PNHP

Universal health care not partisan

Universal health care not partisan

By Rick Staggenborg, M.D.
Corvallis Gazette-Times, Letters, October 5, 2021

Want to know why government doesn’t work for us? Look no further than Kurt Schrader’s recent vote on a provision in the reconciliation bill that would have allowed Medicare to negotiate drug prices.

This is a system that has worked well for the Department of Veterans Affairs, which has saved tens of billions as a result. As a former VA provider, I can attest that I never once had difficulty getting a medication I felt my patient needed. I was happy to have to make an occasional request for mediations outside of the formulary because I knew the money the system saved was used to provide care to my patients.

If you want to know why Schrader voted against a money-saving measure approved by 91% of his constituents, you might take a look at his campaign donations. He has taken over $600,000 from the Pharm, including over $114,000 in the last election cycle. Could this be connected, or perhaps the fact that he inherited a fortune from his grandfather, a high-level Pfizer executive?

Schrader is proud of his bipartisan credentials, but this is an example of a bipartisan effort to protect an industry that is fleecing the public and helping threaten the solvency of Medicare. It’s proof positive that voters have to look beyond party labels and vote for candidates who put their interests over those of health care profiteers.

Once we learn to look at issues objectively, it becomes clear that universal health care is not a partisan issue.

https://www.gazettetimes.com…

Racism in US health, two reminders

Summary: Racism in US health manifests in multiple guises and scales. Today we report on two diverse country-wide phenomena most severely harming Blacks: thousands of deaths due to police violence, and millions burdened by social stresses and substandard insurance for the poor.

Fatal police violence by race and state in the USA, 1980–2019: a network meta-regression, Lancet, October 2, 2021, by GBD 2019 Police Violence US Subnational Collaborators

From the abstract: We compared data from the USA National Vital Statistics System (NVSS) to three non-governmental, open-source databases on police violence: Fatal Encounters, Mapping Police Violence, and The Counted.

Across all races and states in the USA, we estimate 30 800 deaths from police violence between 1980 and 2018; this represents 17 100 more deaths than reported by the NVSS. Over this time period, the age-standardised mortality rate due to police violence was highest in non-Hispanic Black people (0·69 per 100 000), followed by Hispanic people of any race (0·35), non-Hispanic White people (0·20), and non-Hispanic people of other races (0·15). This variation is further affected by the decedent’s sex and shows large discrepancies between states. Between 1980 and 2018, the NVSS did not report 55·5% of all deaths attributable to police violence. When aggregating all races, the age-standardised mortality rate due to police violence was 0·25 per 100 000 in the 1980s and 0·34 per 100 000 in the 2010s, an increase of 38·4% …

Racism, Chronic Disease and Mental Health: Time to Change Our Racialized System of Second‐Class Care, Healthcare, September 27, 2021, by Judith Albert et al.

The “weathering hypothesis” was first proposed by Arline Geronimus in 1992: “Namely, that the health of African American women may begin to deteriorate in early adulthood as a physical consequence of cumulative socioeconomic disadvantage.” Now, nearly 30 years later, a large body of literature has expanded upon this hypothesis. There is accumulating evidence that structural as well as interpersonal racism contribute to the significant increases in Black maternal and infant morbidity and mortality compared to that of whites.

Blacks use about half the outpatient care and fewer psychiatric medications as white adults, yet are hospitalized at twice the rate as their white counterparts for mental illness

From the abstract: Medicaid … while passed alongside Medicare during the Civil Rights era, was Congress’s concession to Southern states unwilling to [permit] federal oversight and funds to the provision of equal healthcare for poor and Black people. Medicaid, which covers 33% of all Blacks in the US and suffers from chronic underfunding and state efforts to weaken it through demonstration waivers, is a second‐class system of healthcare with eligibility criteria that vary by state and year.

Comment:

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

Racism in US health is structural, pervasive, and multi-faceted. Two articles published this week together convey this devastating point.

The article in Lancet is an impressive national comparison of databases of more than 30,000 deaths from police violence with government vital statistics. The official statistics 50% under-report violent deaths by police. These deaths are 3.5 times more common for Blacks than for Non-Hispanic Whites. It’s not healthcare, but it certainly is health-related. And these vast racial differences constitute highly suggestive evidence of systemic racism in attitude and approach.

The article in Healthcare reviews social and health burdens disproportionally faced by millions in Black populations. These include social stressors, poor access to mental health care, and the Medicaid insurance for impoverished populations – under-funded and manipulated to impede access to care. Our health insurance system is profoundly structurally inequitable.

And what for? We know that the simplest, most equitable insurance systems – covering everyone with the same insurance — are also the most efficient and effective.

Single payer would not only eliminate insurance and care inequities, it would foster social cohesion, and thus help reduce policing bias.

Who’s gaining with our current bloated, lopsided system? Mainly the rich, so they can stash more money overseas (that’s another story this week!).

http://healthjusticemonitor.org…

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

Medicare for all 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.

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