PNHP

Legislation to Advance California Single Payer Process

Legislation to Advance California Single Payer Process

Summary: A proposed law in the California Senate would instruct state officials to engage with the federal government on approvals and coordination for a state single payer bill. This is an important complement to a single payer bill in the Assembly.

New bill would pressure Newsom to speed up work on single-payer health care, San Francisco Chronicle, March 21, 2023, by Sophia Bollag

Gov. Gavin Newsom would face new deadlines on his administration’s work to revamp the state’s health care system under a bill unveiled Tuesday in the state Legislature.

Newsom, a Democrat, has said for years that he supports creating a government-run health system in California, including while campaigning for governor, but since taking office has not endorsed specific legislation to do so.

Early last year, when Newsom was asked if he supported a bill to create a universal, government-run health care system in California, he dodged the question, saying he was waiting for a report from a state commission studying the issue. That report came out last April, and endorsed a vast overhaul of California’s health system.

Transitioning the state from a system where private health insurance companies control much of the market to one run by the state would be a huge undertaking, one that would require permission from the federal government in the form of a waiver. On his first day in office, Newsom announced that he was pursuing such a waiver. More than four years later, California still does not have one.

A bill Sen. Scott Wiener, D-San Francisco, announced Tuesday would impose deadlines on the administration and give the Legislature a role in the process of securing a waiver. It doesn’t explicitly call for a single-payer health care system, and instead uses the term “unified financing,” which is the language endorsed by the report from the state commission.

Advocates of “single payer” generally endorse a system that is government-run, and where the state is the sole entity paying for health care. A “unified financing” system could take that form, according to the report, but could also include a role for private insurance companies that fiercely oppose a single-payer system that would put them out of business. The report does, however, call for distinctions between private insurance and government plans to be dissolved.

Wiener’s bill, SB770, would require Newsom’s health secretary to brief the Legislature on the status of its work to secure a federal waiver every few months, and to produce a formal report on the administration’s progress and plans by June 2024. It would also give legislative leaders power to appoint people to a group advising the administration’s work.

Comment:

By Michael Lighty

With the introduction last week of California Senate Bill 770, advocates for health justice opened a new path to achieve guaranteed healthcare for all based on single payer financing.

Rather than propose a comprehensive policy bill developed by a few single payer experts (an essential component of our work but an approach that has not succeeded politically after numerous attempts), SB 770 seeks to engage health justice supporters of all stripes to collaborate on a proposal to be presented to the California Legislature under a definite timeline.

SB 770 is part of the newly launched Healthy California for All Now campaign. Our goal is to guarantee equitable healthcare to all California residents that provides better care at less cost for families, through public financing.

The campaign builds on the positive momentum created by the Healthy California for All Commission, which concluded that single payer (what they call “unified financing”) could save at least 4,000 lives annually and $158 billion in 2031. The Commission gave official approval for a program which it summarized as:

  • All Californians will be entitled to receive a standard package of health care services;
  • This package could include Long Term Care Support and Services, which would relieve huge and growing burdens that are falling on millions of families;
  • Entitlement will not vary by age, employment status, disability status, income, immigration status, or other characteristics; and
  • Distinctions among Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage will be eliminated within the system of unified financing.

Those findings are incorporated into SB 770 as the first step in a process which directs the Secretary of the California Health and Human Services (HHS) Agency to:

  • Pursue waiver discussions with the federal Center for Medicare and Medicaid Services (CMS) to facilitate the creation of a unified healthcare financing system;
  • Establish a Waiver Development Workgroup of diverse healthcare system stakeholders appointed by the Governor, Speaker of the Assembly, and President Pro Tempore of the Senate;
  • Provide quarterly reports to the chairs of the Assembly and Senate Health Committees on the status and outcomes of waiver discussions with the federal government and on workgroup progress;
  • Submit a complete set of recommendations regarding the elements to be included in a formal waiver application, as specified, by no later than June 1, 2024

Single payer advocates are building an outreach and public education campaign to bring into legislative discussions health justice advocates from varied contexts: labor, expanding coverage for undocumented residents, reforming Medi-Cal, and rate-setting for health systems. This marks a critical broadening of our advocacy base. It will foster decisions on unsettled key policy and financing issues from the Healthy California for All Commission that the Legislature will support.

SB 770 and CalCare (AB 1690), the comprehensive single payer bill sponsored by the California Nurses Association, are on complementary tracks. The first legislative goal would be passing the collaborative engagement and advisory process in SB 770, to be followed by consideration of a comprehensive single-payer program, including the proposals in CalCare, which is slated to be considered in 2024.

It’s vital that advocates support the process. We must repeatedly highlight the broad and deep political support for single payer, and contribute to the resolution of key political, legal, and technical issues to support state single payer. SB 770 provides an essential opportunity and a path to guaranteed healthcare.

We have an historic opportunity to achieve political success for single payer – let’s seize the moment!

Mr. Lighty is President, Healthy California Now.

http://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.

How Cigna Saves Millions by Having Its Doctors Reject Claims Without Reading Them

Internal documents and former company executives reveal how Cigna doctors reject patients’ claims without opening their files. “We literally click and submit,” one former company doctor said.

By Patrick Rucker, Maya Miller and David Armstrong
ProPublica, March 25, 2023

When a stubborn pain in Nick van Terheyden’s bones would not subside, his doctor had a hunch what was wrong.

Without enough vitamin D in the blood, the body will pull that vital nutrient from the bones. Left untreated, a vitamin D deficiency can lead to osteoporosis.

A blood test in the fall of 2021 confirmed the doctor’s diagnosis, and van Terheyden expected his company’s insurance plan, managed by Cigna, to cover the cost of the bloodwork. Instead, Cigna sent van Terheyden a letter explaining that it would not pay for the $350 test because it was not “medically necessary.”

The letter was signed by one of Cigna’s medical directors, a doctor employed by the company to review insurance claims.

Something about the denial letter did not sit well with van Terheyden, a 58-year-old Maryland resident. “This was a clinical decision being second-guessed by someone with no knowledge of me,” said van Terheyden, a physician himself and a specialist who had worked in emergency care in the United Kingdom.

The vague wording made van Terheyden suspect that Dr. Cheryl Dopke, the medical director who signed it, had not taken much care with his case.

Van Terheyden was right to be suspicious. His claim was just one of roughly 60,000 that Dopke denied in a single month last year, according to internal Cigna records reviewed by ProPublica and The Capitol Forum.

The rejection of van Terheyden’s claim was typical for Cigna, one of the country’s largest insurers. The company has built a system that allows its doctors to instantly reject a claim on medical grounds without opening the patient file, leaving people with unexpected bills, according to corporate documents and interviews with former Cigna officials. Over a period of two months last year, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of 1.2 seconds on each case, the documents show. The company has reported it covers or administers health care plans for 18 million people.

Before health insurers reject claims for medical reasons, company doctors must review them, according to insurance laws and regulations in many states. Medical directors are expected to examine patient records, review coverage policies and use their expertise to decide whether to approve or deny claims, regulators said. This process helps avoid unfair denials.

But the Cigna review system that blocked van Terheyden’s claim bypasses those steps. Medical directors do not see any patient records or put their medical judgment to use, said former company employees familiar with the system. Instead, a computer does the work. A Cigna algorithm flags mismatches between diagnoses and what the company considers acceptable tests and procedures for those ailments. Company doctors then sign off on the denials in batches, according to interviews with former employees who spoke on condition of anonymity.

“We literally click and submit,” one former Cigna doctor said. “It takes all of 10 seconds to do 50 at a time.”

Not all claims are processed through this review system. For those that are, it is unclear how many are approved and how many are funneled to doctors for automatic denial.

Insurance experts questioned Cigna’s review system.

Patients expect insurers to treat them fairly and meaningfully review each claim, said Dave Jones, California’s former insurance commissioner. Under California regulations, insurers must consider patient claims using a “thorough, fair and objective investigation.”

“It’s hard to imagine that spending only seconds to review medical records complies with the California law,” said Jones. “At a minimum, I believe it warrants an investigation.”

Within Cigna, some executives questioned whether rendering such speedy denials satisfied the law, according to one former executive who spoke on condition of anonymity because he still works with insurers.

“We thought it might fall into a legal gray zone,” said the former Cigna official, who helped conceive the program. “We sent the idea to legal, and they sent it back saying it was OK.”

Cigna adopted its review system more than a decade ago, but insurance executives say similar systems have existed in various forms throughout the industry.

In a written response, Cigna said the reporting by ProPublica and The Capitol Forum was “biased and incomplete.”

Cigna said its review system was created to “accelerate payment of claims for certain routine screenings,” Cigna wrote. “This allows us to automatically approve claims when they are submitted with correct diagnosis codes.”

When asked if its review process, known as PXDX, lets Cigna doctors reject claims without examining them, the company said that description was “incorrect.” It repeatedly declined to answer further questions or provide additional details. (ProPublica employees’ health insurance is provided by Cigna.)

Former Cigna doctors confirmed that the review system was used to quickly reject claims. An internal corporate spreadsheet, viewed by the news organizations, lists names of Cigna’s medical directors and the number of cases each handled in a column headlined “PxDx.” The former doctors said the figures represent total denials. Cigna did not respond to detailed questions about the numbers.

Cigna’s explanation that its review system was designed to approve claims didn’t make sense to one former company executive. “They were paying all these claims before. Then they weren’t,” said Ron Howrigon, who now runs a company that helps private doctors in disputes with insurance companies. “You’re talking about a system built to deny claims.”

Cigna emphasized that its system does not prevent a patient from receiving care — it only decides when the insurer won’t pay. “Reviews occur after the service has been provided to the patient and does not result in any denials of care,” the statement said.

“Our company is committed to improving health outcomes, driving value for our clients and customers, and supporting our team of highly-skilled Medical Directors,” the company said.

PXDX

Cigna’s review system was developed more than a decade ago by a former pediatrician.

After leaving his practice, Dr. Alan Muney spent the next several decades advising insurers and private equity firms on how to wring savings out of health plans.

In 2010, Muney was managing health insurance for companies owned by Blackstone, the private equity firm, when Cigna tapped him to help spot savings in its operation, he said.

Insurers have wide authority to reject claims for care, but processing those denials can cost a few hundred dollars each, former executives said. Typically, claims are entered into the insurance system, screened by a nurse and reviewed by a medical director.

For lower-dollar claims, it was cheaper for Cigna to simply pay the bill, Muney said.

“They don’t want to spend money to review a whole bunch of stuff that costs more to review than it does to just pay for it,” Muney said.

Muney and his team had solved the problem once before. At UnitedHealthcare, where Muney was an executive, he said his group built a similar system to let its doctors quickly deny claims in bulk.

In response to questions, UnitedHealthcare said it uses technology that allows it to make “fast, efficient and streamlined coverage decisions based on members benefit plans and clinical criteria in compliance with state and federal laws.” The company did not directly address whether it uses a system similar to Cigna.

At Cigna, Muney and his team created a list of tests and procedures approved for use with certain illnesses. The system would automatically turn down payment for a treatment that didn’t match one of the conditions on the list. Denials were then sent to medical directors, who would reject these claims with no review of the patient file.

Cigna eventually designated the list “PXDX” — corporate shorthand for procedure-to-diagnosis. The list saved money in two ways. It allowed Cigna to begin turning down claims that it had once paid. And it made it cheaper to turn down claims, because the company’s doctors never had to open a file or conduct any in-depth review. They simply denied the claims in bulk with an electronic signature.

“The PXDX stuff is not reviewed by a doc or nurse or anything like that,” Muney said.

The review system was designed to prevent claims for care that Cigna considered unneeded or even harmful to the patient, Muney said. The policy simply allowed Cigna to cheaply identify claims that it had a right to deny.

Muney said that it would be an “administrative hassle” to require company doctors to manually review each claim rejection. And it would mean hiring many more medical directors.

“That adds administrative expense to medicine,” he said. “It’s not efficient.”

But two former Cigna doctors, who did not want to be identified by name for fear of breaking confidentiality agreements with Cigna, said the system was unfair to patients. They said the claims automatically routed for denial lacked such basic information as race and gender.

“It was very frustrating,” one doctor said.

Some state regulators questioned Cigna’s PXDX system.

In Maryland, where van Terheyden lives, state insurance officials said the PXDX system as described by a reporter raises “some red flags.”

The state’s law regulating group health plans purchased by employers requires that insurance company doctors be objective and flexible when they sit down to evaluate each case.

If medical directors are “truly rubber-stamping the output of the matching software without any additional review, it would be difficult for the medical director to comply with these requirements,” the Maryland Insurance Administration wrote in response to questions.

Medicare and Medicaid have a system that automatically prevents improper payment of claims that are wrongly coded. It does not reject payment on medical grounds.

Within the world of private insurance, Muney is certain that the PXDX formula has boosted the corporate bottom line. “It has undoubtedly saved billions of dollars,” he said.

Insurers benefit from the savings, but everyone stands to gain when health care costs are lowered and unneeded care is denied, he said.

Speedy Reviews

Cigna carefully tracks how many patient claims its medical directors handle each month. Twelve times a year, medical directors receive a scorecard in the form of a spreadsheet that shows just how fast they have cleared PXDX cases.

Dopke, the doctor who turned down van Terheyden, rejected 121,000 claims in the first two months of 2022, according to the scorecard.

Dr. Richard Capek, another Cigna medical director, handled more than 80,000 instant denials in the same time span, the spreadsheet showed.

Dr. Paul Rossi has been a medical director at Cigna for over 30 years. Early last year, the physician denied more than 63,000 PXDX claims in two months.

Rossi, Dopke and Capek did not respond to attempts to contact them.

Howrigon, the former Cigna executive, said that although he was not involved in developing PXDX, he can understand the economics behind it.

“Put yourself in the shoes of the insurer,” Howrigon said. “Why not just deny them all and see which ones come back on appeal? From a cost perspective, it makes sense.”

Cigna knows that many patients will pay such bills rather than deal with the hassle of appealing a rejection, according to Howrigon and other former employees of the company. The PXDX list is focused on tests and treatments that typically cost a few hundred dollars each, said former Cigna employees.

“Insurers are very good at knowing when they can deny a claim and patients will grumble but still write a check,” Howrigon said.

Muney and other former Cigna executives emphasized that the PXDX system does leave room for the patient and their doctor to appeal a medical director’s decision to deny a claim.

But Cigna does not expect many appeals. In one corporate document, Cigna estimated that only 5% of people would appeal a denial resulting from a PXDX review.

“A Negative Customer Experience”

In 2014, Cigna considered adding a new procedure to the PXDX list to be flagged for automatic denials.

Autonomic nervous system testing can help tell if an ailing patient is suffering from nerve damage caused by diabetes or a variety of autoimmune diseases. It’s not a very involved procedure — taking about an hour — and it costs a few hundred dollars per test.

The test is versatile and noninvasive, requiring no needles. The patient goes through a handful of checks of heart rate, sweat response, equilibrium and other basic body functions.

At the time, Cigna was paying for every claim for the nerve test without bothering to look at the patient file, according to a corporate presentation. Cigna officials were weighing the cost and benefits of adding the procedure to the list. “What is happening now?” the presentation asked. “Pay for all conditions without review.”

By adding the nerve test to the PXDX list, Cigna officials estimated, the insurer would turn down more than 17,800 claims a year that it had once covered. It would pay for the test for certain conditions, but deny payment for others.

These denials would “create a negative customer experience” and a “potential for increased out of pocket costs,” the company presentation acknowledged.

But they would save roughly $2.4 million a year in medical costs, the presentation said.

Cigna added the test to the list.

“It’s Not Good Medicine”

By the time van Terheyden received his first denial notice from Cigna early last year, he had some answers about his diagnosis. The blood test that Cigna had deemed “not medically necessary” had confirmed a vitamin D deficiency. His doctor had been right, and recommended supplements to boost van Terheyden’s vitamin level.

Still, van Terheyden kept pushing his appeal with Cigna in a process that grew more baffling. First, a different Cigna doctor reviewed the case and stood by the original denial. The blood test was unnecessary, Cigna insisted, because van Terheyden had never before been found to lack sufficient vitamin D.

“Records did not show you had a previously documented Vitamin D deficiency,” stated a denial letter issued by Cigna in April. How was van Terheyden supposed to document a vitamin D deficiency without a test? The letter was signed by a Cigna medical director named Barry Brenner.

Brenner did not respond to requests for comment.

Then, as allowed by his plan, van Terheyden took Cigna’s rejection to an external review by an independent reviewer.

In late June — seven months after the blood test — an outside doctor not working for Cigna reviewed van Terheyden’s medical record and determined the test was justified.

The blood test in question “confirms the diagnosis of Vit-D deficiency,” read the report from MCMC, a company that provides independent medical reviews. Cigna eventually paid van Terheyden’s bill. “This patient is at risk of bone fracture without proper supplementations,” MCMC’s reviewer wrote. “Testing was medically necessary and appropriate.”

Van Terheyden had known nothing about the vagaries of the PXDX denial system before he received the $350 bill. But he did sense that very few patients pushed as hard as he had done in his appeals.

As a physician, van Terheyden said, he’s dumbfounded by the company’s policies.

“It’s not good medicine. It’s not caring for patients. You end up asking yourself: Why would they do this if their ultimate goal is to care for the patient?” he said.

“Intellectually, I can understand it. As a physician, I can’t. To me, it feels wrong.”

Doris Burke contributed research.

https://www.propublica.org…

America’s Poverty Disgrace

Summary: Matthew Desmond is shaking up how we think about poverty in America: far too prevalent and persistent, fueled by structural exploitation in housing, labor, and financial services. And solvable with an affordable level of resources. Single payer also has a crucial role to play.

America Is in a Disgraced Class of Its Own, New York Times, March 16, 2023, by Matthew Desmond

(bolding by HJM)

The United States has a poverty problem.

A third of the country’s people live in households making less than $55,000. Many are not officially counted among the poor, but there is plenty of economic hardship above the poverty line. And plenty far below it as well. According to the Supplemental Poverty Measure, which accounts for government aid and living expenses, more than one in 25 people in America 65 or older lived in deep poverty in 2021, meaning that they’d have to, at minimum, double their incomes just to reach the poverty line.

Programs like housing assistance and food stamps are effective and essential, protecting millions of families from hunger and homelessness each year. But the United States devotes far fewer resources to these programs, as a share of its gross domestic product, than other rich democracies, which places America in a disgraced class of its own on the world stage.

On the eve of the Covid pandemic, in 2019, our child poverty rate was roughly double that of several peer nations, including Canada, South Korea and Germany. Anyone who has visited these countries can plainly see the difference, can experience what it might be like to live in a country without widespread public decay. When abroad, I have on several occasions heard Europeans use the phrase “American-style deprivation.”

Poverty 
 is experienced as an exhausting piling on of problems. Poverty is chronic pain, on top of tooth rot, on top of debt collector harassment, on top of the nauseating fear of eviction. It is the suffocation of your talents and your dreams. It is death come early and often. From 2001 to 2014, the richest women in America gained almost three years of life while the poorest gained just 15 days. Far from a line, poverty is a tight knot of humiliations and agonies, and its persistence in American life should shame us.

All the more so because we clearly have the resources and know-how to effectively end it. The bold relief issued by the federal government during the pandemic — especially expanded child tax credits, unemployment insurance and emergency rental assistance — plunged child poverty and evictions to record lows and powered a swift economic recovery. “I don’t think we have ever seen a policy have as much impact as quickly as the child tax credit in 2021,” Dorian Warren, a co-president of Community Change, a national organization aimed at empowering low-income people, told me. “In six months — six months — we reduced child poverty almost by half. We know how to do this.”

We do — but predictably, some Americans with well-fed and well-housed families complained that the country could no longer afford investing so deeply in its children. At best, this was a breathtaking failure of moral imagination; at worst, it was a selfish, harmful lie.

We could fund powerful antipoverty programs through sensible tax reform and enforcement. A recent study estimates that collecting all unpaid federal income taxes from the top 1 percent — not raising their taxes, mind you, just putting an end to their tax evasion — would add $175 billion a year to the public purse. That’s enough to more than double federal investment in affordable housing or to re-establish the expanded child tax credit. In fact, an additional $175 billion a year is almost enough to lift everyone out of poverty altogether.

The hard part isn’t designing effective antipoverty policies or figuring out how to pay for them. The hard part is ending our addiction to poverty.

Poverty persists in America because many of us benefit from it. We enjoy cheap goods and services and plump returns on our investments, even as they often require a kind of human sacrifice in the form of worker maltreatment. We defend lavish tax breaks that accrue to wealthy Americans, starving antipoverty initiatives. And we build and defend exclusive communities, shutting out the poor and forcing them to live in neighborhoods of concentrated disadvantage.

Most Americans — liberals and conservatives alike — now believe people are poor because “they have faced more obstacles in life,” not because of a moral failing. Long overdue, however, is a reckoning with the fact that many of us help to create and uphold those obstacles through the collective moral failing of enriching ourselves by impoverishing others. Poverty isn’t just a failure of public policy. It’s a failure of public virtue.

To break this cycle, we must commit to becoming poverty abolitionists.

Like abolitionist movements against slavery or mass incarceration, abolitionism views poverty not as a routine or inevitable social ill but as an abomination that can no longer be tolerated. And poverty abolitionism shares with other abolitionist movements the conviction that profiting from another’s pain corrupts us all.

Ending poverty in America will require both short- and long-term solutions: strategies that stem the bleeding now, alongside more enduring interventions that target the disease and don’t just treat the symptoms. 


When the Johnson administration launched “an unconditional war on poverty in America” in 1964, it wasn’t just lofty rhetoric. It set a deadline. Sargent Shriver, the director of the Office of Economic Opportunity, announced that “the target date for ending poverty in this land” would be 1976, the bicentennial. “We once had ambitions about poverty abolitionism,” Dorian Warren reminded me, and we can rekindle that sense of urgency. 


We can also disrupt all the quotidian ways we normalize the status quo. It is commonplace for privileged Americans to gripe about taxes. But doing so ignores how the country’s welfare state does much more to subsidize affluence — with tax breaks for college savings accounts, wealth transfers and more — than to alleviate poverty. 


Today, as then, the best hope we have of ending poverty is to bind ourselves together and demand this of our country. A mass movement for economic justice is necessary. One led by those who have had enough is stirring. We can join them, no matter our lot in life.

Why Poverty Persists in America, New York Times Magazine, March 9, 2023, by Matthew Desmond

On the problem of poverty, though, there has been no real improvement — just a long stasis. As estimated by the federal government’s poverty line, 12.6 percent of the U.S. population was poor in 1970; two decades later, it was 13.5 percent; in 2010, it was 15.1 percent; and in 2019, it was 10.5 percent. To graph the share of Americans living in poverty over the past half-century amounts to drawing a line that resembles gently rolling hills. 


The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets. 
 When we are underpaid relative to the value of what we produce, we experience labor exploitation; when we are overcharged relative to the value of something we purchase, we experience consumer exploitation. 
 When we don’t own property or can’t access credit, we become dependent on people who do and can, which in turn invites exploitation, because a bad deal for you is a good deal for me. 


Those who have amassed the most power and capital bear the most responsibility for America’s vast poverty: political elites who have utterly failed low-income Americans over the past half-century; corporate bosses who have spent and schemed to prioritize profits over families; lobbyists blocking the will of the American people with their self-serving interests; property owners who have exiled the poor from entire cities and fueled the affordable-housing crisis. 


Living our daily lives in ways that express solidarity with the poor could mean we pay more; anti-exploitative investing could dampen our stock portfolios. By acknowledging those costs, we acknowledge our complicity. Unwinding ourselves from our neighbors’ deprivation and refusing to live as enemies of the poor will require us to pay a price. It’s the price of our restored humanity and renewed country.

Comment:

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

How do we make the poor poor? We exploit them in the labor market, the housing market, and the financial market, leaving us better off. We prioritize subsidizing affluence over the alleviation of poverty, taking good care of our billionaires. We create prosperous and exclusive communities with concentrated riches leaving other communities with concentrated despair. We, the citizens of the richest nation on earth, can and should put an end to this.

Mr. Desmond, a sociologist at Princeton, just published “Poverty, by America”. He tells this story well and generally quite comprehensively, recognizing the manifold ways that we stack the deck against the poor. We should take to heart his analysis and appeal for action.

However, on health care he tells only part of the story, and misses the ultimate solution. He mentions the tax benefit of employer-sponsored health plans, which is of course targeted to those in solid jobs with health insurance.

But there are numerous other ways that the health system afflicts the poor. For starters, most of the tens of millions of uninsured are poor or near-poor. For those on Medicaid, the reliance on private managed care companies shifts money for care into corporate profits. The valuable surge in Medicaid coverage since 2020 is now reversing with reinstatement of stricter pre-COVID eligibility requirements. The growth of high-deductible health plans over 20 years is causing huge barriers to care and driving rises in medical debt and bankruptcy. Health savings accounts that can be transferred to tax-protected retirement funds favor the rich and healthy. And the entire messy financing system removes more than $600 billion per year from care to administrative waste, massive shareholder profits (at insurers, providers, and pharm), and sky-high CEO salaries.

No doubt about it, our health system is contributing to poverty and its deprivation and anxiety. Single payer would solve these problems. Savings from single payer, about $200 billion per year, would be enough to end poverty (per Mr. Desmond’s numbers). And, unlike some of his other poverty strategies (such as reducing tax breaks on home mortgages), single payer would benefit the broad middle class, not hurt them.

Let’s end poverty and the exploitation that drives it, in housing, labor, finance 
 and health care!

http://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.

Retailers Buying Up Health Care Delivery

Summary: Major general retailers, like Amazon and Walmart, are acquiring large medical care delivery networks. And they’re linking to Medicare Advantage, a huge cash cow for insurers and linked providers. We need single payer to interrupt the corporate takeover.

How major retailers are trying to change how America consumes health care, AXIOS, March 8, 2023, by Tina Reed

Amazon, Walmart, CVS, Dollar General and other big retailers are elbowing their way into health care delivery, pushing a customized consumer experience driven by digital health products.

At its core, these companies are pulling together different tech-enabled services – urgent, primary, more and specialty care, pharmacy, and, in some cases, full integration with an insurer.

But the retailers’ forays are prompting growing anti-trust and privacy concerns, as well as fears of further erosion of the doctor patient relationship once considered central to coordinated care.

Amazon brought in an on-demand virtual care services platform, more than 125 locations and a piece of the Medicare Advantage business (with the company’s $3.9 billion acquisition of concierge medicine provider One Medical).

Best Buy Health launched a hospital-at-home program with North Carolina-based Atrium Health.

Walmart announced last week that it plans to nearly double the footprint of its in-store clinics. In the fall, Walmart also inked a 10-year Medicare Advantage deal with UnitedHealth Group.

In January, CVS Health announced a plan to buy Oak Street Health, a primary care group focused on Medicare patients. The pharmacy giant already owns insurer Aetna, pharmacy benefit manager CVS-Caremark, home health company Signify Health and health care service brands MinuteClinic and HealthHUB.

Also in January, Walgreen-backed primary care company VillageMD, scooped up more primary, specialty and urgent care investments augmenting plans to open more than 500 full-service doctors’ offices in Walgreens locations.

Other companies like Rite Aid, Albertsons, and Dollar General have launched programs in health care delivery.

Amazon, CVS and Walmart have made some of the most consequential moves by combining their massive retail footprints with assets like primary or urgent care sites, pharmacies, and some sort of relationship with insurers.

“They’re all acquiring every piece of medicine,” Robert Pearl, a Stanford University professor and former CEO of The Permanente Medical Group, told Axios.

In recent months, retailers are investing in end-to-end primary care. “That’s what gets me increasingly excited about their role because there’s only so much you can do as the urgent care provider and much much more you can do when you have that longitudinal relationship between the doctor and a patient over time,” said Jacob Effron, a principal at Redpoint Ventures.

Each of these businesses are also clearly eyeing a clearly lucrative segment of health care: Medicare Advantage.

Comment:

By Don McCanne, M.D.

It appears that the capture of the health care delivery system by private equity is moving along quite smartly. That is coordinated with private insurance, especially Medicare Advantage plans. The result is a massive cash cow, the “money machine” as we’ve discussed often in HJM.

Two significant trends in this regard have been not only the increase in private Medicare Advantage plans but also the rising recognition that single payer Medicare for All may be the answer to the financial burden that has been created by uninsurance, underinsurance, deductibles, copayments, coinsurance, and disallowed services.

The problem is that they seem to be setting the stage for privatized Medicare Advantage for All, combining the worst of the medical industrial complex. This likely will move even more of our health care dollars into the hands of the uber-capitalists, as Bernie Sanders is explaining on his current book tour, but it will leave care for patients and their providers underfunded, making the wealthy wealthier and the rest of us mired in mediocrity, at best.

No. We don’t want the private sector proposals designed to create more wealth for the wealthy. We want reform designed to provide health services for all of us. But we are rapidly heading in the wrong direction. We need to enact and implement a well-designed single payer Medicare for All, and we need to do it IMMEDIATELY! The billionaires are already swarming.

http://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.

Private Equity’s Path of Destruction in Health Care Continues to Spread

By Eagan Kemp
Public Citizen, March 21, 2023

Introduction: Private Equity Companies Seek Big Profits in Health Care

In general, the private equity industry’s business model poses risks to the long-term sustainability of entities that the industry acquires. That is, in large part, because private equity purchases are typically financed with debt that is immediately transferred onto the books of the businesses acquired, thus leaving the acquired entities with debt burdens to manage.

Meanwhile, private equity investors seek outsize returns on an accelerated timeline, generally aiming to exit investments in three-to-five years with returns of 20%-to-30% per year.1 This objective induces them to take short-sighted steps to supercharge profits or otherwise wring capital out of the assets they acquire.

The risks posed by private equity investments in health care are particularly acute. After all, the services health care providers offer can spell the difference between life and death. Private equity has targeted segments of the health care industry since at least the 1990s, with many predictable outcomes. Among them, shocking lapses in safety have occurred, prices have risen faster than at non-private equity acquired entities and patients have been subjected to price gouging schemes.

The conflict between providers’ obligations to provide the best care and private equity investors’ insatiable appetites for maximized provides is clear. “You can’t serve two masters,” a doctor who previously worked for private equity-owned U.S. Dermatology Partners told Bloomberg. “You can’t serve patients and investors.”2

Private equity continues to move rapidly into health care. Investments rose sharply throughout the first two decades of this century, and continue to rise.3 Since the end of the financial crisis in 2009, acquisitions have steadily climbed, particularly in the last five years, according to figures published by Bain & Co., a private equity firm. [Figure 1]

The particular profitability of health care was also noted by Bain. While the rate of return for private equity in health care was approximately 18% between 2000 and 2009 (compared with 16% for all other industries), returns for 2010-2021 were significantly higher, at around 27% (compared with 21% for all other industries in those years).4 Many of the highest profile deals in the past decade have concerned hospitals, but the private equity industry has been acquiring physician practices and making incursions into other health care sectors at a rapid pace.

Private equity’s incursion into the health care sector has helped to drive two ongoing health care trends: increased consolidation and increased for-profit ownership. Researchers using a different data source than collected by Bain found that between 2000 and 2018 private equity investments in health care increased by a factor of 20.5 Those investments have only increased since then, with the number of health care deals in 2020 and 2021 being the highest in the past decade.6

Unlike acquisitions of hospitals, which typically occur under a public spotlight, the private equity industry’s acquisitions of physician practices and other health care business lines often occur with little or no disclosure or public scrutiny. This absence of transparency hinders the ability of regulators and watchdogs to monitor the effects of private equity ownership.

Though not all acquisitions are required to be reported, industry experts and watchdogs are able to piece together a picture of private equity activity through news releases, accounts in the trade press and other sources. More recently, private equity firms have increased their acquisitions so rapidly that the Private Equity Stakeholder Project (PESP), which monitors such activity, began attempting to track acquisitions consistently. Recent months’ activities show that private equity firms are increasing their holdings in specialty hospitals and chains, including behavioral health and gastroenterology, as well as buying up more diagnostic imaging and radiology practices.7

This report tabulates what we know about the latest incursions of private equity into health care.

Full Report

Download the complete 26 pg. report (as a PDF file) from the Public Citizen website at https://www.citizen.org…

References

  1. Heather Perlberg, How Private Equity Is Ruining American Health Care, BLOOMBERG (May 20, 2020), https://bloom.bg/3Y04dFw.
  2. Id.
  3. BAIN & COMPANY, GLOBAL HEALTHCARE PRIVATE EQUITY AND M&A REPORT 2022, 2022, https://bit.ly/3JfBdFx.
  4. Id.
  5. Anaeze C. Offodile II et al., Private Equity Investments in Health Care: An Overview Of Hospital And Health System Leveraged Buyouts, 2003–17, 40 HEALTH AFFAIRS 719, 719 (2021).
  6. Ryan Prete, PE Healthcare Investments Mature in an Uncertain Year for Health, PITCHBOOK (January 14, 2022), https://bit.ly/3XCGcEu.
  7. Private Equity Health Care Acquisitions – August 2022, PRIVATE EQUITY STAKEHOLDER PROJECT (January 26, 2023), https://bit.ly/3HxtYre.

UK National Health Service Woes Due to Privatization & Funding Cuts

Summary: The UK national health service has been a highly regarded and popular model of public financing and ownership of health services. That is, until the British government fostered privatization and, during Conservative rule, imposed austerity budgets. It can still be saved.

You Don’t Have to Be a Doctor to Know How Much Trouble the N.H.S. Is In, The New York Times, March 17, 2023, by Allyson Pollock and Peter Roderick

You don’t have to work in a hospital to know that Britain’s N.H.S. is in the most serious crisis of its history; you just have to be injured, or ill. And hundreds of thousands of people have had a doctor’s referral for outpatient care at a hospital rejected because there are no available appointments — they are simply bounced back to the doctor to begin the process again.

That the flagship health care service of one of the wealthiest countries in the world is in such a state is shocking, but not without explanation. Decades of marketization, 10 years of Conservative austerity and a pandemic have hollowed out the N.H.S. so much that people who can afford to, and increasingly those who can’t, are having to pay for health care.

A two-tier system with more and more in common with American health care is taking shape. It’s not working, and we’ll soon be at the point where it’s too late to do anything about it.

The damage to the N.H.S. was inflicted in three main waves.

In the late 1980s and early ’90s, a Conservative government introduced the internal market and closed long-stay hospitals — where care was free — under the euphemistic banner of “care in the community.” Private nursing homes backed by equity investors took over provision for older people, and care became chargeable and means-tested.

In the late 1990s and early 2000s, Labour, under Tony Blair, built dozens of new hospitals with money from partnerships with private investors.

In 2010, the Conservatives, back in power — alongside the Liberal Democrats until 2015 — embarked on a decade of austerity.

The cumulative effect was devastating.

But people are also tired of waiting — or not able to wait — and more and more are paying for private treatment.

People are reportedly taking out loans to pay for operations and, in a development that will be familiar to Americans but is something quite new in Britain, more and more people are turning to GoFundMe to raise money for medical treatment.

The government has done plenty to encourage this shift: In 2012, the Conservatives increased the cap on what percentage of an N.H.S. hospital’s income could come from treating private patients to 49 percent.

What we do know is Britons who want to use the N.H.S. are finding it increasingly hard to do so.

The N.H.S. as Britons have known it — accessible, free at the point of use, cherished — is becoming something else. But as long as there are still people willing to fight for it, it’s not too late to save it.

Allyson Pollock in 2014 video raising alarm on NHS privatization

Chart from The Health Foundation, “Health spending as a share of GDP remains at lowest level in a decade”

Comment:

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

For many decades, those of us in the policy community interested in health care justice for all have greatly admired the British National Health Service as it was founded as a cherished health care system, accessible to all, and free at the point of service.

In the meantime, we established a public insurance program for seniors – Medicare – and many of us have supported policies to improve that program and expand it to include everyone. Instead, we are well on the path to total privatization of the Medicare program as it has deteriorated. Uninsurance and underinsurance permeate our system, costs have gone up, medical debt and personal bankruptcy are increasing, many are left without the health care they should have, and the increased spending of our health care dollars has been moving into the coffers of the billionaires. The government has not been listening to us in the policy community who can provide the solutions to our health care injustices.

Today’s article tells a really sad story because we should have been learning from the British model and applying it to our system. The British, of course, had demonstrated how much more effective the government was than the private sector, whereas we increased the role of the private sector resulting in the higher costs and deterioration of our system.

A co-author of today’s article, Allyson Pollock, has been a leader in the British policy community, and has issued warnings that they should not follow privatization schemes such as we have in America. Their political leaders did not listen either. As seen in the figure above, the needed growth in health spending as % of GDP was reversed starting in 2009, starving the system. Just as in the United States, it was not just the conservatives, but it was the neoliberals as well, as they followed a path more like ours instead of us following theirs. This brief report shows what a disaster it has been.

WAKE UP AMERICA! PRIVATIZATION IS WELL ADVANCED RIGHT NOW, BUT WE CAN REVERSE IT. WE CAN HAVE HIGH QUALITY, AFFORDABLE HEALTH CARE FOR ABSOLUTELY EVERYONE. BUT WE ARE GOING TO HAVE TO BRING THE POLITICIANS IN COMPLIANCE. DARE I SAY THEY MIGHT BEGIN THEIR CONVERSATION WITH BERNIE SANDERS?

http://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.

How Medicare Advantage Distorts Clinical Outcome Data

Summary: Two studies reveal how Medicare Advantage plans distort comparisons with Traditional Medicare on inpatient and emergency visit rates, which represent clinical deterioration. A study done by MA employees is biased by massive diagnostic upcoding of MA enrollees. A study by university researchers reveals how inpatient admissions fall while emergency visits rise even more. Properly examined, MA has worse outcomes.

Comparison of Care Quality Metrics in 2-Sided Risk Medicare Advantage vs Fee-for-Service Medicare Programs, JAMA Network Open, December 12, 2022, by Kenneth Cohen, et al.

Findings: In this cohort study of 316 312 individuals, physicians in a 2-sided risk Medicare Advantage model provided care of higher quality and efficiency compared with those practicing in a fee-for-service Medicare program in all 8 metrics measured. [NB – HJM doesn’t believe these findings 
 see comment]

Evaluation of Potentially Avoidable Acute Care Utilization Among Patients Insured by Medicare Advantage vs Traditional Medicare, JAMA Health Forum. February 24, 2023, by Adam L. Beckman, et al.

Importance: Medicare Advantage plans have strong incentives to reduce potentially wasteful health care, including costly acute care visits for ambulatory care−sensitive conditions (ACSCs). However, it remains unknown whether Medicare Advantage plans lower acute care use compared with traditional Medicare, or if it shifts patients from hospitalization to observation stays and emergency department (ED) direct discharges.

Objective: To determine whether Medicare Advantage is associated with differential utilization of hospitalizations, observations, and ED direct discharges for ACSCs compared with traditional Medicare.

Results: Medicare Advantage patients had lower risk of hospitalization for ACSCs compared with traditional Medicare patients (relative risk [RR], 0.94), primarily owing to fewer hospitalizations for acute conditions (eg, pneumonia). Medicare Advantage patients had a higher risk of ED direct discharges (RR, 1.44) and observation stays (RR, 2.38) for ACSCs vs traditional Medicare patients. Overall, Medicare Advantage patients were at higher risk of needing care for an ACSC (hospitalization, ED direct discharge, or observation stay) than traditional Medicare patients (RR, 1.30).

Comment:

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

I’m a huge believer in the value of “health services research”. We need formal quantitative analyses of the effects of insurance status and other factors on measures – like hospitalization – that reflect clinical and financial outcomes. And I’ve seen enough studies over the decades to know that extracting legitimate conclusions from these studies is challenging, due to the complexity of the medical world and due to the risk of shoddy (often biased) research.

Both complexity and bias are in evidence with these two studies that compare hospitalization rates in Medicare Advantage (MA) vs Traditional Medicare (TM). One, done by UnitedHealth Group employees, is profoundly biased. The other, by respected academic researchers, elucidates what’s really happening with hospital and emergency stays.

The industry study (Cohen et al) examines several inpatient and emergency outcomes. Its core problem is huge diagnostic upcoding of the MA beneficiaries. As shown in Table 1, the prevalence of recorded serious diagnoses is twice as high for MA plans as for TM – despite the fact that MA enrollees are known to be healthier than TM enrollees. Why does this matter? Because several of the key statistical analyses are adjusted for the misleading extra diagnoses. If the MA beneficiaries seem sicker than they really are, it makes MA plan outcomes look better. Thus, key results are fallacious, most strikingly for COPD and heart attack / stroke. If the MA population was properly represented as healthier than the TM population, TM would probably have looked better across the board. (The paper is also incompletely and confusingly reported, which challenges sorting out all the details.)

An important quick detour: Rick Gilfillan, Don Berwick, and others analyzed the financial implications of this huge diagnostic upcoding, finding that it would lead to a 34% overpayment to MA as compared with TM. This confirms their prior “money machine” analyses discussed here, buttressing the argument that MA is shifting public funds to private shareholders.

The academic study (Beckman et al) is a model of conceptual clarity, sophisticated statistics, and excellent reporting. It adjusts (in several ways) for diagnostic upcoding. And it finds that an apparent decrease in hospitalization rates in MA is more than offset by increases in emergency department discharges and “observation” visits. In other words, for medical conditions amenable to good ambulatory care, overall MA does worse than TM. Why would these clinical episodes shift from inpatient to emergency department only? An obvious concern is that MA plans are denying authorizations for inpatient admission. Is that inferior clinical care? Impossible to say, but that’s a real concern. In any case, this excellent research clarifies that MA claims of lower hospitalization rates are misleading at best.

When it comes to health services research (perhaps even more than medical research in general), coupled with financial interests, the adage must be, “Buyer beware”. We at HJM strive to be your docent in this world.

http://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.

How Overturning Roe v. Wade Changed Match Day 2023

Abortion restrictions are a physician workforce issue

By Sarah McNeilly, Morgan S. Levy, Simone A. Bernstein, M.D., Jessi A. Gold, M.D., M.S., and Vineet Arora, M.D., M.A.P.P.
Medpage Today, March 15, 2023

For thousands of medical students, years of hard work will culminate this week as Match Day 2023 marks the end of their undergraduate medical education and the start of their residency program. Many newly minted physicians will soon pack up their belongings and move to new institutions in new cities and states across the U.S. Yet, this year’s Match is already different from years past. For the first time since 1973, Match 2023 applicants have compiled their match and rank lists with the knowledge that the U.S. no longer protects the constitutional right to abortion. Roe v. Wade is no longer the law of the land.

This devastating development came after years of accelerating threats to abortion rights and access. Even before the June 2022 Dobbs v. Jackson Women’s Health decision formally ended nearly 50 years of Roe, state legislatures had been enacting record-high numbers of abortion restrictions. Now, post-Roe, states are working to reinstate historical trigger bans and devise new laws and policies to restrict abortion at the state and national levels — including the current action to revoke the use of mifepristone (Mifeprex) for medication abortion.

Such policy trends hold far-reaching implications for the U.S. healthcare system — including consequences for the physician workforce. Namely, how will overturning Roe v. Wade impact the geographical preferences and clinical practice decisions of current and future physicians?

New Findings on Post-Roe Practice Location Preferences

Our recent study published in the Journal of General Internal Medicine begins to answer this question. In a survey of more than 2,000 current and future physicians on social media, we found that most (82.3%) would prefer to work or train in states with preserved abortion access. In fact, more than three-quarters (76.4%) of respondents would not even apply to states with legal consequences for providing abortion care. The same holds true for states with early or complete bans on abortion or Plan B. In other words, many qualified candidates would no longer even consider working or training in more than half of U.S. states.

Perhaps unsurprisingly, those who intend to provide abortion care (27.1%) generally preferred to practice in less restrictive environments. However, similar preferences persisted across other medical specialties and subspecialties, underscoring the essential truth that abortion rights and access affect the entire physician workforce and, thus, the whole healthcare system.

The reasons for physicians’ practice location preferences include, but are not limited to, patient care. While 77.8% of respondents report that their preferences are influenced by patient access to abortion care, others also prioritize preserved access for themselves or their partner (56.1%) or other family members (42.5%). This should not surprise us: physicians are human beings, too, with healthcare needs and personal lives that are not wholly defined by their career choices.

Impact on the Healthcare System

Our findings reveal alarming discrepancies between the environments physicians prefer to work in and the current political realities of most U.S. states. Yet, this is not simply about physicians’ preferences: it is about sustaining the physician workforce and protecting access to care.

Even before Dobbs, the U.S. faced a physician workforce shortage — including a shortage of abortion clinicians — that was projected to impact states unevenly. Many of the same states that now have abortion restrictions were previously predicted to be hard hit by future deficits. Placed within this context, our data suggest that abortion-restricted states may face even more severe shortages post-Dobbs if physicians follow through on these geographic preferences.

Multiple studies have demonstrated the correlation between abortion restrictions and higher maternal mortality rates, especially among women of color. The reasons for this are highly complex but attributable, in part, to the coexistence of other harmful policies like limited Medicaid coverage and fewer maternity care providers. Already, whereas 39% of counties in abortion-restricted states are considered maternity care deserts — in which access to maternity care is limited or absent — relatively fewer counties in abortion-protected states (25%) share that designation. Adding a disproportionate physician workforce shortage to this burden will compound the stress on the healthcare system in these states and, in turn, exacerbate entrenched health disparities. Thus, laws and policies that restrict abortion not only pose a serious threat to the one in every five pregnancies that end in abortion every year but also stand to harm patients seeking various types of primary and specialty care in restrictive states.

The impact of abortion restrictions will extend beyond the clinical practice decisions of reproductive healthcare providers — states will likely see an shortage of clinicians across every medical field, from orthopedic surgery to dermatology to oncology. Though future studies should explore this ripple effect further, one can imagine how a potential exodus may compound physician burnout and exacerbate countless more disparities, like the burden of chronic disease.

This data should sound the alarm. It echoes conversations and trends that have been happening within our profession since before Dobbs.

The fallout of the Dobbs decision will adversely affect our health and our patients’ lives. As physicians, we must unequivocally oppose policies that disrupt healthcare for everyone, including state bans on abortion. At the same time, we must ardently support our colleagues who are living and working in restrictive states so that they may continue accessing the training they need as physicians and the care they deserve as patients. If we do not, our current workforce shortages will only worsen, foretelling a crisis that would endanger us all.

This is a watershed moment for the U.S. healthcare system. As the current and future physician workforce, we must all take these threats seriously.

Sarah McNeilly is a medical student at the Albert Einstein College of Medicine in New York City, and a leader with Medical Students for Choice. Morgan S. Levy is a medical student in the MD and Master’s in Public Health program at the University of Miami Miller School of Medicine. Simone A. Bernstein, MD, is a resident physician at Washington University School of Medicine in St. Louis, and a co-founder of Inside the Match. Jessi A. Gold, MD, MS, is an assistant professor and director of Wellness, Engagement, and Outreach in the Department of Psychiatry at Washington University in St. Louis, and a member of the MedPage Today editorial board. Vineet Arora, MD, MAPP, is the Herbert T. Abelson professor of medicine and dean of Medical Education at the Pritzker School of Medicine at the University of Chicago.

https://www.medpagetoday.com…

Medicare for All Explained Podcast: Episode 94

Why Doesn’t the Government Provide the Same Help to People Who Are Denied Care?

March 15, 2023

Podcast host Joe Sparks considers the federal government’s swift action on behalf of depositors with Silicon Valley Bank, and wonders why similar action isn’t taken whenever a health insurance claim is denied.

“It’s time for the government to start protecting normal people who suffer … when they are denied care by health insurance companies,” he says, arguing that such denials are almost never justified—but adding that “a simpler solution would be to implement single-payer Medicare for All.”

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

https://medicareforallexplained.podbean.com

Akron City Council pushes mayor to fund medical debt relief program for residents

By Doug Livingston
Akron (Ohio) Beacon Journal, March 14, 2023

[ Update: Akron leaders set aside $500,000 to pay off residents’ medical debt ]

Akron City Council unanimously and swiftly passed a resolution Monday urging the mayor to fund the proposed eradication of tens of millions of dollars in medical debt held by thousands of residents.

With Mayor Dan Horrigan on board, Akron would join a growing number of Midwestern cities partnering with RIP Medical Debt, a New York nonprofit that negotiates and buys consumer medical debt held by hospitals and other health care providers.

Unlike traditional debt collectors, RIP forgives the outstanding medical bills or late fees. The goal isn’t to make money but to provide relief. People who earn no more than 400% of the federal poverty line ($111,000 for a family of four) and carry medical debt equal to 5% or more of their annual income would get a letter in the mail without having to ask for the help.

“I want you to just close your eyes and imagine what it would be like after you’ve endured cancer treatment, after you have gone through a difficult childbirth or long-term care of a sick family member,” said Ward 1 Councilwoman Nancy Holland, who brought the idea to her colleagues on council. “Imagine the feeling of opening the letter and it says, ‘We’ve retired your medical debt.’”

For every dollar Akron invests in the plan, RIP estimates it could eliminate $100 in privately held debt, potentially stretching one-time federal pandemic money further than anything the city has done so far with its $145 million American Rescue Plan Act allocation.

By erasing medical debt, proponents argue that residents could afford basic expenses like food and shelter or make the kind of purchases that help families grow. Or they could again seek preventative and regular health care at a doctor’s office without fear of running into a bill collector.

The idea came to Holland from a group of second-year students at Northeast Ohio Medical University — Max Brockwell, Emily Huff, Michael Massey and James Moore. The leaders in their local chapter of the Students for a National Health Program sat in the front row of City Council on Monday afternoon as Holland painted a picture for her colleagues.

Akron council members quickly sign on to medical debt relief

It wasn’t a hard sell for Ward 9 Councilman Mike Freeman. As chair of council’s Budget and Finance Committee, he looked over at the students and wondered if they’ll ever help so many people in their entire medical careers.

“You’re going to have a hard time topping this one,” said Freeman. “This is huge.”

Holland first brought the plan to Council President Margo Sommerville and Vice President Jeff Fusco, who quickly signed on. Then Marco Sommerville, deputy mayor for intergovernmental relations, joined the team.

In council Monday afternoon, Shammas Malik of Ward 8 and Tara Mosley of Ward 5 gave the project their resounding endorsements. But the lawmakers still need to work with the administration on the issue of funding the popular idea.

Federal ARPA relief funds already spent for Akron

With Finance Director Steve Fricker on deck to talk about the next item on council’s agenda — the 2023 operating budget — Malik asked if there’s anything allocated for the medical debt relief program.

“In the current budget, there are not funds for this,” said Fricker. “But I think that’s part of this discussion is to see where those might fit in.”

That night, as all 12 members present prepared to vote yes on the resolution with Councilwoman Sharon Connor absent, Malik looked to the audience and asked them to come back next week to lobby their city government to follow through and put money in the budget for the medical debt relief. The city’s 2023 operating budget must be passed by March 31, per the city charter.

Other cities, including Toledo, Chicago, Pittsburgh, Columbus and Cleveland, are using federal pandemic dollars to partner with RIP. The U.S. Treasury, which set the guidelines for how cities must spend the COVID stimulus money, and Guidehouse, the firm Akron hired to help it comply with federal regulations, have approved the plan.

But Horrigan has already set his plans for Akron’s $145 million in COVID stimulus funds. Everything has been allocated, Fricker said. And Akron council has no authority to force the mayor to change course because the 13-member body voted 8-5 in 2021 to give Horrigan blanket spending authority for the full tranche of federal funds.

So, the funding may have to come from the city’s general revenue fund, which is fed mostly by income tax collections, or from a partnership with the county or a private donor.

Mosley suggested Akron reach out to its partners in Cleveland to see how the city is determining the scope of their partnership with RIP. The Ward 5 councilwoman noted that in Georgia, a political action committee controlled by two-time gubernatorial candidate Stacey Abrams donated $1.34 million, which RIP estimates will erase $212 million in medical debt owed by 108,000 residents of Georgia, Arizona, Louisiana, Mississippi and Alabama.

https://www.beaconjournal.com…