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Trump administration’s false rhetoric on the social determinants of health

Trump administration’s false rhetoric on the social determinants of health

Social Determinants Of Health: A Public Health Concept In Conflict

By Danielle Garrett, Ann Hwang, Clare Pierce-Wrobel
Health Affairs Blog, May 30, 2018

The new battlefront over health programs for the poor is taking place over what has historically been a progressive concept: social determinants of health. The new battlefront over health programs for the poor is taking place over what has historically been a progressive concept: social determinants of health.

This approach builds off of extensive public health research that shows changing health behaviors is most effective when paired with changes to the broader environment that enable those behaviors. In practice, this often involves removing barriers to services and increasing access to successful interventions.

Same Words, New Meaning

In January 2018, when the Centers for Medicare and Medicaid Services (CMS) announced that it would allow states to implement work requirements as a condition of receiving Medicaid coverage, the letter from CMS to state Medicaid directors employed language with seemingly familiar tones as it noted the many “determinants of health.” It went on to state that, “CMS recognizes that a broad range of social, economic, and behavioral factors can have a major impact on an individual’s health and wellness, and a growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve health outcomes.”

Secretary of Health and Human Services Alex Azar echoed the letter from CMS when he noted that many state officials were discussing requests for work requirements. “It seems to be getting a great deal of excitement to deal with the social determinants of health,” Secretary Azar shared during a February press conference in Indianapolis announcing the federal government’s approval of a Medicaid work requirement waiver for the state of Indiana.

While described as being about social determinants of health, the proposed policy from CMS actually takes an antithetical approach. If a beneficiary doesn’t meet the work requirements, this policy imposes a barrier to health care access by locking that individual out of Medicaid coverage. Rather than addressing the underlying factors that might contribute to lack of employment, such as need for education, training, transportation, the availability of jobs in the community, and poor health itself, the policy utilizes a punitive approach.

All Sticks And No Carrots

Punishing people for not engaging in a desired behavior by removing their access to care has very real consequences for people’s health and might actually exacerbate undesired health behaviors. It is nonsensical for a policy that is pitched by policymakers as improving health to actually do the opposite, as people will lose access to health care. Such an approach will likely make it even more difficult for individuals to find employment in addition to impacting their health.

The history of safety net programs has shown work requirement policies to be unsuccessful in improving employment or health status. For example, when Wisconsin implemented a work requirement for their food support program, more than three people lost coverage for every individual who gained employment. Lack of health insurance coverage is associated with a variety of poor health outcomes and a lack of access to care.

Creating A New Barrier To Health

While truly addressing the social determinants of health involves removing barriers that prevent people from making healthy decisions, punitive policies such as work requirements create an environment where people face more barriers to making healthy decisions. Medicaid work requirement waivers currently under development also demonstrate how these policies can inequitably distribute these barriers. A proposal under consideration in Michigan, for example, would disproportionately enforce the requirements for urban centers and communities of color that are facing major health and employment crises—like Flint—while exempting mostly white, rural communities.

An agenda that attempts to change health behaviors by making it harder to make healthy choices runs the risk of actually worsening health outcomes, increasing disparities, and diverting investments away from evidence-based interventions that improve health. We should not be fooled by the contorted language from CMS about “social determinants” that is being used to promote policies that only make it harder for people to make the healthy choice.

https://www.healthaffairs.org…

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After Years of Trying, Virginia Finally Will Expand Medicaid

By Abby Goodnough
The New York Times, May 30, 2018

Virginia’s Republican-controlled Senate voted on Wednesday to open Medicaid to an additional 400,000 low-income adults next year, making it all but certain that the state will join 32 others that have already expanded the public health insurance program under the Affordable Care Act.

Republican lawmakers in the state had blocked Medicaid expansion for four straight years, but a number of them dropped their opposition after their party almost lost the House of Delegates in elections last fall and voters named health care as a top issue.

The House passed the Senate bill within hours; it will now go to Mr. Northam’s desk. The measure includes a requirement that many adult recipients who don’t have a disability either work or volunteer as a condition of receiving Medicaid — a provision that was crucial to getting enough Republicans on board.

“That is debt, and I have four kids who are going to be having to pay for that for the rest of their lives,” Senator Amanda Chase, a Republican from Chesterfield, said of the federal funds spent on Medicaid expansion, explaining her vote against it on Wednesday.

This year, Republican governors and state lawmakers, encouraged by the Trump administration, have focused on adding new requirements for Medicaid eligibility, such as requiring adults without disabilities to work or volunteer, and many beneficiaries to pay premiums.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

It is an outrage that Trump administration officials contend that taking away health benefits from individuals who are unable to find qualifying employment is a policy that “may improve health outcomes.”

We can be thankful to Danielle Garrett, Ann Hwang, and Clare Pierce-Wrobel for writing this article and for Health Affairs for publishing it. It is important that the nation understands what these policies really mean. As the authors state, “It is nonsensical for a policy that is pitched by policymakers as improving health to actually do the opposite, as people will lose access to health care.”

This is not some theoretical consideration; it is really happening. Virginia legislators have fought Medicaid expansion for years and now agree to it only because the work requirement was added.

We are seeing more pleas for everyone to come together to address these social problems for the betterment of all of us. But when a policy goal of accessible and equitable health care for all conflicts with a policy goal of erecting barriers to health care (work requirements, unaffordable deductibles, narrow provider networks, spartan plans, unaffordable benefit tiers, etc.), how can we ever find common ground?

Those supporting health care for all clearly hold the moral high ground. Those who would deliberately create barriers to health care for some should explain to the rest of us the moral basis for their positions that seem to rest on very shaky ground. They should provide us with a credible explanation of how they are sharing with us a firm moral footing. The fact that health care costs money is not an adequate excuse since we are already spending enough to provide care for everyone if we would just change our policies to those that work, such as with an improved Medicare for all.

Really. It is depressing to see our nation’s political leaders support these inherently cruel policies. What is it that the voters see in them? Aren’t we entitled to a reasonable explanation of why these legislators should be the ones to dictate policy?

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Everyone agrees: Trump’s new insurance rules are terrible

Trump's new insurance rules are panned by nearly every healthcare group that submitted formal comments

By Noam Levey
Los Angeles Times, May 30, 2018

More than 95% of healthcare groups that have commented on President Trump’s effort to weaken Obama-era health insurance rules criticized or outright opposed the proposals, according to a Times review of thousands of official comment letters filed with federal agencies.

The extraordinary one-sided outpouring came from more than 300 patient and consumer advocates, physician and nurse organizations and trade groups representing hospitals, clinics and health insurers across the country, the review found.

State insurance regulators from both political parties have also warned that the administration’s proposals could destabilize insurance markets, raise premiums for sick Americans and open the door to insurance fraud.

And dozens of industry leaders and other experts have called on the administration to rethink moves to scale back consumer protections enacted through the Affordable Care Act, often called Obamacare.

“Basically anybody who knows anything about healthcare is opposed to these proposals,” said Sandy Praeger, a former Republican state insurance regulator in Kansas and onetime president of the National Assn. of Insurance Commissioners. “It’s amazing.”

After the failure to repeal the healthcare law last year, the Trump administration is weighing two controversial new rules to loosen regulations governing health plans. One would expand the availability of short-term coverage plans that last less than a year. The other would make it easier for self-employed Americans and small businesses to band together to form so-called association health plans.

These plans — which administration officials say will be more affordable — would not have to offer the full set of health benefits required under the 2010 law and in some cases could turn away sick customers.

Altogether, more than 95% — or 266 of 279 — of the healthcare groups that filed comments about the proposed association health plan regulation expressed serious concern or opposed it, the Times analysis found.

And more than 98% — or 335 of 340 — of the healthcare groups that commented on the proposal to loosen restrictions on short-term health plans criticized it, in many cases warning that the rule could gravely hurt sick patients.

Among the groups were virtually every leading patient advocate in the county, including the American Lung Assn., the American Heart Assn., the Cystic Fibrosis Foundation, the March of Dimes, the National Multiple Sclerosis Society, Susan G. Komen, AARP and the advocacy arm of the American Cancer Society.

Not a single group representing patients, physicians, nurses or hospitals voiced support in the public comments for the two Trump administration proposals.

These concerns were echoed by the leading health insurance trade groups, as well as many individual health insurers that cautioned that rates would only increase as looser rules further destabilized insurance markets across the country.

The Trump administration has not indicated when it will finalize the proposed new insurance regulations.

http://www.latimes.com…

***

Comment:

By Don McCanne, M.D.

Donald Trump, Alex Azar and Seema Verma just don’t get it. Everyone, expect for a few ideologues, agrees that the administration is mismanaging our nation’s health care policies. Obviously we need to change course.

The policies that would accomplish the goals of universality, access, equity, and affordability are not secret. They are those policies contained within a well designed, single payer, improved Medicare for all. We simply need an administration and Congress who agree and are willing to enact and implement such a system.

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

Enough is enough. It’s time for single-payer health care.

By Jennifer Perkins, M.D.
Anchorage (Alaska) Daily News, May 29, 2018

How much longer will we tolerate incremental approaches to fix a broken health care system that feeds off disease and profits on the sick? Extremely high health care costs have become so common place that we rarely question them. News headlines flash about a “… plan to control drug prices,” or “Medicaid work requirements to cut state costs,” while casualties of the pharmaceutical-driven opioid epidemic pile up on the inside pages.

I am part of the problem. As a family doctor, I direct the flow of health care dollars through the drugs I prescribe, the tests I order and the specialists I refer to. I do not set the prices. In fact, as an employed physician, I often have no idea what they are. The incredible complexity of financing is a direct result of the “profit-driven disintegration of our health care ‘market.'”

I moved to Alaska to work for an innovative, nonprofit system truly committed to the health of its population. I love my work, my team and my patients. I am frustrated that all of us do not have access to this quality care. The health care system I imagine would focus on wellness, not just the absence of disease. When we got sick in this system, we would receive the appropriate care without the financial burden.

James worked three jobs for most of his life. Providing for an adult child struggling with addiction and aging parents, he had to choose between exorbitant health insurance premiums and paying the bills. He had the sense that something was wrong long before his nausea made eating impossible. He refused to go to the emergency room despite his wife’s pleas because he knew he couldn’t afford the evaluation. He fell. His wife called 9-1-1. He was diagnosed with Stage 4 colon cancer, dying from this preventable disease nine months later after multiple surgeries and bank-breaking medications. Mercifully, he never saw the hospital bills that claimed every last penny, including the roof over his family’s head.

Our health care system is killing us. Literally thousands of people die every year from lack of insurance. Figuratively, lives are forever altered by too many unnecessary, profitable medical procedures and too little focus on preventative health. Healthcare costs for families skyrocket, shifted from ever- wealthier insurance companies. Teachers fight tooth and nail for mediocre coverage while their wages stagnate. Small businesses flounder under the unpredictable burden of providing employee plans. Large businesses lose competitive advantage on the international stage. Health care consumes a dominant chunk of state budgets (35 percent in Alaska), while many of its hardworking residents remain without insurance or are inadequately covered.

James’s death could have been prevented by access to basic primary care. His financial ruin could have been averted. In other industrialized nations, hardship from medical expenses is rare. All provide some version of universal coverage, liberating citizens from the stress of medical bills when coping with accident or illness, and at a much lower cost. Our market-based system has failed us. The time for single payer is now.

In a single-payer system, everyone is covered by a comprehensive health plan that is publicly funded but privately delivered. This allows innovation in health care delivery by privately owned physician groups and hospital systems.  The government does not run your health care, they pay for it. In fact, they already are. The federal government spends more per person right now in the U.S. than in most countries that provide universal coverage. We match the federal dollars with individual contributions and still do not get better outcomes. Sweden, considered to have one of the best systems in the world, spends about half and pays people when they are sick. By centralizing the payer, we shift incentives from procedures to prevention and contain outrageous costs.

Some say that definitive reform is out of reach, that it is not politically viable. As Nelson Mandela said, “It always seems impossible until it’s done.” Yes, we are a country that contains extremes of values and opinions, of independence and free market priorities. And we all have bodies that may fail us at unpredictable times. It is time to demand a system that promotes our health and protects us from financial hardship when ill.

Dr. Jennifer Perkins is a family physician in Anchorage and founder of the Alaska chapter of Physicians for a National Health Program.

https://www.adn.com…

The Comprehensive Primary Care Initiative at four years

The Comprehensive Primary Care Initiative: Effects On Spending, Quality, Patients, And Physicians

By Deborah Peikes, Stacy Dale, et al (Mathematica Policy Research and Center for Medicare and Medicaid Innovation)
Health Affairs, May 23, 2018

Abstract

The Comprehensive Primary Care Initiative (CPC), a health care delivery model developed by the Centers for Medicare and Medicaid Services (CMS), tested whether multipayer support of 502 primary care practices across the country would improve primary care delivery, improve care quality, or reduce spending. We evaluated the initiative’s effects on care delivery and outcomes for fee-for-service Medicare beneficiaries attributed to initiative practices, relative to those attributed to matched comparison practices. CPC practices reported improvements in primary care delivery, including care management for high-risk patients, enhanced access, and improved coordination of care transitions. The initiative slowed growth in emergency department visits by 2 percent in CPC practices, relative to comparison practices. However, it did not reduce Medicare spending enough to cover care management fees or appreciably improve physician or beneficiary experience or practice performance on a limited set of Medicare claims-based quality measures. As CMS and other payers increasingly use alternative payment models that reward quality and value, CPC provides important lessons about supporting practices in transforming care.

From the Introduction

Public and private payers are increasingly experimenting with ways to improve primary care delivery, reduce spending, and improve patient outcomes. Payers are also considering ways to strengthen primary care. New primary care models, such as the patient-centered medical home, have had mixed effects on quality and spending.

The Centers for Medicare and Medicaid Services (CMS) launched the Comprehensive Primary Care Initiative (CPC) in October 2012. CPC tested whether requiring practices to implement a new approach to delivering primary care, and providing financial and technical support to help them do so, reduced spending and improved quality over a four-year period in 502 practices across seven US regions. In addition to CMS, thirty-nine other private and public payers supported CPC practices by implementing an aligned approach to changing care delivery and payment.

This article provides an update to earlier evaluation results of the first two years of CPC.

EFFECTS ON SPENDING AND SERVICE USE

Our estimates showed no significant differences in spending growth during CPC, with or without care management fees.

EFFECTS ON QUALITY OF CARE AND PATIENT EXPERIENCE

Over the course of CPC, we found no significant effects on the claims-based quality-of-care process measures for beneficiaries with diabetes or on the continuity-of-care measure, defined as the percentage of primary care visits that occurred at the practice that the beneficiary was attributed to when CPC began.

EFFECTS ON PHYSICIAN EXPERIENCE

Physicians in CPC practices had largely favorable views of CPC in 2016. However, many indicated that CPC’s administrative reporting was a burden and the transformation work was difficult.

Although CPC required intensive work for practices, we found no meaningful differences on measures of burnout, control over work, alignment of work with training, and job satisfaction between physicians in CPC practices and those in comparison practices in 2013 or 2016.

From the Discussion

Practices participating in the Comprehensive Primary Care Initiative improved some aspects of care delivery, which in turn led to less growth (relative to comparison practices) in numbers of ED visits and thirty-day ED revisits among fee-for-service Medicare attributed patients. However, the four-year initiative did not reduce Medicare hospitalizations or reduce Parts A and B spending enough to cover care management fees. There were no appreciable improvements in patient experience, claims-based quality of care, or physician experience, except that patients reported more follow-up care after hospitalizations and ED visits. Beyond the reduction in ED visits, the additional two years to transform care delivery did not substantively alter the earlier results from midway through the initiative.

Results from CPC illustrate how hard it is to reduce Medicare spending. There are several potential reasons why the findings were not more favorable. First, primary care practices might need stronger value-based financial incentives, accompanied by strong and consistent incentives for other providers (such as specialists and hospitals) that care for the same patients.

Second, some participating practices reported facing barriers to improving care delivery (for example, the burden of reporting, potentially limited actionability of data feedback, insufficient health information technology support for care delivery, and poor health information exchange) that may have made implementation of the initiative less robust than it might have been without such barriers.

Third, general care delivery improvements by comparison practices and other providers—for example, in response to Medicare’s financial penalties for high readmission rates—could have made it challenging for CPC practices to improve their outcomes relative to those of comparison practices.

CPC+

CPC+ aims to improve on these outcomes by building several new elements on the same foundation of multipayer support and five primary care functions. First, CPC+ introduces a second track that deepens care delivery requirements for practices with more experience in delivering advanced primary care.

Second, CPC+ further moves away from traditional fee-for-service by providing a hybrid payment for practices in the second track (combining a portion of fee-for-service and global payment for evaluation and management services).

Third, CPC+ strengthens incentives. It replaces shared savings with a prepaid bonus that practices must repay if they do not meet practice-level performance targets.

Finally, CMS partners with health information technology vendors to encourage improvement in health information technology functionalities to support practices in meeting the care delivery requirements of CPC+.

https://www.healthaffairs.org…

Full report from Mathematica Policy Research (over 300 pages):
https://downloads.cms.gov…

***

Comment:

By Don McCanne, M.D.

CMS is fixated on pushing the health care delivery system into accountable alternative payment models. The Comprehensive Primary Care Initiative is a study that has been going on for four years, and yet the improvements are negligible.

Instead of moving forward with a financing system that really would improve health care spending, CMS is going to expand this experiment with measures such as replacing shared savings with “a prepaid bonus that practices must repay if they do not meet practice-level performance targets.” That’s bizarre since we already know that such policies reduce physician satisfaction and increase burnout. That can’t be their policy goal, or is it?

Enough experimentation with alternative payment models. We definitely need to keep improving primary care, but not with financing policies that don’t work. Let’s go right to the model that does work – a well designed, single payer, improved Medicare for all. Within that system we can refine primary care to make it work well for all of us – patients and health care professionals alike.

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

Americans must learn to value health

By Emily Kane, N.D.
Juneau (Alaska) Empire, May 29, 2018

I was pleased the Empire dedicated the entire opinion page to the important topic of curtailing health care costs in the May 22 issue. It was also good to get a sense of our legislators working across what sometimes seems an impassible divide towards getting better value for our health care expenditures. Dr. Alan Gross’ salient point about health care costs crippling businesses and school districts is urgent. However none of these Alaskans thought leaders addressed the fundamental flaw in our approach to “health care.”

As a society, we have placed value on illness. We manage disease, and not very efficiently. We shine in emergency medicine. Some of our most progressive and effective physicians end up as ER docs, where the conventional model of care is actually appropriate. For the majority of unwell-ness, however, we are remiss to run up huge lab, radiology and prescription costs without first and foremost promoting wellness. When we have an industrial and corporate approach to “health care” we actually place value on chronic illness. Dialysis centers are a growth industry.

We are a toxic nation and that is why we have the highest rates per capita of diabetes, heart disease, obesity and other “lifestyle” illnesses. We must begin to value health. Our founding fathers intended it to be an inalienable right. They never imagined the marketing of disease management.

I strongly advocate moving toward a single payer system because the current hodgepodge of insurers is an expensive administrative nightmare and contributes very little to actual health. Alaska recently formulated a chapter of Physicians for a National Healthcare Program of which I am a member. However, the $1,000 per month price tag quoted by Dr. Gross to buy into Medicaid is out of reach for most.

An immediate albeit partial fix would be to outlaw direct-to-consumer advertising of pharmaceuticals. This egregious overreach is absent in all other “first world” countries. The other large driver of cost, besides the ridiculous markup on drugs, is physician fees, particularly specialists. Why should a urologist earn 10 times more than a plumber? Or an orthopedic surgeon 20 times more than a finish carpenter?

When we as a society insist on policy which values health, as many of us do as individuals, we will start to turn the tide. We will choose high-quality food whenever possible. We will reserve pharmaceutical fixes for short-term emergencies. We will take responsibility for the care of our body, and our planet, with simple sustainable measures such as daily exercise, doing our best to stay cheerful, drinking mostly water and getting enough sleep. Cultivating wellness is exceptionally cost effective.

Dr. Emily Kane has offered naturopathic health care to patients of all ages in Juneau since 1993.

http://juneauempire.com…

The Cost of Emergency Room Care

By John Perryman, M.D.
The New York Times, May 27, 2018

Anthem’s tactic of refusing to pay emergency room bills in certain cases is portrayed as an effort to influence patient behavior and avoid the most costly medical setting for minor ailments. Asking frightened patients to diagnose their illnesses without the benefit of training is absurd on its face.

Anthem, like most health insurers, is obligated to maximize the wealth of its shareholders. The company has been very successful in this regard, generating profits of $3.8 billion in 2017, and paying an effective tax rate of 3.1 percent, according to Healthcare Finance.

The practice of threatening not to cover an E.R. visit is consistent with this goal. What does it matter if a few patients die or are injured because they are afraid of getting hit with a large medical bill? Profits jumped by 55 percent in 2017!

When third-party payers are driven to be profitable, these types of incentives result. This ridiculous, immoral situation is yet another reason the United States must adopt a single-payer health system.

The writer is a pediatrician from St. Charles, Ill.

https://www.nytimes.com…

Malleability of single payer support

Californians & Their Government

By Mark Baldassare, Dean Bonner, Alyssa Dykman
Public Policy Institute of California, May 2018

Health Care Policy

A single-payer state health insurance program is now under discussion. Senate Bill 562, which would establish such a program, passed in the senate last year and is currently held in the state assembly. How do Californians feel about this idea today? A majority of adults (64%) and likely voters (53%) favor a single-payer state plan. However, if this plan requires raising taxes, support declines (41% adults still favor, 41% likely voters still favor). Similar shares of adults and likely voters held this view last May. An overwhelming majority of Democrats (78%) favor a single-payer state system—including 62 percent even if it means raising taxes—while a strong majority of Republicans (67%) are opposed. A majority of independents (55%) are in favor, while 36 percent are opposed. Majorities across demographic groups favor a single-payer system, but if raising taxes is required, support falls below 50 percent for all groups—with the exception of college graduates (51%).

Q: “Do you favor or oppose having guaranteed health insurance coverage in which all Californians would get their insurance through a single state government health plan? (If favor: Do you favor it even if it means raising taxes?)”

64% – Favor
41% – Favor, even if it means raising taxes
23% – Favor, not if it means raising taxes
29% – Oppose
7% – Don’t know

http://www.ppic.org…

Full report:
http://www.ppic.org…

***

Comment:

By Don McCanne, M.D.

A single payer, improved Medicare for all program would be vastly superior to our current method of financing health care (even with the Affordable Care Act), and 64 percent of California adults favor “a single state government health plan.” However, significant partisan opposition persists, and even support is malleable, dropping to 41 percent when those favoring are asked “even if it means raising taxes.”

The malleability of support is important. Since no state government has been successful in both enacting and implementing a state single payer system, it has been suggested repeatedly that it should be submitted to the voters as a ballot measure. However that has already been tried in California, Oregon, and Colorado where the measures were defeated by overwhelming margins (3 to 1 or 4 to 1) since the voters proved to be very sensitive to the anti-government, anti-tax rhetoric of the opponents.

The Vermont legislature did enact what began as a single payer proposal but which was later modified because of conflicts with existing federal programs, but even the modified version was abandoned when implementation proved to be too difficult.

Many say that we should continue to push for a state single payer system to serve as an example for the nation, just as Saskatchewan served as an example for Canada that eventually led to single payer systems in all provinces. A major hurdle to that approach is that federal programs are already in place in the United States that would require comprehensive federal legislation to modify regulations and free up federal funds for use by the states. Of course there are valiant efforts in states such as New York (Gottfried) and Minnesota (Marty) to work around these federal limitations and restrictions, so we do not need to give up entirely on state efforts as transitional programs that can provide relief until we can achieve the goal of a national program for all.

What lessons can our Medicare and Canada’s Medicare provide for us? Both were accomplished through federal congressional or parliamentary acts. The people elected representatives who were supportive of Medicare (though the political process limited ours to those with the greatest needs – Medicare for seniors and Medicaid for the poor), and then the representatives enacted the programs.

We can do that again. We do need to increase our efforts at educating the public. When people hear “more taxes for health care” they need to immediately think “but a much fairer way of paying for health care for all of us.” When they hear that the government can’t do anything right, they need to remind themselves how relieved they were when they finally qualified for the government Medicare program.

If the people lead, the politicians will follow. This poll shows 64 percent support for single payer, and other polls have shown that the support is especially great when Medicare is invoked (again, malleability). We are getting there. We just need to step up our efforts to educate and activate as we head up this path toward health care justice for all.

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

Gaming of Part D generic drugs passes more costs on to seniors

Seniors Pay More For Generics in Medicare Prescription Drug Plans Despite Stable Prices

By Clara Son
Avalere, May 22, 2018

New research from Avalere finds that seniors with Medicare prescription drug plans (Part D) pay more for generic drugs even as the market price of these drugs stays stable.

Avalere experts note that seniors are paying more because generic drugs are being placed on higher formulary tiers where patients pay more out of pocket for drugs. The number of generic prescription drugs placed on the lowest tier, where patients pay less for their drugs, declined 53 percentage points between 2011 and 2015. This shift resulted in a 93% increase in total patient cost sharing for these drugs, or a total of $6.2 billion.

This higher cost sharing and movement of generics to higher tiers did not correspond with an increase in the underlying price of generic drugs over that same time period, according to an analysis by Avalere experts of the average volume-weighted price of generics that were included on plan formularies in both 2011 and 2015.

In 2011, 71% of generic drugs were placed on tier 1, the lowest tier in the formulary. By 2015, 19% of covered generics were placed on tier 1, while 46% were placed on tier 2 and 35% were placed on tier 3 or higher. This shift represents a 53 percentage point decrease in the number of generics being placed on the lowest tier between 2011 and 2015.

The use of generic drugs has saved the Medicare Part D program billions of dollars. However, higher tier placement of generic drugs is leading to higher out-of-pocket costs for patients and may reduce savings.

http://avalere.com…

In response, the Pharmaceutical Care Management Association (PCMA) released the following statement which still does not refute the fact that the industry moved more expensive generics into non preferred tiers in order to keep Part D premiums competitive:

https://www.prnewswire.com…

***

Comment:

By Don McCanne, M.D.

This report confirms that the industry shifted over half of generic drugs out of the lowest tier into higher tiers wherein patient cost sharing is higher. This benefits the pharmacy benefit managers because the shift in costs to the patients allows them to keep the Part D premiums more competitive, but it certainly has an adverse impact on seniors who are dependent on generic medications that are supposed to be cheaper than the brand names.

In fact, it has been reported that the cost sharing of generic drugs is sometimes greater than the full price of the generic if it were purchased without using the insurance, and the pharmacy benefit managers may have gag clauses prohibiting the pharmacist from telling the patient that it would cost less if they didn’t use their insurance. Would you call this nefarious?

This is one more example of how the private sector takes good care of the industry itself while using the patients as pawns. Not only are prices high, insurance premiums are unaffordable for many, and they also shift more costs to patients’ pockets as they take away their choices in health care, whether through narrow provider networks or through unaffordable deductibles and other cost sharing. To add to the insult, we pay more because of the high costs of administering these shenanigans.

Through a well designed, single payer, improved Medicare for all we would have the full range of choices in health care with no need for the patient to share costs of the health care services and products at the point of service. When people need care, they simply get the care they need. And, of course, everyone is included for life, and we can do that without spending any more than we already do by using equitable public financing.

Now explain again the basis of those disingenuous arguments that are going around that this approach is not feasible. It is the only approach that is feasible if we want everyone to have affordable health care.

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

Cost of health care for a typical family of four now over $28,000

2018 Milliman Medical Index

By Christopher S. Girod, Susan K. Hart, Scott A. Weltz
Milliman Research Report, May 21, 2018

In 2018, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $28,166, according to the Milliman Medical Index (MMI).

2018 MMI Components of Spending

31% ($8,631) – Inpatient

19% ($5,395) – Outpatient

29% ($8,275) – Professional services

17% ($4,888) – Pharmacy

4% ($995) – Other (Home health, ambulance, DME, prosthetics)

Employers pay more; employees pay a lot more

The MMI’s healthcare expenditures are funded by employer contributions to health plans and by employees through their payroll deductions and out-of-pocket expenses incurred when care is received. Over the long-term, we have seen employees footing an increasingly higher percentage of the total. That trend continues in 2018, with employee expenses increasing by 5.9% while employer expenses increased by only 3.5%.

Employees’ share of healthcare costs

The total cost of healthcare for the MMI family of four is shared by employers and employees. To clearly define each payment source, we use three main categories:

1) Employer subsidy. Employers that sponsor health plans subsidize the cost of healthcare for their employees by allocating compensation dollars to pay a large share of the cost.

2) Employee contribution. Employees who choose to participate in the employer’s health benefit plan typically also pay a substantial portion of costs, usually through payroll deduction.

3) Employee out-of-pocket cost at time of service. When employees receive care, they also often pay for a portion of these services via health plan deductibles and/or point-of-service copays.

Relative Proportions of 2018 Medical Costs

56% ($15,788) – Employer contribution

27% ($7,674) – Employee contribution

17% ($4,704) – Employee out-of-pocket

The Milliman Medical Index is an actuarial analysis of the projected total cost of healthcare for a hypothetical family of four covered by an employer-sponsored preferred provider organization (PPO) plan. Unlike many other healthcare cost reports, the MMI measures the total cost of healthcare benefits, not just the employer’s share of the costs, and not just premiums. The MMI only includes healthcare costs. It does not include health plan administrative expenses or insurance company profit loads.

http://us.milliman.com…

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Real Median Household Income in the United States

Federal Reserve Bank of St. Louis; FRED – Economic Data

$59,039 (2016)

https://fred.stlouisfed.org…

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Historical Income Tables: Families

United States Census Bureau

Table F-8. Size of Family – Families by Median and Mean Income

Families with four people:
Median income $90,746 (2016)

https://www.census.gov…

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Comment:

By Don McCanne, M.D.

The Affordable Care Act was supposed to make health care affordable for all Americans while protecting the segment of health care coverage that seemed to be working well – employer-sponsored health plans. So the typical working family of four now pays through premiums, cost sharing and forgone wage increases (for the employer contribution) an average of $28,166.

For this select population – employed families of four with insurance through work with a median income for a family of four ($90,746) – the average payment is 31 percent of income. Of course, this is a family that is doing well. If a family with a median household income ($59,039) spent the same amount on health care it would be 48 percent of income.

One more significant point. That $28,166 is what is actually spent on health care. It does not include health plan administrative expenses nor insurance company profits, and we know what that means.

People want to know what they would be paying under a single payer Medicare for all system. When they ask, they should be reminded that they first need to understand what they are paying now. They understand the premium that is deducted from their paychecks, but they need to find out how much the employer is paying because that represents a reduction in their wages. They also should look at what they pay out of pocket for deductibles and other cost sharing while keeping in mind that they need to maintain reserves should they receive a major hit in their health. They should also realize that over half of health care in the United States is paid through our taxes, and most of that health care spending is relatively opaque for the average individual. Taxpayer-funded health care spending includes Medicare, Medicaid, CHIP, VA Health, military medicine, Indian Health Service, Public Health Service, much of the cost of health insurance purchased for federal, state, and local government employees, and the tax expenditures from the exclusion of employer contributions for medical insurance premiums and medical care (tax exclusion of $236 billion in 2018!). So that $28,166 represents only the most direct spending on health care for that individual family; they are paying much more through the tax system.

People want to know what the tax for a single payer system would be that would be deducted from their paychecks. Then they want to compare that with the current deduction for their employer-sponsored plan, not considering that that is only a very small fraction of the total amount they are actually paying. Because each person’s situation is different, it is impossible to give a precise dollar amount that they would be paying under an improved Medicare for all, but we can say that the amount will be equitable – fair – based on progressive taxes, and that, for all but the wealthiest, will be less than they are paying now (not to mention that they are assured coverage for life). And for the very wealthy, it would be painless anyway. They wouldn’t even know what are paying for health care through their taxes unless their accountant told them.

So remember the Milliman Medical Index – the typical working family of four is already paying on average over $28,000 for employer-sponsored health care, but also don’t forget how much we are already paying in addition through the tax system. We can’t just walk away. We need to enact an equitable financing system that ensures that everyone receives health care that is affordable. That would be a well-designed, single payer, improved Medicare for all.

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Trump’s plan won’t lower prescription drug prices. Ours would.

The White House is pushing half-measures. We need more.

By Adam Gaffney, M.D.
Washington Post, May 23, 2018

The drug price reforms that President Trump recently proposed are as potent as a placebo, but not as harmless.

Trump once blustered that drug firms were “getting away with murder,” but his real-life plan caused pharmaceutical stocks to surge as investors foresaw even higher prices and profits ahead. The president stepped away from his earlier promises to allow Medicare to negotiate prices, while vowing to fight for higher drug prices abroad — a gold mine for the industry that would do nothing to reduce drug prices at home.

With Fortune 500 drug firms raking in $67.7 billion in profits in 2016, more revenue is the last thing the industry deserves. But a failure to contain drug costs isn’t the only shortcoming of Trump’s proposal. The whole pharmaceutical system — from the way medicines are developed to how they are tested, regulated, promoted, priced and provided — is broken, bent to the interests of the pharmaceutical industry. It cries out for reform.

Enter the comprehensive reform proposal drafted by a group of U.S. and Canadian physicians and drug policy experts (led by me and Joel Lexchin of Toronto), published May 17 in the British Medical Journal. Our proposal outlines a pharmaceutical vision that, unlike Trump’s, would both reduce costs and improve health.

Bringing down the price of brand-name drugs isn’t brain surgery: High-income nations throughout the globe get prices roughly half of ours by relying on a central payer to use its leverage in negotiations with drug firms — an approach we estimate could save about $154 billion annually if implemented in the United States. Negotiations by Medicare, once supported by Trump, might produce a chunk of those savings.

But the problem is bigger than prices. A recent analyst’s report from Goldman Sachs illustrates the pitfalls of letting the profit motive determine research priorities. As reported by CNBC, the report asked a disturbing question: “Is curing patients a sustainable business model”? As the report noted, curing many patients of an infectious disease like hepatitis could stop transmission and eliminate new cases, causing profits to plummet. That firms would even ponder such factors may seem nefarious, but it’s the inevitable consequence of a profit-obsessed R&D agenda. One noxious side effect of that agenda is the proliferation of drugs that offer no advance over existing agents: The majority of new agents are “me-too” drugs — trivial modifications of older medications — whose sales are pumped up by aggressive advertising campaigns but do nothing to improve health.

The public — mostly through the National Institutes of Health — ­already contributes richly to the research that underlies basically all modern drugs. But once a breakthrough looks imminent, the research is often turned over to pharmaceutical firms to carry out the last stages of developing a drug and profiting from it. Why not go all the way, and set up a public program parallel to compete with the private firms in developing and testing new drugs, and keep those publicly developed drugs outside the patent system, as the economist Dean Baker and others have described? These new drugs could immediately be manufactured cheaply as generics. Research could be directed toward the drugs that are most needed, not the most profitable, while testing would be performed by scientists without conflicts of interest.

That kind of reform would save money (and give us better drugs) in the long run, but relief is needed now. While drug price negotiations — as Trump once recognized — can help, they may not always suffice. For instance, if only one drug is available to treat a particular disease, the firm that owns the patent holds all the cards in negotiations, and it can walk from the bargaining table. In those situations, we need additional tools to lower prices while ensuring that patients have access to all necessary medications.

So our working group endorsed “compulsory licensing,” or allowing government to greenlight the generic production of expensive branded medicines in cases of medical necessity. Public drug manufacturing (which already happens in Sweden) should also be an option, as a last resort to combat price gouging — and to deal with shortages that have left hospitals scrounging for basic essentials like IV fluids and post-op pain medications as commercial manufacturers have faltered.

But regardless of who funds drug development, we also need to raise the standards for evaluating and approving drugs, which neither this administration nor its predecessors have shown an interest in doing. In recent years, expedited drug development pathways and downgraded standards of evidence have left us in the dark about how well many new drugs work — or even if they really work at all. Rushing new drugs to market based on shoddy research serves the industry, not patients. A study of recently approved cancer drugs in JAMA Internal Medicine found a majority of these drugs won approval on the basis of “surrogate endpoints,” like imaging findings, that frequently don’t translate into better health. Disturbingly, on follow-up, more than half of the drugs were never shown to improve survival.

That problem won’t get better unless we upgrade the FDA’s standards for approving new drugs. Drugmakers should be required to prove that new medicines improve the length or quality of life over and above existing treatments. Industry funding of the FDA — which began in 1993 and appears to have led to an increase in the approval of unsafe drugs — should end, and the agency should be fully publicly funded.

Even if reforms like these bring us lower prices and higher quality drugs, it won’t mean much for patients who can’t access them. For the more than 28 million uninsured Americans, medicines are often entirely out of reach — a problem that would be exacerbated by Trump’s Obamacare repeal efforts. And even for those who are insured, drug co-pays and deductibles force difficult — and unnecessary — choices between filling prescriptions and paying for other necessities.

Fortunately, there’s a simple solution: universal single-payer coverage without drug co-pays or deductibles. It’s how things work in Wales, Scotland and Northern Ireland (where it has proved entirely financially feasible), and it’s the only way to ensure nobody has to make a decision between their money and their life.

Our proposals for reform are ambitious. But the deep-seated problems in our pharmaceutical system demand a vigorous response, not the paltry half-measures Trump has proposed. Lives are at stake.

Dr. Adam Gaffney is an instructor in medicine at Harvard Medical School and a pulmonary and critical care physician at the Cambridge Health Alliance and serves on the board of directors of Physicians for a National Health Program.

https://www.washingtonpost.com…