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David Blumenthal on life expectancy and the American health care system

David Blumenthal on life expectancy and the American health care system

Drop in U.S. life expectancy is an ‘indictment of the American health care system’

By David Blumenthal
STAT, January 4, 2018

The economy may be growing and the stock market booming, but Americans are dying younger — living shorter lives than previous generations and dying earlier than their counterparts around the world.

It is easy to place the blame squarely on our nation’s opioid epidemic, but if we do that we miss seeing the abysmal new life expectancy data from the Centers for Disease Control and Prevention for what they are — an indictment of the American health care system.

At first glance, substance abuse would seem more a social and economic problem than one of health care, and there is no question that socioeconomics are a major player in causing the so-called deaths of despair associated with substance abuse.

But, we cannot let our health care system off too easily.

The epidemic of drug abuse and overdose deaths has not affected other developed countries the way it has ours. With 4 percent of the world’s population, the U.S. accounts for 27 percent of the world’s overdose deaths. The European Union, with a population of 507 million, reported 6,800 overdose deaths in 2014, compared to 47,055 in the U.S.

Why has it been it so much worse here? One reason is that the U.S. doesn’t have strong social safety nets that buffer the effects of recessions and job loss as other nations do. Another reason is the way the U.S. health care system functions.

The profitability of drugs in the United States, a result of sky-high and skyrocketing drug prices, has made the aggressive marketing and sale of new prescription opioids an almost irresistible temptation for American pharmaceutical companies.

The opioid epidemic is not the only area in which the U.S. health system lags. In 2015, life expectancy at age 65 in the U.S. ranked 26th among the 37 members of the Organization for Economic Cooperation and Development, which includes most developed nations. It is widely accepted that the accessibility and quality of medical services strongly affect life expectancy among the elderly and elderly Americans fall behind their counterparts overseas when it comes to being able to get and afford the health care they need.

This may seem surprising given that Americans over 65 enjoy universal health insurance coverage under Medicare. But as valuable as Medicare is, it provides far less protection against the cost of illness, and far less access to services, than do most other Western countries. In a recent cross-national survey, U.S. seniors were more likely to report having three or more chronic illnesses than their counterparts in 10 other high-income countries. At the same time, they were four times more likely than seniors in countries such as Norway and England to skip care because of costs. Medicare, it turns out, is not very good insurance compared to what’s available in most of the western world.

We are the wealthiest nation on earth, but far from the healthiest, and things are getting worse, not better. The CDC report is yet another call to action for fundamental health system change that should include, among other things, reforming our pharmaceutical markets and making good health insurance available to all Americans. These need to be urgent priorities in 2018 for a government that should care as much about the health of Americans as their wealth.

David Blumenthal, M.D., is president of the Commonwealth Fund.

https://www.statnews.com…

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Comment:

By Don McCanne, M.D.

The excerpts from David Blumenthal’s article speak for themselves. Life expectancy in the United States is declining, partly due to the opioid epidemic, but deficiencies in our health care system and how we pay for it certainly contribute to the poor performance.

That includes our Medicare program. As Blumenthal states, “Medicare, it turns out, is not very good insurance compared to what’s available in most of the western world.”

So don’t be too urbane when speaking of Medicare for all, and don’t ever omit “improved,” as in Improved Medicare for All.

Now that “single payer” has become widely accepted terminology, don’t hesitate to use that term in advancing the PNHP golden standard of single payer:

https://pnhp.org/nhi

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Trump is right: Negotiate for lower drug prices

By Rob Stone, M.D., Chris Stack, M.D., and Fran Quigley
Indianapolis Star, Jan. 4, 2018

All Hoosiers have seen the headlines about drug price increases, and too many of us see the struggle first-hand. A vial of insulin can cost a person with diabetes 10 times as much as it did in the late 1990s. The price of an EpiPen has risen 450%. Some new treatments for cancer and other diseases are priced as high as $750,000, even when taxpayers paid for the most critical research to develop those drugs.

One of every five Americans report either skipping medicine doses or failing to fill prescriptions each year due to cost. As physicians and a lawyer working on health-care access in Indiana, we have talked with people who have suffered strokes after they could not afford to fill their doctors’ prescription for blood pressure medicines. We have talked with mothers who have lost adult children who had been forced to ration their insulin.

Americans are outraged, and rightly so. In poll after poll, strong majorities of people across different political parties agree that our government needs to do more to rein in drug pricing abuse. President Trump has said that pharmaceutical companies are “getting away with murder,”  and promised that the U.S. government would start negotiating down the price we pay for our medicines.

Negotiation is the right prescription for curing out-of-control drug price increases. Thanks to benefitting from taxpayer-supported research and government-granted monopolies, the pharmaceutical industry enjoys some of the highest profit margins in modern history, even after spending more of its revenue on advertising than on research. That is why President Trump and a whopping 92% of Americans support allowing our Medicare program to negotiate down drug prices.

Negotiation would make a big difference, since other nations’ use of their bulk-purchaser negotiating power is the key reason why medicines cost far less overseas than they do here.

A recent study by researchers at Harvard Medical School and the University of British Columbia found that the countries that do the best job of keeping medicines prices affordable are the ones that have adopted single-payer health systems. When the government is the one paying for all medicines, it possesses the negotiating power to control costs.

The widespread frustration over our U.S. health-care system’s tragic flaws, where we pay the world’s highest costs for very poor coverage and health outcomes, is building momentum for a single-payer system here. Over half of Americans support single-payer, and more than 100 members of Congress have signed on in support of Medicare for All legislation. Businesses of all sizes are struggling with health-care costs, leading leaders like Warren Buffet to support a single-payer system.

A single-payer system will allow all of us to enjoy the security of health-care coverage even when we change or lose jobs, and no matter what our pre-existing conditions. It will save money for taxpayers and patients alike. And there is no better argument for single-payer than the guarantee that Hoosiers will no longer go without medicines due to unreasonable prices.

Dr. Rob Stone is the director of Hoosiers for a Commonsense Health Plan. Dr. Chris Stack and Fran Quigley are with People of Faith for Access to Medicines.

https://www.indystar.com…

NHS strains under flu epidemic

PM sorry for NHS chaos as thousands queue in ambulances

By Chris Smyth
The Times, January 4, 2018

Theresa May has apologised to patients hit by winter chaos in the NHS as figures showed that thousands of patients who arrived at hospital by ambulance struggled to get into A&E because hospitals were so full.

Long waits for ambulances to hand over patients doubled in a week as flu increased over Christmas.

NHS leaders say that so many patients arriving in A&E need admitting that they are running out of beds. Hospitals were well above the 85 per cent bed occupancy level considered safe, with a national average of 91.7 per cent last week.

Professor Derek Alderson, president of the Royal College of Surgeons, said: “That many hospitals have full wards, even after cancelling operations, shows that we simply don’t have sufficient numbers of beds in English hospitals.”

Sir Vince Cable, the Liberal Democrat leader, said: “Every day seems to bring yet more bad news about the state of the health service. The blame lies firmly at the government’s door. Ministers refused to provide the funding top NHS officials said was necessary and now patients are paying the price.”

Professor John Appleby of the Nuffield Trust think tank agreed that the NHS simply did not have enough money or staff to cope. “The sobering reality is that winter for the NHS has hardly started,” he said. “The service is likely to face another three months of exceptional need for care, and it is starting from a precarious position. There is an underlying mismatch between the capacity to deliver care and the level of care patients require.”

The NHS 111 urgent care helpline had its busiest week on record as almost half a million patients called for advice over the Christmas period, resulting in 58,000 ambulances being sent out.

https://www.thetimes.co.uk…

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Socialized medicine update: Britain cancels 50,000 surgeries as NHS hospitals face winter crisis

By Philip Klein
Washington Examiner, January 4, 2018

American liberals such as Sen. Bernie Sanders like to tout socialized healthcare systems such as Britain’s for spending less and covering everybody, but here’s a reality check you shouldn’t expect to hear in any of his fiery speeches: the British government-run National Health Service has abruptly canceled 50,000 nonemergency surgeries due to overcrowding at hospitals this winter.

Do we think Americans are going to stand for a system in which government officials cancel surgeries en masse based on bureaucratic judgments about what is urgent and go on TV to offer inadequate apologies?

http://www.washingtonexaminer.com…

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Comment:

By Don McCanne, M.D.

It is expected to be a bad year for influenza, and the United Kingdom is already experiencing an overload of its health care delivery system. Because of the overload, 50,000 nonemergency surgeries are being postponed. What lessons are there for the United States?

The capacity of the system is crucial, and that requires balance. If there is excess capacity then personnel and facilities are underused and that wastes money. Furthermore, excess capacity results in overutilization of services that may be of little value. When capacity is at the right balance, services of little or no value tend to be crowded out, while essential services are readily accommodated.

When capacity is inadequate, excessive queues for elective services tend to form, and acutely ill patients may be subjected to crowded conditions such as being admitted to hospital corridors, or, worse, being held in ambulances for hours. Though hospitals should not deliberately create excess capacity, they do need to have plans for surge capacity such as with epidemics or major catastrophes. Triage becomes even more important during times that the system is stressed.

At such times, postponing elective procedures in order to handle the surge in urgent problems may reflect appropriate planning. But if the system is running near capacity at times of less urgent demand, then the capacity may be deficient. The same can be said if excessive queues persist throughout the year, including times when no reasons for surges exist.

It appears that the conservative and neoliberal governments of recent decades may have underfunded the NHS resulting in deficient capacity. Certainly the opponents of single payer reform in the United States are going to attack the NHS for cancelling surgeries (see Philip Klein’s comment, above). Underfunding is a vulnerability of publicly financed systems during inevitable intervals of conservative control. But the counter to this is the popularity of public programs that drives political support for them.

Lessons? Support public planning of a balanced capacity in the system. Support public stewards who will fund the system adequately. Counter the naysayers by spreading the truth about a well designed single payer system that would work well for all of us in the United States.

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Another gimmick to overpay private Medicare Advantage plans

2019 Medicare Advantage Part I Advance Notice – Risk Adjustment

CMS.gov, December 27, 2017

Today, the Centers for Medicare & Medicaid Services (CMS) released Part I of the 2019 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part D Payment Policies (the Advance Notice), which contains key information about proposed updates to the Part C Risk Adjustment Model and the use of encounter data.

2019 Part C Risk Adjustment Model proposal

The 21st Century Cures Act amended the Social Security Act by, in part, requiring CMS to make improvements to risk adjustment for 2019 and subsequent years. In response to these requirements, we are proposing changes to the CMS-HCC Risk Adjustment model that is used to pay for aged and disabled beneficiaries enrolled in Medicare Advantage plans. These proposals reflect changes to risk adjustment required by the 21st Century Cures Act, including an evaluation of adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model and making adjustments to take into account the number of conditions an individual beneficiary may have, as well as a variety of additional technical updates.

For 2019, CMS is proposing a model that includes additional mental health, substance use disorder, and chronic kidney disease conditions in the risk adjustment model.

With respect to taking into account the number of conditions an individual beneficiary has, in Part 1 of the Advance Notice we describe a proposed new risk adjustment model and discuss an alternative model. The model we are proposing – the “Payment Condition Count model” – takes into account the number of conditions that a beneficiary has, only among the conditions that are included in the payment model. The model discussed as an alternative – the “All Condition Count model” – takes into account all conditions that a beneficiary has, including both those in the payment model and those not in the model.

Overall, while the experience of individual plans would vary, the Payment Condition Count model is projected to increase MA risk scores by 1.1%, while the All Condition Count model would decrease MA risk scores by -0.28%. Under the Payment Condition Count model, the change in MA contracts’ risk scores is generally positive and less varied than the All Condition Count model. The change in MA contracts’ risk scores under the All Condition Count model is more varied, with both negative and positive changes.

https://www.cms.gov…

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CMS.gov

NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties

SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2019 for the Medicare Advantage (MA) CMS-HCC Risk Adjustment Model

https://www.cms.gov…

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CMS floats Medicare Advantage payment tweaks that would boost insurers’ risk scores

By Leslie Small
Fierce Healthcare, January 2, 2018

Over the holidays, Medicare Advantage insurers got a gift from the federal government.

That gift arrived on Dec. 27, when the Centers for Medicare & Medicaid Services released part one (PDF) of its 2019 advance notice of changes to MA capitation rates and Part D payment policies.

To comply with the Cures Act, CMS is proposing an MA risk adjustment model that includes additional mental health, substance use disorder and chronic kidney disease conditions. The agency uses risk adjustment models to adjust payments based on the characteristics and health conditions of each plan’s enrollees, with the goal of preventing insurers from enrolling only the healthiest patients.

The agency is also proposing a “Payment Condition Count model” for risk adjustment, which takes into account the number of conditions that a beneficiary has—but only among the conditions that are included in the payment model. This model is projected to increase MA risk scores by 1.1%, meaning more government reimbursement would be flowing toward health plans.

By comparison, the alternative “All Condition Count model”—which takes into account all conditions that a beneficiary has—would have decreased MA risk scores by 0.28%, CMS said.

The proposed methodological change to risk adjustment is “more industry friendly than the status quo,” Leerink Partners analysis Ana Gupte wrote in a research note (PDF). It’s the most positive for Humana, UnitedHealth and WellCare, she said, but also a good sign for the sector as a whole.

Such changes are consistent with the MA-friendly stance of the Trump administration.

https://www.fiercehealthcare.com…

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Comment:

By Don McCanne, M.D.

The private Medicare Advantage plans have continued to be overpaid deliberately. Each year the administration, whether Democratic or Republican, uses quirky arcane rules to ensure an adequate revenue buffer so that private insurers can compete favorably with the traditional Medicare program by offering lower premiums and cost sharing and expanded benefits. This year’s gimmick is to use a “Payment Condition Count model” instead of an “All Condition Count model” which then increases Medicare Advantage risk scores by 1.1% and thus pads the margins for the private plans.

For those who need a reminder, this is intended to privatize Medicare, converting it to a premium support (voucher) model. Once a critical mass has enrolled in private plans, Congress will gradually reduce the relative value of the voucher-equivalent, reducing the government component of the funding of Medicare by shifting more costs to the Medicare beneficiaries.

It’s working. Medicare Advantage enrollment has increased each year and was at 33% as of 2017 (19 million enrollees). With continued coddling by Congress and the administration, we can anticipate further increases. The current House leadership now wishes to accelerate this change by reducing government expenditures in the traditional Medicare program (“we can’t afford it,” especially after the tax cuts).

Although we describe their sequential innovative chicanery each year, nobody seems to get excited about it. As disgusting as the analogy is, we seem to be the proverbial frog in the water being heated over the stove. Get out your health care justice thermometers or traditional Medicare will be cooked before we see the pot come to a boil.

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It’s the prices, but why are they high?

Why the U.S. Spends So Much More Than Other Nations on Health Care

By Austin Frakt and Aaron E. Carroll
The New York Times, January 2, 2018

The United States spends almost twice as much on health care, as a percentage of its economy, as other advanced industrialized countries — totaling $3.3 trillion, or 17.9 percent of gross domestic product in 2016.

But a few decades ago American health care spending was much closer to that of peer nations.

What happened?

A large part of the answer can be found in the title of a 2003 paper in Health Affairs by the  Princeton University health economist Uwe Reinhardt: “It’s the prices, stupid.”

The study, also written by Gerard Anderson, Peter Hussey and Varduhi Petrosyan, found that  people in the United States typically use about the same amount of health care as people  in other wealthy countries do, but pay a lot more for it.

Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute, studies how health systems from various countries compare in terms of prices and health care use. “What was true in 2003 remains so today,” he said. “The U.S. just isn’t that different from other developed countries in how much health care we use. It is very different in how much we pay for it.”

Did we do more for patients in each health visit or inpatient stay? Did we charge more? The JAMA study found that, together, these accounted for 63 percent of the increase in spending from 1996 to 2013. In other words, most of the explanation for American health spending growth — and why it has pulled away from health spending in other countries — is that more is done for patients during hospital stays and doctor visits, they’re charged more per service, or both.

Though the JAMA study could not separate care intensity and price, other research blames prices more.

There are ways to combat high health care prices. One is an all-payer system, like that seen in Maryland. This regulates prices so that all insurers and public programs pay the same amount. A single-payer system could also regulate prices. If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States.

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NYT Reader Comment:

By Don McCanne, M.D.

Our very high per capita health care spending certainly has been associated with high prices. So why hasn’t market competition (competing private health plans) or government price controls (Medicare and Medicaid) controlled prices? Simply it is what is built into those prices that is unique in the United States – our profoundly wasteful administrative excesses. Ratcheting down prices either through the market or through regulation would not change our fragmented, dysfunctional financing infrastructure with all of its waste and would result in intolerable underfunding of the actual health care delivery system.

Frakt and Carroll suggest that an all-payer system might work, but that would fall short since most of the dysfunctions of the current system would remain in place. On the other hand, a well-designed single payer system (an improved Medicare for all) would recover close to half a trillion dollars that is wasted on administration and other excesses.

It is likely that prices would be reduced for health care professionals and facilities, but only by the savings in administrative excesses that would no longer be required. The net income for the health care delivery system would remain about the same.

It has been about fifteen years since Anderson, Reinhardt and their colleagues told us, “It’s the prices, stupid.” We really are pretty stupid to have wasted trillions of dollars in administrative excesses since that time.

https://www.nytimes.com…

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The Leap to Single-Payer: What Taiwan Can Teach

How one nation transformed a health care system. Can America do big things anymore?

By Aaron E. Carroll and Austin Frakt
New York Times, December 26, 2017

Taiwan is proof that a country can make a swift and huge change to its health care system, even in the modern day.

The United States, in part because of political stalemate, in part because it has been hemmed in by its history, has been unable to be as bold.

Singapore, which we wrote about in October, tinkers with its health care system all the time. Taiwan, in contrast, revamped its top to bottom.

Less than 25 years ago, Taiwan had a patchwork system that included insurance provided for those who worked privately or for the government, or for trade associations involving farmers or fishermen. Out-of-pocket payments were high, and physicians practiced independently. In March 1995, all that changed.

After talking to experts from all over the world, Taiwan chose William Hsiao, a professor of economics at the Harvard T.H. Chan School of Public Health, to lead a task force to design a new system. Uwe Reinhardt, a longtime Princeton professor, also contributed significantly to the effort. (Mr. Reinhardt, who died last month, was a panelist on an Upshot article comparing international health systems in a tournament format.) The task force studied countries like the United States, Britain, France, Canada, Germany and Japan.

In the end, Taiwan chose to adopt a single-payer system like that found in Medicare or in Canada, not a government-run system like Britain’s. At first, things did not go as well as hoped. Although the country had been planning the change for years, it occurred quite quickly after democracy was established in the early 1990s. The system, including providers and hospitals, was caught somewhat off guard, and many felt that they had not been adequately prepared. The public, however, was much happier about the change.

Today, most hospitals in Taiwan remain privately owned, mostly nonprofit. Most physicians are still either salaried or self-employed in practices.

The health insurance Taiwan provides is comprehensive. Both inpatient and outpatient care are covered, as well as dental care, over-the-counter drugs and traditional Chinese medicine. It’s much more thorough than Medicare is in the United States.

Access is also quite impressive. Patients can choose from pretty much any provider or therapy. Wait times are short, and patients can go straight to specialty care without a referral.

Premiums are paid for by the government, employers and employees. The share paid by each depends on income, with the poor paying a much smaller percentage than the wealthy.

Taiwan’s cost of health care rose faster than inflation, as it has in other countries. In 2001, co-payments for care were increased, and in 2002, they went up again, along with premiums. In those years, the government also began to reduce reimbursement to providers after a “reasonable” number of patients was seen. It also began to pay less for drugs. Finally, it began to institute global budgets — caps on the total amount paid for all care — in the hope of squeezing providers into becoming more efficient.

Relative to the United States and some other countries, Taiwan devotes less of its economy to health care. In the early 2000s, it was spending 5.4 percent of G.D.P., and by 2014 that number had risen to 6.2 percent. By comparison, countries in the Organization for Economic Cooperation and Development spend on average more than 9 percent of G.D.P. on health care, and the United States spends about twice that.

After the most recent premium increase in 2010 (only the second in Taiwan’s history), the system began to run surpluses.
 
This is not to say the system is perfect. Taiwan has a growing physician shortage, and physicians complain about being paid too little to work too hard (although doctors in nearly every system complain about that). Taiwan has an aging population and a low birthrate, which will push the total costs of care upward with a smaller base from which to collect tax revenue.

Taiwan has done a great job at treating many communicable diseases, but more chronic conditions are on the rise. These include cancer and cardiovascular and cerebrovascular disease, all of which are expensive to treat.

The health system’s quality could also be better. Although O.E.C.D. data aren’t available for the usual comparisons, Taiwan’s internal data show that it has a lot of room for improvement, especially relating to cancer and many aspects of primary care. Taiwan could, perhaps, fix some of this by spending more.

As we showed in our battle of the health care systems, though, complaints can be made about every system, and the one in the United States is certainly no exception. For a country that spends relatively little on health care, Taiwan is accomplishing quite a lot.

Comparing Taiwan and the United States may appear to be like comparing apples and aardvarks. One is geographically small, with only 23 million citizens, while the other is vast and home to well above 300 million. But Taiwan is larger than most states, and a number of states — including Vermont, Colorado and California — have made pushes for single-payer systems in the last few years. These have not succeeded, however, perhaps because there is less tolerance for disruption in the United States than the Taiwanese were willing to accept.

Regardless of which health system you might prefer, Taiwan’s ambition showed what’s possible. It took five years of planning and two years of legislative efforts to accomplish its transformation. That’s less time than the United States has spent fighting over the Affordable Care Act, with much less to show for it.

Aaron E. Carroll is a professor of pediatrics at Indiana University School of Medicine who blogs on health research and policy at The Incidental Economist and makes videos at Healthcare Triage.

Austin Frakt is director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health. He blogs at The Incidental Economist.

https://www.nytimes.com…

The most important qotd message this year

Whither 2018...and beyond?

By Don McCanne, M.D.

When Ronald Reagan became president the Dow Jones Industrial average was about 800. Now the Reagan era has brought it to almost 25,000. So the nation’s optimism is resting on a bubble; you can bet your bitcoins on that.

We have problems, beginning with the most expensive and dysfunctional health care financing system of all wealthy nations (what this blog is all about). Although that is a multi-trillion dollar problem, it is only but a small portion of all of our nation’s and the world’s ills.

Recite in your mind some of the many problems we have. You realize that most of them have reasonable solutions – solutions that most of us support. So why are we not moving forward to address them?  In yesterday’s message, Benjamin Page and Martin Gilens described what has gone wrong and what we can do about it. Basically we need better public policies along with government officials dedicated to carrying them out.

What is holding us back? We are a Democracy aren’t we? Well, that seems to be a problem. Although we have the right to vote, most of us are unable to influence what actually happens in government. In their classic 2014 paper in Perspectives on Politics, Gilens and Page showed us that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”

What we lack is policy responsiveness to ordinary citizens – Page and Gilens’ definition of democracy. What we need is for all of us who care to join together in a social movement for Democracy. Only then can we hope to make progress in combating the other ills of our society (including correcting the deficiencies in our expensive but dysfunctional health care system).

As you see, for the last message of the year, I decided to repeat yesterday’s theme – the most important message I’ve sent out all year. Read “Democracy in America?” and then let’s all join together and act on it.

Benjamin I. Page and Martin Gilens, “Democracy in America? What Has Gone Wrong and What We Can Do About It”
The University of Chicago Press, November 2017
http://press.uchicago.edu…

Quote of the Day on “Democracy in America?”
December 28, 2017
https://pnhp.org…

Martin Gilens and Benjamin I. Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens”
Perspectives on Politics, September 2014
https://www.cambridge.org… (page has link to full article)

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Page and Gilens: Democracy in America?

What Has Gone Wrong and What We Can Do About It

By Benjamin I. Page and Martin Gilens
The University of Chicago Press, November 2017

From the Introduction

Today the United States faces a number of daunting problems. Economic inequality has reached levels not seen for a hundred years. While the wealthy keep piling up riches, many Americans are hurting from job losses, low wages, high health-care costs, and deteriorating public services. Whole communities have been devastated by factory closings. Our public schools are neglected. Our highways and bridges are in disrepair.

Well-designed government policies could help deal with these problems. Large majorities of Americans favor specific measures that would be helpful. Yet our national government often appears to ignore the wants and needs of its citizens. It pays more attention to organized interests than to ordinary Americans, and it gets bogged down in gridlock and inaction.

In this book we argue that gridlock and inaction in Washington result from two main causes: clashes between our two sharply divided political parties and obstructive actions by corporations, interest groups, and wealthy individuals. The many “veto points” in our complex political system (that is, the many opportunities for one or another political actor to thwart policy change) are used to prevent the enactment of policies that most Americans want.

The nonresponsiveness and dysfunction of government are closely related to undemocratic features of our political system.

It follows that our problems can be more effectively addressed if we reform our political system to achieve more democracy: more equal opportunity for all citizens to shape what their government does and policies that better address the needs of all Americans.

Why Democracy

We define democracy as policy responsiveness to ordinary citizens – that is, popular control of government. Or simply “majority rule.”

How This Book Unfolds

In the next chapter we note certain patterns in American history, from Alexis de Tocgueville’s 1830s onward. Democracy has tended to flourish in times of relative economic equality but has withered when there are big gaps between rich and poor.

In part 2 of the book we examine more closely what has gone wrong and what is obstructing democratic responsiveness now.

Chapter 3 shows how undemocratic the United States is today. Ordinary citizens have little or no influence on public policy, while affluent and wealthy Americans and organized interest groups – especially business groups – often get their way.

In chapter 4 we examine just how much political clout wealthy Americans have (a great deal), what techniques they use to exercise it, and what sorts of government policies they want and get.

Chapter 5 documents the substantial political influence of organized interest groups and explains how they exercise it. Corporations and business associations do particularly well, while “mass-based” groups have relatively little clout.

Chapter 6 explores the vexing problems of highly polarized political parties, gridlock, and policy inaction.

We then turn, in part 3, to the question of what sorts of political reforms might be effective for making government politics more responsive to ordinary citizens.

Chapter 7 discusses a number of “equal voice” reforms that would move all citizens toward equal political influence. Campaign finance regulation – or (even without such regulation) public funding – could greatly reduce the power of private political money. Other reforms could curtail the impact of interest groups. Still others could encourage voting by citizens who are currently not well represented in the electorate – especially lower-income people and racial and ethnic minorities.

Chapter 8 considers how to overcome policy gridlock and, more generally, how to make our political institutions more democratic. It notes undemocratic features of Congress that our legislators could easily improve if they felt sufficient pressure to do so. It also discusses undemocratic electoral arrangements that will be harder – but far from impossible – to change. And it mentions certain particularly difficult but important-to-address problems, including the extremely unrepresentative, rural-heavy nature of the Senate, and the tendency of the Supreme Court to overturn (without, in our opinion, sound justification) certain policies backed by large majorities of Americans.

Part 4, the final section of the book, addresses the difficult question of whether and how major democratic reforms can actually be enacted. Big obstacles stand in the way, especially the need to persuade, pressure, or replace officials who have been elected in an undemocratic system and would be happy to keep it that way. Major changes will likely take a long time and a lot of work. But we are optimistic that they can be achieved.

Chapter 9 addresses the idea of a special movement for Democracy. Some important improvements can be accomplished through simple changes in rules or laws that policy makers might be pushed to adopt through conventional political pressure. Ultimately, however, we believe that the most important major reforms can probably be won only by means of something new: a large-scale, long-term social movement for Democracy. The chapter draws lessons from past social movements – especially the Populists, the Progressives, the labor movement, and the civil rights movement – to suggest what sorts of strategies and tactics might lead to success. And it points to groups that are already beginning to work together toward democratic reforms and might help form the core of a Democracy movement.

Chapter 10 highlights democratic reforms that are currently being achieved on the state and local level. By building on these efforts, we believe that that a successful social movement for more Democracy can eventually transform America, enhancing both the quality of our politics and the quality of our lives.

http://press.uchicago.edu…

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Comment:

By Don McCanne, M.D.

It is imperative that all caring Americans join together in a social movement for Democracy. In “Democracy in America?” Benjamin Page and Martin Gilens explain why and how. It will be difficult, but we must do it.

Read this book. Then act! Inertia is no longer an option.

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Obamacare sells well in Trump states

More than 4 in 5 enrolled in Obamacare are in Trump states

CBS News, December 26, 2017

An Associated Press analysis of new figures from the government found that 7.3 million of the 8.8 million consumers signed up so far for next year come from states Trump won in the 2016 presidential election.

“There’s politics, and then there’s taking care of yourself and your family,” said analyst Chris Sloan of the consulting firm Avalere Health. “You can have political views about a program like the Affordable Care Act, but when you get an opportunity to get subsidized health insurance for you and your family … politics is a distant consideration.”

https://www.cbsnews.com…

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Donald J. Trump (@realDonaldTrump)

Twitter, December 26, 2017

Based on the fact that the very unfair and unpopular Individual Mandate has been terminated as part of our Tax Cut Bill, which essentially Repeals (over time) ObamaCare, the Democrats & Republicans will eventually come together and develop a great new HealthCare plan!

https://twitter.com/realDonaldTrump

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Comment:

By Don McCanne, M.D.

Over four-fifths of those enrolling in plans offered though the ACA exchanges come from states that supported Donald Trump in the presidential election after he campaigned on repealing Obamacare. Before passing judgment on these people, keep in mind that many were looking forward to the promised replacement plans. When it turned out that the replacement plans were a hollow promise, the subsidized plans offered through the exchanges were a much better choice than remaining uninsured.

President Trump now says, “…the Democrats & Republicans will eventually come together and develop a great new HealthCare plan!” Replacement is still the goal for all but the libertarian ideologues.

And what would that new plan be? The majority support a national health program. Very few decline Medicare once they become eligible for it, though it could stand some improvements. The logical “great new HealthCare plan” would be a well designed single payer program – an improved Medicare that covered everyone.

Will the current Democrats and Republicans in Congress bring it to us? If they don’t, we should reject and replace them with politicians who will.

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US citizens worry most about health care

By Emily Swanson and Ricardo Alsonso-Zaldivar, Associated Press
The Christian Science Monitor, December 21, 2017

As President Trump completes his first year in office, Americans are increasingly concerned about health care, and their faith that government can fix it has fallen.

A new poll by The Associated Press-NORC Center for Public Affairs Research finds that 48 percent named health care as a top problem for the government to focus on in the next year, up 17 points in the past two years.

The poll allows Americans to name up to five priorities and found a wide range of top concerns, including taxes, immigration, and the environment. But aside from health care, no single issue was named by more than 31 percent.

And 7 in 10 of those who named health care as a top problem said they had little to no confidence that government can improve matters. The public was less pessimistic in last year’s edition of the poll, when just over half said they lacked confidence in the problem-solving ability of lawmakers and government institutions.

Rumblings of discontent have political repercussions for next year’s midterm elections and the presidential contest in 2020, said Robert Blendon, a professor at the Harvard T.H. Chan School of Public Health, who follows opinion trends on health care.

“It’s the issue that won’t go away,” said Professor Blendon. “Given the news cycle, taxes should be first, the economy should be second, and this health care thing should be buried.”

https://www.csmonitor.com…

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New Year, Same Priorities: The Public’s Agenda for 2018

The Associated Press-NORC Center for Public Affairs Research
Interviews: 11/30-12/4/2017

Q31. Thinking about the problems facing the United States and the world today, which problems would you like the government to be working on in the year 2018? Please list up to 5 problems. (Open-ended question)

48% – Health care (all)
31% – Taxes/tax reform
27% – Immigration/border wall/DACA
18% – Environment/climate change
17% – Education
15% – Racism/racial inequality/racial issues
15% – Trump
15% – Economy, general

Q32. For each of these problems that you mentioned, how much effort would you like the federal government to devote to solving this problem in the year 2018?

Health care (all)
81% – A lot of effort/ great deal of effort
10% – A moderate amount of effort
2% – No effort/only a little effort

Q33. How confident are you in the ability of the federal government to make progress on this problem in 2018?

Health care (all)
6% – Very/extremely confident
24% – Moderately confident
72% – Not at all/slightly confident

http://www.apnorc.org…

AP-NORC Report:
http://apnorc.org…

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Comment:

By Don McCanne, M.D.

This poll was taken in the first week of December – a time when there was intense coverage of tax legislation. Yet in an open-ended question about problems that the government should be working on in 2018, heath care was far and away the greatest concern of Americans represented in this poll, up 17 points in the past two years, in spite of the implementation of the Affordable Care Act.

Four-fifths would like to see the government devote a lot or a great deal of effort to solving this problem in 2018. Yet only seven percent are confident in the ability of the federal government to make progress on health care.

Americans are very concerned about our health care system; they want something done about it, and they want it done now. Yet they are not at all confident that the government can make progress on reform.

If there ever was a time to change the government (changing the agenda of the current actors, or replace them), that time is now. Join in the groundswell of citizen action to bring us Democracy in America.

(Coming soon, a brief review of “Democracy in America?” by Benjamin Page and Martin Gilens.)

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Medicare Advantage plans using benchmarks and rebates to further game the system

Do Medicare Advantage Plans Minimize Costs? Investigating the Relationship Between Benchmarks, Costs, and Rebates

By Stephen Zuckerman, Laura Skopec, Stuart Guterman
The Commonwealth Fund, December 21, 2017

Abstract

Issue: Medicare Advantage (MA), the program that allows people to receive their Medicare benefits through private health plans, uses a benchmark-and-bidding system to induce plans to provide benefits at lower costs. However, prior research suggests medical costs, profits, and other plan costs are not as low under this system as they might otherwise be.

Goal: To examine how well the current system encourages MA plans to bid their lowest cost by examining the relationship between costs and bonuses (rebates) and the benchmarks Medicare uses in determining plan payments.

Methods: Regression analysis using 2015 data for HMO and local PPO plans.

Findings: Costs and rebates are higher for MA plans in areas with higher benchmarks, and plan costs vary less than benchmarks do. A one-dollar increase in benchmarks is associated with 32-cent-higher plan costs and a 52-cent-higher rebate, even when controlling for market and plan factors that can affect costs. This suggests the current benchmark-and-bidding system allows plans to bid higher than local input prices and other market conditions would seem to warrant.

Conclusion: To incentivize MA plans to maximize efficiency and minimize costs, Medicare could change the way benchmarks are set or used.

From the Discussion

Prior to the Affordable Care Act, research indicated that Medicare Advantage plan costs, as reflected in plan bids, were not as low as they might have been, in part because of overly generous benchmarks. This study indicates that, after the ACA lowered MA benchmarks, plans in areas with high benchmarks have continued to exhibit their market power through costs that are higher than those for plans in areas with low benchmarks (holding input prices and other factors constant).

MA plans also receive higher rebates in regions where benchmarks are high. It appears that plans use some of the additional revenue resulting from these high benchmarks to provide an even greater level of benefits or reduced cost-sharing to attract enrollees compared to what plans in other areas provide. (Plans receive between 50 percent and 70 percent of the difference between their bid and the benchmark as a rebate if their bid is lower than the benchmark. Plans must, by law, use rebates to provide supplemental benefits or lower premiums to enrollees, less a portion to cover administrative costs and profits.) Overall, for each one-dollar difference in benchmarks, we find that plan costs (including profits) are 32 cents higher and rebates 52 cents higher. Thus, high benchmarks allow plans to be less efficient than they might be otherwise. That is because they can still earn sufficient rebates to fund the extra benefits that attract enrollees, even after controlling for plan cost determinants such as beneficiary health risks, input prices, plan type, plan quality, and MA market concentration. Clearly, the MA bidding system is not fostering a highly competitive Medicare Advantage market, and costs to the Medicare program could likely be lower with more robust competition.

MA plans may continue to capture some of the variation in benchmarks as extra revenue — above and beyond factors that would justifiably drive cost differences — without passing along all potential gains to beneficiaries in the form of extra benefits or to the Medicare program in the form of savings.

http://www.commonwealthfund.org…

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Comment:

By Don McCanne, M.D.

This is yet one more study that shows that the taxpayers are paying the private Medicare Advantage plans too much – as the authors state, more than they would be paid if this were a truly competitive market. Even the rebates, which are to be used to increase benefits, are also used to increase payment for the excessive administrative services that they are selling us, and, egregiously, to increase profits. No wonder that the private insurers continue to expand their participation in the Medicare Advantage markets.

This, of course, fits in with Paul Ryan’s agenda to shift to a premium support (voucher) model for Medicare. Overpay the plans so they can displace the traditional Medicare program and then ratchet down the value of the premium support voucher. That will shift ever more of the costs of health care onto the backs of the Medicare beneficiaries. That’s unfortunate, but with the tax legislation signed by President Trump today the budget deficit will be out of control and we will have no other choice, according to Ryan.

Bah! Humbug! We do have a much better choice. Improve the traditional Medicare program and then expand it to cover everyone. And paying for it? The new tax legislation has created a massive amount of untapped reserves. We will have no choice but to make use of those funds to fill the gap left by those workers who cannot afford the taxes that would be required to pay a full, equally divided portion of our national health expenditures. In this Holiday Season we should give thanks in advance to those who are wealthy enough to help ensure that each of us has the health care that we need.

Happy Holidays!

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