Summary: Our favorite absurdity-revealing ophthalmologist comedian again sinks his teeth into our health insurance morass.

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Glaucomflecken Explains: What’s So Special About Teeth?, video, 2 minutes, by Dr. Glaucomflecken

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The American Dental Association (ADA) successfully resisted participating in Medicare in the 1960s. Today, medical insurance has an out-of-pocket maximum for policyholders, whereas with dental insurance the maximum is for the insurer. Also, eye care insurance is separated from vision care. It doesn’t make any sense. That’s US healthcare in a nutshell. We make things way more complicated than they need to be.

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Comment:

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

I adore Dr. Glaucomflecken … always brief, funny, and laser-like to the essence of an issue.

My experience as a patient, and discussions with my dentist, suggest that one major dental insurer (Delta) is steadily ratcheting down coverage. Fewer procedures covered, with higher copays, and annual benefit limits reached more quickly. Lower payments for providers, I’m told. It would be far cheaper to travel to another country and pay full out of pocket. I’m beginning to wonder about the value proposition of having dental insurance.

Guess what? Dental (and vision) care would be entirely covered under single payer. Full payment just like for medical care. That’s a version of “one size fits all” that everyone can endorse!

http://healthjusticemonitor.org…

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Summary: Reports from two leading foundations find that older adults – those insured privately and those in Medicare – face huge financial challenges to getting health care. Our system built on private insurance has failed. It’s time for public insurance administration: single payer.

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Can Older Adults with Employer Coverage Afford Their Health Care?, The Commonwealth Fund, August 10, 2023, by Lauren A. Haynes & Sara R. Collins

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Among older adults with employer coverage:

• Nearly half of lower-income older adults, and more than one-third of those with moderate income, said it was very or somewhat difficult to afford their premiums.
• Fifty-four percent of those with low income and nearly one-third with moderate income were underinsured, meaning that they had high out-of-pocket costs and/or deductibles relative to their income.
• Nearly half of those with low income reported skipping or delaying needed care because of cost.
• Difficulties paying medical bills and paying off medical debt loads affected 44 percent of older adults with low income and two of five of those with moderate income.
• Sixty-three percent of those who struggled with medical bills and debt were not confident they have enough money to retire – more than double the rate for older adults without problems paying their medical bills.

The survey data in this brief indicate employer health insurance is failing many older adults, especially those with low and moderate incomes.

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Medicare Households Spend More on Health Care Than Other Households, KFF, July 19, 2023, by Nancy Ochieng, Juliette Cubanski, & Anthony Damico

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The health care spending burden was twice as large for Medicare households than for non-Medicare households in 2021, measured by average health care spending as a share of total household spending, and one in three Medicare households spend at least 20% of their household budgets on health care.

With health care use increasing with age and income falling as people retire, it’s not unexpected that health care is a bigger cost burden for Medicare households.

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Comment:

By Don McCanne, M.D.

It is hardly a wonder why we have problems with health care financing in the United States when these studies show that two of our best programs – employer-sponsored health plans for employees and their families, and Medicare for the retired and long-term disabled – fail to provide adequate financial protection for the medical needs of older Americans. Since these are amongst our best insurance, how can we possibly expect the rest of the system to work well for us?

We are already spending enough money to provide all reasonable, beneficial health care for everyone without inducing financial hardship on anyone. Obviously we are doing something very wrong. Economists Liran Einav and Amy Finkelstein recently pointed us in the right direction by proposing that we cover everyone automatically with care that is free – no premiums, no deductibles, no copays. Instead, the system should be financing equitably by progressive taxation. That way it is affordable for everyone. The universal “basic” insurance needs to cover all reasonable, beneficial health care, though defining “basic” is fraught.

This situation reflects a serious conundrum with health care financing in the US. Even though two-thirds of health care dollars come from the government, we rely mainly on private health insurance administrators. This includes Medicare Advantage, Medicaid managed care, and private insurance including for government workers. The insurers’ mission is to move a large slice of our health care dollars to CEO salaries and shareholders. This aligns with the American ideology of wealth building, creating more billionaires than our international competitors.

Come now. Should that be the primary mission of our health care administrators? Of course not! Their primary mission should be to move health care to the people, the patients, all of the patients, and they need to use our health care dollars to do that. Our current system has demonstrated beyond any doubt whatsoever that private administrators have been and always will be on the wrong mission, and we need to replace them with public administrators who will always pursue a mission for the public good.

It will be our public administrators who will have the mission to cover care that is reasonable, beneficial, and at the right prices. Single payer!

It’s the public administrators that I want running the program that will take care of financing the health of me and my family, thank you!

http://healthjusticemonitor.org…

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

Summary: When CMS tried to enforce a 15-year-old rule that insurers cannot charge providers for electronic payments, a former CMS staffer working for a payment intermediary cajoled and intimidated them to back down. This is quintessential regulatory capture, enabling another layer of massive profit extraction in our fragmented health insurance system.

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The Hidden Fee Costing Doctors Millions Every Year, ProPublica Health Care, August 14, 2023, by Cezary Podkul

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A powerful lobbyist convinced a federal agency that doctors can be forced to pay fees on money that health insurers owe them. Big companies rake in profits while doctors are saddled with yet another cost in a burdensome health care system.

It was a multibillion-dollar strike, so stealthy and precise that the only visible sign was a notice that suddenly vanished from a government website.

In August 2017, a federal agency with sweeping powers over the health care industry posted a notice informing insurance companies that they weren’t allowed to charge physicians a fee when the companies paid the doctors for their work. Six months later, that statement disappeared without explanation.

The vanishing notice was the result of a behind-the-scenes campaign by the insurance industry and its middlemen that has largely escaped public notice — but that has had massive financial consequences that have rippled through the health care universe. The insurers’ invisible victory has tightened the financial vise on doctors and hospitals, nurtured a thriving industry of middlemen and allowed health insurers to do something no other industry does: Take one last cut even as it pays its bills.

Insurers now routinely require doctors to kick back as much as 5% if they want to be paid electronically. Even when physicians ask to be paid by check, doctors say, insurers often resume the electronic payments — and the fees — against their wishes. Despite protests from doctors and hospitals, the insurers and their middlemen refuse to back down.

There are plenty of reasons doctors are furious with the insurance industry. Insurers have slashed their reimbursement rates, cost them patients by excluding them from their provider networks, and forced them to spend extra time seeking pre-authorizations for ever more procedures and battling denials of coverage.

Paying fees to get paid is the final blow for some. “All these additional fees are the reason why you see small practices folding up on a regular basis, or at least contributing to it,” said Dr. Terence Gray, an anesthesiologist in Scarborough, Maine. Some medical clinics told ProPublica they are seeking ways to raise their rates in response to the fees, which would pass the costs on to patients.

“It’s ridiculous,” said Karen Jackson, who until her retirement in March was a veteran senior official at the Centers for Medicare & Medicaid Services, the federal agency that posted, then unposted, the fee notice. Doctors, she said, shouldn’t have to pay fees to get paid.

But that’s precisely what’s happening. Almost 60% of medical practices said they were compelled to pay fees for electronic payment at least some of the time, according to a 2021 survey. And the frequency has increased since then, according to medical clinics. With more than $2 trillion in medical claims being paid electronically each year, these fees likely add up to billions of dollars annually.

Huge sums that could be spent on care are instead being siphoned off to insurers and middlemen. The fees can cost larger medical practices $1 million a year, according to an April poll by the Medical Group Management Association, which represents private medical practices. The figure sometimes runs even higher, according to a 2020 complaint to CMS from a senior executive of AdventHealth, which has 53 hospitals in nine states: “I have to pay $1.8M in expenses that I could use on PPE for our employees, or setting up testing sites, or providing charity care, or covering other community benefits.” Most clinics are smaller, and they estimated annual losses of $100,000 or less. Even that figure is more than enough to cover the salary of a registered nurse.

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Comment:

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

I was stunned to read this. I’m no longer stunned easily about health insurance, having seen and written about so many manipulations, abuses, dysfunctions, inefficiencies, and harms in our horrendously fragmented and profit-oriented insurance non-system.

However, this one caught me off guard in its audaciousness and illogic. Electronic payments from insurers to providers is a no-brainer in our modern computerized world, and has been advocated (including by the Affordable Care Act) as a way to save the system money by eliminating the labor intensiveness of paper-based payments.

And, yet, the insurers found a way to profit. A rule from 2000 prohibited insurers charging doctors fees for electronic payment. So instead, an intermediary business model popped up, performing payment services, including up to 5% in fees for electronic transfer. CMS in 2017 clarified that these entities could not charge the prohibited fees. Yet a former CMS staffer – who helped write the 2017 rule – working for a payment company, cajoled and intimidated CMS into dropping the clarification. You can read the details in the ProPublica article.

Here are the five lessons I take away from this story:

1. This is a perfect example of regulatory capture. CMS is controlled by the private insurers which they are supposed to regulate. We saw it recently in the battle over Medicare Advantage payment levels. Note the specific version in this instance – the revolving door of agency officials becoming industry executives, who then informally lobby their former colleagues.

2. CMS folding to the pressure is likely influenced by inquiries from Congressional offices, though I’m speculating in this instance.

3. There’s a fundamental structural problem: fragmentation of billing and payment creates needless complexity. This creates niches for powerful actors pursuing their own interests. Specifically, it puts power into the hands of insurers and associated businesses they foster (eg payment entities and pharmaceutical benefit managers). The interests of these actors diverge profoundly from the purpose of health insurance – to efficiently and equitably pay for health care.

4. Our system accepts profits over patients. There is no evidence the electronic payment fees are warranted. Money for patient care is shorted.

5. The entire episodes is ironic & corrupt to the extreme. An ACA push for efficiency savings becomes a lever for insurer profit-making.

Our fragmented, profit-driven system does not work for patients … instead serving the interests of corporate executives and shareholders. That’s why we need single payer.

http://healthjusticemonitor.org…

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

Summary: The new book “We’ve Got You Covered” offers a laudable prescription for the US: universal free insurance for primary, specialty, and hospital care. However, its vision for basic (“bare bones”) coverage unnecessarily undermines the potential for high quality care for all.

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We’ve Got You Covered: Rebooting American Health Care, Portfolio, 2023, by Liran Einav and Amy Finkelstein

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How can we fix the US health-care system?

Requiring coverage did not get us to universal coverage. We must therefore provide it. Automatically. Only then will we achieve universal coverage. This is why basic coverage must be taxpayer financed. Charging premiums for basic coverage is at odds with providing that coverage automatically.

Any medical care that is included in basic coverage must be completely free to the patient. If not, the lesson is clear: we’ll end up back in the same mess of trying – and not fully succeeding – to come to the aid of patients who cannot afford the required payments for that basic coverage. We’ve described what basic coverage must do – it must be provided automatically, with no patient payments for covered services.

Basic coverage must systematically cover all essential medical care for the critically ill. For all conditions. Basic coverage must also include primary and preventive care for patients who are not yet critically ill.

The big picture is clear. Basic coverage should include primary and preventive care, specialist, outpatient, emergency room, and hospital care. Once we go beyond that high-level description, there will inevitably be a multitude of gray areas. There are many aspects of medical care that can be excluded from basic coverage while still fulfilling our social contract: infertility treatment, dental care, vision care, physiotherapy, various forms of long-term care, and the list goes on and on. These are hard choices, But they are just that – choices.

For the thirty million Americans without formal insurance, basic coverage would be an improvement. It would provide reliable coverage of major medical needs without any costs to the patient – or attempts to collect costs from them. For the seventy million low-income Americans with Medicaid, basic coverage would be similar to the coverage they already have.

For the remaining two-thirds of Americans, basic coverage would likely be worse on many – although not all – dimensions. We suspect that many of them would purchase supplementary insurance. This includes the one hundred fifty million Americans who have private health insurance and the sixty-five million elderly and disabled Americans with Medicare. For them, basic coverage would mean longer wait times, for example – along the lines of what those covered by Medicaid or the Veterans Affairs experience – and less well-apportioned waiting areas and hospital rooms.

The coverage we do have is a universal mess. The only option is to tear down the current “system” and rebuild it from the ground up.

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Comment:

By Don McCanne, M.D.

In their book, “We’ve Got You Covered,” Liran Einav and Amy Finkelstein have provided a very valuable contribution to the dialogue on healthcare reform in the United States. They have described many of the defects in our very expensive yet highly dysfunctional financing system that result in financial hardship for so many while leaving tens of millions without adequate coverage for care.

In their proposal for reform, they do advocate for a few policies that would be essential in a system of healthcare justice for all. They would include absolutely everyone automatically without the necessity of requiring an insurance premium but rather funding the covered system with a progressive income tax. They would eliminate deductibles and co-payments to make healthcare free on access. They would include primary and preventive care for everyone.

In their policy proposals, they do make one profoundly deficient recommendation. They would propose a basic set of benefits for everyone that would be similar to the current coverage under Medicaid, but, for two-thirds of Americans, coverage would be worse than people now receive under private insurance or Medicare. Basically this would be much worse than the proposed single payer Medicare for All model because it would be Medicaid for All (though the authors reject this label because individuals could purchase upgrades in coverage).

What would be wrong with this? Their intent is to make healthcare affordable for everyone by eliminating premiums, deductibles, and copayments, yet most individuals would be faced with the potential for large out-of-pocket costs unless they did buy a major upgrade in coverage, but then they would have to pay for that. This means that the private insurance industry would continue in its role of diverting billions of our healthcare dollars to its own pecuniary interests with the inevitable high costs and consequent impaired outcomes that we are seeing today.

Also, the healthcare delivery system would likely continue to try to avoid providing care to the sector that was structured like the underfunded Medicaid beneficiaries, and would cater to the more affluent sector that was insured with these supplementary plans, creating a two-tiered or multi-tiered delivery system: basement ward with budget drugs for the basic plan and penthouse medical suite with the million dollar miracle drugs for the affluent. Besides, how many physicians would decline to see patients covered only by the basic plan, accepting only patients with comprehensive supplemental coverage, just as they now decline Medicaid patients?

I’d like to go back a few decades and give a different definition of what basic care is. My brother, Monte, and I practiced primary care in South Orange County. (In 1995, the Los Angeles Times published a human interest story on our practice.) We saw routine illnesses, minor trauma, employment physicals, family planning, uncomplicated obstetrics, and other routine problems you would expect, referring more serious problems to the specialists, or to specialized centers. We were paid by private insurance, Medicaid, Medicare, cash, and often not at all, but we basically just provided care as it was needed, even to the undocumented, largely ignoring the payment side of the practice. Primary care with interaction with the rest of the healthcare delivery system is what I would suggest is basic care and is what should be covered by a single payer Medicare for All system. This approach really worked well for our patients. Rather than being care that is stripped down, like the authors suggest, it is just reasonable routine care that we should be giving, rejecting extravagances such as the building of luxurious penthouse medical suites, or the production of new drugs designed to sell for a million dollars.

You might wonder what happened to our practice. Employer sponsored plans converted to managed care and were not interested in including solo practitioners like my brother and me in their panels. MediCal, a very large part of our practice, was privatized and our patients were sent to contracting groups, including our fairly large obstetrical (midwifery) practice. Eventually, Medicare privatization, especially Medicare Advantage plans, also excluded our practice from their panels, though that was about the time we retired. Based on this, I would say that we do not want to look for the insurance industry to provide us with coverage for basic care, as I have defined it.

We just need to reinforce the delivery system, staff it, provide the care that people need, and use public funding to finance the system. We are spending enough now to do that. Truly comprehensive basic care for everyone! Medicare for All!

http://healthjusticemonitor.org…

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