PNHP

Single Payer Is Actually a Huge Bargain

Single Payer Is Actually a Huge Bargain

It would save both dollars and lives compared to our current system.

By Steffie Woolhandler, M.D., M.P.H., David U. Himmelstein, M.D., and Adam Gaffney, M.D.
The Nation, August 10, 2018

Last week, Charles Blahous at the Koch-funded Mercatus Center at George Mason University published a study suggesting that Bernie Sanders’s single-payer health-care plan would break the bank. But almost immediately, various observers—including Sanders himself—noted that according to Blahous’s own estimates, single payer would actually save Americans more than $2 trillion over a decade. Blahous doubled down on his argument in The Wall Street Journal, and on Tuesday, The Washington Post’s fact-checker accused Democrats of seizing “on one cherry-picked fact” in Blahous’s report to make it seem like a bargain.

The Post is wrong to call this a “cherry-picked fact”—it’s a central finding of the analysis—but it is probably right that single-payer supporters shouldn’t make too much of Blahous’s findings. After all, his analysis is riddled with errors that actually inflate the cost of single payer for taxpayers.

First, Blahous grossly underestimates the main source of savings from single payer: administrative efficiency. Health economist Austin Frakt aptly demonstrated the “bewildering complexity of health care financing in the United States” in The New York Times last month, citing evidence that billing costs primary-care doctors $100,000 apiece and consumes 25 percent of emergency-room revenues; that billing and administration accounts for one-quarter of US hospital expenditures, twice the level in single-payer nations; and that nearly one-third of all US health spending is eaten up by bureaucracy.

Overall, as two of us documented recently in the Annals of Internal Medicine, a single-payer system could cut administration by $500 billion annually, and redirect that money to care. Blahous, in contrasts, credits single payer with a measly fraction of that—or $70 billion—in administrative savings.

Our profit-driven multi-payer system is the source for this outlandish administrative sprawl. Doctors and hospitals have to negotiate contracts and fight over bills with hundreds of insurance plans with differing payments rates, rules, and requirements. Simplifying the payment system would free up far more money than Blahous estimates to expand and improve coverage.

Next, Blahous lowballs the potential for savings on prescription drugs. He assumes that a single-payer system couldn’t use its negotiating clout to push down drug prices, ignoring the fact that European nations and the US Veterans Affairs system achieve roughly 50 percent discounts relative to the US private sector. (Single payer’s only drug savings, he argues, will come from shifting 15 percent of brand-name prescriptions to generics.) Hence Blahous foresees only $61 billion in drug savings in 2022, even though tough price negotiations would likely achieve threefold higher savings.

Third, Blahous underestimates how much the government is already spending on health care. For instance, he omits the $724 billion that federal agencies are expected to pay for employees’ health benefits over the 10 years covered by his analysis, which would simply be redirected to Medicare for All. He also leaves out the massive savings to state and local governments, which would save nearly $3.6 trillion on employee benefits and another $5.3 trillion on Medicaid and other health programs. Hence, much of the “new money” needed to fund Sanders’s reform is already being collected as taxes.

Yes, there will need to be some new taxes—albeit much less than Blahous estimates. But those new taxes would just replace—not add to—current spending on premiums, co-pays, and deductibles. Additionally, at least some of the new taxes would be virtually invisible. For instance, the $10 trillion that employers would otherwise pay for premiums could instead be collected as payroll taxes. Similarly, Medicare for All would relieve households of the $7.7 trillion they’d pay for premiums and $6.3 trillion in out-of-pocket costs under the current system.

It’s easy to get lost in the weeds here. But at the end of the day, even according to Blahous’s errant projections, Medicare for All would save the average American about $6,000 over a decade. Single payer, in other words, shifts how we pay for health care, but it doesn’t actually increase overall costs—even while providing first-dollar comprehensive coverage to everyone in the nation. The Post’s fact-checker is wrong: Single-payer supporters can and should trumpet this important fact.

Of course, the most important benefits of single payer are altogether invisible in economic analyses like the one performed by Blahous. No matter what injury or illness we faced, we would be forever freed from one great worry: the cost of our care. It’s hard to put a price tag on that kind of freedom. Yet, paradoxically, even the slanted analysis of a libertarian economist provides evidence that it would be fiscally responsible.

Steffie Woolhandler is a Distinguished Professor of Public Health at the City University of New York at Hunter College.

David U. Himmelstein is a Distinguished Professor of Public Health at the City University of New York at Hunter College.

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

https://www.thenation.com…

5 doctors and surgeons tell us what they really think about Medicare-for-all

Some doctors support single-payer health care — even if that means a lower salary.

By Dylan Scott
Vox, August 10, 2018

The muscle of the health industry lobby — pharma, health plans, doctors, and hospitals — is gathering to stop single payer.

The Hill’s Peter Sullivan had the report on Friday morning. The industry’s influence can’t be underestimated: It stopped Clintoncare. And, for better or worse, it was a boon for passing Obamacare that the industry mostly supported the legislation.

The industry’s disparate interests fight over a lot of issues, but Medicare-for-all unites them. That is going to be a factor if we get to 2021 with a Democratic Congress and president, and they decide to pursue single-payer health care.

That moment really might come. A sign times are changing: A Republican health care lobbyist called me recently to ask whether all-payer rate setting would be a better alternative to single payer, by causing less disruption. (I quibbled that you would need some kind of coverage component, given the moral urgency that is animating the left on health care.)

Still, a Republican almost endorsing price controls. That is a pretty strong indicator of where our health care debate seems to be heading.

Payment cuts for health care providers, if we eliminate private insurance and move everybody to Medicare rates, are going to come up a lot in this debate.

Those cuts are an easy thing for industry lobbyists to target and for Republicans to run ads on. Cuts could be overstated, depending on how much legitimate waste single payer can actually eliminate by consolidating the administration of health care, but the projections for Medicare for All plans are going to anticipate big cuts.

That explains the industry’s lobbying position. But reality on the ground is more complicated than that. There are absolutely health care providers who support single payer. Quite a few of them sent me emails after I asked for their thoughts last week.

Here are some of the most interesting responses. From a registered Republican working at a next-gen gene sequencing company:

Medicare is, without question, the most reliable, most predictable payer that we deal with. And for somebody like me it would be a dream to only have to deal with them. Yes, they are pretty heavily regulated. And yes, they have pretty strict guidelines for who to cover. But unlike other payers, who make life virtually impossible for smaller providers because they’re in the for-profit game (the not paying for care game), Medicare at least adheres to a clear set of rules. Other payers put up an endless set of traps against reimbursement, contracting, and other parts of the revenue life cycle that add substantial cost to services and thus increase cost to the consumer. I can say with near certainty that parties in my industry would provide services at a materially lower price and with more predictable out of pocket costs if every payer was as reliable and consistent as Medicare.

As such, I’m now, despite growing up a conservative afraid of such government largesse as “Medicare for all,” convinced that a single public payer, either as rate setter or as a true single payer, is needed. In contrast, I remain a staunch defender of private medical care, where companies such as my own and our competition do battle to increase quality and lower patient cost.

So I guess you could count me as pro-Medicare for all, a sentence I never thought I’d write 15 years ago.

From a retired neurosurgeon, who had also thought of himself as a Republican:

I practiced neurosurgery in Texas and retired 20 years ago. I started out as a pretty solid, but non-thinking, Republican, opposing perceived intrusions of Medicare into my practice. I read Himmelstein and Woolhandler’s NEJM articles and thought they were Harvard hippie Communists. Over time, I came to see that they were right, that we really need a universal health care system, as so many of my patients weren’t getting needed care. I was a bit embarrassed making as much money as I did, and would have done it for half of that.

From a radiation oncologist of more than 20 years, in Chicago and for the military:

I left full-time medicine a few years ago after getting fed up with continuously fighting insurance companies for pre-authorization and for the right to practice medicine the way I was trained within the standard published guidelines. I now work part-time seeing primarily uninsured and Medicaid patients.

A 2011 Health Affairs study found that the average US physician spends nearly $83,000 a year interacting with insurance plans. And a 2010 American Medical Association Study found the average doctor spent 20 hours a week on pre-authorization activities. This has only gotten more expensive and much worse. Under a single payer plan, this would be much easier and far less expensive.

In addition, we know that the major cost of malpractice coverage is for the continued medical care of the patient that was harmed. A single payer system would insure that any such patient would be covered for the rest of their lives and as a result, malpractice coverage would also be dramatically lower.

While reimbursement under a single payer plan most likely would be less, so would the headaches and administrative hassles and costs. And I would be able to see far more patients instead of being on the phone fighting with a case manager, while my office and malpractice coverage costs would be far less.

From a Texas oncologist still early in their career:

My general view of Medicare-for-all is that it would moderately contribute to remedying our health care spending problem, but by no means fix it.

My understanding is that the biggest savings would come from getting rid of the huge administrative dead weight in our private insurance system. However, that in and of itself would not fix the fact that billing rates are through the roof here in the US. Saving a few percent on overhead would be great, but MRIs and appendectomies are still going to cost 2x-4x here than in other OECD countries.

I am definitely heterodox among physicians in believing that our salaries (mainly among specialists such as myself) ought to be significantly lower. The greater bargaining power that a single, government payer might have could potentially rein in some of that.

On the other side, from an anesthesiologist intern in Chicago, fiscally liberal but socially conservative, who has some concerns about how single payer would handle Catholic hospitals:

The one part of a more single-payer system that worries me relates to the socially conservative opinions I have. I’m sure you have seen the series FiveThirtyEight has had the past week on the effects of Catholic hospitals coming to predominate more rural areas and even some cities. (As someone who grew up in a small town, I can say the main health care provider in the area is a Catholic hospital.) I don’t fear a single-payer system would result in individual providers being required to provide services they individually oppose for religious beliefs.

However, I do worry about whether or not there would be requirements for Catholic hospitals to provide services contrary to Catholic teaching, generally surrounding abortion or end of life care, in order to be eligible for billing Medicare. I do presume a Medicare-for-All system would pass on a party-line vote with only Democrat support and could see them trying to expand abortion coverage–either directly in a law or through regulation like many abortion coverage issues have been changed–at the same time since that issue has also grown much more partisan in the past decade.

https://www.vox.com…

ACA subsidies cost more per person than Medicaid

ACA subsidies cost more per person than Medicaid. Is that sustainable?

By Susannah Luthi
Modern Healthcare, August 8, 2018

Government spending on Obamacare premiums has raced past its per-person spending on Medicaid expansion, and the gap is poised to increase—a trend that has some policy experts shaking their heads over the long-term economic picture and at least one major insurer questioning the sustainability of the individual market.

The CBO’s latest projections from earlier this year show government paying out an average of $6,300 annually for every subsidized enrollee in fiscal 2018. It estimates that number will rise to nearly $12,500 in 2028. In contrast, Medicaid spends $4,230 per non-disabled adult, set to inflate at 5.2% annually to just over $7,000 per person in 2028.

UnitedHealthcare leveraged these numbers for an issue brief criticizing the exchanges as “significantly more costly and less sustainable than envisioned” and touting Medicaid expansion as more stable. The insurer has loaded up on its government business while ramping back its presence on the state exchanges, and in the white paper predicted more instability for the individual market.

The individual market is a very different animal than Medicaid. Its cost increases reflect the volatile reactions to congressional policies and moves by the Trump administration. The 2018 surge in Obamacare subsidies followed President Donald Trump’s cutoff of the cost-sharing reduction payments (CSRs) for low-income enrollees that insurers are still required by law to pay. Insurers priced CSRs into the silver plans that serve as the benchmark for calculating federal subsidies. This spiked silver plan premiums for the unsubsidized enrollees and financial help for the subsidized.

Supporters of the Affordable Care Act defend its subsidy structure as the unbreakable backbone of the law, while critics say tying premium tax credits to silver plans shields insurers at the expense of the government and the unsubsidized.

http://www.modernhealthcare.com…

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Comment:

By Don McCanne, M.D.

The news is that the government subsidies alone per individual enrolled in the ACA exchange plans ($6,300) are greater than the amount that the government is paying for complete care per individual enrolled in Medicaid ($4,230). These numbers are being used by UnitedHealthcare to support their decision to avoid the ACA exchanges and build its business of private Medicaid managed care plans, as being a better deal for the government.

The numbers are distorted since the ACA enrollees who do not receive government subsidies are left out (which would make the government costs per ACA enrollee lower), and they leave out the Medicaid patients with expensive disabilities (which would make the government costs per Medicaid enrollee higher).

But there is a lesson here, and that is that an administratively complex system using private health plans is an expensive way of financing health care. Taxpayer funds are being wasted on excessive administrative functions designed to reduce the financial burden on low- and moderate-income individuals – not only the administrative excesses of the private insurers  and the administrative burden they place on the providers of care, but also the addition of the administrative costs of the insurance exchanges themselves.

The low costs of the Medicaid program are another issue. Payment rates were not enough to cover the costs of physicians caring for these patients and so many opted out, impairing access to care because of a lack of willing providers. Thus the private Medicaid managed care plans have moved in. Their business success depends on paying as little for health care as they can. That appears not only to be price concessions that they have negotiated with the providers, but also it seems that they have been successful in reducing the amount of care that patients are receiving, especially specialized services. Patients do not realize that they have been deprived of care if it was never offered to them.

Regardless, our health care financing system is clearly dysfunctional. We could get rid of the exchanges, the private insurers, the private Medicaid managed care plans and all of the other waste and inequities of our multi-payer system by enacting and implementing a well designed, single payer, improved Medicare for all. But then you’ve heard that before.

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

To Fight Burnout, Organize

By Leo Eisenstein, B.A.
New England Journal of Medicine, August 9, 2018

The clinician who coined the term “burnout” was not a primary care physician buried under paperwork, nor an emergency physician beset by an unwieldy electronic health record. He was Herbert Freudenberger, a psychologist working in a free clinic in 1974.1 Discussing risk factors for burnout, he wrote about personal characteristics (e.g., “that individual who has a need to give”) and about the monotony of a job once it becomes routine. He also pointed to workers in specific settings — “those of us who work in free clinics, therapeutic communities, hot lines, crisis intervention centers, women’s clinics, gay centers, runaway houses” — drawing a connection between burnout and the experience of caring for marginalized patients.

In recent years, burnout has become a chief concern among physicians and other front-line care providers. But somewhere along the way, the concept was separated from its original free-clinic context. The link between marginalized patients and clinician burnout seems to have gotten lost.

As a fourth-year medical student, I have received ample warning about the sources of burnout: death by a thousand clicks, too many hours at work, feeling like a cog in a machine, too many bureaucratic tasks. As a newcomer to medicine, I feel intimidated by it all. But from what I’ve observed — both during medical school and before enrolling, when I spent several years working in safety-net clinics — Freudenberger’s free-clinic context points to another source of burnout that receives insufficient attention. It is the experience of caring for patients when you know that their socioeconomic and structural circumstances are actively causing harm in ways no medicines can touch.2 As medical students, we are educated about the social determinants of health and increasingly warned about burnout, yet little is made of how the former may contribute to the latter — for example, how clinicians may feel worn down by the poverty and oppression their patients face; may feel powerless when they cannot offer more than, say, a form letter to a landlord explaining that turning off a patient’s heat would be deleterious to her health; and may feel demoralized when they realize that their instruction “Do not take this medication on an empty stomach” translates into patients taking their medications only sporadically because they don’t have enough to eat.

This contributor to burnout is not unique to physicians’ work. In medical school, though, I’ve seen an additional problem that may make it especially painful: we are led (and allow ourselves) to believe that we as individuals have more power than we do. Despite a shift toward team-based care, the image of physicians as singular heroes, as saviors, remains deeply embedded in medical culture.3 To many people, the white coat and the prescription pad represent the highest form of individual agency, the very picture of social power. But eventually, a physician will encounter patients whose health problems derive from a wicked, multigenerational knot of poverty and marginalization, and even the most astute, excellent physician may well find herself outmatched. Facing patients’ adverse social circumstances as an individual clinician is a recipe for disillusionment: the physician who believed she was maximizing her individual agency comes to feel utterly powerless. No longer the lone hero — just alone.

In this link between social determinants of health and burnout, I see a problem, but also a way forward. If individual powerlessness is the crux of this source of burnout, then organizing toward collective action should be part of the solution. Each of us can advocate for our homeless patients to be put on waiting lists for public housing. But what would happen if all doctors with homeless patients organized to demand more affordable housing?

Organizing is both strategic and therapeutic — strategic because our collective labor and voice are greater than the sum of their parts; therapeutic in the sense that the activist Grace Lee Boggs articulated: “Building community is to the collective as spiritual practice is to the individual.” When we recognize ourselves not as individual actors each isolated in an exam room, but as a collective joined in common cause, we start to feel less alone.

Some researchers have asked whether physician advocacy should be seen as a professional obligation or an aspirational goal.4 For me, the link between physician burnout and patient marginalization changes the terms of this debate. Beyond whether we must or should do it for our patients, collective advocacy to address the harmful social determinants of health can buoy physicians’ morale and thus be an act of self-care; organizing toward collective action means looking after both our patients and ourselves.

You have probably heard this parable before: A group of friends comes upon a fast-moving river where they find people drowning. The friends jump in headlong to save as many people as they can. But the drowning people keep coming. As soon as the friends rescue one, another comes into view. Eventually, one friend starts heading upstream. Another, exhausted, yells after her: “Where are you going?” The first one says, “I’m going to find out what’s throwing all these people into the river.”

The classic reading is that this parable is about prevention, but it also points to how upstream determinants contribute to burnout. Here is, I imagine, what happened to the friend who headed upstream: she saw the unending flow of drowning people coming their way. She deduced that there must be some force, hidden around the bend, that was sending people to drown. She noticed herself and her friends getting exhausted, all on the brink of burnout from the urgent, unending work. So she mobilized her friends to go upstream, for the drowners’ sake and for their own.

Obviously, it is not new for front-line clinicians to get fed up, organize, and start heading upstream. It’s what happened when physicians built collective-action organizations like Physicians for Social Responsibility and Physicians for a National Health Program; it’s what happened when clinicians joined the Moral Mondays demonstrations in North Carolina to fight for Medicaid expansion; and it’s what happens every Sunday morning in Boston, when residents and attendings, faced with an overdose epidemic, organize with the group SIFMA NOW to advocate for supervised injection facilities as a harm-reduction strategy.

In SIFMA (Supervised Injection Facilities–MA) NOW, health professionals organize side by side with harm-reduction advocates and people who use drugs. The group enables participants to build solidarity and take action in an otherwise overwhelming crisis. Dinah Applewhite, a resident at Massachusetts General Hospital, reflected at a recent meeting on how organizing can be a balm for her as a physician: “Despite my best efforts in clinic, I’ve had too many patients overdose, get endocarditis, or contract hepatitis C or HIV from unsafe injection practices. Being part of a community of advocates empowers me to fight for solutions to this crisis. It means that I’m energized and grounded, rather than burnt out, by these preventable tragedies.”

The social determinants of health — and physicians’ sense of powerlessness in the face of them — seem crucially missing from the discussion of burnout. This kind of burnout is the feeling you get when you’re trying to rescue the drowning people but they keep coming. And you’re torn between competing exigencies: the proximal needs of the people drowning, and the distal need for naming, fighting, and demanding accountability for the upstream forces that are causing harm.5 Medical students are trained to think from a vantage point of individual agency, and we become stuck there: “What can I do?” begins as an earnest, ambitious question, but it so often spoils to a cynical one. If medical schools and residency programs are serious about burnout, they have to teach us about collective action — teach us to ask, “What can we do?” To fight burnout, we should never worry alone about the social determinants of health that patients face. To fight burnout, organize.

https://www.nejm.org…

References

1. Freudenberger HJ. Staff burn-out. J Soc Issues 1974;30:159-165.

2. Hood CM, Gennuso KP, Swain GR, Catlin BB. County health rankings: relationships between determinant factors and health outcomes. Am J Prev Med 2016;50:129-135.

3. Berwick DM. Moral choices for today’s physician. JAMA 2017;318:2081-2082.

4. Gruen RL, Pearson SD, Brennan TA. Physician-citizens: public roles and professional obligations. JAMA 2004;291:94-98.

5. Krieger N. Proximal, distal, and the politics of causation: what’s level got to do with it? Am J Public Health 2008;98:221-230.

Immigrants’ use of health care in the U.S.

Do immigrants drive up health care costs for U.S. citizens? Despite loud claims from our political leaders, recent studies have found the opposite to be true. Immigrants in the U.S. make significant contributions to health care as taxpayers, as relatively healthy plan enrollees, and as dedicated health professionals. But they are still subject to scapegoating and discrimination.

“Review of Medical Expenditures of Immigrant Populations in the United States” was published August 8, 2018 in the International Journal of Health Services. It found that, as a group, immigrants pay more into private and some public health insurance programs (through premiums and taxes) than is paid out for their care. (PNHP press release here.)

“Immigrants Pay More in Private Insurance Premiums Than They Receive in Benefits” was published October 1, 2018 in Health Affairs. It found that immigrants pay billions more in private insurance premiums than insurers pay out for their care, thereby subsidizing the benefits of U.S.-born enrollees. (PNHP press release here.)

“Care For America’s Elderly And Disabled People Relies On Immigrant Labor” was published June 3, 2019 in Health Affairs. It found that the U.S. health care system as a whole is dependent on the work of over three million immigrants, who account for 18.2 percent of all health care workers. (PNHP Quote of the Day here.)

“Implications of changing public charge immigration rules on children who need medical care” was published July 1 2019 in JAMA Pediatrics. It found that the Trump Administration’s proposed public charge rule would likely cause millions of children to lose health and nutrition benefits, including many children with specific medical needs. (PNHP press release here.)

Rally to tear down barriers to care

PNHP members rallied outside of an Immigration and Customs Enforcement (I.C.E.) office in San Diego on November 9, 2018 as part of our Annual Meeting & Leadership Training. We demanded an end to draconian immigration policies and the enactment of an efficient, effective, and humane health care system that covers all residents of the United States, regardless of immigration status.

We were joined by several local organizations for the rally, including Women’s March San Diego, San Diego Border Dreamers, and Border Angels.

Media coverage

“Immigrants use health services at a lower rate than people born in the U.S.”
NPR, Marketplace, August 8, 2018

“Immigrants cost the health care system less than US-born Americans: Study”
ABC News, August 10, 2018

“Immigrants use less healthcare than people born in U.S.”
Reuters, September 13, 2018

“Immigrants Not a Burden on U.S. Health Care: Study”
U.S. News & World Report, August 15, 2018

“Immigrants Contribute More To Public Health Programs Than They Use, A New Study Says”
BuzzFeed News, August 8, 2018

“Are Immigrants Health Care ‘Moochers’? On The Contrary, Boston Researchers Say”
WBUR, CommonHealth, August 8, 2018

“Debunking Trump’s Racist Myth, Study Shows Immigrants Boosting US Healthcare, Not Draining It”
Common Dreams, August 8, 2018

“Trump Plan Would Bar Citizenship for Millions of Immigrants”
Colorlines, August 8, 2018

“Immigrants’ Health Premiums Far Exceed What Plans Pay For Their Care”
Kaiser Health News, October 1, 2019

“Immigrants Subsidize U.S. Private Health Insurance”
Bloomberg Law, October 1, 2018

“U.S. immigrants pay more for health insurance than they get in benefits”
Reuters, October 10, 2018

“Study: Trump’s Immigration Agenda May Compromise Care for Elderly, Disabled”
Morning Consult, June 3, 2019

“Immigrants play big role in caring for elderly and disabled in U.S”
Reuters, June 4, 2019

“Health-care worker shortages would be even worse without immigrants”
Washington Post, Health 202, June 5, 2019

“Trump’s immigration proposal could cause millions of children to opt out of health benefits, study says,” CNN, July 1, 2019

“Trump immigration proposal may mean sick kids lose health benefits,”
Reuters, July 1, 2019

“8.3 million children of immigrant families risk losing health insurance under new rule,”
The Guardian, July 1, 2019

“Proposed rule could mean loss of health, nutrition benefits for millions of kids,”
MedPage Today, July 1, 2019

“White House immigration proposal may harm health of 1.9 million kids,”
HealthDay, July 1, 2019

“Millions of kids could lose health insurance and food assistance under Trump’s public charge rule,”
Pacific Standard, July 1, 2019

Immigrants’ health care and the misuse of the ‘public charge’ rule

Medical Expenditures on and by Immigrant Populations in the United States: A Systematic Review

By Lila Flavin, Leah Zallman, Danny McCormick, and J. Wesley Boyd
International Journal of Health Services, August 8, 2018

Abstract

In health care policy debates, discussion centers around the often-misperceived costs of providing medical care to immigrants. This review seeks to compare health care expenditures of U.S. immigrants to those of U.S.-born individuals and evaluate the role which immigrants play in the rising cost of health care. We systematically examined all post-2000, peer-reviewed studies in PubMed related to health care expenditures by immigrants written in English in the United States. The reviewers extracted data independently using a standardized approach. Immigrants’ overall expenditures were one-half to two-thirds those of U.S.-born individuals, across all assessed age groups, regardless of immigration status. Per capita expenditures from private and public insurance sources were lower for immigrants, particularly expenditures for undocumented immigrants. Immigrant individuals made larger out-of-pocket health care payments compared to U.S.-born individuals. Overall, immigrants almost certainly paid more toward medical expenses than they withdrew, providing a low-risk pool that subsidized the public and private health insurance markets. We conclude that insurance and medical
care should be made more available to immigrants rather than less so.

From the Discussion

Many Americans, including some in the health care sector, mistakenly believe that immigrants are a financial drain on the U.S. health care system, costing society disproportionately more than the U.S.-born population, i.e., themselves. Our review of the literature overwhelmingly showed that immigrants spend less on health care, including publicly funded health care, compared to their U.S.-born counterparts. Moreover, immigrants contributed more towards Medicare than they withdrew; they are net contributors to Medicare’s trust fund.

Our research categorized immigrants into different groups, but in all categories, these studies found that immigrants accrued fewer health care expenditures than U.S.-born individuals. Among the different payment sources – public, private, or out-of-pocket – public and private expenditures were lower for immigrants, with immigrants spending more out-of-pocket. Differences decreased the longer immigrants resided in the United States.

While annual U.S. medical spending in 2016 was a staggering $3.3 trillion, immigrants accounted for less than 10% of the overall spending – and recent immigrants were responsible for only 1% of total spending. Given these figures, it is unlikely that restrictions on immigration into the United States would result in a meaningful decrease in health care spending. To the contrary, restricting immigration would financially destabilize some parts of the health care economy, as suggested by Zallman and colleagues, who found that immigrants contributed $14 billion more to the Medicare trust fund than they withdrew.

Fiscal responsibility is an important reason for the United States to provide insurance for newly arrived immigrants, as they could continue to enlarge the low-risk pool of healthy individuals that helps offset the cost of insuring high-risk individuals. Currently, under the ACA, undocumented immigrants cannot enroll in the state health care exchanges. If we are seeking to minimize costs, which would seem a major factor in the reasoning of policymakers who would deny immigrants care, then it makes financial sense to enroll individuals who will (on average) contribute more to the health care system than they withdraw. Healthy, young immigrants are precisely whom we should target for Medicaid enrollment, state exchanges, or private health insurance.

http://journals.sagepub.com…

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A New Threat to Immigrants’ Health — The Public-Charge Rule

By Krista M. Perreira, Ph.D., Hirokazu Yoshikawa, Ph.D., and Jonathan Oberlander, Ph.D.
The New England Journal of Medicine, August 1, 2018

The United States is making major changes to its immigration policies that are spilling over into health policy. In one such change, the Trump administration is drafting a rule on “public charges” that could have important consequences for access to medical care and the health of millions of immigrants and their families. The concept of a public charge dates back to 19th-century immigration law. Under current guidelines, persons labeled as potential public charges can be denied legal entry to the United States. They can also be prevented from adjusting their status from a nonimmigrant visa category (e.g., a student or work visa) to legal permanent resident status. In addition, if they become public charges within the first 5 years after their admission to the United States, for reasons that existed before they came to the country, in rare cases they can be arrested and deported. Immigrants and their families consequently have strong incentives to avoid being deemed public charges.

In evaluating whether a person is likely to become a public charge, immigration officials take account of factors such as age, health, financial status, education, and skills. The use of cash assistance for income maintenance (e.g., Supplemental Security Income or Temporary Assistance for Needy Families) and government-funded long-term care are considered in making these determinations. Other noncash benefits such as health and nutrition programs are specifically excluded from consideration, and use of cash-assistance benefits by the immigrant’s dependents is not currently factored in.

The Trump administration is proposing sweeping changes to these guidelines. A draft rule from the Department of Homeland Security (DHS) would substantially expand the definition of a public charge to include any immigrant who “uses or receives one or more public benefits.” Not just cash assistance but nearly all public benefits from federal, state, or local governments would be considered in public-charge determinations, including nonemergency Medicaid, the Children’s Health Insurance Program (CHIP), and subsidized health insurance through the marketplaces created by the Affordable Care Act (ACA); Medicare would be excluded. The DHS draft notes that in making these determinations, “having subsidized insurance will generally be considered a heavily weighted negative factor.” The broadened definition of public charge would also encompass food assistance (the Supplemental Nutrition Assistance Program [SNAP] and the Women, Infants, and Children Program [WIC]), programs designed to assist low-income workers (e.g., the Earned Income Tax Credit [EITC]), housing assistance (Section 8 vouchers), and the Low Income Home Energy Assistance Program. Moreover, not only immigrants’ use of public assistance but use of these programs by any dependents, including U.S.-born citizen spouses and children, would also be considered.

The potential impact of these changes is enormous. In 2016, about 43.7 million immigrants lived in the United States. If enacted, the new regulations would affect people seeking to move to the United States to be reunified with family members and to work, as well as lawfully present immigrants who hope to become legal permanent residents (green-card holders). One estimate suggests that nearly one third of U.S.-born persons could have their use of public benefits considered in the public-charge determination of a family member. This includes “10.4 million citizen children with at least one noncitizen parent.” Notably, unauthorized immigrants are not the primary target of the draft rule, since they are already ineligible for most federally funded public assistance. Instead, lawfully present immigrants would bear the brunt, as well as persons living in “mixed-status” families (those in which some members are citizens and others are not) and persons living abroad who wish to immigrate to the United States.

We believe that the draft public-charge regulation represents a substantial threat to lawfully present immigrants’ access to public programs and health care services. What modifications may be made is uncertain — after the rule is formally proposed, there will be a public comment period, and revisions could be made before it is finalized. But if this rule takes effect, it will most likely harm the health of millions of people and undo decades of work by providers nationwide to increase access to medical care for immigrants and their families.

https://www.nejm.org…

***

Comment:

By Don McCanne, M.D.

Numerous studies have shown that immigrants pay more into our health care financing systems, both public and private, than they take out in health care services. We should be welcoming their contributions to our health care. Yet the Trump administration is intending to put into place an expansion of the “public charge” rule that will have an enormous negative impact on lawfully present immigrants.

The last paragraph of the NEJM article bears repeating:

“We believe that the draft public-charge regulation represents a substantial threat to lawfully present immigrants’ access to public programs and health care services. What modifications may be made is uncertain — after the rule is formally proposed, there will be a public comment period, and revisions could be made before it is finalized. But if this rule takes effect, it will most likely harm the health of millions of people and undo decades of work by providers nationwide to increase access to medical care for immigrants and their families.”

Is this what kind of a nation we are becoming? Are the large, often unruly crowds at President Trump’s political rallies in charge of presenting our values to the world forum?

Have we no citizen responsibility here? If so, what is it? Yes, we need to vote, but look at who is being elected. Will we have an epiphany by November and change our elected representatives, or will it be more of the same?

And the most perplexing question of all: How did we end up with so many individuals in our nation who demonstrate repeatedly man’s inhumanity to man?

Two contrasting stanzas, excerpted from:

Man was made to mourn: A Dirge

Many and sharp the num’rous ills
Inwoven with our frame!
More pointed still we make ourselves
Regret, remorse, and shame!
And man, whose heav’n-erected face
The smiles of love adorn, –
Man’s inhumanity to man
Makes countless thousands mourn!

Yet, let not this too much, my son,
Disturb thy youthful breast:
This partial view of human-kind
Is surely not the last!
The poor, oppressed, honest man
Had never, sure, been born,
Had there not been some recompense
To comfort those that mourn!

– Robert Burns, 1784

There is hope.

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Immigrants use little health care, may help subsidize care of non-immigrants: Harvard/Tufts researchers

New study finds that immigrants pay more money into both private and public health insurance programs than they take out

FOR IMMEDIATE RELEASE: August 8, 2018

Contacts: Clare Fauke, PNHP communications specialist, 312-782-6006, clare@pnhp.org;
J. Wesley Boyd, M.D, Ph.D., Harvard Medical School/Cambridge Health Alliance, jwboyd@cha.harvard.edu

A study published today in the International Journal of Health Services finds that immigrants use far less health care than non-immigrants, and may actually subsidize the care of U.S. citizens. The findings by researchers at Harvard Medical School and Tufts University School of Medicine contradict recent claims by Pres. Trump and other political leaders that immigrants drive up U.S. medical costs.

Researchers examined all studies published since 2000 related to health care expenditures by immigrants. Compared to U.S.-born individuals, immigrants were found to have lower rates of utilization and lower per capita expenditures from private and public insurance sources; health expenditures were particularly low for undocumented immigrants. Across all age groups, immigrants’ utilization was only one-half to two-thirds as high as that of the U.S.-born population. Immigrants also made larger out-of-pocket health care payments compared to those born in the U.S.

Researchers concluded that as a group, immigrants effectively subsidize private insurance and some public insurance programs such as Medicare because they constitute a low-risk pool that pays more into the system (by way of premiums and tax contributions) than is paid out for their care.

“Immigrants have been blamed for a range of problems plaguing the U.S., including health care costs,” said study author Lila Flavin, a medical student at Tufts University School of Medicine. “But studies demonstrate that immigrants are propping up the Medicare Trust Fund by paying much more into Medicare than they will ever receive in benefits. Recent immigrants are substantially healthier than native-born Americans, which benefits the American health care economy. But to maintain their health over the long term, new immigrants — and all Americans — need access to good health care. Denying care to immigrants is a human rights violation that cannot be justified based on costs, and indeed may raise costs in the future.”

Senior author Dr. J. Wesley Boyd, a psychiatrist at Cambridge Health Alliance and associate professor of psychiatry at Harvard Medical School and Harvard’s Center for Bioethics added, “Our findings show that immigrants are clearly bringing down per capita health care costs and are likely subsidizing care for native-born Americans. Instead of attacking immigrants for driving up costs, we should recognize their proven economic contributions.”

***

“Review of Medical Expenditures of Immigrant Populations in the United States,” by Lila Flavin B.A., Leah Zallman, M.D., M.P.H., Danny McCormick, M.D., M.P.H., and J. Wesley Boyd, M.D., Ph.D. International Journal of Health Services, published online first August 8, 2018. DOI: 10.1177/0020731418791963

A copy of the full study is available to media professionals upon request from Ms. Fauke or Dr. Boyd.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and educational organization of more than 22,000 doctors who support a single-payer national health program. PNHP had no role in funding or otherwise supporting the study above.

Large firms offering HSAs is not enough

High-Deductible Health Plan Enrollment Increased From 2006 To 2016, Employer-Funded Accounts Grew In Largest Firms

By G. Edward Miller, Jessica P. Vistnes, Frederick Rohde, and Patricia S. Keenan
Health Affairs, August 2018

Abstract

Over the past decade, employers have increasingly turned to high-deductible health plans (HDHPs) to limit health insurance premium growth. We used data from private-sector establishments for 2006 and 2016 from the Medical Expenditure Panel Survey–Insurance Component to examine trends in HDHP enrollment and heterogeneity in HDHPs by firm size. We studied insurance plan offerings along the following dimensions: whether employers fund accounts to help defray employees’ out-of-pocket health care spending, the availability of non-HDHP plan choices, and single and family deductible levels. We extend the literature by examining these characteristics by detailed firm-size categories and by including all plans with deductibles that met or exceeded Internal Revenue Service thresholds to be qualified for health savings accounts. We found that in 2016, 78.0 percent of HDHP enrollees in the smallest firms (those with fewer than 25 employees) lacked an employer-funded account, compared to 35.2 percent in the largest firms (those with 1,000 or more employees). Overall, HDHP enrollees in the largest firms had significant advantages relative to workers in smaller firms along all of the dimensions examined.

From the Discussion

Similar to previous studies, we found a rapid rise—in this case, from 2006 to 2016—in the proportion of private-sector enrollees in insurance plans with deductibles that met or exceeded IRS thresholds for HSA-qualified plans. Because the thresholds are indexed by the Consumer Price Index for All Urban Consumers, increasing enrollment in high-deductible health plans indicates that deductibles rose faster than general inflation and that household budgets were exposed to potentially higher out-of-pocket health care spending. Employer contributions to HSAs and HRAs can be used to defray some of these costs, but the share of HDHP enrollees with employer-funded accounts increased only among those in the largest firms (those with 1,000 or more employees) over this time period.

Other studies have identified lower health care utilization, even among plans with employer contributions to a savings account, and higher financial burdens for HDHP enrollees compared to enrollees in non-HDHP plans. Our results suggest that these effects may be larger for workers in small firms, who are more likely to have higher deductible levels and lack employer contributions to help pay for out-of-pocket expenses, compared to workers in larger firms.

https://www.healthaffairs.org…

***

Comment:

By Don McCanne, M.D.

In order to control the cost of employer-sponsored health insurance, employers have increasingly turned to high-deductible health plans. This makes the up-front, high out-of-pocket costs unaffordable for many employees. To get around this hurdle, some employers will also help fund health savings accounts (HSAs) or health reimbursement arrangements (HRAs) to defray some of the upfront costs. How well is this working?

Large employers with over 1,000 employees will more often contribute to these accounts, but, even there, 35 percent of the employees of these large firms do not have an employer-funded account. Even worse, 78 percent of enrollees in high-deductible plans offered by firms with less than 25 employees lack an employer-funded account. Many of these employees without employer-funded accounts do not have the financial capability of funding those accounts on their own.

The literature is clear on the impact of high-deductible health plans on employees who do not have pre-funded HSAs. The financial barriers frequently prevent them from receiving health services that they should have, and when services are unavoidable, financial hardship often ensues. Neither of these are good outcomes. Yet the Trump administration is currently encouraging Congress to expand the use of HSAs.

We should not celebrate the fact that the majority of large employers do contribute to their employees’ HSAs, because all they have done is to dig the hole less deep. We need to get rid of private high-deductible health plans and replace them with an improved Medicare that provides first dollar coverage for everyone. We can control health care costs through much more patient-friendly policies that make health care affordable and accessible for all of us.

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Health care costs matter and single-payer would help

By Ray Bellamy, M.D.
Tallahassee Democrat, August 7, 2018

Health care is too expensive. We can nearly all agree on that. But the public knows its importance as well as its expense.

Efforts by the Trump administration to wound Obamacare with availability of policies aimed at the non-sick, labeled by some as “junk policies,” have not yet destroyed the ACA. And voters rank health care as a high priority.

So how do we make health care more affordable? Technological advances are expected to keep costs rising inexorably. Recent embrace of Medicare for All by the public and many Democrats has encountered strong pushback from entrenched interests.

A recent analysis from the George Mason University Mercatus Center, a known Koch-funded economics outpost, predicted some $2 trillion in savings over a decade if the nation shifted to a single payer system to replace our current $3.5 trillion a year hodgepodge of both public and private payers.

How can this be? Everyone covered with comprehensive health insurance and costs of the system reduced? The key is the simplicity of single payer, with its massive reduction in overhead, along with elimination of corporate profit.

All who interface with the health care mess we now utilize will recognize the waste at every level when a potpourri of partial coverage options and different panels of providers, approved medications, and duration of treatment — along with the varying co-pays, deductibles and associated administrative costs — are encountered. How much simpler to swipe a card with every citizen covered equally, an estimated $400 billion a year in reduced overhead.

Then imagine the additional benefits of lowered auto and homeowners insurance, workers compensation and personal injury costs if everyone is covered comprehensively. Add in the additional hundreds of billions a year in savings if Congress would back off their ban against negotiation for lower drug prices like the VA and other countries operate.

Those are the big savings of a Medicare for All system, but don’t stop counting other advantages: much of our ability to track effectiveness of treatments comes from access to Medicare records. We need ready information on what works for all ages of our citizens, as well as early alerts regarding disease outbreaks.

Health care should be available for all, as should ready information on the health of our population. Contrary to the objections of the ideologues and special interests, an estimated 95 percent of Americans would have lower health care costs under Medicare for All than they have now.

We can do this. We can provide comprehensive high quality care to all or our citizens, beginning at birth. And with less cost in our nation’s $3.5 trillion annual expenditure. The secret is in our wasted overhead, our administrative expense and corporate profit, which we can eliminate.

Dr. Ray Bellamy is a retired longtime Tallahassee physician and member of Physicians for a National Health Program.

https://www.tallahassee.com…

Growing trend for bankruptcy for seniors

Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society

By Deborah Thorne, Pamela Foohey, Robert M. Lawless & Katherine Porter
SSRN, August 5, 2018

Abstract

The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.

From the Introduction

The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.

National concern for the well-being of older Americans soon declined, beginning in the early-1980s, especially as the cost of funding their social safety net strained state and federal budgets. This financial tension and emerging ideological shifts promoted an intergenerational war. Conservatives, free market advocates, and media promoted the image of older Americans as “a threat to economic viability,” as thieves of our children’s futures, and as “responsible for the nation’s economic problems.” In just a few decades, norms of privatized citizenship and individual responsibility upstaged the ideal of America’s social welfare system. Financial risks were shunted off onto individuals, regardless of age. Many older Americans suffered greatly because of this movement toward “private responsibility,” with their Social Security, retirement, and healthcare, among other protections, coming under attack.

Since the early-1990s, scholars on the Consumer Bankruptcy Project (CBP) have collected data on the age of bankruptcy filers. These data are used to determine the percent of older Americans within the U.S. population who file bankruptcy, and the percent of older filers within the bankrupt population. Comparing CBP data between 1991 and now shows significant increases in both categories. The changes are so great that the broader trend of an aging U.S. population can explain only a small proportion of what is happening in the bankruptcy courts. Older Americans’ reported reasons for filing strongly suggest that they are experiencing the fallout from our current individualized risk society and the corresponding shrinkage of their social safety net.

From the Results

Within the Bankrupt Population

One in seven bankruptcy filers is of retirement age, 65 years or over. This is nearly a five-fold increase over just two and a half decades. This is a notable demographic shift.

Within the oldest cohort, those age 75 and over, there has been a near ten-fold increase since 1991. In 1991, this group constituted only 0.3 percent of filers, as compared to 3.3 percent now.

The overall trend is clear. Bankruptcy filers in the youngest cohorts (18-24, 25-34, and 35-44) now comprise a much smaller segment of the bankrupt population than they did twenty-five years ago. During that same period, there has been a marked increase in the percent of filers among the older cohorts (55-64, 65-74, and 75 and above), those people who are approaching or are in their retirement years.

Older Americans’ Reasons for Bankruptcy—Evidence of a Risk Shift

Regardless of age, leading data suggest that income problems and medical costs top the list of events that push households into bankruptcy.

Data from the current CBP suggest that financial struggles, namely a decline in income, was a leading reason for older Americans’ bankruptcies—almost seven out of ten respondents (69.1 percent) reported that they “very much” or “somewhat” agreed that this was the reason for their bankruptcy.

Another respondent’s comment describes an additional financial risk that can be especially consequential for retirees—the popular defined-contribution plans, like 401(k)s, that individuals are left to manage on their own.

Just over seven out of ten respondents (71.6 percent) either “very much” or “somewhat” agreed that they filed because of the stress of dealing with debt collectors.

Medical expenses also were a catalyst for bankruptcy for more than six out of ten (62.2 percent) respondents.

Additionally, 40 percent of respondents reported that they “very much” or “somewhat” agree that missing work for medical reasons was a reason for their bankruptcies.

Finally, respondents were asked to list the single most important thing that they or their family members were unable to afford in the year before their bankruptcies. Over half of older filers (52 percent) who responded indicated that the single most important thing they had to go forego was related to medical care—surgeries, doctor visits, prescriptions, dental care, and health/supplemental insurance. These responses continue to suggest that their health care coverage is inadequate.

From the Discussion

The most effective solution to older Americans’ increasing financial plight is a social safety net that obviates the need to take out debts that result in financial crises. In prior decades, Americans collectively decided that we have a responsibility to our older citizens to absorb the financial risks they face. But it appears that we have since abandoned that commitment. We can do better. Historically, we have.

At the core, the lessons of prior decades show that aid to older citizens must originate with our government. Community and charitable organizations, while having the best of intentions, are inadequate. Comprehensive policies led by our government will ensure financial stability for all elderly citizens. We appear to be in the midst of an old-fashioned game of tug-of-war. On the one hand, many Americans believe that providing a strong social safety net for our older citizens, a net that reduces their individual financial risks, is part of our collective responsibility. On the other hand, there are those who insist on policies that continue to unravel that safety net, leaving older Americans to fend for themselves.

Conclusion

How we manage the time called retirement, the span between when we stop working and when we die, is a social issue affecting the lives of tens of millions. America has come almost full circle in its attitudes toward its older citizens—from sending them to the poorhouse when they became a financial burden, to ameliorating their economic risks with pensions, a responsive social security program, and healthcare, and now to transferring financial risks to them that can drive them to financial collapse.

Absent significant policy changes that reassume the risks of aging and effectively insure the financial stability of older Americans, our data suggest that the trend of an aging bankruptcy population will continue. In 2015, almost 15 percent of the U.S. population was 65 and over. By 2050, almost a quarter of Americans, 88 million, will be over 65 (U.S. Census 2016). If current bankruptcy trends among seniors continue, our bankruptcy courts will be flooded with financially broken retirees. For older Americans, bankruptcy is too little too late. By the time they file, their wealth has vanished, and they simply do not have the enough years to get back on their feet. Our data expose the severity of the continuing financial decline of older Americans. Now that we can see the magnitude of the coming storm of broke elderly, it is time to renew our commitment to supporting our citizens as they age.

https://papers.ssrn.com…

***

Comment:

By Don McCanne, M.D.

The social safety net for older Americans built up during the last century is now showing alarming trends toward shifting greater financial risk to this population. In the past two and a half decades there has been a five-fold increase in the rate of bankruptcy filings for individuals over 65.

There are multiple factors including the loss of income, the deterioration in retirement plans, and the inability to accumulate wealth before retirement, but the inadequacy of health care coverage also has been a significant factor. The authors state, “respondents were asked to list the single most important thing that they or their family members were unable to afford in the year before their bankruptcies. Over half of older filers (52 percent) who responded indicated that the single most important thing they had to go forego was related to medical care—surgeries, doctor visits, prescriptions, dental care, and health/supplemental insurance.”

The authors conclude, “Absent significant policy changes that reassume the risks of aging and effectively insure the financial stability of older Americans, our data suggest that the trend of an aging bankruptcy population will continue… Now that we can see the magnitude of the coming storm of broke elderly, it is time to renew our commitment to supporting our citizens as they age,” and “At the core, the lessons of prior decades show that aid to older citizens must originate with our government.”

As an aside, one of the co-authors of this report, UC Irvine Professor Katherine Porter, is taking her academic credentials into the political arena by running for Congress in California’s 45th District, hoping to join Senator Elizabeth Warren and others in efforts to counter the attack on our social safety net.

Katherine Porter, Professor of Law, University of California, Irvine School of Law:
https://www.law.uci.edu…

Katie Porter for Congress:
https://katieporter.com

PNHP does not endorse candidates for pubic office. This statement on Katie Porter’s candidacy is appropriately included in the Quote of the Day since it shows her bias on the topic of today’s report (for full disclosure, a bias which Quote of the Day editor Don McCanne happens to share).

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

Improved Medicare for All means something. Don’t dilute it!

By Kay Tillow
Daily Kos, August 6, 2018

On July 13, 2018, in an article1 on Vox, Tim Higginbotham and Chris Middleman of the Democratic Socialists of America’s (DSA) Medicare for All campaign condemned Paul Krugman, Adam Green, the Center for American Progress, and Andy Slavitt for their efforts to co-opt and water down the “Medicare for All” slogan into meaningless vague principles and inadequate programs. They are absolutely right!

Higginbotham and Middleman’s analysis of those who seek to use and abuse the growing popularity of “Medicare for All” while abandoning the struggle for a real national single payer program is excellent. The door-to-door grass roots proposal of the DSA is compelling with its plan to reach into the heart of every community.

But there is a problem embedded in Higginbotham and Middleman’s core principles that threatens to destroy all of their good work and do damage to the robust and growing single payer movement. Their five core demands which they assert “dovetail with the Sanders and Ellison bills” are inadequate to give us a viable single payer system. Why are Higginbotham and Middleman moving the goal posts? Their core demands are good—but too sparse to support the reform they say they seek. And the Sanders Senate bill S 18042 and the Ellison House bill, HR 6763 are worlds apart.

Do Higginbotham and Middleman really want to leave long term care out of Medicare for All? Their principles do not include it. That would abandon this vital care to the state Medicaid programs that require impoverishment prior to entering a nursing home. Leaving long term care to state Medicaid programs assures wide variations from state to state as some states will provide the sparsest of care. Medicaid has means-testing for eligibility, and that will worsen economic inequality as families must spend a lifetime of assets for final care. This will worsen the wealth gap because nothing is left to be passed on to families. Long term care isn’t included in Higginbotham and Middleman’s core demands even though it is a part of HR 676. It is a necessity and should be included. All necessary care for everyone means something. Don’t dilute it. The Senate bill S 1804 also excludes long term care.

Do Higginbotham and Middleman really want to allow the investor-owned, for-profit hospitals and nursing homes to continue to gouge patients with their higher costs and higher mortality rates? In their article they call for the elimination of the profit motive, but their core principles are silent on this vital issue. Does not removing the profiteers merit inclusion? HR 676 transforms the investor-owned, for-profit hospitals, nursing homes, and other institutions. S. 1804, the Senate bill, does not. Shouldn’t ending the profits in health care be a core demand? 

Check out the research.

“It has been shown that patients cared for at private for-profit hospitals have higher risk-adjusted mortality rates than those cared for at private not-for-profit hospitals4.”

And

“Private for-profit hospitals result in higher payments for care than private not-for-profit hospitals. Evidence strongly supports a policy of not-for-profit health care delivery at the hospital level5.”

Removing the for-profit hospitals and nursing homes must be a core demand. As Dr. Andy Coates puts it,

“
it’s appalling that one person’s illness would be an opportunity for another to make money. The care of human beings should not be a commodity.6

The United States spends over twice as much on health care, per capita, as the average of other industrialized countries that provide universal health care. So reaching our goal does not require spending more, but instead saving by removing the insurance companies and eliminating the waste caused by profits. Improved Medicare for All, a national single payer system, requires administrative savings to free funds to improve care for all and expand it to everyone. Yet Higginbotham and Middleman leave out of their core principles the vital global budgeting of hospitals and nursing homes and the separation of construction from operating costs. These are essential to assure the savings to make single payer financially viable. Is this not a core principle?

“Without global budgets, the national system has little power to constrain long-term cost growth7.”

In January of 1989 the Physicians’ Proposal for a National Health Program was published in the New England Journal of Medicine. Through updates in 2003 in the Journal of the American Medical Association8 and in 2016 in the American Journal of Public Health9, the plan of Physicians for a National Health Program (PNHP) has continued as the evidence-based single payer proposal uniting a national single payer movement.

In 2003, with the assistance of the Physicians for a National Health Program, Congressman John Conyers, Jr. of Michigan put this plan into legislative form and introduced it into the House of Representatives. Conyers introduced this bill, HR 676, into every Congress since that time, and it has been the sound legislation, Expanded and Improved Medicare for All, that now has 123 cosponsors.

When Rep. John Conyers resigned, Rep. Keith Ellison took over the lead sponsorship of HR 676. He, too, will be leaving the Congress to run for attorney general for the state of Minnesota. Nothing is more important than that the new chief sponsor, whoever that may be, be willing to maintain HR 676 as the model plan, based on the PNHP proposal, that when enacted will bring us the universal care we need.

Some have suggested that the model single payer bill, HR 676, needs to be rewritten to conform to the flawed senate bill S. 1804. That would be a disastrous setback for the single payer movement. S. 1804 excludes long term care. S. 1804 maintains private, for-profit hospitals and nursing homes. S. 1804 includes some copayments for drugs. S. 1804 has no global budgeting of hospitals. S. 1804 adopts in Section 611 (b) a “value based payment” system that has been proven to discriminate10 against physicians who care for those with low incomes. S. 1804 has a public option11 and a Medicare buy-in12 that will become barriers to achieving single payer. S. 1804 needs to be improved to come up to the standards of HR 676.

As every trade unionist knows, a compromise placed on the bargaining table at the beginning of negotiations becomes a ceiling above which it is not possible to go. If the ceiling is below viability of the new system, the plan fails before it gets off the ground. It is vital to set the standards high. A watered down, puny reform cannot inspire a nation to fight for it. We need a bold and beautiful plan.

So applaud Higginbotham and Middleman’s grass roots campaign. Join in the knocking on doors. 

Build and energize across the country. But don’t dilute the single payer principles. Improved Medicare for All means something!

Kay Tillow is a leader of Kentuckians for Single Payer Health Care and the All Unions Committee for Single Payer Health Care–HR 676.

Endnotes

1. https://www.vox.com…

2. https://www.congress.gov…

3. https://www.congress.gov…

4. http://www.cmaj.ca…

5. http://www.cmaj.ca…

6. https://www.pnhp.org…

7. https://www.pnhp.org/MedicareForAll

8. https://www.pnhp.org…

9. https://www.pnhp.org/beyondaca 

10. https://www.pnhp.org…

11. https://www.pnhp.org…

12. https://www.pnhp.org…

Libertarian rationale for single payer

Single payer sympathy?

By John Cochrane
The Grumpy Economist, July 29, 2018

A July 30 2018 Op-Ed in the Wall Street Journal, titled “The tax and spend health care solution”:

Why is paying for health care such a mess in America? Why is it so hard to fix? Cross-subsidies are the original sin. The government wants to subsidize health care for poor people, chronically sick people, and people who have money but choose to spend less of it on health care than officials find sufficient. These are worthy goals, easily achieved in a completely free-market system by raising taxes and then subsidizing health care or insurance, at market prices, for people the government wishes to help.

But lawmakers do not want to be seen taxing and spending, so they hide transfers in cross-subsidies. They require emergency rooms to treat everyone who comes along, and then hospitals must overcharge everybody else. Medicare and Medicaid do not pay the full amount their services cost. Hospitals then overcharge private insurance and the few remaining cash customers.

Overcharging paying customers and providing free care in an emergency room is economically equivalent to a tax on emergency-room services that funds subsidies for others. But the effective tax and expenditure of a forced cross-subsidy do not show up on the federal budget.

Over the long term, cross-subsidies are far more inefficient than forthright taxing and spending. If the hospital is going to overcharge private insurance and paying customers to cross-subsidize the poor, the uninsured, Medicare, Medicaid and, increasingly, victims of limited exchange policies, then the hospital must be protected from competition. If competitors can come in and offer services to the paying customers, the scheme unravels.

No competition means no pressure to innovate for better service and lower costs.

As usual, I (John Cochrane) have to wait 30 days to post the whole thing. It synthesizes some of my earlier blog posts on how cross subsidies are worse than straightforward, on budget, taxing and spending.

Let me here admit to one of the implications of this view. Single payer might not be so bad — it might not be as bad as the current Medicare, Medicaid, Obamacare, VA, etc. mess.

But before you quote that, let’s be careful to define what we mean by “single payer,” which has become a mantra and litmus test on the left. There is a huge difference between “there is a single payer that everyone can use,” and “there is a single payer that everyone must use.”

Most on the left promise the former and mean the latter. Not only is there some sort of single easy to access health care and insurance scheme for poor or unfortunate people, but you and I are forbidden to escape it, to have private doctors, private hospitals, or private insurance outside the scheme. Doctors are forbidden to have private cash paying customers. That truly is a nightmare, and it will mean the allocation of good medical care by connections and bribes.

But a single provider or payer that anyone in trouble can use, supported by taxes, not cross-subsidized by restrictions on your and my health care — not underpaying in a private system and forcing that system to overcharge others — while allowing a vibrant completely competitive free market in private health care on top of that, is not such a terrible idea, and follows from my Op-Ed. A single bureaucracy that hands out vouchers, pays full market costs, or pays partially but allows doctors to charge whatever they want on top of that would work. A VA like system of public hospitals and clinics would work too.  Like public schools, or public restrooms, you can use them, but you don’t have to; you’re free to spend your money on better options if you like, and people are free to start businesses to serve you. And no cross-subisides.

Whether we restrict provision with income and other tests, and thus introduce another marginal disincentive to work, or give everyone access and count on most working people to choose a better product, I leave for another day. It would always be an inefficient bureaucratic problem, but it might not be the nightmare of anti-competitive inefficiency of the current system.

The free market describes well how your and my health care and insurance should work. It does not offer nearly so clear advice on how the government should manage the finances and bureaucracy that provide subsidies (if we want to provide them). There are always tradeoffs, generosity vs. moral hazard and disincentives. Economics is crucial to understanding those tradeoffs, of course, but the answer will always be a muddy middle of tradeoffs. I have offered that taxing and spending — on budget and appropriated — to provide those subsidies may be better than the current mandated cross subsidies. We already have a “single payer” — the federal government. The argument that a single point of entry, a single payer, or a single provider, may be more rational and cost effective than the current system for the purpose of providing subsidized care is not as crazy as it sounds — if it allows a free market for the majority of Americans who own cars, houses, TVs and cell phones and can pay for better services in that free market.

“Single payer” also usually means “single price-setter.” It means a gargantuan Federal bureaucracy that will somehow produce health care cost savings by simply decreeing that doctors and hospitals be paid less. Good luck with that.

Both left and right forget that “negotiation” means only you pay less and somebody else pays more. We can’t all pay less by negotiation. Price controls mean rationing. Period. This is the heart of current “single payer” proposals, and they are doomed.

My “single payer” is just that, a “payer,” operating in a completely free market.

Still, when a politician endorses “single payer,” ask “does that mean we all can use a single payer? Or does that mean we all must use a single payer?”

John H. Cochrane is a Senior Fellow of the Hoover Institution at Stanford, an adjunct scholar of the Cato Institute, and formerly a professor at the University of Chicago Booth School of Business.

https://johnhcochrane.blogspot.com…

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Comment:

By Don McCanne, M.D.

The single payer policy community certainly would dispute that there are two types of single payer – one that allows individuals to opt out and one that mandates participation. In a well designed single payer system there is only one payer for everyone. That does not mean that there are not other systems that allow individuals to opt out of the public program, but those multi-payer systems should not be labeled single payer.

Nevertheless, the comments of conservative economist John Cochrane are interesting. He recognizes that there are enough sound economic policies in a single payer system that it “might not be as bad as the current Medicare, Medicaid, Obamacare, VA, etc. mess.” On that we can agree. However our ideological differences leave us far apart. Cochrane’s insistence that the market must still play a prominent role calls for design features that prevent realization of the single payer goals of true universality, equity, affordability, and universal access.

Many of his comments warrant a response which we won’t bother with now, except one that stands out and that is his statement that a single payer system that does not allow other options is one in which, “you and I are forbidden to escape it, to have private doctors, private hospitals, or private insurance outside the scheme.” Of course, the single payer system supported by Physicians for a National Health Program does allow free choice of private doctors and hospitals. Following is the comment that I submitted in response to his blog:

Under a single payer that everyone must use you are forbidden to have private doctors and private hospitals? But look at the traditional Medicare program. Patients have free choice of their physicians and hospitals. They also can elect to enroll in the private Medicare Advantage (MA) plans, but then they lose their their health care choices by being restricted to provider networks. Not only that, but “MA insurer revenues are 30 percent higher than their healthcare spending,” demonstrating the surplus that the private insurers are receiving from the taxpayers (NBER No. 23090) – a cross subsidy of sorts, but benefiting the insurer rather than the patients.

Of course, single payer advocates also support tax and spend, but we want our tax funds to be used wisely. Providing excess public funding to private insurers while they take away health care choices from patients is not a wise use of our tax dollars. It would be far better to improve the traditional Medicare program and then cover everyone with it, and then let the health care delivery system compete on the basis of service, access, and quality.

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A Libertarian’s Case Against Free Markets in Health Care

By Roman Zamishka
The Health Care Blog, August 2, 2018

This presumably arbitrary nature of prices should be the first thing about the US healthcare market that catches the attention of any student of economics. Prices for the same procedure vary greatly between hospitals on opposite sides of the street and even then appear to have no basis in reality. Further investigation reveals many other features of the healthcare market that economics teaches us will increase transaction costs and the misallocation of resources. The prices we discussed are generally not paid by the patient, but by a third party insurer. Often the patient isn’t even able to select the insurer but is assigned one by his or her employer. What the patient thinks of the insurer’s ability as a steward of his or her premiums is irrelevant. Further, contracts between providers or pharmacies and the insurer completely hide the true price from the patient’s view. In addition, anti-competitive certificate of need laws limit competition between providers and expensive regulations compel providers to merge to compete in a nuclear arms race with the insurers, although the real victim is the patient’s wallet over which the providers and insurers fight their proxy wars. The best way to explain the US healthcare system is if you took every economic best practice and then did the opposite.

Academics and physicians from places like Boston and San Francisco often argue that this situation is proof that free market healthcare has failed in America and that the only solution is to implement a nationalized single-payer model.

(Zamishka here provides a discussion of Kenneth Arrow’s “Uncertainty and the Welfare Economics of Medical Care,“ and then discusses how markets do not work in the various institutions and disciplines of medicine.)

The broader problem that I see is that much of the health insurance market is already nationalized through Medicaid, Medicare and the VA. The reality is that it is politically impossible to reverse from this position. If we then add to this list emergency medicine, perinatal healthcare, child healthcare, genetic diseases, mental health and chronic disease management, all of which I earnestly believe have a legitimate case to be nationalized, then what are we left with for free market shopping? Surgeries and generic drugs? At that point, you might as well nationalize the rest just to simplify things and remove any regulatory asymmetries. I hate to say it, but it’s not clear to me as a conservative that single payer (or at least universal coverage + optional private supplemental insurance) isn’t the right solution.

Roman Zamishka is a healthcare policy student at NYU focused on comparative analysis of healthcare systems.

http://thehealthcareblog.com…

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Comment:

By Don McCanne, M.D.

These articles express the views of two libertarians who recognize the benefits of the single payer model of health care financing, though both would maintain a role for private insurance.

The Cochrane article is reproduced in its entirety. The Zamishka article is quite long and so only brief excerpts are provided. However it might be worth wile to save the link for reading the full article this weekend. He presents a case that we should consider using when discussing single payer with libertarians or conservatives who truly do care and would like to see our health care financing system function better for all of us.

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