PNHP

Dr. Samuel Dickman on MSNBC

Dr. Samuel Dickman on MSNBC

Reproductive health researcher and Planned Parenthood of Montana Chief Medical Officer Dr. Samuel Dickman appeared on “The Katie Phang Show” on MSNBC on January 27, 2024. Dr. Dickman discussed his recent study in JAMA Internal Medicine, which estimated nearly 65,000 pregnancies related to sexual assault in the 14 states that have outlawed abortion following the overturning of Roe v. Wade.

“I wish research like this wasn’t necessary,” said Dr. Dickman, who also urged for the bans to be reversed. “I wish that sexual violence was not so common, and that survivors were able to access medical care.”

Oregon & California on Parallel Paths to Universal Unified Financing Health Care

Two West Coast states have new laws mandating universal health care plans with single payer / unified financing over the next 3-4 years. That represents massive potential for a left coast lead to real US health care reform. Let’s get to work!

Oregon SB 1089 (now enacted law)

(5) “Single payer health care financing system” means a universal system used by the state for paying the cost of healthcare services or goods in which:

(a) Institutional providers are paid directly for health care services or goods by the state or are paid by an administrator that does not bear risk in its contracts with the state;

(b) Group practices are paid directly for health care services or goods by the state or are paid by an administrator that does not bear risk in its contracts with the state, by the employer of the group practice or by an institutional provider; and

(c) Individual providers are paid directly for health care services or goods by the state, by their employers, by an administrator that does not bear risk in its contracts with the state, by an institutional provider or by a group practice.

Comment:

By Michael Lighty

The implementation of California’s Unified Healthcare Financing Act (SB 770) begins this year as Oregon ramps up its Universal Health Plan Governance Board (SB 1089) to create a universal healthcare system based on single payer financing.

Call it the West Coast Way.

In California, SB 770 mandates discussions between the State and the federal government to explore and define waivers to permit unified financing / single payer. We discussed this in HJM.

In Oregon, SB 1089 creates the Universal Health Plan Governance Board. The Board will develop an implementation plan, and then administer it. The process will create a detailed, publicly funded, single payer universal health plan. It will do in-depth research and analysis to design program details. The Board will include members with a variety of expertise and backgrounds. It will present the plan to the state legislature, so implementation could start as soon as 2027 (though note need for ballot referenda below).

In both states, there is a clear requirement for a single source of payment for all healthcare services. This follows the recommendations of the Healthy California for All Commission, and Oregon’s Universal Healthcare Task Force. CA SB 770 (Sec. 1 Part 4 1001 (q)) and OR SB 1089 prohibit risk-bearing contracts and financial incentives to deny care. A key issue for both plans is the role, if any, of integrated delivery systems, benefit funds, and third-party administrators.

The detailed policy development beginning this year by the UHP Governance Board in Oregon and the California Department of Health Services will lead to discussions with the federal government, specifically the Center for Medicare and Medicaid Services, over the terms of federal financial support and approval of the universal healthcare system in each state. This “Waiver” of existing federal rules will then form the basis of final approval by the respective state legislatures likely in 2026. In both states, voters will have the final say on how the programs will be financed, as early as 2028.

These efforts are the most advanced and strategic approaches to determining what it actually takes and implementing a plan to achieve guaranteed healthcare through single-payer financing. Major questions to address include: the role of Medicare in relation to state universal health care programs, how employee benefit funds relate to the new programs, and how the federal ERISA law governing employer provided benefits impacts these state programs. These and other issues must be resolved in order to redirect federal funds currently used to support healthcare in the state into the new universal healthcare programs.

Both states decided to lay out the principles that govern the design of a universal healthcare system, and to finalize the details based upon discussions with the federal government before asking the legislature to approve a full-blown program and financing. That is different from prior efforts to pass the program and then talk to the federal government.

After decades of unsuccessful legislative and ballot initiatives in Oregon and California, advocates are optimistic about this new strategy. Answering political, technical, and legal questions up front can preempt any excuse avowed supporters of universal healthcare may cite to oppose single payer.

Will it succeed? We are some years away from knowing, but the political impact is encouraging. Building a coalition that includes the full range of health reformers from single payer advocates to those working for coverage and access expansion, along with unions and policymakers, has enabled the progress so far. This strategic approach to policy creates a political momentum that could be the missing piece to finally winning guaranteed, efficient, and equitable healthcare. The West Coast can lead the way.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Who is most efficient in health care? Surprise, it’s the VA

This new study finds that in the Veterans Health Administration (VA) 22.5% of personnel are administrative or clerical, vs. 29.3% for the rest of the health care system. If non-VA insurers and providers echoed VA staffing, they would need 900,000 fewer administrators and clerks, sharply reducing administrative costs. Single payer efficiency gains would be even greater.

Administration’s Share of Personnel in Veterans Health Administration and Private Sector Care, JAMA Network Open, January 18, 2024, by Steffie Woolhandler, Andrew Toporek, Jian Gao, Eileen Moran, Andrew Wilper, and David U. Himmelstein

“Nearly 4 million people were employed in health care administration in the private sector (excluding long-term care) in 2019, a number that would have decreased by nearly 900 000 individuals had staffing patterns followed those of the VHA. …

The VHA’s leaner administrative staffing likely reflects the agency’s simpler financing scheme. … [Private sector] health care institutions bill for individual patients and services and interact with insurers that have varying fee schedules, deductibles, prior-approval requirements, formularies, and referral networks. . . . Even capitation payment schemes generally entail risk-adjustment calculations requiring detailed tracking of each patient’s service use, diagnoses, and costs. In this context, investments in administration may make financial sense, for example, increasing revenue by documenting more diagnoses. Financial success is key to private sector institution growth and even survival, and executive compensation is often linked to financial metrics. This could incentivize efforts to improve efficiency but could also encourage revenue-enhancing administrative activities that add little clinical value (eg, marketing and upcoding).

In contrast, VHA hospitals and clinics are funded mostly through lump-sum budgets. The VHA does not bill Medicare or Medicaid and collects only 2.7% of its revenues from private insurers and 0.3% from patients, minimizing the need to attribute costs and charges to individual patients. In the VHA, all facilities are in network, 1 formulary applies to all patients, and few services require prior authorization. While managers must adhere to budgetary constraints and provide a volume of clinical services commensurate with their budgets, incentives based on financial metrics are minimal for hospital leaders and their institutions.

The difference in administration’s share of personnel in the VHA vs the US private sector that we found (6.8 percentage points) appears smaller than administrative cost differences between the US and single-payer nations; for example, there was a 13.2 percentage point disparity in hospital administrative costs and a 17.4 percentage point difference in system-wide administrative costs between the US and Canada. Several factors may account for the VHA’s less streamlined administration; unlike in Canada, where all residents are automatically and equally eligible for care, the VHA must determine eligibility based on veteran disability level, veteran income, and other factors. Additionally, the VHA serves as an insurer for some non-VHA care, spending approximately 20% of its budget purchasing private sector care.”

Comment:

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.

In this study we and our colleagues analyzed data on employment and occupation from a Census Bureau survey of 3.2 million Americans, including 122,315 who worked in private sector and VA hospitals, clinics and medical offices. We grouped all health care occupations into 18 categories, three of them administrative, and applied the same classification criteria to VA and private sector health care workers. We gleaned additional data on health insurance employees from the Bureau of Labor Statistics, and data on employees in the VA Central Office from VA employment records.

Doctors and hospitals waste hundreds of billions each year on useless paperwork. Most of that is inflicted by profit-seeking insurers, who try to avoid paying for care by imposing complex coverage rules and documentation requirements. And our profit-oriented system also rewards providers for devoting more resources to gaming the payment system.

Some VA colleagues complain that the system has rigid rules and too much bureaucracy. But its simplified payment scheme saves so much time and effort that it’s still far more efficient than private sector care. Comparisons with other nations indicate that even greater efficiency is possible under a universal, single payer system.

Previous studies have shown that VA care is as good or better than care in the private sector. We now know that the VA is also more administratively efficient, because patient care – not money – is at the center of its mission.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Rape-Related Pregnancies in the 14 US States With Total Abortion Bans

By Samuel L. Dickman, M.D.; Kari White, Ph.D.; David U. Himmelstein, M.D.; Emily Lupez, M.D.; Elizabeth Schrier, M.D.; Steffie Woolhandler, M.D., M.P.H.
JAMA Internal Medicine, January 24, 2024

Many US women report experiencing sexual violence, and many seek abortion for rape-related pregnancies. Following the US Supreme Court’s 2022 Dobbs v Jackson Women’s Health Organization (Dobbs) decision overturning Roe v Wade, 14 states have outlawed abortion at any gestational duration. Although 5 of these states allow exceptions for rape-related pregnancies, stringent gestational duration limits apply, and survivors must report the rape to law enforcement, a requirement likely to disqualify most survivors of rape, of whom only 21% report their rape to police.

Post Dobbs, 10 or fewer legal abortions occurred monthly in each of the total abortion ban states. We estimated rape-related pregnancies by state to assess how abortion bans affected survivors of rape.

Results: In the 14 states that implemented total abortion bans following the Dobbs decision, we estimated that 519,981 completed rapes were associated with 64,565 pregnancies during the 4 to 18 months that bans were in effect. Of these, an estimated 5,586 rape-related pregnancies (9%) occurred in states with rape exceptions, and 58,979 (91%) in states with no exception, with 26,313 (45%) in Texas.

full study:
https://jamanetwork.com…

Citing ‘denials, delays,’ Baptist Health ends contracts with two more Medicare Advantage carriers

Many Kentuckians are ‘captive customers,’ will have to pay more or change medical providers

By Deborah Yetter
Kentucky Lantern , January 23, 2024

A stalemate between one of Kentucky’s largest health care providers and three major health insurers is affecting thousands of Kentucky retirees enrolled in Medicare Advantage plans.

Baptist Health last fall ended its contract agreement with Humana for physician services covered by Medicare Advantage, the Kentucky Lantern reported in October. That means doctors’ visits are considered “out of network” and patients would have to pay more for services.

And effective Jan. 1, Baptist also ended agreements with United HealthCare and Wellcare for Medicare Advantage coverage for services including physician and hospital care — meaning all such care is considered out of network.

Baptist has cited denials of care and delays in payment which the Medicare Advantage companies dispute.

The changes affect around 102,000 retired public employees enrolled in such plans in which a private company manages health coverage for those 65 or older enrolled in Medicare.

Louisville-based Humana, one of the nation’s largest providers of Medicare Advantage plans, covers some 64,000 state and local government retirees who get health coverage through the Kentucky Public Pension Authority.

Another 38,000 retired teachers have Medicare Advantage plans with United through the Kentucky Teacher’s Retirement System though under terms of their plan they won’t pay more to see Baptist providers.

Kay Tillow, a longtime crusader for single-payer health coverage, said the result of the contract dispute is a loss of access to physicians and other services retirees depend on. She also said the increased privatization of Medicare is damaging the federal government plan she and other advocates see as a model for public, single-payer health coverage.

“The profit motive is destroying patient care,” she said in an email.

Medicare Advantage customers may be eligible for special enrollment period

Other Kentucky retirees have Medicare Advantage plans assigned to them by their unions or former employees such as United Auto Workers union members who may choose either Humana or United, Tillow said.

Together, Humana and United account for nearly half of all Medicare Advantage coverage in the nation, according to KFF, an independent health news site.

Medicare Advantage plans, which now cover more than half of enrollees in the government health plan, tout their role as one of providing more efficient care at lower costs.

“Medicare Advantage organizations approach health care holistically,” a Humana spokesman said last year. “At Humana, we prioritize preventative care and offer expansive supplemental benefits to keep seniors healthy.”

A United spokesman cited “Baptist Health’s repeated demands for changes to our contract” as the reason for the end of its affiliation with the health system.

“While we remain open to continued discussions, our focus now is ensuring the people we serve have access to the care they need through either continuity of care or a smooth transition to one of more than 90 hospitals or 14,000 physicians and practitioners remaining in our Medicare Advantage network in Kentucky,” spokesman Spencer Leuning said in an email.

Wellcare did not immediately respond to a request for comment.

Baptist has cited delays in payments and denial of care by such private insurers as the source of dispute with Medicare Advantage plans.

“The concerns we face with Medicare Advantage plans are similar to the concerns expressed by many providers across the country and echoed by hospital associations that represent them: coverage criteria applied by the plans result in denials and delays of medically necessary care to our patients,” Baptist spokeswoman Kit Fullenlove Barry said in an email statement Monday.

The practice costs time and money and leaves patients “caught in the middle,” she said.

However, Barry, public relations director for Baptist Health, said Baptist is in “active discussions” with Humana about a new contract.

Overall, about 53% of the 950,000 Kentuckians covered by Medicare are insured through Medicare Advantage plans.

Many are, in effect, captive customers since the state or private retirement system selects the Medicare Advantage company and provides it as part of retiree benefits. The retiree pays Medicare premiums to the government and the employer pays the private insurer’s charge.

For those seeking to change Medicare plans, the government’s open enrollment period ended Dec. 7.

However,  Medicare Advantage enrollees who would like to make a change to another plan may be eligible for the “special enrollment” period open to those because of a change in circumstances.

Information about that is available on the Medicare.gov website.

https://kentuckylantern.com…

Growing Job-Based Insurance Premiums Exacerbate Income Inequality

For employers, labor costs include both wages and benefits. So when insurance premiums rise rapidly, wages stagnate. A new study finds that this phenomenon reduced total worker income from 1988-2019 by 5%. Lower paid workers and people of color were hit hardest, amplifying income disparities.

Employer-Sponsored Health Insurance Premium Cost Growth and Its Association with Earnings Inequality Among US Families, JAMA Network Open, January 16, 2024, by Kurt Hager, Ezekiel Emanuel, and Dariush Mozaffarian

Question: What is the association of increasing health care premium costs with earnings inequality and wage stagnation among US families with employer-sponsored health insurance?

Findings: In this economic evaluation of US families receiving employer-sponsored health insurance, the mean cumulative lost earnings from 1988 to 2019 associated with growth in health insurance premiums was $125,340 per family (in 2019 dollars) or nearly 5% of total earnings over the 32-year period. In all 32 years of the study, health care premiums as a percentage of compensation were significantly higher for non-Hispanic Black and Hispanic families than for non-Hispanic White families.

Meaning: This study suggests that increasing health insurance premium costs are likely associated with decreased earnings and increased income inequality, including by race and ethnicity, among US families receiving employer-sponsored health insurance and are meaningfully associated with wage stagnation.

Comment:

By Don McCanne, M.D.

This study is quite disconcerting because it shows that one of the most important categories of health insurance – employer-sponsored health plans – has some very serious deficiencies that might cause individuals to question whether we should be favoring it over other better methods of financing health care.

Perhaps the most shocking finding in this study is that employers are not footing the premium bill for these policies. Employees explicitly pay a portion of premiums. And the nominally employer component is invisibly paid by employees without their knowledge via forgone wage increases. Lest anyone think this is insignificant, the authors have calculated that it amounts to about $125,000 per worker over the 32-year period studied. Imagine the good that would do if it were an additional contribution to retirement plans, especially for low-income employees.

Another deficiency of employer-sponsored plans is that, since the same premium is usually contributed to each employee’s plan, the contributions are regressive. Low-income employees are paying a much higher percentage of their incomes than are high-income employees. Yet another serious deficiency is that this perpetuates the repulsive social inequities in which Black and Hispanic employees pay a larger percentage of their incomes for health insurance by virtue of the fact that their incomes are lower and yet the same premiums are passively omitted from their incomes. It should embarrass us all that we tolerate a health care financing system that perpetuates such racial inequities.

So not only is private insurance a defective method of financing health care when we purchase it, because of its regressive nature of funding health care (the poor paying as much into the insurance pool as the rich), we now know that it is also a regressive method hidden by what appeared to be the generosity of employer sponsorship actually paid by forgone wages and salaries. We also discuss in a recent HJM post that private insurance, whether or not employer-sponsored, is no longer effective in paying medical bills because large cost-sharing is a major cause of unmanageable medical debt.

Now that we know that there are significant problems with both buying and using private health insurance, it’s quite clear that we should be looking for a health care financing system that serves everyone well.

The obvious solution is a single payer, improved version of Medicare. Rather than the flawed premiums and deductibles that we’ve shown are very unfair, the system is paid through progressive taxes. Low-income individuals pay a lower level of taxes that allows them to keep enough income to meet essential needs. High-income individuals pay more taxes, but keep enough for essentials as well as optional possessions and investments that maintain their status as individuals of wealth.

There remains a political divide over the definition of fairness of progressive taxes. In the past, we were concerned about the injustices of tolerating profound poverty, impairing access to food, housing, health care, education, and other needs, while we protected the elegant lifestyles of millionaires from the tax collectors. Now we protect the billionaires. The business elites are looking forward to the category of trillionaire.

Which public policy should we as a nation support? Using our cumulative excess wealth to address financial and social justice deficiencies such as our impaired health care system by using a progressive tax system that will still keep the wealthy exceptionally comfortable, ensconced in their luxury? Or should we ignore our social injustices while we establish policies that would enable one individual to accumulate the equivalent wealth of one thousand billionaires, thus becoming a trillionaire? It seems obvious: yes on social justice, no on trillionaires.

We would still have to deal with health system ownership issues so that the health care system is designed to benefit patients rather than to create wealth for investors, and we would also have to elect public stewards who would want to support our public financing system rather than the trillionaires, but considering the system we could have that would take care of all of us, wouldn’t that be worth the effort?

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Most Medical Debt Now from the Insured

Over the past 5 years, the proportion of US medical debt represented by insured individuals grew from 11% to 58%. Modern health insurance is failing to serve its purpose of assuring financial access to care.

Majority of debtors to US hospitals now people with health insurance, The Guardian, January 11, 2024, by Jessica Glenza

People with health insurance may now represent the majority of debtors American hospitals struggle to collect from, according to medical billing analysts.

This marks a sea change from just a few years ago, when people with health insurance represented only about one in 10 bills hospitals considered “bad debt”, analysts said.

In 2018, just 11.1% of hospitals’ bad debt came from insured “self-pay” accounts, or from patients whose insurance required out-of-pocket payments, according to Kodiak Solutions. By 2022, the proportion who did (or could) not pay their bills soared to 57.6% of all hospitals’ bad debt. Kodiak receives every billing transaction for a little less than one-third of all hospitals in the country.

A recent investigation by KFF Health News and NPR found more than 100 million Americans have medical debt of some kind, debt which often forces families to make heart-wrenching sacrifices. Hospitals refer patients to aggressive debt collectors, use state courts to garnish wages, place liens on people’s homes and report debt to credit agencies, which can drastically worsen future job and housing prospects.

“Obamacare” plans are notorious for high deductibles. Federal regulations allow insurers on state exchanges to charge an individual as much as $9,450 out of pocket in 2024 – not including monthly premiums.

Comment:

By Don McCanne, M.D.

Health insurance is designed to assure that a person can access health care when they need it by removing financial barriers to care. But private insurers want to keep their premiums for their insurance products competitive in the marketplace, and, even more important to them, they want to guarantee generous profits for their investors and executives.

With premiums that must be kept competitive, how do they increase profits? Obviously, they attempt to reduce spending on patient care. There are several mechanisms they use, but one of the most important is to have the patient pay a share of the costs of the care through copayments and especially through high deductibles (many thousands of dollars). That way, theoretically according to insurers, patients will obtain only the care that they need. Actually, health care experts find that patients can’t reliably prioritize care based on medical need.

Well, it’s not working out as insurers promise. Americans need and seek a lot of care and the large deductibles are pushing ever more of them into intolerable levels of debt, defeating the very purpose of health insurance.

Since the marketplace has not worked, this is where the government needs to step in, and they did, with the Affordable Care Act, aka Obamacare. But wait a minute. The ACA provided us with insurance exchanges that are selling us, guess what, high deductible plans! The ACA encouraged higher deductibles with job-based insurance. Maybe the ACA helps with coverage rates and subsidies for premiums, but it fosters flawed high deductible plans in the hands of the private insurance industry.

Though it is imperative that we make a fundamental change, fortunately we don’t have to go back to the drawing board to create it. We’ve already designed a single payer system – an improved and expanded version of our traditional Medicare program. We need to enact and implement that.

But that will only be the first step. We will need to follow through with addressing the ownership issue of the delivery system so that our patient care dollars will be going to patient care rather than to wealth building for billionaire investors. For instance, instead of hospital funds going to private equity and other investors, they will go to fund hospital operating budgets. Single payer will obviate the need for designated patient payments.

The ultimate responsibility is going to lie with us, the people. We select our legislators and the heads of the administrations (governors and the president) to carry out our wishes. If we want a health care system that is universal, comprehensive, affordable and equitable for all, then we need to educate our legislators as to the clear benefits of such a system that would serve all of society well. We could try by beginning with the difficult task of convincing the conservatives and neoliberals of how great it would be to pass legislation that would serve the US population so well, or we could simply go ahead and elect all progressives to run the government. Of course, I’m not crazy. Either way, it won’t be easy. But we have to do it!

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Administration’s Share of Personnel in Veterans Health Administration and Private Sector Care

By Steffie Woolhandler, M.D., M.P.H.; Andrew Toporek, B.S.; Jian Gao, Ph.D.; Eileen Moran, MS4; Andrew Wilper, M.D., M.P.H.; David U. Himmelstein, M.D.
JAMA Network Open, January 18, 2024

Abstract

Importance: Health care administrative overhead is greater in the US than some other nations but has not been assessed in the Veterans Health Administration (VHA).

Objective: To compare administrative staffing patterns in the VHA and private (non-VHA) sectors.

Design, Setting, and Participants: This cross-sectional study was conducted using US employment data from 2019, prior to pandemic-related disruptions in health care staffing, and was carried out between January 14 and August 10, 2023. A nationally representative sample of federal and nonfederal personnel in hospitals and ambulatory care settings from the American Community Survey (ACS), all employees reported in VHA personnel records, and personnel in health insurance carriers and brokers tabulated by the Bureau of Labor Statistics (BLS) were analyzed.

Exposure: VHA vs private sector health care employment, including 397 occupations grouped into 18 categories.

Main Outcome and Measure: The proportion of staff working in administrative occupations.

Results: Among 3 239 553 persons surveyed in the ACS, 122 315 individuals (weighted population, 12 501 185 individuals) were civilians working in hospitals or ambulatory care; of the weighted population, 12 156 988 individuals (mean age, 42.6 years [95% CI, 42.5-42.7 years]; 76.2% [95% CI, 75.9%-76.5%] females) were private sector personnel and 344 197 individuals (mean age, 46.2 years [95% CI, 45.7-46.7 years]; 63.8% [95% CI, 61.8%-65.8%] females) were federal employees. In clinical settings, administrative occupations accounted for 23.4% (95% CI, 23.1%-23.8%) of private sector vs 19.8% (95% CI, 18.1%-21.4%) of VHA personnel. After including 1 000 800 employees at private sector health insurers and brokers and 13 956 VHA Central Office personnel with administrative occupations, administration accounted for 3 851 374 of 13 157 788 private sector employees (29.3%) vs 77 500 of 343 721 VHA employees (22.5%). Physicians represented approximately 7% of personnel in the VHA (7.2% [95% CI, 6.1%-8.2%]) and private sector (6.5% [95% CI, 6.3%-6.7%]), while the VHA deployed more registered nurses (23.7% [95% CI, 21.6%-25.8%] vs 21.2% [95% CI, 20.9%-21.5%]) and social service personnel (6.3% [95% CI, 5.4%-7.1%] vs 4.9% [95% CI, 4.7%-5.0%]) than the private sector.

Conclusions and Relevance: In this study, administrative occupations accounted for a smaller share of personnel in the VHA compared with private sector care, a difference possibly attributable to the VHA’s simpler financing system. These findings suggest that if staffing patterns in the private sector mirrored those of the VHA, nearly 900 000 fewer administrative staff might be needed.

full study:
https://jamanetwork.com…

Medicare for All Explained Podcast: Episode 107

A Traditional Medicare Benefit

January 15, 2024

Podcast host Joe Sparks describes how seniors with so-called “Medicare Advantage” plans often need to scramble to find new doctors—or even new plans entirely—when moving to another state.

“I did not need to scramble [during a recent move], since I have Traditional Medicare with a Medicare supplemental policy,” he says. “My Medicare and Medigap policy transferred to my new state without a problem.”

Additional episodes will be uploaded monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

Financialization – Structural Harm to US Health Care

An excellent commentary in NEJM defines and describes the role of financial actors and actions in US health care. Increasingly, insurers and providers are purchased by financial organizations or adopt financial strategies. The focus on health care is disrupted.

The Financialization of Health in the United States, NEJM, January 11, 2024, by JD Bruch, V Roy, CM Grogan

We believe that health policy discussions concerning quality, equity, and cost must grapple with the emerging influence of the financial sector within the U.S. health care system. …

“Financialization” builds on, but also departs from [corporatization and privatization]. It involves the transformation of public, private, and corporate health care entities into salable and tradable assets from which the financial sector may accumulate capital. Financialization captures … demands of financial markets for short-term profit growth and the distribution of this growth to financial actors that are external to health care entities and U.S. households.

The rise of financialization in the health sector can be traced to economy-wide shifts that occurred in the 1970s and 1980s. … regulatory and policy changes empowered financial actors to make the U.S. health care system a core part of their growth strategies. At the same time, health care entities increasingly began to operate under “shareholder primacy,” a corporate governance strategy that prioritizes the interest of shareholders over other potential stakeholders …

Shifting Patterns of Ownership and Accumulation

One of the most prominent features of financialization in health care is the growing number of health care entities acquired directly by financial actors. For example, in the past decade, PE firms completed more than 8000 transactions involving health care entities, with an estimated combined value of nearly $1 trillion. Leveraging capital from institutional investors (e.g., state pension plans), PE firms fully acquire hospitals, nursing homes, physician practices, dialysis clinics, hospice operators, and a range of other health care operators at a rapid speed. Strapping these acquired health care companies with large amounts of debt, PE firms then engage in quick buy-and-sell turnarounds to make a profit for their partners. Real estate investment trusts (REITs) … acquire health care properties and lease the real estate back to health care facilities (i.e., sale-leasebacks).

… financialization can [also] take the form of indirect control by financial actors that obtain shares in a health care entity, often by means of early-stage investments or through the stock market. For example, venture capitalists fund health care start-ups in exchange for early equity. … Other financial actors — such as pension funds, mutual funds, and hedge funds — have also become heavily intertwined with the health care system. …

From Hospitals to Medical Credit Cards

[H]ospitals, insurance companies, and pharmaceutical firms are increasingly behaving more like financial firms. … In response to uncertainty in reimbursement and enabled by government antitrust deregulation in the 1980s, hospitals began to pursue mergers and acquisitions to increase market power while also pursuing nonoperating income by launching investment arms … can expose hospitals to fluctuations in financial markets. … [N]onprofit hospitals focus on building financial reserves with their investment arms and patient revenue streams because they are preoccupied with maintaining strong credit ratings, which increase their access to the municipal bond market. … finance and business are now the most common professional backgrounds for boardroom members at top-ranked U.S. hospitals.

Publicly traded health care entities such as health insurers and pharmaceutical companies have also become increasingly financialized, pursuing growth through price increases and mergers and acquisitions while distributing accumulated capital to financial market actors — all to maximize shareholder value. …

As health care entities race to generate growth for financial actors and shareholders, patients are facing higher costs in the form of out-of-pocket expenses and rising premiums. [P]hysician practices and hospitals are increasingly partnering with financial institutions to market medical credit cards and installment loans with steep deferred interest rates. …

The Role of the State

… [T]he substantial public financing of the U.S. health care system — which accounts for 60% of national health care expenditures — provides a steady, reliable, and attractive flow of revenue for private companies and the financial actors that invest in them. … capital is flowing to financial actors, including in Medicare Advantage organizations, nursing homes, hospice operators, and other entities …

Third, by means of myriad public policy decisions over a long period, the United States has created an extremely expensive, fragmented, and unequal health care system … contributed to a surge in medical debt and a dependence on medical credit cards.

Confronting Financialization and Its Implications

… Uwe Reinhardt described “value shifting” in health care — a phenomenon in which value is “taken away from some members of society and channeled to the owners of capital.” … Ultimately, the financial sector’s increasing grip on the health care system invites a pressing question: Is the country getting a good deal? …

inequities endemic to and produced by the financial sector — such as unequal access to financial services — may engender health inequities.

… the financial sector … has become a structural determinant of health.

Comment:

By Jim Kahn, M.D., M.P.H.

This NEJM commentary provides a thoughtful tour of the increasingly pervasive role of financial institutions, practices, and norms in US health care. Distinct from, but mutually reinforcing with, privatization and corporatization. The authors correctly conclude that financialization constitutes a structural determinant of health, fostering health inequities. Their solution, however, falls short – more evidence needed.

No, we don’t need more data. We know what we need to know: (a) There is no credible evidence that financialization (or corporatization) fosters health. (b) A profit focus leads to extracting resources from health care, shifting dollars to shareholders. (c) A profit focus also diminishes attention to patient needs, and thus creates a moral hazard for health care providers. (d) We have evidence from dozens of other wealthy countries that universal coverage with standard comprehensive health insurance prevents health care inequities. Let’s not spend another 5-10 years studying financialization and other structural impediments to health care.

Lest we forget – the primary mission of our health system is … to provide quality health care.

Please, no more nibbling at the edges. Let’s sink our teeth into real health care reform. Single payer will empower patients and providers, and disempower the financial mindset in health.

https://healthjusticemonitor.org…

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Majority of debtors to US hospitals now people with health insurance

Analysts say a ‘sea change’ occurred in the American healthcare system from when only a tenth of debt came from the insured

By Jessica Glenza
The Guardian, January 11, 2024

People with health insurance may now represent the majority of debtors American hospitals struggle to collect from, according to medical billing analysts.

This marks a sea change from just a few years ago, when people with health insurance represented only about one in 10 bills hospitals considered “bad debt”, analysts said.

“We always used to consider bad debt, especially bad debt write-offs from a hospital perspective, those [patients] that have the ability to pay but don’t,” said Colleen Hall, senior vice-president for Kodiak Solutions, a billing, accounting and consulting firm that works closely with hospitals and performed the analysis.

“Now, it’s not as if these patients across the board are even able to pay, because [out-of-pocket costs are] such an astronomical amount related to what their general income might be.”

Although “bad debt” can be a controversial metric in its own right, those who work in the hospital billing industry say it shows how complex health insurance products with large out-of-pocket costs have proliferated.

“What we noticed was a breaking point right around the 2018-2019 timeframe,” said Matt Szaflarski, director of revenue cycle intelligence at Kodiak Solutions. The trend has since stabilized, but remains at more than half of all “bad debt”.

In 2018, just 11.1% of hospitals’ bad debt came from insured “self-pay” accounts, or from patients whose insurance required out-of-pocket payments, according to Kodiak. By 2022, the proportion who did (or could) not pay their bills soared to 57.6% of all hospitals’ bad debt.

Kodiak receives every billing transaction for more than 1,800 hospitals across the US, a little less than one-third of all hospitals in the country. It was able to perform the analysis by looking at this in-house database.

The cost of healthcare in the US is a perennial political concern – it eats up more than 18% of gross domestic product, far more, and often for worse health outcomes, than in other peer democracies. As much as 31% of the cost of US healthcare is probably driven by the administration of complex bills that now beset the public.

Now, medical debt and its impact on Americans’ lives is an issue of increasing political perseveration. A recent investigation by KFF Health News and NPR found more than 100 million Americans have medical debt of some kind, debt which often forces families to make heart-wrenching sacrifices.

In part, those sacrifices are driven by hospitals’ extraordinary collection practices. Hospitals refer patients to aggressive debt collectors, use state courts to garnish wages, place liens on people’s homes and report debt to credit agencies, which can drastically worsen future job and housing prospects. Although there are some attempts to rein in these practices, billing analysts like Szaflarski say they do not address the core issue – health plans designed by insurers which force hospitals to become debt collectors.

“These stories really grind my gears,” said Szaflarski. “The idea of patient responsibility” – those deductibles and coinsurance requirements – “was not an idea created by healthcare providers. They were vehicles created by payers,” referring to insurers.

Ariel Levin, the director of coverage policy for the American Hospital Association, says the organization is discussing multiple solutions – such as removing hospitals from the billing equation entirely – to challenges they say are created by insurer decisions.

“Something else we’re exploring recently is how to remove providers from the cost-sharing altogether and require health insurers to collect it,” Levin said.

Even seasoned professionals such as Levin have found it hard to decipher hospital bills, such as when her baby needed surgery.

“It was really hard to look at my plan, even though I should be able to read the fine print and understand,” Levin said.

Deductibles have come under particular scrutiny as the share of workers subject to high deductibles has risen in the last decade. There is not a single definition for a high-deductible health plan, but typically such plans require a payment of $1,000 or more before insurance kicks in for a single person – though costs can soar far above that. Because deductibles reset every year, they can be especially punishing for chronically ill patients – and they can be far more expensive than $1,000 a year.

“Obamacare” plans – that is insurance plans people buy as individuals on state exchanges – are notorious for such high deductibles. Federal regulations allow insurers on state exchanges to charge an individual as much as $9,450 out of pocket in 2024 – not including monthly payments called premiums. That limit is predicted to grow to $14,100 by 2030. And because healthcare costs are rising faster than wages, those expenses are predicted to eat up an ever-larger share of Americans’ paychecks.

Notably, it is unclear whether rising costs for patients alone explain the breaking point the Kodiak analysis saw in 2018. George W Bush signed an act in 2003 allowing insurers to sell such plans, and they quickly grew to represent about 30% of the private employer insurance market by 2012. That proportion remains about the same today, and “cost-sharing” has continued to increase across all kinds of health plans.

“We have seen now that a lot of the debt we purchase and get rid of is also for insured patients,” said Ruth Landé, vice-president of hospital relations at RIP Medical Debt, and the former leader of a hospital billing team. RIP Medical Debt purchases hospitals’ debt portfolios and forgives the debt – part of an effort to relieve Americans of a burden many see as tacitly unfair.

Further, patient advocates criticize bad debt as a metric in its own right. Hospitals view bad debt as bills patients could pay but choose not to. But hospitals rarely screen patients for their ability to pay, and a raft of evidence shows patients who experience medical debt are often low-income and would probably qualify for discounted or free care if they went through hospitals’ lengthy application process.

Landé said when RIP acquires debt portfolios and matches accounts with third-party income data, it often shows the vast majority of patients with past-due debt would probably be eligible for free or discounted care if their finances were assessed. RIP provides debt relief to people with income that is four times the federal poverty level or less.

“It’s obvious to [hospitals] that if someone comes to them and is uninsured there’s a need there,” said Landé. “But if they’re insured,” and can’t afford their insurance, “their processes and systems are not designed to detect that need.”

This article was amended on January 11, 2024 because the American Hospital Association’s Ariel Levin did not say all hospitals would prefer to remove themselves from the billing equation; rather, Levin discussed that as a possible solution to some of the challenges created by insurer decisions.

https://www.theguardian.com…

UK Doctor Strike Reveals Need to Resist Conservative Politics & Corporate Predation

A physician strike in the UK National Health Service reflects how British politicians have betrayed the NHS through austerity funding and support for corporate grabs in health care. In the US we face similar barriers. We must preserve democracy at the ballot box, and build community control.

Yet Another Blow for the National Health Service in England: A Doctors’ Strike, The New York Times, Jan. 3, 2024, by Mark Landler

Thousands of young doctors walked off the job in England, dealing another blow to the country’s already-reeling National Health Service and raising concerns about a cascade of cancelled medical appointments and surgeries.

The junior doctors have been seeking a 35 percent wage increase, which they say is needed to counteract a more than 25 percent cut in real wages since 2008.

The waiting list for procedures at N.H.S. hospitals has reached 7.7 million people, up from 4.6 million people before the coronavirus pandemic. Prime Minister Rishi Sunak pledged last year to cut waiting times, making it one of five bedrock goals of his conservative government. Instead, the list has lengthened by 300,000 people.

The doctors complain about long hours, relentless pressure and pay that has failed to keep pace with double-digit inflation, though that has eased recently – issues that have afflicted other health systems, including those in the United States.

Comment:

By Don McCanne, M.D. and Jim Kahn, M.D., M.P.H.

For the past few decades, we have recognized that the health system in the United States is the most expensive of all nations, while falling far short on measures of quality, comprehensiveness, equity, and universality. Many studies show that we could greatly improve coverage and access while saving money by enacting single payer financing. Health care would be affordable and available to everyone. Single payer models include Canada’s public insurance approach with mostly private providers, and Britain’s National Health Service, built largely on government ownership of care delivery.

However, the news of the UK doctor strikes reminds us that there is a major roadblock to adopting and effectively implementing single payer: the nexus of conservative politics and corporatization of medical services. Two nasty, interacting c’s.

We’ve reported on how conservative, corporate-influenced policies in the UK precipitated the current crisis. Note, this is conservative with a small c, both Tories (the worst offenders) and Labor (seriously complicit). Neo-liberalism undermines the public orientation of the NHS.

In the US, while we may dissect why we have not enacted single payer, it is largely due to conservative political opposition and to both conservative and moderate political support of market over government approaches to health insurance and care provision. Tragically, this preference for the market created the severe deterioration in health care services that we see today.

Those paying attention are painfully aware of the harm done by using health care dollars for the primary mission of personal wealth enhancement rather than improving the health of our population. This is exemplified by private equity’s leveraged purchase of delivery system sectors (e.g., physician groups) to capture wealth for the investors – patients and providers be damned.

Unfortunately, widespread corporate for-profit ownership of health care delivery will likely undermine single payer functioning. Thus, single payer alone would be inadequate. Far too large of a percentage of our health care delivery system is now owned by those motivated primarily by profits rather than by patient care.

So, instead of private, for-profit control of the delivery system, what about non-profit community ownership? Community hospitals and primary and multi-specialty clinics, dialysis clinics, and long term care. Couldn’t we do this on a community basis yet have it funded equitably via national single payer? Functioning like a national health service but with more local control.

What lesson does the current British NHS boondoggle provide for us in today’s fraught political environment? The UK experience demonstrates that public insurance and public ownership together are inadequate, if politicians don’t sustain it. Also in the US, even with a Democratic President, the private actors have too much sway. Biden, who called Obamacare a BFD, strongly supported private health plans in the exchange and in Medicare. Although there are recent baby steps to regulate Medicare drug prices, Medicare Advantage is running amok.

That’s bad enough. But imagine a government health system under the control of Trump appointees. No more constraints on exploitive corporate behaviors. No more attention to real health insurance needs. A deadly free-for-all. Oh, and also – no more democratic governance norms.

Whoa! The first task before us is to elect a government that cares about us – all of us. This may seem like a formidable task before us, but we have to do it! See 13 New Year’s resolutions in pursuit of this essential goal. From there, we must galvanize communities to fight for greater control of health services.

https://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.