PNHP

How can we afford not to adopt single payer?

How can we afford not to adopt single payer?

By Thomas Gates, M.D.
Lancaster News (Penn.), September 13, 2018

The Sept. 10 letter “How can we afford ‘Medicare for all’?” asks the wrong question. The real question is, “How can we continue to afford our current fragmented and wasteful health care system?”

U.S. health care expenditures in 2016 were $3.3 trillion — $10,348 per capita — or 17.9 percent of gross domestic product, a far higher percentage of our income than any other country. A former administrator of the Centers for Medicare and Medicaid Services estimated that up to 30 percent of U.S. health expenditures are waste, largely driven by high administrative costs of for-profit insurance companies. Total overhead for private insurance is 16.8 percent, more than four times that of Medicare and Medicaid. Our current system leaves 12.9 percent of Americans uninsured, while the insured are stuck with ever-increasing premiums, co-pays and deductibles.

The letter cites a study that puts the “Medicare for all” cost at $2.5 trillion, versus our current cost of $3.3 trillion (over half of which is already government funded). That’s $800 billion in savings: How can we afford not to adopt single payer? Yes, it would mean new taxes, but by eliminating insurance premiums, deductibles, co-pays and most out-of-pocket expenses, 95 percent of Americans would end up saving money.

Our expensive health care system makes individuals and society poorer. Single payer would be far more equitable and far less expensive. What are we waiting for?

Dr. Thomas Gates resides in Manheim Township.

https://lancasteronline.com…

Without pharmaceutical price regulation, gouging is to be expected

Pharma chief defends 400% drug price rise as a ‘moral requirement’

By David Crow
Financial Times, September 11, 2018

A pharma executive has defended his decision to raise the price of an antibiotic mixture to more than $2,000 a bottle, arguing there was a “moral requirement to sell the product at the highest price.”

Last month, Nostrum Laboratories, a small Missouri-based drugmaker, more than quadrupled the price of a bottle of nitrofurantoin from $474.75 to $2,392, according to Elsevier’s Gold Standard drug database.

Nitrofurantoin is an antibiotic used to treat bladder infections that was first marketed in 1953, which appears on the World Health Organization’s list of essential medicines.

In an interview, Nirmal Mulye, Nostrum chief executive, said he had priced the product according to market dynamics, adding: “I think it is a moral requirement to make money when you can…to sell the product for the highest price.”

Mr. Mulye said Nostrum was responding to a price rise from Casper Pharma, which makes a branded version of the product known as Furadantin. Casper increased the price of its product by 182 per cent between the end of 2015 and March 2018, taking a bottle to $2,800, according to the Elsevier database.

He also defended the actions of Martin Shkreli, who became infamous in 2015 for his decision to raise the price of an Aids and cancer drug from $13.50 to $750 per tablet. Shkreli was jailed earlier this year on unrelated fraud charges.

“I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders,” said Mr. Mulye.

Mr. Mulye pointed out that Shkreli was able to increase the price of Daraprim so dramatically because his company was the only one making it.

“If he’s the only one selling it then he can make as much money as he can,” said Mr. Mulye. “This is a capitalist economy and if you can’t make money you can’t stay in business.”

In a tweet responding to Mr. Mulye’s comments, Scott Gottlieb, FDA commissioner, said, “There’s no moral imperative to price gouge and take advantage of patients. FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine.”

https://www.ft.com…

***

Comment:

By Don McCanne, M.D.

Appalling drug price gouging will continue until our government fulfills its responsibility to protect the consumer, that is, the patient. FDA Commissioner Scott Gottlieb represents the view of current and previous administrations when he says that we need to promote competition, as if the market will take care of it.

But that’s not the way markets really work. The 400 percent price increase of this generic nitrofurantoin was to bring the price closer to the competition – the branded version, Furadantin. Nostrum chief executive Nirmal Mulye explains to us the way markets really work, “I think it is a moral requirement to make money when you can…to sell the product for the highest price.” A moral requirement, he says.

Maybe we should begin discussions of nationalizing the pharmaceutical industry. That might make them nervous enough that they would finally agree to regulation of prices as is done in other civilized nations. Whether they agree or not, we need to do it.

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Inequities of social spending

The Government-Citizen Disconnect

By Suzanne Mettler
Russell Sage Foundation

From Chapter 1 – A Time of Contradiction

Over the past four decades, Americans’ relationship to the federal government has evolved in a deeply paradoxical manner. As a society, we appear to regard government with ever greater disdain, as evidenced by popular discourse, numerous polls, and election results. Yet people depend on the federal government more than ever to help them attain economic security, health care and educational opportunity.

Yet over these very same decades, Americans have increasingly counted on the federal government’s assistance in their personal lives. Nationwide, the share of the average citizen’s income that flows from federal social “transfers” – including Social Security, food stamps, the Earned Income Tax Credit (EITC), and more than forty other programs – increased from 7 percent in 1969 to 17 percent in 2014. On a per capita basis, the rate grew fairly steadily over time, escalated more quickly with the onset of the 2008 financial downturn, and then declined somewhat more recently. The amount received by the average person increased from $1,853 in 1969 to $7,729 in 2014, in 2014 dollars.

These figures do not include the most generous social benefits, which are either channeled through the tax code, such as home mortgage interest deduction, or provided in tandem with private organizations, such as tax-subsidized, employer-provided health and retirement benefits. These policies serve the same function as social benefits delivered as direct payments or services – such as helping families to afford health care, housing, or education – but in permitting beneficiaries simply to pay less in taxes, they differ in design. If we consider only public social spending or government transfers, the U.S. welfare state is smaller as a percentage of GDP than that of other affluent nations, ranking twenty-fourth worldwide, but if we account also for the social expenditures channeled through the tax code and tax-subsidized payments from employers, the United States has the second largest welfare state in the world after France.

From Chapter 3 – We Are All Beneficiaries

Sheila Turner, who was born in 1973, is a self-described “stay-at-home-mom” who lives in Dallas, Texas, in a middle-income household. She considers herself to be extremely conservative on politics and identifies with the Republican Party. When asked what she thinks of when she hears the term “government social programs,” she says, “Giving money to those who don’t want to work.” Her views of such programs are “mostly negative,” she reports, because they provide support for “people who don’t prioritize their budgets and pay for their (own) bills.” She believes that “government does a poor job of managing things,” and that “people should provide for themselves.”

Yet Turner readily acknowledges that her family has used several specific policies. Her daughter used financial aid to attend college, both Pell Grants and student loans. Her husband used Unemployment Insurance for several months while unemployed, about which she comments, “Every little bit helps when you have no income.” She and her family have also utilized several features of the tax code, including the EITC, the home mortgage interest deduction, and the tax-free status of employer-provided health and retirement benefits. She does not view these tax expenditures as government social benefits, but rather as incentives for making certain decisions, explaining, “They give people a reward for using their money the right way”

American rhetoric about government benefits implies that we are a deeply divided nation of “us” and “them,” the deserving and the undeserving. Yet the evidence tells a different story. When we consider individual Americans across different incomes, parties, and ages, nearly all have used social benefits, and although usage patterns vary, particularly with respect to policy types, the commonalities loom larger than the differences. Similarly, when we consider Americans with respect to the communities across the country where they live, whether rich or poor, they are far more likely to use more such benefits today than Americans did thirty-five years ago. We nearly all benefit from the federal government’s social policies, and we nearly all contribute to those policies. whether through payroll taxes, income taxes, or both.

Percentage of Americans Who Report Having Ever Used Specific Social Policies:

55.3 – Employer-provided retirement (current only)
49.9 – Employer-provided health care (current only)
45.6 – Home mortgage interest deduction
38.5 – Unemployment insurance
34.4 – Earned Income Tax Credit
27.4 – Student loans
25.7 – Child and Dependent Care Tax Credit
25.4 – Food stamps
22.2 – Medicare
17.5 – Medicaid
16.0 – Pell Grants
15.8 – Social Security – retirement and survivors’
13.9 – Welfare/public assistance
10.0 – Hope or Lifetime Learning Tax Credit
9.7 – Social Security Disability Insurance
8.7 – Government-subsidized housing
8.1 – Supplemental Security Income
8.0 – Head Start
5.9 – GI Bill
5.1 – 529 plan or Coverdell Education Savings Account
4.6 – Veterans’ benefits (other than GI Bill)

From Chapter 4 – Different Lenses

In sum, when Americans think about government, only in some instances does their memory of the social policies they have benefited from hover at the top of their minds. As a result, the strong antigovernment attitudes that prevail in the United States today can be found even among many people who themselves have benefited a great deal from social policies. These views may attract Americans to candidates and organizations that articulate such views, even if they hold positions that threaten the very policies from which individuals have benefited.

From Chapter 5 – Unequal Voice

How is it that the nation has shifted to electing more officials who want to undermine social policies at the very same time as citizens depend on them more than before? The answer is in part for reasons we saw in chapter 4, that many Americans use benefits that make government’s role less than apparent, and that when they evaluate government, other considerations and affiliations loom more heavily in their minds than their social policy experiences. But it is also a matter of who shows up to participate in political activity. Those who have benefited from more visible government programs are both more aware of the role that government has played in their lives and more supportive of social spending. Yet they tend to participate less than other Americans, for reasons related to their socioeconomic status and also because candidates, parties, and groups do less to mobilize them and involve them. As a result, their voices are less likely to be heard in the political process, which meanwhile overrepresents those who are less aware that government has made a difference for them. The American polity is skewed by a participatory tilt that exaggerates the views of those who remain incognizant of government’s role in their lives and drowns out those of others. But it does not have to be this way.

From Chapter 6 – Reconnecting Citizens and Government

Although the United States has nevertheless increased the extent to which it provides economic security and educational opportunity to citizens, many Americans who are beneficiaries of these policies do not perceive government to be responsive to them. This conundrum amounts to a government-citizen disconnect.

Policy designs do not speak for themselves in communicating the value of government. Even if appealing internet tools and other procedures help citizens make sense of how government has helped them and their families over time, the impact on assessments of government may still be minimal. In our highly polarized polity, where organizational linkages that connect citizens and government have frayed and some groups beat the antigovernment drum, more is needed. Organizations that seek to strengthen democracy must step up to play these roles, making connections for citizens and drawing them into politics when the fate of policies is at stake. They can do so effectively by developing activists, including individuals from communities that are usually excluded from civic engagement. In the process, they can help people see how government matters in their lives – through social policies like those examined here as well as through others – and spur their involvement in the political process.

As Americans face the future, far more unites us than divides us. We are not a nation of moochers and takers. Rather, we are a political community, one built on respect for the ideas that all are created equal and that “we the people’ can govern ourselves. We can advance by honoring our reciprocal obligations to each other through the bonds of citizenship. By reaffirming that quest, we can carry on together, as citizens of a democracy.

Suzanne Mettler is Clinton Rossiter Professor of American Institutions in the Government Department at Cornell University.

http://www.russellsage.org…

***

Comment:

By Don McCanne, M.D.

Because much of our social spending is not transparent, most people do not realize just how much they benefit from these government social policies. Those who benefit the most, especially though tax expenditures (tax deductibility of retirement plans, health plans, home mortgage interest, etc.), frequently do not consider the government’s largess accruing to their benefit as a government social program, yet they are resentful when others of lesser means receive more visible support to meet basic needs such as food stamps, unemployment benefits, public assistance, or Medicaid.

Yet the opaque social benefits the wealthy receive to help pay for their large mortgages, generous retirement plans or executive health benefit programs are frequently much more than the person with the food stamps at the super market checkout stand is receiving. Further, there is a prevailing attitude that somehow the person working at a job with poverty-level wages is not deserving of a government handout, whereas the very wealthy individual has somehow earned, as a reward, much greater benefits through tax expenditures, which is still a government handout, but for the rich.

It seems that we could inject a much greater dose of fairness into our social spending programs, and this is where health care financing enters the scene. Everyone should have health care, and they could if we used progressive tax policies to fund an equitable universal system such as an improved Medicare that covered everyone. If the system already existed, the rich would not be resentful of poor people getting the health care that they need. At least the rich don’t seem to be so in other nations that have equitable, universal systems.

We really could have the same here, but we’re going to have to acknowledge that we must change our attitude that low-income workers are not deserving of support for basic needs while the rich are entitled to tax expenditures to support their more extravagant lifestyles.

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Medicare for All and the Myth of the 40% Physician Pay Cut

A single payer system works by cutting administrative waste, not doctors' income

By Carol Paris, M.D.
Common Dreams, September 11, 2018

The surge in support for improved Medicare for All—now up to 70% in recent polling—has single-payer opponents ramping up their scare tactics. The Koch-funded Mercatus Center recently claimed that Medicare for all could only work with painful sacrifices from doctors, specifically by paying us Medicare’s current reimbursement rates, which are about 40% lower than private insurance.

If single payer would cost doctors so much, why do a majority of us now prefer it? I invite supporters of the status quo to spend a week at a typical doctor’s office to understand the out-of-control costs of practicing medicine in our current system.

Let’s look at how doctors actually get paid. Most of us accept a mix of Medicare, Medicaid, and private insurance, which pay mostly on a fee-for-service basis: a certain amount for each exam, scan, or procedure. While rates differ from state to state, private insurance usually pays the most, Medicaid usually pays the least, and Medicare is somewhere in between (and for those patients with no insurance, it’s anybody’s guess).

But don’t assume physicians prefer dealing with private insurers just because they pay more. Private insurers make their money by paying out less in claims than they collect in premiums, and make us jump through bureaucratic hoops to secure payment. Basic tests and treatments must be cleared in advance with insurers or they won’t be covered. Claims are routinely denied. If you’ve ever spent hours on the phone haggling with your insurance company, then you’ve had a small taste of what it’s like to practice medicine today.

Since for-profit insurers ultimately decide what will be covered, it’s like having a third party in the exam room second-guessing our medical decisions. This process disrupts the doctor-patient relationship that we work so hard to build. And copays and coinsurance (what patients pay out-of-pocket) mean that even smaller practices must employ several full-time staff just to handle payments, billing, and collections.

Smaller practices spend an average of $83,000 per year on claims, coverage and billing. Doctors personally spend nine hours each week on billing and admin; that’s time we’re not seeing patients. It’s no surprise that doctors today report unprecedented levels of exhaustion and burnout.

Then there’s the issue of malpractice insurance, which takes a big bite out of doctors’ income. Future medical costs are a large part of malpractice settlements, but are removed from the settlement equation under Medicare for All. Lower potential settlements means lower premiums for doctors.

Dealing with one single payer—Medicare—would mean drastically fewer hours of uncompensated administrative time, fewer office staff, and lower overhead. It’s a tremendous amount of time and money that Mercatus fails to include in their analysis.

In reality, relatively few doctors work in private practice anymore. Due to rampant industry consolidation, most providers actually work on salary for larger health systems or hospitals. Under our current multi-payer system, billing and administration account for one-quarter of U.S. hospital expenditures, twice the level in single-payer nations. Medicare for All would simplify hospital payments by funding them through global budgets (similar to the way fire departments are paid), rather than the current patient-by-patient payments, saving billions more in administrative costs.

At the national level, single payer would cut about $504 billion annually in administrative costs. In other words, single payer works by cutting administrative waste and corporate profits, not doctor incomes.

Overall, we estimate that average physician incomes would remain unchanged under Medicare for All. Some doctors, such as family physicians and pediatricians, might see a pay increase while others, such as highly-paid specialists, might see a slight pay cut. But “painful sacrifices” would not be required.

Single-payer opponents will try to pit doctors against patients by claiming that universal coverage only works by cutting doctor incomes. That’s a false choice. The only winners in the current system are the insurance companies who profit by keeping more of our nation’s health care dollars for themselves. By moving to a single-payer program, doctors can finally get back to our calling: caring for patients.

Dr. Carol Paris is a psychiatrist and president of Physicians for a National Health Program.

https://www.commondreams.org…

Ask Medicaid-eligible individuals what a work requirement would do

Medicaid Recipients’ Early Experience With the Arkansas Medicaid Work Requirement

By Jessica Greene
Health Affairs Blog, September 5, 2018

In June, Arkansas became the first state to implement a work requirement in its Medicaid program.

Little is known to date about how those impacted by the new Medicaid work requirement feel about the policy. To explore Medicaid recipients’ attitudes about Arkansas’ work requirement and their early experiences with the policy, in mid-August I conducted in-depth interviews with 18 adult Medicaid recipients in northeast Arkansas.

While this group is far too small to provide generalizable results, the interviews do illustrate how the state’s policy is interacting with the day-to-day lives of Medicaid recipients to produce serious potential consequences that have little to do with policy’s stated objectives.

Lack Of Awareness

Two thirds of the Medicaid recipients (12/18) I interviewed had not heard anything about the new work requirement. “First time I’ve ever heard anything [about it],” a 31-year old man, who had started a vocational training program the day we spoke, said. “You’d think it’d be on the news or something. I ain’t seen it on the news, and I watch Channel 8 news every night.”

At Risk Of Losing Coverage

Of the nine people who, based on their age, should have received a DHS letter letting them know they were subject to the work requirement, four said they had received a letter. Two said the letters indicated they were exempt because they already met the SNAP work requirement.

The other two were at risk for losing Medicaid coverage. One, a 47-year old woman, said she had received her letter about three months earlier; she believed, incorrectly, that she had three months to report her hours. When I asked her if reporting her hours was an obstacle, she said she was struggling with very stressful life issues, including a mentally ill sister, and as a result the work requirement had not received much of her attention. The other person, a 40-year-old woman, described being overwhelmed by receiving the letter: “Basically… I’m like, okay, I’ve got this letter. I file it and I don’t know what to do with it…”

The other five who should have received a work requirement letter were either not sure if the letter arrived or thought it had not. When asked about receiving a DHS letter, a 42-year-old woman said, “I don’t know, I’m going to have to check and make sure [I didn’t receive the letter], because I need my Medicaid card for my sugar pill and my blood pressure pills.” A 46-year-old man, who had recently completed an inpatient drug treatment program, kicking a multi-decade drug addiction, wasn’t sure either. “I may have [received the letter]…I’m horrible about opening mail….I probably throw’d it away.” While the three others did not believe they received the letter, they were all exempt by either working and/or having children in the home, but likely needed to report their hours and exemptions in the portal to maintain Medicaid coverage.

Policy Not Sparking Work-Related Changes

Of the nine participants who were likely subject to the policy, only two were not meeting the 80 hour work-related activity requirement and did not seem to qualify for an exemption. Both told me that they were actively seeking work, and that the work requirement had not at all impacted their job seeking. In addition, those I interviewed between the ages of 19-29, who will be subject to the policy in 2019, either worked, went to school, and/or had children under 18 years old in the home. No one I spoke with reported that the policy had or would spark them to change their work-related activities.

Online Portal Challenging For Many

Participants described a very wide range of computer and online skills and access. Approximately a third said that reporting hours on the online portal would not be possible for them: “I can’t do that. I don’t have a phone. I don’t have a computer.”

Several, who were confident of their own skills, mentioned family members who would struggle. “Half my family probably doesn’t have a smart phone….A lot of people here don’t have internet still,” a 19-year old woman explained.

Mixed Attitudes About Linking Medicaid And Work-Related Activities

Almost all the participants believed that people who could work should be working. “I believe if you are able to work and you want the extra help that Medicaid gives, then you should work,” said a 28-year old woman who was currently working and has young children. But several expressed concern about those who had mental or physical conditions that would prevent them from meeting the requirement. One man raised questions about people who were “borderline” who were not officially considered disabled but still had serious health conditions. A 42-year-old woman, who works with people with disabilities said, “I think it’ll do more harm than good…. What they supposed to do, just get cut off Medicaid because they can’t meet those requirements?”

Others raised concerns about transportation needed to get to work and volunteering. “Some people don’t have vehicles, and sometimes it’s not necessarily their fault. Sometimes something happens and they lose their money… It’s not fair,” said a 21-year old recipient who is a college student. When I asked a woman who was looking for work whether she had tried to get help from the Department of Workforce Services, she said that she couldn’t get there because it was 30 miles away and there is no public transportation.

Not Going To Lift People Out Of Poverty

Participants were very skeptical about the Governor’s claim that the work requirement policy would help them out of poverty, as many were already working and still struggling financially.

One participant argued that the policy was not about getting people to work at all, but about reducing the number of Medicaid recipients: “It seems like a ploy for the state to save money. That’s all it is. It’s nothing about trying to get people back to work…”

Summing Up

Of the people I interviewed who were at risk of losing Medicaid coverage as a result of the work requirement, most were at risk because they lacked awareness of the policy or were overwhelmed by it, rather than because they were not meeting the 80 hours a month of work-related activities or the terms of an exemption. If this is true more broadly, the state will be ending people’s health coverage for the wrong reasons, adding credence to those who argue this policy is about reducing the rolls, rather than supporting people to get employment.

A 38-year-old woman who recently had to quit her job to get her niece, who she mothers, a birth certificate and other paperwork to start school argued that the policy does not take into account the complex lives of low-income people. “You are saying this should be possible, but you don’t know my circumstances. You haven’t been here,” she explained.

Dr. Jessica Greene is a Professor and the Luciano Chair of Health Care Policy at Baruch College, City University of New York.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

Sometimes you simply do not need extensive health policy research to understand what impact various policy proposals would have. As an example, to understand what a work requirement to qualify for Medicaid would mean for the low-income, target population, just ask them.

This brief series of interviews of Medicaid beneficiaries done by Professor Jessica Green provides enough anecdotes that are fully predictable. This relatively unsophisticated, low-income population is already struggling with just trying to make ends meet. Throwing in an employment reporting requirement just further complicates their personal agendas. Besides, none of them believe that the program will cause them to change their work-related activities.

The purpose of Medicaid is to provide access to medical care for individuals who cannot afford it. Does requiring work as a condition of Medicaid enrollment advance that goal? No, just the opposite. Under this requirement many will lose their Medicaid coverage and thus lose access to medical care.

Look. We’re trying to get people the health care that they need. We already understand the policy decisions that would do that. A well designed, single payer, improved Medicare for all would take care of it. We do not need the injection of screwball ideas based on sterile ideology rather than benevolent compassion.

As one interviewee said, “you don’t know my circumstances; you haven’t been here.” But we do know how to get her and everyone else the health care program that they need. That’s what we need to be working on.

***

Additional Comment:

By Stephen Tarzynski, M.D.

Republican opposition to government-regulated medical care is partially based on the view that government governs best which governs least. Conservatives associate liberty with markets.

They may not realize it but they have more than a little in common, ideologically, with the early 17th century British statesmen who crafted the Elizabethan Poor Laws. These laws gave local governments the power to raise taxes to maintain almshouses and provide relief for the “worthy” poor, including the elderly. But they also mandated that the “able-bodied poor” be set to work in a House of Industry and sent the “idle poor” to Houses of Correction. In their twisted logic, poor people were only desperate because they were lazy or morally inferior to the wealthy.

GOP legislators echo these obsolete ideas when they talk about indigent “able-bodied adults” needing to work to deserve health insurance.

From my decades of experience as a doctor, it seems to me that no market-driven healthcare system can simultaneously limit costs, guarantee universal coverage and deliver desired outcomes. Overwhelming evidence demonstrates that the best way to reduce costs and guarantee healthcare to everyone is to have the largest risk pool — that is, the entire nation. These facts compel the United States to move to a single-payer system guided by comparisons with other countries’ experiences and by our own American successes, such as Medicare and Medicaid.

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Thanks, Obama?

Barack Obama thinks Medicare for All is a good idea. His support is welcome — but this time, we won’t accept any compromises on a universal, free public health program.

By Tim Higginbotham
Jacobin, September 10, 2018

For the first time in over a decade, Barack Obama is a Medicare for All supporter.

On September 7 in Illinois, Obama promoted the idea while campaigning for Democrats ahead of the 2018 midterm elections. “Democrats aren’t just running on good old ideas like a higher minimum wage,” he said, “they’re running on good new ideas like Medicare for All.” His is the biggest endorsement from the political center for the idea, and a sign that Democrats are beginning to yield to this overwhelmingly popular demand — a recent Reuters/Ipsos poll showed that 70 percent of Americans support the plan.

But Medicare for All supporters should be skeptical of Obama’s support. Centrists are engaged in an ongoing effort to reinterpret what M4A means, which could lead to a watered-down proposal that throws the possibility of achieving single-payer health care into jeopardy.

Back in 2003, Obama spoke glowingly of single-payer, arguing that the only reason it might not happen “immediately” was that first, the Democrats would have to take back the White House and Congress. By 2009, Obama’s stated prerequisite for single-payer had come true. He himself occupied the White House, while Democrats held majorities in both the House and Senate. But by that point, of course, Obama had long abandoned single payer.

In fact, his administration worked to deliberately marginalize the idea and instead rallied support for the Affordable Care Act’s market-centered approach. They even dropped the planned inclusion of a public option when Senator Joe Lieberman threatened to filibuster the ACA in protest.

Ultimately, the powerful Democratic majority passed only a weak, fragmented plan with high costs and uneven benefits. While the ACA helped many people by expanding Medicaid and adding protections for people with preexisting conditions, it failed to combat the true source of the United States’ health-care crisis: the privatized multi-payer system that allows giant for-profit health companies to profit from Americans’ illnesses. Unsurprisingly, after voters replaced Obama with Trump, the key accomplishments of the ACA came under immediate threat.

In the wake of the ACA’s failure to lower costs and achieve universal coverage, single-payer has become a popular, viable demand. It was the lead plank of Bernie Sanders’s 2016 presidential platform and a regular applause line at his mass rallies. Sanders has kept Medicare for All in the spotlight, hosting viral town halls and releasing dozens of social media videos highlighting the plan’s benefits.

Sanders’s message is clearly resonating. Polling shows that Medicare for All now maintains majority support. Progressive candidates have successfully used the demand as a key campaign plank. And grassroots activists have found success taking the message to the streets, with groups like National Nurses United and Democratic Socialists of America running nationwide canvassing campaigns to build on the plan’s popularity.

Yet despite Medicare for All’s overwhelming popular support, many Democratic politicians have been reluctant to sign on. Sanders has earned sixteen cosponsors for his Senate bill, while its companion legislation in the House has 123. That amounts to only 34 percent and 64 percent of Democrats in the Senate and House, respectively — far lower than the 85 percent of Democratic voters who support the plan nationwide, according to the Reuters/Ipsos poll.

But that level of mass demand can’t be ignored forever. It has now become a litmus test for candidates.

Democratic socialists Alexandria Ocasio-Cortez and Rashida Tlaib campaigned heavily on Medicare for All while making waves this summer with upset primary wins in their bids for House seats. Andrew Gillum supported it on his way to winning the Democratic primary in Florida’s gubernatorial race. And nearly all prospective 2020 Democratic presidential candidates have expressed support for the plan, including Kirsten Gillibrand, Cory Booker, Kamala Harris, and Elizabeth Warren. Democrats are finally recognizing that they need Medicare for All — not rhetoric about “fixing the ACA” — in order to win.

Obama’s 180-degree turn on Medicare for All could cement the Democratic establishment’s shift into the M4A camp. It’s now likely that the congressional bills will have strong legislative support should Congress change hands. At the same time, centrist Democrats have a history of grinding down progressive policies into complex, unpopular, market-friendly schemes.

In order for Sanders’s vision of single-payer health care to succeed, the public must remain uncompromising in its demand for a truly ambitious Medicare for All — one that guarantees comprehensive care to every American resident as a single, public program and ensures a just transition that provides severance and jobs training to all workers whose jobs are impacted. Liberal think tanks and pundits are attempting to capitalize on Medicare for All’s popularity by watering it down, arguing that its meaning is ambiguous and could refer to something as meager as a Medicare buy-in — essentially a “public option” plan that would preserve the multi-payer system while allowing people to purchase Medicare coverage.

Given his record, it’s reasonable to expect that Obama will join this effort to co-opt Medicare for All and kowtow to the private insurance industry, the pharmaceutical lobby, and the American Medical Association, which have spent the last century using their power and influence to squash every effort to win a national insurance system. Democrats haven’t confronted this power in the past and, as shown in 2009, can’t be expected to do so even if they manage to take back Congress.

It’s going to take an unshakeable mass movement to win a system that actually provides health care as a right. That means no financial barriers to care — no copays, no deductibles, and no premiums. It means abolishing the private insurance industry once and for all. It means universal care with equal treatment for everyone — not means-tested coverage with a higher standard of care for the rich. It means a single, simple, and bold public program — not a public option that will leave millions underinsured and keep insurance profiteers intact.

Obama’s endorsement is a sign that the demand for Medicare for All is overwhelming. It will hopefully bring much-needed legislative support to the congressional single-payer bills. But Americans cannot allow the people who bungled the Affordable Care Act to undermine this fight, too. Medicare for All means nothing less than a universal, single-payer program that provides comprehensive care, free at the point of delivery. Obama’s support is welcome. But this time, we won’t accept any compromises.

Tim Higginbotham is an organizer with the Democratic Socialists of America’s Medicare for All campaign.

https://www.jacobinmag.com…

Analysis of Work Requirement Exemptions and Medicaid Spending

By Anna L. Goldman, M.D., M.P.H.1,2; Steffie Woolhandler, M.D., M.P.H.3,4; David U. Himmelstein, M.D.3,4; David H. Bor, M.D.1,3; Danny McCormick, M.D., M.P.H.1,3
JAMA Internal Medicine, Research Letter, September 10, 2018

To date, 4 states (Arkansas, Indiana, Kentucky, and New Hampshire) have federal waivers to impose work requirements as a condition of eligibility for Medicaid (although a judge recently stayed Kentucky’s waiver1), and 7 other states (Arizona, Kansas, Maine, Mississippi, Ohio, Utah, and Wisconsin) have submitted waiver applications. The governor of Kentucky2 claimed that excluding “able-bodied” adults will reduce Medicaid enrollment by 16%, ensuring the program’s “fiscal sustainability.” However, such claims may be overstated because many Medicaid enrollees already work, and waivers have specified that many others (eg, people with disabilities and caregivers of young children) will be exempted. To our knowledge, no studies have quantified the potential influence of work requirements on Medicaid spending. We estimated the number of Medicaid enrollees at risk of losing coverage if work requirements are implemented with the exemptions specified in approved waiver applications, and we calculated current Medicaid spending for those enrollees at the national level and among states with approved or pending waivers.

Methods

The Institutional Review Board at Cambridge Health Alliance deemed this study exempt from review and waived the need for informed consent of participants. We identified characteristics of Medicaid enrollees and Medicaid spending on their behalf using the 2015 Medical Expenditure Panel Survey.3 We calculated Medicaid enrollment and expenditures for categories of persons already fulfilling or exempt from work requirements specified in approved waiver applications (Kentucky, Indiana, Arkansas, and New Hampshire) including persons with the following characteristics: older than 64 years or younger than 19 years, employed or actively seeking work, receiving Supplemental Security Income for disability, disabled but not receiving Supplemental Security Income, and serving as caregivers for disabled household members or children younger than 6 years, as well as those who are pregnant, students, or medically frail. These exemptions are common to all approved waivers.

Using total Medicaid enrollment and total Medicaid spending from the Medicaid Budget and Expenditure System, we then calculated the proportion of total Medicaid enrollment and total Medicaid spending accounted for by the residual group of nonworking, nonexempt adults (“work-eligible adults”). We estimated enrollment figures and spending for the work-eligible adults nationally and for states requesting waivers.4,5 We repeated our national analysis using varying age limits, including 50 years and older (Arkansas waiver) and 60 years and older (Indiana waiver). All analyses account for the complex survey design of the MEPS.

Results

Most Medicaid enrollees were already working or exempt (Table 1). If work requirements were applied nationally with all of the exemptions applied, 2.1 million persons could be at risk for disenrollment, representing 2.8% of current Medicaid enrollees, who account for 0.7% (95% CI, 0.4%-1.1%) of Medicaid spending (Table 2). Among those at risk for disenrollment, the mean annual income is $3820, 42.0% are of black or Hispanic race/ethnicity, 18.6% have children younger than 18 years, 26.6% have hypertension, 33.7% have depression/anxiety, and 31.0% report an activity limitation.

In the 6 states (Arizona, Arkansas, Indiana, Kentucky, New Hampshire, and Ohio) that have applied for waivers and have expanded Medicaid through the Patient Protection and Affordable Care Act, the affected group represents 3.4% (95% CI, 1.6%-5.2%) of the current total Medicaid enrollment and 1.1% (95% CI, 0.3%-1.9%) of total Medicaid spending (Table 2). In nonexpansion states that have applied for waivers (Kansas, Maine, Mississippi, Utah, and Wisconsin), work requirements would affect 0.8% (95% CI, 0.0%-1.6%) of current total Medicaid enrollment and 0.04% (95% CI, 0.0% to 0.3%) of total Medicaid spending.

Discussion

After applying exemptions and removing working adults, 2.8% of current Medicaid enrollees would be subject to new work requirements nationally; they account for less than 1% of Medicaid spending. In states that applied for waivers but did not expand Medicaid, potential savings represent less than 0.1% of Medicaid spending.

Our study was limited by several factors. The analysis likely overestimates the population size and Medicaid spending of the work-eligible group because accurate data on several exemption or work categories were unavailable, including addiction or behavioral health treatment, homelessness, volunteer work, and history of foster care. In addition, exemptions specified in waivers vary among states, and we opted to only include exemptions that were present consistently in all states with approved waivers. Exemptions present in only a subset of waivers, such as receipt of unemployment benefits, were not included, which may also have resulted in overestimation of the population size and Medicaid spending by individuals affected by work requirements. Conversely, we may have underestimated the population size and Medicaid spending by the work-eligible group because we did not have information on the number of hours worked per week by employed individuals (adults must work 20 hours per week or 80 hours per month to meet the work requirement); therefore, we classified all individuals reporting employment as fulfilling work requirements. We also classified individuals with an exempt status lasting less than a full year, such as pregnancy, as exempt for the full year. We did so because data on Medicaid expenditures are only available as annual totals, making it impossible to calculate expenditures for less than a full year. Furthermore, there is wide variability in the frequency of redetermination of exemption: in Kentucky, redetermination is required only on an annual basis, while redetermination is monthly in Arkansas. Finally, data in the MEPS are self-reported and thus subject to inaccuracy and may not correspond with data obtained through Medicaid documentation.

Conclusions

Results of our analysis indicate that savings to Medicaid would be minimal if exemptions were precisely applied. However, savings might be much larger (as Kentucky’s governor2 suggested) if work requirements caused a “spillover effect” (ie, loss of coverage by exempt Medicaid enrollees unable to comply with documentation requirements).6 If spillover loss of coverage is the primary mechanism by which work requirements decrease Medicaid enrollment and spending, these savings would likely come at substantial cost in terms of human health.

https://jamanetwork.com…

References

1. Ronnie Maurice Stewart, et al, Plaintiffs v Alex M Azar, II, et al, Defendants. US District Court for the District of Columbia. Filed June 29, 2018. Accessed August 3, 2018.

2. Yetter D. Bevin revises Medicaid plan, seeks to reduce Kentucky’s rolls by another 9,000 people. Louisville Courier Journal. July 7, 2017. Accessed August 3, 2018.

3. Medical Expenditure Panel Survey, Agency for Healthcare Research and Quality. MEPS HC-181: 2015 Full Year Consolidated Data File. HC-174 replaced by HC-181. Released August 2017. Accessed April 23, 2018.

4. Centers for Medicare & Medicaid Services. Source of state enrollment totals: Medicaid December 2015 enrollment files. Accessed August 6, 2018.

5. Medicaid and CHIP Payment and Access Commission. Source of state Medicaid spending totals: MACPAC’s MACStats: Medicaid and CHIP Data Book, Figure 16, December 2016. Accessed June 28, 2018.

6. Garfield R, Rudowitz R, Musumeci M, Henry J. Kaiser Family Foundation. Implications of a Medicaid work requirement: national estimates of potential coverage losses. Published June 27, 2018. Accessed June 28, 2018.

Author Affiliations

1. Cambridge Health Alliance, Cambridge, Massachusetts

2. Department of Health Policy and Management, Harvard T.H. Chan School of Public Health, Boston, Massachusetts

3. Department of Medicine, Harvard Medical School, Boston, Massachusetts

4. Department of Medicine, City University of New York at Hunter College, New York

Stan Brock

Stan Brock, 82, Intrepid Provider of Health Care in Remote Areas, Dies

By Sam Roberts
The New York Times, September 6, 2018

Stan Brock died on Aug. 29 at RAM’s offices in Rockford, Tenn., where he had lived ascetically since he founded the nonprofit outfit in 1985. He was 82.

(The Remote Area Medical clinic service, or RAM) began operating initially in British Guiana and then expanded to the United States in 1992, starting out with a single pickup truck that hauled a single dentist’s chair. It opened its first American clinic in Sneedville, Tenn., in 1992 and still runs an airborne ambulance operation in what is now the independent nation of Guyana.

The organization estimates that it has provided medical, vision and dental care to more than 700,000 patients since its founding, in areas ranging from Appalachia to New York City, and in Puerto Rico in the aftermath of Hurricane Maria.

Last year, about 1,400 health professionals volunteered to treat 2,300 people who showed up at one of RAM’s outdoor clinics at the fairgrounds in the western Virginia town of Wise. Some had camped out for three days to make sure they would be treated.

“The health fair reminded me of scenes I’ve witnessed in refugee camps in South Sudan,” Nicholas Kristof wrote in his Op-Ed column in The New York Times. “But here in America?”

“I’m just the voice of the homeless and the underserved,” he said. “But unless they fix these basic things, we’re going to be doing this long after my lifetime.”

Asked in an interview about his legacy, Mr. Brock said, “I hope that a hundred years from now, nobody will remember me at all because this will be a thing of the past.”

“But,” he added, “there seems to be no end in sight.”

https://www.nytimes.com…

***

Comment:

By Don McCanne, M.D.

For those who want to see that all of us receive the health care that we should have, each of us approaches the deficiencies in our own way. Stan Brock’s high-profile efforts were quite unique. Besides serving people in need, he continued to provide us with an unambiguous visual image of how great the unmet need is.

When he recognized that the need was not only in poor countries but also right here in the United States, he began holding these Remote Area Medical (RAM) clinics in this country. At the time he began, the nation was ready for comprehensive health care reform which many thought that we would have under the Clinton administration. When that effort failed, people were still ready. Eventually the Affordable Care Act was enacted, but it was not the comprehensive reform that we needed. A quarter of a century after Brock began, people are still camping out at the RAM clinics in hopes of receiving just a modicum of care, here in America!

When asked about his legacy, Mr. Brock said, “I hope that a hundred years from now, nobody will remember me at all because this will be a thing of the past. But there seems to be no end in sight.”

No end in sight… here in America? We have to change that ASAP.

And thanks, Mr. Brock, for pointing that out.

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A physician/policy wonk faces our health care financing system

As consumers' out-of-pocket costs grow, will the patient bill-of-rights movement rise again?

By Harris Meyer
Modern Healthcare, September 1, 2018

Emergency physician Dr. Matthew Wetschler was body surfing off Ocean Beach in San Francisco last November when a wave slammed him head-first onto the ocean floor, breaking his neck and paralyzing him. Another surfer pulled him out of the water just before he drowned.

He was taken to Zuckerberg San Francisco General Hospital, the closest hospital that was well-equipped to treat him, where neurosurgeons performed surgery to fuse five vertebrae and maintain blood flow to his spinal cord. After months of physical therapy at Santa Clara Medical Center and Valley Medical Center, he’s walking, but still has no feeling in his hands.

During his grueling recovery, Wetschler received frequent calls from bill collectors seeking payment of nearly $500,000 in medical bills from the hospitals and physicians, plus a $13,000 bill from the air ambulance company that flew him 40 miles to Santa Clara for rehab care. Those providers were not in network for his insurer, Oscar Health.

Wetschler’s experience with a large out-of-network bills and opaque healthcare bureaucracies is common. Nearly 18% of hospital stays for members of large-employer health plans resulted in patients facing out-of-network balance bills, the Kaiser Family Foundation recently found. That rose to 27% when patients passed through the emergency department.

Healthcare consumers also face other common problems with cost, coverage and access, which may increase as the federal government allows the expansion of skimpier, less-regulated health plans. These problems include:

* Coverage denials for emergency department visits that insurers later deem unnecessary.

* Lack of access to specialty providers in health plan networks.

* Difficulty in getting coverage for mental health and substance abuse treatment from health plans.

* Delays in receiving care due to plans’ preauthorization requirements on providers.

* Patients’ inability to find out from providers ahead of time how much they will owe for particular services.

* Large out-of-pocket costs for prescription drugs, particularly specialty medicines.

“There’s plenty to do in the area of consumer protection, with high deductibles and out-of-network bills,” said Dr. David Blumenthal, president of the Commonwealth Fund. “But there is an anti-regulatory fervor we’re seeing in Congress and conservative circles that will be an obstacle to moving a consumer-protection agenda.”

Wetschler, the doctor injured in the surfing accident, has finally gotten the hospitals, physicians and his health plan, Oscar Health, to waive most of out-of-network bills. But he still gets calls from collectors on about $27,000 of that total, including $13,000 for air ambulance services from ProTransport-1.

In his view, there should be consumer protections in place so patients don’t find themselves in this type of terrible situation, which can destroy their finances.

“I’m a doctor with a master’s degree in health policy, yet I feel so overwhelmed that it’s almost paralyzing,” Wetschler said. “I’m stuck in no man’s land. For a person with no medical training, what hope is there?”

http://www.modernhealthcare.com…

***

Oscar

Oscar’s story begins, fittingly, in a hospital room. In 2012, Oscar CEO Mario Schlosser and his wife were going through their first pregnancy in New York. Confronted with a maze of insurance jargon and no practical way to identify the best obstetrician, their first meaningful experience with the health care system put them at a loss as to how to navigate care or hold anyone accountable.

Mario’s friend Josh Kushner had recently had his own frustrating encounter following what should’ve been a routine treatment for an injury. Mario and Josh knew that their experiences were reflective of a larger problem in health care: consumers were powerless. That spring, they founded Oscar Health.

Oscar has been focused on one mission – to be a health insurance company centered around the patient.

https://www.hioscar.com/about

***

Comment:

By Don McCanne, M.D.

A young emergency physician with a master’s degree in health policy should understand better than anyone how to interact with our health care financing system. Dr. Wetschler was insured by Oscar, a relatively new health insurance company cofounded by Josh Kushner, the brother of Jared Kushner of White House fame – a company that professes to be centered around the patient. Yet if the system is not working well in this situation, it could hardly be expected to work better for the rest of us.

Imagine having an improved version of Medicare wherein you receive the medical care you need, when you need it, and wherever you need it, and payment is taken care of automatically through a public system of health care financing. Instead we have a system in which even the most innovative insurers, like Oscar, restrict your choices and burden you with further debt. How can Oscar claim to be “a health insurance company centered around the patient” when they create additional problems for the patient that would be unnecessary in a well designed, publicly-financed and publicly-administered system?

It appears that President Trump and his son-in-law and advisor Jared Kushner are not going to help resolve these problems even though there is already more than enough money in the health care system, and they both profess to know a lot about how to manage money. Maybe instead of having a political leadership of money managers dedicated to business interests, we should replace them with political leaders who are dedicated to serving the people. It would really be nice to be rid of these unnecessary barriers to health care, and it wouldn’t cost us any more than we are already spending collectively.

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Is there a moral basis for universal health care?

By George Bohmfalk, M.D.
The Aspen (Colo.) Times, September 6, 2018
(Part 1 of 6. Read parts 2, 3, 4, 5 and 6.)

Is health care is a right or a privilege? Discussions about health care commonly break down over this moral disagreement.

In a series of articles over the next six weeks in The Aspen Times, I will explore many aspects of the U.S. health care system and how it might be improved. I will not express an opinion on the right-versus-privilege dilemma, because it is a false argument. We each have our own moral systems, and mine may conflict with yours. Just like religions, I can’t claim that my moral pillars are any more valid than yours.

As social psychologist Jonathan Haidt described in his book, “The Righteous Mind,” conservatives and liberals feel differently about several moral values, and those values affect almost every decision we make. Liberals feel very strongly about fairness and caring, as seen in their traditional support for civil rights for the poor and the disenfranchised. They certainly also value loyalty, liberty, sanctity and authority, but fairness and caring take precedence. Conservatives hold all of these values in about equal regard, such that questions of fairness and caring may at times take a back seat if an issue of authority or liberty arises. Most conservatives are comfortable that a few innocent prisoners may have been held in Guantanamo, as they regard national security as being morally more important than fairness to certain individuals. Given our differing moral systems, it’s no wonder that we often find it difficult to discuss politics and religion.

Many conservatives feel that it’s unfair to ask them to pay for anything that will benefit someone else. They believe everyone who is capable should be self-sufficient and not depend on the government. I don’t know any liberals who are opposed to self-sufficiency, but liberals tend to be more empathetic to those who, for any number of reasons, need help. Let’s look at one industry that everyone supports: fire departments.

Until the mid-1800s, most fire departments were formed and run by property insurance companies. Insured buildings were marked by plaques, just as we erect signage of our home security companies. An insurer’s fire brigade would only extinguish fires in buildings carrying their sign. This system was very profitable for the companies.

As you might imagine, terrible things happened, as unattended fires from uninsured buildings spread to insured ones. Public demand prompted cities to form their own fire departments as a community service. Insurance company fire brigades disappeared, many merging into municipal fire departments. Fire departments were fully socialized, with governments owning and operating all aspects. We all pay for them in taxes and hope never to have to use them. As a nation, we decided that for-profit fire departments were not a good idea, and that universal protection, for everyone, simply made more practical sense.

What moral values led to that decision? Perhaps the main one is group loyalty — we’re all better off putting out fires as a community than as individuals. Another is authority — putting someone in charge of the overall situation, rather than responsibility being spread around a myriad of companies. Sanctity and liberty also play roles — we protect our sacred homes and enjoy some freedom from worry and loss. Municipal fire departments are fair — everyone gets the same protection, regardless of ability to pay. Fire departments care for their communities. Accordingly, fire departments enjoy broad bipartisan support. But in the end, tax-supported municipal fire departments are just a good, common sense solution, immune from any contentious moral debate.

Similarly, providing health care to everyone is a good, common-sense community service. It also would satisfy both conservative and liberal moral values. Insurance companies should not be motivated to withhold care in order to make profits, like the old fire brigade companies. Health care protects individuals and families and strengthens the entire nation. Universal health care brings everyone together, under clear public, not-for-profit leadership. In helping all Americans, and providing liberty from financial ruin, universal health care would be patriotic and fair.

So, is health care a right or a privilege? It doesn’t matter. As I hope to demonstrate in this series, providing health care to everyone is simply the common-sense, correct thing to do, regardless of your moral pillars.

Dr. George Bohmfalk practiced neurosurgery in Texas before retiring to spend half of each year in the Roaring Fork Valley. He is active in Physicians for a National Health Program, a physician-driven group advocating for a single-payer health care system.

https://www.aspentimes.com…

Beyond The ACA: Paths To Universal Coverage In California

By Andrew B. Bindman, Marian R. Mulkey, and Richard Kronick
Health Affairs, September 2018

Abstract

California has long sought to achieve universal health insurance coverage for its residents. The state’s uninsured population was dramatically reduced as a result of the Affordable Care Act (ACA). However, faced with federal threats to the ACA, California is exploring how it might take greater control over the financing of health care. In 2017 the state Senate passed the Healthy California Act, SB-562, calling for California to adopt a single-payer health care system. The state Assembly did not vote on the bill but held hearings on a range of options to expand coverage. These hearings highlighted the many benefits of unified public financing, whether a single- or multipayer system (which would retain health plans as intermediaries). The hearings also identified significant challenges to pooling financial resources, including the need for federal cooperation and for new state taxes to replace employer and employee payments. For now, California’s single-payer legislation is stalled, but the state will establish a task force to pursue unified public financing to achieve universal health insurance. California’s 2018 gubernatorial and legislative elections will provide a forum for further health policy debate and, depending on election outcomes, may establish momentum for more sweeping change.

Barriers to Unified Public Financing

California would need to overcome daunting technical and political challenges if it were to transition to a system of unified public financing, whether single- or multipayer. It would be doubly challenging to accomplish this transition at the state level, in part because political agreement would be needed from two levels of government—state and federal. Concerns about providers fleeing the state or sick people being drawn to the state complicate the technical challenges of establishing a unified publicly financed health care system at the state level. These concerns would be minimized if unified public financing were enacted at the federal level.

Accomplishing such a sweeping transition would require substantial and unprecedented changes in federal and state law as well as decisions regarding many design parameters. To implement such a system, Congress would need to pass legislation to redirect payments away from individual Medicare beneficiaries and providers to whatever state agency was operating California’s unified public financing program.

Current federal law might allow federal waivers to redirect federal funds for Medi-Cal and subsidies for individuals in Covered California into a unified state pool, but such waiver requests would be unprecedented. In addition to establishing an initial set of assurances about payments, determining the rate at which the federal payment to California would grow over time would require political agreement. It is hard to imagine that the current Congress or administration would approve such requests. Even with a hypothetical Democratic Congress and president, such approvals would be far from certain.

At the state level, a move to unified public financing of health care would also face significant political challenges. Very large new state taxes would be required to generate program revenue to replace employer-sponsored insurance funding, support those who are currently uninsured, and cover the administrative costs of operating the program. Given anticipated savings from reduced billing and insurance-related costs and potentially (at least eventually) some reduction in low-value care and in the rate of growth of prices, it seems likely that total spending would be less over time than under the status quo. But even if total health spending declined (or at least did not increase), transforming employer-sponsored funding into public funding would be a massive undertaking.

Other challenges include developing processes to match the rate of spending growth to the rate of revenue growth and to determine the “right” revenue growth rate. Physicians, other providers, and some patients would be concerned that a system of unified public financing would overly constrain spending growth, denying Californians the benefits of outcome-improving technology. On the other side, some would be concerned that as a result of regulatory capture, health spending would increase more quickly than justified by the rate of improvement in outcomes, leading to tax increases that did not produce commensurate increases in value or to squeezing out other government spending.

The Select Committee hearings convened to explore these and other issues did not delve into the details of how new taxes might be constructed to support unified public financing; however, the California Legislative Analyst’s Office provided broad tax alternatives with ballpark estimates. Assuming that the current amounts being spent by Medicare and Medicaid could be contributed to a unified public financing approach, new taxes would be needed mainly to substitute for the current employer and employee contributions. Because employer and most employee contributions are made with pretax dollars, purchasers of employer-sponsored coverage benefit today from a discount in the form of a federal tax subsidy. Other methods of financing might increase Californians’ federal income tax burden. Based on the Legislative Analyst’s Office estimates, a 3 percent gross receipts tax levied on all sales and services at all stages of production would generate approximately $120 billion—an amount similar to that spent in California for employer-sponsored insurance. Alternatively, a similar amount could be generated with a 9 percent payroll tax.

A payroll tax could be applied uniformly to all employers, or the state could consider a firm-specific payroll tax in which the tax rate for each firm approximated the percentage of the payroll that the firm pays for health benefits under the status quo—with a plan to narrow the gap between high- and low-rate firms over time. A firm-specific payroll tax would have the political advantage of creating fewer winners and losers, compared to most other financing approaches, and would also minimize any effect on federal income tax liabilities.

Amendments to the California constitution would be required to implement unified public financing in the state. Proposition 98 requires that a portion of any new taxes, regardless of the stated rationale for them, must be directed to K–14 education. The Gann limit, passed by voters via a 1979 statewide ballot initiative, sets appropriation limits on state budget categories supported by taxes. A new tax to support unified public financing would almost certainly exceed the limit. Therefore, adequate funding for unified public financing would require a majority vote of the state’s population to modify the limit.

Even if an amendment to the California constitution were not required by Proposition 98 and the Gann limit, support from California voters for a system of unified public financing would be important for at least two reasons. First, as we have seen with the Affordable Care Act, opponents of change will likely not concede after a legislative loss and will continue to litigate, both in court and in the court of public opinion. A statewide vote in support of change would not prevent that activity but would reduce its effectiveness. Second, and more important, obtaining the federal legislative changes and administrative approvals needed to implement unified public financing would be challenging, and a statewide expression of support could increase the chances of success.

https://www.healthaffairs.org…

***

Comment:

By Don McCanne, M.D.

The September, 2018 issue of Health Affairs is on “California: Leading The Way?” Of importance to not only California, but the entire nation, is California’s effort to enact a single payer program of health care financing. The article by Bindman, Mulkey, and Kronick describes the process that has been taking place. In the excerpt above they describe the barriers to unified public financing, whether single payer or multipayer. The policy community in other states and in the nation at large may find this information useful in their own work.

If California were an independent nation it would be the world’s fifth-largest economy. Yet, as described in another report by Zelman and Wulsin, California has had a very long history of attempting to achieve universal health insurance, but the goal has remained elusive. Even though the state has been very successful in implementing the Affordable Care Act, it still falls far short on most important goals of reform. There is even an article by Enthoven and Baker, still touting managed competition in spite of its obvious shortfalls. The state seems to be mired in health policy innovations that somehow seem to be adding to the muck that we’re trying to wade through.

The full article by Bindman, et al certainly acknowledges the benefits and virtues of a single payer system, but it is discouraging since it seems to default to the misguided direction in which we are headed in health care reform. The barriers, though clearly surmountable with the cooperation of state and federal legislators and their administrations, seem to be distracting the policy community as they redirect to approaches that perpetuate the fragmented, multipayer infrastructure we have, while adding yet more costly administrative complexity that leaves patients exposed to financial hardship and loss of choices in health care.

Bindman and his colleagues conclude, “Implementation of unified public financing in California is technically feasible, but leadership, vision, and persistent public and private commitment—both in California and in Washington, D.C.—are needed to make it happen. Recent deliberations within the California legislature demonstrated both the compelling logic of and the growing emotion associated with movement away from today’s unequal, complex, and fragmented health insurance arrangements. It remains to be seen whether the proponents of change can overcome status-quo interests, renegotiate state and federal responsibilities, and set a new course toward universal coverage.”

That will not happen unless the people lead.

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