By Emilie Raguso
Berkeleyside, December 5, 2020

Bob Hess Sr., an iconic figure in the world of Bay Area horse racing, died Saturday morning after being diagnosed in mid-November with COVID-19, Golden Gate Fields racetrack announced.

Hess came down with COVID-19 amid a widespread outbreak at Golden Gate Fields that initially resulted in more than 200 coronavirus cases. But he refused to blame anyone for getting sick and said he was just focused on getting well. (A photograph of Bob with his wife Maria and their horse Maggie’s Magic showed both of them wearing their masks.)

Hess is survived by Maria, his wife of 56 years, and their four children, horse trainer Bob Jr., Howie, Erica and Anna.

When advised Hess had passed away this morning, jockey Abel Cedillo was moved to tears.

“When I was riding up north, he was like a second father to me,” said Cedillo, a Guatemalan native who was the leading rider at Del Mar’s recently concluded Bing Crosby Meeting. “I had so much respect for him. I’m shocked. I’m going to really miss him.”

https://www.berkeleyside.com…

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Trump, still infectious, back at White House — without mask

By Zeke Miller, Jill Colvin and Aamer Madhani
AP, October 5, 2020

President Donald Trump staged a dramatic return to the White House Monday night after leaving the military hospital where he was receiving an unprecedented level of care for COVID-19. He immediately ignited a new controversy by declaring that despite his illness the nation should not fear the virus that has killed more than 210,000 Americans — and then he entered the White House without a protective mask.

Trump’s message alarmed infectious disease experts and suggested the president’s own illness had not caused him to rethink his often-cavalier attitude toward the disease, which has also infected the first lady and several White House aides, including new cases revealed Monday.

He entered the White House, where aides were visible milling about the Blue Room, without wearing a face covering.

The president left Walter Reed National Military Medical Center, where his doctor, Navy Cmdr. Sean Conley, said earlier Monday that the president remains contagious and would not be fully “out of the woods” for another week.

https://apnews.com…

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Elevating Fringe Theories, Ron Johnson Questions Virus Science

By Catie Edmondson and Nicholas Fandos
The New York Times, December 7, 2020

In choosing a slate of doctors to testify about coronavirus treatments before his committee on Tuesday, Senator Ron Johnson has assembled a cast of witnesses who question much of the public health consensus about the virus.

Mr. Johnson has suggested that the dangers of the coronavirus have been overblown and excessively regulated.

Mr. Johnson’s lead witness on Tuesday, Dr. Jane M. Orient, has cast doubts on coronavirus vaccines and has pushed for the use of hydroxychloroquine, an antimalarial drug pushed by Mr. Trump, as a treatment. She helps run a group that believes government vaccine mandates violate human rights.

Another, the Washington cardiologist Ramin Oskoui, said on Fox News last month that it was “settled science” that “social distancing doesn’t work, quarantining doesn’t work, masks don’t work.” On the contrary, it is settled science that all three are effective in limiting the spread of the virus.

https://www.nytimes.com…

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The Outlook for Health Reform in 2021

By Grace-Marie Turner, Galen Institute
Benjamin Rush Institute, November 30, 2020

Grace-Marie Turner: I really do think that there is so much politicization in academia in medical schools. A friend of mine, Dr. Sally Satel who works with the American Enterprise Institute, actually wrote a book in the early two thousands called PC MD, the political correctness in medicine that really corrupts the science of truth and what physicians need to know. Masks are a perfect example, you know, data shows, and this broad study in Denmark recently showed that masks – it doesn’t make a difference whether you’re wearing masks or not in the infection rate. The politicians still insist that we’re going to have to wear a mask because they really don’t know what else to do. So I think that the real risk is that the more power that we give government over decisions, more academia over decisions, the less power doctors and patients and real science will have over really guiding change and reform in the right way. So, yes, does climate change have a role in medical school? Not sure, but I bet there’s a lot of funding behind that. I want physicians as scientists to be able to make the right decisions for their patients, not a politically directed decision.

At 52:20 of video:
https://www.youtube.com…

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Comment:

By Don McCanne, M.D.

Bob Hess was a close friend of one of our sons. Sandy and I previously spent a weekend with him and his family, and what a wonderful person he was – a very colorful and caring person – and, of course, his stories about the horse race culture were spellbinding.

Bob said that he refused to blame anyone for him getting sick, but our son, overwhelmed with grief, does cast blame and does so in language laced with four letter words. Hints of where he casts blame are found in the positions expressed by President Donald Trump, Senator Ron Johnson, and Galen Institute’s Grace-Marie Turner. The guidance that people like them are providing to the nation has caused massive, reckless disregard for the health of victims exposed by individuals who believe that the recommended precautions are somehow conspiratorial and that, as a result, people are being deprived of their freedom to associate freely with whomever, wherever and however they felt inclined to do so.

Our son stated that our leaders who are setting an example by going maskless as a right and as a political statement amounts to negligent homicide, and I agree with him. So far, over 282,000 people have died, and many more will – a number compounded by the uncaring leadership that abandoned public health science.

May the memory of Bob motivate more of us to follow the real public health science and move us through this pandemic much more rapidly with the least grief possible. I think Bob would want that. He was too nice of a guy to think otherwise.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Sheryl Gay Stolberg and Michael D. Shear
The New York Times, December 6, 2020

President-elect Joseph R. Biden Jr. has selected Xavier Becerra, the Democratic attorney general of California, as his nominee for secretary of health and human services, tapping a former congressman who would be the first Latino to run the department as it battles the surging coronavirus pandemic.

An outspoken advocate of improved health care access, Mr. Becerra said in 2017 that he would “absolutely” support Medicare for all, a proposal for government-run health care that Mr. Biden has explicitly rejected. A source familiar with the selection said Mr. Becerra would support the president-elect’s call for strengthening and preserving the A.C.A. and would not be pushing Medicare for all while in office.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Supporters of single payer Medicare for All should be pleased that President-elect Biden has selected Xavier Becerra as his nominee for HHS Secretary since Becerra has been a long time supporter of single payer, having repeatedly been a co-sponsor of John Conyers’ H.R. 676 Medicare for All Act.

At the same time, we should understand why Becerra is willing to agree to honor Biden’s campaign promise to reject Medicare for All. Becerra had a choice to do all he can to support health care justice short of single payer reform, or to reject the offer, leaving the opportunity for someone else who would likely be more friendly with the medical-industrial complex, including the private insurers. There is no way that Becerra, or anyone else, could have convinced Biden to permit single payer advocacy by his administration’s HHS Secretary.

Becerra’s most urgent task will be, with other members of the Biden team, to quash the COVID-19 pandemic. At the same time, he will have to supervise the reversal of the harmful policies implemented by Trumps’ team that wreaked so much havoc at HHS, significantly impairing the government’s role in ensuring health care justice in America. He will be buried in essential work that must be done immediately, so it is not the time to spin his wheels trying to make Biden change his mind on this one issue.

It is not clear that efforts will begin soon on enacting a public option, but it is unlikely considering that they have their hands full. Nevertheless, if and when the public option process begins, the private insurance industry will be working behind the scenes to be certain that the government will not produce a product that can successfully compete with the private insurance industry as long as we perpetuate our fragmented, dysfunctional financing infrastructure. There is absolutely no chance that a public option would be created that has all of the features of the PNHP single payer model and still would cost less than the private plans. Yet the risk is that a mediocre plan could be used to convince the public that the government role has been fulfilled and that Medicare for All should be dismissed permanently from consideration, especially when they find out how mediocre a government plan can be, while remaining oblivious to the sabotage.

At this point, it is not Becerra who has to be convinced that single payer Medicare for All is a much better approach for the intermediate and long term. It is Joe Biden that needs convincing.

So that brings it back to us.

We need to step up the education of our colleagues and the public at large since they still do not understand the vast superiority of the single payer model and still believe that everyone should be offered the option of private insurance.

We need to work with others in the social justice movement, bringing us together in coalition activities that will be effective in delivering the message.

We need to build a grassroots movement that will reach the very high political threshold of “make me do it.” Joe Biden is not asking us to make him do it; we need to change the politics so that he will.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Arush Lal, M.Sc.; Ngozi A Erondu, Ph.D.; David L Heymann, M.D.; Githinji Gitahi, M.D.; Robert Yates, M.B.A.
The Lancet, December 1, 2020

Summary

The COVID-19 pandemic has placed enormous strain on countries around the world, exposing long-standing gaps in public health and exacerbating chronic inequities. Although research and analyses have attempted to draw important lessons on how to strengthen pandemic preparedness and response, few have examined the effect that fragmented governance for health has had on effectively mitigating the crisis. By assessing the ability of health systems to manage COVID-19 from the perspective of two key approaches to global health policy—global health security and universal health coverage—important lessons can be drawn for how to align varied priorities and objectives in strengthening health systems. This Health Policy paper compares three types of health systems (ie, with stronger investments in global health security, stronger investments in universal health coverage, and integrated investments in global health security and universal health coverage) in their response to the ongoing COVID-19 pandemic and synthesises four essential recommendations (ie, integration, financing, resilience, and equity) to reimagine governance, policies, and investments for better health towards a more sustainable future.

Introduction

National responses to COVID-19 have varied greatly, from swift and proactive at best to haphazard and negligent at worst. That countries have managed the pandemic differently is expected, but COVID-19 has pushed all health systems to their limits, exposing severe gaps in public health infrastructure, even in nations once lauded as the gold standard for readiness. Although much has been discussed about how countries could have been better prepared, these analyses have largely missed a focus on how fragmented governance for health and the resulting silos in financing of health systems (ie, vertical funding streams towards single disease categories, independence of tertiary care from primary care, and differences in domestic health priorities vs global health priorities) continue to hamper response efforts. Analysing the spread of COVID-19 from the perspective of global health security (GHS) and universal health coverage (UHC) offers a useful opportunity to uncover blind spots in fostering health-system resilience moving forward. In this Health Policy paper, we seek to understand how health systems that are heavily influenced by either GHS or UHC policies have initially fared with the shock of the ongoing COVID-19 pandemic, and we conclude with four key recommendations to redesign health systems for a sustainable future.

Health systems with stronger investments in GHS capacities

Despite the USA receiving top ratings for pandemic preparedness in the Global Health Security Index, it has, to date, reported the world’s highest number of COVID-19 cases and deaths. Although the country has an impressive array of public and private laboratories, innovative pharmaceutical and technology companies, and a national public health institute with high capacity, the USA ultimately relies on a greatly fragmented health-care system. Each state funds and operates its own systems for public health and surveillance, and the nation has been reluctant to build a unified health system that is publicly funded. This absence of clear coordination, a crucial IHR (International Health Regulations) core capacity, has so far hindered the country’s ability to accurately estimate and forecast the effect of COVID-19, resulting in delayed response activities, including testing and contact tracing. Additionally, the scarcity of centralised funding has led to chronic misuse and underuse of human and financial resources. Finally, high rates of underinsurance could disincentivise health-care use and discourage citizens from seeking emergency care, leading to untreated chronic diseases, reducing capacity for syndromic surveillance, and undermining overall trust in public services; thus further accelerating the effect of COVID-19. The USA is one of the most prominent examples, showing that reliance on traditional GHS capacities to provide an accurate assessment of health-system readiness does not account for the effect of incoherent coordination and inadequate UHC and political economy during health emergencies.

Health systems that align GHS and UHC investments

Although not mutually exclusive, GHS and UHC tend to have different policies in practice. Thus far, countries with policies that are closely aligned with both frameworks have generally fared better and might be better equipped to recover after COVID-19 compared with nations with health systems that are not aligned to both frameworks, which could struggle to cope with challenges in the long term. Importantly, health systems that successfully integrated GHS core capacities with PHC services have been particularly effective at mitigating the effects of COVID-19.

Reimagining governance, policies, and investments for global health

Although breaking the cycle of panic and neglect, which is necessary for sustained GHS, might be unlikely, re-envisioning UHC as the foundation for solidarity and action, including for health security and healthy societies, offers a necessary path forward in the world after COVID-19. A system with programmes for social protection, cost-effective PHC, inclusive leadership, and adequate public financing can guarantee quality services for all, especially in fragile contexts where poverty, overcrowded housing, and inadequate resources make communities most susceptible. In the recovery from COVID-19, economic fallout and public fear might push countries to favour isolationist approaches to health, favouring privatised health care and quick fixes to provide the illusion of health security. Donors and advocates should be wary of overly securitised or neoliberal solutions that have long restricted both GHS and UHC, instead backing truly universal, publicly financed, and country-owned health systems that promote health equity and upstream determinants of health to leave no-one behind. This expanded implementation of GHS capacities that are embedded and delivered through UHC can be developed along four core recommendations: integration, financing, resilience, and equity.

• Integration: build robust GHS capacities into comprehensive UHC systems
• Financing: break narrow funding pathways that prevent unified health systems
• Resilience: develop and assess health-system resilience
• Equity: apply a rights-based approach as the necessary foundation for health systems

From the Conclusion

With the effects of additional sociopolitical factors, such as protracted crises, race, gender, climate change, economic status, and differing social contracts between citizens and their governments, the influence of competing priorities in the governance for global health should be integrated into traditional preparedness and response guidance. A reimagined framework for global health that prioritises health-system integration across UHC and GHS domains, innovative and unified health financing, cross-sector resilience indicators, and equity as a core value offers a necessary path ahead. National authorities developing health-system priorities and funders, who control expenditure, agenda setting, and prioritisation of investment, cannot continue business as usual. To rebuild a more sustainable future after COVID-19, embedding the core capacities of GHS into holistic, publicly financed UHC systems is the clear next step forward. We cannot keep jumping from one epidemic to the next while ignoring the political will that is required to invest in the foundations of health for all. In the end, truly universal, comprehensive health systems in all countries, which have integrated core capacities for public health and are aligned across all levels of governance, will be our strongest defence against the next great pandemic.

https://www.thelancet.com…

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Comment:

By Don McCanne, M.D.

In response to the enormous strain placed on countries by the COVID-19 pandemic, the authors recommend rectifying the misalignment between global health security and universal health coverage.

How does this apply to the greatest health care system on earth, er, well, the most expensive one? Our current commitment to global health security is perhaps best represented by our withdrawal from the World Health Organization just at the time or our greatest need – not much of a commitment. Also, of all wealthy nations, ours is the only one that is not fully committed to universal health coverage.

Next month we will have a new administration. President-elect Joe Biden has told us that we will immediately rejoin the WHO, obviously a very important first step toward improving global health security, though much more will need to be done.

Regarding universal health coverage, Biden has already rejected the most efficient and effective model that would achieve that goal – single payer improved Medicare for All. Although he proposes policy patches to our current system, those measures are not adequate to correct the severe dysfunctions in our financing system and will still leave an unacceptable number of us without adequate coverage.

The authors state that we need “a reimagined framework for global health that prioritises health-system integration across UHC and GHS domains, innovative and unified health financing, cross-sector resilience indicators, and equity as a core value.” With our wealth and our renewed pledge for cooperative leadership in the world, the United States should lead the way.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Lindsey Dawson, Matthew Rae, and Jennifer Kates
KFF, November 30, 2020

Background

The legal and policy landscape regarding protections based on sexual orientation and gender identity in health care and other areas has shifted markedly in the last decade. Most recently, on June 15, 2020 in Bostock vs. Clayton County, the Supreme Court of the United States ruled that, under Title VII of the Civil Rights Act of 1964, it is unlawful sex discrimination for an employer (with at least 15 employees) to fire an employee because of their sexual orientation or gender identity. It is likely that this ruling will have implications for employers’ decisions regarding health insurance coverage for employees with same-sex spouses, among other areas of employment.

Conclusion

These findings indicate that access to employer coverage for same-sex spouses is increasing in the U.S., though it still is less than access to opposite sex spousal coverage. Coverage varies substantially by employer size, with employees at small firms having less access while those at the largest firms have almost uniform access to this benefit. In some cases, lack of access could be a policy decision, though that appears to be on the decline, with smaller shares of firms saying explicitly that they do not offer same-sex spousal coverage. Moreover, it is likely that the Bostock decision will have further implications for same-sex spousal coverage, with more firms being required to offer this benefit under the sex protections in Title VII. However, Title VII nondiscrimination protections do not apply to the 5% of employees at firms with less than 15 employees. Further, the Bostock court cautioned that employers could potentially secure religious liberty exemptions from extending sex protections to encompass sexual orientation and gender identity and it is yet to be seen how such exemptions interact with Title VII.

https://www.kff.org…

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Comment:

By Don McCanne, M.D.

Most people agree that everyone should have health care coverage, but there is considerable disagreement on the role that government should play in ensuring coverage for all. In today’s example, coverage for same-sex spouses is not assured in employer-sponsored plans. Why should we have any policies that would exclude individuals from coverage if the goal is to cover everyone?

Tens of millions of Americans do not have health care coverage today, not to mention tens of millions more who have inadequate coverage. We can fix this with one single policy: cover absolutely everyone with a national health program – a single payer improved Medicare for All.

Why do we keep beating around the bush? Let’s do it.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Anirban Basu, Peter J. Neumann, Sean Sullivan
Health Affairs Blog, December 2, 2020

Pharmaceutical pricing is a perpetually contentious policy issue. Branded drug list prices grew annually by 9.1 percent over the last decade. The growth rate in net prices (reflecting discounts and rebates) was lower, at around 4.5 percent, but still much higher than gross domestic product (GDP) growth.

Recent legislative proposals, including US Senate Bill S.2543, US House of Representatives Bill HR 3, and various Trump Administration proposals and plans, have advanced some form of international reference pricing (IRP) to lower drug prices. As its name suggests, IRP seeks to benchmark US drug prices to prices of similar or comparable drugs in other counties. On November 20, the Trump Administration issued an Interim Final Rule on its IRP plan that it refers to as a “most-favored-nations-rule.” Compared to the proposed rule the Administration issued in 2018, several changes were advanced. In our view, the assorted IRP policies are misguided attempts to address the real issue of aligning drug prices with value in the US.

Failure To Align American Drug Prices With Value

American drug pricing policy rewards large capital investments and risks the biomedical industry undertakes in bringing innovations to the market by allowing companies to charge temporary monopoly prices. Because most Americans have insurance and face a fraction of the monopoly price, demand is greater than it would otherwise be in a market without insurance. Consequently, insurers pay for drugs at monopoly prices, a practice that fuels industry profits and raises premiums to employers and out-of-pocket costs to patients. Health plans, especially public ones, would want patients who might benefit from a drug to receive it, subject to budget constraints. Therefore, in principle, they should aggressively negotiate a lower price that still maintains appropriate incentives for manufacturers to innovate. However, the private health insurance market in the US is heavily regulated in ways that limit the full power of such negotiations, such as through imposition of requirements that all drugs in a protected class be covered, even though not all drugs within a class show similar value. Public health insurers, like Medicare, are sometimes expressly prohibited from negotiating prices, and, in the Part D outpatient drug benefit, Medicare has ceded this role to private managed care organizations.

In contrast, most public-funded health care systems worldwide engage in rigorous negotiations, often supported by transparent value assessment processes. Their prices, which the US plans to reference, are a product of these processes. The US’s fundamental challenge has been the lack of political will to formally address drug pricing using any form of national value assessment that explicitly considers drugs’ relative costs and benefits, and informs prices accordingly. Cost-effectiveness analysis, one of the methodological tools of value assessments, is effectively prohibited for major federal payers and evaluators under the Affordable Care Act. The US Congress does not allow the Centers for Medicare and Medicaid Services (CMS) to consider explicitly any value assessment inclusive of costs and prices to determine coverage for drugs or services.

The IRP proposals are misguided as they do not address these central limitations of US statutes – the barriers to systematic use of value assessment and negotiation in drug pricing.

A Recipe For Inaction

Two vocal camps tend to dominate the US drug pricing debate, and neither supports IRP. The first supports explicit consideration of a drug’s value (costs in relation to benefit) in setting prices.

The second camp defends the status quo of free pricing (with certain restrictions) and rejects formal value assessments or government price negotiations.

An IRP policy would fail to satisfy either faction, leading to continued inaction on drug pricing.

The Dynamics Of IRP

It is also naïve to think that observed low prices in other countries would remain low (or even transparent) once the US implements IRP. This is especially true under the most-favored-nations model, which targets only one country’s price for any particular drug as the reference (i.e., the OECD country with the lowest price for that drug — as long as the country has a GDP per capita of at least 60 percent of the US level). Recently, researchers estimated that Medicare Part D plans could save $73 billion in 2018 if their prices for single-source brand-name drugs that had been on the market for at least three years reflected prices from UK, Japan, and Ontario (Canada). However, such hypothesized savings are unlikely to be realized. Unfettered IRP will lead to increases in market prices for the countries referenced, which may align with the goal of having other countries pay a bigger share of pharmaceutical development expenditures. More importantly, it should be expected that the referenced countries will resist this price creep in their own country by hiding their negotiated prices, while letting list prices equate to those of US prices. The real losers of such an outcome would be lower-income countries that do not have the resources and expertise to implement their own value assessment practices and must rely on negotiated prices from other counties. We believe it is highly dubious that IRP, in the long-run, would reduce US drug prices and, more importantly, reduce patient out-of-pocket burden.

Conclusions

The latest bills and proposals that promote IRP fail to learn from the experience of public purchasers, such as the Veterans Administration (VA) and Medicaid, that often achieve lower prices through negotiation and best-price rules. For example, the federal supply schedule drug prices, or the prices available to the “Big Four” (VA, Department of Defense, Public Health Service, and Coast Guard), often resemble prices in European counties. The Veterans Administration contracting mechanism often beats Big Four prices, although it comes with access restrictions.

Any serious attempt to address drug prices in the US – whether through negotiation or some other means – should start by establishing a national center for health technology assessment. This center would be charged with developing a transparent, scientifically rigorous, and deliberative process of assessing drug value, taking into account the US population preferences and benchmark value-based prices for price negotiations proposed in the current bills. Without such a formal mechanism, drug prices will continue to be misaligned with their value for the US.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

With U.S. politicians and policymakers being obsessed with catering to the medical-industrial complex, we continue to pay excessive prices for our drugs. Right now there is a movement to introduce international reference pricing as a means to reduce excessive drug spending, but the authors explain why that is not a good idea, for us or for the reference nations.

More importantly, they explain that we can “learn from the experience of public purchasers, such as the Veterans Administration (VA) and Medicaid, that often achieve lower prices through negotiation and best-price rules.” Of course, this is what is proposed for the single payer model of Medicare for All. Only instead of limiting reform to pharmaceutical pricing, we should go for the full package and enact and implement Medicare for All.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Claudio Lucarelli, Molly Frean, Aliza S. Gordon, Lynn M. Hua, and Mark Pauly
National Bureau of Economic Research, November 2020

Abstract

The growth of health care spending has been a longstanding policy concern. Over the years, several innovations have been proposed to lower levels of health care spending; however, their impact has been limited and not sustained over time. Costly new technology, while often an improvement to existing care, has been identified as a principal driver of health care spending growth. Recent literature has shown that high deductible health plans (HDHP) can have an immediate impact on levels of health care spending, but their medium- and long-run effects on spending growth remain unknown. In this paper, we use multiple-employer-group claims data from a large national insurer to (i) study whether HDHPs reduce the growth in spending over four years compared to lower deductible alternatives; and (ii) explore the mechanisms behind any reductions in growth by looking at whether HDHPs reduce the use of low- vs. high-value treatments. We find that HDHPs have a limited effect on spending growth, with a statistically significant reduction observed only for prescription drugs. HDHPs are not associated with significantly lower growth in spending on highly cost-effective medicines in a sample of drugs but do reduce spending growth for less cost-effective drugs.

From the Introduction

The overall pattern in our data therefore is one of no effect on aggregate spending growth for all insured care, and modest but potentially efficiency-improving effects on spending growth for drugs. High deductibles do not curb runaway medical spending, but may lead to more selective choices among drugs that better balance health benefits and cost. It appears that HDHPs do not have as much potential for long-term cost containment as their advocates contend, nor do they pose as much risk to the use of effective and cost-effective care as their detractors fear.

https://www.nber.org…

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The Economics of Moral Hazard: Comment

By Mark V. Pauly
The American Economic Review, June 1968

When uncertainty is present in economic activity, insurance is commonly found. Indeed, Kenneth Arrow has identified a kind of market failure with the absence of markets to provide insurance against some uncertain events. Arrow stated that “the welfare case for insurance of all sorts is overwhelming. It follows that the government should undertake insurance where the market, for whatever reason, has failed to emerge.” This paper will show however, that even if all individuals are risk-averters, insurance against some types of uncertain events may be nonoptimal. Hence, the fact that certain kinds of insurance have failed to emerge in the private market may be no indication of nonoptimality, and compulsory government insurance against some uncertain events may lead to inefficiency. It will also be shown that the problem of “moral hazard” in insurance has, in fact, little to do with morality but can be analyzed with orthodox economic tools.

The particular type of insurance for which the argument will be presented is that of insurance against medical care expenses, for it was in discussion of medical care expenses that Arrow framed the propositions cited above.

https://www.jstor.org…

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Comment:

By Don McCanne, M.D.

In 1968, Mark Pauly shook up the health policy world by noting, paraphrased, that the “moral hazard” of insurance created an inefficiency in which individuals would obtain health care that they would have otherwise declined if they had to pay for it. This moral hazard then has supposedly contributed to the very high health care spending in the United States.

Cost sharing in the form of deductibles, copayments and coinsurance were supposed to counter moral hazard by exposing patients to the costs of health care. Of course, costs continued to rise, so high deductibles were introduced to increase patient sensitivity to the costs, as one feature of the move to consumer-directed health care designed to make patients better shoppers of health care.

Now we have many studies that confirm that high deductibles have caused patients to forgo not just marginal care but also beneficial health care services. So it is interesting to see what Mark Pauly and his colleagues have found in studying the long-term effects of high deductibles.

The most important finding of this study: “The overall pattern in our data therefore is one of no effect on aggregate spending growth for all insured care.” They did show that there was some decrease in spending on less cost-effective drugs but not on highly cost-effective medicines, but that effect was so minimal that it produced no statistically significant change in spending growth in health care.

One of the reasons that this debate over moral hazard has been so important is found in the excerpt from The American Economic Review of June 1968. Kenneth Arrow states, “the government should undertake insurance where the market, for whatever reason, has failed to emerge.” Mark Pauly states, “compulsory government insurance against some uncertain events may lead to inefficiency.” So far, the Pauly camp has prevailed. Our insurance market failures have not led to universal government insurance, but, rather, we have turned to the market for private insurance “efficiencies” such as high deductible health plans. Yet Pauly now shows us that high deductibles have had no effect on aggregate spending growth.

There is one massive natural experiment that demonstrates that there is an effective method of slowing aggregate spending growth. The curves in the growth of health care spending in the United States and Canada were the same until Canada implemented their single payer provincial health programs. Since that time, the growth of U.S. health care costs has continued on the same high trajectory whereas Canada bent the cost curve down towards more sustainable levels. U.S. private insurers with their high deductibles and other market innovations have failed not only in controlling costs but also in achieving other crucial goals such as universality and equitable access and coverage for all.

So let’s say no to deductibles and the private insurance industry that has foisted them off on us. Let’s say yes to single payer improved Medicare for All.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

PNHP, November 30, 2020

Dear single-payer supporter,

While the dust settles from the elections, many PNHP members are thinking about what the coming year means for Medicare for All. As your new national president, I want to share with you my top five priorities for 2021, both for PNHP as an organization and for our broader movement for health care justice.

1. Set the standard for health care reform: As a new President and Congress prepare to take office, PNHP must be at the forefront of the national debate on health care reform by continuing to provide evidence-based policy solutions. For decades, PNHP has set the gold standard for reform with the Physicians’ Proposal for Single-Payer Health Care Reform and our Prescription for Reform pharma proposal. We must clearly communicate why single-payer Medicare for All — and not incremental reform that preserves private insurance — is the only way to solve people’s health care problems.

2. Move the medical profession towards Medicare for All: The momentum is growing: In 2020 alone, PNHP members have been instrumental in passing single-payer resolutions in the American College of Physicians, the Society of General Internal Medicine, and the Vermont Medical Society, as well as resolutions in several major cities and counties. In 2021, we will expand our resolutions campaign to every specialty society and state and local medical society with PNHP members. We must also strengthen PNHP as the home base for physicians who want to fight for single payer by recruiting more physicians, medical students, and activists to join our organization. We will encourage members to increase their activism and financial support.

3. Confront institutional racism in all forms, and especially in health care: As our Annual Meeting keynote speaker Dr. Rhea Boyd said, “Racism kills, but equality saves lives.” The U.S. health system is plagued with inequity: Compared to whites, people of color are more likely to be uninsured, face discrimination that creates barriers to care, and suffer from preventable health conditions and early death. PNHP must fight not only for equitable and universal coverage, but for the eradication of racism in all forms.

4. Build the grassroots movement by supporting the work of PNHP and SNaHP chapters: The number one takeaway from our Annual Meeting was this: We can only win Medicare for All by continuing our grassroots movement across the nation. That work is already being done by the 100+ local chapters of PNHP and SNaHP. We must support that work by connecting and mentoring chapter leaders and amplifying their local campaigns.

5. Expand our alliances and coalitions: PNHP will never win Medicare for All on our own. We must build power by joining forces with allies at the national and local levels (many PNHP chapters already do this well!). We now work closely with groups like National Nurses United, Public Citizen, HeathCare-NOW, and the Center for Popular Democracy, but we must bring many, many more allies into the fold.

The coming year will bring us extraordinary challenges and opportunities for change. I look forward to working closely with PNHP members to grow our organization and our movement. If you have ideas for me, please don’t hesitate to reach out at pres.rogers@pnhp.org.

Let’s get to work!

In solidarity,

Susan Rogers, M.D.
President

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Comment:

By Don McCanne, M.D.

People want to know what we can do to advance the cause of single payer Medicare for All. For a couple of decades these Quote of the Day messages have repeatedly called for education, coalitions, grassroots efforts, and, more recently, addressing institutional racism. These approaches are so fundamental that PNHP’s president, Susan Rogers, has independently come up with the same list. As she says, “Let’s get to work!”

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