the Before Times, I would have been much more polite. But here we are.
  2. Back when Obama was shilling for the Affordable Care Act, he did a series of town halls on health care policy, to which I listened. The post on the town hall has long ago succumbed to link rot, but I remember that a PNHP doctor with whom I was familiar actually managed to ask Obama a question on single payer. I forget what Obama answered, but the fact of the question itself was remarkable (given that Max Baucus refused to allow single payer advocates at his hearings, and had them arrested when they protested). The White House had an intern out of Fowler’s office doing a live blog. When I checked, the single payer question had been censored.
  3. Sounds like an opportunity for in-and-out-of network gaming, to me.
  4. Ditto.
  5. This also explains why Biden but a non-entity like Becarra in charge of HHS (aside from the payoff to the California oligarchy). Alex Azar, shark though he was, would have understood this play. Becarra is a babe in the woods with no health care experience, and won’t.

High Uninsurance post-ACA for Low-Income, Black, Hispanic Americans

Summary: This study used a national survey to document high levels of uninsurance among vulnerable populations after ACA implementation, especially in states not choosing to expand Medicaid – up to 40-60% for some groups in some states. Sadly, but unsurprisingly, the ACA falls far short.

States’ Performance in Reducing Uninsurance Among Black, Hispanic, and Low-Income Americans Following Implementation of the Affordable Care Act, Health Equity, July 21, 2021, by G. Lines et al.

From the abstract:

Purpose: To assess state-level variation in changes in uninsurance among Black, Hispanic, and low-income Americans after implementation of the Affordable Care Act (ACA) [in 2014].

Methods: We analyzed data from the Behavioral Risk Factor Surveillance System from 2012 to 2016…

Results: The range in the percentage point reduction in uninsurance varied substantially across states: 19-fold for Black (0.9–17.4), 18-fold for Hispanic (1.2–21.5), and 23-fold for low-income (1.0–27.8) adults. … In some states, more than one quarter of Black, one half of Hispanic, and approaching one half of low-income adults remained uninsured after full implementation of the ACA. Compared with states in the lowest quintile of change in coverage, states in the highest quintile experienced greater improvements in ability to see a physician.

From Fig 3, for low-income individuals. Dark bars are states that expanded Medicaid.

Comment:

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

National averages for uninsurance don’t do justice to the dismal post-ACA shortfalls for vulnerable groups – Blacks, Hispanics, and low-income. Especially in states that failed to expand Medicaid, but also in states that did expand. As this study demonstrates, these shortfalls impair ability to see a physician, and that, we know, worsens health outcomes.

How long will our country continue its commitment to highly inefficient convoluted health insurance schemes when there is a simple, efficient, equitable solution waiting for us to pluck it off the shelf and put it in place?

Single payer would not need studies or graphics like this. We’d just cover everyone.

Please.

http://healthjusticemonitor.org…

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