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The Economist: Rent seeking in America’s health care system

The Economist: Rent seeking in America’s health care system

Which firms profit most from America’s health-care system

The Economist, Schumpeter, March 15, 2018

Every year America spends about $5,000 more per person on health care than other rich countries do. Yet its people are not any healthier. Where does all the money go? One explanation is waste, with patients wolfing down too many pills and administrators churning out red tape. There is also the cost of services that may be popular and legitimate but do nothing to improve medical outcomes.

The most controversial source of excess spending, though, is rent-seeking by health-care firms. This is when companies extract outsize profits relative to the capital they deploy and risks they take. Schumpeter has estimated the scale of gouging across the health-care system. Although it does not explain the vast bulk of America’s overspending, the sums are big by any other standard, with health-care firms making excess profits of $65bn a year. Surprisingly, the worst offenders are not pharmaceutical firms but an army of corporate health-care middlemen.

In crude terms, the health-care labyrinth comprises six layers, each involving the state, mutual organisations and private firms. People and employers pay insurance companies, which pay opaque aggregators known as pharmacy-benefit managers and preferred provider organisers. They in turn pay doctors, hospitals and pharmacies, which in turn pay wholesalers, who pay the manufacturers of equipment and drugs. Some conglomerates span several layers.

To work out who is stiffing whom, Schumpeter has examined the top 200 American listed health-care firms. Excess profits are calculated as those earned above a 10% return on capital (excluding goodwill), a yardstick of the maximum that should be possible in any perfectly competitive industry.

Total excess profits amount to only about 4% of America’s health-care overspending. But this still makes health care the second biggest of the giant rent-seeking industries that have come to dominate parts of the economy. The excess profits of the health-care firms are equivalent to $200 per American per year, compared with $69 for the telecoms and cable TV industry and $25 captured by the airline oligopoly. Only the five big tech “platform” firms, with a figure of $250, are more brazen gougers.

Everyone hates pharmaceutical firms, but their share of health-care rent-seeking is relatively trivial, especially once you include the many midsized and small firms that are investing heavily. Across the economy, average prices received by drug manufacturers have risen by about 5% per year, net of the rebates. But their costs have risen, too. As a result, even for the 15 biggest global drugs firms, returns on capital have halved since the glory days of the late 1990s, and are now barely above the cost of capital.

As the drug industry has come back down to earth, the returns of the 46 middlemen on the list have soared. Fifteen years ago they accounted for a fifth of industry profits; now their share is 41%. Health-insurance companies generate abnormally high returns, but so do the wholesalers, the benefit managers and the pharmacies. In total middlemen capture $126 of excess profits a year per American, or about two-thirds of the whole industry’s excess profits.

The dark view is that pockets of rent-seeking have become endemic in America’s economy. Wherever products are too complex for customers to understand, and where subsidies and complex regulation add to the muddle, huge profits can opaquely be made.

https://www.economist.com…

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The Price of Inequality

By Joseph E. Stiglitz

Our political system has increasingly been working in ways that increase the inequality of outcomes and reduce equality of opportunity. This should not came as a surprise: we have a political system that gives inordinate power to those at the top, and they have used that power not only to limit the extent of redistribution but also to shape the rules on the game in their favor, and to extract from the public what can only be called large “gifts.” Economists have a name for these activities: they call them rent seeking, getting income not as a reward to creating wealth but by trapping a larger share of the wealth that would otherwise have been produced without their effort. Those at the top have learned to suck out money from the rest in ways that the rest are hardly aware of – that is their true innovation.

http://books.wwnorton.com…

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Comment:

By Don McCanne, M.D.

Joseph Stiglitz defines rent seeking as “getting income not as a reward to creating wealth but by trapping a larger share of the wealth that would otherwise have been produced without their effort.” Investopedia defines it as “obtaining economic gain from others without reciprocating any benefits to society through wealth creation.” Rent seeking is an important phenomenon to understand because it has been a major contributor to the injustices of increasing income and wealth inequality, especially in the United States.

The Economist’s Schumpeter column discusses the middlemen in the U.S. health care system – insurance companies, pharmacy benefit managers, preferred provider organizers, etc. – and describes as rent seeking their all-too-prevalent profits in excess of a 10 percent return on capital. Their share has now grown to 41 percent of industry profits. “In total middlemen capture $126 of excess profits a year per American, or about two-thirds of the whole industry’s excess profits.”

Although this egregious spending is particularly offensive, it is still relatively small compared to the wasted expenditures on high prices and profound administrative excesses in our health care system. But these middlemen add to our high health care costs without providing any additional health care services. If we changed to a well designed single payer national health program – an improved Medicare for all – not only would health care finally be priced fairly and administrate waste dramatically reduced, we would also get rid of these rent seeking leeches.

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Inequitable health care is a national scandal

By G. Richard Dundas, M.D.
Bennington (Maine) Banner, Letters, March 19, 2018

To the Editor:

“Equity” and “equal” have the same derivation. In the case of health care, it means that necessary care would be provided to everyone and not be dependent upon income, social status, race, etc. Is our current system of health care equitable? I think not.

In spite of Obamacare, there are still 28 million of us who are uninsured. There are about 1,500 uninsured people in Bennington. If you had to pay out of pocket, had limited income, and got sick, might you hesitate to go to the doctor?

An additional 18 million of us had a gap in coverage at some point during the year (eg. lost coverage when changing to a different job).

Compared to higher income enrollees, lower income enrollees in high deductible plans use very little preventive care.

– 16 percent reported skipping a recommended test or treatment because of cost.

– 33 percent of non-elderly adults reported a problem paying a medical bill.

– 20 percent of adults do not get their prescriptions filled because they don’t have enough money.

It is clear that economically disadvantaged citizens are not served well by our system of care. Health care has become unaffordable for many (there is no equity). For all of us, health care should be a right. We should not be put in a position in which we have to decide whether to buy medicine or buy groceries.

The cost of health care is literally killing us. Uninsured citizens are dying because the cost of care is so high that they avoid seeking care. Another burden is borne by the working poor who don’t qualify for Medicaid and can’t afford to purchase a policy through Vermont Health Connect. The high cost of an insurance policy (ranging from bronze to platinum) is a real barrier to many, even when they receive a subsidy. It now costs nearly $20,000 per year for a commercial family plan with a low deductible. We spend about twice as much on health care as other wealthy nations, yet important outcomes such as life expectancy are worse.

The cost of health care is also killing the nation. About 19 percent of our gross domestic product goes to payment for health care — almost twice as much as other industrialized countries. If we spend that much on health care, there is less left for other important projects such as infrastructure upgrades, housing, education, etc.

Our health care system, which is based on insurance companies’ profiteering, is a failure. Wouldn’t it be better if we were all insured from birth to death? Wouldn’t it be better if coverage were more comprehensive and included dental, vision, hearing aids, long term care, and negotiated prices for prescription drugs? Wouldn’t it be better if there were no deductibles? Wouldn’t it be better if the cost of care were less? A system change to “Improved Medicare for All” is what is needed. Lack of universal health care is a national scandal. In the coming elections, support a candidate who will work for universal single payer health care.

https://www.benningtonbanner.com…

Andy Slavitt gives his candid views on single payer

Perspectives from Former CMS Administrators: The Path Forward

Healthcare Costs Innovation Summit
West Health, February 21, 2018

Joseph Smith, Moderator: At lunch we talked briefly about millennials and their absence of appetite for complexity, and looking for simpler solutions perhaps. And we talked about how health care is wildly complicated, at least the cost structure around it is wildly complicated, and it can frustrate the understanding of many people in the room. And so you were encouraging us to think about single payer systems as something that a larger cohort of the populous might be interested in. Can you expand on that?

Andy Slavitt: Oh, I think if you asked me and probably most of us two years ago whether or not single payer would even be part of the conversation let alone a real possibility, most of us would have been pretty skeptical. And, you know, I think I’m not as skeptical any longer in large part because I think over the last year public opinion has been really influenced by being exposed to the messiness, messiness that many of the experts in this room probably see every day. But it seems to scare the crap out of the public, and it’s not just people on the left, people on the right as well. Things that are more radical and transformational, more radical than we talk about every day – I mean the stuff we’re talking about is not radical compared to some of these things – find favor in public polling. Now we can all say that they don’t understand and all those other things, but I wouldn’t be so quick to write that off. I think there is a sentiment that is not just among young people but among many that this needs to be part of the conversation, and it’s going to be part of the political dialogue, no matter what. So I think it is that moment, where that has entered the lexicon, has arrived and is arriving, and quite frankly this group probably underrepresents the part of the public that’s pushing it.

http://hcidc.org/about

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Comment:

By Don McCanne, M.D.

As Acting Administrator of CMS under President Obama, Andy Slavitt dutifully supported the implementation of the Affordable Care Act. Since he left office he has led the formation of United States of Care – an organization with the mission “to ensure that every single American has access to quality, affordable health care regardless of health status, social need, or income.”

He tried to make the organization non-partisan but a disproportionate number of the board members are conservative and none of them are active proponents of single payer reform. Some of us were concerned that the crucial topic of single payer might be left out of their deliberations. Thus it is reassuring to see what Slavitt’s candid views are in this Q&A before a meeting heavily attended by members of the medical-industrial complex.

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Why is health care spending in the United States so much greater?

Health Care Spending in the United States and Other High-Income Countries

By Irene Papanicolas, Ph.D.; Liana R. Woskie, M.Sc.; Ashish K. Jha, M.D., M.P.H.
JAMA, March 13, 2018

Key Points

Question: Why is health care spending in the United States so much greater than in other high-income countries?

Findings: In 2016, the United States spent nearly twice as much as 10 high-income countries on medical care and performed less well on many population health outcomes. Contrary to some explanations for high spending, social spending and health care utilization in the United States did not differ substantially from other high-income nations. Prices of labor and goods, including pharmaceuticals and devices, and administrative costs appeared to be the main drivers of the differences in spending.

Meaning: Efforts targeting utilization alone are unlikely to reduce the growth in health care spending in the United States; a more concerted effort to reduce prices and administrative costs is likely needed.

From the Discussion

The data also suggest that some of the more common explanations about higher health care spending in the United States, such as underinvestment in social programs, the low primary care/specialist mix, the fee-for-service system encouraging high volumes of care, or defensive medicine leading to overutilization, did not appear to be major drivers of the substantially higher US health care spending compared with other high-income countries. Instead, the data suggest that the main driving factors were likely related to prices, including prices of physician and hospital services, pharmaceuticals, and diagnostic tests, which likely also affected access to care. In addition, administrative costs appeared much higher in the United States. These findings indicate that efforts targeting utilization alone are unlikely to reduce the gap in spending between the United States and other high-income countries, and a more concerted effort to reduce prices and administrative costs is likely needed.

https://jamanetwork.com…

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Comment:

By Don McCanne, M.D.

This consequential study confirms, once again, that the most important contributors to our greater health care spending are high prices and wasteful administrative excesses. It also demonstrates again our underperformance when compared with ten other wealthy nations.

This article is particularly helpful because it also analyzes other factors commonly cited as causes of our high spending, demonstrating that, to the contrary, they are not major drivers of higher spending when compared to other nations. This is really important because having this knowledge is essential when designing policies to correct what is actually wrong with our system.

As an example, our fee-for-service financing has been cited as a driver of high volumes of care which has led to policies that are supposedly designed to replace volume with value which in turn has led to the establishment of intrusive solutions such as accountable care organizations. Yet this study shows that fee-for-service is used in many other nations and has not resulted in health care costs as high as ours. In fact, many of the misguided policy solutions being implemented are actually increasing administrative excesses and increasing total health care spending (e.g., all those computers and their vendors don’t come for free).

There are four editorials accompanying this article, each with a predictable theme (that I perhaps exaggerate to make my points). Ezekiel Emanuel seems hesitant to accept the simple truth of the conclusion and continues to advance the tweaking of Obamacare. Katherine Baicker, supported by Amitabh Chandra, pushes studying minutiae in policy science to meticulously craft new policies to address what are really straightforward problems for which simple solutions already exist. Stephen Parente pushes his typically disconnected thoughts on market-based reform, criticizing the authors for not mapping out “all the important factors that drive this issue.” The editorial that stands out is a tribute to Uwe Reinhardt by Editor in Chief Howard Bauchner and Executive Editor Phil Fontanarosa, reminding us of Reinhardt’s regrets that we tolerate such a great social injustice.

The ideal solution to the problems of high prices and administrative excesses is a well designed single payer system. Not only would that meet the problem of high spending head on, it would also correct many of our other problems – ending uninsurance and underinsurance while reducing inequity, maldistribution of resources, impaired access, and some of the other serious flaws in our system.

JAMA has provided free access to this article. It will be a classic, so it should be downloaded as an important resource for crafting and advocating for sound policies based on actual facts rather than ideology, pipe dreams, and wishing upon stars. When others try to ram through their pet solutions, we can hold up this policy cross constructed of facts to ward off the policy vampires. (Okay, too cute. But this detailed ten page paper plus supplementary material will provide an abundance of solid facts which is the best antidote to policy folly.)

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California ‘Select Committee’ report has important lessons for the U.S.

Single-payer bill all but dead this year as California lawmakers craft new health package

By Angels Hart
The Sacramento Bee, March 13, 2018

California Democratic lawmakers are quietly working on a package of up to 20 health care bills that would soften the political blow from the all-but-certain death of a single-payer universal care bill this year.

Senate Bill 562 cleared the Senate last year but stalled in the Assembly when Speaker Anthony Rendon blasted it as “woefully incomplete.” The legislation still lacks a plan to cover its $400 billion price tag, a way to control rising health care costs and a strategy to secure federal waivers needed from the Trump administration.

Rendon has not formally killed the bill, but he told The Sacramento Bee earlier this month that a fresh health care package is in the works – the clearest sign yet that Senate Bill 562 is dead.

Democratic Assemblymen Jim Wood of Healdsburg and Joaquin Arambula of Fresno, who chair a special health committee formed by Rendon last year after the single-payer bill passed the Senate, said Tuesday they are eying legislation this year that seeks to improve quality, expand access and lower rising health care costs.

Both expressed doubt, however, that single-payer bill could move forward this year.

“I would say single-payer is not a reality this year because of the complexity of the steps that we need to go through,” Wood said.

To capture current federal health care funding and use it to fund a state-based single-payer system, California would have to secure numerous federal waivers. Voters would likely have to approve changes to the state Constitution and massive tax increases would be required.

Wood and Arambula declined to say what specific bills they’re planning to introduce, but said they’re considering legislation based on a broad set of recommendations released Tuesday by a trio of health policy experts who produced a report analyzing the committee’s work over the past four months in identifying a path forward on universal care.

Wood said he’d like to focus on a politically and financially obtainable approach to creating a universal health care system.

“I think that our report, our hearings illustrate pretty clearly that you can’t go from concept to execution of a complicated, complex, completely transformative system in a really short amount of time,” Wood said. “If you read our report…you’ll understand a little better why we couldn’t just pass 562 and the next day everybody has health care. It just can’t work that way.”

Assemblywoman Laura Friedman, D-Glendale, said she’s contemplating a bill that would establish a single-payer system in future years — once other benchmarks are met, such as achieving specific cost containment goals and obtaining needed federal waivers.

“I’m looking at legislation we could adopt that sets up a roadmap to single payer, just like we have with (Assembly Bill 32) that gives us a roadmap to reducing greenhouse gas emissions,” Friedman said. “I’m also very interested in what can give people very real relief in the short-term.”

http://www.sacbee.com…

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A Path to Universal Coverage and Unified Health Care Financing in California

By Andrew B. Bindman, MD, Marian Mulkey, M.P.P., M.P.H., and Richard Kronick, Ph.D.
University of California, San Francisco, March 12, 2018

The California State Assembly contracted with the University of California San Francisco in order for the authors of this report to (a) serve as research and subject matter experts to the co-chairs of the Select Committee on Health Care Delivery Systems and Universal Coverage (Select Committee) ; (b) assist in fact-finding for Select Committee hearing preparation; (c) attend Select Committee hearings and summarize the content of the hearings; (d) assist Select Committee in identifying and analyzing the components of a sustainable and affordable universal health care system; and (e) provide a report to Select Committee summarizing the Select Committee’s hearings, including any findings and potential options.

This report reflects the authors’ attempts to explain information that emerged from the six  Select Committee hearings and yo assemble the findings from the hearing into a coherent set of possible recommendations for the California Assembly.

This report describes health coverage and care in California and identifies remaining challenges related to access, coordination, and cost. It presents a range of options to expand coverage, address issues of fragmentation and cost under our current mixed public-private financing system, followed by options and considerations should the state move toward a state-based publicly financed approach. It concludes with a discussion of potential paths forward in the near future and over the longer term.

Conclusion

California has established itself as a leader in using the opportunities created by the Affordable Care Act to increase insurance coverage. Building on that foundation, as discussed during the hearings and summarized in this report, state leaders can take steps now to make coverage more widely available, increasing coverage from its current level of 93% to very close to 100%. Further, state leaders can take steps to reduce financial barriers to care for people who are insured. Something close to universal coverage can be achieved even with continuation of the current fragmented system in which Medicare, Medi-Cal, employer-sponsored insurance and the individual market continue to be the main channels through which Californians obtain coverage.

Testimony during the hearings also suggested a number of options for mitigating the deleterious effects of fragmentation and reducing the rate of growth of health spending within the context of a fragmented financing system. This report has summarized many of those suggestions and provided an assessment of the some of their major advantages and disadvantages.

Many people who testified during the hearings also voiced the opinion that the surest way to achieve universal coverage and the most likely way to substantially improve equity, quality and efficiency would be to implement a system of unified public financing. Under such a system, all Californians would have health insurance coverage by virtue of living in the state, and the separate coverage systems of Medicare, Medi-Cal, employer sponsored insurance and the individual market would be eliminated.

However, testimony also made clear that there are substantial legal, political and technical obstacles to implementing such a system. Substantial changes in federal law and federal waivers would be required to transform Medicare, Medi-Cal and the funds used for premium tax credits for Covered California enrollees into a system of unified public financing, and to allow the federal government to transfer funds to California in lieu of continuing to pay for Medicare, the federal portion of Medi-Cal and premium tax credits. In addition, the state would need to raise new revenue to replace most of the money currently spent by employers and employees for employer-sponsored insurance.

While there are obvious shortcomings in the design and implementation of the Medicare program, the Medi-Cal program, employer-sponsored insurance, and Covered California, 93% of Californians currently have insurance through one of these channels. Transitioning the vast majority of Californians into a new system of coverage, which does not have an established track record in the state, involves uncertainty and some risk. Policymakers have a responsibility to educate the public about the benefits and risks of various options to provide health care coverage and to incorporate the public’s values and priorities into their decision-making.

Short-term changes to increase coverage and improve equity, quality, and efficiency make sense given uncertain prospects and a multi-year timeline for achieving unified public financing. This is particularly true if short term changes are pursued in ways that facilitate rather than impede a potential future transition to unified public financing. Short-term efforts to expand coverage, improve access, reduce fragmentation, and improve transparency, coupled with development of a longer-term path toward unified public financing, would help secure a future in which all Californians have access to the health care they need and deserve.

http://healthcare.assembly.ca.gov…

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Comment:

By Don McCanne, M.D.

Those following the latest single payer effort in California know that SB 562 passed the Senate but has been held back in the Assembly, substituting in its place a series of hearings by the Select Committee on Health Care Delivery Systems and Universal Coverage to be followed by a report of its findings. That report has now been released.

It was known from the beginning that this was not an effort to advance SB 562, the stalled single payer bill, but rather it was an elaborate effort to build support for incremental measures that would build on our current system. The report does make such recommendations. Statements from the legislators involved have made it clear that the process for SB 562 would be too complex to move forward with the legislation at this time. They say that they will now introduce a package of bills in support of some of the incremental steps proposed in the Select Committee report.

The report did not remain silent on “a unified, publicly financed approach that assures coverage for all state residents; pools funds for health coverage across Medicare, Medi-Cal and other major financing sources and dramatically reduces or eliminates variations in eligibility, benefits and payments” (what we would refer to as single payer). Much to its credit it did discuss some of the many considerations that would have to be addressed to achieve such a goal. They explain why the barriers are formidable as far as enacting single payer legislation in this session of the state legislature.

That said, they do discuss in general terms a roadmap to achieve unified public financing in California. They suggest establishing a planning commission tasked with resolving design features, overseeing analyses of options for financing, recommending a management plan, educating the public regarding the proposed changes, assist in the drafting of state legislation and ballot propositions necessary to implement recommendations, and then assist state policymakers in drafting needed federal statutory changes, developing federal waiver requests, and negotiating with the federal executive branch and Congress. They say that at a minimum this would require a multi-year process.

How many times do we have to start the multi-year process all over again?

It looks like California will move forward with patching ACA, even though that is the most expensive model of reform and falls far short of our goals. So the lesson is, don’t depend on California to lead the way, at least anytime soon. Medicare did not start in one state. A bona fide single payer Medicare for all will not either. California has shown us once again that we need to get on with enacting a national single payer program – an improved Medicare for all.

SB 562 may be dead this year, but the dream of single payer is alive and well.

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Michigan Medicine selling queue jumping to the wealthy

Exclusive U-M medical plan buys you 'better' care, special access

By David Jesse
Detroit Free Press, March 9, 2018

Michigan Medicine — the health system owned by the University of Michigan — is drawing fire from its own staff over a plan to offer personalized service, reduced waiting times and preferential access to physicians for a hefty yearly fee.

The plan, part of the growing nationwide movement known as concierge care, is drawing protests from U-M doctors who are concerned it strays from the institution’s public mission. The program is currently enrolling patients.

“Victors Care purports to offer ‘better’ health care to those with enough money to pay a large access fee,” says a letter sent to the health system’s administration by 200 doctors and staff. “The University of Michigan is a public institution and our commitment is to serve the public, not a private few. We do not feel this is the role of a state university and are unable to justify this to the patients and families we serve.”

The program works like this, according to the Victors Care website: People interested in the program pay a yearly fee — $2,700 now, going up to $3,600 after July 1. In exchange, the program promises shorter waits in waiting rooms, more face time with doctors, 24-hour access to a doctor via e-mail and the doctor’s cell phone number, and “assistance” with scheduling tests and other specialty appointments.

“We urge Michigan Medicine leadership to focus on increasing access for all of our patients,” the letter from the Michigan Medicine staff says. “We need greater efforts to improve infrastructure, space, and clinic support for all. We are eager to promote and strengthen primary care services at the University of Michigan, but we feel strongly this should be done for all patients, not based on their ability to pay.”

Susan Goold, professor of internal medicine and health management and policy, said she believes there are ethical questions that must be addressed.

“Does this make it harder for people who don’t pay for Victors Care to see their doctor or get in to get a test they need done?” she told the Free Press. “That’s an issue of fairness for a public university. It’s not just because it’s supported by public dollars, but our mission — we serve the public.”

https://www.freep.com…

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Comment:

By Don McCanne, M.D.

Should wealthy patients have a right to buy their way to the front of a queue?

Or instead should we ask if we’ve optimized our health care resources to ensure appropriate capacity and queue management to prevent excessive queues for everyone? Rather than devoting resources to cater to the wealthy by allowing them to bypass problems in the system, wouldn’t it be better to use our resources to resolve those problems and improve the system for everyone?

The wealthy have a much greater political voice than the rest of us. If the health care system treats the wealthy the same as the rest of us, then if the system is not performing well they would be motivated to advocate for reform. If the system performs well for them but worse for everyone else, they may not be sensitive to the issues and thus not as motivated to advocate for improvement.

Then there is the matter of fairness. At the DMV, or at the post office, or at the checkout line of the supermarket, usually there is some effort to manage the queues (DMV appointments, quick check line, etc.), but we would still be offended if the wealthy were moved into the front of the line. In health care, which should be a fundamental right for all, we should be even more sensitive about queue jumping.

There is debate as to whether Americans are less egalitarian than citizens of other nations, but, regardless, we still do have some sense of fairness. Except for medical problems of great urgency, queue jumping is never fair, and we should not institutionalize it.

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Can we do something about the forthcoming high premium increases?

Individual Markets Nationally Face High Premium Increases in Coming Years Absent Federal or State Action, With Wide Variation Among States

Covered California, March 8, 2018

Every state is at risk of significant cumulative premium increases in 2019-2021 due to continued federal uncertainty in the individual market. The uneasy conditions in many states have been exacerbated by recent decisions made at the national level, such as the removal of the federal penalty for being uninsured; the introduction of association health plans and short-term, limited-duration plans that could promote higher costs and the siphoning of healthy consumers; and the potential of continued underinvestment in marketing and outreach to consumers eligible for coverage in those states that rely on federal marketplace.

Highlights:

• All states’ individual markets risk higher than normal premium increases — ranging from 35 to 90 percent over three years — due to continued uncertainty at the federal level, but state variation informs understanding of local risks.

• Premium increases in the individual markets will likely range from 12 to 32 percent in 2019, and cumulative increases from 2019-2021 will range from 35 percent to more than 90 percent.

• Increases are on average more than double the rate of medical inflation as a result of healthier consumers leaving the individual market.

• The report identifies 17 states that are more likely — because of their historic risk mix and enrollment — to have cumulative premium increases of 90 percent or more and 19 additional states are at a higher risk of experiencing hikes of 50 percent.

• Policy actions could both lower premiums and promote more plan competition by reducing uncertainty — with independent actuarial analysis finding that reinsurance or similar programs could cut premium increases in half, bringing them to single digits in many states.

Federal and State Policies That Could Affect Premiums and Promote Stability:

• Institute a Reinsurance Program

• Directly Fund Cost-Sharing Reduction (CSR) Subsidies

• Provide Additional Subsidies to Consumers to Purchase Insurance

• Increase Marketing and Outreach

• State-Based Penalties for Non-Coverage

• State Regulations on Association Health Plans or Short-Term, Limited-Duration Plans

• Auto-Enrollment

http://hbex.coveredca.com…

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Comment:

By Don McCanne, M.D.

This Covered California analysis of the individual insurance market in each state reveals that, in the absence of any federal policy action, premiums could increase between 35 and 90 percent over the next three years, on average more than twice the rate of medical inflation. The report also discusses various potential federal and state policies that could reduce this impact.

It is understandable that Covered California, one of the more successful programs under the Affordable Care Act, would support this study and try to suggest policies that would improve the functioning of the individual insurance market. But it is important to understand why this instability even exists, and that is because of the fragmented, dysfunctional financing infrastructure that we continue to tolerate. When you read through the report you can see a multitude of interactions that take place over which various individuals, institutions and states may have little control. As an obvious example, a private insurance risk pool heavily burdened with sick people is not able to attract the healthy in order to dilute individual risk.

This fragmentation intuitively leads to the various federal and state policies that they suggest might slow the rate of premium increases. But look at the list. These measures are not so much for the direct provision of health care, but rather they add more administrative excesses that result in still higher total health care costs. The patient they are treating is the private health insurer who wants lower insurance premiums that are more competitive in the marketplace. Not only do most of the actual patients in our global health care system fail to benefit, they face higher costs collectively because of these administrative excesses.

Now think of what it would be like if we had a well designed single payer national health program – an improved Medicare for all. Look again at the list of recommended policies. None of them would be even remotely considered to be necessary in a single payer system, that is except one – auto-enrollment – at birth, for life. Everybody in, nobody out.

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The Democratic Establishment Is Moving Closer and Closer to Single Payer, but Activists Want the Real Thing

By Zaid Jilani
The Intercept, March 12, 2018

The last two times Democrats seized both the White House and Congress, in 1993 and 2009, they immediately embarked on efforts to reform the national health care system. Both times, those efforts contributed to wave election wipeouts in the following cycle.

This near-trend has veteran Democrats skittish about a third go at it in 2021, but the choice likely won’t be theirs to make. The strong and growing enthusiasm for “Medicare for All” would force health care reform onto the agenda of whichever Democrat, if any, manages to get elected in 2020.

With that popularity in mind, the party’s centrist wing, along with everybody else to the right of Sen. Bernie Sanders, I-Vt., has begun thinking which reforms short of single payer might be feasible if the window of opportunity opens. Last fall, Sen. Tim Kaine of Virginia, Hillary Clinton’s running mate in 2016, teamed up with Sen. Michael Bennet, D-Colo., to introduce what they called Medicare X, a bill that would essentially create a public insurance option.

Sen. Brian Schatz, D-Hawaii, meanwhile, has his own Medicaid buy-in plan, which would utilize the public program that is in many ways superior to Medicare when it comes to coverage and copays. And Sen. Chris Murphy, D-Conn., has put together what he says is possibly the quickest on-ramp to single payer.

A leading Democratic Party-aligned think tank, the Center for American Progress, or CAP, is now offering a proposal that looks much like the Kaine-Bennet bill that allows people to voluntarily buy in to a Medicare-like plan.

The plan differs from the one offered by Sanders in a number of ways. Sanders’s plan — dubbed “Medicare for All” — would move the United States toward a Canadian-style system. All Americans would be covered by a Medicare plan with no deductibles and no copays. It would break the link between employment and health insurance, and private health insurance companies would be relegated to only providing supplemental coverage, similarly to how they operate under the current Medicare system.

CAP’s plan, called “Medicare Extra for All,” would instead offer a public plan (Medicare Extra) as a choice that Americans as individuals and employers could opt into. Unlike the Sanders plan, for most people there would be deductibles, copays, and out-of-pocket limits, but these would exist on a sliding scale that varies with income.

During the 2009 debate over health care reform, the public option was on the unattainable outer edge of the debate, while single payer was ruled off-the-table as too outlandish. The CAP plan is effectively a reworking of the public option, signaling just how far left politics has shifted.

On access to abortion services, though, the party establishment still has some ways to go: A big difference between the CAP plan and that of Sanders is that Sanders’s plan repeals the Hyde Amendment, which prohibits taxpayer dollars for abortion services. CAP’s plan does not touch the issue.

Some pundits have praised CAP’s alternative proposal for being more politically viable because, even though it would make health care would be more expensive and more complicated for the average person than the Sanders plan, it would also be less disruptive to the existing health insurance market.

“Substantively, the Sanders approach has a huge advantage: simplicity. But the experience of the last 25 years — across both Bill Clinton’s and Barack Obama’s presidencies — shows the dreadful politics of pushing people out of their current insurance plan. That’s why Obama promised, ‘If you like your plan, you can keep it.’ And why he got in so much trouble when the promise proved false,” the New York Times’s David Leonhardt wrote, expressing concern that lifting someone out of their existing plan and automatically placing them into the “Medicare for All” system would lead to political pushback.

The reason to automatically enroll patients in the Medicare system, single-payer advocates have long argued, is not only its simplicity, but also its efficiency. A huge portion of current health care costs are due to the private insurance market’s paperwork and bureaucracy. Single-payer advocates have estimated that switching to a single-payer system could save $350 billion annually by eliminating private insurance’s primary role in health care.

Sanders told The Hill that he believes the CAP proposal is a step in his direction: “I believe in a ‘Medicare for All,’ single-payer, but to the degree that people are talking about guaranteeing health care to all people, it’s a step.” But he also continued to promote his idea of cutting private insurance companies out altogether, saying, “I think that the most cost-effective way to do that is by expanding Medicare, eliminating the private insurance companies, and then saving tremendous amounts of money in administrative costs.”

In interviews with The Intercept, longtime single-payer advocates offered similar reactions to CAP’s plan, viewing it as significantly weaker than the Sanders proposal but perhaps a step in their direction.

Max Fine, the last surviving member of former President John F. Kennedy’s Medicare Task Force and a single-payer advocate, told The Intercept that the plan would do little to reduce the inefficiencies in American health care.

“This proposal would be a boon for the private health insurance industry by adding both costs and complexity to our inefficient, ineffective, semi-functional health care non-system — most of which would remain in place,” he wrote in an email to The Intercept.

National Nurses United, the country’s largest nurses union, has made passing single-payer a priority, backing both Sanders’s plan at the federal level and various state efforts to establish such a system.

They see the CAP plan as movement by the Democratic establishment toward expanding Medicare, but believe it falls short of the policy goal of single-payer.

“We see it as a significant recognition by the ‘neo-liberal’ wing of the Democrats that the future of healthcare lies with expanding and improving Medicare, given its popularity and that it works,” Michael Lighty, director of public policy at the union, wrote to The Intercept in a statement.

The CAP proposal is of course not single-payer and not a solution to the escalating out of pocket costs workers face in their employer plans, nor does it achieve the savings of a true Medicare for All system. CAP, like United States of Care, and the new Bezos/Buffet/Dimond [sic] company, now acknowledge that the commercial insurance companies are the problem. Putting CEO’s in charge or keeping the costly employer plans in place is not the solution, but recognizing that the insurance companies are the problem is a start. Our view remains that only guaranteed healthcare through an improved Medicare for All can contain prices and therefore costs, eliminate the deductibles and co-pays that burden US workers and end the denial of care and narrow networks that insurance companies have imposed on us.

Adam Gaffney, a Harvard Medical School pulmonary specialist and the president-elect of the single-payer advocacy group Physicians for a National Health Program, agreed with Lighty that the proposal represents movement by the Democratic establishment. “On the one hand, I think this reflects the fact that the Democratic establishment is finally responding to its more progressive base,” he conceded, comparing it to former presidential nominee Clinton’s proposal for a modest public option. “In many ways, it does much more than previous establishment proposals.”

But he believes that the proposal would keep most of the American health care system’s problems in place — ranging from the inefficiencies of leaving hospitals and doctors to deal with paperwork from hundreds of different insurers, to significant out-of-pocket costs.

“You would not be able to unlock those efficiencies [associated with single payer],” Gaffney noted. “This plan would not unlock those efficiencies by virtue of the fact that the health care system would still be fragmented — with private insurance, you have traditional Medicare, you have ‘Medicare Extra,’ you have the program that covers federal employees. Hospitals would still be dealing with different payers.”

He pointed to the CAP estimate that some middle-class families would have actuarial values of 80 percent, which could incur significant out-of-pocket costs that would not exist under the Sanders plan.

“They say that people with middle incomes would have actuarial values of 80 percent, so that means that 80 percent of your health care costs would be covered. And that leaves room for significant out-of-pocket costs. That 80 percent actuarial value is similar to 80 percent actuarial value on the gold plan in Obamacare,” he said. “And if you look up what an actuarial value looks like for a gold plan, [there are] still significant out-of-pocket payments. We know we don’t need to do that. We know that Canada does not have copayments to doctor visits or hospitalization; we know the U.K. doesn’t have it for either of those things.”

Gaffney also doesn’t buy the argument that moving people from private health insurance plans to Medicare, as Sanders’s plan does, would cause a big political backlash. “People care about being able to go to their doctors and what they’re paying out of pocket,” he said, arguing that people are not sentimental about their plans so much as their doctor and hospital. “They don’t really care about the brand name of their insurer. So if you give everybody a plan that has no network, that has no out-of-pocket payment at time of use, I think you’ll find that people are far happier.”

The grassroots pro-Sanders group People for Bernie, which organized people to support Sanders during the 2016 presidential race and now supports progressive legislation and candidates, was blunt in its response to the CAP plan, arguing that activist energy is behind “Medicare for All,” and that any compromise at this point is opposing those activists:

Fine suggested an alternative incremental approach to single payer if something like the Sanders bill fails to pass in the future: Add children and military veterans to the Medicare program, and then adults between the ages of 60 and 65. This would unlock what he calls an “important conservative result: The VA hospital system would become available to all, for services and for badly needed additional training hospitals for young doctors.”

https://theintercept.com…

More about the crisis of lack of interoperability

A private health care information technology system

By Don McCanne, M.D.
Physicians for a National Health Program, Quote of the Day, July 21, 2004

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The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care

By David J. Brailer, MD, PhD, National Coordinator for Health Information Technology
Health and Human Services, July 21, 2004

Health information technology provides a mechanism for refocusing care delivery around consumers without substantial regulation and industry upheaval. Information technology can result in better care (care that is higher in quality, safer, and more consumer responsive) and at the same time, more efficient (care that is appropriate, available, and less wasteful).

The private sector role

While the federal government plays an important role in HIT adoption, the effective use of, and value creation from, this technology lies predominantly with the private sector. The federal government will provide a vision and a strategic direction for a national interoperable health care system, but will rely on a competitive technology industry, privately operated support services, and shared investments in HIT adoption. The private sector must develop the market institutions to deliver the products and services that can transform the paper-based health care system into an electronic, consumer-centered, and quality-based system. The private sector can best ensure that HIT products are successfully implemented in ways that meet the varying needs of American health care across settings, cultures, and geographies. The private sector can also continue constant innovation in HIT and ensure that products are delivered on an affordable basis.

Federal and state governments have delegated most components of quality assurance to voluntary private organizations, including but not limited, to the JCAHO, NCQA, the National Quality Forum, residency review committees, and others. This will be true of quality and performance accountability in the future world of HIT. New market institutions need to be developed that can support clinician adoption of HIT, provide interoperability, and enhance the value realized by these investments. Close collaboration between public and private sectors can develop new methods for improving care without creating unnecessary regulation and minimizing reporting burdens on private industry.

Comment by Don McCanne, M.D. (7/21/04):

The private, competitive market has produced for us computers that are powerful yet inexpensive. Software that is used widely is quite inexpensive, and that in the public domain is essentially free after the initial development costs. With inexpensive computers and software developed in the public domain, the cost of an integrated health care IT (information technology) system should be quite modest. And the return in error reduction and administrative efficiency would far more than offset any real costs.

The Veterans Administration is far ahead of the rest of the nation in developing and utilizing an integrated IT system. And this has been developed in the public (government!) sector. Many other nations with universal health care systems have also introduced integrated IT systems primarily through the public sector.

What has the magic of the competitive marketplace produced in the way of an integrated IT system to this date? High costs, very poor penetration, and system failures! Competitive market theory dictates that we should be leading the world with a high quality health care IT system at a low cost. What went wrong?

First of all, a fragmented system of multiple private plans, public programs and uninsurance does not provide an infrastructure that is very conducive to an integrated IT system. A single payer system, or, at minimum, a highly regulated system of universal coverage through multiple plans, would provide a framework that would ensure adaptability of an integrated IT system. Of course, a single, publicly administered system would be much preferred for an integrated IT system.

But the greatest difficulty with private IT solutions lies in the very nature of these marketplace models. Their goals are, above all, to maximize profits and to maximize the market price of their shares. To achieve those goals, corporate behavior varies from that of a public entity that has a simpler goal of establishing an effective and efficient high quality system that serves the heath care system and its patients well. The public system does not have to be concerned about being a successful business enterprise, but the private model does.

What might the private sector do that doesn’t serve our interests well? They will produce products that command the highest prices that the market will bear. They will design the products to provide a continuing revenue stream. Once gaining a significant share of the market, they will design incompatibility with other systems in an attempt to garner the entire market. They will design obsolescence into their systems to ensure future markets for their new innovative products. They will partner with and perhaps acquire other related entities that can expand profit potentials through greater control of components of the health care system which their products can influence. Although these are good business practices, they are terrible policies for our health care system.

But without market incentives, wouldn’t innovation be suppressed? We have market innovations now, and they have not resulted in the IT developments that we desperately need. Public innovations have been effective in developing systems in other nations and in the VA that are already working. If private entrepreneurs can develop innovations that could benefit a public system, there is no reason that they couldn’t be sold to the government to place in the public domain. But they should be priced to reflect costs plus a fair one-time profit. We really don’t need more superfluous profit centers in our health care system.

The health information technology report released today should alarm us all. Although we all agree on the importance of an integrated IT system, the Bush administration is limiting the role of the government to being an enabler that encourages the private sector to develop a successful business model. Rather than higher quality at a lower cost, we’ll end up with mediocrity at a much higher cost, wasting even more of our health care dollars.

We desperately need strong leadership from our government in developing a health care IT system that will serve us all well. But based on the current leadership that has failed to address even the fundamental issue of adequate health care coverage for all, it is unlikely that we’ll see any enlightened leadership on this in the near future.

https://pnhp.org…

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Meeting Meaningful Use Criteria and Managing Patient Populations

By Philip A. Verhoef, M.D., Ph.D.
Annals of Internal Medicine, November 19, 2013

To the Editor:

I read with interest DesRoches and colleagues’ article on assessing physician use of EHRs and whether such use was meaningful, as outlined by the Centers for Medicare & Medicaid Services. The fundamental flaw in the authors’ research question (and in the Centers for Medicare & Medicaid Services’ misguided use of this metric) is that the meaningful use criteria pertain to patient care, but the commercially available EHRs are invariably designed to optimize billing and insurance reimbursement. Thus, the finding that fewer than 1 in 10 physicians reported being able to use their systems to meet meaningful use criteria is hardly surprising.

The commercial EHR has resulted in more money in the pockets of physicians who use it, although it has failed to facilitate meaningful use or show overall cost-savings. Further, one need only look at the U.S. Department of Veterans Affairs Veterans Health Information Systems and Technology Architecture (VistA) Computerized Patient Record System as an example of an EHR that was designed to optimize patient care and has successfully achieved meaningful use. The West Virginia Department of Health implemented a statewide modified VistA system for one tenth the cost of the introduction of the Epic system (Epic Systems, Verona, Wisconsin) at West Virginia University.

The VistA system within the U.S. Department of Veterans Affairs allows easy exchange of information with physicians around the country because all of the hospital inpatient and outpatient sites are linked. Both Veterans Affairs and non–Veterans Affairs hospitals using the VistA system are among the few in the nation that achieve measurable meaningful use according to the Healthcare Information and Management Systems Society. Finally, the VistA system has won repeated accolades over the past 2 decades for its ease of use and for improving efficiency and optimizing prescription accuracy.

Why, then, would a physician or health system implement anything other than the VistA EHR if they seek to use an EHR in a meaningful way, as the Centers for Medicare & Medicaid Services mandates? Stated differently, and in parallel with our current health financing crisis, why do we pay so much more for a privately delivered product that is so much less effective than one developed with taxpayer dollars?

https://www.ncbi.nlm.nih.gov…

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National Coordinator Rucker Urges CMIOs to Participate in Helping to Improve Interoperability, Usability

By Mark Hagland
Healthcare Informatics, March 5, 2018

Moving forward towards greater interoperability and usability will take time and effort, (National Coordinator Donald) Rucker said, but he said he remained convinced that much will change in the coming years, some of it stimulated by the federal government, but a great bulk of it stimulated by consumer empowerment and the mechanisms of the free market.

https://www.healthcare-informatics.com…

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Comment:

By Don McCanne, M.D.

Yesterday’s message discussed the failure of our conservative government stewards, past and present, to move forward with an effective plan that would establish much needed interoperability of the health care IT system throughout the nation. More needs to be said now because the current path will have serious negative consequences for decades to come for our health care delivery system and its patients. And ultimately health care should be all about the patients.

It was mentioned that David Brailer, the first National Coordinator for Health Information Technology, had decided that the system, including interoperability, should be developed in the private sector. In a Quote of the Day message published in 2004 (above), he said that the federal government “will rely on a competitive technology industry, privately operated support services” in the creation of “a national interoperable health care system.”

Rather than repeating here, please read my comment from 7/21/04 (above). The state of the art at that time was the VA’s VistA system. It was owned by us, the people of the United States, and was a far better system at a small fraction of the cost of the systems being privately developed. Most important, the VistA system was designed to benefit patients, whereas the private systems were designed to fulfill entrepreneurial dreams of control and wealth.

A decade later, Philip Verhoef, in the Annals of Internal Medicine, describes the consequences of the decision to place control of electronic health records in the hands of the private sector. As he says, “why do we pay so much more for a privately delivered product that is so much less effective than one developed with taxpayer dollars?” And now, over four years later, the politicians still have learned nothing. (Philip Verhoef is a board member of Physicians for a National Health Program – an organization with a mission dedicated to patients.)

The current National Coordinator for Health Information Technology, Donald Rucker, at a meeting this week said that moving forward towards greater interoperability and usability will be stimulated by consumer empowerment and the mechanisms of the free market. VistA certainly is not a free market creation. Even the Internet was a government creation.

Perhaps the most arrogant comment this week was by the White House’s Jared Kushner who gleefully took credit for the “huge win” in bringing in the private IT vendor Cerner to displace the VistA system at the time that the VistA system was successfully undergoing an upgrade. The “win” is that the VA will copy the Cerner system currently being implemented for the active duty military – a process that has been described as “We took a broken system and just broke it completely.” That’s okay as long as it’s the private sector that gets to break it.

There are some things that the government does better than the private sector, like health IT. The issue is not public versus private, both have a role. The issue is that you do not elect/appoint as your government stewards people who do not believe in government, especially those individuals who support policies that take very good care of the wealthy while leaving the rest of us flat.

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Our incompetent stewards for health IT interoperability

‘We took a broken system and just broke it completely’

By Arthur Allen
POLITICO, March 8, 2018

President Donald Trump last year hailed a multibillion-dollar initiative to create a seamless digital health system for active duty military and the VA that he said would deliver “faster, better, and far better quality care.”

But the military’s $4.3 billion Cerner medical record system has utterly failed to achieve those goals at the first hospitals that went online. Instead, technical glitches and poor training have caused dangerous errors and reduced the number of patients who can be treated, according to interviews with more than 25 military and Veterans Affairs health IT specialists and doctors, including six who work at the four Pacific Northwest military medical facilities that rolled out the software over the past year.

Prescription requests came out wrong at the pharmacy. Physician referrals failed to go through to specialists. Physicians were unsure how to do basic things such as request lab reports. Doctors complained it could take 10 minutes to get into the system, which then frequently kicked them out.

“We took a broken system and just broke it completely,” said one doctor, who like most of those interviewed requested anonymity because they lacked military authorization to speak about the project.

These and other problems, particularly concerns about the VA’s ability to share records with civilian health systems, contributed to VA Secretary David Shulkin’s decision in December to delay signing a $10 billion contract to install Cerner at the VA.

Despite the startup issues, which have been glossed over in public discussion of the project, the White House continues to make the overhaul of the military and VA medical records a centerpiece of its government reform efforts.

“This was a huge win for our service,” Jared Kushner told a health IT conference in Las Vegas on Tuesday, referring to Shulkin’s decision last spring to use Cerner following consultations with Kushner’s office. “The president wants to make interoperable health records available for all Americans.”

But Kushner’s comments gave the impression the military had already created an electronic record system, and was just waiting for the VA to connect to it. In fact, the military’s MHS Genesis project, which started rolling out in February 2017, is still in the early stages, with completion scheduled for 2022.

And the tough experiences described by doctors and others suggest a thorny path ahead.

Efficiency promises notwithstanding, the new system has resulted in significant slowdowns so far, said physicians at the two hospitals that went live with MHS Genesis in September and October, respectively. At Bremerton, the system is so cumbersome and confusing that doctors who saw 18 to 20 patients a day now see 12 or 14, they said.

Shulkin’s decision to delay the contract won widespread praise, but critics bemoan his decision last year to shutter an internal program to modernize the VA’s existing digital record system, known as VistA. Many health IT experts left the agency after cancellation of the program, which involved hundreds of staff and contractors.

“We’re doing a once-in-a-lifetime replacement of an … [existing electronic health record system] that’s pretty functional — some of our physicians like it better than Epic or Cerner,” said a recently retired VA official. “Why replace it with something that’s basically the same?”

https://www.politico.com…

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ONC chief Donald Rucker lays out his agency’s very full plate

By Mike Miliard
Healthcare IT News, March 7, 2018

In an evening session at HIMSS18 on Tuesday, National Coordinator for Health IT Donald Rucker, MD, sat down for a candid talk about an array of issues related to federal healthcare policy.

On what makes interoperability so hard for healthcare:

What makes it hard is that you have to solve for multiple things at once. We have to solve simultaneously for just the physical wiring, the interoperability stack. We have to solve for the simple syntactic standards of data transmission. We have to come to some consensus for semantic interoperability: what was the meaning of what was transmitted. And then finally, we have to deal with the business case. And the business cases are hard to deal with because some of these cases are virtual things in the future, involving competitors, and business models that don’t exist at the present. And if that weren’t enough, we have to do it with privacy and security. That’s what makes it hard.

http://www.healthcareitnews.com…

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Comment:

By Don McCanne, M.D.

If we were to fulfill the dream of having immediate Internet access to any prior medical records throughout the nation, it was important that IT systems be interoperable. However, when David Brailer was appointed George W. Bush’s first IT guru, he insisted that the systems be developed in the private sector, rejecting a proven system that we, the taxpayers, already owned – the VA’s VistA system.

It was clear at the time that the private vendors did not want interoperability with any other systems than their own. Each wanted to become the dominant system, Microsoft-style, so that new purchasers of health IT systems would have to go with the dominant vendor to ensure interoperability. As it turns out, there are too many systems, and they are not interoperable. But the Trump administration is now claiming that they will bring interoperability to us, but through the private sector.

So what does the current IT guru, Donald Rucker, have to say about interoperability? He says, “we have to deal with the business case, and the business cases are hard to deal with because some of these cases are virtual things in the future, involving competitors, and business models that don’t exist at the present.” The business case.

In a speech at the same IT conference in Las Vegas this week, Jared Kushner is taking credit for the “huge win” for bringing in the private vendor Cerner to replace the VistA system, saying, “The president wants to make interoperable health records available for all Americans.” Well the interoperability is intended to be between the military’s health IT system and the VA system. He seems to assume that the military system being designed by Cerner is a given, but this report indicates that it has been a disaster and it has hardly even gotten off the ground. And that is going to be duplicated for the VA?

It’s too bad because the VistA system was undergoing modernization when the new administration shut the process down (and lost hundreds of highly competent staff and contractors).

Insisting on private sector solutions for interoperability has been a disaster, just as the private sector has been a disaster in financing of our health care system when a public single payer system would be vastly superior. Is Trump going to put Jared in charge of further privatizing our health care financing? Can hardly wait.

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How to lower the cost of prescription drugs

By Leslie Hartley Gise, M.D.
The Maui (Hawaii) News, Letters, March 8, 2018

The high cost of prescription drugs is a common complaint and was in this newspaper in the Feb. 9 editorial, “Out-of-control health system.” The solution is simple. We have already done it. If our Congress would vote to allow Medicare to bargain with drug companies, like the VA already does, prices would drop significantly.

Drug companies were not penalized by the Affordable Care Act. Their profits and stock prices are soaring. Drug companies claim they need high costs to do research, but the vast majority of drug research is done by the government and at universities. Drug companies take over in the later stages when a drug is ready for testing on people. They focus on drugs that folks need to take for life and drugs that are still on patent. And they market aggressively.

They patent profitable “me too” drugs which are no better than the ones we already have. Their high costs are related to marketing, profits and administration. Drug companies spend enormous amount of money on lobbying and contribute massively to our legislators and to our FDA. We need to elect legislators who care about us and are not beholden to the pharmaceutical industry.

http://www.mauinews.com…

Worker health coverage needs rethinking

The recent contract negotiations between union workers and Hannaford provides an opportunity to examine the health care model.

By Daniel Bryant, M.D.
The Portland (Maine) Press Herald, Letters, March 8, 2018

Employment-based health insurance, now covering 56 percent of the nonelderly population, was introduced during World War II to help employers avoid wage controls. The issue of health care coverage in the recent contract negotiations between United Food and Commercial Workers Local 1445 and the company that operates the South Portland Hannaford distribution center provides an opportunity to examine that persisting model. When we do, several problems leap out.

• Employers are saddled with the unpredictable cost and hassle of insuring workers, while remaining vulnerable, as in the Hannaford case, to the threat of strikes. (A 2003 strike over health care benefits in Southern California cost three grocery chains over $2 billion.)

“In most labor negotiations during the past 30 years, more time and effort has probably been spent on the health care plans provided by labor agreements than on any other contract provisions, including pensions,” attorney Arthur Smith Jr. wrote in HR Magazine in 2013.

• Workers can’t see what they’re paying for health insurance within overall labor costs, have no guarantee that their plan or network will remain the same and risk losing coverage if they leave for any reason (the average worker has 11.9 jobs from age 18 to age 50, according to the Bureau of Labor Statistics). An employer’s retention advantage can be an employee’s job lock.

• When commercial insurers insure employees, they are cherry-picking the healthiest demographic, leaving the poorest, sickest and oldest pool to be funded by increased taxes and cost-shifting. And sometimes blamed (“state patients”).

The possibility of another strike at a Hannaford distribution center may not be as newsworthy as assault weapons or Russian meddling, but it should serve to remind us, when we get back to the issue of health care reform, that we should not let outdated conventions and entrenched interests keep us from rethinking the relevance of today’s workplace to today’s health care.

https://www.pressherald.com…