By Andy Marso
The Kansas City Star, February 21, 2019

Kansas Republicans and trade associations, empowered by changes President Donald Trump’s administration made to the Affordable Care Act, are pushing for health plans that are less expensive because they don’t have to cover pre-existing conditions.

One such bill, requested by the Kansas Farm Bureau, passed the Republican-controlled state Senate 28-11 Wednesday. It now heads to the House.

“According to a Gallup poll, citizens are more concerned about rising health premiums than pre-existing conditions,” said Sen. Mary Pilcher-Cook, a Republican from Shawnee who voted for the bill. “We should support lower cost of acquiring health care coverage, so people can have it before they develop what would otherwise be pre-existing conditions.”

Unlike plans under the ACA — commonly called Obamacare — alternatives like the Farm Bureau health plan could exclude people with pre-existing conditions. Such plans also wouldn’t have to cover things like maternity care, mental health and prescription drugs, which are required in ACA plans.

A number of measures have been introduced in Topeka to expand “association health plans,” which are offered to members of professional trade groups, many of whom are small business owners.

The most extreme example is the bill that would allow Kansas Farm Bureau to sell coverage that not only would circumvent ACA rules but also would not fall under the jurisdiction of the Kansas Insurance Department and therefore not be subject to any state rules either.

Kansas Farm Bureau CEO Terry Holdren told legislators that in a national survey, 65 percent of farmers and ranchers said the cost of health coverage was the top obstacle to being able to stay on a farm.

Several farmers testified for the bill, including Sarah Schmidt, whose family grows corn, wheat and soybeans across four counties near Junction City.

Schmidt said that before the ACA, she, her husband and their four kids paid about $525 a month in premiums for a plan that covered most local providers.

After the ACA their premiums doubled, and many of their providers were out-of-network.

“This has been one of our greatest struggles since coming back to my family’s fifth generation farm,” Schmidt said, “not only financially but also physically and emotionally.”

Association health plans have been available for some time, but the ACA required most of them to cover 10 “essential health benefits” (hospitals, outpatient physician visits, emergency services, maternal and neo-natal care, mental health and substance abuse treatment, prescription drugs, lab tests, federally recommended preventative care, pediatric care and rehabilitation).

Now they can get out of those federal requirements.

Lobbyists for Kansas health insurance companies have come out strongly against the Farm Bureau plan, saying it would be impossible for them to compete.

Kari Rinker, a spokeswoman for the MS Society, said that before the ACA, association plans had “a long history of fraud and insolvency which have historically harmed small employers and individuals the most.”

“Many of these plans collected premiums for health insurance coverage that did not exist and did not pay medical claims — leaving businesses, individuals, and providers with millions of dollars in unpaid bills,” Rinker said. “For people with chronic illnesses or disabilities such as MS, the results have been disastrous.”

Dana Bacon, a spokesman for the Leukemia and Lymphoma Society, said short-term plans often have fine print that allows the insurer to look back into a person’s medical history to find things that could justify denying claims.

Democrats and patient groups said that even if everyone knows the limitations of the coverage they’re buying, people with pre-existing conditions or people who need things like maternity care will still be harmed by something called “adverse selection.”

That’s when healthy people leave the ACA markets for things like association plans or short-term plans. The people left behind, for whom those plans aren’t a viable option, then end up paying higher premiums.

https://www.kansascity.com…

Comment:

By Don McCanne, M.D.

It is easy to understand how a Kansas farmer and her family, living on a modest household budget, would have been upset with the Affordable Care Act that doubled the family’s insurance premium while taking away choices of their health care providers because of network limitations. Something needed to be done.

What is difficult to understand is why the Kansas state legislators responded with policies that would only make things worse. Coverage of essential health benefits is no longer guaranteed. Preexisting medical conditions can be excluded from coverage. As people leave the plans to enroll in junk insurance, premiums for those remaining will go up because those with greater needs will stay in the plan – classic adverse selection. The death spiral that results can cause insurers to leave the market, leaving residents with not much in the way of options, especially when the legislators refuse to expand the Medicaid program thus leaving the desperate, well, desperate.

What this cries out for is a national program of social insurance – include everyone in a national health program automatically and pay for it equitably. A Single Payer Improved Medicare for All would cover everyone and make it affordable for each, based on ability to pay. Although some states make the effort, no state has yet been able to include everyone equitably. Other states, such as Kansas, don’t even try, often leaving their residents high and dry. Anyone who needs health care should have health care, including the residents of Kansas. We can do it.

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By Andrea M. Sisko, Sean P. Keehan, John A. Poisal, et al, Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs, Published Ahead of Print, February 20, 2019

Abstract

National health expenditures are projected to grow at an average annual rate of 5.5 percent for 2018–27 and represent 19.4 percent of gross domestic product in 2027. Following a ten-year period largely influenced by the Great Recession and major health reform, national health spending growth during 2018–27 is expected to be driven primarily by long-observed demographic and economic factors fundamental to the health sector. Prices for health care goods and services are projected to grow 2.5 percent per year, on average, for 2018–27—faster than the average price growth experienced over the last decade—and to account for nearly half of projected personal health care spending growth. Among the major payers, average annual spending growth in Medicare (7.4 percent) is expected to exceed that in Medicaid (5.5 percent) and private health insurance (4.8 percent) over the projection period, mostly as a result of comparatively higher projected enrollment growth. The insured share of the population is expected to remain stable at around 90 percent throughout the period, as net gains in health coverage from all sources are projected to keep pace with population growth.

Conclusion

During the past ten years the lingering effects of the Great Recession, coupled with the coverage and payment provisions of the Affordable Care Act, have significantly influenced the trends in health care spending and enrollment in the United States. Over the next decade, however, the outlook for health spending and insurance coverage is expected to be primarily driven by long-observed demographic and economic factors fundamental to the health sector. While the national health spending growth rate is projected to average 5.5 percent per year for 2018–27, annual growth is expected to generally accelerate over much of the projection period. Medicare spending growth is expected to accelerate and be the fastest among the major payers, reflecting not only the continued enrollment shift of the baby-boom generation into the program but also the growth rate for use and intensity, which is projected to gradually increase toward the rates observed during Medicare’s long-term history. Growth in health care prices, reflecting both economywide and relative personal health care price inflation, is also expected to rebound somewhat toward rates more consistent with the period before the Great Recession and to return to a state in which personal health care price growth exceeds that of economywide price inflation. Finally, recent and anticipated faster growth in disposable personal income is expected to lead to an increased demand for services, albeit with a lag, and put upward pressure on the pattern of private health insurance and out-of-pocket spending growth over the projection period.

https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

National health expenditures are projected to grow at an average annual rate of 5.5 percent for 2018–27 and represent 19.4 percent of gross domestic product in 2027, driven primarily by long-observed demographic and economic factors fundamental to the health sector.

There are a couple of items of special interest:

• Annual growth is expected to generally accelerate over much of the projection period as we leave behind us the lingering effects of the Great Recession.
• Growth in health care prices is expected to rebound somewhat toward rates more consistent with the period before the Great Recession and to return to a state in which personal health care price growth exceeds that of economywide price inflation.
• Medicare spending is expected to grow faster than Medicaid or private insurance spending because of higher projected enrollment growth and an increased growth rate in use and intensity of services.
• The percentage of uninsured is expected to remain around ten percent.

Of these, perhaps the most alarming is the fact that the authors anticipate that a decade from now we will still have tens of millions uninsured. Apparently they do not predict enactment of major health reform legislation. We should press for an all out effort to screw up their prediction by finally making Single Payer Medicare for All a reality.

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By Harvard Health Care Policy Professor Michael Chernew
NEJM Catalyst

The basic goal: Build payment models like population-based payment, where the delivery system assumes accountability for the full amount of spending and individual clinical outcomes, and bundled payments, assuming accountability, for an episode of care, and allow the provider system to rearrange the resources they need to provide that service or care for that patient more efficiently and share some of the fiscal savings it generates.

“We call those payment models, commonly, value-based payment, but in my view it’s just a misnomer,” says Chernew. “The word ‘value’ is simply the sugar that makes the medicine go down. This is about risk transfer.” Someone has to control what goes on, and someone has to have the incentives to control what’s going to go on.

“Frankly, as providers, you’ve drawn the short straw,” he says. “You may not have gone to medical school to learn how to save money, but increasingly the delivery system is put in the situation where they need to save money or at least control the rate of growth and spending.”

From the NEJM Catalyst event Disrupting the Health Care Landscape: New Roles for Familiar Players, held at NewYork-Presbyterian, October 25, 2018.

Nine minute video and transcript:
https://catalyst.nejm.org…

Comment:

By Don McCanne, M.D.

Nowhere in his comments does Harvard Professor Michael Chernew even mention single payer, and that’s the point. He is describing the status quo of the prevalent health policy views on health care financing – a vision with which we will have to live indefinitely as there would be no future role for single payer.

Set aside nine minutes to watch this video, and then a few more minutes to recover, but use that recovery time productively by thinking about the following. Instead of a vision of a system in which the “providers” are put at risk to control spending for the benefit of the payers, refresh your vision of a system in which health care professionals and institutions are dedicated to providing optimal care for the patients in a system which automatically allocates health care spending with that goal in mind – efficiently, effectively, equitably, and affordable for all – with no necessity to give thought as to how the care will be financed, any more than you would give thought about how the fire department will be paid as they are putting out a fire in your home.

Do we really want to live with a system in which the provider’s role is to curb health care spending? No? Then it’s time for bold action.

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New single-payer plans don’t need to worry about carving out roles for health-care profiteers.

By Adam Gaffney
The Nation, February 18, 2019

Does achieving “Medicare for All” mean mostly eliminating private health insurance? Single-payer proponents say yes: After all, if a public plan provides comprehensive, no-deductible coverage for everyone, nobody would want—much less be willing pay for—duplicative private coverage.

Let’s assume we agree on the need for a universal public-insurance plan that covers everyone, as in Canada, Great Britain, or France. Would there still be a role for private insurance? If so, what would it be?

In nations that have universal public-insurance programs, private health plans fall into three categories: “duplicative” plans, “supplementary” plans, and “complementary” plans.

Let’s start with “duplicative” coverage, which refers to private plans that “duplicate” benefits of the public plan, like covering doctor visits or procedures that are also covered by the single-payer plan.

At first glance, it might seem odd that insurers would offer such plans, much less that anyone would pay for them. You wouldn’t, for instance, buy a private plan hawked by a company that promises you “access” to Central Park. You already have that. Obviously, such plans must offer some advantage to be viable.

And they do: In the single-payer context, they let individuals jump to the front of the line, gaining wider or quicker access to physicians’ services or other care covered by the public plan.

Should a scarce bed go to a less sick person over a sicker one who needs it more, just because the former has better-paying insurance? Most, I believe, would find that appalling.

But essentially, that’s what duplicative plans promise, albeit usually for non-emergency care.

Whether you’re talking about access to a primary-care doctor or a specialist, a psychiatrist or a hospital bed, health—not wealth—should be the factor determining access.

Duplicative plans, in other words, are not desirable, but they are also unnecessary. We should not embrace them.

But how about “supplementary” coverage, the private plans that provide benefits for services not covered by the public system? As Sarah Kliff of Vox notes, in Canada, the public system doesn’t offer universal drug benefits or dental care, so people need supplementary private plans to cover their medicines and their teeth. Similarly, in the United States, Medicare doesn’t cover dental-care benefits, and until 2003 didn’t cover prescription drugs.

The single-payer bills in Congress do not ban supplementary private coverage. However, because both the forthcoming bill in the House and (with the exception of long-term care) the bill in the Senate have comprehensive benefits—including dental care, prescription drugs, and vision care—there is not much left for supplementary plans to cover. Perhaps cosmetic surgery, or trips to Swiss medicinal spas?

When fashioning any new health program, we should pick and choose the best policies. For instance, the United Kingdom does have universal drug coverage (mostly without co-pays) and, consequently, basically everyone gets the medicine they need. That should be our model. The underlying question is simple: Do we offer comprehensive benefits in the universal public system, or do we drop benefits at random so as to give Aetna and Cigna something to do? The answer, to my mind, seems clear.

Finally, many nations have “complementary” private plans, which cover the co-pays and deductibles imposed by some (but not all) public systems.

For instance, many Medicare beneficiaries take out so-called “Medigap” plans today, which cover that program’s often substantial out-of-pocket expenses. In France, almost everyone has a complementary plan that covers the cost-sharing (e.g., co-pays) imposed by the single-payer program. The United Kingdom and Canada, in contrast, have no co-pays for physician care, diagnostic testing, emergency-room care, surgical procedures, or hospital care.

But far more importantly, let’s not forget how bad co-pays and deductibles are. It’s not just that they are unnecessary for cost control: Canada and the United Kingdom provide no-deductible universal coverage and have lower overall health-care costs. And it’s not just that they squeeze family budgets, effectively worsening inequality: By deterring the use of needed care, they are also harmful to health itself.

The presence of complementary private plans requires the erection of unnecessary financial barriers to care. Without the latter, we won’t need the former.

In other words, the only way to make room for a significant role for private insurance in the American context is to make the public system paltrier or skimpier, to impose onerous co-pays and deductibles, or to let the rich preferentially displace working-class people from hospital beds and doctors’ offices. But it doesn’t seem to make sense to punch holes in your own floor just to create work for a carpenter. That is particularly true if your floor is your health care—and your carpenter is an extractive insurance giant.

Adam Gaffney is a pulmonary and critical care specialist at the Cambridge Health Alliance and Harvard Medical School, and President of Physicians for a National Health Program.

https://www.thenation.com…

Comment:

By Don McCanne, M.D.

It has often been said that even if we enacted and implemented a single payer Medicare for All program there would still be a need for additional private insurance, whether duplicative, supplementary or complementary. That is not true.

Not only would a well designed single payer system obviate the need for additional coverage, we also would not have to face the additional costly administrative excesses of superfluous insurance, plus we would not be introducing the inequities that are often characteristic of such plans.

A single, publicly-funded, universal risk pool that provides comprehensive benefits for everyone is the most effective, most efficient, and least expensive on a per capita basis of all models of health care financing that would truly ensure that all of us receive the health care that we need. As Adam Gaffney explains, we shouldn’t compromise in the design of a single payer Medicare for All program simply to accommodate the desires of the expensive, intrusive and administratively inefficient private insurance industry. We need them out of our system.

An excerpt from yesterday’s Quote of the Day seems appropriate here:

“Particularly hot right now is the meme that people would have to sacrifice by giving up their private insurance if we switched to single payer. But private insurers are intermediaries that use administrative mechanisms designed to reduce utilization of health care no matter how beneficial that care may be. High deductibles and other cost sharing create financial barriers to care. Narrow provider networks limit access to health care professionals and institutions. Administrative interventions such as prior authorization requirements create additional barriers to care. And for this we pay more because of these expensive administrative functions that provide no health benefit. Besides, how many people do you know who have been able to keep their same precious private insurance plan throughout their lives? Nobody. Private insurance is an unstable method of financing health care with constant changes in providers, benefits, and in the insurers themselves, especially with inevitable changes in employment. Switching from private insurers to stable, life-long coverage is not a sacrifice, but rather it is another benefit of a single payer system.”

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A battle is looming over universal health care. Politicians and voters will have to decide whether the trade-offs are worth it.

By The Editorial Board
The New York Times, February 16, 2019

It’s been nearly 10 years since the passage of the Affordable Care Act — one of the most sweeping health care overhauls in the nation’s history. The law has brought the number of uninsured people in America to an all-time low, secured protections for people with pre-existing conditions and advanced the notion that health care is a human right.

But the system was never perfect, and its fractures and stress points have become too great to ignore. The number of people who are uninsured or underinsured is rising again, after two years of sabotage to the current law by the Trump administration. A Republican-led lawsuit that once seemed like a lark is threatening Obamacare’s protections for pre-existing conditions. And high out-of-pocket costs, absurd hospital billing practices and ever-rising prescription drug prices have forced too many people to skip crucial treatments, avoid emergency rooms and ration life-sustaining medications.

America may be a country rich in medical innovation — a place where robots perform surgery — but it’s also one where tens of thousands of people die every year because they can’t afford basic care.

Both parties seem certain to make health care a significant election issue over the next two years. There are no fewer than six Democratic bills floating through Congress that would address these problems. And “Medicare for all” — a concept that describes only some of those proposals — has become both a rallying cry and a test of progressive credentials.

Voters, however, appear more ambivalent. Though health care has long topped the electorate’s list of concerns, including in the 2018 midterms, surveys suggest that most Democrats want their party to focus on fixing the Affordable Care Act rather than on starting a long-shot bid for a single-payer health care system. In a recent Kaiser Family Foundation poll, some 56 percent of Americans, including nearly a quarter of Republicans, supported the idea of a new federal program; but when trade-offs like higher taxes or the loss of private insurance options were factored in, that support evaporated.

As the 2020 race heats up, here’s a primer to help citizens sort out where they stand.

What are the options?

The plans currently in play differ in their particulars: Senator Bernie Sanders’s Medicare for All Act would scrap private insurance and create a new federal system to cover everyone; a plan from the Center for American Progress, a think tank, would create an optional public program that anyone could buy into; and a plan from Senator Debbie Stabenow would give all Americans the option to buy into Medicare when they turn 50. But these plans would extend coverage to more people and would increase the federal government’s role in providing and policing health insurance.

The proposals fall into two broad categories: universal and incremental. On the universal side, Medicare for all would largely eliminate the need for private insurance and for other public programs like Medicaid and the Children’s Health Insurance Program. Its coverage would also be more expansive than current Medicare: It would include eye and dental care as well as prescription drugs, and it would eliminate premiums, deductibles, copays and surprise medical bills.

A single federal payer — as such proposals envision — may well eliminate the waste, inefficiency and corruption that make the current system so expensive and inaccessible; the experience of countries like Canada and Britain that rely heavily on one government payer suggests as much. But such a system would require dramatic changes from the status quo and would be a tough political sell. What’s more, single-payer is not the only way to achieve universal coverage.

On the incremental side, several different proposals would allow certain people to buy into existing public plans. Some would enable older Americans who are not yet eligible for Medicare to buy into that program — at age 50 or 55 or 60. One would let people who don’t have other insurance coverage buy into Medicaid (as long as their state opted into the program).

Because these programs don’t rely on a single payer, they would not do as much to clean up the existing system. But they have a better chance of being adopted by Congress, and some could bring the country very close to achieving universal coverage.

What would happen to private insurance?

A recent Kaiser poll found that the potential loss of private insurance was what turned most people off the concept of Medicare for all. That’s not surprising. About half of all Americans — some 156 million people — get their health insurance through employer-based plans, and another 30 million rely on other forms of private coverage, including the A.C.A. marketplace and Medicare Advantage plans. The vast majority of those people say that they like their coverage. And so far, the majority of Americans seem loath to give up what they have, no matter how good the alternative is made to sound.

That’s too bad. The idea of forcing more than half the country off existing programs might sound scary, but the majority of those people are at constant risk of losing their health coverage — for instance, if they lose or leave their jobs, if their employers change plans or if their insurers change their terms in ways that increase out-of-pocket costs.

Still, the choice between universal health care and private insurance will very likely prove to be a false one. Most of the six plans leave ample room for private options to play a role, and the ones that don’t — the true Medicare for all proposals — will almost certainly change as they are negotiated. As Vox points out, no other country has managed to achieve universal health care without including some form of private insurance.

Who pays?

Proponents of Medicare for all say that total health care spending would remain roughly the same, but that more of that spending would be shouldered by the federal government and less of it would be wasted.

A single-payer system would mean fewer administrative costs. Eliminating other government programs would free up billions of dollars for the new plan. And eliminating private insurers would bring billions more dollars worth of profits and employer taxes back into the health care system. (Businesses currently enjoy a tax break on the money they spend covering their employees.)

But there would also be new taxes. Proponents say that, to the extent those taxes fell on consumers, they would be offset by the elimination of premiums, deductibles and copays. But that may not be enough to assuage voters. In Vermont and Colorado, legislators dropped bids for a state-run single-payer system when it became clear that people would not support the tax increases needed to sustain such a program.

Taxes are not the only trade-off. Increased efficiency and less profiteering should mean that more people would be covered and could afford the care they needed. But a single-payer system could also mean the elimination of many thousands of health care jobs and lower pay for providers, both of which could impede access to, and the quality of, care. Those impediments could be small — slightly longer wait times, for example. Or they could be substantial — much longer wait times and far fewer doctors.

What would be covered?

There are two basic ways for insurance programs to curb costs. One is to cover fewer things; the other is to negotiate on prices.

Medicare for all would forgo the first option, meaning that it would cover everything. But it would use the massive bargaining power of so many users — the entire United States population — to negotiate far better deals on prescription drugs, hospital stays and more. The different incremental programs would use both levers: Most would not cover vision or dental, for example. But all of them would also direct the secretary of health and human services to negotiate costs with providers.

Most other countries use negotiating power to control health care costs; that’s why prescription drugs cost so much less elsewhere than they do in the United States. But those countries accept a trade-off, inherent in this approach, that the United States has so far resisted: They forgo access to certain innovations, like pricey new drugs and medical devices whose benefits are found to be minimal.

A plan that results in higher taxes but skimps on cutting-edge medicine may seem unfair — and may well be unpopular. But many Americans are already being denied essential services every day. It may make sense to forgo innovations that a growing number of people can’t benefit from anyway in exchange for a program that sets fair prices at the outset and doesn’t leave people rationing low-tech essentials or begging for donations to cover basic costs.

The fight to once again remake American health care will almost certainly be brutal. Before voters can decide if they want to have that fight, candidates will need to clarify what they are selling. Only then can the nation have an honest dialogue about the risks, benefits and trade-offs ahead.

https://www.nytimes.com…

Comment:

By Don McCanne, M.D.

If you read this New York Times editorial carefully and sort out the facts, the editors have made a very solid case for a single payer Medicare for all system of financing health care. Such a system would provide efficient, comprehensive health care for everyone, and it would be affordable for each of us. Yet they have woven into their narrative the suggestion that such a system would require trade-offs or sacrifices. Not a very bold approach. Besides, what sacrifices are they talking about?

They say that higher taxes would be a trade-off for enacting a single payer system. But those taxes displace our current inequitable, fragmented system of financing health care. How can you call this a sacrifice when single payer is financed through progressive taxes based on ability to pay – a highly equitable (i.e., fair) method of financing health care for all of us? Using the tax system is not a sacrifice, but rather it is a benefit of the single payer model.

Particularly hot right now is the meme that people would have to sacrifice by giving up their private insurance if we switched to single payer. But private insurers are intermediaries that use administrative mechanisms designed to reduce utilization of health care no matter how beneficial that care may be. High deductibles and other cost sharing create financial barriers to care. Narrow provider networks limit access to health care professionals and institutions. Administrative interventions such as prior authorization requirements create additional barriers to care. And for this we pay more because of these expensive administrative functions that provide no health benefit. Besides, how many people do you know who have been able to keep their same precious private insurance plan throughout their lives. Nobody. Private insurance is an unstable method of financing health care with constant changes in providers, benefits, and in the insurers themselves, especially with inevitable changes in employment. Switching from private insurers to stable, life-long coverage is not a sacrifice, but rather it is another benefit of a single payer system.

The editors point out that doing away with private insurance may be a false choice since other countries include some form of private insurance. But the benefits in a well designed single payer system should be comprehensive enough that additional insurance should not be necessary. If someone wants a penthouse hospital suite or vanity cosmetic surgery, they are likely wealthy enough to not need a supplementary plan anyway, plus who really wants to participate in funding that kind of a risk pool? Also it is important to prohibit private plans that duplicate the coverage of the public program since those plans are used to jump the queue. Instead of allowing wealthier individuals a ticket to the front of the line, we need to recruit wealthy individuals to advocate for appropriate capacity adjustments and queue management so that none of us has to face excessive queues.

Another trade-off they allude to is the elimination of hundreds of thousands of administrative jobs that would no longer be required in an efficient single payer system. Not only are the administrative services that are being sold to us by the insurance industry, plus the administrative service burden placed on the health care delivery system by the insurers, costing us enormous amounts of money, they are intrusive services that we do not even want. It would be far better to eliminate those positions and transfer those employees into jobs that improve productivity for our economy. That’s not a sacrifice. We would all benefit – employees and society alike.

They hint that government price negotiation might suppress innovation for new drugs and medical devices, but there is no way that the pharmaceutical, biotechnology, and medical device industries are going to walk away from trying to get a significant share of the multi-trillion dollar health care industry budget. They might have to price their products fairly, but that is hardly a sacrifice on our part.

The editors tell us that a single payer system “would require dramatic changes from the status quo and would be a tough political sell.” Dramatic changes? You mean, everybody in, nobody out? Isn’t that the kind of dramatic change we really want to see? And a tough political sell? Now there’s a trade-off for you – trade our current stuck-in-the-mud politicians for ones who really care about the people and our health. So that’s our sacrifice – losing a few politicians on the way, returning them to the economy where they can improve productivity instead.

Time for boldness.

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By Howard Bauchner, M.D., Editor in Chief, JAMA
JAMA, Editorial, February 13, 2019

The modern era of medicine began in the 1960s. Health care coverage expanded with the passage of Medicare and Medicaid and the increasing availability of employee-based health insurance. Scientific and clinical advances began to occur at a far more rapid pace. Physicians became more specialized and began to focus on acute care dominated by cardiovascular disease, diabetes, and cancer rather than infectious diseases, and there was increasing recognition of the importance of chronic diseases. With more data available, it became possible to measure variation in the delivery and quality of care, along with disparities and rationing in the provision of care. Health care costs per person more than doubled between 1960 and 1970, beginning their 5-decade increase.

Rationing and cost of care are inextricably linked, although measuring the amount and extent of rationing and defining rationing is difficult. There are many types of rationing, including rationing by access (type of insurance), by cost (out-of-pocket expenses), by restriction (the service is not available or paid for by a third party), or by long waits (Canada and parts of the United States). Broadly, rationing refers to approaches that are used to allocate resources and potentially restrict access to effective therapies. Rationing is linked to poverty, race, and ethnicity, and it inevitably leads to differences in the care that certain groups of individuals receive.

Rationing of care often is part of the larger discussion of disparities in health care. Healthy People 2020 defines a health disparity as “a particular type of health difference that is closely linked with social, economic, and/or environmental disadvantage. Health disparities adversely affect groups of people who have systematically experienced greater obstacles to health based on their racial or ethnic group; religion; socioeconomic status; gender; age; mental health; cognitive, sensory, or physical disability; sexual orientation or gender identity; geographic location; or other characteristics historically linked to discrimination or exclusion.” Disparity in health care is often used as an inclusive term, including differences in health outcomes, which is not only a product of access to treatment but also social determinants of health. Social determinants of health, for example, the quality of education and housing, are largely outside of the general focus of the health care system, although that is changing with an increasing commitment to population health and renewed interest in the inextricable link between social determinants of health and health outcomes. Disentangling and differentiating among health disparities, health outcomes, rationing of care, health equity, population health, and social determinants of health represent important challenges.

This decade and the next likely represent the postmodern era of medicine. Big data, machine learning, precision medicine–based therapies, and the genetics revolution, including rapid sequencing of the genome and manipulation of both the germline and somatic cells, suggest that the scientific advances to emerge may be as significant as the expansion of health care coverage and other medical advances in the 1960s and 1970s. The expansion of health care coverage brought with it the recognition of health care disparities and the rationing of health care. An important question is whether these new scientific advances, with their attendant cost, will lead to further rationing of care.

Following the passage of the Affordable Care Act, much of the national discussion was focused on expansion of coverage and value in health care, but new concerns about rationing of care are emerging. For instance, more than 3 million individuals in the United States have hepatitis C infection. Who has been treated and who has not been treated? Will the remarkable discoveries such as CART-T cell technology or cancer immunotherapy be widely available, or rationed based on the ability to pay? Who has had access to transcatheter aortic valve replacement and who has not? With a cure for sickle cell disease in reach, will this treatment be developed and then become widely available, similar to new treatments for cystic fibrosis, or will inadequate research funding delay the development of a possible cure? How will decisions be made about the use of extremely expensive care during the last years of life? As more successful treatments become available for rare diseases, at very high cost, will all individuals benefit, or just a select few?

The cost of health care continues to increase, now approaching 18% of the US gross domestic product. Health care expenditures consume approximately 30% of many state budgets, and this does not include the cost of health care paid by states for their own employees and via pension benefits. Even at the estimated 4% to 5% yearly increase in health care costs for the next decade, this projected increase exceeds the rate of inflation. As the number of individuals working in health care increases, any reduction in the ongoing increase in cost will be nearly impossible. Moreover, some highly prevalent conditions will continue to drive increases in health care costs. For instance, the obesity epidemic will inevitably increase health care expenses, with its associated complications affecting the endocrine, cardiovascular, and musculoskeletal systems, including hip and knee replacement operations at younger ages, and often necessitating subsequent joint replacement procedures.

The United States is mired in a great philosophical debate. Is health care a right or a privilege? In part this debate is embedded in the historical, underlying sociopolitical discourse in the United States — is this a nation that champions individual rights and achievement at the expense of the common good? This philosophical debate plays out in health care. Rationing of health care is likely always going to occur, but for those who maintain that health care is a privilege, attention to rationing and attempts to ensure that rationing is minimized may not be a priority. Yet, even for those who assert that health care is a right and that health care coverage should be provided to all individuals in a more just and fair way, unless the relentless increase in the cost of health care is addressed, rationing of health care is likely to become more common.

Identifying approaches to mitigate the increase in health care costs has been elusive. Debates about waste in health care, prices of drugs and devices, volume, fraud, defensive medicine, inappropriate testing, and misaligned incentives have been ongoing for more than a decade. Each of these potential areas of cost containment provides income for specific groups, making change difficult. However, there is one area — administrative costs — about which there is broad agreement that it adds needlessly to the cost of health care, frustrates physicians and other clinicians, provides little benefit beyond employment, and clearly is one area in which the United States leads the world. These costs involve, but are not limited to, billing, excessive documentation, and the need to obtain prior approval for certain medications, radiological procedures, and specialty referrals. Although there is uncertainty about what percentage of the $3.5 trillion in annual health care spending is accounted for by administrative costs, if that amount is 10%, and could be reduced to 5%, an estimated $175 billion could be saved or redirected to provide care to patients and avoid rationing of some health care services. Reducing administrative costs should be the major focus of national efforts to reduce waste in health care and help control increases in health care spending.

For the United States to prosper in the 21st century, controlling health care costs is critical — indeed, it is the single most important challenge facing health care. Greater rationing of care is inevitable if health care costs continue to increase. Controlling health care costs is the only way to ensure appropriate investment in other areas, such as education, the environment, and infrastructure, and to provide a more equitable, just, and fair distribution of the remarkable health care advances that have been achieved with even more on the horizon. It has been said many times that in the richest country in the world, in which many of the greatest scientific and medical advances are developed, it is a blight on the US soul that each of its residents does not fully benefit from available health care.

https://jamanetwork.com…

Comment:

By Don McCanne, M.D.

For those of you who skip the quoted text and go right to the comment (often a wise move as a time-saver), please pause here and read the last three paragraphs of Howard Bauchner’s editorial, and then return here.

How many times have you heard the opponents of single payer Medicare for All say that if we adopt such a system here then we’ll have rationing like the socialist health care systems of other nations? Yet the irony is that we already have a major problem with rationing, and it is perhaps the cruelest version of all since we ration by ability to pay in spite of spending far more on health care than any other nation.

So how did we end up with both high spending and rationing? Quite simply we have the most administratively complex health care financing system of all nations, which is very expensive to run, wasting funds that could be used on health care for those who are victims of rationing, not to mention that our financing system is profoundly inefficient. Remember that tens of millions of US residents remain uninsured, tens of millions more face excessive financial barriers to care due to excessive out-of-pocket spending, and personal bankruptcy due to medical debt has not declined with the implementation of the Affordable Care Act.

Bauchner has defined the problem: profound administrative excesses. We know the solution: administrative efficiency through a publicly-administered, equitably funded Single Payer Medicare for All program.

There has been a surge in support for a public option such as a Medicare buy-in, but that only adds one more player to our administratively complex, wasteful system. There is also support being expressed for our employer-sponsored plans and for other private approaches such as the Medicare Advantage plans, but these perpetuate our costly, dysfunctional, multi-payer approach to health care financing.

So what about rationing? With Single Payer Medicare for All we would essentially eliminate rationing by insurance design, rationing by restriction of benefits covered, rationing by prohibition of obtaining care outside of narrow provider lists, rationing by unaffordable out-of-pocket cost sharing, or rationing by administrative barriers such as prior authorization requirements. These forms of administered rationing are harmful and should be done away with. Inability to pay for care would no longer be a barrier since a Single Payer Medicare for All program finances care equitably such that it is affordable for everyone. Maldistribution of health care professionals and institutions would be corrected through central planning and equitable distribution of our health care resources. Although all nations, including ours, must deal with queues, other nations have shown that the delays can be minimized by improving distribution of health care resources and funds, and also by simply applying the science of queue management, though that requires that we select to run our government stewards who actually care.

Bauchner says, “it is a blight on the US soul that each of its residents does not fully benefit from available health care.” But we can fix this, and the sooner the better.

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