PNHP president Dr. Robert Zarr appeared on Thom Hartmann’s “The Big Picture” on RT America on Aug. 18, 2016, to discuss Aetna’s decision to withdraw from the Affordable Care Act marketplace in most of the states where it currently operates.
Dr. Susan Rogers on ‘Chicago Tonight’
PNHP board member-elect Dr. Susan Rogers appeared on “Chicago Tonight” on WTTW Channel 11 on August 18, 2016. She discussed Aetna’s decision to withdraw from the Affordable Care Act marketplace in numerous states, including Illinois.
Dr. Rogers’ segment can be viewed below, or on the WTTW website.
Dr. Andy Coates: Single payer will enhance our lives across the board
The following is a lightly edited, unofficial transcript of the second half of an interview that Dr. Andrew D. Coates gave to Ed “Flash” Ferenc, host of the labor-oriented, Cleveland-based America’s Work Force Radio, WERE AM 1490, on March 30, 2016. Dr. Coates is immediate past president of Physicians for a National Health Program.
In this segment of the interview, Dr. Coates talks about how a single-payer, improved-Medicare-for-All system would benefit everyone who lives in the United States. In the first half of the interview (not transcribed here), Dr. Coates describes how he came to support single payer, how a majority of physicians now support it, and how the Affordable Care Act, despite the gains it has achieved, has failed to resolve the health care crisis in the U.S. and has actually strengthened the hand of the for-profit sectors of health care, whose interests run counter to the nation’s health.
The audio of the entire program is available at http://awfradio.com/todays-show-3-30-16/. The first segment of the interview with Dr. Coates runs from the 17:20-minute mark to 27:30; the second segment, transcribed below, runs from the 30-minute mark to 54:38.
HOST ED ‘FLASH’ FERENC: [We’re speaking with] Dr. Andy Coates, Physicians for a National Health Program. He’s a professor of medicine at Albany Medical College. We’re here to talk about taking Medicare as you know it and expanding it to everybody in America. Now this is not a new system. Other countries have used this system that you’re talking about, that you’re supporting, and it’s working, right?
ANDREW COATES, M.D.: Indeed. Every other industrialized nation has some version of this system. We could talk about a program where the government owns all of the health care infrastructure and pays the caregivers – nurses, doctors, pharmacists, and so on – directly; that would be like the National Health Service in Scotland now or as it used to be in England. There are some other examples.
And there are systems like the Canadian, Taiwanese, New Zealand systems, where the government pays the bills but where the health care infrastructure remains privately owned and operated, but operated on a not-for-profit basis.
Then there are some hybrid models that came from the 19th century, where there is some version of “private insurance,” but the private insurance is usually – as in Germany or other European nations – where the private insurance doesn’t correspond to UnitedHealthcare, Aetna or the kind of insurers in the United States. It’s an insurance fund that came through religious health organizations or through the labor movement, unions, or from communities. These are heavily regulated and controlled by the government to make sure that everybody’s in, and nobody’s out. So to call those systems private insurance systems is really a misnomer.
So the way of organizing the payment of care is, in my view, the beginning of the way to organize the delivery of care. If you don’t have control over the elements that go into the system, then how can you make the system serve the people in the right way? It seems to me that in a modern democracy, health care being so essential to our lives, that we absolutely would have to have control over how everyone in the country has access to the best possible care. That would be a key responsibility of a truly democratic government.
HOST: So the plan that’s on the table right now, this is a piece of legislation that has been introduced, it’s House Resolution 676, it’s called the Expanded and Improved Medicare for All Act: I know it’s been introduced and reintroduced a number of times. John Conyers of Michigan is supporting it. It’s my understanding that there are about 60, maybe 70 members of the Congress that are behind it. It’s just a fraction – you’d need a whole lot more support. But you’re in favor of that bill, which would take essentially Medicare, the way we have it right now, and expand it to everybody – every man, woman and child in the United States – is that right?
COATES: Yes. The Medicare for All Act, or H.R. 676, is a very, very useful document. Listeners should look it up. It’s short; if you print it out, it’s about 30 pages – easy to read. It’s a blueprint of a system that we know, — from the great deal of health policy evidence, — would absolutely work. It would cover all necessary care, there would be no copays or deductibles.
By all necessary care, I’m taking about all prescription drugs – here, I’ll just read it to you: primary care and prevention, dietary and nutritional therapies, inpatient care, outpatient care, emergency care, prescription drugs, durable medical equipment, long-term care, palliative care, mental health services, the whole scope of dental services, including periodontics, oral surgery, and endodontics, but excluding cosmetic dentistry, substance abuse treatments, chiropractic services, not including electrical stimulation, basic vision care and vision correction (other than laser vision correction), hearing services, including coverage of hearing aids, and podiatric care.
So all necessary care. Many of these things are not presently covered by Medicare, so it would expand and improve Medicare.
And this idea would exclude charges due at the point of service by patients. And that’s very important. It’s been very popular for the last decade or so to talk about “skin in the game” – you know, making patients go shopping for care when they’re sick, as the way to drive down prices. This has become a talking point, and this is very much the kind of neoliberal nuttiness that led to the Affordable Care Act, which has the taxpayers subsidizing the private insurance companies. You know, the idea is that if people don’t pay for their care when they’re sick, then they won’t understand how things work. But it turns out that if people are asked to pay charges for necessary care, they will avoid necessary care. There’s a wealth of evidence that will show that, in all kinds of different ways.
So this bill, H.R. 676, will actually work for the patients, and it will take us in the direction that we need to go. On the one hand there’s a big question about how it would be paid for and I’d be glad to talk with you about that. But the other thing that I’d really like to talk to your listeners about is to think about what it would mean for our daily lives if we had a system like this.
HOST: Let’s start with No. 1, how we’re going to pay for it. Because you know the conservatives are going to say, “Oh, we can’t afford it.”
COATES: Well, it’s not just the conservatives. That’s what Hillary Clinton’s advisers have been yelling to the public too. I think that Hillary Clinton’s campaign has come out attacking this idea that we should have a national health program. Look – all of the existing – if you look at the taxpayer money in the United States that is funding health care right now – all of this calculated on a per-person cost basis, a majority of the care is already funded by taxpayers in the U.S. And if you compare the U.S. level of spending with all the other nations on the planet, the United States spends more taxpayer money on health care per person than any other nation spends in total. It’s an astonishing thing. On a per-person basis, we have more taxpayer money spent on health care than any other nation spends in total on health care.
So there’s plenty of money in the U.S. system already, plenty of taxpayer money. If the existing sources in our employer-based system – you know, the employers pay huge amounts into the insurance companies to cover their employees – I’m taking about the big employers that have the big plans, if that money were put into the system, there would be plenty of resources to cover everyone.
But more, there would be enormous savings of hundreds of billions of dollars because there’s an enormous amount of waste in having a myriad, a great big pile of insurance companies fighting over every penny – with the hospitals and doctors’ offices having many people, whole departments to fight for the money. Hospitals might have hundreds of coders and billers trying to fight for the money. There’s this incredible administrative waste, waste that comes down to chasing money in the system. That would be eliminated, and so there would be hundreds of billions of dollars in savings there.
In addition, in the Conyers bill, H.R. 676, would convert the system to a not-for-profit basis. There’s a spectacular amount of waste in profits and profit-seeking. It might be difficult to make a hefty profit off the care of a sick person, but the effort to do so brings with it a great deal of administration. So when it comes to pharmaceutical prices and medical equipment, all kinds of efficiencies could be found in the system if there were only one payer – in other words, the pharma companies would have to bargain with the people over prices. So the savings in the single-payer system would be spectacular from that point of view, and could liberate all of those resources so we could cover everyone.
There’s also a myth that some of the uninsured and sick patients would come flocking into the system and that would burden the system unduly. It turns out that, for example, when Medicare was built, and that was when the elderly in the United States had no one to pay for their care, it wasn’t the case that patients overwhelmed the system.
Furthermore, the single payer, because now we’d have a way for every patient’s care to be compensated, we could plan to expand our health system – I think of some of the rural counties here in upstate New York that don’t really have hospitals or adequate clinics. Those places could now afford to have them. And so the expansion of care could take place could take place in a planned way.
HOST: If you think back to when Medicare was debated back in the ’60s – Medicare was instituted in 1965 under Lyndon Baines Johnson – the same arguments that you’re hearing today, “Oh, you can’t do that!” In fact, Ronald Reagan, as I recall, was one of the big opponents of Medicare. “It’s socialistic, they do that in communist countries, we can’t do that!” Now, if you ask a senior today what they thought of Medicare, they’d say it’s the best thing since sliced bread. So this would basically take Medicare and expand it to everybody. I tell you, we have a long way to go. We need to educate people on this. Let me ask you one more question before you go. Do you feel, as a doctor, as a medical professional, that eventually this is going to happen – because of the high cost of health care under the Affordable Care Act, that this is the only way to solve the situation of getting access to health care in America? What are your thoughts on that?
COATES: If the goal is to cover absolutely everybody, to make sure that all necessary care is attainable, so we don’t have the undesirable situation where many people are completely left out, lost to medical follow-up, not able to access the clinic … if the goal is to do that, and also to keep the costs from spiraling completely out of control, and to help control costs overall, then, this is the only system that’s going to work.
The other thing I’ve learned though, in my travels around over the last 10 years or so, talking to many different audiences – way beyond some kind of FOX News feature where there’s a phony debate about whether some people “deserve to die” of illnesses that they never asked for – I think virtually everyone believes that if you’re sick, you should be able to get the best possible care. It doesn’t matter if you live in the city or the countryside, if you’re wealthy or poor, in an African American community, Latino – it doesn’t matter.
HOST: Right.
COATES: Because that’s the way it should be. That’s what everyone understands, in some way. I hope what will happen, and I think what will happen, is what we’ll start to understand is how liberating it would be if we didn’t have to get health care through our employer, or through our spouse, or through our parents.
What it would mean to us if we didn’t have to worry about our children being unsafe, meaning without health care – getting out of high school and looking for work – at time of stress and insecurity for them, as they find their way? Imagine how liberating it would be for them not to have to worry about health care.
Imagine what it would mean for the union movement. It’s very hard to organize unions when the thought of a strike means they’ll discontinue your health insurance, and that means that your wife won’t have access, or for a working woman to keep her job because her husband ended up getting multiple sclerosis and she is afraid to leave, the “job lock” phenomenon.
Really, when it comes to health care, there are so many insecurities in our personal lives – for instance with a parent has to transition to nursing home because of a devastating stroke. This should not be a time when the whole family, I mean the expanded family, should have its finances decimated, with brothers and sisters, cousins all drawn into it because of one person’s health care crisis. This is really a terrible situation and undignified and all too common in the United States.
But if you look at it the other way, how liberating it would be, how proud people would be of this country, if that were not an issue. Proud to know that the system would be there, ready for us, and the system was designed around the patients. I really think that’s completely attainable. I don’t think it’s that radical. I think it’s a very modest reform, if you will. It wouldn’t threaten anything – it would actually enhance life across the board. It would not only work but be a great thing for public pride.
HOST: There you go. Well said. If you want more information on this, here’s the website: pnhp.org, Physicians for a National Health Program. Dr. Coates, we love having you on the show. Let’s keep this conversation going. So maybe one of these days Congress will move forward and do the right thing.
COATES: Also, there are hundreds of unions that have endorsed H.R. 676 and it continues to be a great campaign. Let’s build the word of mouth about it in the union movement. We’re hopeful that the unions can show us the way forward.
HOST: So you keep up the fight, OK?
COATES: Thanks.
Why I’m at odds with my party on health care
By Jack Bernard
Georgia Health News, Aug. 18, 2016
“Not everything that is faced can be changed, but nothing can be changed until it is faced.” (James Baldwin)
With a proven record of cutting waste and reducing spending, I am a fiscally conservative Republican, as well as a health care professional. But the Georgia GOP legislative leadership and I have reached very different conclusions about Medicaid expansion and the Affordable Care Act (ACA).
Nationally, my party has passed legislation in the House more than 50 times to repeal the ACA, also known as Obamacare. The ACA was implemented anyway and shows no sign of going away. So, is the ACA working? And what about Medicaid expansion here?
I was a senior corporate and government planner. Planners evaluate programs in one of two ways, based on: 1) history, or 2) the ideal.
I will address the historical method first.
According to both federal officials and a 2014 Gallup report, there has been a precipitous drop in the number of uninsured people under the ACA. The U.S. Department of Health and Human Services states that the national rate of uninsured is 9 percent for the overall population and 12 percent for those under 65. According to HHS, the ACA has been responsible for covering 20 million more Americans since it was enacted.
Medicaid expansion was a key factor in realizing this drop in most states, although not here. Republicans, like other Georgians, should be concerned that Georgia now has the third-highest rate of uninsured in the nation.
Demographically, the national decrease is uneven. The rate dropped much more for Hispanics (from 42 percent down to 21 percent) and blacks (from 22 percent to 10 percent) than for whites (from 14 percent to 7 percent). It should be no surprise that, according to surveys, the ACA is more popular among Hispanics and African-Americans.
Likewise, according to Gallup, the drop in the rate of uninsured was greatest in those under $36,000 in household income (from 31 down to 25 percent). Among higher-income households, the drop was much less.
In Georgia, 74 percent of those in the “coverage gap” are minorities.
I do not know exactly what influences the thinking of the Georgia GOP leadership when it comes to expanding coverage. But I am very concerned when key legislators make unsubstantiated — and factually incorrect — statements, such as saying that Medicaid expansion would cover “Georgians who are fully capable of getting a job that would provide them with private health insurance.”
Of Georgians in the coverage gap (low-income people who don’t qualify for either Medicaid or ACA exchange discounts), 57 percent are in working families. Surely our GOP legislative leaders know some low-income working people. Do they seriously believe that these men and women do not want good jobs that provide them with health insurance?
Regarding the second evaluation method, comparing the ACA to the ideal is much more difficult. When researching the developed world for other insurance models, we find that there is no need for something like Medicaid expansion (or weird “waivers”). All of these nations cover everyone under a coordinated, comprehensive system.
There is the direct government delivery model. Britain has had a National Health Service since the end of World War II. Our experience with this format has not been as positive, as shown by the VA scandals.
Another system used in some European nations is to have a small number of highly regulated private insurance carriers, where everyone gets coverage. These nations all have lower costs and better outcomes than here.
Finally, there is the model in which the government provides insurance covering to all citizens. The Canadian system can be likened to a “Medicare for All” program here, where it would cover every citizen. Surveys have shown a high level of satisfaction among Canadians with their system.
But what about cost? Let’s look at a 2013 report from the Organization for Economic Cooperation and Development (OECD), which includes all the developed nations worldwide.
With our fragmented system, we spend 17.7 percent of our GDP on health care. Canada spends only 11.2 percent and covers everyone. Many other nations spend much less. Australia, for instance, spends just 8.9 percent. The average OECD nation spends only 9 percent.
Per capita, we spent $8,508 for health care in 2011. Canada came in at $4,522. The average OECD (developed nation) spent only $3,339 per capita!
Oddly, we spent more tax dollars on health care (VA, Medicare, Champus, Medicaid, etc.) than almost any other developed nation. We just do not spend our money as wisely. Pandora’s box regarding cost escalation was opened here a long time ago by Big Pharma and private insurance companies.
And, according to a 2013 report by the Institute of Medicine, of 17 high-income countries examined, we are at the bottom in many health indicators.
In 1960, life expectancy in the United States was 1.5 years above the OECD average. In 2011, our nation was 1.5 years below the other OECD nations.
So, what can we conclude about the ACA? First, it is much better than what we had before, regarding health care access and coverage.
Secondly, a Canadian-style “Medicare for All” system would cover everyone — and at less cost — clearly a better option than the current ACA and its Medicaid expansion provisions.
I agree with our state GOP leaders that the ACA is imperfect, but it is what we have in the short term to provide coverage to the uninsured. My question to these leaders is: “Why aren’t you advocating for Medicaid expansion instead of for depriving the working poor of insurance coverage?”
Jack Bernard is a former Director of Health Planning for the state of Georgia. He retired as an executive with a national health care corporation.
http://www.georgiahealthnews.com/2016/08/odds-party-health-care/
Medicare Advantage plans pay hospitals less than does traditional Medicare
By Laurence C. Baker, M. Kate Bundorf, Aileen M. Devlin and Daniel P. Kessler
Health Affairs, August 2016
Abstract
There is ongoing debate about how prices paid to providers by Medicare Advantage plans compare to prices paid by fee-for-service Medicare. We used data from Medicare and the Health Care Cost Institute to identify the prices paid for hospital services by fee-for-service (FFS) Medicare, Medicare Advantage plans, and commercial insurers in 2009 and 2012. We calculated the average price per admission, and its trend over time, in each of the three types of insurance for fixed baskets of hospital admissions across metropolitan areas. After accounting for differences in hospital networks, geographic areas, and case-mix between Medicare Advantage and FFS Medicare, we found that Medicare Advantage plans paid 5.6 percent less for hospital services than FFS Medicare did. Without taking into account the narrower networks of Medicare Advantage, the program paid 8.0 percent less than FFS Medicare. We also found that the rates paid by commercial plans were much higher than those of either Medicare Advantage or FFS Medicare, and growing. At least some of this difference comes from the much higher prices that commercial plans pay for profitable service lines.
From the Discussion
Knowing how Medicare Advantage prices compare to those of FFS Medicare is important for public policy. Health spending is the product of price and quantity. If Medicare Advantage prices are lower than those of FFS Medicare, then Medicare can obtain the same quantity of services for less money through Medicare Advantage than through FFS Medicare.
Contrary to conventional wisdom, we found that Medicare Advantage plans paid lower prices for hospital services than FFS Medicare — around 8 percent lower in both 2009 and 2012 — once the DRG and geographic-area mix of FFS Medicare was made comparable to those of Medicare Advantage.
If differences in hospital mix are also accounted for, Medicare Advantage’s hospital prices are about 5.6 percent less than those of FFS Medicare. Thus, about a third of the 8 percent difference is attributable to the narrower hospital networks in Medicare Advantage, compared to FFS Medicare.
Our results also show how Medicare Advantage can be used to get a better deal (at least from hospitals) for the Medicare program as a whole, by adjusting administered prices across geographic areas and DRGs to better reflect the market.
Finally, consistent with previous research, we found that the rates commercial plans pay to hospitals are significantly higher than those of either Medicare Advantage or FFS Medicare and that they are rising.
http://content.healthaffairs.org/content/35/8/1444.abstract
***
Comment:
By Don McCanne, M.D.
The pro-market authors of this study have shown that the private Medicare Advantage plans pay hospitals less than traditional Medicare pays, concluding that the private plans “get a better deal for the Medicare program.” But that conclusion is not true if you look at the whole picture.
Because the private Medicare Advantage plans were being paid more than what was being paid for comparable care in the traditional Medicare program, Congress included in the Affordable Care Act adjustments to reduce the overpayments. However, the private plans have continued with their mastery of gaming the system to increase their payment rates, such as selective marketing to healthier populations and upcoding to receive greater payments through risk adjustment. This has been with the complicity of the people in HHS who have used innovative administrative tools and creative accounting to more than offset the required reductions. The private plans are still receiving greater payments than are being made for comparable patients in the traditional Medicare program.
Since the private plans are receiving larger payments, and, according to this study, are paying less for health care, the Medicare program is getting a worse deal, and it is the private insurers themselves who are getting a great deal, at a cost to taxpayers. This extra money that the insurers are siphoning out of the system is going to overpriced administrative services and, yes, to extra profits.
Although the private insurers are pulling out of the ACA exchanges because they cannot make their business model work there, they boast to their investors that their commercial accounts are highly profitable (employer-sponsored plans) and that their government accounts – especially the Medicare Advantage plans – are producing extraordinary returns for the investors (and humongous compensation packages for the corporate executives). We are paying for this through higher premiums for private plans and greater taxes for privately-managed government programs. A well designed single payer system should fix that.
To Sanders, Aetna’s Pull-Back from Affordable Care Act Markets Shows Need for Overhaul
By Laura Meckler
The Wall Street Journal, Aug. 16, 2016
Sen. Bernie Sanders, who mounted a strong challenge for the Democratic presidential nomination, said Tuesday that news that a major health insurer was pulling back its participation in the Affordable Care Act exchanges affirms the need for his single-payer, government-run program. He promised to introduce legislation creating “Medicare for all” again next year.
This week, Aetna Inc. said it will withdraw from 11 of the 15 states where it currently offers plans, the latest major national insurer to sharply pull back its participation.
Rather than minimizing the problem, Mr. Sanders cast Aetna’s decision is part of a trend.
“It is disappointing that Aetna has joined other large for-profit health insurance companies in pulling out of the insurance marketplace,” he said in a statement. “Despite the Affordable Care Act bringing them millions more paying customers than ever before, these companies are more concerned with making huge profits then ensuring access to health care for all Americans.”
He added: “The provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible.”
The statement makes clear that he intends to continue fighting for his agenda from the Senate, possibly in opposition to a future President Hillary Clinton.
The health exchanges have been attacked from the political right as too much government, but also criticized from the left as not going far enough. Throughout the Democratic presidential primary, Mr. Sanders argued that only a government-run system can guarantee affordable coverage for all. Former Secretary of State Hillary Clinton, who won the nomination, says more modest tweaks to the Affordable Care Act can address its shortcomings.
To win his endorsement, Mrs. Clinton also reiterated her support for a government-run insurance plan to compete with private insurers, but she has said little about that plan on the campaign trail.
Bernie Sanders is not giving up on Medicare for all
Sanders Statement on Aetna’s Decision to Withdraw from Health Insurance Exchanges
By Senator Bernie Sanders
August 16, 2016
U.S. Sen. Bernie Sanders (I-Vt.) issued the following statement Tuesday after Aetna announced plans to withdraw from Affordable Care Act health exchanges in 11 of 15 states where it currently operates:
“It is disappointing that Aetna has joined other large for-profit health insurance companies in pulling out of the insurance marketplace. Despite the Affordable Care Act bringing them millions more paying customers than ever before, these companies are more concerned with making huge profits than ensuring access to health care for all Americans.
“In my view, the provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible. That is why we need to join every other major country on earth and guarantee health care to all as a right, not a privilege. That is also why we need to pass a Medicare-for-all single-payer system. I will reintroduce legislation to do that in the next session of Congress, hopefully as part of the Democratic Senate majority.”
http://www.sanders.senate.gov/newsroom/press-releases/sanders-statement-on-aetnas-decision-to-withdraw-from-health-insurance-exchanges
***
Comment:
By Don McCanne, M.D.
Since the Clinton Camp was successful in keeping single payer out of the Democratic Party platform, much of the media seems to believe that it has completely gone away as an issue. The good news is that Bernie Sanders assures us that it hasn’t. We need to do our part to be sure that the nation knows that.
Aetna Shows Why We Need a Single Payer
By Robert Reich
Common Dreams, Aug. 17, 2016
The best argument for a single-payer health plan is the recent decision by giant health insurer Aetna to bail out next year from 11 of the 15 states where it sells Obamacare plans.
Aetna’s decision follows similar moves by UnitedHealth Group, the nation’s largest insurer, and Humana, one of the other giants.
All claim they’re not making enough money because too many people with serious health problems are using the Obamacare exchanges, and not enough healthy people are signing up.
The problem isn’t Obamacare per se. It’s in the structure of private markets for health insurance –- which creates powerful incentives to avoid sick people and attract healthy ones. Obamacare is just making the structural problem more obvious.
In a nutshell, the more sick people and the fewer healthy people a private for-profit insurer attracts, the less competitive that insurer becomes relative to other insurers that don’t attract as high a percentage of the sick but a higher percentage of the healthy. Eventually, insurers that take in too many sick and too few healthy people are driven out of business.
If insurers had no idea who’d be sick and who’d be healthy when they sign up for insurance (and keep them insured at the same price even after they become sick), this wouldn’t be a problem. But they do know – and they’re developing more and more sophisticated ways of finding out.
It’s not just people with pre-existing conditions who have caused insurers to run for the happy hills of healthy customers. It’s also people with genetic predispositions toward certain illnesses that are expensive to treat, like heart disease and cancer. And people who don’t exercise enough, or have unhealthy habits, or live in unhealthy places.
So health insurers spend lots of time, effort, and money trying to attract people who have high odds of staying healthy (the young and the fit) while doing whatever they can to fend off those who have high odds of getting sick (the older, infirm, and the unfit).
As a result we end up with the most bizarre health-insurance system imaginable: One ever more carefully designed to avoid sick people.
If this weren’t enough to convince rational people to do what most other advanced nations have done and create a single-payer system, consider that America’s giant health insurers are now busily consolidating into ever-larger behemoths. UnitedHealth is already humongous. Aetna, meanwhile, is trying to buy Humana.
Insurers say they’re doing this in order to reap economies of scale, but there’s little evidence that large size generates cost savings.
In reality, they’re becoming very big to get more bargaining leverage over everyone they do business with – hospitals, doctors, employers, the government, and consumers. That way they make even bigger profits.
But these bigger profits come at the expense of hospitals, doctors, employers, the government, and, ultimately, taxpayers and consumers.
So the real choice in the future is becoming clear. Obamacare is only smoking it out. One alternative is a public single-payer system. The other is a hugely-expensive for-profit oligopoly with the market power to charge high prices even to healthy people – and to charge sick people (or those likely to be sick) an arm and a leg.
Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
http://www.commondreams.org/views/2016/08/17/aetna-shows-why-we-need-single-payer
Bernie Sanders is not giving up on Medicare for all
Sanders Statement on Aetna’s Decision to Withdraw from Health Insurance Exchanges
By Senator Bernie Sanders
August 16, 2016U.S. Sen. Bernie Sanders (I-Vt.) issued the following statement Tuesday after Aetna announced plans to withdraw from Affordable Care Act health exchanges in 11 of 15 states where it currently operates:
“It is disappointing that Aetna has joined other large for-profit health insurance companies in pulling out of the insurance marketplace. Despite the Affordable Care Act bringing them millions more paying customers than ever before, these companies are more concerned with making huge profits than ensuring access to health care for all Americans.
“In my view, the provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible. That is why we need to join every other major country on earth and guarantee health care to all as a right, not a privilege. That is also why we need to pass a Medicare-for-all single-payer system. I will reintroduce legislation to do that in the next session of Congress, hopefully as part of the Democratic Senate majority.”
http://www.sanders.senate.gov/newsroom/press-releases/sanders-statement-on-aetnas-decision-to-withdraw-from-health-insurance-exchanges
Since the Clinton Camp was successful in keeping single payer out of the Democratic Party platform, much of the media seems to believe that it has completely gone away as an issue. The good news is that Bernie Sanders assures us that it hasn’t. We need to do our part to be sure that the nation knows that.
Aetna, UnitedHealth and Humana provide important lesson on feasibility
Aetna to Quit Most Obamacare Markets, Joining Major Insurers
By Zachary Tracer
Bloomberg, August 15, 2016
Health insurer Aetna Inc. will stop selling individual Obamacare plans next year in 11 of the 15 states where it had been participating in the program, joining other major insurers that have pulled out of the government-run markets in the face of mounting losses.
While the Affordable Care Act, known as Obamacare, has brought coverage to millions, the new markets have proven volatile for some of the largest for-profit insurers. Aetna said earlier this year that it expected to lose $300 million on the plans. UnitedHealth Group Inc. and Humana Inc., which Aetna has agreed to buy for $37 billion, are also pulling out after posting hundreds of millions of dollars of losses.
“The vast majority of payers have experienced continued financial stress within their individual public exchange business,” Aetna Chief Executive Officer Mark Bertolini said in the statement. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool.”
http://www.bloomberg.com/news/articles/2016-08-16/aetna-quits-most-obamacare-markets-joining-other-major-insurers
***
Aetna to Pull Back From Public Health Care Exchanges
By Robert Pear
The New York Times, August 16, 2016
Kevin J. Counihan, the chief executive of the federal insurance exchange, said the marketplace would remain strong and vibrant despite Aetna’s decision.
“It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality, rather than by denying coverage to people with pre-existing conditions,” Mr. Counihan said Monday.
http://www.nytimes.com/2016/08/16/us/politics/aetna-health-care-law-marketplace.html
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Comment:
By Don McCanne, M.D.
Three of the nation’s largest insurers – Aetna, UnitedHealth and Humana – are pulling out of the ACA insurance exchanges because they have been unable to use their business model to make a profit. Although over fourth-fifths of enrollees are receiving government subsidies for these plans, that is not enough for the insurers. They also want the government to pay for those who need significant amounts of care (reinsurance). They want to abandon covering risk while they sell us wasteful administrative services.
The failure stems from the fact that our public administrators and legislators bent over backwards to try to make reform work for the private insurers, but health care is now so expensive that the insurers’ model requires unaffordable premiums and unaffordable deductibles and other cost sharing. They pushed the limit on premiums and deductibles and that has resulted in tens of millions remaining uninsured or unable to pay their out-of-pocket costs.
And the government’s response? The marketplace remains “strong and vibrant” because insurers compete on “cost and quality” rather than “denying coverage to those with pre-existing conditions.” Yet the nation’s largest insurers cannot compete on those terms.
It is difficult to believe that members of the administration and Congress are so dense that they cannot see that it is this model of health care financing that is creating so many of our problems. Mention a model that actually does work – single payer – and they plead that it is not feasible, that it is not capable of being done. But they have already proven that the fragmented system under ACA is not capable of covering everyone with affordable health care. It is not a feasible method of ensuring affordable health care for all. Single payer is.
Aetna, UnitedHealth and Humana provide important lesson on feasibility
Aetna to Quit Most Obamacare Markets, Joining Major Insurers
By Zachary Tracer
Bloomberg, August 15, 2016Health insurer Aetna Inc. will stop selling individual Obamacare plans next year in 11 of the 15 states where it had been participating in the program, joining other major insurers that have pulled out of the government-run markets in the face of mounting losses.
While the Affordable Care Act, known as Obamacare, has brought coverage to millions, the new markets have proven volatile for some of the largest for-profit insurers. Aetna said earlier this year that it expected to lose $300 million on the plans. UnitedHealth Group Inc. and Humana Inc., which Aetna has agreed to buy for $37 billion, are also pulling out after posting hundreds of millions of dollars of losses.
“The vast majority of payers have experienced continued financial stress within their individual public exchange business,” Aetna Chief Executive Officer Mark Bertolini said in the statement. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool.”
http://www.bloomberg.com/news/articles/2016-08-16/aetna-quits-most-obamacare-markets-joining-other-major-insurers***
Aetna to Pull Back From Public Health Care Exchanges
By Robert Pear
The New York Times, August 16, 2016Kevin J. Counihan, the chief executive of the federal insurance exchange, said the marketplace would remain strong and vibrant despite Aetna’s decision.
“It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality, rather than by denying coverage to people with pre-existing conditions,” Mr. Counihan said Monday.
http://www.nytimes.com/2016/08/16/us/politics/aetna-health-care-law-marketplace.html
Three of the nation’s largest insurers – Aetna, UnitedHealth and Humana – are pulling out of the ACA insurance exchanges because they have been unable to use their business model to make a profit. Although over fourth-fifths of enrollees are receiving government subsidies for these plans, that is not enough for the insurers. They also want the government to pay for those who need significant amounts of care (reinsurance). They want to abandon covering risk while they sell us wasteful administrative services.
The failure stems from the fact that our public administrators and legislators bent over backwards to try to make reform work for the private insurers, but health care is now so expensive that the insurers’ model requires unaffordable premiums and unaffordable deductibles and other cost sharing. They pushed the limit on premiums and deductibles and that has resulted in tens of millions remaining uninsured or unable to pay their out-of-pocket costs.
And the government’s response? The marketplace remains “strong and vibrant” because insurers compete on “cost and quality” rather than “denying coverage to those with pre-existing conditions.” Yet the nation’s largest insurers cannot compete on those terms.
It is difficult to believe that members of the administration and Congress are so dense that they cannot see that it is this model of health care financing that is creating so many of our problems. Mention a model that actually does work – single payer – and they plead that it is not feasible, that it is not capable of being done. But they have already proven that the fragmented system under ACA is not capable of covering everyone with affordable health care. It is not a feasible method of ensuring affordable health care for all. Single payer is.
TPP and pharmaceutical regulation in Canada and Australia
The Trans Pacific Partnership Agreement and Pharmaceutical Regulation in Canada and Australia
By Joel Lexchin and Deborah Gleeson
International Journal of Health Services, August 11, 2016
Abstract
The Trans Pacific Partnership Agreement (TPP) is a large regional trade agreement involving 12 countries. It was signed in principle in February 2016 but has not yet been ratified in any of the participating countries. The TPP provisions place a range of constraints on how governments regulate the pharmaceutical sector and set prices for medicines. This article presents a prospective policy analysis of the possible effects of the TPP on these two points in Canada and Australia. Five chapters of relevance to pharmaceutical policy are analyzed: chapters on Technical Barriers to Trade (Chapter 8), Intellectual Property (Chapter 18), Investment (Chapter 9), Dispute Resolution (Chapter 28), and an annex of the chapter on Transparency and Anti-Corruption (Chapter 26, Annex 26-A). The article concludes that the TPP could have profound effects on the criteria these countries use to decide on drug safety and effectiveness, how new drugs are approved (or not) for marketing, post-market surveillance and inspection, the listing of drugs on public formularies, and how individual drugs are priced in the future. Furthermore, the TPP, if ratified and enforced, will reduce future policy flexibility to address the increasing challenge of rising drug prices.
From the Conclusion
The final text of the TPP Agreement holds significant possible risks for pharmaceutical regulation and access to affordable medicines in both Australia and Canada. For Australia, the final provisions related to biologic products in the intellectual property chapter are worryingly ambiguous and unclear. This ambiguity was intended to be constructive, but it may have unintended effects if the United States insists on a certain interpretation, in the event of a dispute, or if the provisions have a chilling effect on future regulatory reform to bring biosimilars to the market more speedily.
Aside from the biologics provisions, there are a number of other provisions in the intellectual property chapter that will lock in existing policy settings and could potentially frustrate future reform efforts to reduce pharmaceutical expenditure in both Australia and Canada. Adopting detailed, prescriptive policy settings negotiated in a fraught political context—largely out of the view of stakeholders and involving bargaining and trade-offs between the objectives of different sectors—does not amount to sensible health or intellectual property policy making, which is attuned to current and future domestic needs.
The TPP’s investment chapter, and in particular its investor-state dispute settlement mechanism, also bring new threats to the affordability of medicines. It is likely that multinational pharmaceutical companies will quickly take advantage of this new avenue, along with the provisions in Chapter 8 on the Technical Barriers to Trade, to contest and frustrate Australia’s and Canada’s pharmaceutical policy making.
It is also worth repeating that the U.S. pharmaceutical industry was not satisfied with the outcome of the TPP negotiations, especially with respect to the provisions on intellectual property rights. As a result, it is likely the industry will be very aggressive in pushing for the strictest interpretation of the various provisions of the TPP that relate to medications.
http://joh.sagepub.com/content/early/2016/08/10/0020731416662612.abstract
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Comment:
By Don McCanne, M.D.
The Trans Pacific Partnership trade agreement (TPP) has raised concerns about giving private sector industries too much control over the public affairs of participating nations. In health care we are particularly concerned about the benefits that the agreement would provide to the pharmaceutical sector at a cost to the citizens of participating nations.
Some have suggested that adopting a single payer system would protect the United States since the government could negotiate as a monopsony to ensure availability and fair pricing of their products. But this article discusses the problems that Canada and Australia could face with ratification of TPP – problems that would not be prevented by their single payer systems.
In a previous post I had mentioned, as a typical concern, that the industry was successful in including in TPP the principle that they would be rewarded with the value that use of their products would provide to patients. Thus the drugs for hepatitis C that reduce morbidity and prolong life should command the high prices that they do simply because the pharmaceutical firms believe that they should have ownership of the benefit of their products transferred to them regardless of the fact that research, production and distribution costs may be a very small fraction of the prices they wish to command. It takes a lot of gall to support the concept that “I saved your life therefore I own the value of your life.”
Although both leading presidential candidates have stated their opposition to TPP, there is considerable pressure to ratify TPP during the lame duck session – an approach which is supported by President Obama. Also Hillary Clinton, overwhelmingly favored to win the election, has previously supported TPP and likely will not give more than token verbal opposition to ratification, allowing leeway for President Obama to orchestrate the process.
If TPP is ratified, it is likely that the U.S. pharmaceutical industry would “be very aggressive in pushing for the strictest interpretation of the various provisions of the TPP that relate to medications.” As this article indicates, that would be harmful to Canada and Australia plus other participating nations, but it would also be harmful to the people of the United States as well, sacrificing our health for the wealth of the drug industry investors.
More generally, just because the presidential candidates of the two major parties have expressed token opposition, we should not relax our efforts to inform the public that the TPP is designed to make the rich much richer at the cost of working families in participating nations.