PNHP

To do universal coverage right, ‘Medicare for all’ is the best option

To do universal coverage right, ‘Medicare for all’ is the best option

By Steve Tarzynski, M.D.
Los Angeles Times, Letters, July 25, 2019

To the editor: David Blumenthal and Sara Collins rightly point out that many European systems provide coverage through a mixed public-private approach. These countries have uniform and generous benefits packages, and have largely or totally disentangled coverage from employment.

Still, evidence shows that the less private insurance and employers are involved, the more cost-effective and equitable the system. The greater the role for private insurance, the higher the administrative costs and complexity.

We Americans must ask ourselves two questions with respect to our healthcare system: How much wasteful complexity and bureaucracy do we want? And much inequality do we want?

The authors are correct that “Medicare for all” isn’t the only way to cover everybody. It’s just the most efficient and the fairest way.

Dr. Steve Tarzynski is president of the California Physicians Alliance.

https://www.latimes.com…

Cruel results of state Medicaid policy – 15,600 lives lost

Medicaid and Mortality: New Evidence from Linked Survey and Administrative Data; NBER Working Paper 26081

By Sarah Miller, Sean Altekruse, Norman Johnson, and Laura R. Wherry
National Bureau of Economic Research, July 2019

Abstract

We use large-scale federal survey data linked to administrative death records to investigate the relationship between Medicaid enrollment and mortality. Our analysis compares changes in mortality for near-elderly adults in states with and without Affordable Care Act Medicaid expansions. We identify adults most likely to benefit using survey information on socioeconomic and citizenship status, and public program participation. We find a 0.13 percentage point decline in annual mortality, a 9.3 percent reduction over the sample mean, associated with Medicaid expansion for this population. The effect is driven by a reduction in disease-related deaths and grows over time. We find no evidence of differential pre-treatment trends in outcomes and no effects among placebo groups.

Interpreting the Estimates

Our estimated change in mortality for our sample translates into sizeable gains in terms of the number of lives saved under Medicaid expansion. Since there are about 3.7 million individuals who meet our sample criteria living in expansion states, our results indicate that approximately 4,800 fewer deaths occurred per year among this population, or roughly 19,200 fewer deaths over the first four years alone. Or, put differently, as there are approximately 3 million individuals meeting this sample criteria in non-expansion states, failure to expand in these states likely resulted in 15,600 additional deaths over this four year period that could have been avoided if the states had opted to expand coverage.

Conclusion

There is robust evidence that Medicaid increases the use of health care, including types of care that are well-established as efficacious such as prescription drugs and screening and early detection of cancers that are responsive to treatment. Given this, it may seem obvious that Medicaid would improve objective measures of health. However, due to data constraints, this relationship has been difficult to demonstrate empirically, leading to widespread skepticism that Medicaid has any salutary effect on health whatsoever. Our paper overcomes documented data challenges by taking advantage of large- scare federal survey data that has been linked to administrative records on mortality. Using these data, we show that the Medicaid expansions substantially reduced mortality rates among those who stood to benefit the most.

https://www.nber.org…

Comment:

By Don McCanne, M.D.

Health policy can be a matter of life or death.

The Affordable Care Act offered states the opportunity to expand their Medicaid programs that provided care to low-income families, with 100 percent federal funding for the first three years. Several states declined the offer. This NBER report shows that this decision “likely resulted in 15,600 additional deaths” over the first four years of the program. For the states that expanded their Medicaid programs, there were “roughly 19,200 fewer deaths over the first four years.”

The ubiquitous media reports over the years suggest that these decisions to reject Medicaid expansion were based on political ideology, largely without much mention made of the concerns for the health outcomes of the affected populations, except, of course, by the advocates of health care justice. The opponents of public policies for reforming health care object to the use of the term “cruel” to describe these decisions, but that does not seem to be an inappropriate term to describe politicians who use a signature on a document to commit acts of voluntary manslaughter. (Whether this use of “voluntary manslaughter” fits the legal definition seems to have little import when considering that thousands actually died unnecessarily.)

Obviously the importance of health policy decisions extend far beyond the Medicaid program. We know what policies would improve the functioning of our health care system for the benefit of all of us. Optimal policies begin with the financing infrastructure inherent in the design of the single payer model of Medicare for All. The dispute is not over optimal policy. Tragically, the dispute is over politics. Leaving the current financing system in place while merely adding a public option trades away crucial beneficial policies for mere political considerations. On the other side, repealing the Affordable Care Act while promising only a nebulous “something great” as a replacement doesn’t even make an attempt to initiate rational policy discussions.

It is about policy. We can get that right. So what do we do about the politics that is perpetuating this cruelty? If we fail in our politics we will have to put up with more suffering, hardship, and even death. Now that’s cruel.

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Controlling hospital capacity under single payer Medicare for All

The Effects on Hospital Utilization of the 1966 and 2014 Health Insurance Coverage Expansions in the United States

By Adam Gaffney, M.D., M.P.H.; Danny McCormick, M.D.; David H. Bor, M.D.; Anna Goldman, M.D.; Steffie Woolhandler, M.D., M.P.H.; David U. Himmelstein, M.D.
Annals of Internal Medicine, July 23, 2019

Abstract

Background: Persons with comprehensive health insurance use more hospital care than those who are uninsured or have high-deductible plans. Consequently, analysts generally assume that expanding coverage will increase society-wide use of inpatient services. However, a limited supply of beds might constrain this growth.

Objective: To determine how the implementations of Medicare and Medicaid (1966) and the Patient Protection and Affordable Care Act (ACA) (2014) affected hospital use.

Design: Repeated cross-sectional study.

Setting: Nationally representative surveys.

Participants: Respondents to the National Health Interview Survey (1962 to 1970) and Medical Expenditure Panel Survey (2008 to 2015).

Measurements: Mean hospital discharges and days were measured, both society-wide and among subgroups defined by income, age, and health status. Changes between preexpansion and postexpansion periods were analyzed using multivariable negative binomial regression.

Results: Overall hospital discharges averaged 12.8 per 100 persons in the 3 years before implementation of Medicare and Medicaid and 12.7 per 100 persons in the 4 years after (adjusted difference, 0.2 discharges [95% CI, −0.1 to 0.4 discharges] per 100 persons; P = 0.26). Hospital days did not change in the first 2 years after implementation but increased later. Effects differed by subpopulation: Adjusted discharges increased by 2.4 (CI, 1.7 to 3.1) per 100 persons among elderly compared with nonelderly persons (P < 0.001) and also increased among those with low incomes compared with high-income populations. For younger and higher-income persons, use decreased. Similarly, after the ACA’s implementation, overall hospital use did not change: Society-wide rates of discharge were 9.4 per 100 persons before the ACA and 9.0 per 100 persons after the ACA (adjusted difference, −0.6 discharges [CI, −1.3 to 0.2 discharges] per 100 persons; P = 0.133), and hospital days were also stable. Trends differed for some subgroups, and rates decreased significantly in unadjusted (but not adjusted) analyses among persons reporting good or better health status and increased nonsignificantly among those in worse health.

Limitation: Data sources relied on participant recall, surveys excluded institutionalized persons, and follow-up after the ACA was limited.

Conclusion: Past coverage expansions were associated with little or no change in society-wide hospital use; increases in groups who gained coverage were offset by reductions among others, suggesting that bed supply limited increases in use. Reducing coverage may merely shift care toward wealthier and healthier persons. Conversely, universal coverage is unlikely to cause a surge in hospital use if growth in hospital capacity is carefully constrained.

Primary Funding Source: None.

https://annals.org…

Medicare for All unlikely to cause surge in hospital use: Harvard study

Physicians for a National Health Program, July 22, 2019

Analysis finds no increase in hospitalizations after previous large coverage expansions; increased care for newly insured was counterbalanced by small decreases for the healthy and wealthy

As political leaders debate the merits of a future Medicare for All system in the U.S., some analysts predict that implementing universal coverage could cause a sharp, unaffordable increase in hospital use and costs, overwhelming the system. But new research by a team at Harvard Medical School and The City University of New York at Hunter College, published today in the Annals of Internal Medicine, contradicts that assumption, finding that past insurance expansions did not result in a net increase in hospital use. Instead, researchers found a redistribution of care, with increases in hospital care among those newly insured that was offset by small decreases among healthier and wealthier Americans.

The study examined changes in hospital use among those who gained coverage — as well as those whose coverage remained unchanged — after the implementation of Medicare and Medicaid in 1966 and the Affordable Care Act (ACA) in 2014. Each of those programs provided new coverage to about 10% of the U.S. population, about the same share expected to gain coverage under a Medicare for All program. The researchers analyzed large national surveys from both the Medicare/Medicaid and ACA eras, and examined hospital use before and after the coverage expansions. Hospital admissions averaged 12.8 for every 100 persons in the three years before Medicare, and 12.7 per 100 in the four years after Medicare’s implementation. Similarly, the hospital admission rate was statistically unchanged in the wake of the ACA, averaging 9.4 admissions per 100 in the six years before the ACA coverage expansion and 9.0 per 100 in the two years’ afterward.

While the study found no overall change in hospital use, the coverage expansions redistributed care. Medicare increased hospital admissions by 3.7 per 100 among the elderly, and by 0.7 per 100 among the poorest one-third of the population, i.e., the groups that gained new coverage. In contrast, hospitalizations fell slightly (about 0.5 per 100) for younger and wealthier individuals. After the ACA, admissions rose by 1.5 per 100 among sicker Americans, but fell by 0.6 per 100 among those in good health. The researchers also found a slight shift of hospital care toward the poor after the ACA.

Dr. Steffie Woolhandler, a study author and distinguished professor of public health at CUNY’s Hunter College who is also on the faculty at Harvard Medical School commented: “The good news is that even big coverage expansions didn’t increase hospitalizations overall, indicating that universal coverage won’t cause a surge in care, and that Medicare for All is affordable. On the other hand, it implies that overturning the ACA would deprive millions of needed care without saving any money.”

The researchers hypothesized that the limited supply of hospital beds constrained the overall use of hospitals when coverage was expanded. They noted that many previous studies, such as the Rand and Oregon Health Insurance Experiments, only examined the effects of greater coverage for the newly insured, not changes among those whose coverage was unchanged, nor the societal effects of expanded coverage.

“We’ve long known that when people get new or better coverage, they use more health care,” said senior author Dr. David Himmelstein, a distinguished professor of public health at CUNY’s Hunter College and lecturer in medicine at Harvard Medical School. “What we didn’t know is what happens to those who were already well-insured, and how this plays out society-wide given the limited number of hospital beds, doctors and nurses,” he stated. “Our data shows that if you sensibly control hospital growth, you can cover everybody without breaking the bank.”

Lead author Dr. Adam Gaffney, instructor in medicine at Harvard Medical School and a pulmonary and critical care physician at Cambridge Health Alliance, suggested that the small reductions in hospitalizations among healthier and wealthier individuals are unlikely to be harmful. “We know that the well-insured often receive unnecessary hospitalizations,” said Dr. Gaffney. “While defibrillator implants and coronary artery stents can be lifesaving, thousands of patients each year get these and other procedures even when they offer no benefit,” he added, pointing to an Institute of Medicine study that found that nearly one-third of medical spending is wasted. “The fact that coverage expansions shift hospital care to those who need it, and reduce care for groups currently getting excessive and possibly harmful interventions, means that universal coverage could help everyone,” he stated.

Physicians for a National Health Program is a nonprofit research and education organization whose more than 23,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

https://www.eurekalert.org…

Comment:

By Don McCanne, M.D.

It is often assumed that expanding health care coverage to the uninsured and underinsured will unleash pent-up demand for inpatient hospital services. This important study shows that two periods in our history that expanded coverage by an amount that would be comparable to implementation of a single payer Medicare for All program – Medicare and Medicaid in 1966 and the Affordable Care Act in 2014 – actually may have improved allocation of our hospital resources. There was no surge in occupation of hospital beds, but use increased for older and lower-income populations (groups noted for often having greater health care needs) while decreasing for younger and higher-income persons (generally healthier populations).

System capacity is important. Excess capacity can result in over-provision of services of little value whereas deficient capacity can impair access to essential services. Two features of the single payer model can address these problems: 1) Regional planning and separate budgeting of capital improvements can establish optimal levels of capacity, taking surge capacity into consideration, and 2) Global budgeting of hospitals, much as fire departments are budgeted, can provide assurance that adequate funds are available to meet the needs, with contingency funds for crises, while not wasting funds on excess administrative services or on unnecessary profits.

We can dismiss alarmist comments such as that of Rep. John Delaney who said that, under Medicare rates, “Every single hospital administrator said they would close.” That’s ridiculous. Under single payer Medicare for All, the money will be there; it will be collected equitably and distributed equitably, and all of us will have the health care that we need. Bringing everyone under the umbrella will not place undue stress on the system providing we choose stewards for the system who know how to size the umbrella properly.

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Can we afford Medicare for All?

By Adam Gaffney, M.D., M.P.H., David Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.
Boston Globe, July 23, 2019

Would Medicare for All break the bank? Proponents contend that it could cover the uninsured — and upgrade coverage for just about everybody else — without swelling our nation’s already hefty health care bill. But critics retort that the costs of such an expansion would be exorbitant, even prohibitive. Too often, however, this debate plays out in the absence of good evidence. But our new research, published Tuesday in the Annals of Internal Medicine, may change that.

Universal coverage might increase costs for one big reason: When the uninsured get coverage (or the underinsured get better coverage), they’re likely to use more health care. For example, a study begun in the 1970s randomized thousands of people into different health care plans, and found that those with better coverage used more health care. This sort of evidence drives estimates that Medicare for All, by expanding coverage, could cause US health care spending — already at $3.5 trillion a year — to further swell.

And yet, nations with universal coverage spend much less than the United States on health care. What explains this paradox? To find out, we analyzed how the two biggest coverage expansions in US history — the implementation of Medicare in 1966 and the Affordable Care Act in 2014 — affected hospital utilization. In both of these expansions, about 10 percent of Americans gained coverage — a similar percentage as would gain coverage under Medicare Care for All. But contrary to expectations, neither Medicare nor the ACA caused an overall increase in hospital use. Before Medicare’s startup, the hospitalization rate was 12.8 per hundred Americans. Afterward, it was 12.7. Similarly, before the ACA, the hospitalization rate was 9.4 per capita. After, it was 9.0.

As expected, however, the newly-covered did get more care. With Medicare, hospitalizations increased among the elderly (about half of whom were uninsured before Medicare), particularly among low-income seniors. Yet those increases were counterbalanced by small — nearly imperceptible — reductions in hospitalizations among younger and wealthier people. Effects after the ACA were more subtle, but we again saw evidence that it shifted admissions from wealthier Americans to low- and middle-income ones, and from the healthy to the sick. But, again overall hospital use didn’t rise.

The most likely explanation for these shifts in utilization is “Roemer’s Law,” named for Milton Roemer, a pioneering health policy expert who studied the relationship between the number of hospital beds in a community and the use of those beds. As the number of beds rises, he asserted, so does the number of nights that patients spend in them. Or as he put it back in 1959, “a hospital bed built is a filled bed.” Roemer’s Law has been borne out by many studies over the years, and it implies that if the number of beds in a community is finite, increases in insurance coverage usually won’t translate into more bed use.

As physicians, we have seen Roemer’s Law in action. While some hospitalizations are due to emergencies, many are elective. And when hospitals have many empty beds, the number of elective procedures, and hospitalizations, rises. Elective procedures are not necessarily a good thing, and well-insured patients sometimes receive unnecessary, even harmful care. For instance, while implanting defibrillators or stents into diseased hearts can be lifesaving, these potentially dangerous devices are sometimes overused, inserted into many patients who won’t benefit from them. The same is true of many other tests and surgical procedures, leading the Institute of Medicine to conclude that nearly one-third of medical spending is wasted.

It’s not surprising then, that when expanded coverage caused small reductions in hospitalizations for wealthier, healthier people, no one seemed to complain, or for that matter, even notice. Indeed, by producing offsets in unnecessary care, universal coverage might actually benefit those of us lucky enough to already have good insurance.

Overall, our finding that coverage expansions do not cause a surge in hospital use is reassuring. It implies that universal coverage via Medicare for All could enhance care for those who need it, without breaking the bank. Conversely, it suggests that shrinking coverage — for instance, by repealing or overturning the ACA — would save little in health care costs, even as it deprived millions of the care they need.

Past projections of the likely costs of universal coverage for the United States assumed that expanded coverage would increase hospital use and raise costs. But that assumption is wrong. The history of Medicare and the ACA, together with the experiences of nations with national health insurance around the globe, shows that covering everyone is not just the right thing to do — it’s also something we can afford to do.

Dr. Adam Gaffney is an instructor in medicine at Harvard Medical School and a physician at the Cambridge Health Alliance. Dr. Steffie Woolhandler is a professor of public health at the University of New York at Hunter College and lecturer at Harvard Medical School. Dr. David Himmelstein is professor of public health at the University of New York at Hunter College and a lecturer at Harvard Medical School. They are also members of Physicians for a National Health Program, which advocates for Medicare for All. The organization was not involved in the study.

https://www.bostonglobe.com…

Medicare-for-all might not cause surge in hospital use

By Lisa Rapaport
Reuters, July 23, 2019

Medicare-for-all and other versions of universal coverage being proposed for the U.S. by several presidential hopefuls wouldn’t necessarily lead more people to seek hospital care, a new analysis suggests.

Critics of Medicare-for-all have raised concerns that it might lead to a surge in use of inpatient services, because people with comprehensive health insurance tend to use more hospital care than people with bare-bones benefits, researchers note in the Annals of Internal Medicine.

Some previous studies suggest this surge might materialize, but other studies also suggest that hospital use only rises dramatically when more beds are available and staffed for an anticipated spike in utilization.

To see how universal coverage might play out today, researchers looked at the two biggest expansions of health benefits in U.S. history: the implementation of Medicare and Medicaid from 1966 and the Patient Protection and Affordable Care Act (ACA) in 2014.

Using data from the National Health Interview Survey (1962 to 1970), they found that hospital discharges averaged 12.8 per 100 people in the three years before implementation of Medicare and Medicaid and 12.7 per 100 people in the three years afterward.

And based on data from the Medical Expenditure Panel Survey (2008 to 2015), with the ACA, discharges dropped from 9.4 per 100 people in the three years before the law to 9.0 per 100 people in the three years afterward.

“Contrary to expectations, overall hospitalizations didn’t rise after both expansions – suggesting that universal coverage expansions like Medicare for All also won’t cause a surge in hospitalizations,” said Dr. Adam Gaffney, lead author of the study and president of Physicians for a National Health Program, an organization that advocates for Medicare for All.

The expectation when previously uninsured people get health coverage is that they will start using every kind of care, including hospital care, driving up costs, Gaffney, also an instructor at Harvard Medical School in Boston, said by email.

In the current study, while some populations did increase their use of hospital care, the increases were offset by reductions among others.

For example, after the introduction of Medicare and Medicaid, hospital use increased among elderly and low-income persons but decreased among younger and higher-income persons.

This suggests that major coverage expansions result in shifts in who uses the hospital, but not increases in overall hospital use, the study team concludes.

One limitation of the study is that it only looked at hospital care – which only accounts for about one-third of total healthcare spending. These coverage expansions might mean something different for outpatient or clinic visits, or prescription drug use, which are also big drivers of health spending.

“When it comes to prescription drugs, there is no supply limit as there is with hospital beds in the case of hospital care,” Gaffney said. “So we probably would expect a more unconstrained increase in prescription drug use after Medicare for All, relative to hospital care.”

It’s also possible that expanding insurance extends coverage mostly to people who aren’t at high risk of hospitalization, like young, healthy people who rarely see doctors, said Dr. Anupam Jena, a researcher at Harvard Medical School and Massachusetts General Hospital in Boston who wasn’t involved in the study.

“It’s very clear from many studies that insurance expansion or insurance coverage raises health care costs, despite the argument sometimes made that better insurance leads to better primary care which then leads to lower overall costs,” Jena said by email. “That isn’t true – insuring more people costs more money, but for a wealthy society such as ours, that in many people’s minds is still the right thing to do.”

SOURCE: bit.ly/2K2bAYo Annals of Internal Medicine, online July 22, 2019.

https://www.reuters.com…

Medicare for all

By Joan MacEachen, M.D.
Deseret News, Letters, July 23, 2019

The 54th anniversary of Medicare affords an opportunity to evaluate the successes and shortcomings of the system of health care in America. I have worked in rural hospitals and clinics for 34 years and see Medicare as the shining example of an equitable and humane method of providing clinic visits, medications and hospital services.

Once people enter their mid-60s they come to a clinic to address the neglected health problems that they couldn’t afford before they qualified for Medicare. In contrast I see younger adults and families struggle and sacrifice to make the rising payments for insurance bills, cut back on medications which they can’t afford or wait to address medical problems till they become emergencies.

A Medicare for all system would provide a proven system to allow these families to have the good health to remain the backbone of our Social Security system. Medicare for all would be especially beneficial to rural and other underserved communities. Many rural hospitals have closed in recent years, significantly overburdened by administrative strains — eating up more than a quarter (25.3%) of hospital budgets.

Medicare for all would cut hospital administrative costs by funding them through global budgets, similar to the way we fund fire and police departments. Instead of billing hundreds of insurers, hospitals would be guaranteed stable funding to meet community health needs. The solution to our health care crisis has been here all along. Medicare, now 54 years old, is popular, efficient and proven to improve seniors’ health.

Dr. Joan A. MacEachen resides in Durango, Colorado.

https://www.deseretnews.com…

Medicare for All unlikely to cause surge in hospital use: Harvard study

Analysis finds no increase in hospitalizations after previous large coverage expansions; increased care for newly insured was counterbalanced by small decreases for the healthy and wealthy

As political leaders debate the merits of a future Medicare for All system in the U.S., some analysts predict that implementing universal coverage could cause a sharp, unaffordable increase in hospital use and costs, overwhelming the system.  But new research by a team at Harvard Medical School and The City University of New York at Hunter College, published today in the Annals of Internal Medicine, contradicts that assumption, finding that past insurance expansions did not result in a net increase in hospital use. Instead, researchers found a redistribution of care, with increases in hospital care among those newly insured that was offset by small decreases among healthier and wealthier Americans. 

The study examined changes in hospital use among those who gained coverage — as well as those whose coverage remained unchanged — after the implementation of Medicare and Medicaid in 1966 and the Affordable Care Act (ACA) in 2014. Each of those programs provided new coverage to about 10% of the U.S. population, about the same share expected to gain coverage under a Medicare for All program.  The researchers analyzed large national surveys from both the Medicare/Medicaid and ACA eras, and examined hospital use before and after the coverage expansions. Hospital admissions averaged 12.8 for every 100 persons in the three years before Medicare, and 12.7 per 100 in the four years after Medicare’s implementation. Similarly, the hospital admission rate was statistically unchanged in the wake of the ACA, averaging 9.4 admissions per 100 in the six years before the ACA coverage expansion and 9.0 per 100 in the two years’ afterward.  

While the study found no overall change in hospital use, the coverage expansions redistributed care. Medicare increased hospital admissions by 3.7 per 100 among the elderly, and by 0.7 per 100 among the poorest one-third of the population, i.e., the groups that gained new coverage. In contrast, hospitalizations fell slightly (about 0.5 per 100) for younger and wealthier individuals. After the ACA, admissions rose by 1.5 per 100 among sicker Americans, but fell by 0.6 per 100 among those in good health. The researchers also found a slight shift of hospital care toward the poor after the ACA.  

Dr. Steffie Woolhandler, a study author and distinguished professor of public health at CUNY’s Hunter College who is also on the faculty at Harvard Medical School commented: “The good news is that even big coverage expansions didn’t increase hospitalizations overall, indicating that universal coverage won’t cause a surge in care, and that Medicare for All is affordable. On the other hand, it implies that overturning the ACA would deprive millions of needed care without saving any money.”

The researchers hypothesized that the limited supply of hospital beds constrained the overall use of hospitals when coverage was expanded. They noted that many previous studies, such as the Rand and Oregon Health Insurance Experiments, only examined the effects of greater coverage for the newly insured, not changes among those whose coverage was unchanged, nor the societal effects of expanded coverage. 

“We’ve long known that when people get new or better coverage, they use more health care,” said senior author Dr. David Himmelstein, a distinguished professor of public health at CUNY’s Hunter College and lecturer in medicine at Harvard Medical School. “What we didn’t know is what happens to those who were already well-insured, and how this plays out society-wide given the limited number of hospital beds, doctors and nurses,” he stated.  “Our data shows that if you sensibly control hospital growth, you can cover everybody without breaking the bank.”

Lead author Dr. Adam Gaffney, instructor in medicine at Harvard Medical School and a pulmonary and critical care physician at Cambridge Health Alliance, suggested that the small reductions in hospitalizations among healthier and wealthier individuals are unlikely to be harmful. “We know that the well-insured often receive unnecessary hospitalizations,” said Dr. Gaffney. “While defibrillator implants and coronary artery stents can be lifesaving, thousands of patients each year get these and other procedures even when they offer no benefit,” he added, pointing to an Institute of Medicine study that found that nearly one-third of medical spending is wasted.  “The fact that coverage expansions shift hospital care to those who need it, and reduce care for groups currently getting excessive and possibly harmful interventions, means that universal coverage could help everyone,” he stated. 

“The Effects on Hospital Utilization of the 1966 and 2014 Health Insurance Coverage Expansions in the United States,” by Adam Gaffney, M.D.; Danny McCormick, M.D.; David H. Bor, M.D.; Anna Goldman, M.D.; Steffie Woolhandler, M.D., M.P.H.; and David U. Himmelstein, M.D. Annals of Internal Medicine, July 23, 2019.  DOI: 10.7326/M18-2806

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 23,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

The private insurers are shifting the costs of fraud to us

Health Insurers Make It Easy for Scammers to Steal Millions. Who Pays? You.

By Marshall Allen
ProPublica, July 19, 2019

Health insurers are regarded as fierce defenders of health care dollars. But the case of David Williams shows one reason America’s health care costs continue to rise. The personal trainer spent years posing as a doctor and billing the nation’s top insurers, making off with millions.

There are a host of reasons health care costs are out-of-control and routinely top American’s list of financial worries, from unnecessary treatment and high prices to waste and fraud. Most people assume their insurance companies are tightly controlling their health care dollars. Insurers themselves boast of this on their websites.

In 2017, private insurance spending hit $1.2 trillion, according to the federal government, yet no one tracks how much is lost to fraud. Some investigators and health care experts estimate that fraud eats up 10% of all health care spending, and they know schemes abound.

Williams’ case highlights an unsettling reality about the nation’s health insurance system: It is surprisingly easy for fraudsters to gain entry, and it is shockingly difficult to convince insurance companies to stop them.

Williams’ spree also lays bare the financial incentives that drive the system: Rising health care costs boost insurers’ profits. Policing criminals eats away at them. Ultimately, losses are passed on to their clients through higher premiums and out-of-pocket fees or reduced coverage.

Insurance companies “are more focused on their bottom line than ferreting out bad actors,” said Michael Elliott, former lead attorney for the Medicare Fraud Strike Force in North Texas.

(This article provides details on the extensive acts of insurance fraud committed by David Williams for which he was eventually convicted, but. more importantly, it shows the lack of diligent responsiveness on the part of insurers in spite of repeated notifications of the extent of his fraud. – DMc)

Many health care experts and fraud investigators said they weren’t surprised to hear that insurers were slow to stop even such an outlandish case of fraud.

“It’s just not worth it to them,” said Dr. Eric Bricker, an internist who spent years running a company that advised employers who self-funded their insurance.

For insurance behemoths pulling in billions, or hundreds of billions, in revenue, fraud that sucks away mere millions is not even a rounding error, he said.

And perhaps counterintuitively, insurance companies are loath to offend physicians and hospitals in their all-important networks — even those accused of wrongdoing, many experts have said. They attract new clients by providing access to their networks.

This ambivalence toward fraud, Bricker and others said, is no secret. Scammers like Williams are “emblematic of gazillions of people doing variants of the same thing,” Bricker said. Insurers embolden them by using a catch-and-release approach to fraud, in which the insurers identify criminals, then let them go.

Joe Christensen has pursued fraud for both government and commercial insurers, serving as a director in Aetna’s Special Investigations Unit, a team of more than 100 people ferreting out fraud, from 2013 to 2018 and as the director of Utah’s insurance fraud division for 13 years. Fraud in government programs, like Medicare and Medicaid, gets more publicity, he said, and has dedicated arms of agencies pursuing fraudsters. But the losses may be even greater in the commercial market because the dollar levels are higher, he said.

Some commercial insurers take a passive approach, Christensen said, in part because it’s expensive to press a fraud case. At Aetna, he said, investigators would identify cases of apparent fraud, but it was up to the executives and legal team to decide how to handle them. Taking fraudsters to civil or criminal court requires resources, so the company often settled for trying to get repaid through settlements or blocking a suspect provider from billing, he said.

Christensen said while he was at Aetna, investigators almost never sought to partner with law enforcement agencies to pursue criminal cases.

ProPublica asked Aetna how many criminal cases it had pursued in 2017 and 2018. A company official said the question could not be answered because it does not track such cases.

Williams’ trial began in the United States District Court for the Northern District of Texas. Without irony, the prosecutor, P.J. Meitl, argued that Williams had preyed on a health insurance system that relies “on trust, relies on honesty” when it pays claims.

He called fraud investigators from Aetna, Cigna and United, who testified that their companies auto-pay millions of claims a year. It’s not cost effective to check them, they said. “Aetna relies on the honesty of the person submitting the claim verifying that it’s true,” testified Kathy Richer, a supervisor in Aetna’s Special Investigations Unit.

Insurers promote themselves as guardians of health care dollars. United says on its website it wants to “help employers manage” medical expenses, resulting in “lower costs.” Aetna promises employers “affordability.” Cigna promises “increased savings.”

But private health insurers allow so much fraud that prosecutors use an idiom to describe the rare person who gets caught: “Pigs get fat, hogs get slaughtered.”

“Pigs” can steal millions, if they bill just enough to avoid notice. But if they get greedy and bill too many millions, they “become a data outlier,” said Elliott, the former fraud task force prosecutor. “You get slaughtered.”

Williams took years to reach hog status.

Part of the problem, experts say, is that health care fraud is often misunderstood as shafting greedy insurers — not the folks paying for health insurance. Ultimately, insurers don’t bear the cost. For their self-funded clients, like Southwest, they merely process the claims. For their traditionally insured clients, they can recover any losses by increasing deductibles and premiums and decreasing coverage.

https://www.propublica.org…

Comment:

By Don McCanne, M.D.

One of the arguments frequently made against single payer Medicare for All is that fraud and abuse are rampant in Medicare and that alone would make expanded Medicare unaffordable. It is known that Medicare fraud does occur, especially since we keep reading about it, and it is reported in the media because our public stewards are more diligent at ferreting it out and rectifying it. What this article contributes is an understanding that fraud is rampant in the plans administered by the private insurers, but that there is a deliberate effort to turn a blind eye to the problem.

Fraud in taxpayer-funded government programs quite appropriately creates public outrage and is not tolerated. Fraud in private insurance programs is just a cost of doing business. It does not harm the insurers since the costs are born by the purchasers of the plans in the form of higher premiums. Rarely is any publicity given to it since the insurers would not want their clients to think that they might not be adequately diligent in the oversight of their own trillion dollar industry, and they especially don’t want us to know that we might be bearing the costs of fraud.

Thus the existence of fraud and abuse is actually an argument in favor of enacting and implementing single payer Medicare for All since our public stewards would be much more effective in ferreting it out than would be the private insurers who merely want to keep it out of our sight as they pay off the crooks. Suppressing public knowledge of fraud might be a cool business move on the part of the insurers. but it’s our money that they are giving away.

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Study: ACA, Medicaid/Medicare Expanded Insurance, Yet Hospital Use Didn’t Rise

Society-wide use of inpatient services remained stable after enactment of the two landmark health care reform laws

By Yusra Murad
Morning Consult, July 22, 2019

While the progressive flank of the Democratic Party has coalesced around proposals to enact a government-run health system to achieve universal health coverage, such as Sen. Bernie Sanders’ (I-Vt.) “Medicare for All” plan, skeptics have sounded the alarm on the adverse effects for providers, warning that millions of newly insured Americans could overburden hospitals and cause lengthy wait times to see a doctor.

But new research published in the Annals of Internal Medicine found that the enactment of the two most sweeping health reform laws in American history — Medicare and Medicaid in 1966 and the Affordable Care Act in 2014 — did not spur a surge in overall hospital use, which remained stable in the wake of both expansions.

The study, led by Physicians for a National Health Plan President Adam Gaffney, used data from the National Health Interview Survey (conducted from 1962-1970) and the Medical Expenditure Panel Survey (2008-2015) to analyze how previous health insurance expansions in the United States affected utilization of inpatient services. Utilization was measured as a function of hospital discharge rates and days spent in the facility.

“Hospital use, hospital spending is about a third of total health care spending,” Gaffney said in an interview. “If you’re going to say that utilization of care is going to skyrocket, that implies that hospital stay is going to skyrocket — that discharges, days in the hospital are going to skyrocket. So did that happen?”

In the case of Medicare and Medicaid, the average overall hospital discharge rate in the three years prior to implementation and the four years after was statistically unchanged, the study found. While average days spent in the hospital increased two years after expansion, the consequences of rising hospital use among seniors and the low-income population were mitigated by reductions in use among younger, wealthier people.

There was also no statistically significant increase in society-wide hospital use associated with the Affordable Care Act. The researchers analyzed hospital use by the non-targeted and targeted populations six years before and two years after implementation. Targeted populations were defined as non-elderly adults with an income at 138 percent of the federal poverty line who became eligible for care; some non-elderly adults earning 250 percent of the poverty threshold who became eligible for premium and cost-sharing subsidies in plans on the exchanges; and some non-elderly adults earning 400 percent of the poverty line became eligible for premium subsidies.

According to Gaffney, the research demonstrates that the effect of insurance expansions on hospital use is a matter of redistribution rather than increase. When operating rooms and hospital beds are plentiful, physicians are more likely to put them to use. But after more people obtain health insurance, there is a slight fall in supplier-induced demand among healthier, high-income people.

Major trade organizations representing hospitals, such as the Federation of American Hospitals and the American Hospital Association, have fiercely opposed Medicare for All and public option proposals calling for an increased government role in the health care system. But for hospitals, the driving concern is not utilization, but rather issues of payment and reimbursement.

“Medicare payments are already 11 percent below the cost of care,” Jeff Cohen, the Federation of American Hospitals’ executive vice president of public affairs, said by email. “Displacing private insurance and exposing community hospitals to Medicare payments for all patients will result in hospital closures and service line disruption compromising patient access to care.”

Unlike the ACA and 1966 expansion of Medicare, the current proposals to expand coverage dramatically reduce or completely eliminate patient costs such as deductibles and premiums. As such, hospitals anticipate utilization may increase not only because of coverage expansion but also the reduction in patient cost-sharing compared to the current system.

Aaron Wesolowski, vice president of policy research, analytics and strategy at the American Hospital Association, said by email that though hospitals and health systems support closing coverage gaps and achieving comprehensive health coverage for every American, that can be accomplished by building on the current public-private system.

“Coverage expansion is one factor that affects inpatient hospital use, but insurer limits on treatment, appropriate discharge to other facilities or the home and the rise in outpatient services are also a factor,” Wesolowski said.

But according to Gaffney, utilization effects are an important factor in addressing potential price effects. Stable utilization, taken alongside potential savings from Medicare for All across different industries within the health system, could end up reducing national expenditures across the board, he said.

“On the one hand, it’s what they’ll get paid,” Gaffney said. “On the other hand, it’s what they’ll save.”

https://morningconsult.com…

Harvard researchers: ‘Medicare for All’ wouldn’t overwhelm hospitals

By Jacqueline Renfrow
Fierce Healthcare, July 22, 2019

There seems to be no evidence that supports the belief that there would be a surge in hospital use if the government implements “Medicare for All,” according to a new analysis published in the Annals of Internal Medicine.

Much of the debate around Medicare for All centers on a fear that there will be a large surge in hospital use, possibly overwhelming the system. But looking at data following both the implementation of Medicare in 1966 and the Affordable Care Act (ACA) in 2014, researchers at Harvard Medical School found no significant increase in hospitalizations.

The analysis, conducted with the help of The City University of New York at Hunter College, instead shows a redistribution of care, and the increase in hospital care among the newly insured would likely be offset by decreases in hospital use for healthier and wealthier Americans.

“When Medicare was being debated in the 1960s, critics warned that the surge in demand among seniors would overload the system, but that’s not what happened,” Adam Gaffney, M.D., lead author of the study and president of the Physicians for a National Health Program, told FierceHealthcare. “Seniors did get more hospital care, which they needed. But wealthier and younger people spent a bit less time in the hospital—which was a good thing. Americans, after all, too often receive unnecessary procedures and elective admissions.”

Following the implementation of Medicare and Medicaid back in 1966, and then the implementation of the ACA in 2014, each of the programs added 10% of the U.S. population into the insurance system.

About the same percentage of Americans are estimated to be put on insurance if Medicare for All is enacted.

Looking at both national surveys and admission records, hospital admissions averaged 12.8 for every 100 persons in the three years before Medicare began, and admissions averaged 12.7 per 100 people in the four years after Medicare began. At the same time, Medicare increased admissions by 3.7 people per 100 among elderly patients and less than one for the poorest of the population while hospitalizations fell 0.5 for younger and wealthier people.

Similarly, average hospital admissions were 9.4 per 100 people pre-ACA and were nine per 100 people, on average, in the two years after implementation. After the ACA, admissions rose by 1.5 per 100 among sicker Americans, but dropped 0.6 per 100 among people in good health.

In essence: Coverage expansions redistributed care.

Gaffney thinks that Medicare for All would have a relatively small net effect on hospital budgets.

“Hospitals should achieve large savings on administration and overhead once we mover to a single-payer system—U.S. hospitals, after all, spend twice as much on administration compared to Canadian hospitals,” he said.

Additionally, hospitals will provide less care that goes unreimbursed, because everyone will be covered. Gaffney says that, as a result, payments to hospitals can fall somewhat without compromising the quantity and quality of care they provide, or, alternatively, that hospitals can increase the amount of care they provide within their existing budgets.

“Future estimates of the cost of Medicare for All should account for the fact that hospital utilization increases are likely to be modest. In other words, we can in fact afford to cover everybody,” Gaffney added.

https://www.fiercehealthcare.com…

Stop the profit-driven insurance system

By Judith L. Albert, M.D.
Pittsburgh Post-Gazette, July 20, 2019

The plight of the Manion family clearly illustrates how private, for-profit health insurance has created an inhumane health care system based on denial of care (July 14, “UPMC-Highmark Agreement Settled but Local Family Still Faces Fallout”).

The recent agreement between UPMC and Highmark will have no lasting impact on the delivery of health care in Western Pennsylvania because these insurers will continue to collect high premiums, deductibles and co-pays while finding new ways to refuse to pay for medical care.

In the Manion family’s situation, a newspaper investigation of their hospital bills was required to remove the threat of a collections agency. No one should have to put up with these bewildering and erroneous billing practices, especially when recovering from serious health problems.

If Kara Manion were over 65, she would have crossed into the safe harbor of traditional Medicare coverage, where patient choice of providers is not limited to narrow networks. We need a national single payer “Medicare for all” system that will eliminate the profit-driven private insurance system and cover all necessary medical care for everyone in order to end this insurance feud for good.

Dr. Judith Albert leads the Pittsburgh chapter of Physicians for a National Health Program.

https://www.post-gazette.com…

Launch of ‘Business for Medicare for All’

Business for Medicare for All

We are business owners who believe our health insurance costs should not increase every year by double digits. Our payments to profiteering health insurers have swelled as our employees have been offered worse health care coverage. At our companies, rising costs paired with declining performance is unacceptable. So why should we accept this exploitation of our companies from health insurers?

We believe a new system that guarantees health care coverage for Americans regardless of where they work is critically important to maintain our profits, grow wages for working families, spur entrepreneurship and compete globally. It is time to cut the middle man — health insurance companies — out of our health care system and pass those savings on to employers of all sizes and their workers.

There is a better way.

These are the core principles we believe in at Business for Medicare for All. All of our members have signed on to support these underlying principles guiding any reform to how we pay for health care:

  • We believe Medicare-for-All must be the top policy priority of American business.
  • We believe the current profit-driven health insurance system poses an existential threat to American business.
  • We believe the current system lowers employee wages and business profits.
  • We believe the current system threatens American innovation and competitiveness.
  • We believe health care guaranteed, regardless of where someone works, is the only business-friendly, economically sustainable way to achieve universal health care in America.

President

Wendell Potter

Business Advisors

Richard Master, CEO and Chairman, MCS Industries
Ben Cohen, Founder, Ben and Jerry’s
Jerry Greenfield, Founder, Ben and Jerry’s
Joe Sanberg, Founder, Working Hero Action
Jen Kimmich, CEO and Co-Founder, Alchemist Beer
Bruce Waldman, Owner, A & H Sportswear
Dan Wolf, CEO, Cape Air
Bastian Lehmann, CEO, Postmates
David Steil, CEO and Owner Micro Trap Corporation
Joe Scott, CEO and President, Easton Coach

Health Care Advisors

Donald Berwick, Co-founder of the Institute for Healthcare Improvement (IHI)
Gerald Friedman, Professor of Economics at the University of Massachusetts Amherst
Dr. Carol Paris, Psychiatrist and immediate past President of PNHP
Dr. Ed Weisbart, Missouri Chair of PNHP, and past CMO of Express Scripts
Gabriel Levitt, Co-founder of PharmacyChecker.com

http://www.businessformedicareforall.org

To sign up:
http://www.businessformedicareforall.org…

Comment:

By Don McCanne, M.D.

Many have said that if only we could get the business community behind the Medicare for All movement then we would have it made. Well, some of our friends and colleagues are launching “Business for Medicare for All.” Let’s see how much interest we can help generate.

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