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New medical bankruptcy study: Two-thirds of filers cite illness and medical bills as contributors to financial ruin

New medical bankruptcy study: Two-thirds of filers cite illness and medical bills as contributors to financial ruin

Researchers found no evidence that the ACA reduced the proportion of bankruptcies driven by medical problems; insurance offered little protection to middle-class Americans.

FOR IMMEDIATE RELEASE: February 7, 2019

Contacts: David U. Himmelstein, M.D., dhimmels@hunter.cuny.edu; Steffie Woolhandler, M.D., M.P.H., steffie_woolhandler@hms.harvard.edu; Clare Fauke, 312-782-6006, clare@pnhp.org

Medical problems contributed to 66.5% of all bankruptcies, a figure that is virtually unchanged since before the passage of the Affordable Care Act (ACA), according to a study published yesterday as an editorial in the American Journal of Public Health. The findings indicate that 530,000 families suffer bankruptcies each year that are linked to illness or medical bills.

The study, carried out by a team of two doctors, two lawyers, and a sociologist from the Consumer Bankruptcy Project (CBP), surveyed a random sample of 910 Americans who filed for personal bankruptcy between 2013 and 2016, and abstracted the court records of their bankruptcy filings. The study, which is one component of the CBP’s ongoing bankruptcy research, provides the only national data on medical contributors to bankruptcy since the 2010 passage of the ACA. Bankruptcy debtors reported that medical bills contributed to 58.5% of bankruptcies, while illness-related income loss contributed to 44.3%; many debtors cited both of these medical issues.

These figures are similar to findings from the CBP’s medical bankruptcy surveys in 2001 and 2007, which were authored by three researchers in the current study (Himmelstein, Thorne, and Woolhandler), and then-Harvard law professor Elizabeth Warren. As in those earlier studies, many debtors cited multiple contributors to their financial woes.

The current study found no evidence that the ACA reduced the proportion of bankruptcies driven by medical problems: 65.5% of debtors cited a medical contributor to their bankruptcy in the period prior to the ACA’s implementation as compared to 67.5% in the three years after the law came into effect. The responses also did not differ depending on whether the respondent resided in a state that had accepted ACA’s Medicaid expansion. The researchers noted that bankruptcy is most common among middle-class Americans, who have faced increasing copayments and deductibles in recent years despite the ACA. The poor, who were most helped by the ACA, less frequently seek formal bankruptcy relief because they have few assets (such as a home) to protect and face particular difficulty in securing the legal help needed to navigate formal bankruptcy proceedings.

Relative to other bankruptcy filers, people who identified a medical contributor were in worse health and were two to three times more likely to skip needed medical care and medications.

Dr. David Himmelstein, the lead author of the study, a Distinguished Professor at the City University of New York’s (CUNY) Hunter College and Lecturer at Harvard Medical School commented: “Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy. For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss – just when families need it most. Private health insurance is a defective product, akin to an umbrella that melts in the rain.”

In the article, the authors note that “medical bills frequently cause financial hardship, and the U.S. Consumer Financial Protection Bureau reported that they were by far the most common cause of unpaid bills sent to collection agencies in 2014, accounting for more than half of all such debts.”

The study’s senior author Dr. Steffie Woolhandler, an internist in the South Bronx, Distinguished Professor at CUNY/Hunter College and Lecturer in Medicine at Harvard commented: “The ACA was a step forward, but 29 million remain uncovered, and the epidemic of under-insurance is out of control. We need to move ahead from the ACA to a single-payer, Medicare for All system that assures first-dollar coverage for everyone. But the Trump administration and Republicans in several states are taking us in reverse: cutting Medicaid, threatening to gut protections for the more than 61 million Americans with pre-existing conditions, and allowing insurers to peddle stripped-down policies that offer no real protection.”

Study co-author Robert M. Lawless, the Max L. Rowe Professor of Law at the University of Illinois College of Law noted: “In the Supreme Court’s words, bankruptcy is a fresh start for the ‘honest but unfortunate debtor.’ Our study shows that for many bankruptcy debtors, the misfortune continues to come from the way we pay for health care. Bankruptcy may provide a fresh start, but it comes at a high financial and emotional cost for those who file. Filing for  bankruptcy can stop the financial bleeding that the health care system imposes, but curing that system’s ills is the only lasting solution.”

“Medical Bankruptcy: Still Common Despite the Affordable Care Act.” David U. Himmelstein, Robert M. Lawless, Deborah Thorne, Pamela Foohey, and Steffie Woolhandler. American Journal of Public Health, March 1, 2019 (online Feb. 6, 2019). DOI: 10.2105/AJPH.2018.304901

Deborah Thorne of the University of Idaho and Pamela Foohey of Indiana University Bloomington also were co-authors of the study. Drs. Himmelstein and Woolhandler founded Physicians for a National Health Program (www.pnhp.org), a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

Hospital prices grew faster than physician prices in hospital-based care

Hospital Prices Grew Substantially Faster than Physician Prices for Hospital-Based Care in 2007–14

By Zack Cooper, Stuart Craig, Martin Gaynor, Nir J. Harish, Harlan M. Krumholz, and John Van Reenen
Health Affairs, February 2019

Abstract

Evidence suggests that growth in providers’ prices drives growth in health care spending on the privately insured. However, existing work has not systematically differentiated between the growth rate of hospital prices and that of physician prices. We analyzed growth in both types of prices for inpatient and hospital-based outpatient services using actual negotiated prices paid by insurers. We found that in the period 2007–14 hospital prices grew substantially faster than physician prices. For inpatient care, hospital prices grew 42 percent, while physician prices grew 18 percent. Similarly, for hospital-based outpatient care, hospital prices grew 25 percent, while physician prices grew 6 percent. A majority of the growth in payments for inpatient and hospital-based outpatient care was driven by growth in hospital prices, not physician prices. Our work suggests that efforts to reduce health care spending should be primarily focused on addressing growth in hospital rather than physician prices. Policy makers should consider a range of options to address hospital price growth, including antitrust enforcement, administered pricing, the use of reference pricing, and incentivizing referring physicians to make more cost-efficient referrals.

From the Discussion

Our findings suggest that there may be significant differences in the bargaining leverage of hospitals and physicians. More work needs to be done to quantify the differences between the two groups’ bargaining leverages and the extent to which there are differences in the price elasticities facing the two types of providers.

Our results also have direct implications for strategies to address growth in health spending for the privately insured. For example, a bill recently introduced in the California legislature would allow state officials to regulate hospital and physician prices. Broad-brush efforts that do not discriminate by setting could miss the mark. Our work suggests that instead of focusing on growth of physician prices (which have grown roughly at the pace of inflation), in the short run policy makers should devote more of their efforts to addressing growth of hospital prices.

https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

Under our current fragmented system of financing health care, it is no surprise that hospital prices have been growing faster than physician prices for both inpatient and outpatient services. Merger and acquisition activities, including hospital acquisition of medical groups have long been suspected as contributors to health care inflation. So what do we do about it?

It is well established that markets do not work well in setting prices for health care, whereas publicly financed and publicly administered programs are more effective in determining appropriate value. A well designed single payer Medicare for All program would go a long way toward improving pricing in health care.

Central planning and budgeting of capital improvements does a better job in controlling capacity of the system, thus ensuring the right number of beds. Operations of the facility should be funded through global budgets, just as the fire department is. That would both slow excessive growth in prices while ensuring adequate funding to fulfill the community’s needs.

Physicians would be reimbursed at negotiated rates whether through fee-for-service or capitation, depending on the practice model. Our government Medicare program has been more effective than private insurers at keeping price increases at sustainable rates.

At any rate, according to this study, “efforts to reduce health care spending should be primarily focused on addressing growth in hospital rather than physician prices.”

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An Open Letter to Rep. Pramila Jayapal Regarding Medicare for All

We applaud your efforts to improve the legislation from previous versions by including guaranteed access to vital services such as reproductive health and long-term care, but have two serious questions about the future of private insurers and exactly who might be left out of an otherwise universal system.

By Isabel Ostrer, Chris Cai, and Ana Malinow, M.D.
Common Dreams, Feb. 6, 2019

Dear Congresswoman Jayapal,

Thank you for your hard work and leadership as the new lead sponsor of the forthcoming Medicare for All Act of 2019. As health care providers and health justice advocates, we look forward to working with you to grow support for the bill and ensure its future passage.

We applaud your efforts to improve the legislation from previous versions by including guaranteed access to vital services such as reproductive health and long-term care. However, we have identified two key policy provisions that must be addressed in the final bill: 1) the explicit prohibition and buyout of investor-owned, for-profit health facilities, and 2) the explicit inclusion of coverage for every resident of the U.S., regardless of immigration or citizenship status.

1. As part of a transition to a Medicare-for-all system, for-profit health facilities should be converted to nonprofit governance and their owners compensated for past investments.

There is no place for profit in a humane and efficient national health program. For-profit providers (including hospitals, dialysis centers, nursing homes, home care agencies, and hospices) have been shown to provide inferior care at inflated prices and are more likely to bend care to profitability. For-profit hospitals spend less on nurses and other clinical aspects of care, but more on administration and financial management, compared to nonprofits. For-profit nursing homes are cited for quality deficiencies 28 percent more often than nonprofits, and for deficiencies that place residents in immediate jeopardy 53 percent more frequently. Investor-owned home care agencies cost Medicare $752 more per patient than nonprofit agencies, while providing worse care. In addition, investor-owned chains have often been cited for questionable business practices and have been repeatedly  implicated in large-scale fraud.

To achieve a fully nonprofit health system, Medicare for all legislation should include plans for the government to “buy out” investors in for-profit institutions. Researchers estimate the fair market value of investor-owned facilities covered by a buyout to be $150 billion at most. Using Treasury Bill financing over 15 years at the current interest rate of 3 percent would cost the government about $12.75 billion annually, equivalent to about 1 percent of annual hospital costs. Even in the short term, these costs would be offset by eliminating what we currently waste on investor profits. For example, total profits of just three investor-owned firms (HCA, DaVita and Fresenius) totaled more than $6 billion in 2017. For the sake of both patient health and cost savings, we cannot afford to let investor-owned facilities participate in a Medicare for all system.

2. A future Medicare for all program must include everyone living in the U.S., regardless of immigration or citizenship status. 

Aside from humanitarian concerns, excluding anyone in the U.S. from a national health plan only adds waste and unnecessary administrative costs. Immigrants are often used as a scapegoat for skyrocketing health costs, but studies show that instead of draining our health care dollars, immigrants subsidize and maintain our health care system.

Between 2002 and 2009, immigrants contributed $115 billion more to the Medicare Trust Fund than they used in health care. Because of their lower utilization costs, immigrants also heavily subsidize private insurance for U.S.-born residents. A single-payer bill must explicitly include both documented and undocumented immigrants, and not leave eligibility up to administrative whims.

As medical students and physicians, we strongly believe that a single-payer program is the only solution to our country’s failing health care system. However, to ensure the long-term success of Medicare for All, we must get the policy details right, including a ban on for-profit health facilities with a planned buyout of investors, and the inclusion of every U.S. resident, regardless of immigration status.

Sincerely,

Christopher Cai, Medical Student
Isabel Ostrer, Medical Student
Ana Malinow, M.D.

Isabel Ostrer is a medical student at the University of California San Francisco (UCSF) and a member of Students for a National Health Program (SNaHP).

Chris Cai is a medical student at the University of California San Francisco (UCSF) and a member of Students for a National Health Program (SNaHP).

Dr. Ana Malinow has  spent her career taking care of undocumented, refugee, and poor children in Cleveland, Houston and Pittsburgh before moving to San Francisco, where she is currently practicing as a general pediatrician. She is past President of Physicians for a National Health Program (PNHP), an organization of 20,000 health care providers that support single payer national health care.

https://www.commondreams.org…

Racial bias influences health care — and it starts in the exam room

By Monica Maalouf, M.D.
Chicago Tribune, February 6, 2019

“No doctor has ever reminded me that I am black before,” the patient said, laughing and nodding his head to let me know he appreciated my advice.

Just as he was startled by my open recognition of his race, so too was I startled by his reaction.

As his physician, I felt the issue I’d raised wasn’t worth ignoring; if anything, I viewed it as the “elephant in the exam room,” desperately begging to be called out: Black patients continue to suffer higher morbidity and mortality from colon cancer, compared to any other racial group, according to a 2016 study published in the Journal of Clinical and Translational Gastroenterology, and that is a fact that warrants discussion in the doctor’s office.

In 2002 the Institute of Medicine, a national consortium of experts, published a 700-page report on racial and ethnic disparities in health care. The group examined more than 100 individual studies and concluded, overwhelmingly, that health disparities exist. While the report emphasized that the reasons behind health status disparities “are complex and poorly understood,” evidence suggests that both socieconomic differences and “direct and indirect consequences of discrimination” are at play.

We are now nearly two decades out from the original publication of many of the studies examined by the IOM, yet we are still grappling with stark disparities in both disease outcomes and treatment. And, although “the incidence and mortality rates of colorectal cancer in the United States has steadily declined” over the years, according to the 2016 study, “reductions have been strikingly much slower among African-Americans.”

This fact shouldn’t shock anyone, given the reality that health systems, and health training environments, are poorly equipped to tackle the crisis of disparate treatment and disparate outcomes.

In 2016, the Accreditation Council for Graduate Medical Education conducted a study of physician training programs nationwide and concluded that few programs “appeared to have a formal strategy for addressing health care disparities or a systematic approach to identifying variability in the care provided to … known vulnerable patient populations.”

Furthermore, there is growing evidence published in recent years, highlighting the fact that practitioners’ implicit biases often shape treatment decisions and health outcomes.

Being a young black child with appendicitis, for instance, means you are less likely than a white child to get pain medication in an emergency room. Being a black patient in an intensive care unit means you might not get as much time with your physician as a white patient. And when it comes to colon cancer, physicians are much less likely to even bring up screening modalities with black patients compared to whites.

The data have led me to believe that we, as a scientific community, have done an amazing job highlighting a problem. Truthfully, the problem of health disparities has not only been highlighted, it’s been written in bold font and ALL CAPS.

What we have yet to do, however, is come up with systematic approaches for tackling this issue and supporting our most marginalized patients.

For the patient I brought up earlier, who was sitting in my exam room asking me if he should get a colonoscopy, I knew we had to discuss it.

As a black man, the numbers are not in his favor. By acknowledging race with him, I hoped that whatever implicit bias I might have as a practitioner would become explicit. By bringing race to the forefront, I hoped it would no longer fall to the side.

We have to chisel away at this disparity, and as a primary care physician, I can do so by starting the conversation, one patient at a time.

Dr. Monica Maalouf is a physician and assistant professor of medicine at Loyola Stritch School of Medicine.

https://www.chicagotribune.com…

Immigration for a healthier nation

California’s secret to health is immigration

By Joe Mathews
San Francisco Chronicle, February 3, 2019

What makes California the very picture of health? It’s neither sunshine nor silicone.

Our health secret is immigration.

While the president blames immigrants for being sources of disease, Californians have long known that immigrants make us healthier.

Those health benefits go beyond the “immigrant health advantage,” the fact that new arrivals to this country are healthier than the native-born. Throughout California history, immigrants have adapted cultural practices and introduced new ideas that have expanded our definition of health.

Today, it is impossible to separate the issues of health and immigration in California. For one thing, our rapidly aging state relies heavily on immigrants to deliver our health care. In many communities, more than half of doctors are foreign-born, and statewide, one-third of the health care workers are immigrants.

You can see the impact of immigration on health across all stages of life. In our homes, multigenerational living, long associated with immigrants, has gone mainstream; sharing a house both saves money on rent and helps older people live longer, while reducing stress for kids.

California’s concepts of healthy eating also have immigrant roots. Catherine Nimmo, a doctor from the Netherlands, founded America’s first vegan society in our state in 1948.

What is more California than a yoga workout? The state has seen waves of immigrant yogis make and remake yoga practice.

Or if you’re really hurting, you might slip into a whirlpool bath, with jets first invented as a rheumatoid arthritis cure by an Italian immigrant to California named Candido Jacuzzi.

It is no exaggeration to say that Californians have chosen to be ruled by immigrant visions of health. After all, it was two brothers from Canada, Joe and Ben Weider, who popularized bodybuilding and working out with weights, sparking the gym industry, which is an inescapable feature of the state landscape.

https://www.sfchronicle.com…

Comment:

By Don McCanne, M.D.

This article might be reaching a little bit to suggest that perhaps health here is dependent on immigration, but it is accurate to state that immigrants by and large are healthier than the average U.S. citizen, and that they do contribute significantly to the health care workforce. They also contribute to the economy, and not just in harvesting our food, but in all sectors of our economy.

Tonight we are expected to hear from President Trump in his State of the Union address some words about immigration, but we should keep in perspective the reality as opposed to our president’s inclination to be creative in his rhetoric.

Immigrants do not burden our health care system. In fact, they contribute more to our economy than they use in public services. A Single Payer Medicare for All program would benefit by adding in to the risk pool our comparatively healthy immigrant population. Those who contend that including immigrants in a national health program would create a burden on the system are flat out wrong. They would help pay for our health care (and even help pay for the Wall if Trump were to get his way).

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

Top Nancy Pelosi Aide Privately Tells Insurance Executives Not to Worry About Democrats Pushing “Medicare for All”

By Ryan Grim
The Intercept, Feb. 5, 2019

Less than a month after Democrats — many of them running on “Medicare for All” — won back control of the House of Representatives in November, the top health policy aide to then-prospective House Speaker Nancy Pelosi met with Blue Cross Blue Shield executives and assured them that party leadership had strong reservations about single-payer health care and was more focused on lowering drug prices, according to sources familiar with the meeting.

Pelosi adviser Wendell Primus detailed five objections to Medicare for All and said that Democrats would be allies to the insurance industry in the fight against single-payer health care. Primus pitched the insurers on supporting Democrats on efforts to shrink drug prices, specifically by backing a number of measures that the pharmaceutical lobby is opposing.

Primus, in a slide presentation obtained by The Intercept, criticized single payer on the basis of cost (“Monies are needed for other priorities”), opposition (“Stakeholders are against; Creates winners and losers”), and “implementation challenges.” We have recreated the slides for source protection purposes.

Democrats, Primus said, are united around the concept of universal coverage, but see strengthening the Affordable Care Act as the means to that end. He made his presentation to the Blue Cross executives on December 4. “We don’t discuss private meetings, if there was such a meeting,” said a BCBS spokesperson. Primus said that he did not discuss any kind of deal with the insurers. Henry Connelly, a spokesperson for Pelosi, said that the assessment of single payer was not related to any dealmaking with the industry. “We’re not going to barter lower prescription drug costs for inaction in the rest of the health care industry. The presentation was a broad look at the health care environment and some of House Democrats’ legislative priorities over the next two years in a period of GOP control of the Senate and White House,” Connelly said.

The debate over Medicare for All is playing out on a number of different levels, with no clear consensus over how the government-run, single-payer health plan ought to take shape. Presidential candidates are arguing over whose plan is stronger and gets to full Medicare for All faster, with a debate raging over whether private insurance should be banned outright or operate in addition to universal Medicare coverage.

In the House, even as the idea has picked up momentum with voters and members of the Democratic caucus, Democratic leadership has remained deeply skeptical. Pelosi’s consistent messaging, instead, has been around protecting the Affordable Care Act and lowering prescription drug prices.

“Speaker Pelosi has ensured that Medicare for All will have hearings in the House and tapped Congressman Brian Higgins to take the lead on Medicare buy-in legislation. For the first time, House committees will be seriously examining and tackling some of the questions and possible solutions raised by Medicare for All legislation,” said Connelly.

“The biggest obstacles facing Medicare for All right now are Mitch McConnell and Donald Trump,” he added. “But in the near term, there is a window for Democrats to press Trump to help pass aggressive legislation to negotiate down the skyrocketing price of prescription drugs.”

Primus concluded his presentation with a bullet point that summarized Pelosi’s mission on health care: “Lower your health care costs and prescription drug prices.”

The “your” refers to insurers, who bear costs for medical expenses covered under their plans. That puts insurers and Pelosi, at least in one sense, in alignment, as both have an interest in lower costs. Indeed, insurers regularly negotiate to lower their health care costs, but in practice their efforts have had little effect on the general trend in costs. Drug company patents give pharmaceutical giants outsized power to set prices, and hospital consolidation has also given providers more power in those negotiations. Even where insurers have been able to negotiate lower prices for their own customers, that has done little to shrink the list price of drugs for the public.

At the briefing, Primus mentioned three avenues that Pelosi, a California Democrat, sees toward lower drug prices, sources said. The first, the CREATES Act, is bipartisan legislation, strongly opposed by Big Pharma, that would make it easier for generic drug companies to get access to a sufficient quantity of medications needed to produce generics.

The second measure addresses what’s known as “pay for delay,” in which a drug company pays a generic manufacturer to not produce a generic version of an expensive drug. Democratic leadership wants to ban that practice. The third revolves around the issue of “evergreening,” which is a pharmaceutical industry practice of extending patent protection for a particular drug through a variety of practices. Democrats want to restrict evergreening to encourage cheaper generics make it to the market faster.

Primus’s approach has a strong political logic to it, as taking on every health care stakeholder at once is arguably more difficult than singling out one industry and hammering away, even if the effort is out of step with where progressive energy is at the moment.

Primus is known in Congress as one of the staunchest foes of Big Pharma, while Pelosi’s posture toward Medicare for All is more complicated. Publicly, she has long said that she supports it aspirationally. “I was carrying around single-payer signs probably before you were born, so I, you know, I understand that aspiration,” she said in 2017 during an interview with TV host Joy Reid.

“This is an idea that if we had a tabula rasa, if we were just starting clean, would be the most cost-effective way to go forward. We don’t have that,” she said. “Over 120 or 150 million people in our country have employer-based access to their health coverage and insurance.”

At the time, her objection to Medicare for All was that it distracted from the fight to defend the ACA, which Republicans were trying to gut. “So right now, I’m going to be crude. Now we’re in my living room, so I can be crude. It isn’t helpful to tinkle all over the ACA right now,” Pelosi said. “Right now, we need to support the Affordable Care Act and defeat what the Republicans are doing.”

At other moments, she has said that single payer isn’t popular, arguing, also in 2017, that “the comfort level with a broader base of the American people is not there yet.”

The Democratic Congressional Campaign Committee, which operates under Pelosi, in 2017 presented House Democrats with survey data, claiming that it showed that single-payer was a political loser, and that Democrats should focus their messaging on lowering drug prices and protecting the ACA.

Yet a significant number of Democrats who flipped Republican districts blue in 2018 were publicly supportive of Medicare for All, suggesting that it isn’t necessarily the albatross Pelosi and the DCCC believe it to be. A poll from October found that more than half of Republicans support the concept.

Pelosi’s agreement to hold House hearings on Medicare for All came after pressure from the Congressional Progressive Caucus. Yet the hearings will be held by the Budget Committee, which, unlike the powerful Ways and Means and Energy and Commerce committees, would not have final jurisdiction over Medicare for All in the event of a genuine attempt to pass it.

Primus, like Pelosi, is well-known to be a deficit hawk, and both subscribe to the argument put forward by the late Pete Peterson that the debt and deficit are among the gravest threats facing the country. When Peterson, a billionaire who spent hundreds of millions of dollars to push Washington policymakers toward austerity, died in 2018, Pelosi delivered a floor speech that praised him and his vision effusively, speaking of the man as if he’d dedicated his life to eradicating child malnutrition or curing cancer, rather than as a Wall Street tycoon who spent millions pushing for major cuts to Social Security and Medicare. “Pete was a clarion voice for fiscal responsibility, and a strong moral conscience in Washington,” Pelosi said in her House floor eulogy of Peterson, who, by 2012, had already spent half a billion dollars targeting Social Security, Medicare, and other spending programs.

“Pete’s prophetic voice on the importance of fiscal sustainability brought together generations of policymakers, no matter their political background,” Pelosi said. “His legacy will endure in many ways, but especially through the work of the Peterson Foundation, which continues to focus on solutions to America’s fiscal and economic challenges.”

Two of Primus’s five objections to single payer before the Blue Cross audience related to such alleged fiscal challenges. That argument, though, runs headlong into a surge of new interest among Democrats in Modern Monetary Theory, the idea that policymakers are still constrained by a mindset that was justifiable when the U.S. was on the gold standard, but is no longer defensible. Now that the U.S. issues a currency independent of its gold reserves, the obstacle to government spending is inflation, not the debt or deficit, proponents of MMT say. “This zero-sum mentality has no place in a post-Bretton Woods world,” said economist Stephanie Kelton in reaction to Primus’s argument that spending on Medicare for All would foreclose other priorities. (Post-Bretton refers to the global agreement that the dollar will be the global economy’s reserve currency, ultimately decoupled from gold.)

“The U.S. dollar is no longer tethered to gold, which means the federal government is not constrained in its spending by the need to raise revenue. The federal government cannot run out of dollars. This should be painfully obvious, but the gold-standard mentality continues to grip many lawmakers,” Kelton said.

As long as inflation remains low, the government can continue to authorize additional spending. That’s not so much an argument as it is simply an observation of the post-gold-standard reality that austerity advocates like Peterson have spent billions to distort. “The government can afford any new program it chooses to fund. The limits are in the real economy — if producers can’t keep up with the additional demand, inflation will result,” said Kelton, a former adviser to the Senate Budget Committee when it was chaired by Sen. Bernie Sanders. “The federal government — as the issuer of the U.S. dollar — can create all the money that is needed to guarantee health care for all of its people. It’s the rest of us — who merely use the dollar — who have to worry about costs and where to come up with the money to pay a huge medical bill when our private insurer refuses to cover the cost of care.”

This reality has been recognized by former Federal Reserve Chairs Alan Greenspan and Ben Bernanke, as well. “The United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default,” Greenspan once said.

https://theintercept.com…

Medicare for All could take center stage in the 2020 election. Here’s what it means.

By Lorie Konish
CNBC, Feb. 5, 2019

Americans say they want better health care. How that will happen is still up in the air.

Enter Medicare for All, a term that increasingly is being used by health-care advocates, politicians and aspiring presidential candidates.

The concept is the latest iteration of a complex discussion about medicine that goes back decades. The current goal: To come up with something better than the Affordable Care Act when it comes to giving more individuals access to care and reducing what they pay, while putting fewer burdens on medical industry.

The debate comes as more Americans worry about health-care issues. A recent poll from the Pew Research Center found that health care ranks as a top public concern, second only to the economy. Terrorism came in third.

The number of Americans who say reducing health-care costs should be a top priority for the president and Congress has increased steadily, according to Pew’s survey. Eight years ago, 61 percent cited those concerns, while today that has risen to 69 percent.

And a majority of Americans are in favor of expanding public health coverage, according to a separate survey from the Henry J. Kaiser Family Foundation.

Of the adults polled by Kaiser, 77 percent said they would support allowing people ages 50 to 64 to buy health insurance through Medicare.

Seventy-five percent said those who do not have health insurance through their employer should be able to purchase insurance through their state’s Medicaid program.

In addition, 74 percent of respondents said yes to a national government-administered health plan that would be open to anyone.

A smaller majority — 56 percent — said they support a national plan often known as Medicare for All, or a single government plan through which all Americans would get their insurance.

“The more gradual approaches have higher levels of support and, particularly among Republicans, those ideas are more palatable than a switch to a single government plan,” said Liz Hamel, director of public opinion and survey research at the Kaiser Foundation.

Americans generally like the fact that these plans would guarantee health insurance, eliminate premiums and reduce out-of-pocket costs, Hamel said.

What some don’t like, however, are the possibilities that a Medicare for All-type plan could eliminate private health insurance companies or the existing Medicare program and increase taxes, according to Hamel.

“People want to be able to keep what they have if they like it,” she said.

Unanswered questions

Medicare for All offers a different idea at a time when many feel that the Affordable Care Act failed to provide universal health-care coverage, according to Dr. Steffie Woolhandler, a co-founder of Physicians for a National Health Program.

As debate around the concept grows, more Medicare for All-type proposals are emerging with similar names: Medicare for America, Medicare Extra for All, Medicare Advantage for All, to name a few, according to Woolhandler.

“They sound a little like Medicare for All,” Woolhandler said. “But they don’t mean the same thing as the three English language words Medicare for All.”

Woolhandler cited a bill sponsored by Sen. Bernie Sanders of Vermont as an example of Medicare for All. That legislation advocates a single-payer plan that will cover everyone in one nonprofit public system. A separate Medicare for All-type bill also has been introduced in the House of Representatives.

Woolhandler said she sees a new system as a way of eliminating the frustrations she encounters as a primary care physician practicing in the South Bronx in New York City. Often, the treatments or medications patients need are not available to them because of their insurance, she said.

Under a Medicare for All system, health care in America would look a lot like it does in Canada, where all patients can see a doctor and generally do not have to pay a bill. Canada also spends about half what the U.S. does on health care on a per-capita basis, Woolhandler said.

“The evidence is fairly strong that, over the long run, you save a lot of money with single payer,” Woolhandler said.

Some health-care experts are not sold on the Medicare for All idea.

Katy Votava, president of Goodcare.com and a Medicare expert, cautions against using the word Medicare to describe a public single-payer system.

That is because most of the current Medicare system is actually private insurance, though it is regulated by the government, Votava said. And the coverage people get from Medicare typically comes after they have paid into that system for 40 or 50 years.

Once they are covered by Medicare, patients are often confronted by high costs and confusing rules, Votava said.

“We can provide more reasonable health insurance for all and health services for all,” Votava said. “I know we can.

“But it involves breaking down some old ways.”

https://www.cnbc.com…

Medicare for All Explained Podcast: Episode 5

Interview with Wendell Potter

February 4, 2019

Former health insurance executive and noted whistleblower Wendell Potter reveals the ways in which the industry creates fear, uncertainty, and doubt around single payer, and how advocates can push back against these lies. Hosted by Joseph Sparks. Additional episodes will be uploaded twice monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Public Citizen: The Case for Medicare for All

By Eagan Kemp and his colleagues at Public Citizen
February 4, 2019

From the Introduction

These facts are not in dispute: The United States spends the most per person in the world for health care while leaving a much greater share of its population uninsured and experiencing the worst health outcomes of any wealthy country.

There is nothing inherent to the United States that consigns us to having poor health outcomes and high care costs. As recently as 1980, our health care spending was close to that of other wealthy countries and our life expectancy was about average. Since then, we have fallen to the bottom in life expectancy of these countries, while our spending has soared far beyond that of any other comparable country.

The authors of the Affordable Care Act (ACA), otherwise known as Obamacare, sought to improve our dismal state of affairs while retaining the fundamental structure of our health care system. Although the law has achieved important progress, such as significantly decreasing the number of people who lack health insurance, it has not provided access to affordable care akin to what other wealthy countries provide to their residents.

Rising out of the ashes of this bleak landscape are increasingly optimistic prospects to improve and expand our most popular health care program—Medicare—to cover all Americans. This proposal, often referred to as Medicare-for-All, has long been recognized by most policy experts as a method to provide access to affordable health care to all Americans while reaping tremendous savings by streamlining our fragmented system.

Despite its allure on policy grounds, many policy makers have previously shied away from pursuing Medicare-for-All legislation for fear of challenging the many powerful special interests that profit from our current health care system. But the ongoing challenges of our health care system along with attacks on the ACA, Medicare, and Medicaid have helped garner mainstream support for reform.

Public Citizen advocates for the broadest and most-inclusive plan possible. There should be no premiums, deductibles, or co-pays for necessary medical services or prescription drugs. Moreover, the plan we advocate for would expand Medicare to include vision and dental care, and vastly improve access to mental health care. The private insurance plans administered by Medicare, named Medicare Advantage, should be eliminated because they squander resources on overhead and private profits that would much more wisely be applied to providing actual health care.

An abundance of supporting research reveals that such a program would accrue tremendous savings, because of its scale and simplicity. A particularly vivid example of this—and a metaphor for the inefficiency that ails our system—would be ridding ourselves of the byzantine billing system that sometimes requires multiple people to handle remittances for a single doctor.

Meanwhile, ensuring that everyone in the United States has access to affordable care through all stages of their lives would prevent many debilitating health conditions. In addition to improving quality of life, it would reduce uncompensated care, a significant source of increased costs for both the public and for health care providers, under the current system.

Numerous studies have concluded that Medicare-for-All would yield significant cost savings. But there is also a very simple exhibit to turn to: Medicare, itself. Although Medicare’s costs have increased over time in real dollars, they have risen much more slowly than the cost of care for Americans covered by private health insurance. Since 2009, Medicare’s costs (adjusted for inflation) have actually fallen.

This accomplishment is all the more remarkable because Medicare primarily treats elderly patients with more chronic and complicated health conditions than the population as a whole. Medicare coverage in its current state is not as generous as the plan we envision but represents a strong foundation on which Medicare-for-All would be built.

We are at a rare moment in time, in the window of what might be a once-in-a-century opportunity to boldly reshape our health care system to expand and improve access to care such that we could potentially leap-frog the countries that currently outperform us in health outcomes. Such a clear surge in support for Medicare-for-All that our nation is experiencing holds the promise of taking us from worst-to-first when it comes to providing guaranteed access to health care. In this report, we highlight research from a variety of scholars and researchers to answer the key questions about Medicare-for-All and lay out a path for finally achieving health care coverage for everyone in the United States.

Link includes a two minute video on 5 myths about Medicare-for-All:
https://www.citizen.org…

Full report – 69 pages:
https://www.citizen.org…

Comment:

By Don McCanne, M.D.

This highly credible and well documented report on the case for Medicare for All (the bona fide single payer version) can serve as a valuable resource to answer many of the questions that people still have about the proposal.

Although the report is 69 pages long, it is concise and quite readable. Just the table of contents alone asks and answers several pertinent questions.

It would be especially valuable for individuals who are intrigued by the concept but want to learn more. It is also valuable to keep as a reference to provide answers to some common questions people have about the proposal.

The report would also be very helpful in informing those who are guided by the rhetorical memes that have been designed to mislead the public about Medicare for All. But that could be a difficult audience if they have closed their minds and refuse to reopen them. Nevertheless we should keep on trying to get through. The health of the nation depends on it.

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

Medicare uniquely suited to facilitating health care for all Americans

It eliminates the balkanization and fragmentation that make our current, for-profit system inefficient.

By Phil Caper, M.D.
Portland (Maine) Press Herald, Maine Voices, Feb. 2, 2019

A commonly held misperception is that Medicare is simply one more type of health insurance. But there are many important differences. Medicare is social insurance, created to facilitate medical care for its beneficiaries. In contrast, commercial insurance is dominated by publicly traded, for-profit companies whose focus, necessarily, is to create wealth for their owners.

Underlying the core business of commercial health insurance companies is a practice known as “medical underwriting.” Underwriting divides insurance beneficiaries into risk pools based on the probability they will use medical services. The practice of denying coverage for pre-existing conditions is but one example of medical underwriting, and is currently outlawed by the Affordable Care Act. But that restriction is now under political attack.

Medical underwriting is a key tool, widely used by insurance companies, to enable them to discriminate against people who are sick or are likely to become sick.

Medical underwriting is complicated and costly. It requires the collection and analysis of detailed and intrusive data.

Using such data, policyholders are segmented into many different risk pools that are priced accordingly. Multiple factors come into play in assessing the likelihood that somebody will need medical care, many completely beyond the policyholder’s control. They include age, gender, occupation, previous medical history, lifestyle, place of residence and access to medical care.

In contrast, social insurance programs such as Medicare use a fundamentally different mechanism to deal with risk. Instead of segmenting and pricing risk, Medicare groups all eligible individuals into a single pool. Instead of charging many different premiums and designing different benefit packages for each, they use public sources to generate a common pool of money and create a common package of benefits that covers most or all eventualities that could face any of the beneficiaries of the program.

By doing this, social insurance eliminates the need to have detailed data, and with it much of the complexity and administrative costs of the commercial insurance system.

In 2012, the National Academy of Medicine (then named the Institute of Medicine) estimated the inefficiencies in our current for-profit health care system to be $190 billion a year nationwide, much of it attributable to medical underwriting and the resulting complexity of our health insurance system. For Maine alone that cost works out to about $800 million a year, money that can and should be used to provide coverage to every Mainer.

Having everybody in a single pool has another benefit – the ability to restrain the now out-of-control overall costs of health care. A single financing pool can be budgeted, something that is impossible in the current multipayer system, leaving us no choice but to attempt to manage costs one service at a time – a very costly, intrusive, contentious and ineffective approach.

There are other advantages to financing health care using a single pool. Our current balkanized and highly fragmented system sets the stage for a great deal of political conflict. Everybody is concerned primarily with making sure their own piece of the system – private insurance, Medicare, Medicaid, the Veterans Affairs system, Obamacare and others – works for them.

A program with just one pool of beneficiaries that serves everybody, such as Medicare, is perceived to be much fairer. Americans sense fairness. Our current balkanized system is perceived to be anything but fair.

That is the key to understanding both Medicare’s efficiency and its broad public appeal. People like it because it’s fair, it works well for everybody and it costs far less than commercial insurance. Public funding also ensures that everybody pays only what they can afford. That’s why such systems work well in most other wealthy countries at a fraction of the cost of ours.

In a universal “Medicare for All” system, we would all have a stake in making sure that system is adequately funded and continues to work well. The public strongly supports universal healthcare for economic, moral, political and practical reasons. It’s time to make the transition to “Improved Medicare for All.”

https://www.pressherald.com…

Cheap capital, predatory pricing and death

As Drug Prices Rise, Is Boston’s Prosperity Based On A Moral Crime?

By Dr. Vikas Saini
WBUR, January 31, 2019

Prescription drug prices have become a high-profile issue, with a growing clamor from politicians, including Massachusetts Gov. Charlie Baker, seeking to take action. There are many laudable elements in Baker’s proposal to negotiate prices directly with drug makers, despite its narrow focus, but such efforts are doomed to become little more than window dressing. We have a much bigger problem to confront.

The week before Thanksgiving, in the freezing rain, a group of patients, nurses, physicians and activists, organized by the Right Care Alliance, marched on the Sanofi drug company in Cambridge, Massachusetts. Sanofi had been marking up its insulin products by as much as 4,500 percent over to the estimated cost of producing a single vial — and people with type 1 diabetes were starting to die. Led by grieving mothers, we carried the ashes of their children to the insulin manufacturer demanding it cut its prices.

I have sympathy for Sanofi employees, and even the company’s management. They are in a difficult, contradictory spot, enticed by well-paying jobs and the promise of doing good in the world – after all, the company’s drugs can sometimes save lives.

But we all need to face up to the real-world consequences of drug pricing practices. That’s not a comfortable thing to do, not for the people who work for drug companies, nor for those of us who are prospering in the “innovation economy.”

There is a story told often here in Massachusetts: The Commonwealth’s economy has boomed, just like Silicon Valley’s, because of a rich ecosystem of startups, intrepid entrepreneurs, savvy venture investors and talented scientists and technologists. Our colleges and universities attract the brightest students from around the world, and their close relationships to industry fuel economic growth.

There is indisputable truth in that story. But there is also an ugly lie at its heart.

The pharma sector, the pride of Massachusetts, is a bubble fed by astronomical, obscene profits. It’s not the innovative ideas, though there are many of those, nor the “best and the brightest” young scientists, though they can be dazzling in their smarts, that are making the biotech sector boom. It’s the recent access to cheap capital and even cheaper hype. And predatory pricing.

The companies that have put down roots here to take advantage of our educated elite – Sanofi, Eli Lilly, Novartis and scores of others – have continued the pattern made famous by Martin Shkreli, the CEO who dramatically hiked the price of several drugs, and is now serving jail time for defrauding investors. Companies today are setting prices to whatever the market will bear, no matter the damage. And we praise their ingenuity for bringing innovation to patients – and dollars to their shareholders.

But what kind of economic miracle routinely depends on the FDA to approve cancer drugs that are unproven when it comes to prolonging life, yet cost more than $100,000 for a course of treatment? What kind of economic miracle leads to people dying because they can’t afford an essential medicine like insulin, which has been around for almost a century?

Antavia Lee Worsham, Alec Raeshawn Smith, Shane Boyle and Jesse Lutgen, four people with type 1 diabetes, died because they couldn’t afford insulin.

People with type 1 diabetes need insulin to stay alive, like all of us need water. When insulin was first purified by Canadian scientists Frederick Banting and Charles Best in 1921, they instantly knew it was a life-saving miracle, an essential medication. The phrase “greed is good” from the movie “Wall Street,” which signaled the start of our recent era of hypercapitalism, wasn’t part of their lexicon: they sold their rights for $1 each to make sure everyone could afford it.

Now the price of insulin is out of reach for anyone paying out of pocket, and it is one more thing driving up insurance premiums and deductibles for everyone else.

For those of us who live in Boston, in what the author Thomas Frank has called “the spiritual homeland of America’s professional class,” it’s time for sober reflection. When “innovation” becomes an empty mantra for extortionate pricing, we should all agree that it’s time for a rethink.

I’m not saying it will be simple. From the first social movements like the abolitionists, who found an early home in Massachusetts, to tackling big tobacco or the fossil fuel industry, economic interests almost always cloud moral judgements and make change incredibly slow and difficult.

But what if Massachusetts’ current economic miracle is based on a moral crime?

What else are we to call it when the preferred business model is starting to kill people?

No fair-minded observer would say that we have a functioning market for pharmaceuticals. Instead, we have an organized syndicate of insurance companies, manufacturers and benefits managers, feeding off the vulnerability of the sick and the weak. As a society, we have sacrificed our own — we sacrificed Antavia, Alec, Shane, and Jesse — on the altar of the church of market fundamentalism. To defend this kind of market is a form of idolatry. And it demands that we ask of ourselves: what are we compelled to do for the well-being of all?

The Right Care Alliance felt compelled to take action at Sanofi because no one else seems willing to state this problem in its stark, unvarnished reality. As a society, we need patent laws reformed and serious government intervention to control prices. Yes, we need to bestow reasonable rewards on true innovators who invent effective drugs that bring real health to patients. But we also need a new system to crack down on speculators and profiteers.

From our political leaders we can no longer tolerate half-measures; we need deeds that match the seriousness of the problem, because people are dying. Massachusetts’ prosperity must be reestablished on a sound moral foundation. Otherwise history will not judge us kindly.

Vikas Saini, MD, is a cardiologist, the president of the Lown Institute and co-chair of the Right Care Alliance, a clinician and patient led health care reform movement.

https://www.wbur.org…

Comment:

By Don McCanne, M.D.

We, the people, can do something about this. We can establish a sound moral foundation by demanding the enactment and implementation of Single Payer Medicare for All – a system that ensures equitable and affordable health care for everyone. If we fail to do this, we share the blame for the ugly lie at the heart of our health care system – the moral crime wherein the preferred business model is killing people.

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What happens when not-for-profit insurers convert to for-profit?

Does It Matter If Your Health Insurer Is For-Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending

By Leemore S. Dafny
Harvard Business School, American Economic Journal: Economic Policy, February 2019

Abstract

There is limited empirical evidence about the impact of for-profit health insurers on various outcomes. I study the effects of conversions to for-profit status by Blue Cross and Blue Shield (BCBS) affiliates in 11 states, spanning 28 geographic markets. I find both the BCBS affiliate and its rivals increased premiums following conversions in markets where the converting affiliate had substantial market share. Medicaid enrollment rates also increased in these markets, a pattern consistent with “crowd in” of families who were formerly privately insured. The results suggest for-profit insurers are likelier than not-for-profit insurers to exercise market power when they possess it.

From the Discussion and Conclusions

Looping back to the theoretical models of NFP (not-for-profit) and FP (for-profit) health care organizations, the findings are consistent with models in which NFPs prioritize enrollment over profits (equivalently, models in which FPs prioritize profits over enrollment). While theoretically this difference in emphasis might not manifest in higher premiums or lower quality because FPs could be more efficient and find it optimal to maintain substantially the same premiums and quality as NFPs (and still reap higher profits via lower operating costs and/or medical expenses), empirically we do find there is a tradeoff: consumers face higher premiums when large NFPs convert to FP status. Although we do not directly study quality, we find no indirect evidence of quality improvements, as inferred from a model of employee health plan choice. Moreover, we do find evidence that rivals of converting plans experienced sizeable increases in medical spending following conversion, a result that suggests FPs are likelier than NPs to engage in risk selection practices (e.g., denying or deterring enrollment of individuals with poor health or high health risk, a practice that was legal during the study period).

Our findings have several implications for regulatory and competition policy vis-à-vis insurers. First, it appears that sizeable FP insurers are more likely to exercise market power via price increases than are comparable NFP insurers. Second, pricing actions by large insurers have a ripple effect on rivals’ prices, further solidifying the evidence of oligopolistic conduct in many local insurance markets. Third, there is no evidence that NFP and FP insurers charge different prices in the large group market when both are relatively small.

https://www.hbs.edu…

For the full 70 page paper:
https://www.hbs.edu…

Comment:

By Don McCanne, M.D.

This is a study of conversions of not-for-profit Blue Cross and Blue Shield (BCBS) affiliates to for-profit status. So what are the findings?

  • BCBS premiums increased in markets where the converting affiliate had substantial market share.
  • When BCBS affiliates increased their premiums the competing rivals also increased their premiums.
  • Medicaid enrollment rates also increased in these markets, a pattern consistent with “crowd in” of families who were formerly privately insured.
  • The results suggest for-profit insurers are likelier than not-for-profit insurers to exercise market power when they possess it.
  • The findings are consistent with models in which not-for-profits prioritize enrollment over profits whereas for-profits prioritize profits over enrollment.
  • There was no indirect evidence of quality improvement (though quality was not specifically studied).
  • Rivals of converting plans experienced sizable increases in medical spending following conversion, a result that suggests for-profits are likelier than not-for-profits to engage in risk selection practices (e.g., denying or deterring enrollment of individuals with poor health or high health risk).

Thus when not-for-profit private insurers change to for-profit status, not only do their prices go up, it creates a culture of greed in the community since their competitors increase their prices as well.

Although this study was about insurers, the findings are similar for the for-profit health care delivery system. Costs go up, and quality does not improve. In our profit-oriented health care system, the patient-consumer loses.

The policy solutions are easy. Get rid of the private insurers and establish a single universal risk pool that covers everyone – a Single Payer Medicare for All. For the health care delivery system, convert the for-profit sector into not-for-profit entities.

In the second week of February, Rep. Pramila Jayapal will be introducing new Medicare for All legislation. We should make sure that it includes provisions for conversion of the for-profit sector into not-for-profit entities. If such a provision is not in the legislation then we need to encourage our legislators to amend the bill so that it is included.

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