PNHP

Texas Bans Nearly All Abortions

Texas Bans Nearly All Abortions

Summary: Texas passed a ban on all abortions after 6 weeks, enlisting citizens to enforce it. This week, the U.S. Supreme Court let the law stand without hearing arguments. Roe v. Wade took a huge hit. So did health care justice.

Supreme Court, Breaking Silence, Won’t Block Texas Abortion Law, New York Times, September 1, 2021, by Adam Liptak, J. David Goodman, and Sabrina Tavernise

The Supreme Court refused just before midnight on Wednesday to block a Texas law prohibiting most abortions, less than a day after it took effect and became the most restrictive abortion measure in the nation. […]

In the emergency application urging the justices to intervene, abortion providers in the state said the new law “would immediately and catastrophically reduce abortion access in Texas,” and most likely force “many abortion clinics ultimately to close.”

Comment:

By Isabel Ostrer, M.D. and Jim Kahn, M.D., M.P.H.

On Wednesday, the U.S. Supreme Court let stand Texas’ near-total ban on abortion (SB8). The law prohibits abortion once fetal cardiac activity can be detected — typically at six weeks of gestation, when most women don’t even know they’re pregnant — in effect banning 85-90% of abortions. Rape and incest are not excepted. The law evades Roe v. Wade’s restrictions on state action by empowering citizens (not the police, not the government) to enforce the ban using civil litigation, with the rules stacked against anyone who facilitates an abortion. There is no precedent for this bizarre enforcement design.

SB8 is the perfect storm of abusing law-making to take away the right to control one’s own body. It strikes at the nexus of health, human rights, and democracy. It will harm health both physically and mentally, predominantly for poor people of color.

Representative Cori Bush wrote, “I’m thinking about the Black, brown, low-income, queer, and young folks in Texas. The folks this abortion health care ban will disproportionately harm. Wealthy white folks will have the means to access abortion care. Our communities won’t.”

Prior to SB8 taking effect, Texan’s seeking abortions had to travel an average of 24 miles round trip to access care. Now they will have to travel nearly 500 miles to access this same care out of state, putting safe abortions out of reach for many.

When abortion bans go into effect, women don’t stop seeking abortions, rather abortions become less safe. Abortions performed by a trained health-care provider are incredibly safe — much safer than child birth. When the U.S. legalized abortion in 1973, the number of abortion-related deaths dropped drastically, mainly due to a decline in the absolute number of deaths from illegal abortion. Total abortions have also dropped to below 1973 levels. With the new law, women’s lives are being sacrificed.

We must ensure access to health care for all — including the full-spectrum of reproductive care, which encompasses abortion care.

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.

Reminder from Med Students & Residents: Academic Medical Centers are Mostly AWOL in the Fight Against Racism

Summary: This extensive report card about 26 medical schools found widespread deficiencies in the pursuit of racial justice in training, clinical care, policing, worker relations, and research. Despite increasing recognition of these problems, attempts to address them remain far short of vigorous.

Racial Justice Report Card, 2020-2021, White Coats for Black Lives, September 1, 2021

The Report Card consists of metrics that evaluate institutions’ curriculum and climate, student and faculty diversity, policing, racial integration of clinical care sites, treatment of workers, and research protocols. Ultimately, WC4BL hopes that the Racial Justice Report Card will highlight best practices and encourage academic medical centers to direct their considerable power and resources toward addressing the needs of our patients and colleagues of color.

Recruitment and Admissions: URM (Under-Represented Minority) physicians are so sparse in the United States that medical schools would have to admit only URM students for almost ten years for physician racial demographics to match that of the general population. For this reason, the RJRC requires each school to have an overrepresentation of URM students with relation to the current demographics to start to correct intentionally produced inequities. None of the 26 medical schools graded met the metric set for this year’s report card with regards to student representation.

Anti-Racist Curriculum Development: While the majority of schools evaluated had some form of education on social determinants of health, schools did not uniformly provide instruction on the sociopolitical (non-biological) nature of race. Only ten of the twenty-five medical schools evaluated were reported to teach race as a social construct.

Clinical Education and Patient Protection: Twenty out of the twenty-five medical schools assessed allowed preclinical (first- and second-year) medical students to provide patient care in the setting of student-run clinics for uninsured patients. This is not the standard of care in academic medical centers, where preclinical students are generally restricted to observation and shadowing. Students at several institutions reported being provided more autonomy when caring for marginalized patients in public hospitals or student-run free clinics than they were afforded when caring for patients in the primary teaching hospital.

Equal Access for All Patients: The majority of medical schools evaluated had some system of segregated care based on insurance status. Because of the link between racism and capitalism in the United States, segregation based on insurance status generates de facto racial segregation.

Medical School and Hospital Relationship to the Carceral State: Most of the hospitals reported that patients who are experiencing incarceration were not interviewed or examined apart from an officer and that there were no clear policies that protect the privacy or information of  these patients.

Treatment of Workers: Nearly all of the evaluated academic medical centers paid at least some of their workers less than the living wage for the local area.

Research: Some medical centers’ institutional review boards (IRBs) listed racial and ethnic minorities as “vulnerable subjects.” However, few schools required researchers to define race or how researchers planned to use race in their research prior to approval.

Comment:

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

These excerpts offer a glimpse of White Coats for Black Lives’ extensive findings documenting the racism that continues to permeate our nation’s leading medical institutions. The carefully researched 411 page report was produced by medical students and house officers at each of the institutions evaluated (disclosure: one of our daughters participated in this effort). All of the schools received mostly failing grades.

While the medical establishment has, in recent years, begun to pay lip service to anti-racism, actions would speak much louder.

http://healthjusticemonitor.org…

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

PNHP President Dr. Susan Rogers on SB8, Texas abortion ban legislation

Thursday, Sept. 2, 2021
Media contact: Clare Fauke, PNHP communications specialist, clare@pnhp.org

Statement from Dr. Susan Rogers, president of Physicians for a National Health Program:

“The Supreme Court’s decision to uphold Texas’ near-total abortion ban (SB8) is a public health emergency. SB8 would force those seeking abortion care to travel hundreds of additional miles — an impossible barrier for low-income Texans who must either carry their pregnancies to term, or risk death or mutilation from self-induced abortions. Lives are at stake, since state-level abortion bans strongly correlate with increased maternal mortality. In addition, SB8’s primitive enforcement mechanism puts a bounty on health care providers, who have endured decades of attacks simply for providing constitutionally protected care. As physicians, we call on the courts to immediately block the implementation of this law, and on our national leaders to guarantee full access and coverage for all reproductive health care, including abortion.”

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 24,000 members support single-payer national health insurance.

Sutter Medicare Advantage Pays $90 million Due to False Data

Summary: Sutter Health (California) is paying $90 million to settle allegations that it submitted false diagnoses to increase payments to its Medicare Advantage plans. This type of gaming and fraud permeates the private insurance-run Medicare Advantage program. Let’s return to a social insurance model – traditional Medicare, without the privates. Then extend it to everyone.

Sutter Health and Affiliates to Pay $90 Million to Settle False Claims Act Allegations of Mischarging the Medicare Advantage Program, The United States Department of Justice, August 30, 2021

Sutter Health, a California-based health care services provider, and several affiliated entities including Sutter Bay Medical Foundation (dba Palo Alto Medical Foundation, Sutter East Bay Medical Foundation, and Sutter Pacific Medical Foundation) and Sutter Valley Medical Foundation (dba Sutter Gould Medical Foundation and Sutter Medical Foundation) … have agreed to pay $90 million to resolve allegations that Sutter Health violated the False Claims Act by knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans.

Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed health care insurance plans called Medicare Advantage Plans. The plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. Payments to plans are based on demographic information and the health status of each plan beneficiary. In general, plans receive larger payments for beneficiaries with more severe diagnoses. …

The government alleged that Sutter Health knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under its care. These unsupported diagnosis codes caused inflated payments to be made to the plans and to Sutter Health. The lawsuit further alleged that, once Sutter Health became aware of these unsupported diagnosis codes, it failed to take sufficient corrective action to identify and delete additional unsupported diagnosis codes.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Comment:

By Don McCanne, M.D.

Sutter Health does not have a reputation of being a crooked organization. But here they have agreed to pay a penalty for knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans. So what happened?

The primary culprits are Congress and the prior administrations. We had a publicly administered program, Medicare, that required updating so that it would function better for the beneficiaries and provide better value to the taxpayers. Instead of making the appropriate adjustments in this social program, they decided to turn it over to the private sector in the form of private Medicare Advantage plans. Thus, rather than being operated as a social insurance program primarily serving the interests of the patients, it was operated as a private business model serving the interests of the investing entity, whether nominally for profit or non-profit.

Should we have been relying on Sutter, or any other sector in the health care delivery system, to override the business model presented to them and provide their services based on a public social insurance model? That’s not the way it works.

You know, we don’t have to continue to cater to the private insurers at a cost to the beneficiary-taxpayers. We can eliminate the private insurance business model and proceed with efforts to improve the Medicare public social insurance program. The vision we have had would be such a beneficial program that it would be appropriate to extend it to everyone and thus eliminate many of the injustices in our health care system. Health justice for all. Although it took the efforts of our Department of Justice to publicize that conclusion, that is also our message here at Health Justice Monitor.

http://healthjusticemonitor.org…

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

Medicare for All Explained Podcast: Episode 63

Interview with Prof. Jerome Katz

September 1, 2021

Entrepreneurship expert Prof. Jerome Katz says costs, including health insurance costs, loom large for small businesses, many of which are run by a single individual. “If health care is taken care of through a Medicare-for-all program,” he says, “then it’s taken off the back of employers.”

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

https://medicareforallexplained.podbean.com

When the U.S. health care system met the comic book

Radcliffe fellow’s project hopes to make the incomprehensible accessible and usher in reforms

By Colleen Walsh
The Harvard Gazette, August 31, 2021

James Sturm has spent his life crafting comics, from a miniseries on the lives of Marvel superheroes to history-themed graphic novels. But following the fraught 2016 presidential election, Sturm turned his attention to a different kind of storyline.

“It seemed as if the very idea of democracy was under assault and at that point I just wondered ‘What can I do as a cartoonist, that is my civic duty, with the skills that I have?’” said Sturm, founder of the Center for Cartoon Studies (CCS) in White River Junction, Vermont, and the 2020-21 Mary I. Bunting Institute Fellow at Harvard Radcliffe Institute.

His answer? Work with some like-minded artists on a 32-page illustrated primer on the nation’s political system titled “This Is What Democracy Looks Like: A Graphic Guide to Governance.” The booklet became a popular teaching tool in classrooms across the country, with copies shipped to schools in more than a dozen states and distributed to teachers at summer conferences and various other educational and literacy events. It also inspired Sturm’s recent Radcliffe project: a comic book aimed at demystifying the nation’s health care system, a horrendously complex industry affecting millions of Americans each year.

“As more people are putting material out there and addressing this issue, the hope is that there is some kind of inflection point,” said Sturm of his latest effort, a collaboration with a graduate student from CCS and several Harvard College students. “Our job was to make this comic as accessible and clear and accurate and engaging as possible, and my hope is that ‘Health and Wealth’ proves useful to organizations who are advocating for health care reform.”

The 32-page graphic guide addresses a range of topics, including the earliest days of Medicare, a history of the hospital, and the convoluted way patients are billed for services depending on how doctors and insurers choose to describe procedures. “It’s really Orwellian,” said Sturm. “Thousands of dollars depend on what word you use.”

The research has already paid off for Sturm, who was able to reduce a recent $3,000 medical bill for an eye procedure to less than $1,000 by negotiating with the hospital over the phone. But Sturm knows most people don’t have any idea how to navigate the system, and that bartering isn’t a sustainable fix. That’s where the comic comes in. “The system is complex and secretive and cruel,” said Sturm, “and the more it remains in the dark the longer it can operate.”

Panels from the 32-page graphic guide to health care. James Sturm and Kazimir Lee © The Center for Cartoon Studies

During the semester Sturm and a team of College students who were part of Radcliffe Research Partnerships program dove into the literature. They read “American Sickness: How Healthcare Became Big Business and How You Can Take It Back” by Elisabeth Rosenthal, listened to health-care-related podcasts, and pored over articles on the U.S. health care system.

“I can’t say enough about working with the students. They were so enthusiastic. They brought so much knowledge, and they were so supportive of a creative process that can sometimes result in dead ends,” said Sturm. “But they just buckled in and were just so great, from research to sketching out pages to copy editing.”

One of those students was Marissa Diggs ’22, a history of science concentrator with plans for medical school. As a child Diggs was diagnosed with Kawasaki disease, an inflammatory condition that can affect the arteries of the heart. In the ensuing years, precautionary heart scans every several years have been accompanied by her fears about rising costs. “There’s just so much anxiety that follows from not understanding the system that is so essential for your health and well-being,” said Diggs, who sees Sturm’s project as a way to shine some much-needed light on a poorly understood system.

A self-described “visual person,” Diggs also embraced the chance to put her drawing skills to the test. Sturm encouraged the students to develop a visual plan for the comic, no matter how basic, stick figures welcome. Every iteration helped inform the final product. “I think that that was probably what I enjoyed most about the project, getting to explore that side in parallel to doing the research in the history of medicine that I love,” said Diggs.

Alisha Yi ’22 was equally attracted by the possibility of helping people better understand the health care system.

“This project was just so interesting to me, because it was using the idea of art to talk about something that’s really important, and so necessary,” said Yi, who is also a history of science concentrator on a premed track. “It’s kind of hard to go online and read the things that we really need to hear. Having this comic combines the best of both worlds, of literature and of science, enabling us to think about things that are really important.”

Together the team also developed a GoFundMe page to pay for printed copies of the comic that they plan to deliver to every member of Congress. “So much of this stuff is a moral issue,” said Sturm. “And ultimately, the book is framed as such.” But it’s done with a clever, comic eye, he added, and conveys an important message without being too strident.

The book’s final visual look is informed by the Schoolhouse Rock! videos — a series of explainer animated shorts for children popular in the 1970s and ’80s that covered topics such as government, science, history and math — retro board games like Monopoly and Operation, and the work of American author and illustrator Richard Scarry, a master at “explaining complicated things very clearly,” said Sturm.

“There’s some fun stuff you can do using this style that you might not be able to do otherwise,” said Sturm. “It’s kind of like a court jester who reveals a truth.”

To download a free copy visit “Health and Wealth.”

https://news.harvard.edu…

More market fiddling, that’s the answer!

Summary: In a JAMA opinion piece, two physicians with homes in the business world propose payment innovations for our multi-payer health care system. Are these proven strategies? Of course not. Do they betray a blind faith in the magic of the marketplace? Sure do.

Setting the Stage for the Next 10 Years of Health Care Payment Innovation, JAMA, August 16, 2021, by Bob Kocher and Rahul Rajkumar

This Viewpoint describes 4 health policy strategies:

Broaden Participation in Alternative Payment Models, Particularly Among Specialists

Alternative APMs [e.g., Accountable Care Organizations] include higher levels of risk and therefore reward clinicians with more money for more cost savings and ensure that the Medicare program saves money by transferring risk to physicians. … A better approach would be to broaden the value-based payment portfolio by creating APMs for specialists …

Ensure That Payment Systems Reward Multiyear Investments in Health

A major shortcoming of the current system is that investments in health have very short payback periods. These time frames make it challenging to invest in interventions that have longer-term benefits, even when these investments may produce substantial improvements in health. …

A new funding mechanism for breakthrough preventive care, such as health-related bonds, which are held by investors, and which increase in value along with a person’s long-term health, could create a strong incentive to address social determinants of health and healthier lifestyle interventions.

Align Payment Models Across Payers

One model could be moving to a capitated payment model for hospital services so hospitals receive monthly payments for the availability of their services rather than be paid on a fee-for-service basis.

Reduce the Administrative Burden of Risk Adjustment and Quality Measure Reporting

Commercial, Medicare Advantage, and Medicaid payers should adopt the same patient attribution, quality metrics, and risk adjustment (when appropriate) methods as Medicare.

Comment:

By Don McCanne, M.D. and Jim Kahn, M.D., M.P.H.

This Viewpoint proposes a set of innovations based on shoddy, non-existent, or discouraging data. One example is shared savings programs. like accountable care organizations. As we recently wrote, Medicare’s experiment with ACOs failed. Why continue it? And why shift to hospital capitation when the primary problem is prices, not utilization? And, if you’re looking for the big pot of gold, why not eliminate $800 billion in annual excess billing-related administrative costs that derives from the morass of insurance products and rules?

The language used by the authors highlights the business orientation. Besides investors gambling on health-related bonds, they also mention bundling for specialists who agree to provide “parsimonious” care, making APMs more “attractive economically” for specialists, and, of course, the great overlooked potential of producing financial savings merely by “reversing” diabetes. Rather than basing the system on the opportunity to improve patient and population health, we should be developing systems catering to physician greed, they seem to suggest.

One innovation they don’t advocate: proven unified health insurance systems that lower costs and lengthen lives. Like single payer. Why not? Because, as the authors’ affiliations indicate, their interest is in making money.

Ah, marketplace innovations, they’ve worked so well for healthcare up to now, as we can all see. Clearly the best medicine is more of the same!

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.

Learning from Costa Rica

Summary: Atul Gawande writes a compelling New Yorker report of how Costa Rica melded medicine and public health to greatly reduce disease and lengthen life. If the U.S. is to learn from this inspiring example, we’ll need universal coverage with no cost barriers, robust health data, and strong primary care. Single payer will help pave the way.

Costa Ricans Live Longer Than Us. What’s the Secret?, The New Yorker, August 23, 2021, by Atul Gawande

“People who have studied Costa Rica, including colleagues of mine at the research and innovation center Ariadne Labs, have identified what seems to be a key factor in its success: the country has made public health—measures to improve the health of the population as a whole—central to the delivery of medical care. Even in countries with robust universal health care, public health is usually an add-on; the vast majority of spending goes to treat the ailments of individuals. …

As the pandemic ebbs, countries will be assessing what went wrong with their public-health systems. A fundamental failure has been the separation of public health from health-care delivery. Getting that right, across the globe, could present our greatest opportunity to secure longer and better lives.”

Comment:

By Isabel Ostrer, M.D.

Atul Gawande’s captivating article about Costa Rica’s robust public health system describes a framework for how to improve health outcomes — one that a single payer healthcare system can facilitate. In fact, I contend that a unified health system is a prerequisite for implementing this type of comprehensive delivery.

Gawande recounts the three principal elements of Costa Rica’s universal approach to care: 1) merge public health services with hospital- and clinic-based care, 2) collect and integrate household-level demographic data with medical records to drive national health priorities, and 3) emphasize local primary care delivery.

Single payer provides the prerequisites for this transformation by:

1) Facilitating marginalized communities’ access to care: For the Costa Rican model to work, everyone needs excellent access to care. In the U.S, 33 million Americans are uninsured and nearly ⅓ of insured adults are inadequately insured. Single payer would eliminate barriers to care by ensuring every American has health insurance, with no point of care costs (premiums, co-pays, and deductibles) which discourage care seeking.

2) Creating a unified electronic health record: Electronic health records (EHR) are clunky and disparate, and don’t communicate with each other. A 2018 report revealed that fewer than half of office-based physicians were able to exchange health information with providers outside their organization electronically. A single payer system would prioritize a single EHR that allows easy exchange of information among medical providers. This foundation could be expanded to include public health data, mirroring the Costa Rican system Gawande describes.

3) Prioritizing a primary health workforce: Greater primary care is associated with lower mortality, lower costs, and higher quality of care. But the number of primary care physicians (PCPs) decreased from 46.6 to 41.4 per 100,000 people between 2005 and 2015. This is unsurprising given that the median PCPs’ income is just 60% of specialists’. The Medicare for All Act of 2019 establishes an Office of Primary Health Care to expand the primary care workforce and ensure greater access to care, particularly in underserved areas. Moreover, primary care compensation would increase through two mechanisms. First, a single payer system would compensate previously unreimbursed care. Second, it would free up time previously spent on administrative work for reimburseable direct patient care.

Gawande writes that as countries assess how they could have better responded to the Covid-19 pandemic there will be more focus on public health infrastructure. Indeed, this moment of reflection is an opportunity to fundamentally rethink how we deliver care with emphasis on universal coverage as a foundation to “braid together public health and individual health.”

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.

Single-payer is much better system

By Kathleen Healey, M.D.
Napa Valley Register, August 27, 2021

In a recent column, Dan Walters notes that Gov. Newsom has not fulfilled his promise as a single-payer champion. (“Newsom slow-rolls single-payer health care promise,” Aug. 16) He suggests that the governor is leaning toward incremental change to expand health care — a “heavy financial lift.”

The most cost-effective way to universal healthcare is with the government as the single-payer, which most of our allies have discovered. Why? 97% of the money goes to healthcare services and we save large sums of money by not sending 25-30% of our health care dollar to our middlemen for-profit insurance companies who use it for advertising, CEO salaries, shareholder profits, lobbyists, and large banks of administrators who deny services to patients, and payments to doctors, in order to increase their own profits.

Raising your taxes to pay for universal healthcare is a scare tactic to make you think your costs will rise when, in fact, most people will pay less. Think of the employee portion of your insurance that comes out of your salary, your co-pays, deductibles, and drug costs. America’s healthcare system is the most expensive in the world and ours scored last out of 11 countries in The Commonwealth Fund’s most recent report.

A tax paid by everyone would be fair, less costly for most and families would no longer have to worry about medical debt, bankruptcy, or losing insurance with job loss, as we saw with the pandemic.

Incremental expansion of Medicaid and ACA is more expensive for the state and gives people insurance cards that many physicians will not accept, forcing more trips to emergency rooms, a costly alternative. With a single-payer, physicians have the same fee schedule for every patient, and submit their bills to one payer only, as is done with Medicare. This markedly reduces administrative costs for everyone, which currently amount to $815 billion each year nationally.

The California Legislature under Gov. Newsom’s direction has created the Healthy California for All Commission to study single-payer financing. It is continuing to meet during the pandemic. The commission will send its recommendation to Newsom when it concludes its study.

With the big money on the side of the status quo, popular demand is needed to convince our governor and our legislators that we want healthcare to be considered a common good, like fire services, and elementary education, as it is in most countries, and not privatized for profit. A healthy state is a more productive state and more preventive care will reduce future health expenditures and improve our lives.

Remember, single-payer healthcare is not socialized medicine. Doctors’ practices and hospitals remain private. What changes is where their invoices are sent. Specifically, invoices go to a single government agency instead of a multitude of for-profit insurance companies.

Please connect today with Health Care for All-CA. (heatlhcareforall.org) or Physicians for a National Health Program (pnhp.org).

https://napavalleyregister.com…

PhRMA Distorts Public Opinion on Drug Price Negotiation

Summary: The pharmaceuticals trade association ran a big ad claiming that Americans oppose negotiations on drug prices. It is dishonest: only after hearing pharma’s scare tactics do most Americans become opposed. It’s time for drug price negotiations in Medicare.

Axios Vitals, August 24, 2021

Message from PhRMA

KFF Health Tracking Poll – May 2021: Prescription Drug Prices Top Public’s Health Care Priorities, June 3, 2021

From the Key Findings

Overall, nearly nine in ten (88%) favor allowing the federal government to negotiate for lower prices on medications, including three-fourths (77%) of Republicans, nine in ten independents (89%) and 96% of Democrats. And while majorities of the public continue favoring this proposal after hearing that people and the federal government could save money on their prescription drugs if this policy were implemented, majorities oppose this policy proposal [after hearing the] argument made by pharmaceutical companies that it could lead to less research and development for new drugs, or that access to newer prescriptions could be limited.

Comment:

By Don McCanne, M.D.

The KFF Health Tracking Poll was the reference provided by PHARMA to support their claim that Americans reject government negotiation in Medicare. Yet the tracking poll indicates that 88% do support allowing federal negotiation for lower prices on medications. What they report as a myth is actually a fact. What they report as a fact is actually a myth. Only when told specifically that negotiations could cause less drug research or less access to newer prescriptions (dubious claims meant to scare us) do 65% become opposed.

The fact is that PHARMA is being dishonest in presenting an ad that can only be interpreted as representing American opposition to drug price negotiation, when the opposite is true. They certainly do not deserve to have their price gouging protected, especially when based on deception. It’s long past time to enact government drug price negotiation for Medicare.

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.

Pharmacy Benefit Managers: The mystery bureaucrats managing your prescription drugs

By Linda L. Ujifusa, Esq. and J. Mark Ryan, M.D., F.A.C.P.
Uprise RI, August 25, 2021

“In between most patients and healthcare providers are middlemen health insurers (“payers”) who take money from patients, pay some to healthcare providers, and keep some for themselves. These multiple payers cause the United States to spend about twice per capita what other industrialized nations with “single payer” spend and they get better universal healthcare…

Summary:

About 40% of Americans struggle to afford their regular prescription medicines – with 1/3 saying they have skipped filling a prescription one or more times, because of the cost. COVID-19 has exacerbated the problem by causing job and health insurance loss and delaying routine care.

Rhode Island policymakers know skyrocketing prescription drug prices must be better controlled.

Unfortunately, they have ignored a key cost driver: Pharmacy Benefit Managers (PBMs).

PBMs such as CVS Caremark, Express Scripts and OptumRx “manage” prescription drug benefits on behalf of insurers and siphon off enormous revenues in the complex non-transparent system that gets drugs from manufacturers to patients.

Other states are doing a much better job monitoring and controlling PBMs and have saved consumers and tax payers hundreds of millions of dollars.

Rhode Island should follow their lead.

To urge RI policymakers to take action, please sign this petition.

A fully footnoted version of this article is available to download here.

What are PBMs?

In between most patients and healthcare providers are middlemen health insurers (“payers”) who take money from patients, pay some to healthcare providers, and keep some for themselves. These multiple payers cause the United States to spend about twice per capita what other industrialized nations with “single payer” spend and they get better universal healthcare.

In the middle of payers, patients and pharmacies, there are Pharmacy Benefit Managers (PBMs).

PBMs: Middlemen for middlemen

PBMs are for-profit companies that “manage” prescription drug benefits for more than 266 million Americans on behalf of payers, including private insurers, Medicare Part D drug plans, government employee plans, large employers, and Medicaid Managed Care Organizations (MCOs).

PBMs help payers:

  1. create a list of covered drugs for plans (“a formulary”);
  2. manage drug utilization by enrollees (e.g., by setting co-pays, prior authorization policies, etc.);
  3. reimburse pharmacies for providing the enrollee drugs.

This article will focus on:

  • Who are Pharmacy Benefit Managers (PBMs)
  • How PBMs Harm Consumers and Taxpayers
  • PBM Oversight in Other States
  • Potential Roadblocks to RI Reforms
  • How RI Can Rein in PBMs

Who are Pharmacy Benefit Managers (PBMs)?

PBMs began in the 1970s as small independent middlemen between insurers and pharmacies, taking a set fee for processing claims.

Today, three PBMs control 80% of the market and are part of large vertically integrated conglomeratesthat include health insurance companies and pharmacies (including “specialty pharmacies”)

PBMs are also part of a complex non-transparent distribution system that gets drugs from manufacturers to beneficiaries (see Figure 1).

Source: https://healthpolicy.usc.edu/research/state-drug-pricing-transparency-laws-numerous-efforts-most-fall-short/, adapted from, Sood, N., et al., “Flow of Money Through the Pharmaceutical Distribution System,” USC Schaeffer Center for Health Policy white paper.

In this system, businesses can keep payments and discounts between themselves confidential, but analyses show that pharmaceutical manufacturers make the most profits for developing and manufacturing prescription drugs AND:

Revenues of top PBM conglomerates exceed those of top pharmaceutical manufacturers.

PBM conglomerates rank 4th (CVS), 5th (UnitedHealth Group) and 13th (Cigna) on the Fortune 500 list ranking largest corporations by revenue.

PBMs drive revenues for their parent companies:

  • “CVS Health’s Pharmacy Services (PBM) segment will make 46% of $324 Billion in 2021 revenues for the company and remains key to its revenue growth.”
  • In 2019, Cigna’s total revenues more than doubled ($14.3 billion to $38.2 billion) and its Express Scripts Holding Co. unit was the “driving force” behind the $22 billion surge.
  • UnitedHealth’s Optum subsidiaries collected more profit in the fourth quarter of 2019 ($3 billion) than United Healthcare insurance ($2.1 billion)

How PBMs harm consumers and taxpayers

1. PBMs get legal kickbacks (“rebates”) from drug manufacturers for putting certain drugs on formularies

When PBMs create a list of covered drugs, they negotiate with drug manufacturers for legal kickbacks (“rebates”) in exchange for giving certain drugs preferred placement on formularies (e.g., Tier 1 with no co-pay, etc.).

Kickbacks are generally illegal under federal law, but PBMs are given a “safe harbor” and a federal rule making PBM rebates illegal has been delayed.

PBMs have a conflict of interest developing formularies because they get more money for shareholders by choosing an expensive drug with a higher rebate than by choosing the most effective or affordable drug for consumers.

Although PBMs pass rebates to insurers (who may be their parent companies) and claim this will result in lower premiums and co-pays, analyses show there is no such trickle down to consumers.

In fact, drug manufacturers cover PBM rebates by raising their list prices for drugs and consumers pay a higher co-pay because they pay a % of the higher list prices.

At $143 billion in 2019, it is estimated that rebates added nearly 30 cents per dollar to the price consumers pay for prescriptions.

2. PBMs overcharge payers (including state Medicaid) and underpay pharmacies because they can keep the difference (“spread”) between what they are paid and how much they reimburse pharmacies

Multiple states have found PBMs problems related to their keeping the “spread.” An Ohio audit, for example, found that in one year, “CVS Caremark and UnitedHealth’s OptumRx PBMs reaped more than $223 million—and made an 8.8% profit—by overcharging Medicaid managed care plans, underpaying pharmacies, and pocketing the difference.”

Ohio found the spread came to $5.70 per prescription across all brand-name and generic drugs and that Ohio could have gotten the same services for $1.90 per prescription or less by switching to a fee-based model – where pharmacies are reimbursed their acquisition cost plus a set administrative fee.

Ohio ordered managed-care plans in the state to terminate PBM spread pricing contracts for 2019.

3. PBMs “claw back” and keep excess consumer co-pays

Consumers are often unaware they could have paid less if they had NOT used their insurance (for example, when a co-pay is $10, but the drug price without insurance is $7).

Although consumers should be allowed to recover such overpayments, PBMs are the ones who “claw back” overpayments – and keep them.

A study by researchers at the University of Southern California Schaeffer Center for Health Policy & Economics found that because of PBM claw backs, customers overpaid for their prescriptions 23 percent of the time.

4. PBMs profit from a federal program (“Section 340B”) meant to help low income patients

In 1992, Congress enacted Section 340B of the Public Health Service Act mandating that pharmaceutical manufacturers provide outpatient drugs at significant discounts to certain “covered entities.” 340B’s original purpose was to allow a handful of safety-net hospitals that cared for the poor to obtain drugs at substantially reduced prices.

Changing federal laws caused the number of entities eligible for 340B discounts to explode so that today, there are now about 5,000 covered entities and 20,000 affiliated sites, as well as, “30,000 pharmacy locations—half of the entire United States pharmacy industry – now act[ing] as contract pharmacies for the hospitals and other healthcare providers that participate in the 340B program.” 340B discounted drugs make up “more than 8% of the total United States. drug market and about 16% of the total rebates and discounts that manufacturers provide.”

This large, complex and relatively unknown program is detailed here, but PBM problems generally involve their engaging in “discriminatory reimbursement,” e.g., offering 340B entities lower reimbursement rates than those offered to non-340B entities.

Currently, the federal 340B statute allows PBMs to make significant revenues and not pass money to those Section 340B intended to help.

5. PBM conglomerates own retail, mail order and specialty pharmacies and can work against consumer interests by:

  • Setting low reimbursements for their competitors – a cause of local independent pharmacies disappearing.
  • Pharmacy Steering – PBMs “steer” customers to pharmacies, including mail order and specialty pharmacies, with whom they are affiliated, e.g., by requiring a higher copay if the patient obtains the drug from a non-affiliated pharmacy.
  • Pharmacist gag orders – despite a federal law and a new 2021 Rhode Island law that prohibits PBMs from preventing pharmacists from discussing cheaper options, the consumer still has to ask and may not be told all options.

6. PBMs can hide profits

Reasons for the lack of transparency noted in Figure 1 include:

  • PBMs keeping their negotiated discounts and rebates confidential – even from a recent federal Senate committee investigating insulin prices.
  • PBMs disguising profits, e.g., as “rebate management fees” and “savings.”
  • PBMs controlling their own audits, e.g., by having the right to veto auditors, determine frequency of audits, require auditors to sign “Confidentiality Agreements,” etc.

7. PBM “Utilization Management” can harm patients

PBMs claim to implement “utilization management” strategies on behalf of payers to benefit payers AND consumers. These strategies can include:

  • “Prior authorization,” which requires patients to get third-party approval prior to getting the medicine prescribed by their healthcare provider.
  • “Step therapy,” also known as “fail-first,” “sequencing,” and “tiering,” which requires patients to start with lower-priced medications before being approved for originally prescribed medications.
  • “Non-medical drug switching” which forces patients off their current therapies for no reason other than to save money. “Tactics include increasing out-of-pocket costs, moving treatments to higher cost tiers, or terminating coverage of a particular drug.

Unfortunately, such utilization management can also harm consumers by making providers spend excessive time on administrative tasks, delaying and discouraging patient care, and adversely affecting clinical outcomes.

PBM Oversight in Other States

Rhode Island has some PBM-related laws and regulations, but other states are more aggressively investigating and reining in PBMs to better protect consumers and tax payers.

A recent Supreme Court case, Rutledge v. PCMA, supports states taking more actions to regulate PBMs.

Some actions other states are taking include:

1. Imposing transparency reporting requirements

27 states with private insurance companies (Managed Care Organizations – MCOs) managing their Medicaid programs reported they will have transparency reporting requirements in place in FY 2020. For example:

  • Texas passed a 2019 law requiring PBMs to report information to the state and discovered, “Since 2016, through a complex rebate and price concession process, the PBM industry in Texas pocketed more than $350 million in revenue, while passing a mere $16 million in savings to enrollees.”

2. Investigating PBMs

Several states have investigated or are currently investigating PBMs.

  • Florida: State audit found “prescription markups” by PBMs cost Florida’s Medicaid system $113.3 million in 2020 ($89.6 million in “spread costs”).
  • Kentucky: Attorney General investigating PBMs for overcharging the state and discriminating against independent pharmacies after state discovers PBMs kept $123.5 million in spread annually.
  • Massachusetts: Investigation found prices charged by PBMs for generic drugs were often “markedly higher” than the actual cost of the drug in both Mass Medicaid Managed Care and Commercial Plans, “contributing to higher health care spending” (e.g., up to 111% more for certain drugs than in fee-for-service state-managed Medicaid program).
  • Mississippi: Auditor General is investigating PBMs suspected of overcharging state Medicaid and the Mississippi State and School Employees’ Life and Health Insurance Plan, which covers nearly 200,000 state employees, retirees and their families after audit found PBMs were paid more than $1.1 billion; sometimes as much as $25 million a month.
  • Pennsylvania: Auditor General found between 2013 and 2017, the amount that taxpayers paid to PBMs for Medicaid enrollees more than doubled from $1.41 billion to $2.86 billion and is urging greater transparency and more state control.

3. Carving out PBMs from managing Medicaid pharmacy benefits

  • Four states reported in 2019 that they generally “carve out” pharmacy benefits from their Medicaid managed care programs (Missouri, West Virginia, Tennessee and Wisconsin) and other states were considering doing so.
    • West Virginia “carved out” PBMs, including Express Scripts and CVS, from its Medicaid managed-care program and began running the program as a fee-for-service program – eliminating spreads and reducing administrative fees. It expected to save $30 million a year—about 4 percent of the state Medicaid drug spending. In fact, WV Medicaid saved $54.4 million in its first year and $122 million that used to go to out-of-state PBMs instead went to West Virginia pharmacies in the form of fixed dispensing fees.
  • Ohio contracted with a single PBM for Medicaid after undertaking the state audit described above and the State Auditor concluding, “It is now overwhelmingly apparent that PBMs are operating the biggest shell game in modern history, and we are all paying for it.

4. Prohibiting spread pricing

About 17 states reported a spread pricing prohibition would take effect by January 2021 (Figure 3).

  • Arkansas: Passed a law, upheld by the Supreme Court, that required all PBMs to reimburse pharmacies at a price equal to or higher than what the pharmacy paid to buy the drug from a wholesaler.
  • Maryland: Banned spread pricing after a state Medicaid report found PBMs pocketed “spread” of $72 million annually.
  • Ohio: Ended spread pricing contracts with PBMs and switched to a pass-through model following a state audit that found PBM profit accounted for 31.4% ($208.4 million) of the $662.7 million paid by Ohio Medicaid MCOs for generic drugs

5. Restricting PBM rebates

  • Ohio: rebates and discounts must be passed back to the state.
  • Maine: required PBMs to pass rebates and other “compensation” to consumers or insurers (who must in turn apply the funds to “offset the premium for covered persons”).
  • West Virginia: now handles pharmacy benefits for both state workers and Medicaid recipients through the West Virginia State University of Pharmacy, saving $38 million in its first year.
  • About 17 states: have enacted stronger laws requiring PBMs to disclose rebate information.

6. Prohibiting “claw backs”

  • About 38 states have prohibited PBM “claw backs.

7. Prohibiting pharmacy discrimination

  • Georgia, Louisiana, Minnesota and Utah have passed legislation banning the practice of “pharmacy steering.”
  • Kentucky created an act that requires PBMs to provide greater transparency and “fair and reasonable” reimbursements.

8. Restricting Section 340B reimbursements

  • About 11 states: have passed legislation to prohibit PBMs from reimbursing 340B covered entities less than other entities who get their standard reimbursement rate.

9. Limiting “Utilization Management”

  • Prior Authorization – 12 states (including RI) have legislation protecting drug classes or categories from using Prior Authorization in some or all circumstances, and most (excluding RI) also apply such statutory limits to Medicaid MCOS.
  • Step Therapy – 11 states have passed and many more are considering legislation to limit Step Therapy, e.g., Arkansas became the first state to pass a comprehensive step-therapy ban.
  • Non-Medical Drug Switching – Several states have prohibited or introduced bills limiting non-medical switching.

Potential roadblocks to RI reforms

1. CVS-Aetna-Caremark

  • CVS Caremark is a large Rhode Island-based corporation whose single biggest source of revenue is its PBM business.
  • Although the full extent of corporate influence is difficult to discern, it can be significant, and:
    • CVS pays lobbyists large sums (e.g., Pharmacy Care Management Association -PCMA, $3,962,000 in 2020) to advocate in RI against PBM reforms.
    • CVS contributes to RI elected leaders who have not voted to investigate nor control middlemen payers and PBMs as healthcare cost drivers.
    • CVS has threatened to cut RI jobs to influence proposed legislation.
    • Since 2010, CVS has secured over $240 million in Rhode Island tax breaks despite apparently cutting its RI workforce from about 12,000 to 3,000 (including getting over $20 million in FY2016 and cutting 247 jobs without notice to the state) and despite taxpayers paying for at least 300 RI CVS employees on Medicaid.

2. The Rhode Island Executive Office of Health and Human Services (EOHHS)

  • RI EOHHS has advocated for RI Medicaid to be “managed” by private insurance companies – despite lack of evidence that privatizing Medicaid serves consumers and taxpayers better than the fee-for-service state-run Medicaid program previously in place.
  • Today, about 90% of RI Medicaid is run by managed care organizations (MCOs): (Neighborhood Health Plan of Rhode Island, Tufts Health Plan and United Healthcare Community Plan) who are paid approximately $1.7 billion annually (about 40% state/60% federal funds) – even though the RI Auditor General, since 2009, has flagged inadequate state MCO oversight.
  • RI MCO contracts, scheduled to expire in April 2022, are missing PBM oversight and restrictions, e.g., they:
    • do not have reporting requirements to identify the amount of PBM spread.
    • do not make statutory limitations on prior authorizations also apply to Medicaid managed care PBMs.

3. RI Office of Health Insurance Commissioner

  • Rhode Island is the only state in the country to have a separate “Office of Health Insurance Commissioner” (OHIC) whose #1 listed purpose is to “guard the solvency of health insurers.” See RIGL § 42-14.5-2.
  • Although OHIC may also seek to protect consumers, it appears to prioritize health insurer economic interests, e.g., raising health insurance premiums during the COVID-19 pandemic.
  • OHIC recognizes prescription drug costs are major healthcare cost drivers, however, its analyses fail to consider what role insurers and PBMs play in skyrocketing healthcare cost.

4. RI Health Care Costs Trends Project

  • The latest major research effort to study Rhode Island healthcare costs is the RI Health Care Cost Trends Project (“Cost Trends Project”), a “private-public partnership” funded by a $550,000 grant from the Peterson Center on Healthcare (PCH), founded by Pete Peterson, a “power from Wall Street to Washington,” who championed the theory that “entitlement programs” like Medicare, Medicaid and Social Security, would wreck the US economy. PCH-sponsored analyses do not analyze whether middlemen insurers and PBMs could be cost drivers.
  • The Cost Trends Project’s goals are to “identify cost and utilization drivers, develop an annual health care cost growth target, and inform system performance improvements.”
  • After spending its initial $550,000 grant, the Cost Trends Project has produced analyses that ignore how insurers and PBMs affect health care costs and could not establish an accurate “annual health care cost growth target.”
  • A majority of the Cost Trends Project’s steering committee and staff:
    • have ties to insurance company or PBM middlemen as current or former high level employees or
    • are employed by organizations that rely heavily on insurer/PBM funding; or
    • have a history of producing healthcare cost analyses that fail to analyze middlemen and focus on reining in providers, despite evidence that such policies are ineffective.

What RI should do

Rhode Island legislative and executive branch officials should follow the lead of other states more aggressively reining in PBMs, including:

  1. Require PBMs to disclose information that results in effective ongoing state oversight and control of PBMs.
  2. Pursue appropriate civil and criminal investigations and actions.
  3. Carve out PBMs from Medicaid Managed Care Organization (MCO) contracts set to renew in April 2022.
  4. Restrict Insurer/PBM middlemen unjustified revenues, such as those arising from spread pricing, “claw backs,” “pharmacy steering,” discriminatory reimbursements, manufacturer rebates, and Section 340B transactions.
  5. Restrict harmful Insurer/PBM utilization management practices, such as, Prior Authorization, Step Therapy and Non-medical Drug Switching.
  6. Establish an unbiased research group to analyze ALL potential healthcare cost drivers, including private middlemen insurers and PBMs.

What you can do

Sign this petition to ask state legislators, OHIC and EOHHS to reform oversight and control over RI PBMs.

Linda L Ujifusa, Esq. is the Chair of the RI Healthcare Access & Affordability Partnership, and Dr. J. Mark Ryan is the Chair of Physicians for a National Health Program – RI Chapter.

https://upriseri.com…

Price Chaos at US Hospitals

Summary: The New York Times found huge price variations reported by hospitals across private insurers, generally far above Medicare prices. This causes inefficiencies, inequities, and financial distress for patients. These problems would be eliminated with a single set of negotiated prices.

Hospitals and Insurers Didn’t Want You to See These Prices. Here’s Why. New York Times, Aug 23, 2021, by Sarah Kliff and Josh Katz

This year, the federal government ordered hospitals to begin publishing a prized secret: a complete list of the prices they negotiate with private insurers.

… [M]any hospitals are simply ignoring the requirement and posting nothing.

But data from the hospitals that have complied hints at why the powerful industries wanted this information to remain hidden.

It shows hospitals are charging patients wildly different amounts for the same basic services: procedures as simple as an X-ray or a pregnancy test.

And it provides numerous examples of major health insurers—some of the world’s largest companies, with billions in annual profits—negotiating surprisingly unfavorable rates for their customers. In many cases, insured patients are getting prices that are higher than they would if they pretended to have no coverage at all.

Comment:

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

Excellent analyses and reporting by the New York Times highlight three very important facts about the now mandatory reporting by hospital of prices by payer:

  1. Most hospitals are ignoring the reporting requirements, either failing to report altogether or providing mostly empty or unnavigable data sets.
  2. For the limited price data available, variations are astoundingly wide across insurers, and self-pay patients may do much better than insurer cost-shares.
  3. The insurer prices are far above prices paid by Medicare – which are based on actual costs.

So what we have is price chaos. A profound morass of prices determined by myriad individual negotiations.

Why do we care? Because this chaos has severe consequences. It causes inequity – vast differences across individuals. It causes financial distress – for the unfortunate individual whose cost share is thousands of dollars. It causes inefficiency – setting those prices and implementing them takes a significant portion of the hospital and insurer operating budgets. It’s profligate for the system – prices far above actual (Medicare) costs. There is a huge financial conflict of interest that harms patients – hospitals and insurers jockey to gain profit, and patients lose out.

It also confirms, yet again, that the free market doesn’t work for health care. The price is hidden, so how can the consumer be price sensitive? Indeed, there is no unitary price for a specific product – a fundamental principle of market theory. Kenneth Arrow is turning in his grave.

There is another way, as other countries demonstrate.

A single payer, with a single set of negotiated prices.

No inequity, distress, inefficiency, profligacy, or excess profits.

http://healthjusticemonitor.org…

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