Re: Chernew M, Cooper Z, Larsen Hallock E, and Scott Morton F. “Physician Agency, Consumerism, and the Consumption of Lower-Limb MRI Scans.” Journal of Health Economics. (2021).
National Institute for Health Care Management (NIHCM), March 2021

What This Study Found

• Patients often received their MRIs from higher-priced providers even when lower-priced options were available closer to home. On average, patients bypassed six lower-priced providers on their way to the higher-priced location.
• If patients spent no additional time traveling but selected the lowest-priced provider available, total MRI spending would be 36 percent lower. If patients extended their travel time to one hour to reach the lowest-priced provider they could cut overall MRI spending by 55 percent.
• Despite significant price variation and high cost sharing for MRIs, out-of-pocket costs had little influence on patient decisions about where to receive care. Fewer than one percent of patients used the price transparency tool to investigate MRI prices and compute their out-of-pocket costs for different providers.
• Referring physicians are the key arbiter of where patients receive care. Physicians tend to refer their patients to a very small set of imaging providers regardless of prices charged. As a result, to access lower cost providers patients must diverge from physicians’ established referral patterns.

What These Findings Mean

This analysis highlights the influence that referring physicians have over where patients receive care. Rather than price shopping for lower-limb MRI scans, patients appear to receive care at the usual locations to which their physician traditionally refers patients.

https://nihcm.org…

Journal of Health Economics: Chernew et al
https://www.sciencedirect.com…

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Comment:

By Don McCanne, M.D.

This reference is being used by NIHCM to support consumer-directed health care – having the consumer help to control health care spending by shopping for health care prices.

In this case it is shown that the patient will travel a further distance for a higher priced MRI if the physician has made the specific referral, when price shopping could save time and money.

But should price shopping really be the primary determinant in health care spending? Wouldn’t it be preferable to rely on the advice of your physician who is presumably making the referral based on quality, service, and the existence of an established, functional referral relationship?

In fact, this week I am scheduled for an MRI, and I will not be going to the closest facility, nor will I know the price that is being charged. Rather I have relied on my physician to make the right choice based on what he believes to be optimal management of my medical condition. I have no urge to price shop and then use that to override my physician’s recommendation.

If we had a single payer Medicare for All system, price would not be a consideration since it would automatically be determined by our public stewards and be set to be fair based on legitimate costs and an appropriate margin. I think the government can do a much better job of determining how we can get the best value for our $4 trillion national health expenditures than I could as a health care price shopper.

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The Biden administration is trying to make the health care law more generous and closer to its original design, but may disappoint progressive allies hoping for more.

By Sarah Kliff and Margot Sanger-Katz
The New York Times, February 27, 2021

Tucked inside the stimulus bill that the House passed early on Saturday are a series of provisions to make the private plans more affordable, at least in the short term.

The legislation, largely modeled after a bill passed in the House last year, would make upper-middle-income Americans newly eligible for financial help to buy plans on the Obamacare marketplaces, and would increase the subsidies already going to lower-income enrollees. The changes would last two years, cover 1.3 million more Americans and cost about $34 billion, according to the Congressional Budget Office.

Republican critics of the law contend that Democrats are seeking to install long-sought permanent policies through a temporary stimulus plan.

Those close to the effort say its ambitions — and its limits — reflect the preferences of those leading the way. Mr. Biden, who was involved in the passage and rollout of Obamacare as vice president, ran on the idea of expansion, not upheaval.

But the Biden health project still faces challenges, and it may disappoint his allies. The new proposed spending, which would bring the law’s subsidies in line with early drafts of the Affordable Care Act, is temporary.

And for many Democrats, the overhauls do not go as far they had hoped.

Mr. Becerra has previously supported a single-payer system. He faced questions about his commitment to that idea from Senator Bernie Sanders, who has repeatedly introduced Medicare for All legislation, and from Republican senators who oppose the idea. In each case, he responded similarly: The Affordable Care Act is the president’s focus, and his own as well.

“I’m here at the pleasure of the president of the United States,” Mr. Becerra said. “He’s very clear where he is — he wants to build on the A.C.A. That will be my mission.”

Pramila Jayapal, a Democratic congresswoman from Washington State, who led a joint Biden-Sanders policy task force during Mr. Biden’s presidential campaign, says she is heartened by the measures the administration is taking — but concerned that the current efforts don’t yet match the promises made to progressives during the campaign.

“I believe we’re going to do so many things in this package, and I do think it’s a good package,” she said. “But I believe we haven’t done enough to help everyone who has fallen into the cracks.”

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Once Joe Biden was assured of the Democratic nomination for president, he made it very clear that he would reject legislation for single payer Medicare for All, disappointing most progressives, and build on the Affordable Care Act instead. We should take a look at what we want out of our health care system and what some of Biden’s temporary Bandaid approaches will do as compared with single payer Medicare for All (M4A).

• We want a system that is truly universal – everybody in, nobody out. Biden’s proposal will add more participants to the current program, but still leave millions out. M4A is truly universal.
• We want a program that is affordable for each individual and for society as a whole. Biden’s plan will add significantly more spending to the program while leaving it still unaffordable for too many individuals. M4A would achieve all goals of financing reform without significantly increasing spending.
• We should end fragmentation of the financing system which results in tremendous inequities. Biden’s plan would perpetuate fragmentation. M4A would end fragmentation, creating a program that serves everyone equitably.
• Health care coverage should be stable and permanent throughout life. Biden’s proposed fixes would be temporary, many expiring in two years. It is likely that legislators would develop reform fatigue in this session and fail to followup with more permanent measures. M4A would be a single program – permanent throughout life.
• We won’t attempt to itemize the multitude of problems with employer-sponsored insurance, such as job lock, but many conservatives and progressives believe that it should be terminated. Biden would perpetuate it since it involves less government involvement – predominantly private spending with a tax benefit. M4A would end employer-sponsored insurance, and, for many, M4A would be better.
• Medicaid carries the stigma of being a welfare program which results in legislative underfunding and neglect. Biden would attempt to expand Medicaid in those states that have underutilized it. M4A would terminate the program and move everyone into a universal, comprehensive and equitable program.
• Fragmentation results in dysfunctional financing of health care. Biden would perpetuate fragmentation whereas M4A would bring an end to it.
• The U.S. system is uniquely characterized by profound administrative waste, especially by the private insurers and the administrative burden they place on the health care delivery system. Biden’s proposals would add more administrative burden along with the costs they entail. M4A is specifically designed to greatly reduce this burden and its associated costs.
• The privatization of public programs such as Medicare through Medicare Advantage and Medicaid through private managed care programs have proven to provide poor value for the taxpayer (obscured by cherry picking and lemon dropping) and should be eliminated. Biden would continue these programs, whereas M4A would eliminate them.
• Patients should have free choice of their professionals and health care institutions. Biden would continue health plans with restrictive networks that take away free choice. M4A allows choices within the entire health care delivery system.
• Facing out-of-pocket costs at the time health care is received results in impaired access to beneficial care. Biden would continue these financial barriers to care, whereas M4A would basically eliminate them.

The list is endless. As Abdul El-Sayed, M.D. and Micah Johnson, M.D. say in their book, “Medicare for All: A Citizen’s Guide,” we want universal coverage, comprehensive coverage, pricing power, administrative efficiency, progressive financing, and public accountability.

Do we want one system that works well for everyone, or do we want to continue with an overpriced, dysfunctional system that leaves so many out? When Becerra and Jayapal are reluctantly willing to yield to Biden’s wishes, for lack of an alternative that he will accept, we have a problem. President Biden needs to hear our message, loud and clear, so that he will understand that single payer Medicare for All is an imperative. No more expensive mediocrity!

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By Jonathan Cohn
St. Martin’s Press, February 2021

Excerpts from the Conclusion – What Change Looks Like:

The next great debate over health care reform might not happen for many years. Or it might happen right away. It depends to some extent on what else is happening in politics – and how the Supreme Court rules on the new Obamacare case. But a debate will happen sooner or later, and when it does, two directions are possible.

One is to reverse course, to scale back the Affordable Care Act or eliminate it altogether. This remains the agenda of the Republicans and their allies. The idea is to cut back on the things conservatives instinctively oppose, so that taxes are lower, regulations are looser, and federal spending comes down. But for many, the objection to Obamacare also reflects a more basic rejection of universal coverage, which by definition means putting everybody into one system with a lot of redistribution – with contributions from healthy people financing the costs of the sick, and the wealthy paying extra to cover the poor.

Republicans want less of that redistribution or maybe none at all. And if they get their way someday, people who are healthy will save money, at least while they remain healthy, and people at higher incomes won’t have to pay so much in taxes. But the burden of medical expenses will shift onto those who have more health problems and those who have less money, which is what every reputable projection about every serious Republican plan of the last ten years has shown.

The alternative approach on health care is to continue the crusade for universal coverage that Democrats have been carrying on since the days of Roosevelt and Truman. It would mean finding some way to make sure everyone has insurance – as in 99 percent of the population, not just 92. It would mean improving benefits, so everyone can afford to go to the doctor, or fill a prescription, or be admitted to the hospital without having to pay big out-of-pocket costs. Today, that’s a problem for many Americans with “good” coverage. Ideally, it would also mean a simpler system, one in which patients and providers weren’t constantly fighting with insurance companies over billing and approvals, or shifting between plans and networks.

The Affordable Care Act, like the Clinton plan before it, was an attempt to achieve the liberal end of universal coverage through a more conservative scheme that relied heavily on competition among private insurers. But the intellectual foundation for that calculation seems increasingly shaky, especially when it comes to controlling the cost of care.

Even many card-carrying economists schooled in the virtues of markets and hazards of government control now wonder whether it’s time for the United States, like other developed nations, to set a global budget for health care, have the government regulate prices, or maybe do both of those things.

The version getting the most attention in American politics today is the single-payer proposal that Bernie Sanders and his followers have been promoting: Medicare for All. The reality is that any system that covers everybody with low out-of-pocket costs and some kind of government control over spending is going to look a lot more like Medicare for All then what the U.S. has now. That shouldn’t scare anybody. Medicare for All is the same basic idea Harry Truman proposed in the 1040s, and it’s in the DNA of Medicare, a program Americans cherish.

The case shouldn’t be that hard to make, given how well the best systems abroad perform. But it will require a lot more work – by wonks and operatives, officials and activists.

https://us.macmillan.com…

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Comment:

By Don McCanne, M.D.

Jonathan Cohn’s new book has been receiving excellent reviews, and rightfully so. It is a well researched, meticulously accurate summary of the last ten years with the Affordable Care Act and the preceding health care reform history leading up to it.

If you are interested in history, it is great, but more importantly, if you are interested in how we got here in health care reform and where the various pathways before us lead, it is essential reading.

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By Cheryl Clark
MedPage Today, February 19, 2021

When they made their bold announcement in mid 2018, three corporate powerhouses — Berkshire Hathaway, Amazon, and JP Morgan Chase — were going to revolutionize the healthcare delivery system.

After all, they had author, innovator, and surgeon Atul Gawande, MD, at the helm.

But less than three years later, the companies acknowledged the effort known as Haven would dissolve by the end of this month.

In a nutshell, the concept was fatally flawed, (Gawande) said, in so many words.

On the good side, he said, the effort accomplished a lot. In its two and a half years of existence, Haven’s thought leaders designed a coverage model with no co-insurance, no deductibles, no cost for 60 critical drugs, and low-cost mental health services and primary care.

But the pandemic brought home a critical point. “We have an employer-based system. A job-based system is a broken system in a world where people are moving every couple of years to different roles and many, many, kinds of jobs,” he said.

“The pandemic has really brought this out in spades,” he said, as the lockdowns cost many workers their jobs, and thus the health insurance that came with them.

“The vulnerability we have of tying your healthcare to your job, that remains still a big hill to climb, and the government has to solve it. That is a public core issue that we still have not faced up to,” Gawande said.

https://www.medpagetoday.com…

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Comment:

By Don McCanne

“Tying your healthcare to your job, that remains still a big hill to climb, and the government has to solve it,” so says Atul Gawande. Apparently Warren Buffett, Jeff Bezos and Jamie Dimon agree since they are walking away from any effort to try to revolutionize our health care system.

What is the obvious solution? A single payer model of an improved Medicare for All. These icons of corporate America know that. It’s too bad they won’t say it.

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A new study finds that dealing with health insurance administrators costs the U.S. economy billions in wasted work time and lost productivity.

By Edmund L. Andrews
Stanford Graduate School of Business, February 23, 2021

It’s no secret that health care in the United States is tangled in wasteful red tape. A study in 2019 estimated that administrative complexity was the single biggest source of waste in health care — bigger even than fraud or over-pricing — and imposes an annual cost of $265 billion.

The true extent of that waste, according to a new study led by Jeffrey Pfeffer at the Stanford Graduate School of Business, is even more shocking. Pfeffer and his colleagues found that administrative “sludge” in health care insurance costs employers and the economy billions of dollars in squandered work time, employee stress, absenteeism and reduced productivity.

Specifically, the researchers estimate, the economy loses $21.6 billion a year simply from the time employees spend on the phone with health insurance representatives. On top of that, the study estimates that companies lose $26 billion a year from extra absence on the part of employees who have to deal with health benefits administrators, and $95 billion from the reduced productivity that arises because people who spend time on the phone with health insurers are less satisfied with their jobs. All of those dead-weight losses to the economy could be diminished if employers held benefits administrators accountable for reducing administrative hassles in the system.

The Drain on Productivity

If that just sounds like grousing, it’s not. Pfeffer teamed up with researchers at Gallup, the polling company, to assess how much time employees spend on the phone with benefit administrators and how those encounters affect their work.

“Until now, most of the research on health care sludge has focused on the paperwork costs incurred by health care providers such as doctors and hospitals,” Pfeffer says. “Our new twist, which I can’t believe no one looked at before, is how much employee time is wasted and the measurable effect of that time on employee stress, burnout, increased absence, and diminished job satisfaction.”

The team began by polling people on how much time they had spent on the phone in the prior week with health insurance administrators. All told, the annual cost of lost work amounted to $21 billion — frittered away while talking on the phone with health insurance representatives.

The Impact on Worker Morale

The next step was to look at whether those encounters made people more dissatisfied and less engaged in their work.

Sure enough, the people who had talked with a benefits administrator were significantly less satisfied with their jobs and more likely to be absent from work.

Who’s Really to Blame?

Pfeffer says the fault lies less with insurance companies than with the companies that hire them and then fail to hold them accountable.

“CEOs are the ones who should care about this, but they’re only interested in how to reduce direct medical costs,” he says, “not realizing that the indirect costs of turnover, absenteeism, and diminished productivity are many times the direct costs of ill-health.

The upshot, Pfeffer continues, is that companies end up paying huge sums of money for employee health care benefits that don’t provide increased employee morale because of the burdens imposed by insurers.

“Companies say they offer health insurance to attract and retain talent, but they’re offering a benefit which is administered so that it often doesn’t feel like a benefit,” says Pfeffer. “If employers would select better-performing health insurers and get rid of those that are administratively inefficient, they would get more value for the money they are spending.”

https://www.gsb.stanford.edu…

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Comment:

By Don McCanne, M.D.

So finally someone has discovered that private insurance companies not only waste a tremendous amount of health care funds on administrative excesses, but they also place a tremendous administrative burden on others – the health care delivery system, the business community and the employees insured by these firms. Professor Pfeffer says that he can’t believe that no one looked at the employee burden before, but, of course, they have.

More astonishing is the fact that Pfeffer says that the fault lies less with the insurance companies and more with the companies that purchase the private insurance plans and then fail to hold the insurers accountable. Accountable? Accountable for what?

The insurance companies are private businesses rather than public service organizations. They strive for business success by erecting barriers to spending money on health care. They spend a large amount of funds on accomplishing this – not only on their own administrative services that are designed to cut back on health care spending, but also by creating administrative burdens for the health care delivery system, and businesses and their employees.

That’s just good business. If they want efficient public service organizations whose job it is to assist patients in getting the care they need, they should advocate for a single payer Medicare for All program and then dismiss the private insurers and their inefficiency at obtaining beneficial health services.

But then isn’t it characteristic of market-oriented business schools like Stanford to place the blame on the consumers? We should be assisting the consumers of health care, not blaming them.

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By Atul Gupta, Sabrina T. Howell, Constantine Yannelis & Abhinav Gupta
National Bureau of Economic Research, February 2021

Abstract

The past two decades have seen a rapid increase in Private Equity (PE) investment in healthcare, a sector in which intensive government subsidy and market frictions could lead high-powered for-profit incentives to be misaligned with the social goal of affordable, quality care. This paper studies the effects of PE ownership on patient welfare at nursing homes. With administrative patient-level data, we use a within-facility differences-in-differences design to address non-random targeting of facilities. We use an instrumental variables strategy to control for the selection of patients into nursing homes. Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases by 11%. We observe operational changes that help to explain these effects, including declines in nursing staff and compliance with standards. Finally, we document a systematic shift in operating costs post-acquisition toward non-patient care items such as monitoring fees, interest, and lease payments.

From the Conclusion

This paper studies PE buyouts in healthcare, an important sector where PE activity has increased dramatically, generating policy debate. Nursing homes are a useful setting because they have particularly high levels of for-profit ownership and subsidy and have experienced extensive PE investments. In an instrumental variables design incorporating facility fixed effects, we address both targeting and patient selection challenges to identification. We find that going to a PE-owned facility increases 90-day mortality by about 10% for short-stay Medicare patients, while taxpayer spending over the 90 days increases by 11%. Furthermore, we document declines in nurse availability per patient and in measures of compliance with Medicare’s standards of care. We also find a corresponding increase in operating costs that tend to drive profits for PE funds.

https://www.nber.org…

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Comment:

By Don McCanne, M.D.

Private equity investment in health care raises some concerns since there can be a conflict between the business interests of the equity investors and the health care interests of the patients.

In this paper, private equity investment in nursing homes was associated with an increase in mortality for short-stay Medicare patients, an increase in taxpayer spending, a decrease in nurse availability, a decrease in compliance with Medicare’s standards of care, and an increase in operating costs that tend to drive profits for private equity funds. Ouch!

It appears that our health care system places a higher priority on business interests than it does on patients. Instead of advocating for a national program of social insurance, maybe we should be thinking about public ownership of the system since the interests of taxpayers and patients are one and the same. Just a thought.

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By California Nurses Association
National Nurses United, February 19, 2021

Renewing its commitment to the larger fight for health care justice, the California Nurses Association (CNA) is pleased to sponsor Assembly Bill 1400 (Kalra), the California Guaranteed Health Care for All Act (CalCare), which would guarantee comprehensive, high-quality health care to all California residents as a human right. The establishment of the CalCare program is an improved Medicare for All-type health care system.

Despite the gains made under the Affordable Care Act, nearly 3 million Californians have no health insurance, while millions more have insurance that they can’t afford to use because their copays and deductibles are too high. Meanwhile, for-profit insurance companies are reporting record-breaking profits, even while the Covid-19 pandemic continues to ravage California and medical bankruptcies are at an all time high.

Sponsored by CNA and authored by Assemblymember Ash Kalra, AB 1400 will ensure that all Californians, regardless of employment, income, immigration status, race, gender, or any other considerations, can get the health care they need, free at the point of service.

“A single-payer health system represents the belief that health care is truly a human right. Our current system results in unjust outcomes and these inequities are underscored especially now, exacerbating economic downturns for working families who have lost their income and meaningful access to health care,” said Assemblymember Ash Kalra. “We will have a long fight ahead in fixing our broken system, but this bill will set us on a real path towards a single-payer system and affirms the policy that would save lives, decrease suffering, and improve public health in California.”

https://www.nationalnursesunited.org…

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Assembly Bill No. 1400: AB-1400 Guaranteed Health Care for All. (2021-2022)

California Legislative Information, February 19, 2021

From the Legislative Counsel’s Digest

This bill, the California Guaranteed Health Care for All Act, would create the California Guaranteed Health Care for All program, or CalCare, to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state. The bill, among other things, would provide that CalCare cover a wide range of medical benefits and other services and would incorporate the health care benefits and standards of other existing federal and state provisions, including the federal Children’s Health Insurance Program, Medi-Cal, ancillary health care or social services covered by regional centers for persons with developmental disabilities, Knox-Keene, and the federal Medicare program. The bill would require the board to seek all necessary waivers, approvals, and agreements to allow various existing federal health care payments to be paid to CalCare, which would then assume responsibility for all benefits and services previously paid for with those funds.

This bill would prohibit a participating provider from billing or entering into a private contract with an individual eligible for CalCare benefits regarding a covered benefit, but would authorize contracting for a health care item or service that is not a covered benefit if specified criteria are met. The bill would authorize health care providers to collectively negotiate fee-for-service rates of payment for health care items and services using a 3rd-party representative, as provided. The bill would require the board to annually determine an institutional provider’s global budget, to be used to cover operating expenses related to covered health care items and services for that fiscal year, and would authorize payments under the global budget.

This bill would state the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for CalCare. The bill would create the CalCare Trust Fund in the State Treasury, as a continuously appropriated fund, consisting of any federal and state moneys received for the purposes of the act.

This bill would prohibit specified provisions of this act from becoming operative until the Secretary of California Health and Human Services gives written notice to the Secretary of the Senate and the Chief Clerk of the Assembly that the CalCare Trust Fund has the revenues to fund the costs of implementing the act.

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Section 1.

(b) (2) It is the intent of the Legislature to work to obtain waivers and other approvals relating to Medi-Cal, the federal Children’s Health Insurance Program, Medicare, PPACA, and any other federal programs pertaining to the provision of health care so that any federal funds and other subsidies that would otherwise be paid to the State of California, Californians, and health care providers would be paid by the federal government to the State of California and deposited in the CalCare Trust Fund.

(3) Under those waivers and approvals, those funds would be used for health care coverage that provides health care benefits equal to or exceeded by those programs as well as other program modifications, including elimination of cost sharing and insurance premiums.

(4) Those programs would be replaced and merged into CalCare, which will operate as a true single-payer program.

Section 2. TITLE 23. The California Guaranteed Health Care for All Act

Chapter 7. Funding

Article 1. Federal Health Programs and Funding

100660. (b) (1) The board shall apply to the United States Secretary of Health and Human Services or other appropriate federal official for all waivers of requirements, and make other arrangements, under Medicare, any federally matched public health program, the Affordable Care Act, and any other federal programs or laws, as appropriate, that are necessary to enable all CalCare members to receive all benefits under CalCare through CalCare, to enable the state to implement this title, and to allow the state to receive and deposit all federal payments under those programs, including funds that may be provided in lieu of premium tax credits, cost-sharing subsidies, and small business tax credits, in the State Treasury to the credit of the CalCare Trust Fund, created pursuant to Section 100665, and to use those funds for CalCare and other provisions under this title.

Article 3. CalCare Financing

100670. (a) It is the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for CalCare. In developing the revenue plan, it is the intent of the Legislature to consult with appropriate officials and stakeholders.

(b) It is the intent of the Legislature to enact legislation that would require all state revenues from CalCare to be deposited in an account within the CalCare Trust Fund to be established and known as the CalCare Trust Fund Account.

https://leginfo.legislature.ca.gov…

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Comment:

By Don McCanne, M.D.

So California is once again attempting to enact and implement a state-level single payer system. As before, they run into the glitch as to how they are going to pay for it.

They are intensifying their efforts to obtain “waivers” for all federal sources of health care funds so that they can be deposited into California’s single payer CalCare fund. One barrier is that California cannot dictate to the federal government – Congress and the administration – the use of those funds, rather the federal government has to set up avenues through which those funds can be transferred. Some mechanisms already exist but there is considerable more work to be done to accomplish this task.

The CalCare program will also need the health care funds that are generated within the state, whether by individuals, businesses, or local governmental agencies. They will also need to generate any funds that might be required to provide additional care for those currently uninsured or underinsured. The amount is unknown especially since it is hoped that there will be considerable savings through elimination of administrative excesses and more efficient purchasing of health care products and services. As in previous California legislative attempts, this effort is addressed by stating in the legislation that it is the “intent” of the Legislature to enact legislation that would develop a revenue plan. In the last attempt, this caused a rather dramatic pulling of the bill with the claim that it was incomplete legislation.

Although a national single payer Medicare for All would be greatly preferred, we have a president that has threatened to veto any such legislation. We can be thankful for California and a few other states that are keeping the concept alive through their state efforts.

But we can no longer hide the issue of how we are going to pay for the program. Besides obtaining what federal funds are available, we are going to have to establish equitable, progressive taxes within the state, and we are going to have to let the people know just what that means. This situation requires transparency. We can no longer hide behind a vague “legislative intent” statement. We can develop a system that works well for all of the people, as long as the super wealthy recognize their obligation to return a modest portion of their rewards to society. But we are simply going to have to let the people know what that system is. Taxes are good when they enable beneficial, equitable societal goals.

In the meantime, let’s celebrate the fact that California has not given up.

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By Karl T. Johnson, B.A.; Deepak Palakshappa, M.D.; Sanjay Basu, M.D., Ph.D.; Hilary Seligman, M.D., M.A.S.; Seth A. Berkowitz, M.D., M.P.H.
HSR, Health Services Research, February 17, 2021

From the Discussion

In this study of nationally representative data, we found support for both directions of the relationship between food insecurity and healthcare expenditures—food insecurity is associated with greater health care expenditures, and greater health care expenditures are associated with food insecurity. However, the strength of these associations appears to be unequal. Though we found a statistically significant association between health care expenditures and subsequent food insecurity, the difference in odds was small—about 1% greater risk of food insecurity per $1000 difference in health care expenditures. When examining the association between food insecurity and subsequent health care expenditures, the difference in expenditures between food insecure and food secure participants was relatively larger—approximately 25% greater expenditures for those who were food insecure. This suggests that upstream efforts that seek to address food insecurity may have greater impact than downstream efforts that seek to address health care expenditures directly.

Expenditures for prescriptions made up the largest share of the difference in health care spending between those who were food insecure and those who were food secure. Furthermore, with regard to the relationship between health care expenditures (as predictor) and food insecurity status (as outcome), we found evidence that greater health care expenditures may be an indicator of underlying poor health status. In models that adjusted for both indicator health care expenditures and indicators of poor health (eg, disability) the association between health care expenditures (as predictor) and food insecurity status (as outcome) was weakened, while the association between disability and subsequent food insecurity was strong. This suggests that high health care expenditures may be associated with food insecurity risk because they indicate poor health (which can impair the ability to work), rather than because they drain household resources directly. The finding that out‐of‐pocket expenditures is not associated with food insecurity risk also supports this idea.

The results of this study have several implications. First, the confluence of comorbidities, health care expenditures, and food insecurity suggests that attempting to address food insecurity without paying attention to comorbidity could limit the effectiveness of the intervention. Rather than viewing food insecurity as one standalone issue to address, it may be more effective to think of addressing food insecurity as one aspect of a more comprehensive disease management plan. Relatedly, given that the strength of the association appears larger when food insecurity is the predictor and greater health care expenditures is the outcome (compared with when these roles are reversed), disease management plans, which target the upstream determinants of food insecurity and general poor health, may be more efficacious at breaking this cycle than interventions that merely offset the cost of disease management. Thirdly, the category of prescription expenditures stands out in our analyses. One reason for this may be that if food insecurity increases the risk for the development or worsening of chronic conditions, it could lead to increasingly complicated medication regimens, with attendant costs. Finally, the lack of association between out‐of‐pocket expenditures and food insecurity, coupled with a strong association between medical debt and food insecurity, warrants closer attention. Current insurance benefit design often considers out‐of‐pocket expenditures (eg, yearly out‐of‐pocket maximums set at an absolute number) without considering medical debt. More nuanced design that takes into account an individual’s ability to match resources to expenditures (eg, yearly out‐of‐pocket maximums set as a percentage of income or assets) may better protect individuals from the consequences of out‐of‐pocket costs.

The presence of these relationships sets up the potential for a self‐reinforcing “vicious cycle” whereby food insecurity worsens health and worse health increases the risk for food insecurity. Given the different directional associations, however, interventions targeted at addressing food insecurity as a part of chronic disease management may be a more promising way to break this cycle and improve health for disadvantaged individuals.

https://onlinelibrary.wiley.com…

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MA Enrollment in Plans with Extra Benefits for Chronically Ill Tripled in 2021

By Robin Duddy-Tenbrunsel, Shruthi Donthi, Joanna Young, Thomas Kornfield
Avalere, February 5, 2021

Over 3 million Medicare Advantage (MA) beneficiaries are enrolled in plans providing additional supplemental benefits to individuals with chronic illnesses, compared to just over 1 million in 2020.

Starting in 2020, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2018 permits plans to also target non-primarily health-related supplemental benefits to beneficiaries with chronic illnesses (e.g., diabetes, asthma). By allowing SSBCI, policymakers gave MA plans more flexibility to address social and environmental factors that may impact beneficiary health.

In 2021, the second year that plans can offer SSBCI, 787 plans are offering at least 1 SSBCI, which is more than triple the number in 2020, when 239 plans offered these benefits. As shown in Table 1 (see at link below), among the plans offering SSBCI, the most commonly offered benefits are meals (45% of plans, enrolling 1.5 million beneficiaries), food and produce (43% of plans enrolling 1.9 million beneficiaries), and pest control (25% of plans enrolling 1.4 million beneficiaries).

https://avalere.com…

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Comment:

By Don McCanne, M.D.

We’ve long known that food insecurity is a major problem that can have a significant impact on a patient’s health. This HSR study shows that food insecurity is associated with higher health care expenditures. That certainly should catch the attention of the private health insurers, and it has.

Avalere reports that private Medicare Advantage plans are now offering “non-primarily health-related supplemental benefits to beneficiaries with chronic illnesses.” The most commonly offered benefits are meals (45% of plans, enrolling 1.5 million beneficiaries), and food and produce (43% of plans enrolling 1.9 million beneficiaries).

We have continued to sit back and watch the private insurance industry take over significant portions of the health care delivery industry. Now are we going to continue to sit back as we watch them take over the food industry as well?

I’d say that enacting and implementing a single payer system of improved Medicare for All has become an emergency, lest the out-of-control steamroller wipes out more of us.

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