By Carey Goldberg and Meghna Chakrabarti
WBUR, CommonHealth, Jan. 22, 2018
A new study out in JAMA Internal Medicine shows that in the years following the implementation of the Affordable Care Act, out-of-pocket spending decreased, while premiums increased. (Click here to read PNHP’s news release on this study.)
By F. Perry Wilson, M.D., M.S.C.E.
MedPage Today, Jan. 22, 2018
The Affordable Care Act. We often discuss its impact on reducing the uninsured rate in the US healthcare system, but there’s another salient question. Did the Affordable Care Act make care more affordable?
A new analysis, appearing in JAMA Internal Medicine, is the first to really quantify what has happened to individual health care spending since the ACA was put into effect.
Drawing on data from the Medical Expenditure Panel Survey, a nationally representative sample of more than 83,000 US adults, researchers led by Dr. Anna Goldman (in her first peer-reviewed publication, congratulations Dr. Goldman), determined how much individual expenses changed from the pre-ACA to the post-ACA era.
The study looked at out-of-pocket expenses and premiums and the two combined. But in a conversation with Dr. Goldman, she pointed out to me that out-of-pocket expenses might be more important when it comes to healthcare access:
“Out of pocket spending really can be – in a different way then premiums – a real barrier to care. Since it saves at the point of care.”
So what happened when the ACA was introduced?
Overall, premiums went up and out-of-pocket costs went down. The net effect was that the average American family spent $28.71 less on healthcare in the two years after the ACA compared to the two-years before.
But the benefits were not evenly distributed. Families making up to 138% of the federal poverty level spent, on average $160 less on healthcare after the ACA. Families making more than 400% of the poverty level spent around $281 dollars more per year. I should note that this doesn’t include the added cost of some ACA-associated taxes that affected higher income earners.
These numbers may not seem that impressive, but consider two factors. First, healthcare expenditures had been increasing in the run-up to the ACA, so even a modest decrease is somewhat encouraging. Second, even if there were no changes in healthcare spending, 6.5% more of the US population became insured in the two years after the ACA.
So did the Affordable Care Act make care more affordable? For some people, yes, but perhaps that’s not the main point.
Dr. Goldman again:
“Even though it was called the Affordable Care Act, its major intervention was to expand insurance coverage. Experts in the field who I’ve spoken to about this take issue with the idea that it should even be expected to make care more affordable.”
Is “affordability” even the right metric for healthcare? I’m not sure. The effect of the ACA should be measured not in terms of cost, but value – the outcomes achieved for the cost. In other words, this paper gives us the denominator. We’ll need more time before Information on the numerator, particularly any long-term health outcomes, can be put into the equation.
F. Perry Wilson, M.D., M.S.C.E., is an assistant professor of medicine at the Yale School of Medicine. He is a MedPage Today reviewer, and in addition to his video analyses, he authors a blog, The Methods Man. You can follow @methodsmanmd on Twitter.
FOR IMMEDIATE RELEASE: Monday, January 22, 2018 at 11:00 a.m. EST
Contact: Clare Fauke, clare@pnhp.org, 312-782-6006
Families’ out-of-pocket medical expenses decreased in the first two years after the Affordable Care Act was implemented, but their premium payments rose, according to a new study by researchers at Harvard Medical School and the City University of New York at Hunter College published today in JAMA Internal Medicine. The savings on annual out-of-pocket expenses averaged $74 (12 percent), with poorer individuals seeing the biggest drop (21.4 percent) while those with higher incomes saw no change. In contrast, higher-income households bore the brunt of premium increases (23 percent), while premiums for other income groups didn’t change significantly. Overall, households’ premiums rose by an average of $232 (or 12 percent). The findings indicate that the ACA shifted the spending burden from low- to higher-income households, and from out-of-pocket spending to spending on premiums.
The study analyzed national data on 83,431 non-elderly adults. The researchers compared households’ medical spending during the two years before and after the full implementation of the ACA in 2014. They assessed out-of-pocket outlays (any medical spending not covered by insurance) and premium contributions made by household members. In addition to analyzing how much families spent, the study examined “high-burden spending,” such as paying more than 10 percent of income (or 5 percent for low-income households) for out-of-pocket expenses. Premiums were considered “high-burden” if they exceeded 9.5 percent of income (the affordability threshold specified in the ACA).
High-burden out-of-pocket spending fell by 20 percent overall, with the most substantial decrease seen among poorer individuals. In contrast, middle-income households (those with incomes between 250-400 percent of poverty) saw a 28 percent increase in high-burden premium spending, while other income groups experienced little change in this measure.
“Our findings suggest that the Affordable Care Act reduced out-of-pocket costs for many Americans,” said the study’s lead author, Dr. Anna Goldman, a primary care doctor at Cambridge Health Alliance and fellow at Harvard Medical School. “But the ACA didn’t stem the steady rise in families’ premiums. Overall, the law helped ease families’ medical cost burden, but there is plenty of room for progress.”
“It’s not surprising that the ACA’s effects were modest,” continued Dr. Goldman. “Only 6.5 percent of Americans gained coverage through the ACA, while about 28 million remained uninsured. Moreover, efforts to make the ACA’s financing budget-neutral limited the generosity of subsidies and may have reduced the law’s potential to reduce medical spending.”
Dr. Steffie Woolhandler, a distinguished professor of public health at CUNY’s Hunter College and lecturer in medicine at Harvard Medical School noted: “The ACA helped smooth out spending, and made it more predictable. Fewer families were left with high out-of-pocket costs when they were sick, but paid more in upfront premiums. But the law fell far short of what many nations with single-payer systems have achieved: universal, comprehensive, and affordable coverage.”
“We’re worried that recent moves by the administration and Congress to undermine the ACA will erase the gains we observed, or worse,” said senior study author Dr. Danny McCormick, an associate professor of medicine at Harvard Medical School and primary care physician at Cambridge Health Alliance. “The repeal of the ACA mandate, weakening of insurance standards, and erosion of Medicaid will punish many lower-income Americans,” concluded Dr. McCormick.
“Out-of-Pocket Spending and Premium Contributions after Implementation of the Affordable Care Act” by Anna L. Goldman, M.D., M.P.A., Steffie Woolhandler, M.D., M.P.H., David U. Himmelstein, M.D., David H. Bor, M.D., and Danny McCormick, M.D., M.P.H., JAMA Internal Medicine, published online ahead of print January 22, 2018.
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Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.
By Martha Bebinger
WBUR, January 18, 2018
A decision about health coverage for state employees and retirees is shaking the Massachusetts health insurance industry. Harvard Pilgrim Health Care, Tufts Health Plan and Fallon Health, which are the second-, third- and fourth-largest insurers in the state, have been dropped by the state Group Insurance Commission (GIC), which manages coverage for 442,000 members.
The GIC says it’s been talking to insurers about the need to simplify, streamline and save money for more than a year, so Thursday’s 8-5 commission vote should not be a surprise. But dropping three prominent, nonprofit Massachusetts insurers is a major blow.
“Time and again, the Group Insurance Commission has voted to make workers bear the brunt of out of control health care costs, instead of tackling the crisis with providers,” said Peter MacKinnon, president of SEIU Local 509. “It is evident that the GIC has taken a bad situation and made it far worse with this anti-consumer vote.”
http://www.wbur.org…
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By Don McCanne, M.D.
We keep hearing that most people are pleased with their current health care coverage so we should reject the disruption that would be caused by changing to a single payer system. What better coverage could there be than that of public employees in Massachusetts whose options include three of the largest nonprofit carriers in the state? Until now that is.
This is the best there is and yet it results in instability, especially in the choice of their health care professionals and institutions. And the reason given for the disruption is that the costs are too high.
This would not occur under a well designed single payer system. Individuals would have permanent free choice of their health care and costs would be contained through patient-friendly policies.
Think of the health care coverage you had twenty years ago. Ten years ago. Even perhaps five years ago. And they say that single payer would be disruptive? It is single payer that finally would bring us stability of coverage – for life!
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
By Vann R. Newkirk II
The Atlantic, Jan. 19, 2018
For most people, a single doctor’s visit can be a financial obstacle course.
Many patients throughout the year pay hundreds or thousands of dollars in premiums, most often through workplace contributions. Then, at the doctor’s office, they are faced with a deductible, and they may need to pay coinsurance or make a copayment. If they have prescriptions, they’ll likely fork over cash for those, too.
And that’s just for basic primary care for one person. Repeat that process for an entire family; add in any labs, referrals, specialists, emergency-room visits, and surgeries; and the result for even healthy families is dozens and dozens of payments, and often thousands of dollars. This series of expenditures before, during, and after care is euphemistically called having “skin in the game.” But the reality is, the American insurance system is designed to make health care financially unpleasant, often to the point where patients forego necessary care.
A new study in the forthcoming March issue of the American Journal of Public Health sheds light on just how all that “skin in the game” affects the material conditions of patients. The research—by Andrea Christopher at the Boise Veterans Affairs Medical Center, David Himmelstein and Steffie Woolhandler at the City University of New York at Hunter College, and Danny McCormick at Harvard Medical School—indicates that household spending on health care is a significant contributor to income inequality in the United States. It also indicates that medical expenses push millions of Americans below the federal poverty line, including 7 million people who make more than 150 percent of the poverty level. Four million of those Americans are pushed into the ranks of extreme poverty.
That health-care costs in the country are expensive—often, prohibitively so—is well known. As Vox’s Sarah Kliff notes, the first reason why is the exorbitantly high cost of care, which doesn’t always correspond with measurable increases in quality or demand. Even for routine procedures or precautionary visits, hospital bills can run over $400, an expense that almost half of American households can’t meet without dipping into credit. Additionally, billing is famously opaque, incoherent, and fragmented, creating major barriers to informed care decisions and often resulting in bills going into collections.
Health insurance is supposed to mitigate those cost and information barriers. A 2016 Kaiser Family Foundation analysis found that while significant numbers of Americans have trouble paying medical bills, only 20 percent of insured people had difficulty versus half of all uninsured people. Most of that difficulty for both groups comes from sudden medical events or accidents, or sudden life events like the loss of a job. Medical debt is also a major contributor to bankruptcy in the United States. One of the major arguments for the Affordable Care Act was in its name: a promise to help shield people from the worst financial effects of medical catastrophe or chronic illness.
New avenues of subsidized or free health insurance that sprang from Obamacare—including private insurance offered on the exchanges and expanded Medicaid rolls in many states—have been able to do some shielding. The ACA helped reduce total bankruptcies by as many as 1.5 million between 2010 and 2017. The Centers for Disease Control and Prevention reports that, between 2011 and 2016, the percentage of Americans with trouble paying medical bills dropped precipitously. And a 2017 study by the Urban Institute’s Kyle Caswell and Timothy Waidmann found “improved credit scores, reduced balances past due as a percent of total debt, reduced probability of a medical collection balance of $1,000 or more, … and a reduction in the probability of a new bankruptcy filing” for people in Medicaid-expansion states.
But the new AJPH study complicates some of that rosy analysis. The researchers didn’t split the survey population up based on insurance status; they instead measured income inequality across the population, both before medical expenses were taken into account and after. They found that income inequality in 2014 actually increased by 1.5 points after medical expenses were subtracted from income. Put another way, poor people spent much more of their income on health care than the richest people did, and as a result around 1.5 percent of all relative income shifted toward the higher earners.
The researchers also found that medical spending sent millions of people effectively into poverty or into deeper rungs of poverty. Seven million Americans making more than 150 percent of the federal poverty line—$31,000 for a family of three—dropped below that line if medical expenses were subtracted from their income. That meant that these families spent something like a third or more of all their income on health care. Of the 7 million, 4 million found their post-health-care income reduced below 50 percent of the poverty line, meaning they spent about two-thirds of their total income on health care. The study also found that the ACA decreased the amount of inequality caused by health-care expenses, but only slightly.
There are some limitations to how far these results can be interpreted. It’s possible that, since 2014, continued gains in insurance coverage—at least until the uninsured rate rose in 2017—combined with additional states expanding Medicaid, decreased coverage costs; a more recent study would be needed to say for sure. Also, without insurance-enrollment breakdowns, it’s impossible to see where and why the biggest gaps in income inequality emerge, and the exact role the ACA may have played in fixing them.
Still, the study adds to the body of evidence on the dramatic impact of health-care costs. Even with Medicaid as a safety net, health care is a major burden for low-income people—so much so that it deeply exacerbates differences in income and wealth.
One major reason for this burden, perhaps even especially under the ACA, is deductibles. While almost the whole of the national health-care debate has centered on how to lower premiums, the ACA and other health policies have in many cases purposefully driven deductibles upward. More Americans say they have trouble affording their deductibles than they do affording their premiums. Between 2006 and 2017, the Kaiser Family Foundation found that deductibles for people with employer-sponsored insurance increased fourfold. The out-of-pocket maximums on many of these plans also increased sharply. Many of these hikes came from an across-the-board embrace of so-called high-deductible plans, which have been theorized to limit both utilization of health care and the burden of premiums. The tradeoff for those lower premiums is that those who use their insurance have to pay a lot more to do so.
As a 2017 Atlantic investigation showed, this theory can often create two kinds of adverse outcomes when put into practice. Many people simply spend what they need to to cover health-care costs, draining their savings and income as they go. And many who don’t turn to crowdfunding to pay their bills, or go without care in the first place. Technically, these outcomes reduce the number of medical bankruptcies—a victory for policymakers—because even high-deductible plans place a hard cap on medical expenditures.
Yet even as Americans are better protected from the worst consequences of catastrophic illness, routine care continues to hurt low-income people’s finances.
The ACA isn’t really designed to combat that particular paradox. In fact, the law at times embraces it. It juiced up the comprehensiveness of most plans, and it shields people from the true cost of premiums through a number of mechanisms. But in exchange, the structure of the high-deductible plan was accepted as a basic mechanism for both rationing and budgeting. While cost-sharing reductions were introduced to put a cap on the burden that deductibles, copayments, and coinsurance place on low-income Americans, 90 percent of all people on the exchanges still pay deductibles in excess of $1,300 individually or $2,600 per family, amounts that are often difficult to afford even for middle-class families.
Republican plans to create a new health-care regime would, for the most part, only increase that difficulty, because both the Senate and House bills to repeal Obamacare increased deductibles even further. President Trump, meanwhile, has stopped paying cost-sharing reduction payments and signed a tax law that repealed the individual mandate to purchase insurance. Both of these actions could increase premiums, thus giving some patients yet another financial burden to worry about.
The new study functions as a reminder that policymakers seeking to address income and wealth inequality cannot do so without continuing to address health care, still one of the most constant sources of financial woe in American life. That includes both the absolute cost of health care and the myriad ways the cost is passed onto people with insurance. Until those problems are mitigated, having “skin in the game” for the poorest Americans translates to losing financial ground.
By Andrea S. Christopher, MD, MPH, David U. Himmelstein, MD, Steffie Woolhandler, MD, MPH, and Danny McCormick, MD, MPH
American Journal of Public Health, January 18, 2018 (online ahead of print)
Objectives. To assess the effect of households’ outlays for medical expenditures on income inequality and changes since the implementation of the Affordable Care Act (ACA).
Methods. We analyzed data from the US Current Population Surveys for calendar years 2010 through 2014. We calculated the Gini index of income inequality before and after subtracting households’ medical outlays (including insurance premiums and out-of- pocket costs) from income, the financial burden of medical outlays for each income decile, and the number of individuals pushed below poverty by medical outlays.
Results. In 2014, the Gini index was 47.84, which rose to 49.21 after medical outlays were subtracted, indicating that medical outlays effectively redistributed about 1.37% of total income from poorer to richer individuals, a slightly smaller redistribution compared with the years before the ACA. Medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty.
Conclusions. The way we finance medical care exacerbates income inequality and impoverishes millions of Americans. This regressive financing pattern improved minimally in the wake of the ACA.
From the Results
In 2013, medical outlays lowered the median income (calculated after subtracting medical expenditures) for the poorest decile by 49.2% and by 10.7% for the next poorest group versus 2.5% for the wealthiest decile, a markedly regressive pat- tern. This unequal pattern improved only slightly in 2014. In that year, medical outlays lowered median income in the lowest income decile by 47.6% versus 2.7% in the top decile. For those in the top 1.0% of income, medical outlays decreased income by only 1.3%.
In 2014, 9.28 million Americans whose incomes before their medical outlays were above poverty were pushed into near poverty (150% of FPL) when medical outlays were subtracted from their family incomes. Similarly, 7.013 million were lowered into poverty (below 100% of the FPL), and for 3.946 million, medical outlays reduced their incomes into the extreme poverty range (below 50% of the FPL). These numbers were little changed from 2013 (before the main provisions of the ACA took effect), when medical outlays pushed 7.263 million people below the poverty line, 3.809 million into extreme poverty, and 9.576 million below the near-poverty threshold.
From the Discussion
In the United States, most insured families pay premiums, deductibles, and copayments that are not scaled to income. As a result, medical care expenses exacerbate poverty and income inequality, which are key social determinants of health. Although access to high-quality care might narrow the health disparities caused by social inequality, the ways we pay for care—notably, the failure of most insurance programs to scale premiums and deductibles to income—may widen them.
Out-of-pocket health care expenditures are likely to continue increasing under the ACA, as well as under Republicans’ proposed alternatives. The proportion of privately insured employees whose individual coverage carries an annual deductible of $2000 or more has increased 6-fold since 2006. Most of the new private coverage offered on the ACA exchanges carries high deductibles. These could drive many families into poverty despite cost-sharing subsidies that reduce copayments and deductibles for those with incomes below 250% of the FPL.
Equally worrisome, Centers for Medicare & Medicaid Services has allowed several states to impose cost sharing on Medicaid recipients, reversing a long-standing rule against such policies.
In some nations the wealthy pay a larger share of their incomes toward health care than do the poor. In others, health expenditures account for a similar share of incomes for the poor and rich. In the United States, health expenses exact a higher toll from the poor, whereas the wealthy pay relatively little. This regressive financing pattern—which redistributes as much as 1.7% of total income from poorer to richer Americans—lies largely hidden in a complex web of private and public insurance arrangements. We suspect that the opacity of US funding streams helps shield the wealthy from demands for a fairer health-financing pattern.
http://ajph.aphapublications.org…
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By Don McCanne, M.D.
The way we pay for health care in the United States is egregiously regressive. In spite of ACA, “medical outlays reduced the median income of the poorest decile by 47.6% versus 2.7% for the wealthiest decile and pushed 7.013 million individuals into poverty.”
Income inequality has reached intolerable levels in the United States bringing ever more riches to the wealthy (how much wine and cheese do they need?) while leaving workers with relatively stagnant wages and leaving the poor without much hope for ever moving up to at least a minimally acceptable standard of living. This astonishing study shows that medical expenditures have worsened this inequity and have shoved another 7 million people into poverty (4 million into extreme poverty!). What a penalty to pay for having the misfortune of needing health care.
Considering the recent tax bill signed into law by President Trump, the nation is moving in the wrong direction in addressing the problem of income inequality. We need new policies, and one of the easiest and most beneficial would be to enact a well designed single payer national health program, funded equitably through the tax system. That way we would ensure that everyone would have health care while shifting from a regressive to a progressive pattern of financing. It would be good for our health and good for our personal finances.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
FOR IMMEDIATE RELEASE: January 18, 2018
Contact: Clare Fauke, 312-782-6006, clare@pnhp.org
Households’ payments for medical premiums, copayments and deductibles pushed more than 7 million Americans into poverty in 2014, according to a study appearing in the American Journal of Public Health. Such payments also dramatically worsened overall income inequality.
The researchers analyzed data on household medical payments from the Census Bureau’s 2010-2015 Current Population Survey, the standard source for estimating income and poverty. First, the researchers calculated the number of people who were below the poverty level before taking into account their medical expenses. Then they compared that to the number whose income fell below the poverty level after subtracting payments for health insurance and out-of-pocket medical expenses.
After taking account of households’ medical payments, the incomes of the poorest 10% of the population fell by 47.6 percent. In addition, the burden of health care spending fell steadily as income rose. Such spending cut the incomes of households at the median income by about 8 percent, while it reduced the income of the wealthiest 1 percent by only 1.3 percent.
In their analysis, the researchers found that families’ health care spending markedly increased overall income inequality. Using economists’ standard measure of income inequality, the Gini index, they found that the index worsened by 1.37 points after taking account of health care expenditures. If employer-paid premiums were considered part of an employee’s compensation (a standard assumption in economics), the effect of medical payments on income inequality was even greater, a worsening of 1.70 points. These health spending impacts on incomes were equivalent to transferring between $149.6 billion (1.37 percent) and $185.6 billion (1.70 percent) from households with incomes below $75,738 to wealthier households in 2014.
The study also found that the Affordable Care Act slightly improved this pattern (by 0.10 points) even before considering the effects of its $22 billion increase in Medicare taxes on the top 2 percent of earners.
Dr. Steffie Woolhandler, a study author who is a distinguished professor of public health at the City University of New York at Hunter College (CUNY/Hunter) and lecturer in medicine at Harvard Medical School commented: “In many other countries, health care helps cushion the effects of poverty. But our health care financing system drives millions of Americans into poverty and worsens inequality. That’s not just a financial problem, it’s a medical one because poverty breeds ill-health.”
According to Dr. David Himmelstein, a distinguished professor at CUNY/Hunter and staff physician at Montefiore Medical Center in the Bronx: “In recent years, the gaps between rich and poor in both income and life expectancy have widened. Today, the richest Americans live 10 to 15 years longer than the poorest. A national health insurance program funded from progressive taxes instead of premiums and out-of-pocket payments would shift the financing burden to those who can afford it, and improve the health of our nation.”
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“The Effects of Household Medical Expenditures on Income Inequality in the United States”by Andrea Christopher, M.D., M.P.H., David U. Himmelstein, M.D., Steffie Woolhandler, M.D., M.P.H., and Danny McCormick, M.D. American Journal of Public Health, published online ahead of print January 18, 2018.
Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 22,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.
By Eric T. Roberts, PhD; J. Michael McWilliams, MD, PhD; Laura A. Hatfield, PhD; Sule Gerovich, PhD; Michael E. Chernew, PhD; Lauren G. Gilstrap, MD; Ateev Mehrotra, MD, MPH
JAMA Internal Medicine, January 16, 2018
Importance
In 2014, the State of Maryland placed the majority of its hospitals under all-payer global budgets for inpatient, hospital outpatient, and emergency department care. Goals of the program included reducing unnecessary hospital utilization and encouraging greater use of primary care.
Objective
To compare changes in hospital and primary care use through the first 2 years of Maryland’s hospital global budget program among fee-for-service Medicare beneficiaries in Maryland vs matched control areas.
Design, Setting, and Participants
We matched 8 Maryland counties (94 967 beneficiaries) with hospitals in the program to 27 non-Maryland control counties (206 389 beneficiaries). Using difference-in-differences analysis, we compared changes in hospital and primary care use in Maryland vs the control counties from before (2009-2013) to after (2014-2015) the payment change, using 2 different assumptions. First, we assumed that preintervention differences between Maryland and the control counties would have remained constant past 2014 had Maryland not implemented global budgets (parallel trend assumption). Second, we assumed that differences in preintervention trends would have continued without the payment change (differential trend assumption).
Main Outcomes and Measures
Hospital stays (defined as admissions and observation stays); return hospital stays within 30 days of a prior hospital stay; emergency department visits that did not result in admission; price-standardized hospital outpatient department (HOPD) utilization; and visits with primary care physicians (overall and within 7 days of a hospital stay).
Results
We matched 8 Maryland counties with hospitals in the program (94 967 beneficiaries; 41.8% male; mean [SD] age, 72.3 [12.2] years) to 27 non-Maryland control counties (206 389 beneficiaries; 42.8% male; mean [SD] age, 71.7 [12.5] years). Assuming parallel trends, we estimated a differential change in Maryland of −0.47 annual hospital stays per 100 beneficiaries (95% CI, −1.65 to 0.72; P = .43) from the preintervention period (2009-2013) to 2015, but assuming differential trends, we estimated a differential change in Maryland of −1.24 stays per 100 beneficiaries (95% CI, −2.46 to −0.02; P = .047). Assuming parallel trends, we found a significant increase in primary care visits (+10.6 annual visits/100 beneficiaries; 95% CI, 4.6 to 16.6 annual visits/100 beneficiaries; P = .001), but assuming differential trends, we found no change (−0.8 visits/100 beneficiaries; 95% CI, −10.6 to 9.0 visits/100 beneficiaries; P = .87). Comparing estimates with both trend assumptions, we found no consistent changes in emergency department visits, return hospital stays, HOPD use, or posthospitalization primary care visits associated with Maryland’s program.
Conclusions and Relevance
We did not find consistent evidence that Maryland’s hospital global budget program was associated with reductions in hospital use or increases in primary care visits among fee-for-service Medicare beneficiaries after 2 years. Evaluations over longer periods should be pursued.
https://jamanetwork.com…
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By Don McCanne, M.D.
Making health care payment rates the same for all payers, public and private, and establishing global budgets for hospitals seem like reasonable steps toward establishing a single payer system. So how has Maryland done so far with this program?
The stated goals were to reduce unnecessary hospital utilization and to encourage greater use of primary care. But they “did not find consistent evidence that Maryland’s hospital global budget program was associated with reductions in hospital use or increases in primary care visits among fee-for-service Medicare beneficiaries after 2 years.” As is typical of unsuccessful policy studies, an accompanying editorial suggests that we should give the study five or ten years before we expect to see any transformation of the delivery system. Sure.
This has in common with other health policy studies the major defect that an isolated policy is studied within the background of our highly dysfunctional, fragmented, multipayer system. You cannot study a universal single payer system unless you have a universal single payer system to study (and they do exist elsewhere).
Right now we are seeing proposals such as a public option, a Medicare or Medicaid buy-in, or a change in the age of Medicare eligibility, all of which some hope eventually would lead to single payer. But when added to our current dysfunctional system, little benefit will be evident because the fundamental defects will remain extant. Each such step will reinforce the views of those who profess that single payer can’t work because our system will still be overpriced, too many will still be uninsured or underinsured, and patients will still be deprived of choices of their health care professionals and institutions.
Currently in California there is a proposal for a Medi-Cal Public Option as an incremental step to single payer. That seems to be so far off track that it constitutes a derailment of the Single Payer Express.
We need to end this nonsense of spoon-fed policy and move forward with comprehensive policy that we know works – a single payer national health program. Now. Full steam ahead.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
By Ed Weisbart, M.D.
STAT, Jan. 17, 2018
The Republicans are right. We should cut Medicare. And I know how: Keep Medicare’s funding for actual health care but eliminate bureaucratic waste, profits, and the expensive and preposterous ban on negotiating drug prices. In other words, get rid of Part C and Part D and absorb the extra features into traditional Medicare.
Strong majorities of Americans across the political spectrum agree that Medicare needs to negotiate the price of prescription drugs. Prices here are roughly double what patients in other countries pay for the same drugs. Over the next ten years, Medicare is projected to spend $1.5 trillion on prescription drugs. Clearly, negotiating drug prices would save a lot of money.
Medicare Advantage, formally known as Medicare Part C, was created as a way for the private insurance industry to help control the cost of Medicare. But instead of saving taxpayers money, these for-profit insurers successfully lobbied the federal government to pay them significantly more than would have been paid for comparable patients in “traditional” Medicare.
Although Advantage plans aren’t allowed to overtly exclude costly (read: unprofitable) patients, they have found ways to push high-cost patients back into traditional Medicare by charging high copayments for drugs and services that are mostly used by high-cost patients. For instance, the Advantage plans have raised copayments particularly quickly for ambulance services, home health care, partial hospitalization, and inpatient services. A new analysis shows that the resulting shift of high-cost Advantage patients to the traditional Medicare program saved the for-profit Advantage plans $5.2 billion in 2007-2009.
Advantage plans save additional money by limiting care. Compared to traditional Medicare enrollees, seniors on Advantage plans received 24 percent fewer diagnostic tests, 38 percent fewer flu shots, and 15 percent fewer colon cancer screening tests. That’s just not good medicine.
Because Medicare pays Advantage plans a higher premium for sicker seniors, Advantage plans have learned to cherry-pick healthier seniors and lemon-drop the sicker ones. For example, Medicare pays Advantage plans several thousand dollars extra for patients with heart failure. But insurers know that heart failure ranges from nearly undetectable (and inexpensive to care for) to overwhelming (and very expensive to care for). Insurers have become remarkably effective at attracting the undetectable and shunning the overwhelming. Witness the mobile echocardiogram units that provide free screening for heart failure, a strategy guaranteed to identify trivial — but reimbursable — disease.
And what is the “advantage” of throwing tax dollars at private insurers whose overhead averages 30 percent, compared to a bit over 3 percent for traditional Medicare?
Medicare Advantage insurers have learned how to maximize their payments from the federal government. They have learned to “upcode” — overestimating their members’ disease burden and justifying higher federal reimbursements — to the tune of $2 billion a year. Between upcoding and other schemes, Medicare Advantage plans are paid an average of 105 percent of what comparable patients would cost the traditional Medicare program.
Medicare Advantage is an increasingly popular choice among seniors, and now attracts more than 18 million members. The growth is easy to understand: These plans often come with richer benefit designs and reduced financial exposure for patients. But the trade-off is narrow networks of physicians and hospitals. More than one third of Advantage plans fail to include even a single National Cancer Institute center. None of the Advantage plan networks in the New York City area, for example, include Memorial Sloan Kettering Cancer Center.
Patients with short-term nursing home stays are nearly three times more likely to switch out of an Advantage plan and those with long-term nursing home stays are five times more likely. Twenty-seven percent of those leaving plans with relatively high disenrollment rates do so because of problems getting needed care; 41 percent leave because their preferred provider is not in the plan’s network. The sicker you are, and the more you actually need access to your choice of health care, the less advantage you see to an Advantage plan.
Medicare Advantage plans continue to grow in popularity, now attracting 31 percent of all Medicare beneficiaries. People make this choice because most Advantage plans offer reductions in copays and deductibles, along with enhanced benefits like membership in gym clubs or including a Medicare Part D pharmacy benefit. We could embed these modest features into traditional Medicare and still reap substantial savings for the national budget.
The arithmetic is easy, the benefits are clear, and the money is there. Take the profit motive out of Medicare to save billions. It’s just a matter of political will.
Dr. Ed Weisbart is a family physician and chair of the Missouri chapter of Physicians for a National Health Program.
By F. Douglas Stephenson, L.C.S.W., B.C.D.
The Gainesville (Fla.) Sun, January 17, 2018
In order to further sabotage and undermine quality health care insurance for all, President Donald Trump and the GOP proposed “association health insurance plans” that let small businesses band together and insure themselves or buy insurance as a group.
Association health plans have a bad track record over the past 10 years, with dozens of court cases and enforcement actions by federal and state officials. Many turn into criminal cases involving fraud, embezzlement, diversion of premiums and mismanagement, leaving employers and employees with millions of dollars in unpaid medical bills.
Association health plans are not required to provide essential health benefits like mental health, substance abuse treatment and drug coverage, and claim they are will become exempt from all state insurance laws under Trump’s executive order.
When toxic plans like this are approved, it’s clear that our health-insurance system is broken. Like a cracked pipe, money gushes into our health-care system but steadily leaks out. Money is siphoned into the advertising budgets of private-profit insurance companies and the army of corporate bureaucrats working to deny claims.
Even more dollars are soaked up by the pockets of insurance CEOs who have collectively earned $9.8 billion since the Affordable Care Act was passed in 2010. Nearly a third of all of our health-care dollars go to something other than health care.
Another example is the deceptive appeal of profitable “copper catastrophic” plans. They are stunningly inadequate plans that have very low premiums because their actuarial value is only a pathetic 50 percent, giving the illusion of health insurance coverage.
They cover an average of about half of health-care costs. For 2017, the deductible for these plans is $7,150. These plans will work great if you never get sick or have an accident.
Offering only deteriorating financial protection, especially those with larger deductibles, this downward trend can produce severe adverse consequences for the physical, mental and financial health of the insured. Because of the spartan nature of the newly proposed copper catastrophic plans, the adverse consequences can be anticipated to be even more severe.
This latest absurd plan shows once again the fallacy that we can take beneficial policies and detrimental policies and combine them into a reasonable compromise. Good policy for big insurance companies means bad policies for hapless patients and families.
Bad policies cannot be neutralized by political accommodations. Under a well-designed Medicare for all national insurance program, catastrophic plans like these would not exist. The sooner we get to single-payer health insurance, the better it will be for all of us — meanwhile, buyer beware!
PNHP Rhode Island President Dr. J. Mark Ryan appeared on “Portsmouth This Week” on YouTube on January 17, 2018. He spoke with host Doug Smith about the advantages of single-payer reform for patients, doctors, taxpayers, and the public at large.