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Saez and Zucman: The Triumph of Injustice

Saez and Zucman: The Triumph of Injustice

How the Rich Dodge Taxes and How to Make Them Pay

By Emmanuel Saez and Gabriel Zucman
From Chapter 9: A World of Possibility

Private Health Insurance: A Huge Poll Tax

The other specificity of the United States compared to other advanced economies is that public health insurance is far from universal in America. About half of all health care spending (10% out of 20% of national income) is publicly funded. A large fraction of the population must purchase private insurance. The system of private insurance excludes millions of Americans and imposes a mammoth burden on workers.

As we saw in Chapter 5, private insurance premiums are akin to a huge private tax. Although most workers get insurance through their employers – and thus employers nominally foot the bill – the premiums are a labor cost as much as payroll taxes are. Just like payroll taxes, premiums are ultimately borne by employees. The only difference is they are even more regressive than payroll taxes, because the premiums are unrelated to earnings. They are equal to a fixed amount per employee (and only depend on age and family coverage), just like a poll tax. The secretary literally pays the same dollar amount as an executive.

(Historically, in American colonies and in some US states before 1964, voting registration was conditioned on the payment of “poll” taxes. In this book, we use the classic definition of a poll tax, namely a tax levied on every adult without reference to income or resources.)

Poll taxes, unsurprisingly, are not popular. When Margaret Thatcher imposed a poll tax in 1988 to replace real estate property taxes, she faced an unprecedented revolt and was ousted from office in 1990. No government would out of the blue impose a poll tax to fund health care; it would be a crushing burden on moderate-income families. And yet in essence that’s what the United States does today: employers are administering a huge poll tax on behalf of the government. Since the passage of the Affordable Care Act in 2010, employers with fifty or more employees are legally required to provide health insurance to their workers or pay a penalty of $2,500 per employee in 2019. Given how big the average annual health insurance premium has become ($13,000 per covered worker), this system is unsustainable.

To illustrate the magnitude of this poll tax, let’s look at the distribution of US tax payments once we include mandatory private health insurance premiums. As we saw in the first chapter, considering regular taxes only the US tax system looks like a giant flat tax that becomes regressive at the top. But with the health care poll tax added, it is in fact frankly regressive: once private health insurance is factored in, the average tax rate rises from a bit less than 30% at the bottom of the income distribution to reach close to 40% for the middle class, before collapsing to 23% for billionaires.

The poll tax hammers the working and the middle class. At the bottom of the distribution, it’s not as onerous as sales and payroll taxes. But that’s because many working-class Americans do not get health insurance from their employers. They either face the burden of obtaining coverage themselves, rely on a family member to cover them, enroll into Medicaid, or go uninsured. The Affordable Care Act increased the pool of Americans eligible for Medicaid and subsidized the purchase of private insurance for low-income people who weren’t otherwise covered, but the law still left about 14% of the adult population uninsured in 2019. And it provided no relief for workers who fund their health care through a poll tax whose cost for the middle-class far outweighed that of the income tax.

https://wwnorton.com…

Tax Justice Now: Use the following link to access an interactive website where you can see the current tax system, Triumph of Injustice’s Tax Plan, Joe Biden’s Tax Plan, Bernie Sanders’ Tax Plan, Elizabeth Warren’s Tax Plan, or make your own tax plan.

https://taxjusticenow.org…

Comment:

By Don McCanne, M.D.

The Quote of the Day for Friday, October 25 was from an article in The Guardian by Emmanuel Saez and Gabriel Zucman which was adapted from their book, “The Triumph of Injustice.” In that article they explained how single payer Medicare for All would make health care affordable for everyone while also providing a pay raise for most of us.

If you expect to be able to explain to others how we can make health care affordable for everyone through Medicare for All, then it is imperative that you have a clear understanding of the tax policies that would make that possible. The policies are not that complex, but they are not simply intuitive either. So this is why you should read “The Triumph of Injustice.”

The excerpt selected today explains how private health insurance premiums act like a huge poll tax – one of the least fair forms of taxation since it is not based on ability to pay, that is, it is not based on income nor personal resources. Because health care is now close to one-fifth of our economy, that places a very large financial burden on middle-income Americans who are not eligible for government subsidized programs such as Medicaid or ACA subsidies.

Think about what that means for Medicare as a public option. Presumably those eligible for government assistance will be enrolled in Medicaid or a subsidized plan in the ACA exchanges whereas those with middle incomes who do not qualify for subsidization will be paying high premiums for the Medicare public option just like they would with private insurance plans. Once again, this would be like a huge poll tax – very unfair.

If you go to the Tax Justice Now website (link above) and click on “Tax Breakdown” you can see how the revenue sources would vary by income groups under various tax plans, including that of the authors. It would be difficult to see how we could have a more equitable method of funding health care than that devised by the authors, with two of the three presidential candidates’ plans coming close. Compare theirs with the current tax system to see how unfair the status quo would be (private insurance premiums and out-of-pocket cost sharing would fall in the pink “health” section).

As stated in the last message, let’s make America affordable again.

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

Makes case for Medicare for All

By Earl Fuller
West Plains (Mo.) Daily Quill, October 26, 2019

To the editor:

I attended the Oct. 8 Medicare for All presentation at OzSBI in West Plains. The speaker, Ed Weisbart MD, is a family physician who volunteers in free clinics and chairs the Missouri Chapter of Physicians for a National Health Program.

I walked away a Medicare for All believer, but fear big money health insurance and drug company lobbyists will use our politicians to spread fear and lies and kill the program. Perfect example was news stories this week reporting Medicare for All would cost $32 trillion over 10 years.

What they left out was that Fortune magazine reports Americans spent $3.65 trillion in 2018 for healthcare. So current spending will be $36.5 trillion over 10 years, assuming prices stay the same. But Fortune reports healthcare cost is rising 5% per year, meaning we could spend $60 trillion for 10 years with our current healthcare system.

Another tactic is to claim private industry is more efficient than the government. But, health insurance companies use 18 cents of every premium dollar on profit and overhead, so only 82 cents go toward doctors. The Medicare system run by the government for our senior citizens uses almost 97 cents of every dollar for actual healthcare.

Employer provided health insurance for a family is now $20,000 per year with employers covering 71% of the cost. So an average family is spending $6,000 per year for its portion plus a $2,700 average deductible, plus drug costs, copays, extra costs for emergency room visits, the list goes on and on.

Compare this to a Medicare For All plan where everything is covered, every doctor is in network, and you don’t have to worry about dying or going bankrupt because you couldn’t afford a doctor.

A fear tactic is to tell you your taxes will go up. And that is true, but what if you could pay $5,000 more in taxes to Uncle Sam instead of $9,000 to United Healthcare or Anthem. A family would save $4,000 with much less to worry about.

But all you hear is “your taxes will go up.”

In 1972, when Canada implemented a national healthcare system, a Canadian and an American had the same life expectancy and spent about the same for healthcare. Today a Canadian lives three years longer and spends half per person for healthcare.

Think about this when Jason Smith or Roy Blunt warn you about socialism and left-wingers.

https://www.westplainsdailyquill.net…

Make no mistake: Medicare for All would cut taxes for most Americans

Not only would universal healthcare reduce taxes for most people, it would also lead to the biggest take-home pay raise in a generation for most workers

By Emmanuel Saez and Gabriel Zucman
The Guardian,

The debate about healthcare has been at the center of the Democratic primaries, yet it is hard to make sense of the conversation. For some, public universal health insurance – such as Bernie Sanders’s Medicare for All bill – would involve massive tax increases for the middle class. For others, it’s the opposite: Medicare for All would cut costs for most Americans. Who is right?

The starting point of any intelligent conversation about health in America must be that it’s a cost for all of us – and a massive one. The United States spends close to 20% of its national income on health. Elderly Americans and low-income families are covered by public insurance programs (Medicare and Medicaid, respectively), funded by tax dollars (payroll taxes and general government revenue). The rest of the population must obtain coverage by a private company, which they typically get via their employers. Insurance, in that case, is funded by non-tax payments: health insurance premiums.

Although they are not officially called taxes, insurance premiums paid by employers are just like taxes – but taxes paid to private insurers instead of paid to the government. Like payroll taxes, they reduce your wage. Like taxes, they are mandatory, or quasi-mandatory. Since the passage of the Affordable Care Act in 2010, it has become compulsory to be insured, and employers with more than 50 full-time workers are required to enroll their workers in a health insurance plan.

A frequent objection to calling health insurance premiums a tax is that people have some choice. Can’t the poor, the argument goes, enroll in cheap health plans? If you start calling health insurance premiums a tax, then shouldn’t we also call spending on food and clothes a tax?

This argument, however, is wrong, because cheap healthcare does not exist. There are cheap meals, there are cheap clothes, but there is no cheap way to treat your heart attack, to cure your cancer, or to give birth. Cheap health insurance means no healthcare when you need it. All wealthy nations, even those that try hard to control costs, spend 10% of their national income on health – the equivalent of $7,500 a year per adult in the United States. The view that healthcare services are like haircuts or restaurant meals – services for which there is a product tailored to any budget – is a myth. Healthcare is like education: everybody needs it, regardless of their budget, but it’s expensive. That’s why all advanced economies, except the United States, fund it through taxation.

The main difference between the insurance premiums currently paid by American workers and the taxes paid by workers in other countries is that taxes are based on ability to pay. The income tax has a rate that rises with income. Payroll taxes are proportional to income, at least up to a limit. Insurance premiums, by contrast, are not based on ability to pay. They are a fixed amount per covered worker and only depend on age and the number of family members covered. Insurance premiums are the most regressive possible type of tax: a poll tax. The secretary pays the same amount as the executive.

Many people believe that the United States has a progressive tax system: you pay more, as a fraction of your income, as you earn more. In fact, if you allocate the total official tax take of the United States across the population, the US tax system looks like a giant flat tax that becomes regressive at the very top. And if you add mandatory private health insurance premiums to the official tax take, the US tax system turns out to be highly regressive. Once private health insurance is factored in, the average tax rate rises from a bit less than 30% at the bottom of the income distribution to reach close to 40% for the middle class, before collapsing to 23% for billionaires.

The health insurance poll tax hammers the working class and the middle class. At the bottom of the distribution, it’s not as onerous as sales and payroll taxes. But that’s because many low-income Americans rely on a family member to cover them, enroll into Medicaid, or go uninsured. For the middle-class, the burden is enormous. Take a secretary earning $50,000 a year, who has employer-sponsored health insurance at a total cost of $15,000. In reality her labor compensation is $65,000 (that’s what her employer pays in exchange of her work), but the secretary only gets $50,000. The executive earning $1,000,000 also pays the same $15,000 for his healthcare. This is a terrible funding mechanism.

Funding healthcare via insurance premiums would be acceptable if this private poll tax was small. When the system of private health insurance developed initially, the cost of employer-sponsored health insurance was moderate, the equivalent of 0.5% of national income in the 1950s. Today, however, it is huge: 6% of national income, almost as much as payroll Social Security taxes. The Affordable Care Act increased the pool of Americans eligible for Medicaid and subsidized the purchase of private insurance for low-income people not covered by their employer. But it provided no relief for workers who fund their healthcare through a huge and growing poll tax.

This situation is not sustainable. Most countries have understood this a long time ago. Health and retirement benefits started, like in the United States, as negotiated arrangements between employees (represented by their unions) and employers. But the task of funding health and retirement was then gradually entrusted to the government. Private premiums morphed into regular taxes, based on ability to pay. In the United States, this transformation has not happened yet for healthcare – leading to the crises we are in now.

This is the context needed to understand the current debate at the heart of the presidential elections. Proposals such as Medicare for All would replace the current privatized poll tax by taxes based on ability to pay. Some believe that it would result in a big tax increase for America’s middle class. But the data show that it would, in fact, lead to large income gains for the vast majority of workers.

Take again the case of a secretary earning $50,000 in wage and currently contributing $15,000 through her employer to an insurance company. With universal health insurance, her wage would rise to $65,000 – her full labor compensation. With an income tax of 6% – which, if applied to a base large enough, would be enough to fund universal health insurance – she would have to pay about $4,000 more in tax. But the net gain would be enormous: $11,000. Instead of taking home $50,000, the secretary would take home $61,000.

On TaxJusticeNow.org, any interested reader can simulate the effect of replacing private health insurance premiums by taxes – progressive income taxes, wealth taxes, consumption taxes, or broad taxes on consumption or all of national income. This simulator that we developed is open-source, user-friendly, and based on a systematic exploitation of all available statistics about who earns what and pays what in taxes and health insurance in America.

As one illustration, it’s possible to see how the tax plans of the leading Democratic primary candidates would affect tax rates for each group of the population. For instance, Bernie Sanders’s tax proposals would be enough to replace all existing private insurance premiums, while leaving 2.6% of national income to cover the uninsured and spend on other programs. Under such a plan, the 9 bottom deciles of the income distribution would gain income on average, as would the bottom of the top 10%. With smart new taxes—such as broad income taxes exempting low wages and retirees—it is possible to make the vast majority of the population win from a transition to universal health insurance.

Supporters of Medicare for All are right. Funding universal health insurance through taxes would lead to a large tax cut for the vast majority of workers. It would abolish the huge poll tax they currently shoulder, and the data show that for most workers, it would lead to the biggest take-home pay raise in a generation.

Emmanuel Saez and Gabriel Zucman are economics professors at the University of California, Berkeley, and the authors of The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, from which this essay is adapted.

https://www.theguardian.com…

Saez and Zucman: We can have health care and a pay raise

Make no mistake: Medicare for All would cut taxes for most Americans

Not only would universal healthcare reduce taxes for most people, it would also lead to the biggest take-home pay raise in a generation for most workers

By Emmanuel Saez and Gabriel Zucman
The Guardian, October 25, 2019

The debate about healthcare has been at the center of the Democratic primaries, yet it is hard to make sense of the conversation. For some, public universal health insurance – such as Bernie Sanders’s Medicare for All bill – would involve massive tax increases for the middle class. For others, it’s the opposite: Medicare for All would cut costs for most Americans. Who is right?

The starting point of any intelligent conversation about health in America must be that it’s a cost for all of us – and a massive one. The United States spends close to 20% of its national income on health. Elderly Americans and low-income families are covered by public insurance programs (Medicare and Medicaid, respectively), funded by tax dollars (payroll taxes and general government revenue). The rest of the population must obtain coverage by a private company, which they typically get via their employers. Insurance, in that case, is funded by non-tax payments: health insurance premiums.

Although they are not officially called taxes, insurance premiums paid by employers are just like taxes – but taxes paid to private insurers instead of paid to the government. Like payroll taxes, they reduce your wage. Like taxes, they are mandatory, or quasi-mandatory. Since the passage of the Affordable Care Act in 2010, it has become compulsory to be insured, and employers with more than 50 full-time workers are required to enroll their workers in a health insurance plan.

A frequent objection to calling health insurance premiums a tax is that people have some choice. Can’t the poor, the argument goes, enroll in cheap health plans? If you start calling health insurance premiums a tax, then shouldn’t we also call spending on food and clothes a tax?

This argument, however, is wrong, because cheap healthcare does not exist. There are cheap meals, there are cheap clothes, but there is no cheap way to treat your heart attack, to cure your cancer, or to give birth. Cheap health insurance means no healthcare when you need it. All wealthy nations, even those that try hard to control costs, spend 10% of their national income on health – the equivalent of $7,500 a year per adult in the United States. The view that healthcare services are like haircuts or restaurant meals – services for which there is a product tailored to any budget – is a myth. Healthcare is like education: everybody needs it, regardless of their budget, but it’s expensive. That’s why all advanced economies, except the United States, fund it through taxation.

The main difference between the insurance premiums currently paid by American workers and the taxes paid by workers in other countries is that taxes are based on ability to pay. The income tax has a rate that rises with income. Payroll taxes are proportional to income, at least up to a limit. Insurance premiums, by contrast, are not based on ability to pay. They are a fixed amount per covered worker and only depend on age and the number of family members covered. Insurance premiums are the most regressive possible type of tax: a poll tax. The secretary pays the same amount as the executive.

Many people believe that the United States has a progressive tax system: you pay more, as a fraction of your income, as you earn more. In fact, if you allocate the total official tax take of the United States across the population, the US tax system looks like a giant flat tax that becomes regressive at the very top. And if you add mandatory private health insurance premiums to the official tax take, the US tax system turns out to be highly regressive. Once private health insurance is factored in, the average tax rate rises from a bit less than 30% at the bottom of the income distribution to reach close to 40% for the middle class, before collapsing to 23% for billionaires.

The health insurance poll tax hammers the working class and the middle class. At the bottom of the distribution, it’s not as onerous as sales and payroll taxes. But that’s because many low-income Americans rely on a family member to cover them, enroll into Medicaid, or go uninsured. For the middle-class, the burden is enormous. Take a secretary earning $50,000 a year, who has employer-sponsored health insurance at a total cost of $15,000. In reality her labor compensation is $65,000 (that’s what her employer pays in exchange of her work), but the secretary only gets $50,000. The executive earning $1,000,000 also pays the same $15,000 for his healthcare. This is a terrible funding mechanism.

Funding healthcare via insurance premiums would be acceptable if this private poll tax was small. When the system of private health insurance developed initially, the cost of employer-sponsored health insurance was moderate, the equivalent of 0.5% of national income in the 1950s. Today, however, it is huge: 6% of national income, almost as much as payroll Social Security taxes. The Affordable Care Act increased the pool of Americans eligible for Medicaid and subsidized the purchase of private insurance for low-income people not covered by their employer. But it provided no relief for workers who fund their healthcare through a huge and growing poll tax.

This situation is not sustainable. Most countries have understood this a long time ago. Health and retirement benefits started, like in the United States, as negotiated arrangements between employees (represented by their unions) and employers. But the task of funding health and retirement was then gradually entrusted to the government. Private premiums morphed into regular taxes, based on ability to pay. In the United States, this transformation has not happened yet for healthcare – leading to the crises we are in now.

This is the context needed to understand the current debate at the heart of the presidential elections. Proposals such as Medicare for All would replace the current privatized poll tax by taxes based on ability to pay. Some believe that it would result in a big tax increase for America’s middle class. But the data show that it would, in fact, lead to large income gains for the vast majority of workers.

Take again the case of a secretary earning $50,000 in wage and currently contributing $15,000 through her employer to an insurance company. With universal health insurance, her wage would rise to $65,000 – her full labor compensation. With an income tax of 6% – which, if applied to a base large enough, would be enough to fund universal health insurance – she would have to pay about $4,000 more in tax. But the net gain would be enormous: $11,000. Instead of taking home $50,000, the secretary would take home $61,000.

On TaxJusticeNow.org, any interested reader can simulate the effect of replacing private health insurance premiums by taxes – progressive income taxes, wealth taxes, consumption taxes, or broad taxes on consumption or all of national income. This simulator that we developed is open-source, user-friendly, and based on a systematic exploitation of all available statistics about who earns what and pays what in taxes and health insurance in America.

As one illustration, it’s possible to see how the tax plans of the leading Democratic primary candidates would affect tax rates for each group of the population. For instance, Bernie Sanders’s tax proposals would be enough to replace all existing private insurance premiums, while leaving 2.6% of national income to cover the uninsured and spend on other programs. Under such a plan, the 9 bottom deciles of the income distribution would gain income on average, as would the bottom of the top 10%. With smart new taxes—such as broad income taxes exempting low wages and retirees—it is possible to make the vast majority of the population win from a transition to universal health insurance.

Supporters of Medicare for All are right. Funding universal health insurance through taxes would lead to a large tax cut for the vast majority of workers. It would abolish the huge poll tax they currently shoulder, and the data show that for most workers, it would lead to the biggest take-home pay raise in a generation.

Emmanuel Saez and Gabriel Zucman are economics professors at the University of California, Berkeley, and the authors of The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, from which this essay is adapted.

https://www.theguardian.com…

Comment:

By Don McCanne, M.D.

We have two major socioeconomic problems that cry out for resolution. Decades of income inequality have resulted in income stagnation for low- and middle-income workers while the benefits of their gains in productivity have flowed upward, with massive wealth accumulation at the top. Also, health care spending is approaching one-fifth of our economy, placing a great economic burden on those whose incomes have not kept pace with health care inflation.

As difficult as these two problems are we should recognize the opportunity we have to address both problems with one straightforward solution, improving significantly the lot of the typical American. Emmanuel Saez and Gabriel Zucman show us that by enacting and implementing a well designed single payer model of Medicare for All we can not only make health care affordable for everyone, but we can also use equitable tax policies to improve incomes for most of the nation’s workers and their families (and we can do that without disrupting the lifestyles of the wealthy).

Let’s make America affordable again!

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A New Generation of Activist Doctors Is Fighting for Medicare for All

By Abigail Abrams
TIME, October 24, 2019

Miriam Callahan remembers the patient who clarified her decision to become a political activist. He was homeless, suffered from severe arthritis in his hip and was self-medicating with fistfuls of Advil. That gave him a bleeding gastric ulcer that landed him in the emergency room at a public hospital. Callahan, who is a medical student at Columbia University, and her colleagues patched him up and sent him back to the shelter, where he began self–medicating once again. He was stuck in a horrific cycle. Arthritis isn’t a disease that should kill people, Callahan says, but in this case, it was becoming a real possibility. “It’s immoral,” she says, “the way that we treat people in this country.”

In the months since seeing that patient, Callahan has channeled her frustration into political organizing—and she’s hardly alone among her fellow medical professionals. With roughly 27.5 million Americans uninsured and nearly 80 million struggling with medical bills, doctors, nurses, medical students and other patient-facing professionals are finding themselves on the front lines of a broken system. Like Callahan, many are looking for ways to fix it. The result is that the medical field, which was once one of the most conservative professions, is becoming an unlikely hotbed of progressive political activity. One of these advocates’ top goals? Single-payer health care, now known most often by its politically charged nickname: Medicare for All.

“I don’t think I can just be a patient advocate at the bedside,” says Deb Quinto, a 38-year-old nurse in California who has canvassed in support of Medicare for All. “It’s our job to protect our community and to protect any threat to their health.”

Single-payer health care was once considered a fringe idea in the U.S. But so were the ideas that led to Medicare and Medicaid, through which the government pays for qualifying citizens’ medically necessary services. And over the course of the past few years, proposals for a universal single-payer plan have entered the mainstream political lexicon, at least that of one major party. Large majorities of Democratic voters now say they support some version of Medicare for All, and Senators Elizabeth Warren and Bernie Sanders, two of the three top-polling Democratic presidential candidates, have made the policy central to their campaigns. There are two Medicare for All bills currently pending before Congress. Medical professionals are central to this growth in popularity. From 2008 to 2017, the share of physicians who favor single-payer health care increased from 42% to 56%, according to Merritt-Hawkins, a physician-recruitment firm.

While Medicare for All remains deeply controversial among many Americans—and a nonstarter among most Republicans—physician-activists insist the tide is beginning to turn. “There’s been a sea change in the way we talk about health care reform,” says Dr. Adam Gaffney, an instructor at Harvard Medical School and president of Physicians for a National Health Program, which supports single-payer health care. He notes that as a growing number of doctors advocate for Medicare for All, the policy stands a better chance than it has in a generation. “Whatever reform we achieve,” he says, “we need them—us—to be a part of it and make it work.”

For most of the 20th century, physicians were a staunchly Republican group. Overwhelmingly white and male well into the 1990s, many ran their own practices and operated as small-business owners. Their leading trade group, the American Medical Association, reflected their members’ politics: it helped sink attempts by Presidents Franklin Roosevelt and Harry Truman to pass universal health care, hiring a public relations firm and employing doctors themselves to warn patients against national insurance. As Medicare gained steam in the 1960s, the group produced a record featuring Ronald Reagan, then an actor, to raise the specter of creeping socialism as part of its pitched, if losing, battle against the safety net for older Americans.

But in the past generation, both health care and the job of being a doctor have fundamentally changed. As the insurance industry expanded, physicians have moved from running their own private practices to being employees of hospitals and health systems. Instead of building their own patient bases, doctors nowadays often receive fixed salaries. “What that allowed physicians to do is basically look at the system in a more altruistic way,” says Travis Singleton, executive vice president of Merritt-Hawkins. “It doesn’t mean the independent physician 15 years ago didn’t care about every patient who walked in the door. They simply knew that if they didn’t control their payer mix, then they couldn’t keep the doors open.”

Meanwhile, other macroeconomic shifts have affected where doctors live, how they work and who chooses to join the profession in the first place. Beginning in earnest in the 1990s, hospitals and medical groups began consolidating, pushing once rural and suburban doctors into big cities. And as medical schools became more expensive, aspiring doctors began taking on ever larger debt loads. In 2018, medical-school graduates carried a median $200,000 in student debt, a burden heavy enough to reshape expectations. “If you want to make a lot of money, maybe go into finance or business consulting,” says Courtney Harris, a Chicago medical student, who will have $300,000 in student loans when she graduates.

As the economics of medicine have shifted, so have the underlying demographics of the profession. In the past two decades, more women and people of color have entered the profession. Medical schools, meanwhile, have expanded their curricula to include information about gun violence, climate change and how social determinants, like class and race, affect people’s health. “These are not just our patients, but our parents, our cousins, our uncles, our grandparents,” says Yoseph Aldras, a medical student whose parents are Honduran and Palestinian.

Medical schools have embraced these ideas so thoroughly that when a former associate dean at University of Pennsylvania’s medical school complained about politicized medical education in a recent Wall Street Journal op-ed, he was met with swift backlash from the school’s faculty, students and more than 150 alumni. Other schools have gone further, such as at Oregon Health and Science University, where students themselves now teach a required course on structural factors in health like institutional racism or immigration.

Singleton, whose firm conducts a biennial survey of doctors’ opinions, says that while there are myriad reasons for an uptick in political involvement, one of the most compelling is simple: doctors see the dysfunction of the health care system on a daily basis. As health care costs ballooned and the private insurance industry expanded, the job of being a doctor changed. Instead of just treating patients, doctors today must battle with insurance requirements, manage arcane reimbursement systems and juggle enormous administrative costs, Singleton’s firm found. Much of this is a direct consequence of physicians’ early opposition to health care reform, explains Beatrix Hoffman, a history professor at Northern Illinois University. By pushing back against government involvement, she says physicians created the system that is now dominated by private insurance. “We’ve heard so many horror stories from doctors who have come before us about spending hours on the phone negotiating with insurance companies,” says Scott Swartz, a 28-year-old medical student in San Francisco. “That’s not how we want to spend our time.”

All of these factors have combined to shift doctors’ politics to the left. In 1994, 67% of political campaign contributions by doctors went to Republicans, according to research by Adam Bonica, Howard Rosenthal and David Rothman. By 2004, donations to Republicans dropped below 50%. And by 2018, the ratio had more than flipped: Democrats captured more than 80% of physician donations last year. “There is an absolutely notable shift over 25 years away from Republicans,” says Rothman, a professor of social medicine at Columbia University’s Vagelos College of Physicians and Surgeons. “And it’s persisting.”

A decade ago, many physicians’ groups supported the Obama Administration’s effort to pass the Affordable Care Act, which aimed to extend access to health insurance to nearly all Americans. While the law failed to keep insurance costs low for many Americans, Republicans also failed to present a workable alternative to American voters. Though Republican lawmakers maintained control of the House and Senate in 2017, their attempts to repeal or replace the flawed Obamacare failed, leaving millions of Americans to continue to struggle with sky-high health care costs. This fruitless political maneuvering galvanized many in the physician-activist community. It was clear that Obamacare, which was designed to safeguard access to quality insurance, wasn’t doing enough, they argued. Why not push for a system that skips insurance entirely and instead offers access directly to quality care? “There’s a growing recognition among physicians that the current system, even with the ACA, costs too much, leaves too many people behind,” says Bob Doherty, senior vice president of governmental affairs and public policy at the American College of Physicians (ACP).

Enter: renewed interest in single-payer plans. In 2016, the American Academy of Family Physicians, which has supported the idea of “health care for all” since 1989, launched a study of various payment models, hoping to inform discussions of how to reform the health care system. The American College of Physicians, which supports a government-funded option for health insurance, is developing its own recommendations too.

The AMA, which has maintained its opposition to Medicare for All, began softening its rhetoric. “The AMA has and always will welcome debate at our House of Delegates on moving forward on health care reform,” says AMA president Dr. Patrice Harris. This attitude reflects a broader cultural consensus, according to Hoffman, the NIU historian. “It’s become more unacceptable than in the past to so blatantly oppose the expansion of health coverage,” she says. Bonica, who led the research on physician partisanship, says that incremental shift makes a difference. “There’s potential for physicians to organize among themselves,” he says. “Conditions are very ripe for that.”

At the AMA’s annual meeting in June, members voted on a proposal to remove the organization’s opposition to single-payer health care. It lost, but narrowly—just 47% to 53%. Outside the meeting, a group including doctors, nurses and medical students held a rally and shared stories about why they wanted to fight for universal health care. Two months later, advocates for a government-backed health care option scored another victory when the AMA pulled out of Partnership for America’s Health Care Future, the industry coalition aimed at stopping single-payer and public-option plans.

Adam Gaffney: It’s the financing system, stupid.

What the Health Care Debate Still Gets Wrong

A decade ago, Harvard surgeon Atul Gawande helped popularize the idea that U.S. health care spending is high because we use too much medicine. He was wrong: it’s the prices, and who pays them.

By Adam Gaffney, M.D., M.P.H.
Boston Review, October 17, 2019

Priced Out: The Economic and Ethical Costs of American Health Care
By Uwe Reinhardt
Princeton University Press, $27.95 (cloth)

Reinhardt helped reorient the health care reform discussion from quantity to price, which was a step in the right direction. Yet high prices should be seen less as the underlying disease than a symptom of the true malady, our uniquely privatized and fragmented financing system.

That system leaves millions uninsured and underinsured—by current counts upwards of 87 million are inadequately insured. It is premised on the notion that private insurers can control costs by forming restrictive provider networks—increasing their market leverage but reducing patients’ choice of providers—but this scheme invariably results in out-of-network bills of the ruinous sort Kliff and others describe.

By the same token, it is our financing system that has accommodated, and indeed rewarded, hospitals that transform into capitalistic, consolidating, revenue-maximizing behemoths—because those institutions can then extract higher prices from payers through greater leverage of their own. It is the way we pay for health care in the United States that has led to an arms race of administrative bloat, as insurers and providers fight over payments with legions of bureaucrats and billers. And it is our financing system that has allowed some hospital systems to flourish and expand facilities of ever-increasing technological prowess and splendor, but that forces others—the unprofitable ones—to wither, and sometimes die.

And in the end, it is not just empirical questions that are at stake, but ethical ones. “Unfortunately,” Reinhardt notes in the prologue of his book, “we are too shy in this country to debate forthrightly the ethical precepts we would like to see imposed on our health care system.”

But debate them forthrightly we must. For above all, it is our financing system that is increasingly giving way, as Reinhardt recognized, to the rationing of care according to economic class, as policymakers seek to control costs by passing them through to patients instead of doing what high-performing universal systems across the globe have long done: control that spending at its source. The way we pay for health care has produced a curious but deadly mix of deprivation and excess. There is no great mystery behind it. It’s the financing system, stupid.

https://bostonreview.net…

Comment:

By Don McCanne, M.D.

Although at first glance this is camouflaged as a book review, it is far, far more than that. It is one of the most important treatises ever written on the U.S. health care system.

It is a long article, studded with links to supporting references, so it will take time to read and digest. Graciously, Boston Review does not use a paywall, so the entire article can and should be accessed at the link above (without the necessity of including the entire article in this email).

This is essential reading for the health policy community, politicians, and stakeholders, especially patients. We will need to reduce this message to simple terms in order to inform the large segment of the population that is driven more by memes than by sophisticated discussions of policy science. But the message is fairly straightforward so we should be able to do that.

Your task right now? Select a time that you can read the full article, whether it is now, or perhaps sometime this weekend. Then join with others in communicating this message to the nation. It needs to become the meme that drives health care justice in America.

With thanks to Adam Gaffney and Uwe Reinhardt, we have confirmed that it is the financing system that is the source of the ills of the U.S.health care system, and understanding that fact is not so stupid after all.

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

This Arizona nonprofit health system CEO topped the salary list at $25.5 million in 2017

By Stephanie Innes
Arizona Republic, October 23, 2019

A debate over hiking the salary of Phoenix-based Valleywise Health CEO Steve Purves raises the question of what a nonprofit Arizona health system leader is paid these days.

Generally, it’s a lot.

Leading the earnings for executives leading nonprofit health systems in Arizona is Peter Fine, the CEO of Phoenix-based Banner Health.

Fine’s most recent salary data available, listed on Schedule J of the company’s IRS Form 990, shows he earned a total of $25.5 million in gross pay in 2017. That’s a significant leap from his prior year earnings of $8.7 million.

The increase was driven by a one-time executive retirement plan payment of $17 million, Banner officials said.

Fine’s base salary in 2017 was $1.3 million. His compensation was boosted by a bonus and incentives, deferred pay and a payment of $17 million from a Supplemental Executive Retirement Plan — a program that was put in place early in Fine’s tenure, company spokeswoman Nancy Neff wrote in an email.

“If you subtract the one-time SERP payment, his annual compensation is very similar to 2016,” Neff wrote.

The Valleywise board on Tuesday voted 3-2 to hike Purves’ base pay to $685,000 from the current $600,000 beginning Friday. The five-year pay package for the public health system CEO includes a performance bonus of up to 25% of his base salary (up to $171,250) and an added $68,500 retention bonus on Oct. 25, 2020.

The decision to increase Purves’ pay followed debate over whether his salary is too high for a public health system CEO.

Phoenix-based Intellimed, a health care analytics company, could not immediately provide market share data for Arizona health systems. The Arizona Hospital and Healthcare Association’s most recent data says that for the 12 months ending in June 2018, Banner Health’s market share in Arizona was 32.9%.

The Valleywise market share, by comparison, was 2.3%. Market share data is based on patient discharges, association officials said.

What Arizona nonprofit health CEOs earn

Base salaries and bonuses aren’t the only compensation that CEOs receive.

The Republic looked at data from 2017 and, when it wasn’t available, from 2016, using IRS Forms 990 and, in the case of Valleywise Health, information obtained in a records request.

The following is the total gross compensation for top nonprofit health system CEOs in Arizona in 2017.

  • 1. Peter Fine, Banner Health: $25.5 million
  • 2. Linda Hunt, Dignity Health: $1.8 million
  • 3. Thomas Sadvary, HonorHealth: $1.8 million (through 04/17  as CEO, plus work through the end of the year as adviser to the CEO and board of directors)
  • 4. Dr. Wyatt Decker, CEO, Mayo Clinic in Arizona: $1.8 million
  • 5. Judy Rich, TMC Healthcare (Tucson Medical Center): $1.7 million
  • 6. Todd LaPorte, HonorHealth: $1.2 million (from 04/17 through the end of the year)
  • *7. Robert Trenschel, Yuma Regional Medical Center: $1.1 million
  • *8. Robert Thames, Northern Arizona Healthcare: $762,410
  • 9. Steve Purves, Valleywise Health: $761,764.45

*Compensation is for 2016

Sources: 990 IRS forms via GuideStar, ProPublica’s Nonprofit Explorer and Valleywise Health. Not all the CEOs listed are still in those jobs.

Banner is a leading U.S. health system

Banner Health is Arizona’s largest health system. It’s nonprofit, but it’s private. It is also one of the largest health systems in the country, with 52,000 employees across six states, 28 hospitals and a network of urgent care centers, clinics, outpatient surgery centers and retail pharmacies.

A compensation committee that’s part of the Banner Health board of directors works with an independent consulting firm to establish the president and CEO’s salary, Banner officials said.

Officials say the Banner committee then works with an independent compensation consulting firm that measures salary proposals against several benchmarks, including compensation paid by a peer group of comparable nonprofit health care systems.

Valleywise Health, formerly known as the Maricopa Integrated Health System, by comparison, is a nonprofit, public teaching health system that has earned a reputation for being a “safety net” that provides care for low income and underserved populations.

Among its services, Valleywise operates the only American Burn Association-verified burn center in Arizona — one of 68 such centers nationwide. It is also one of the largest local providers of inpatient psychiatric beds.

Valleywise does not file Form 990s like other nonprofit organizations. That’s because it functions like a government organization — specifically as a “political subdivision” of the state. Under Arizona law it is a special taxing district, approved by voters in 2003 when the health system was in danger of shutting down, which is governed by a publicly elected board of directors.

At the time of the vote, Maricopa Medical Center was in danger of closing because of financial problems.

The 2003 vote authorized a tax that equates to $43.68 per year for a home assessed at $300,000 and brings in an estimated $76 million annually. In 2014, voters approved investing an additional $935 million for facility improvements at Valleywise. That added secondary property tax generates approximately $42 million per year.

Another nonprofit health system with a similar market share to Valleywise is Northern Arizona Healthcare based in Flagstaff, which paid its then-CEO, Robert Thames, a base salary of $487,078 in 2016. Thomas’ total compensation that year was $762,410, which was almost the same as Purves’ total gross compensation for that same year.

In 2016, the most recently available 990 financial information shows Yuma Regional Medical Center CEO Robert Trenschel earned a base salary of $763,687 and total gross compensation of $1.1 million.

Medicare For All = reduced CEO salaries?

The 25 highest-paid not-for-profit health system executives nationwide received a combined 33.2% increase in total compensation in 2017, Modern Healthcare found in June. Banner Health’s Fine topped the publication’s list when ranked according to total gross compensation.

“This is in some ways a symptom of the whole health care system moving into a very business-oriented model. I would add, a very business-oriented model to the detriment of patients, who find themselves paying more and more for care,”  said Dr. Steffie Woolhandler, co-founder of the group Physicians for a National Health Program, which promotes a single-payer “Medicare For All” reform of U.S. health care.

“In other countries, the nonprofit CEOs earn, you know, a couple of hundred thousand, which is about what doctors are earning, frankly, and their hospitals work just fine,” she said.

“In the United States, there’s been this tendency to keep raising the CEO salaries in the non-profits … $8 million is on the high end and $25 million is very much out of range, even if it’s a one-year thing.”

She added that people in other high-income countries tend to live longer than people in the U.S.

Indeed, the latest data from the Organization for Economic Cooperation and Development shows that life expectancy from birth in the U.S. is 78.6 years old. That’s worse than 28 other countries. In Japan, which has universal, publicly-financed primary care, life expectancy is 84. Also, per capita health care spending in 2014 in Japan was less than half of what it was in the U.S., OECD data says.

“If you go for a nonprofit public service model like other countries have done, it’s going to be less expensive for everyone,” Woolhandler said. “You are going to be spending less on medical care and less on these ridiculously high CEO salaries.”

U.S. CEO pay is soaring

Nonprofit health system executives are not the only CEOs making more money. There’s an overall trend of higher CEO compensation in the private, for-profit sector of all industries.

CEO pay overall vs. typical worker compensation in the U.S. is on average a ratio of at least 221 to 1, says the Economic Policy Institute, a nonprofit, non-partisan think tank that in August released a report on CEO pay. In contrast, the CEO to typical worker compensation ratio was 20-to-1 in 1965.

“Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with,” the report says. “CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills.”

https://www.azcentral.com…

Republican Study Committee releases the RSC Health Care Plan

Republican Study Committee, October 22, 2019

Today, the Republican Study Committee released The RSC Health Care Plan: A Framework for Personalized, Affordable Care (click here to download full report). Spearheaded by RSC Chairman Mike Johnson (LA-04), RSC Health Care Task Force Chairman Roger Marshall, M.D. (KS-01), and members of the RSC Health Task Force, the RSC Health Care Plan would protect vulnerable Americans – including those with pre-existing conditions, chronic illness, and serious health issues – while reducing premiums, deductibles, and overall health care costs.

The product of a year of research and stakeholder discussions, the RSC’s approach to achieve more personalized, affordable care is designed to empower patients and doctors rather than bureaucrats and insurance companies.

The RSC Health Care Plan is presented as an alternative to Democrat proposals to double-down on the failing status quo or force all Americans off their current insurance plans – including those with employer-sponsored coverage – and into a one-size-fits-all, government-run health care system.

https://rsc-johnson.house.gov

The RSC Health Care Plan

Enhanced Portability Protections

First, under the RSC plan, movement into the individual marketplace from the employer marketplace would be facilitated by ensuring that individuals do not need to exhaust COBRA (or other continuation) coverage before entering the individual market with portability protections. Employer-sponsored plans are often far broader and more expensive than people need or can afford on their own.

Second, whether a person is moving from an employer plan into the individual marketplace or switching individual plans, they would receive the same coverage protections afforded to a person enrolling in employer-sponsored coverage under pre-ACA HIPAA law. However, if a person does not have twelve months of continuous coverage,121 the person could be subject to an exclusion period of up to twelve months for an existing condition. Lawmakers could also explore ways in which states could be given flexibly in providing these portability protections in the individual marketplace for those with continuous coverage.

To ensure that ample options exist for Americans to possess continuous coverage, short-term, limited- duration plans would count toward periods of continuous coverage under the RSC plan. Additionally, the RSC plan would codify the Department of Health and Human Services’ new rule allowing short- term, limited-duration plans to last for a term of one year (and renewable for up to 36 months). Health care sharing ministry plans would also count toward continuous coverage. However, in order to combat a potential adverse selection issue where individuals with portability protections attempt to switch to a plan with more substantial benefits, carriers should be given the flexibility to apply the continuous coverage requirements on a benefit-by-benefit basis.

Guaranteed Coverage Pools

The RSC plan would provide federal funding for states to supplement the medical costs of eligible high-risk individuals. The RSC plan refers to this mechanism as a Guaranteed Coverage Pool.

More specifically, under the RSC plan, the federal government would make funding available for states to design and operate their own Guaranteed Coverage Pools. States would not be locked into a particular Guaranteed Coverage Pool mechanism, but rather would be given the freedom to use the federal funds to implement innovative, state-centric designs that would ensure everyone in the state’s pool has access to better care than under the ACA.

Federal funding for Guaranteed Coverage Pools would be delivered to states in the form of a grant derived from repackaging the ACA’s individual marketplace subsidies and Medicaid expansion.

Though the potential $17 billion annual price tag135 may not seem ideal, it sets up a sustainable path for the individual marketplace and deters our nation from heading toward a government-run, one-size-fits-all health care system that would cost taxpayers more than $30 trillion over the next decade.

Tax Benefit Equality

The most notable flaw in the tax code as it relates to health care is the inequitable treatment between employer-sponsored and individually purchased health insurance. A person choosing to purchase health insurance with income from their paycheck is at a significant tax disadvantage versus a person receiving employer-sponsored insurance.

The RSC plan proposes a more efficient system that would provide equal tax treatment in the employer and individual health insurance markets. Thus, the RSC plan would give individuals the ability to use health savings accounts (HSAs) to pay for premiums in the individual marketplace.

Unleashing Health Savings Accounts

Beyond allowing individuals to use health savings accounts to pay health insurance premiums, the RSC plan would enact a significant amount of reforms to expand the accessibility and effectiveness of health savings accounts. In particular, the RSC plan would eliminate the requirement that health savings accounts be tied to a high-deductible plan, increase health savings accounts’ maximum contributions, and expand the scope of eligible health care expenditures.

Critically, while the RSC plan would unleash health savings accounts, it would ensure that these accounts are pro-life and do not inadvertently allow a back-door method of subsidizing abortion procedures.

Protecting Medicaid’s Vulnerable Populations

The RSC plan calls on lawmakers to right-size the Medicaid program so that it can remain a sustainable health care safety net for vulnerable populations for generations to come.

The first step to right-sizing Medicaid under the RSC plan is an immediate moratorium on future Medicaid expansions and the institution of a phase-out of the expansion’s enhanced FMAP rate.

Expanding Direct Primary Care

Direct Primary Care is an innovative, affordable, and transparent care delivery system that allows patients to pay a monthly service fee—usually about $60 – $70 per month—directly to a health care provider instead of paying a copay or coinsurance for each visit to a doctor. As Avik Roy has said, “It’s like concierge medicine, but for everyone, including the poor.”

Health Care Sharing Ministries

Health care sharing ministries (HSMs) are faith-based nonprofit organizations whose members share a common set of ethical and religious beliefs and share medical expenses among themselves in accordance with those beliefs.

Association Health Plans

The RSC plan urges codification of the reforms promulgated by the Department of Labor that ensure Americans have greater access to Association Health Plans (AHP).

Health Status Insurance

Traditional health insurance covers your risk of medical expenses in the current year, whereas health status insurance covers your risk that your insurance premiums may rise due to an unforeseen circumstance that may occur in the future. This essentially allows an individual to pay for the option to purchase more comprehensive insurance at a later date. Functions as “health insurance-insurance.”

Short-Term, Limited-Duration Plans

Short-term, limited-duration plans are exactly what they sound like: health insurance plans meant to be used for short periods of time in-between jobs or during other short lapses of health coverage.

Telemedicine

The RSC is recommending that states work to remove barriers for telemedicine to be able to innovate and become more prevalent.

Certificate of Need Laws

By restricting new construction of provider facilities, these programs reduce competition, prevent the market from working on its own, and are subject to political influence. For these reasons, the RSC plan urges states to reform or repeal their certificate of need laws.

From the Conclusion

To argue for doubling-down on the status quo is to argue against helping these families and the countless number of other Americans who have fallen through the cracks of the ACA. At the same time, to embrace the Left’s “solution” of a government-run, one-size-fits-all ACA replacement proposal is to ignore the fact that individuals have unique health care needs.

As conservatives, we have joined together to propose another path forward—one that can dramatically improve access to quality, affordability, and choice in the American health care system. We offer a plan that will PROTECT the vulnerable, EMPOWER patients, and PERSONALIZE care. It is a plan that will give Americans, including those with pre-existing conditions, access to coverage options they can actually afford to use, and it will right-size Medicaid so it can remain a sustainable health care safety net for those who truly need it for generations to come.

https://rsc-johnson.house.gov…

Comment:

By Don McCanne, M.D.

The health care plan of the Republican Study Committee might best be characterized as a plan to empower patients to use their own money to personalize their health care. What could be wrong with that?

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Contrary to GOP Talking Points, Medicare For All Will Reduce Costs for All

Interview with Dr. Susan Rogers

Between the Lines Radio, October 23, 2019

full audio:
https://btlonline.org…

Democratic candidates vying for their party’s presidential nomination by and large agree that achieving universal health care in the U.S. is a worthy goal. But the candidates diverge on how to reach that goal. While Vermont Sen. Bernie Sanders and Massachusetts Sen. Elizabeth Warren have championed Medicare For All mandating universal coverage, other candidates including former Vice President Joe Biden, Minnesota Sen. Amy Klobuchar and South Bend Indiana Mayor Pete Buttigieg have attacked Medicare For All as too costly, too complicated and politically unpopular.

In recent Democratic candidate debates, television moderators have posed questions that repeat Republican party, insurance and healthcare industry talking points, maintaining that middle-class Americans will both lose the private health insurance policies they like and will be burdened by steep tax increases.

While Sanders and Warren have done their best to effectively rebut these conservative criticisms, it’s clear that they will need to be more specific about the overall costs of Medicare For All, and who will bear the burden. Between The Lines’ Scott Harris spoke with Dr. Susan Rogers, a board member of the group Physicians for a National Health Program. Here, she responds to some of the often-repeated false claims about Medicare For All, while making the point that every other industrialized nation in the world except for the U.S., has a universal health care system.

DR. SUSAN ROGERS: Well, there is a lot of talk about taxes and people respond almost emotionally to just the word “tax.” But what we’re advocating for is that there would be a small tax that people would pay, but that would be in place of what they’re currently paying as part (what) they pay for part of their cost of their health insurance. And I like to look at this as when you look at your paycheck, you have a gross amount at the top and then you have multiple deductions from that amount. They go to Medicare and their federal tax, state tax, whatever. And there’s also a deduction for your part of the payment for your healthcare, your health insurance that is on there. And what we propose is a tax that would take the place of that deduction for the health insurance, which would likely be smaller than what you’re already paying.

Some people are already paying a couple hundred, several hundred dollars a month for their, you know, family coverage. And so, not only would you be paying less, but you’d also not have to pay any more deductibles, which can sometimes be $5,000 or $6,000 a year. You wouldn’t have any co-pays. We would negotiate to get the costs of drugs decreased so that your total out-of-pocket expenses would be less. And I really believe that the bottom line on your check would be greater. You would be able to deposit more money in the bank because you’re not paying this deduction for your health insurance.

BETWEEN THE LINES: Do you think the candidates advocating Medicare for All have answered the questions effectively to dispel some of the fear-mongering that’s going on, particularly among conservative politicians, but also from the healthcare industry itself, which vast parts of that healthcare industry are opposed to Medicare for All?

DR. SUSAN ROGERS: I don’t think they have. I mean, one of the biggest problems that people face isn’t just what they pay for their health insurance, but the out-of-pocket expenses are just phenomenal, most people cannot afford. And, one of the things that happened with the Affordable Care Act is that clearly the number of people who were uninsured decreased. But what happened was that the number of people who, what we call “underinsured” markedly increased. And by underinsured, we talk about where you pay – it gets tricky depending on income – but up to 5 percent to 10 percent of your income for medical bills. If that’s you, then you are underinsured.

And what happens is that people cannot pay, you know a $1,000, $2,000, $3,000 deductible. So essentially, they are not even able to use their insurance. So people are underinsured. They have an insurance card but they cannot afford to pay for it. And to me that’s just like having a car sitting in your garage. You pay the car note every month, but you don’t have the keys to the car; you can’t drive it. And that’s what’s happened to a lot of people with insurance and you know, they are now underinsured. So I see it a lot. People do not come in for care because they cannot afford to pay down that deductible before their health insurance kicks in.

BETWEEN THE LINES: Doctor, I wanted to mention – in addition to the tax question that comes up quite often in these debates and commentary about Medicare for All, the other question that the candidates running in the Democratic primary are confronted with is “Will you sign on to the plank in the Medicare for All legislation that private insurance will hereby be abolished?” Tell us a little bit about the private insurance industry and what happens to it if Medicare for All gets passed?

DR. SUSAN ROGERS: Well, there would be no role for private insurance with a single-payer program. There’s really only three reasons why other countries have private insurance even though they have a single-payer program or government-funded care. And that’s if you have what we would call supplemental insurance and that’s where it pays for benefits that aren’t already covered. So a single-payer system would really have no need for private insurance because everything would be covered.

And a lot of people talk about “If I like my plan, I should be able to keep it.” But I think that we’re missing the really important piece of that is that people don’t like their plan. They like their doctor. People like their hospital, people like where they go for services. The plan is nothing but a middle man and so there’s no reason to “like the plan.” Plus, you don’t even know if that’s the same plan you’re going to have next year. You don’t know if your employer is going to offer it. You don’t know if you’re still going to be employed there. You don’t want to have to keep that job just to keep that plan when you could get the same and it would be better benefits under a Medicare for All and you wouldn’t have a $5,000 deductible.

https://btlonline.org…

Paul Krugman on Warren’s Medicare trap

Can Warren Escape the Medicare Trap?

By Paul Krugman
The New York Times, October 21, 2019

On Sunday, Elizabeth Warren said that she would soon release a plan explaining how she intends to pay for “Medicare for all.” Like many policy wonks, I’ll be waiting with bated breath; this could be a make or break moment for her campaign, and possibly for the 2020 election.

There are three things you need to know about Medicare for all, which in the current debate has come to mean a pure single-payer health insurance system, in which the government provides all coverage, with no role for private insurers.

First, single-payer has a lot to recommend it as a way to achieve universal health care. It’s not the only route — every major advanced country besides the United States achieves universal coverage, but many of them get there via regulations and subsidies rather than by relying solely on public insurance. Still, single-payer is clean and simple, and many health economists would support it if we were starting from scratch.

But we aren’t starting from scratch, which is the second thing you need to know. More than half of Americans are covered by private health insurance, mainly through employers.

Not many people love their insurance companies, but that doesn’t mean that they’re eager to trade the coverage they know for a new system they don’t. Most people probably would end up better off under single-payer, but convincing them of that would be a hard sell; polls show much less support for Medicare for all than for a “public option” plan in which people could retain private insurance if they chose to.

Which brings me to the third point: In reality, single-payer won’t happen any time soon. Even if Democrats win in a landslide in 2020, taking control of the Senate as well as the White House, it’s very unlikely that they will have the votes to eliminate private insurance.

Warren, who has made policy seriousness a key part of her political persona — “Warren has a plan for that” — surely knows all of this. And early this year she seemed to recognize the problems with a purist single-payer approach, saying that she was open to different paths toward universal coverage.

Since then, however, she seems to have gone all in for the elimination of private insurance.

The right question is whether the overall costs facing U.S. families would go up or down. Warren has been claiming that for most families, they would go down, but she hasn’t offered specifics.

Also, let’s get real: If Warren gets the Democratic nomination, the outcome of the general election isn’t going to hinge on dueling think tank estimates.

The election might, however, hinge on the support of people who have good private coverage and would be nervous about making a leap into the unknown, no matter how many facts and figures Warren deploys.

Whatever Warren comes up with, this is a crucial moment. There are many excellent things in her overall policy agenda; but she won’t get a chance to do those things unless she can extricate herself from what looks like a health policy trap.

NYT Reader Comment:

By Don McCanne, M.D.

As policy, the single payer model of Medicare for All is vastly superior. It is efficient (recovering hundreds of billions of dollars in administrative waste), effective (includes everyone throughout life), comprehensive (covering all essential health care services), and equitable (financed with progressive taxes based on ability to pay and thus affordable for everyone). Our private plans, even with ACA marketplaces or with a competing public option, cannot come close to that.

Yet those who understand this often slide into the argument that we can’t do it because the politics are too difficult, and, by implication, we need to compromise on policy, accepting reform that achieves none of these goals.

When the proposed policy is right and the politics are wrong, you don’t change the policy, you change the politics. That begins with people having a clear understanding of the single payer Medicare for All model. If they understand it, most will demand it.

https://www.nytimes.com…

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Stop fearmongering about ‘Medicare for All.’ Most families would pay less for better care.

The case for Medicare for All is simple. It would cover everyone, period. Done right, it would lower costs. And it would ease paperwork and confusion.

By Donald M. Berwick, M.D.
USA Today, October 22, 2019

With costs rising painfully, insurance companies denying care and nearly 30 million people still uninsured, America desperately needs an honest health policy discussion. That’s why it has been so disappointing over the past several weeks to watch multiple candidates parrot right-wing attacks on “Medicare for All,” like claiming that it will greatly increase spending on health care or ringing alarms about raising taxes on the middle class.

The truth is the opposite: Medicare for All would sharply reduce overall spending on health care. It can be thoughtfully designed to reduce total costs for the vast majority of American families, while improving the quality of the care they get.

Over my career, I have witnessed the problems with our health care system firsthand. As a pediatrician, I have seen how our fragmented, expensive system hurts children and families. As a researcher at Harvard Medical School, I have studied the causes of waste and overspending in our system. And as President Barack Obama’s head of the Centers for Medicare and Medicaid Services, I led the existing Medicare system and helped stand up Obamacare.

Best fix for a patchwork health system 

What I saw convinced me that the Affordable Care Act was an essential step forward. But covering all Americans through a single-payer, federal insurance program would now be a wiser path. President Obama has said it himself: It is now time for “good new ideas like Medicare for All.”

The case for Medicare for All is simple. It would cover everyone — period. Done right, it would lower costs, a lot, while letting us leverage health care dollars to respond to public health crises like the opioid epidemic, invest in disease prevention and modernize care delivery with telemedicine. And it would be simpler, easing the onerous burdens of billing for doctors, endless paperwork for all health care professionals, and navigating the confusing coverage system for patients and families. Compared with some candidates’ plans that retain our patchwork of coverage, Medicare for All wins twice: on both simplicity and savings.

Some candidates have attempted to sidestep the cost debate by promising to spend less and accomplish the same goals. These proposals, such as relying on a public option or expanding Medicare Advantage, offering private plans within Medicare, provide too few details to allow real cost comparisons. But it is unlikely they will do as much as Medicare for All would to reduce national health care spending or reduce costs for families.

Sen. Elizabeth Warren of Massachusetts suggested as much when she claimed in the latest Democratic presidential debate that one alternative proposal, “Medicare for All Who Want It,” would really mean “Medicare for All Who Can Afford It.” The reasons are simple. First, these alternative plans retain a costly architecture of private profits and payment complexity. And second, they don’t have the scale of Medicare for All, which is crucial for simplifying billing, improving the quality and safety of care, and removing wasteful spending.

Nearly certain to save trillions

Faced with these facts, opponents of Medicare for All too often revert to myths instead. The first myth is that Medicare for All will necessarily increase health care spending. That’s wrong. The fact is that, without a change, Americans will spend over $45 trillion on health care in the next 10 years. Under Medicare for All, total health care spending would likely be far lower. The cost would depend on many implementation decisions that Vermont Sen. Bernie Sanders’ bill, for example, leaves open for thoughtful exploration, careful choice and adjustments over time: payment rates to hospitals and doctors, content of the benefit package, details of price negotiations with drug companies, design of simplified administration and more.

The costs are largely under our control; they will depend on how we design the new system. If we made wise choices, I regard it as nearly certain that Medicare for All would save trillions of dollars over the decade compared with our projected health care spending.

The second myth is that is Medicare for All must raise taxes on middle-class families. That is misleading. Medicare for All’s cost to families, no matter how it is funded, should be compared with what those same American families will spend on health care if we do nothing. And as things stand now, the trajectory of their health care spending is looking increasingly painful. Sanders at last week’s debate railed against “defending a system which is dysfunctional, which is cruel,” one that leaves tens of millions of people uninsured or underinsured, and contributes to tens of thousands of deaths and bankruptcies each year.

Health care costs are crushing the middle class, taking more and more money straight from the wallets of workers and families. Small businesses simply cannot afford coverage anymore, and governments at all levels know that uncontrolled health care costs crowd out other priorities, like roads, schools and the social safety net. Every “Made in America” product has these sky-high costs built into its price. The average premium for a family of four in 2019 is a staggering $20,576 — a toll that is eating into their wages, while their out-of-pocket costs soar.

Since 2009, premiums have increased 54% and workers’ contributions to premiums have increased 71%, but wages have risen only 26%.

A shift in family costs, not an increase 

Framing this debate by fearmongering over “higher taxes” ignores that this money is already coming out of American families’ pockets. Right now, these costs actually amount to a regressive tax that every family pays no matter whether their wage-earner is a CEO or a secretary. We can discuss whether a Medicare for All program that uses our money to fund Medicare instead of financing private insurance companies is a good idea. But it is deeply misleading to pretend that this shift is an increase in family health care costs. It is not.

And no one should buy the myth that Medicare for All represents a “government takeover of health care.” It does not. Medicare for All is about paying for care, not providing it. Not one proposal suggests that health care delivery should become a government function (beyond existing forms like the Veterans Health Administration). It offers Americans, at last, a simple way to assure that they have the coverage they need to see the doctors they want and use the hospitals they choose. Almost all doctors and hospitals would be in Medicare’s network, and no patients would have to check their insurance card to find out whom they can see and at what cost out of pocket.

The country deserves a real debate about health care — not one that misleads Americans about how public financing of health care would affect them. A real debate would show that Medicare for All, though not a perfect solution, is the best option we have to get health care costs and quality back on track, lifting an exhausting burden off American families and businesses.

Dr. Donald M. Berwick, president emeritus and senior fellow at the Institute for Healthcare Improvement, is a lecturer and former faculty member at the Harvard Medical School and was administrator of the Centers for Medicare and Medicaid Services in the Obama administration.

https://www.usatoday.com…

It’s not just the insurers who are causing sky-high surprise medical bills

The PR Campaign to Hide the Real Cause of those Sky-High Surprise Medical Bills

By Eileen Appelbaum
CounterPunch, October 18, 2019

Most people assume that if they are treated at a hospital in their insurance network, the doctors they see will accept their insurance. But that’s not always the case. Since 2010, an increasing number of hospitals have outsourced their emergency rooms, radiology, anesthesiology, and other specialized services to physician staffing firms. Patients who need these critical services may inadvertently receive care from a doctor outside of their insurance network and find that they owe thousands or even tens of thousands of dollars in surprise medical bills.

Rates of surprise billing are highest for insured patients treated in emergency rooms. A Stanford University study of millions of ER visits found that more than 2-in-5 (43%) visits resulted in a surprise medical bill in 2016. A person who urgently needs care is in no position to argue and has no choice about either the ambulance, the hospital, or the ER they are taken to. One estimate is that almost 65 percent of U.S. hospitals have ERs staffed by outside firms. As might be expected, surprise billing is most likely to occur in these hospitals.

Patients stuck with surprise bills from out of network doctors are likely to be shocked at the fees they are being charged and angry at their insurance company. But they are unlikely to be aware of the Wall Street firms behind these bills.

Private equity firms have been busy gobbling up physicians’ practices and consolidating them into large national staffing firms. The two biggest physician staffing firms – Envision and TeamHealth – are owned by two of the biggest private equity firms – KKR and Blackstone Group. By 2013, these private equity-owned staffing firms had cornered 30 percent of the market for outsourced doctors, and private equity ownership of doctors’ groups has continued to grow. Private equity firms also own two of the three largest emergency ambulance and emergency air transport services – another major source of surprise medical billing.

Private equity loads these staffing firms up with debt and it promises its investors high returns. It keeps the doctors’ practices it owns out of insurance networks so it can collect high fees from patients. Or it uses the threat that its doctors will go out of network to bully insurance companies into paying its doctors much more for procedures than is paid to other doctors. Either way, health care costs and insurance premiums go up, and consumers pay the price.

Recently, bipartisan legislation passed through committees in both the House and the Senate that would prevent doctors and hospitals from sending big bills to patients for care provided by out-of-network doctors, most often by emergency room physicians. President Donald Trump called on Congress to protect patients from surprise medical bills. It looked like patients were going to be protected from surprise medical bills.

But legislation to roll back surprise medical bills will cut into the heady profits enjoyed by the Wall Street firms behind surprise billing. It didn’t take long for Envision and TeamHealth to reach into the deep pockets of their private equity owners to fund a dark money campaign and spend $28 million on ads intended to keep any legislation from passing. The ads don’t mention surprise billing. Instead, they claim that patients will be harmed if the government steps in to set rates – that is, limit how much out-of-network doctors can charge. Or they claim that big insurance doesn’t want to pay doctors and hospitals, without mentioning that these providers are out-of-network and can charge however much they want.

Medical debt is a leading cause of bankruptcy for families, and surprise medical bills are a major contributor to rising levels of medical debt. Patients need to be protected from unreasonable fees that don’t improve medical care but simply line the pockets of Wall Street investors. Congress needs to act.

https://www.counterpunch.org…

Comment:

By Don McCanne, M.D.

Advocates of single payer Medicare for All are outraged by the fact that the problem of surprise medical bills – medical bills for which patients are personally responsible because some of their providers were not included in the insurers’ networks – are being approached as an isolated problem when the real defect is due to the fragmentation of our health care financing system. Private insurance contracting and publicly administered pricing are two very different methods of controlling excessive prices that do not mesh well when both are applied to different segments of a single clinical encounter. It is no wonder that huge sums are being spent to try to influence legislation on surprise bills, especially when the interests of various stakeholders are in conflict.

An obvious fault with our health care financing system is that private insurers are allowed to establish contracted networks of providers with controls on prices and patient cost sharing while failing to provide adequate financial protection for patients who inadvertently or unavoidably receive care outside of the networks. We certainly blame the private insurers for their role in this health care injustice, but, as today’s article points out, there are two other players that are involved as well – the health care providers themselves, and Wall Street.

Much has been written about provider consolidation and the creation of oligopolies that give them leverage to charge higher prices, sometimes much higher prices. Many hospitals are now outsourcing their emergency rooms, anesthesiology, radiology, pathology, laboratory and other specialized services to physician staffing firms. These staffing firms usually have greater negotiating power through further consolidation.

And now Wall Street has entered the picture: “Private equity firms have been busy gobbling up physicians’ practices and consolidating them into large national staffing firms. The two biggest physician staffing firms – Envision and TeamHealth – are owned by two of the biggest private equity firms – KKR and Blackstone Group. By 2013, these private equity-owned staffing firms had cornered 30 percent of the market for outsourced doctors, and private equity ownership of doctors’ groups has continued to grow. Private equity firms also own two of the three largest emergency ambulance and emergency air transport services – another major source of surprise medical billing.”

Further, “Private equity loads these staffing firms up with debt and it promises its investors high returns. It keeps the doctors’ practices it owns out of insurance networks so it can collect high fees from patients.”

How many times have we seen private equity firms acquire companies only to draw out of them as much funds as possible by loading them up with debt, and passing those extracted funds on to their investors and, of course, their own executives? Buried under debt, there is an even greater need to push prices to the max, and beyond. Greed is driving our health care system.

We can eliminate the private insurers and reduce the profound administrative waste associated with their model of health care financing. We can eliminate the need to divert health care dollars to passive investors by converting our health care delivery system to not-for-profit status. And we can replace our financing system with a single, efficient, equitable, publicly-financed and publicly-administered system that would ensure affordable health care for everyone – Single Payer Medicare for All – with no surprise bills or any of the other evils associated with our current dysfunctional system. What’s stopping us?

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