PNHP

What one expensive patient teaches us about risk pooling

What one expensive patient teaches us about risk pooling

This one unbelievably expensive Iowa patient makes the case for single-payer healthcare

By Michael Hiltzik
Los Angeles Times, April 24, 2017

Back in mid-2016, Iowa customers of Wellmark Blue Cross Blue Shield, the dominant company in the state’s individual insurance market, got a shock: Premium increases of 38% to 43% were in store for many of them for this year.

Three weeks ago they got a bigger shock: Wellmark was pulling out of Iowa’s individual market entirely, leaving the state with one company selling individual policies. Wellmark placed some of the blame on congressional Republicans’ failure to come up with a coherent repeal plan for the Affordable Care Act, leaving plans for 2018 in legislative limbo. With Wellmark’s departure, Iowa’s individual market may be down to a single insurer next year.

But Iowa has another problem that appears to be unique for a state its size: one single state resident whose care costs $1 million a month. That’s enough to all but destroy an individual insurance market that comprises about 30,000 customers. Indeed, that one patient’s care, according to Wellmark, was responsible for 10 percentage points of the 43% premium increase this year.

The important aspect of the Iowa case is what it tells us about the importance of spreading risk in the healthcare market, and the limitations of the Republican nostrum of segregating seriously ill patients into high-risk pools. The idea is to keep their costs from driving up everyone else’s premiums.

The case also points directly to the benefits of a single-payer healthcare system. “The idea of single-payer is that there’s just one risk pool,” says Steffie Woolhandler, a New York physician who is co-founder of Physicians for a National Health Program, the nation’s leading advocacy group for single-payer healthcare. “That’s what makes the care of very high-cost patients affordable.”

High-risk pools and reinsurance funds tend to be hopelessly underfunded. This was the case in most of the 35 states with high-risk pools prior to the Affordable Care Act, including California. Without sufficient public funding to cover all their high-cost residents adequately, most imposed waiting lists for coverage, time limits on eligibility, and premiums so high that many patients couldn’t afford them at all. The proposals for high-risk pools coming from congressional Republicans are similarly stingy.

“What high-risk pool could tolerate a patient costing a million dollars a month?” asks Woolhandler. “It would have to be a huge pool.”

The only fair and effective way to manage such patients, especially the few with truly stratospheric medical costs, is to make them part of a nationwide pool. A risk pool on that scale would represent the functional equivalent of single-payer healthcare. And that’s leaving aside some of the other virtues single-payer advocates cite, including the ability to negotiate prices on pharmaceuticals with the bargaining power of the entire country, and the virtual elimination of insurance company and provider billing office overhead.

The healthcare cost crisis is spreading nationwide, which makes it a national problem demanding a national — meaning a federal — solution.

http://www.latimes.com…

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Comment:

By Don McCanne, M.D.

Perhaps the most fundamental principle of health insurance is to pool risk – the high costs of the few are distributed amongst all participants in the pool. Since health care has become so expensive, distributing costs has made each person’s share – the insurance premium – unaffordable for many.

The Republican proposal to establish high-risk pools is simply a proposal to break up the existing pools into larger pools of the healthy which would then make their insurance premiums more affordable, and small pools of individuals with higher medical costs – the high-risk pools. But these high costs spread amongst fewer individuals would require exorbitant premiums that only the wealthiest individuals could afford, if even them (covering a-million-dollar-a-month patients?).

So how do you pay for the care for individuals in the high risk pools? Well, we have experience with that in the form of state-level high-risk pools and the answer is that you don’t pay for them. These pools were tremendously underfunded, so much so that the states covered only about one-tenth of the otherwise-eligible high-risk population, and those who were covered had very spartan benefits leaving them exposed to much of the costs.

Would the Republicans get serious with their high-risk proposal and fund it adequately? The House Republican Study Committee proposed $50 billion seed money for the states with contributions to the state pools of $2.5 billion per year for ten years. For perspective, the care for the 20 percent of individuals who use 80 percent of our national health care – all of the high-risk individuals in the nation – costs about $2830 billion (national health expenditures for 2017: $3,539 billion), indicating the enormity of the high-risk problem. Of course, many high-risk patients are already covered in other risk pools – Medicare, Medicaid, the VA, employer-sponsored plans, etc. – but the residual who are covered by non-group plans is about 7 percent of the total, and 8o percent of that would be about $200 billion per year – almost 100 times what the Republicans propose. Basically, they are unwilling to fund the high-risk pools they tout.

The larger the risk pool, the greater and more assured is the dilution of risk. Of course, a national single payer system would use a single universal risk pool. As Michael Hiltzik says, it is a “a national problem demanding a national — meaning a federal — solution.” One risk pool for all.

Paul Song: What is California to do?

California’s Golden Healthcare Opportunity

By Paul Y. Song, M.D.
The Huffington Post, April 24, 2017

The Affordable Care Act (ACA) commonly known as Obamacare expanded healthcare coverage to approximately 4.6 million Californians and cut the uninsured rate in the Golden state from 16% in 2013 to 8.6% in 2016.

Despite over 60 attempts by Republicans under President Obama to repeal the ACA, and one recently botched effort under President Trump, the overall threat of a radically weakened ACA remains, placing the healthcare of millions of Californians at constant risk. It also leaves California in a constant state of financial uncertainty with regard to its aggressive Medicaid expansion.

Yet, event without any GOP repeal, 2.9 million Californians remain uninsured, of which a third are undocumented, 75% are from communities of color, and approximately 250,000 are kids.

Because most of the ACA was largely written by the private insurance and pharmaceutical industries, the ACA had no provisions to regulate health insurance premiums or rising prescription drug costs. As a result insurance premiums have increased roughly 200% in the past 10 years in California and a recent Kaiser Family Foundation study shows that the number of insured Americans that have trouble affording their premiums has increased from 27 to 37 percent since 2015, while the number of folks who have trouble with their deductibles has increased from 34 to 43 percent.

Meanwhile, one in 10 seniors cannot afford their prescriptions and one-third of all insured Americans delay seeking care because they cannot afford their co-pays and deductibles, while medical illness remains the number one cause of bankruptcies.

To date, Covered California has one of the most limited exchanges in the country in terms of having 75% of all their plans with very narrow networks (patients have access to 25% or less of physicians in a defined area). And premiums for 2017 jumped an average of 13.2%, three times the increase within the past two years.

Healthcare benefits remain a major source of labor negotiation strife as workers are being forced to contribute more towards their own healthcare while companies are handcuffed by skyrocketing premiums, which leave less money for capital improvements and their own R&D.

And, California has a $150 Billion unfunded retiree healthcare liability that has never been addressed.

California’s fragmented multi-payer system takes upwards of 20 cents of every healthcare dollar away from actual patient care to spend towards administrative costs often used to deny care, marketing, overheard, and executive compensation. A 2005 study by the Lewin Group revealed that a “single payer” system rather than multiple insurers to oversee funding of a private healthcare delivery system would save California a minimum of $20 Billion in the first year alone in administrative savings. At the same time it would expand coverage to care for everyone without requiring massive new taxes or spending.

A 2016 study from the UCLA Center for Health Policy Research revealed that 71% of all healthcare expenditure in California in 2016 was paid for by taxpayers. Coupled with the previously mentioned administrative waste, Californians are essentially paying for universal healthcare, just not getting it.

So what is California to do?

The fact is that our legislators can no longer turn a blind eye while California remains hostage to a federal government run by a heartless majority who recklessly controls the purse strings in favor of tax cuts for the 1% while refusing to view healthcare as a right. As the 6th largest economy, California needs to think boldly and look at what all major industrialized nations do.

The answer has been there all along.

California Senate Bill 562, authored by Senators Ricardo Lara and Toni Atkins calls for a California Single Payer program. While some specifics still need to be worked out especially with regard to obtaining a federal waiver to incorporate Medicare, Medicaid, and S-Chip funds, it is clear that any such program already faces tremendous opposition from corporatist legislators.

In order to get a healthcare program for the people, it must come from an unprecedented groundswell by the people. We must hold our elected officials publicly accountable and demand what we are already paying for and readily deserve. The ACA pointed our state and nation in the right direction, but the time for real universal healthcare is now and the opportunity to do so is golden and now!

Paul Y. Song, M.D. is Co-Chair of the Campaign for a Healthy California and Board Member of Physicians for a National Health Program.

http://www.huffingtonpost.com…

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Comment:

By Don McCanne, M.D.

Paul Song’s article is particularly helpful in understanding the health care reform challenge before us in that it describes one of the most successful programs in the nation – California’s – while noting the gross inadequacies of reform limited by our current federal laws and regulations. The best we have – a meticulous implementation of the Affordable Care Act – still leaves us far too short of judicious reform.

As co-chair of the Campaign for a Healthy California, Song supports the latest effort to enact a single payer system in California – Senate Bill 562 – while acknowledging that difficulties remain in attempting to incorporate Medicare, Medicaid and S-CHIP funds into the state program. But he also acknowledges that the federal government is now under the control of politicians who do not support guaranteeing essential health care services for all.

So what is California to do? Move forward with health care reform on both fronts. Advance the state single payer agenda behind SB 562, taking it as far forward as the federal politicians and courts will allow. But even more important is to join with other states to  change the federal political agenda so that everyone in the nation can have affordable  health care, and then even Californians will not be limited by federal restrictions.

Whatever it is, if it is for the good of patients, be there and do it, but always keep in mind that this is for everybody, so don’t leave anyone behind.

Health reform — the GOP’s direction forward

By Jack Bernard
The (Columbus, Ga.) Ledger-Enquirer, April 21, 2017

When he was in office, President Obama stated that my party, the GOP, had been highly critical of the ACA (Obamacare), but had offered no alternative for improving access and cutting cost. At the time, he was right.

For eight years, the GOP had talked vaguely about free market alternatives, but the only real suggestions coming out of the GOP at that time (via Paul Ryan and Tom Price primarily) were to (a) remake Medicare into a voucher program; (b) institute tax credits and health savings accounts versus the ACA ; and (c) convert Medicaid into a state block grant.

As a former state government budget analyst, I know where Speaker Ryan (in my opinion purely a budget guy versus an intellectual policy wonk) is coming from. These proposals will restrict federal expenditures.

However, they will not lower non-governmental systemic costs. Directly or indirectly, they simply dump the financial burden on the patient and will almost certainly add expenses to state and local government.

Morally, this position is wrong because it does not consider the pain caused by these proposed changes. Plus, on a purely pragmatic level, these initiatives have very little support from the American public, as shown by the town hall meeting protests that accompanied GOP representatives foolhardy enough to hold them.

Other GOP politicians, like my own representative and senators, chose either to hold no meetings at all or to have telephone calls instead. I call this the “repeal and run away” strategy.

The GOP should have anticipated this backlash. A Gallup survey a few years back found that preservation of Medicare was more important to Americans than deficit reduction. If the taxpayers have to choose, their preference is to cut the military rather than Medicare, per that survey.

This very visible and vociferous negative reaction most certainly factored into the rejection in the House of the AHCA (the GOP bill incorporating a variation of “b” and “c” above), especially for representatives in “blue” districts.

Both Democrats and Republicans know that it will continue to be hard to implement the ACA. But the GOP has been beating its head against a wall in opposition for many years. The House passing 60-plus bills for ACA repeal under Obama was a meaningless gesture, especially when considering that the GOP can’t come up with an acceptable alternative plan now that it controls the White House.

So, in the short term, the nation has to live with the ACA. The ACA will eventually expand coverage via: a (a) mandated private health insurance and (b) voluntary state Medicaid expansion, although not in 19 GOP dominated states, some having the most uninsured. But coverage will never be universal and tens of millions will not be covered under Obamacare.

On the flip side, the ACA makes relatively minor attempts at cost containment, tinkering with the private insurance systems generating much of the problem. But expenditures (public and private) will continue to rise significantly under the ACA.

So, the question is: Where should my party go from here to contain costs while improving coverage and outcomes? The answer may surprise you.

Nixon, a staunch anti-communist, weighed the long-term costs and benefits and correctly recognized China. Can you imagine what other nations would think if the U.S. had continued to refuse to recognize a country that would become the second-largest world economy?

Well, that is how the rest of the developed world currently views the U.S. when it comes to our healthcare.

Historically, despite the (when convenient) citing of us being the “party of Lincoln,” the GOP has been the more conservative alternative for the last century. When we go in the other direction, it has a significant effect on both national policy and politics.

Politicians in the GOP often state that “we have the best healthcare in the world.” But, what are the facts?

The National Research Council (NRC) and the Institute of Medicine (IOM) issued a panel report in January 2013, which described the dismal state of U.S. healthcare compared to other nations. Among their findings: “Americans are more likely to find their health care inaccessible or unaffordable” and “even advantaged Americans are in worse health than similar individuals in other countries.”

In 2008, the respected Commonwealth Fund found in a study of 19 industrialized nations that the U.S. placed last in preventable deaths and was improving more slowly than other countries. If we were just average, we would have had 75,000 to 100,000 fewer deaths.

In 2000, the World Health Organization did a comparative analysis of healthcare in the countries around the world and ranked the U.S. 37th, lower than nations like Colombia (22), Saudi Arabia (26) and Morocco (29).

To be fair, these studies do have us number one in a very important category: expenditures. We consistently spend more per capita on healthcare, though our outcomes are worse than in other developed countries. Per OECD, in 2016, the cost per capita here was $9,451. It was $5,227 in Sweden, with great cradle-to-grave care. Other nations with very good care were also lower; for example, Italy’s per capita cost was just $3,272.

For health expenditures as a proportion of GNP, we exceed all others (save the Marshall , with the GNP of many Georgia counties). And the proportion to GNP keeps growing. By 2021, healthcare expenditures will reach nearly 20% of our GNP (up from 18% now), according to the government actuaries (CMS, Medicare). This is money that would otherwise go to education or infrastructure improvements.

The government (federal, state, local) accounts for 46% of total expenditures currently and that will grow to 50% by 2021. We spend more tax money per capita than most other nations do, just not as wisely.

When we look around the world, there are a number of national healthcare systems that work much better. Many use models in which government delivers most services, similar to our VA. Although good enough for our vets, conservatives (many veterans) decry this system as too socialistic for Americans.

A more palatable solution for our country is to simply expand Medicare, which is widely accepted. With Medicare for All, everyone would receive coverage as those over 65 do now, leaving control of delivery (hospitals, physicians and other providers) in private hands.

During the 2009 congressional debates on structuring the ACA, the public option was abandoned. One reason given was that it was “unfair” to the private sector, which would be unable to compete for customers.

When it comes to Medicare, that is exactly the point. Medicare is more efficient than the free market. It has administrative costs of 3%, versus up to 20% for private insurers (it averages 12%). Overhead is lower; marketing costs are non-existent.

The best way to get U.S. healthcare expenditures under control is through one payer, Medicare. By recognizing this fact and pursuing real reform, the GOP can take the lead in the ongoing debate on how to replace the ACA.

And there is considerable support for this move by the public. According to a KFF 12-15 survey, 81% of Democrats want single payer, as well as 60% of independents. Although only 30% of Republicans lean this way, that number would rise dramatically if the President came out in favor of Medicare for All.

After all, in his 2000 book “The America We Deserve” he stated: “As far as single payer, it works in Canada. It works incredibly well in Scotland. It could have worked (here) in a different age.” Mr. President, do you mean before drug and insurance company lobbyists bought Congress?

This past election reflected an out–of-touch Democratic Party with an unlikeable candidate, as well as a celebrity populist candidate on the Republican side, resulting in a surprising upset. However, given the demographic changes under way in our nation, the GOP needs a hook to make it viable long term in national elections.

If the GOP proposed its own version of universal Medicare, there would be enough Democrats voting for the bill to pass (the Dems already introduced HR 676 proposing single payer). It would be the “Nixon goes to China” moment that might just start to turn around the party, moving it toward the middle where it needs to be for long-term success.

Jack Bernard, former chairman of the Jasper County Republican Party, is a former Director of Health Planning for the state of Georgia who now lives in Peachtree City.

http://www.ledger-enquirer.com…

Uninsured trauma patients: Cured into destitution

Catastrophic Health Expenditure Risk Among Uninsured Trauma Patients in the United States

By Scott, John W. M.D., M.P.H.; Raykar, Nakul P. M.D., M.P.H.; Rose, John A. M.D., M.P.H.; Tsai, Thomas C. M.D., M.P.H.; Zogg, Cheryl K. M.S.P.H., M.H.S.; Haider, Adil H. M.D., M.P.H.; Salim, Ali M.D.; Meara, John G. M.D., D.M.D., M.B.A.; Shrime, Mark G. M.D., M.P.H., Ph.D.
Annals of Surgery, April 7, 2017

Abstract

Objective: To characterize the economic hardship for uninsured patients admitted for trauma using catastrophic health expenditure (CHE) risk.

Background: Medical debts are the greatest cause of bankruptcies in the United States. Injuries are often unpredictable, expensive to treat, and disproportionally affect uninsured patients. Current measures of economic hardship are insufficient and exclude those at greatest risk.

Methods: We performed a retrospective review, using data from the 2007-2011 Nationwide Inpatient Samples of all uninsured nonelderly adults (18-64 yrs) admitted with primary diagnoses of trauma. We used US Census data to estimate annual postsubsistence income and inhospital charges for trauma-related admission. Our primary outcome measure was catastrophic health expenditure risk, defined as any charges >=40% of annual postsubsistence income.

Results: Our sample represented 579,683 admissions for uninsured nonelderly adults over the 5-year study period. Median estimated annual income was $40,867. Median inpatient charges were $27,420. Overall, 70.8% of patients were at risk for CHE. The risk of CHE was similar across most demographic subgroups. The greatest risk, however, was concentrated among patients from low-income communities (77.5% among patients in the lowest community income quartile) and among patients with severe injuries (81.8% among those with ISS >= 16).

Conclusions: Over 7 in 10 uninsured patients admitted for trauma are at risk of catastrophic health expenditures. This analysis is the first application of CHE to a US trauma population and will be an important measure to evaluate the effectiveness of health care and coverage strategies to improve financial risk protection.

http://journals.lww.com…

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Uninsured with traumatic injuries may be cured into destitution

By Ronnie Cohen
Reuters, April 20, 2017

When a badly injured patient rolls into the emergency room, Dr. John Scott doesn’t ask to see proof of insurance. Instead, he immediately begins treatment.

Hospital care frequently saves patients from gunshots, stab wounds, crushing car accidents and other traumatic injuries. But Scott found in a new study that 7 out of 10 adult uninsured trauma patients suffer another debilitating injury: financial catastrophe.

“We’re getting better at trauma, and they’re going home financially ruined,” Scott said in a phone interview.

“There’s nobody we turn away for emergency trauma care. We don’t check people’s insurance status. We don’t check their wallet,” he said. “If everybody is deserving of world-class trauma care, everybody is deserving of protection from financial catastrophe from that care.”

Dr. David Himmelstein, a professor at the City University of New York’s Hunter College School of Public Health, described the study as “quite sophisticated.” It “paints an extraordinarily disturbing picture of America’s vulnerability,” he said in an email.

“This study shows that someone who is in a car accident, or is mugged, or experiences sudden trauma for some other reason, risks being driven to financial ruin,” he added.

“In essence, unless you’re Bill Gates, you could be at risk of financial catastrophe if you fall seriously ill,” said Himmelstein, who was not involved with the study.

http://www.reuters.com…

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Comment:

By Don McCanne, M.D.

We hear often of healthy individuals remaining uninsured because of the very high cost of health insurance, but it is a risk that they are willing to take because they have very few health care needs…though they hope nothing really bad happens. Well, bad things do happen, and this study confirms that 70 percent of those who lost the bet face destitution.

The intent leading up to health care reform was that everyone would be covered. But, as the Affordable Care Act was crafted, it became obvious that the design in putting together various public and private programs was not seamless, and could never be. Thus it was accepted that millions would remain uninsured (28.5 million under 65 as of Sep 2016 – KFF), unless we were to do single payer or something like that, but, of course, that wasn’t feasible, so they said.

More patches could be added to the system but only at higher marginal costs, requiring a major expansion of our wasteful administrative burden, and yet it would still fall short. The deficiencies of the Republican proposals have been exposed by their own rhetoric – that it’s about “access” (but not about actually financing insurance or health care). Their proposals would only increase the numbers of uninsured.

Today’s report shows that relying on current good health and hoping for the best in the future is not a satisfactory approach. As study coauthor Dr. John Rose indicates, absolutely everyone is entitled to our world-class trauma care, and yet they are not entitled to protection from financial catastrophe from that care. We have to change that.

It has become obvious that a single payer national health program is the only feasible approach for the United States that would not only guarantee access to care but would also finance it for everyone. The patchwork models just don’t work, and are too expensive anyway.

What single payer means to an Alaskan fisherman with breast cancer

By Malena Marvin
Medium, April 17, 2017

If you haven’t had a chronic illness while self-employed, the term “single payer” might not mean much to you. Let me explain what it means to me. Grab a cup of coffee and put your feet up, this is going to take a few minutes.

https://medium.com…

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Comment:

By Don McCanne, M.D.

Believe me. Take a few minutes (9 to be precise), and read this (at link above). Then send it to others and strongly recommend that they read it, and then have them send it on to yet others who might also care. This needs to go viral. You will not find a better description of why we need a single payer system. (Caution: she uses all caps near the end of her story.)

Physician and patient churning in ACOs

Substantial Physician Turnover And Beneficiary ‘Churn’ In A Large Medicare Pioneer ACO

By John Hsu, Christine Vogeli, Mary Price, Richard Brand, Michael E. Chernew, Namita Mohta, Sreekanth K. Chaguturu, Eric Weil and Timothy G. Ferris
Health Affairs, April 2017

Abstract

Alternative payment models, such as accountable care organizations (ACOs), attempt to stimulate improvements in care delivery by better alignment of payer and provider incentives. However, limited attention has been paid to the physicians who actually deliver the care. In a large Medicare Pioneer ACO, we found that the number of beneficiaries per physician was low (median of seventy beneficiaries per physician, or less than 5 percent of a typical panel). We also found substantial physician turnover: More than half of physicians either joined (41 percent) or left (18 percent) the ACO during the 2012–14 contract period studied. When physicians left the ACO, most of their attributed beneficiaries also left the ACO. Conversely, about half of the growth in the beneficiary population was because of new physicians affiliating with the ACO; the remainder joined after switching physicians. These findings may help explain the muted financial impact ACOs have had overall, and they raise the possibility of future gaming on the part of ACOs to artificially control spending. Policy refinements include coordinated and standardized risk-sharing parameters across payers to prevent any dilution of the payment incentives or confusion from a cacophony of incentives across payers.

From the Introduction

Recently, the Centers for Medicare and Medicaid Services (CMS) announced intentions to move half of all Medicare payments away from traditional fee-for-service reimbursement by 2018 and toward alternative payment models, such as those exemplified by the accountable care organization (ACO) program.

Using a combination of organizational and Medicare data, we examined the distribution of beneficiaries in a Pioneer ACO across affiliated physicians, the magnitude of physician changes from year to year, and the impact of physician changes on an aligned beneficiary population.

From the Discussion

There are two important findings. First, not all physicians had attributed beneficiaries, and those who did had relatively few ACO beneficiaries, on average. This limited ACO penetration at the physician level could mitigate the ACO’s potential to achieve its financial targets, at least for any effects mediated through physician behavior. With the small numbers, it is not surprising that the distribution of high-spending beneficiaries also is skewed such that a few physicians appeared to have the sickest beneficiaries, while many appeared to have mostly beneficiaries with modest spending.

Second, we found evidence of substantial changes in the affiliation status of physicians with respect to this large Pioneer ACO, which were associated with changes in numbers of beneficiaries aligned and could affect the predicted spending for the ACO beneficiary population. New physician affiliations accounted for only half of the growth in the ACO beneficiary population over time. In short, the physician changes appeared to affect the composition of the ACO beneficiary population, which could have important implications for the ACO program’s overall financial impact.

With higher physician reimbursement and explicit CMS goals associated with alternative payment models, it is likely that the impetus will only increase for physicians to join ACOs. ACOs’ ability to deliberately select participating physicians year to year, however, creates a relatively simple mechanism to “game” the risk pool. For example, in our sample, dropping the twenty-two primary care physicians (top 5 percent) with the most high-spending beneficiaries (spending more than $81,000) would reduce the mean Medicare ACO spending per beneficiary by 17 percent.

The presence of this mechanism and the ease of its use, especially compared to the more difficult task of redesigning care, could result in an undesirable but powerful temptation for ACOs, particularly those facing financial constraints or pressing financial motivations. Indeed, the push to increase ACO incentives now that the program is in its fifth year could exacerbate this concern.

From the Conclusion

As the pace and magnitude of reform grow, we might expect that the potential impact on physicians’ behavior could increase but that the amount of organizational change also could accelerate, thus creating the potential for mischief.

http://content.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

Under the MACRA replacement for the flawed SGR method of determining Medicare payments, CMS is moving forward with shifting the delivery system into alternative payment models, the predominant model being the accountable care organization (ACO). This study of one of the premier ACOs in the nation (Partners HealthCare) should make us question whether such a shift is wise policy.

Briefly, this study shows that there is considerable instability in the professional relationships of physicians and patients due to considerable churning in both professional employment and patient enrollment in ACOs. Also, ACO patients are a small percentage of the physicians’ patient populations and thus provide little motivation for the delivery model improvements that some in the policy community say would be inevitable in the drive to higher quality and lower costs that the ACO model supposedly promotes. Further, as this article explains, the ACO organizational change creates “the potential for mischief.” Flags should go up.

When we want to save money, improve quality and improve the physician/patient relationship, this does not seem to be the right model to pursue. In contrast, changing to a well designed single payer system improves efficiency while establishing long term professional relationships. The policy community should be working on that model instead – an improved Medicare for all.

Stephanie Woolhandler, MD: Bankruptcy due to medical bills remains a problem

By MedPage Today Staff
MedPage Today, April 18, 2017

Bankruptcy is common in the U.S., and medical bills often play a role — even for people with health insurance, according to Stephanie Woolhandler, MD, of the Albert Einstein College of Medicine, in New York City. The number of bankruptcies ranges from 1 million to about 1.5 million per year depending on how well the economy is doing, and medical bills are by far the most common item sent to collection agencies, she noted.

Following is a transcript of her remarks:

Three-quarters of people who are bankrupted by medical costs actually had insurance, at least when they first got sick. Many of them lost their insurance because they lost their job when they got sick, but for the majority of them, they managed to hold on to private insurance throughout the bankrupting illness, but were bankrupted anyway by gaps in their coverage like co-payments, deductibles, and uncovered services.

In our studies, we found that well over half of all bankruptcies were due, at least in part, to medical illness or medical bills. In 2007, for instance, about 62% of all personal bankruptcies were related to medical causes. Bankruptcy is extremely common in this country. When the economy is doing well, there’s about a million bankruptcies a year. When it does poorly, the numbers rise closer to one and a half million.

So in the United States for a woman, bankruptcy is about as common as graduating from college, so it’s a very, very common experience and well over half of the time it’s due to medical illness or medical bills, at least in part.

The new administration and Congress [are] taking a lot of steps that are going to raise co-payments and raise deductibles and make health insurance even skimpier than it is today. So we would certainly expect to see many more people driven into bankruptcy by healthcare costs, including many people with insurance, only their insurance is so partial that it doesn’t protect them when they have a serious or prolonged illness.

We finished up our studies in 2009, but the Consumer Financial Protection Bureau has been following the problem of people getting medical debts referred to collection agencies, and it turns out that medical bills are by far the most common item that are sent to collection agencies and end up on credit reports because of unpaid bills. Medical bills are about six to eight times more common than other items like cellphone bills, cable TV, utilities, retail.

So well over half of all the black marks that people have on their credit reports that worsen your credit are due to medical bills. So that has a lot of consequences because if your credit score goes down, that can make it more expensive to purchase insurance, difficult or impossible to buy a home or rent a home, maybe even affect your ability to get a much needed job if your potential employer checks your credit scores and sees that it’s low. So medical bills are having a very serious impact on family finances and family credit all the time, and in many cases, they do result in a personal bankruptcy.

full video:
http://www.medpagetoday.com

Inappropriate medical debt collection

Medical Debt Malpractice

United States Public Interest Research Group (U.S. PIRG), April 11, 2017

Millions of Americans are contacted by debt collectors every year over debt related to medical expenses.

Medical debt collectors often employ aggressive tactics and attempt to collect debt from the wrong customers – putting consumers’ credit records at risk. Medical debt accounts for more than half of all collection items that appear on consumer credit reports. A review of 17,701 medical debt collection complaints submitted to the Consumer Financial Protection Bureau (CFPB) shows that problems with medical debt collection are widespread and harm Americans across the country.

Complaints submitted to the CFPB suggest that many consumers contacted about medical debt should not have been contacted in the first place, and that many contacts involve aggressive or inappropriate tactics.

* Nearly two-thirds (63%) of complaints about medical debt collection assert either that the debt was never owed in the first place, it was already paid or discharged in bankruptcy, or it was not verified as the consumer’s debt.

* Many complaints document inappropriate and aggressive tactics including frequent or repeated calls, calls harassing friends and family, threats of legal action, or the use of abusive language.

Medical debt collection affects a broad swath of the population and subjects millions of consumers to undue stress and financial harm. State and federal policymakers should work to protect consumers from unfair treatment by medical debt collectors.

Federal policymakers should also defend the CFPB against attempts to eliminate or cripple it, and should continue to ensure the CFPB has the resources, independence and tools at its disposal to effectively protect consumers from all kinds of predatory financial behavior.

http://www.uspirgedfund.org…

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Medical Debt: You May Not Owe It

By Ann Carrns
The New York Times, April 12, 2017

Nearly two-thirds of people who complained to federal regulators about medical debt collectors said they did not owe the money, a new report found.

The report, by the advocacy group United States Public Interest Research Group — better known as U.S. PIRG — and the Frontier Group, a left-leaning think tank, examined more than 17,000 publicly available complaints about medical debt collection filed with the Consumer Financial Protection Bureau over more than three years.

Chi Chi Wu, a lawyer with the National Consumer Law Center, said the findings in part reflected the complexity of the health care payments system, which often involves insurers that may pay all or part of the cost of care. Consumers may not understand the details of how their health insurance works, and may think that it covers more than it actually does. Co-payments and deductibles — the amount that you pay before insurance does — can often trip people up.

“The medical and health care billing process is just really confusing and complicated,” Ms. Wu said.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

The United States is unique in having a massive amount of personal medical debt when we are spending twice the amount per person on health care than the average of other wealthy nations in which medical debt is much less common. What is wrong here?

The primary defect is in the way we finance health care – especially depending on private sector intermediaries (the insurance industry) that create innovative methods of financing health care that work very well for their own industry but work poorly for patients with health care needs. This flawed system has created greater opportunities for the debt collection industry which, again, serves its own industry well but also works very poorly for patients.

Regular readers know that a well designed single payer system would eliminate much of this waste and grief. What is difficult to understand is why we have failed to enact an improved Medicare for all program before now. It is long past due.

Elisabeth Rosenthal: ‘An American Sickness’

How Healthcare Became Big Business and How You Can Take It Back

By Elisabeth Rosenthal
Penguin Random House, April 2017

From the Introduction

Everyone knows the healthcare system is in disarray. We’ve grown numb to huge bills. We regard high prices as an inescapable American burden.

The current market for healthcare just doesn’t deliver. It is deeply, perhaps fatally, flawed. Even market economists themselves don’t believe in it anymore.

All the harrowing tales in this book occurred despite the 2010 passage and the 2014 enactment of the Patient Protection and Affordable Care Act (the ACA, also known as “Obamacare”). The ACA is not a failure, as some still assert, but the “affordable” in its name was an overreach to win over votes and public opinion.

Each market has certain rules that are determined by the conditions, incentives, and regulations under which it operates. Currently, we buy and sell medical encounters and accoutrements like commodities, but how do participants in the marketplace make purchasing choices? Prices are often unknowing and unpredictable; there’s little robust competition for our business; we have scant information on quality to guide our decisions; and very often we lack the power ourselves to even choose.

The rules governing the delivery of health care in the United States have grown out of the market’s design. The type of healthcare we get these days is exactly what the market’s financial incentives demand. Some have to get wise to them, and be smarter, far more active participants in this ugly, rough-and-tumble world. More important, we have to change the rules of the game, with different incentives and new types of regulation.

The economist Adam Smith spoke of an “invisible hand” with respect to income distribution. But in American healthcare, there’s a different type of invisible hand at work: it’s on the till.

http://www.penguinrandomhouse.com…

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Why an Open Market Won’t Repair American Health Care; A Review of Elisabeth Rosenthal’s “An American Sickness”

By Jacob S. Hacker
The New York Times, April 4, 2017

It was March 2012, and the Affordable Care Act (a.k.a. Obamacare) was before the Supreme Court. Justice Antonin Scalia zeroed in on its controversial requirement that all Americans purchase health insurance. Yes, everybody needs health care, Scalia conceded, but everybody needs food too. If the government could make people buy insurance, why couldn’t it “make people buy broccoli”?

The Affordable Care Act survived, of course — though not before a fractured court made the expansion of Medicaid optional, leaving millions of poorer Americans without its promised benefits. But the question Justice Scalia asked remains at the heart of a debate that has only intensified since: Why is health care different? Why does it create so much more anxiety and expense, heartache and hardship, than does buying broccoli — or cars or computers or the countless other things Americans routinely purchase each day?

For those leading the charge to roll back the 2010 law, the question has a one-word answer: government.

Where Rosenthal’s account falls short is in explaining why this deeply broken system persists. Early on, Rosenthal seems to side with Speaker Ryan and Senator Paul, describing “the very idea of health insurance” as “in some ways the original sin that catalyzed the evolution of today’s medical-industrial complex.” But, as Rosenthal (too briefly) discusses, countries where people are much better insured don’t have anything like our self-dealing, upside-down incentives and outrageous costs. Somehow, despite largely keeping citizens’ skin out of the game, other rich democracies manage to have much lower costs per person — as well as greater utilization of physician and hospital services and better basic health measures.

The difference between the United States and other countries isn’t the role of insurance; it’s the role of government. More specifically, it’s the way in which those who benefit from America’s dysfunctional market have mobilized to use government to protect their earnings and profits. In every country where people have access to sophisticated medical care, they must rely heavily on the clinical expertise of providers and the financial protections of insurance, which, in turn, creates the opportunity for runaway costs. But in every other rich country, the government not only provides coverage to all citizens; it also provides strong counterpressure to those who seek to use their inherent market power to raise prices or deliver lucrative but unnecessary services — typically in the form of hard limits on how much health care providers can charge.

In the United States, such counterpressure has been headed off again and again. The industry and its elected allies have happily supported giveaways to the medical sector. But anything more, they insist, will kill the market. Although this claim is in conflict with the evidence, it is consistent with the goal of maximum rewards to (and donations from) the industry.

Without a clear view of the political economy of health care, it’s easy to see the problem as Justice Scalia did. If we could just start treating health care like broccoli, the market would solve the problem. But as Rosenthal’s important book makes clear, the health care market really is different. Speaking of her Times series in 2014, Rosenthal told an interviewer her goal was to “start a very loud conversation” that will be “difficult politically to ignore.” We need such a conversation — not just about how the market fails, but about how we can change the political realities that stand in the way of fixing it.

https://mobile.nytimes.com…

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Comment:

By Don McCanne, M.D.

In her book, “An American Sickness,” Elisabeth Rosenthal has provided an excellent description of the dysfunction of the business model of health care delivery in the marketplace. On this basis alone it is an invaluable resource for every health policy library – home or institutional.

Rosenthal makes a valiant effort to describe what we can do about it, but she does so apparently under the assumption that we are going to have to live with this system for the indefinite future. Her recommendations largely require a very aggressive stance in dealing with the health care delivery system, especially with the business transactions. A limitation of this approach is that it requires not only access to the system by virtue of good insurance coverage or personal wealth, but it also requires a personality capable of rough-and-tumble negotiations. Most people would not really qualify and thus would not be effective in taking on the medical-industrial complex. She also quite appropriately recommends more aggressive regulation, though, except for the quite modest reforms of ACA, that has not been forthcoming in the environment of political polarization that has dominated the scene in the past few decades.

However this “sickness” is unique in the United States, so hope springs from observing how other nations have made their systems work. I am going to yield to Yale political science professor Jacob Hacker, who also reviewed her book, to provide us with a description of what accounts for other nations’ success, but in one word, it is government.

Rosenthal mentions single payer, but is far too timid here, suggesting, at most, allowing individuals over 55 to purchase Medicare. It is true that single payer reform alone would not correct all of the sins of capitalizing on unfettered market opportunities for excess revenues, but changing the milieu from the market business model to the public patient service model would go a long way toward realigning incentives of the providers. It would be a refreshing environmental change to concentrate on how the health care needs of the patients can best be served instead of wasting time trying to figure out how to pull in more big bucks.

Sorry, Republicans, but most people support single-payer health care

By Catherine Rampell
The Washington Post, April 17, 2017

Despite the rise of the tea party and unified Republican control of government, one decidedly anti-free-market idea appears ascendant: single-payer health care.

And it’s no wonder, given that a record-high share of the population receives government-provided health insurance. As a country, we’ve long since acquiesced to the idea that Uncle Sam should give insurance to the elderly, veterans, people with disabilities, poor adults, poor kids, pregnant women and the lower middle class.

Many Americans are asking: Why not the rest of us, too?

A recent survey from the Economist/YouGov found that a majority of Americans support “expanding Medicare to provide health insurance to every American.” Similarly, a poll from Morning Consult/Politico showed that a plurality of voters support “a single payer health care system, where all Americans would get their health insurance from one government plan.”

Divining the longer-term trend in attitudes toward this idea is difficult, as the way survey questions on the topic are asked has changed over time. Views of a health-care system in which all Americans get their insurance from the government single payer vary a lot depending on how you frame the question. Calling it “Medicare for all,” for example, generally elicits much stronger approval, while emphasizing the word “government” tends to depress support.

But at the very least, some survey questions that have remained consistent in recent years show support has been rising back up over the past few years for the broader idea that the federal government bears responsibility for making sure all Americans have health-care coverage.

In a way, stronger public support for single payer is the logical conclusion of recent health-insurance trends.

Since 1987, the share of Americans who receive some sort of public insurance has roughly doubled, to about 4 in 10  as of 2015. That’s not even counting the people who receive subsidies to buy private insurance on the Affordable Care Act exchanges.

The increase in the share of Americans on government insurance is partly due to demographics (baby boomers aging into Medicare) and partly due to deliberate policy changes growing the pool of Americans eligible for government insurance (such as the creation of the Children’s Health Insurance Program and Obamacare’s Medicaid expansion).

Expansions of government coverage have been cheered on by many liberals, but they have also bred suspicion and jealousy.

In both the recent YouGov and Morning Consult polls, for example, the age group most opposed to single payer was the only one that basically already has it: those 65 and up. In other words, single payer for me but not for thee.

That’s not because older Americans hate their experience with Medicare and wouldn’t wish something similar upon their worst enemy. To the contrary, those on Medicare are more satisfied with how the health-care system works for them than people on private insurance are, according to Gallup survey data.

Rather, seniors are probably worried that expanding government coverage to more Americans could put their own generous benefits at risk. That is, they want single-payer enthusiasts to keep your government hands off their Medicare.

Many of those not among the growing pool of public-insurance beneficiaries, on the other hand, have become resentful of the fact that everyone else seems to be getting a big fat government handout. Or so they perceive.

Many of the stories in the booming “blue-state reporter ventures into Trump country” genre have featured Trump supporters with deep hostility toward Obamacare, among other government programs. Some of these Trump supporters are, perhaps puzzlingly, themselves Obamacare beneficiaries, receiving government subsidies for private insurance on the individual exchanges. But often what these Trump voters say they want is not a return to pre-Obamacare days; rather, they want in on the great insurance deal that they think their lazy, less-deserving neighbors are getting.

In fact, that recent YouGov poll found that 40 percent of Trump voters support expanding Medicare to all Americans. Among Republicans overall, the share rises to 46 percent.

Among Republican politicians, needless to say, attitudes are somewhat different.

Expanding public health coverage to more people costs a lot of money, which doesn’t exactly jibe with their tax-cutting agenda. House Speaker Paul D. Ryan (R-Wis.) and his congressional compatriots seem to further believe — despite all evidence to the contrary — that the private sector is on the verge of some innovation that will magically reduce health-care costs and give all Americans the coverage and care they yearn for.

But it’s probably not fair to paint Republicans as the only roadblock here. Even Democrats don’t have the stomach for the battle required to replace our jury-rigged, mostly employer-sponsored insurance system with single payer. Which is understandable — while I also favor universal health-insurance coverage, I’m skeptical it will be achieved through single payer, given both the state of our political process and Americans’ cultural allergy to tax hikes.

Even so, somewhere out there, Bernie Sanders is smiling.

https://www.washingtonpost.com…

Docs want single-payer and so should you

By Phil Arvia
Daily Southtown, April 17, 2017

Obamacare, Trumpcare, I don’t care.

There is no fixing U.S. health care as it now teeters, a festering bureaucracy that spends more money on patients than any other country in the world yet lets them die faster than many nations supposedly our lesser siblings.

I can give you the facts of our failings: Health care spending in the U.S. as a percentage of GDP is 1.5 times that of any country you’ve heard of. In the 34-nation Organization for Economic Co-operation and Development, the average is 3.1 physicians and 3.4 hospital beds for every 1,000 people, while those figures in the U.S. are 2.4 and 2.6. In 2010, the average life span in OECD countries was 79.8 years; in the U.S., 78.7. Medical expenses, according to a Harvard University study of bankruptcy court statistics, account for roughly 62 percent of all personal bankruptcies in the U.S. — and 72 percent of that group had health insurance.

So go ahead, repeal and replace Obamacare — President Donald Trump was maneuvering in that direction again last week — with something else that keeps the public sick and insurers rich. Or do something that an allegedly great and Christian nation should demand: A single-payer system — Medicare for all — that ensures everyone has all the medical care they will ever need.

It’s the only thing that makes sense. Ask a doctor. Judging by the surveys, there’s a 60 percent chance that doc is a single-payer proponent.

“That is correct,” said Dr. Susan Rogers, an attending physician at Cook County Hospital and a board member of Physicians for a National Health Program. “Over the last 30 or 40 years, when managed care came along, the administration of health care became super complicated and labor-intensive. We’re spending more time on administration and documentation than actual health care.

“Physicians are very, very frustrated.”

Were the single-payer plan currently espoused by Bernie Sanders in place, frustration would fall away.

“People would be healthier,” Rogers said. “The workforce would be stronger, families would be stronger. When everyone is healthier, everything works better.

“Most older people are satisfied with traditional Medicare. And if you look at other countries with single-payer systems and how people feel about their care, it is not a source of stress.”

Stress is our current system’s chief product — for patients and providers alike.

“Right now, there’s an economic incentive for insurance companies not to pay doctors,” said Dr. Peter Orris, the chief of occupational and environmental medicine at University of Illinois Health. “That’s the origin of the huge administrative overhead that’s inflating costs in this country.”

Roughly 28 percent of health care spending in the U.S. is on administrative costs. Medicare shuffles its papers much more efficiently, as do virtually all other Western nations.

“Single-payer is the only system that addresses cost,” Rogers said. “Single-payer eliminates the market forces and administrative costs that drive the cost of health care up.”

It also eliminates the ridiculous premise that health care can be pursued in our capitalist, free-market society like a new car or a flat-screen. Because, sure, doc, you say I need an appendectomy, but let me shop around for a better deal on the anesthesiology, or at least for a hospital that will thrown in the sponge bath for free.

(By the way, according to the International Federation of Health Plans, in 2014 the average appendectomy in the U.S. ran about $16,000, and in Australia about $3,800.)

“Free markets are based on full knowledge on the part of the buyers and the sellers — and that’s impossible here,” Orris said. “The only thing single-payer takes out of the equation is private insurance agencies, which add nothing to the process except cost and complication.”

The 2013 Commonwealth Fund International Health Policy Survey suggested that if the U.S. had Canada’s health care system, 57 million fewer adults would go without health care because of cost; $1.3 trillion fewer dollars would be spent; 5,400 fewer infant deaths would occur; and 56,000 fewer preventable deaths would occur.

And the patients aren’t the only ones who’d fare better.

“Doctors would make more money because they’d have more time to see patients and that whole administrative issue would be resolved,” Rogers said. “Doctors could be doctors again.”

But what about research? Would the next wonder drug be stymied if the pharmaceutical companies couldn’t sell cancer drugs here at nine times the price they fetch in the United Kingdom?

“If you look at who is funding research, the government is already funding the bulk of it through grants,” Rogers said. “And statistics show single-payer countries are producing more journal articles that the U.S.”

Here in the greatest country on earth, our medical system seems simply to produce opioid addicts and opinion pieces.

We should demand more.

http://www.chicagotribune.com…

Single-payer not same as socialized medicine

By James Garb, M.D.
Cape Cod Times (Hyannis, Mass.), April 16, 2017

While I wholeheartedly support Carl Yingling’s desire for universal single-payer health care (“Americans need socialized medicine,” Letters, April 11), it’s important not to conflate that with “socialized medicine.”

The term socialized medicine is about care delivery, and means that all health care providers and hospitals work for the government, which would control how and where care is delivered; I’m not aware of anyone advocating that. The only “socialized” health care in America is the veterans health system. Anything beginning with the word “socialized” is a nonstarter for most Americans.

Alternatively, single-payer is about insurance, and means replacing our inefficient, costly patchwork system of competing private insurance with a nonprofit program (expanded Medicare) that would save more than $500 billion per year, enough to pay for privately provided universal health care, while eliminating copays and deductibles. It would help contain rising health care costs through streamlined administration, bulk purchasing and global budgeting.

Medicare has low administrative overhead and high approval ratings. Instead of covering only the oldest, sickest among us, expanded Medicare would be strengthened by bringing younger, healthier people into the pool, lowering the overall cost per member.

Mr. Yingling is correct that most industrialized countries have universal single-payer health care, and that should be our goal as well.

http://www.capecodtimes.com…