By Charles Bankhead
MedPage Today, Jan. 29, 2014
Oncologists have a “moral and ethical obligation” to their patients to advocate for a single-payer universal health insurance program, according to two oncologists who stated their case in an editorial.
A single-payer system would simplify healthcare delivery for patients and providers without sacrificing quality of care, said Ray Drasga, MD, and Lawrence Einhorn, MD, in an editorial published online in the Journal of Oncology Practice, a journal of the American Society of Clinical Oncology.
The switch to such a national system would face huge and innumerable challenges, but gradual implementation, perhaps even on a state-by-state basis, would reduce the administrative burdens, they wrote.
“Because the [Affordable Care Act or ACA] will fail to remedy the problems of the uninsured, the underinsured, rising costs, and growing corporate control over care giving, we cannot in good conscience stand by and remain silent,” said Drasga, a retired oncologist in Chicago, and Einhorn, of Indiana University in Indianapolis.
“Life is short, especially for some patients with cancer; they need help now.”
Making Their Case
Drasga and Einhorn state their case for a single-payer system by delineating problems that such a system could address:
- Reduced administrative costs, which currently account for almost a third of healthcare expenditures
- Eliminating many bankruptcies attributable to healthcare costs, which accounted for more than 60% of family bankruptcies identified in a 2009 report
- Improved health, as indicated by evidence that being uninsured increases the mortality hazard by 40%
- Building on an existing structure, noting that about 60% of all healthcare in the U.S. is publicly funded
- Implementation of proven cost-containment strategies, which are absent from the ACA
- Improving quality of care and outcomes by increasing access to care
- Reverse the trend toward for-profit, investor-owned healthcare plans
- Preserve physician’s income potential, as judged by experience with the Canadian healthcare system
The authors devoted special attention to the cost of drugs and devices. They cited a study showing that pharmaceutical companies charge 50% more in the U.S. than in Europe for the same drugs. Much of the difference can be traced to large outlays for marketing and for a 20% profit margin, they said. By comparison, research and development (R&D) accounts for about 13% of drug costs.
The Department of Veterans Affairs gets a 40% discount on medication by buying in bulk. Medicare is legally forbidden to negotiate drug prices.
“Lower drug prices would not jeopardize drug innovation,” Drasga and Einhorn stated. “Most true innovations in therapeutics (as opposed to me-too drugs that are slightly different versions of existing drugs) stem from publicly financed research.”
The issue of drug pricing is especially relevant to oncology, they added, where the median cost of a new drug has risen to $10,000 a month since 2010.
The authors called on ASCO to lead the way in advocating for a single-payer system, which would orient healthcare “toward care giving, not toward maximizing investors’ profits.”
ASCO has taken no position on a single-payer or other type of healthcare system, said ASCO chief executive officer Allen Lichter, MD.
“We have long advocated that every American deserves to have insurance coverage,” Lichter told MedPage Today. “We have advocated that those patients who receive a new cancer diagnosis and don’t have insurance should be placed into Medicare because facing a cancer diagnosis without insurance lowers your risk of survival, as Dr. Drasga and Dr. Einhorn pointed out in their paper.”
Coinciding with the Drasga-Einhorn editorial, ASCO and the Community Oncology Alliance (COA) jointly issued principles for achieving payment reform in oncology.
The six principles focus on:
- Oncologists taking a leadership role in payment reform
- The inadequacy of current reimbursement models
- The need for new models for delivering oncology services to ensure high quality and value
- Retaining choices in payment models at the local level
- Improved measurement of quality
- The inadequacy and inequity of reimbursement for oncology drugs under Medicare Part B
The editorial provides “a good look at Nirvana,” but most community-based oncologists would find it difficult to embrace, said Mark Thompson, MD, president of the COA, which represents community oncology practices and centers.
“You can’t dispute a lot of the facts that they lay out in the article,” said Thompson, who practices at the Mark H. Zangmeister Center in Columbus, Ohio. “We do spend a huge amount of money in administering healthcare in the U.S.
“The difficulty that most of us who have spent any time in Washington — and I’ve spent a lot of time there — is the idea of making this public, which to me translates into government. I don’t think we have a government or a Medicare program that can handle all of the wonderful suggestions that they talk about.”
To the arguments against government-run programs, Drasga and Einhorn countered that “years of private-sector solutions have failed. There needs to be a major paradigm shift in our approach to funding healthcare in the U.S.”
Strong opposition to a single-payer system is to be expected because a lot of money is at stake, Drasga told MedPage Today. Several academic oncologists turned down Drasga’s offer of co-authorship before Einhorn accepted.
“I think they were afraid that it might hurt their relationship with pharma,” he said. “A lot of research is funded by the pharmaceutical industry. There are a lot of powerful forces that do not want to see something like socialized insurance come along.”
Nirvana or not, the single-payer approach is coming, Drasga continued. Vermont has set the process in motion by starting implementation of a state-run single-payer system. Total implementation is anticipated by 2017.
“Once one or two states get programs in place and see that they can save millions and millions of dollars, plus insure everybody, I think we could see a snowball effect,” he said.
The Vermont program is envisioned as “kind of a Medicare for all, but at the state level,” said Deb Richter, MD, a primary care physician from Montpelier who also is on the board of directors of Green Mountain Healthcare, the organization coordinating implementation of the state’s single-payer plan.
Program leaders still have to jump through a lot of legislative and bureaucratic hoops (including waivers from the ACA and Medicare), but they remain optimistic the plan will be fully operational by 2017. The waivers could provide a portion of the funding for system, but the state still has to come up with extra revenue, currently estimated at $1.6 to $2 billion.
The Green Mountain board will submit revenue options to the state legislature in March.
When fully implemented, the plan will leave little business for private insurers, Richter said. The state plans to accept bids for administration of the system, but the market for private insurers will be limited to Vermonters who opt out of the state-run plan.
Whether support for a single-payer system catches fire remains to be seen, but reaction to the Drasga-Einhorn editorial has been limited thus far in the week-plus since the online article appeared, said journal editor John Cox, DO, of Texas Oncology in Dallas.
“The intention was to stir the pot the little, and I suspect we will because this is an issue that has a lot of strong feelings on both sides,” Cox told MedPage Today.
Charles Bankhead is a staff writer at MedPage Today.
OncoBlog: Single-Payer, the Authors Respond
By Charles Bankhead
MedPage Today, February 6, 2014
When two oncologists wrote an editorial to make a case for a single-payer healthcare system, the response was immediate, abundant, and passionate — on both sides of the issue. One reader, Gary Jones, AA-C, of Case Western Reserve in Cleveland, wrote apoint-by-point rebuttal of the editorial, which set off another round of verbal jousting among MedPage Today readers. In response to the rebuttal by Jones, the two oncologists, Ray E. Drasga, MD, of Chicago, and Lawrence Einhorn, MD, of Indiana University in Indianapolis, submitted their own point-by-point response, published here as a guest blog.
“We read the rebuttal by Mr. Jones and appreciate his time and effort to comment upon our article in Journal of Oncology Practice (JOP). Medical oncologists are particularly data-driven and make clinical decisions based upon evidence-based medicine. Initially, data becomes information which can then lead to a change in standard practice. However, sometimes data simply permits us to form opinions and write commentaries.
“We did not expect complete congruence among the readers of the JOP paper. We realized the conclusions we reached would be contentious with a certain segment of the intended audience. H.L. Mencken once opined, ‘For every complex problem there is an answer that is clear, simple, and wrong.’ However, that does not mean we should avoid solutions for difficult issues, nor accept that the current status quo in healthcare is immutable. With these points in mind, we would like to respond to the points [in boldface below] that were raised by Mr. Jones.”
1. Overhead costs for Medicare and Medicaid are higher than those in the private sector. Calculating the overhead costs based on the Medicare trustees’ report rather than using Zycher’s methodology dramatically changes per-capita spending. For example in 2005, Medicare’s per-capita spending was $144 compared with $680 in the private sector. Medicare’s overhead of 1.4% includes all types of nonmedical spending by the Centers for Medicare and Medicaid Services, as well as other federal agencies, such as the IRS, and is based on data contained in the latest report of the Medicare trustees. Alternative estimates aren’t credible and have been refuted elsewhere. Under the Affordable Care Act, insurers are allowed overhead and profits of 15% of premiums, or 10-fold Medicare’s.
2. Data on bankruptcies related to healthcare costs are inaccurate or misleading. The high proportion (three-fourths) of people with coverage at the onset of illness or injury demonstrates how widespread the problem of under-insurance is. This is particularly the case for cancer patients, who face high deductibles, copays, and high medication costs even with coverage. When you add the under-insured to the uninsured, about 80 million Americans would be financially devastated by a serious illness. In a recent study from the CDC, one-fourth of Americans reported having problems paying medical bills. We have a national problem and need a national solution. Medical bankruptcies in Canada are unheard of.
3. Outcomes with Medicare and Medicaid should be compared with those of private-sector payers, not with the underinsured or uninsured. Medicare is better than private insurance at controlling costs, and beneficiaries are more satisfied with their coverage. Furthermore, studies show that the private Medicare Advantage plans that participate in the Medicare program raise Medicare’s costs by 14% per beneficiary — over $34 billion annually.
4. Using the existing publicly funded system as the foundation for a single-payer system makes little sense. Instead of building on the existing system run by private insurers, who consider every dollar spent on healthcare to be a “loss,” we propose the U.S. adopt a nonprofit national health insurance program, like an improved Medicare for all. We propose to stop using public funds to enrich the drug and insurance companies. We are already paying for comprehensive coverage for everyone, but we aren’t getting it.
5. Government-mandated cost-containment strategies will not work. Effective cost-containment strategies are well known and include implementing global budgets for hospitals, negotiated fees with providers, and bulk-purchasing of drugs and medical supplies. Although it’s better at controlling costs than private insurers, if the U.S. Medicare program was as good at controlling costs as Canada’s is for care of the elderly, the U.S. would have saved over $2 trillion since 1980, when our health systems diverged.
6. Increased access to care does not assure improved quality of care or outcomes. The U.S. ranks 19th out of 19 high-income countries in preventing deaths amenable to medical care, and while we are improving slightly, other countries are improving faster, so we are falling further behind.
7. Reverse the trend toward government-funded healthcare and empower patients by increasing choices. People don’t want to be free to choose between two or three or 300 overpriced, defective insurance products. They want to choose their doctors and know they will receive medically necessary healthcare if they become ill or injured. Private insurance with its “skinny” networks means that people have a limited choice of oncologists and may have to change doctors annually.
8. Physician income will decrease as government-funded healthcare increases. Once you factor in lower malpractice costs in Canada and their much lower overhead to run a practice, the difference in earnings isn’t that great. Besides, with our much greater level of health spending (twice Canada’s) we can afford to continue to pay physicians well.
OncoBlog is a blog by the MedPage Today staff for readers with an interest in oncology. This post comes from guest bloggers Ray Drasga, MD, and Lawrence Einhorn, MD.