PNHP

Resolution in Support of Medicaid Expansion in Georgia and Medicare for All Nationally 

Resolution in Support of Medicaid Expansion in Georgia and Medicare for All Nationally 

Adopted by delegates to the Democratic Party of Georgia’s State Convention on August 27, 2022

WHEREAS every person in the state of Georgia and the USA deserves high quality health care; and

WHEREAS the number of Americans without health insurance before the COVID-19 pandemic was still nearly 30 million, with more than 40 million Americans underinsured, despite important gains made since the implementation of the Affordable Care Act; and

WHEREAS Georgia has a lower health system performance score than 37 other states; and

WHEREAS Georgia is among the worst performing states regarding mortality amenable to healthcare; and

WHEREAS Georgia is failing to get its fair share of ACA money and 700,000 more Georgians would be covered if Georgia fully expanded its Medicaid program; and

WHEREAS expansion of Medicaid under the ACA would create 50,000 new jobs for Georgians, and

WHEREAS ​many people delay seeking needed health care due to an inability to pay​, leading to a sicker and poorer population in the long run; and

WHEREAS the ever-increasing costs of health care, which are further elevated due to the on-going pandemic, may challenge our already strapped state and municipal budgets​​; and

WHEREAS long term ​COVID-19 related treatment could cost uninsured patients tens of thousands of dollars​; and

WHEREAS​ in order to equitably and effectively address the health care burden, we must urge the expansion of health insurance coverage to provide comprehensive coverage to every resident of the United States without any cost sharing; and

WHEREAS Medicare for All would provide national health insurance for every person in the United States for all necessary medical care including prescription drugs; hospital, surgical and outpatient services; primary and preventive care; emergency services; reproductive care; dental and vision care; and long-term care; and

WHEREAS Medicare for All would provide coverage without copays, deductibles or other out-of-pocket costs, and would slash bureaucracy, protect the doctor-patient relationship and assure patients a free choice of doctors; and

WHEREAS polls show that a majority of Americans support Medicare for All and expansion of Medicaid; and

WHEREAS Medicare for All will guarantee that all residents of Georgia will be fully covered for health care without copays, deductibles or other out-of-pocket costs, and would save millions in taxpayer dollars now spent on premiums that provide often inadequate health insurance coverage for government employees; and

WHEREAS the quality of life for the residents of Georgia will vastly improve because they would be able to get the ongoing care they need, instead of waiting until they have a medical emergency that could upend their lives as well as further burden local resources;

NOW THEREFORE BE IT RESOLVED, that the Georgia Democratic Party expresses its enthusiastic support for immediate full expansion of Medicaid in our state and urges the Georgia General Assembly to fully expand Medicaid under the Affordable Care Act with no waivers and calls upon each of our state legislators to work toward its immediate expansion.

BE IT FURTHER RESOLVED, that the Georgia Democratic Party asks Congress to enact legislation to provide universal, comprehensive health coverage with zero cost-sharing for patients and enthusiastically supports Medicare for All  as referenced in the Medicare for All  Act of 2021 (H.R. 1976 and S. 4204) and calls on our federal legislators to work toward its immediate enactment, assuring appropriate and efficient health care for all residents of the United States.

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The Financial Fallout of Chronic Illness

Summary: A new study finds that privately-insured individuals with chronic illness are far more likely to have medical debt that is delinquent or in collections, and credit problems. And the debt is larger. Our insurance system is punishing people for being ill.

Association of Chronic Disease with Patient Financial Outcomes Among Commercially Insured Adults, JAMA Internal Medicine, August 22, 2022, by Nora V. Becker et al.

From Abstract: Among individuals with 0 vs 7 to 13 chronic conditions, the predicted probabilities of having any medical debt in collections (7.6% vs 32%), any nonmedical debt in collections (7.2% vs 24%), any delinquent debt (14% vs 43%), a low credit score (17% vs 47%) or recent bankruptcy (0.4% vs 1.7%) were all considerably higher for individuals with more chronic conditions and increased with each added chronic condition. Among individuals with medical debt in collections, the estimated amount increased with the number of chronic conditions ($784 for individuals with 0 conditions vs $1252 for individuals with 7-13 conditions) (all P < .001). In secondary analyses, results showed significant variation in the likelihood and amount of medical debt in collections across specific chronic conditions.

From Discussion: Further research in this area is needed to determine the relative importance of these pathways, as the policy implications of each are different. If poor financial well-being leads to additional chronic disease, policy makers should consider new social safety-net policies to reduce poverty rates and should explicitly incorporate improvements in physical health—and correspondingly reduced health care spending—as a benefit of antipoverty programs. If, in contrast, chronic disease diagnoses are directly leading to adverse financial outcomes, then improving commercial insurance benefit design [JGK – For a different solution, see below.] would be warranted to provide additional protection from out-of-pocket medical expenses, particularly for conditions identified as being costly for patients. In addition, policy makers should consider expanding access to disability benefits and implementing other social safety net policies to help patients recoup income loss after illness.

Comment:

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

These findings come as no surprise – in our health insurance system with very high patient cost-sharing (deductibles, copays, and uncovered services), individuals with greater ongoing medical needs inevitably have more medical expenses, more debt, more low credit scores, and more bankruptcies.

The cost-sharing doesn’t control healthcare costs. So why do we design a health insurance system this way, to financially punish the ill?

You know the answer: it’s profitable for insurers. Costs shift from shareholders to patients. It’s also profitable for drug makers and providers who charge high prices and garner out-sized profits.

When will we adopt an insurance system that is humane – that serves and protects the ill? And that is, in the process, efficient, saving money for the healthcare system.

It sounds magical. It is. It’s called single payer.

(We also need far better income protection for individuals who are disabled by chronic illness.)

http://healthjusticemonitor.org…

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CMS Should terminate the Medicare Advantage Program

PNHP Comments on CMS file code CMS-4203-NC: “Medicare Program; Request for Information on Medicare Advantage”

By Physicians for a National Health Program
August 25, 2022

Medicare Advantage is a program offering private health insurance plans as options to replace traditional Medicare. Medicare Advantage plans differ from traditional Medicare in that they are paid with capitation (per member), they are required to limit enrollees’ out-of-pocket spending and can offer extra benefits (e.g. gym membership, dental benefits), they almost always offer prescription drug coverage, they use a defined and often restricted network of providers and can require enrollees to pay more for out-of-network care, they can use utilization management techniques such as prior authorization, and they can fund special programs such as rewards for beneficiaries to encourage healthy behaviors. The hope is that these differences will lead to improved care at lower cost compared to traditional Medicare.

However, capitation has serious drawbacks and introduces perverse incentives to skimp on care, game risk pools, and upcode. Payment with unadjusted capitation based on average cost would grossly overpay for the healthy and even more grossly under-pay for the sick. Capitation therefore requires risk adjustment and quality incentives to mitigate its inherent incentives to worsen disparities in care. Risk adjustment and quality incentives in turn require detailed data on diagnoses and treatment, adding administrative costs and burdens that exceed those required by fee-for-service (FFS).1,2

Capitation is justified by the common assertion that FFS incentivizes excessive “volume” (over-use) of care and that this can be corrected by shifting insurance risk onto providers of care. However, the four key assumptions – that there is widespread overuse of care due to FFS, that capitation carries improved incentives compared to FFS, that risk adjustment can be done accurately, and that the overhead cost of capitation is worth it to achieve more cost-sensitive care – are all contradicted by the evidence. There is very little evidence for the claim that “volume” of services with FFS payment, as opposed to their price, explains the high cost of health care in the US.3,4,5 It appears demonization of FFS in health policy is mainly a rationale promoted by the insurance industry to justify a central role for themselves in health care, because unlike FFS, capitation requires their capacity to handle the data demands of risk management. But the overhead required for capitation far exceeds savings from the incentive to reduce care, so patients get less care, Medicare pays more, and intermediary insurers take home large profits.

And risk adjustment cannot be done anywhere near accurately enough to avoid over-paying for the healthy and under-paying for the sick. Gaming of risk pools means capturing a population of members or beneficiaries (risk pool) with lower-than-average health risk while getting paid for an average risk pool, so as to profit from the difference. MA plans use marketing tactics6 (including variations in coverage and contracting with employers to directly enroll newly Medicare eligible retirees) that attract healthier beneficiaries, and they employ multiple tactics to deny care to the sick, including narrow networks, formulary restrictions, and prior authorization. Sicker enrollees, such as in the last year of life, who have been frustrated by denial or delay of services tend to disenroll and return to the traditional Medicare program.7 The effect of both marketing tactics (“cherry-picking”) and disenrollment of sicker beneficiaries (“lemon-dropping”) is to create for Medicare Advantage plans a healthier and less costly than average risk pool.8,9 

CMS added diagnostic categories to the HCC risk adjustment formula in 2004. This improved its predictive accuracy from 1% to only 12%,10 but linked payment to diagnosis and introduced a major new opportunity for gaming: up-coding. Up-coding means choosing more specific or severe (and more highly paid) diagnosis codes than would be required for purely patient care purposes, and fraudulently adding irrelevant or non-existent diagnoses. Up-coding has been extensively exploited by Medicare Advantage plans since soon after diagnoses were added to the HCC, apparently often to the point of fraud11,12. According to one expert estimate, the cost to Medicare of aggressive diagnostic coding by Medicare Advantage plans and the failure of CMS to correct for it will reach several hundred billion dollars in coming years.13

Medicare Advantage plans have achieved profitability largely by gaming their risk pools, up-coding, and blunt restrictions on care including issuing millions of inappropriate denials for care that met Medicare coverage rules,14 and minimally if at all by improving care. 15,16 Typical administrative costs for Medicare Advantage plans, including profits, have been in the 15-20% range1,17, compared to around 2% for Traditional Medicare prior to the Affordable Care Act.2

It would be far more cost-effective for CMS to improve traditional Medicare by capping out-of-pocket costs and adding improved benefits within the Medicare fee-for-service system than to try to indirectly offer these improvements through private plans that require much higher overhead and introduce profiteers and perverse incentives into Medicare, enabling corporate fraud and abuse, raising cost to the Medicare Trust Fund, and worsening disparities in care. 

These problems are not correctable within the competitive insurance business model, and the Medicare Advantage program should be terminated.

References:

  1. McDermott D, Stolyar, L, Hinton E, et. al., Health Insurer Financial Performance in 2020. Kaiser Family Foundation, May 3, 2021. https://www.kff.org…
  2. 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. April 23, 2012. 
  3. Health at a Glance 2019. OECD Indicators: Number of doctor consultations per person. Hospital discharge rates, 2000 and 2017. 
  4. Deborah Korenstein, et al., Overuse of health care services in the United States: an understudied problem, Archives of Internal Med, 2012. doi:10.1001/archinternmed.2011.772. 
  5. Katz MH. Overuse of health care: Where are the data? 2012;172:178. doi:10.1001/archinternmed.2011.1253.
  6. Gilfillan R, Berwick DM. Medicare Advantage, Direct Contracting, and The Medicare ‘Money Machine,’ Part 1: The Risk-Score Game. Health Affairs Blog. Sept. 29, 2021. 10.1377/forefront.20210927.6239.
  7. Meyers DJ, Belanger E, Joyce N, McHugh J, Rahman M, Mor V, Analysis of drivers of disenrollment and plan switching among Medicare Advantage beneficiaries, JAMA Intern Med. 2019;179(4):524–532. doi:10.1001/jamainternmed.2018.7639.
  8. Brown, J., M. Duggan, I. Kuziemko, et al., 2011. How does risk selection respond to risk adjustment? Evidence from the Medicare Advantage program. NBER working paper 16977. Cambridge, MA: National Bureau of Economic Research. doi:10.3386/w16977.
  9. Neuman P, Jacobson GA, Medicare Advantage Checkup, N Engl J Med 2018; 379:2163-2172. doi:10.1056/NEJMhpr1804089.
  10. June 2014 Report to the Congress: Medicare and the Health Care Delivery System. MedPAC, June 13, 2014.
  11. Schulte F. Researcher: Medicare Advantage Plans Costing Billions More Than They Should. Kaiser Health News, Nov. 11, 2021. 
  12. Hiltzik M. The government lawsuit against Kaiser points to a massive fraud problem in Medicare. Los Angeles Times, August 4, 2021.
  13. Kronick R. Projected Coding Intensity In Medicare Advantage Could Increase Medicare Spending By $200 Billion Over Ten Years. Health Affairs 36, no.2 (2017):320-327. doi: 10.1377/hlthaff.2016.0768.
  14. Grimm, Christi A, Inspector General. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care. OIG Report OEI-09-18-00260. https://oig.hhs.gov…
  15. Park S, Jung J. Burke RE et al. Trends in Use of Low-Value Care in Traditional Fee-for-Service Medicare and Medicare Advantage. JAMA Network Open. 2021;4(3):e211762. doi:10.1001/jamanetworkopen.2021.1762.
  16. Figueroa JF, Wadhera RK, Frakt AB, et al., Quality of Care and Outcomes Among Medicare Advantage vs Fee-for-Service Medicare Patients Hospitalized With Heart Failure. JAMA Cardiol. Published online September 2, 2020. doi:10.1001/jamacardio.2020.3638.
  17. Day B, Himmelstein DU, Broder M, Woolhandler S. The Affordable Care Act and Medical Loss Ratios: No Impact in First Three Years. Int J Health Svcs, 2015:45(1);127-131. http://org.salsalabs.com…

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Time to ‘correct course’ on health care access, affordability

By Howie Wolf, M.D.
Arizona Daily Star, August 25, 2022

The Aug. 18 guest opinion “Let’s stand together for health care affordability” by Pam Kehaly, president and CEO of Blue Cross/Blue Shield of Arizona, requires a reasoned response.

The premise of her article is valid in that she points out that “health care has reached a critical tipping point.” Kehaly correctly states that “rising costs are unsustainable, and it is time to correct course. Families should be able to meet their health care needs without fear of facing crushing debt.”

As a retired family doctor with over 50 years of practice, I am a member of PNHP (Physicians for a National Health Program). Our group recognizes why we rank last among six other industrialized countries on measure of quality, efficiency and access to care. The main reason is that the citizens of these countries — Australia, Canada, Germany, Netherlands, New Zealand and the UK — have access to government-run care paid for by taxes. Profiting from providing basic health care does not happen. In my practice, I frequently saw evidence of delayed care due to anticipated costs.

Administrative expenses of private insurance companies in the U.S. account for 15%-25% of total health care expenditures, amounting to $600 billion to $1 trillion per year. If you have health insurance, that is the percentage of your premium that does not pay for health care. By comparison, Medicare, the U.S. system for those 65 and older, operates at 2%-3% of administrative costs.

Proposals for a Medicare for All system in the U.S. have failed primarily because lobbyists for our private health insurance and pharmaceutical companies have influenced our senators and representatives. The last thing they want to see is a universal, not-for-profit system here.

Kehaly points out that her insurance company has an obligation to ensure that “we are good stewards of every health care dollar” and they have become advocates for families and individuals because “it is the right thing to do.” These claims ring hollow when our country has nearly 30 million uninsured and more “underinsured.” Policies with high deductibles also represent a barrier to access to care. If the first $1,000-$4,000 of medical expenses each year comes out of your pocket, it is easy to understand the reluctance to seek care. It is not surprising that medical expenses are the leading cause of bankruptcies in our country.

I would urge readers to learn more about why the richest country in the world, which spends more on health care than any other country, ranks so low in life expectancy, maternal mortality, access to care and other comparisons. If you agree, let your legislators know the time has come to “correct course” and support Medicare for All.

Dr. Howie Wolf is a retired family doctor with over 50 years of practice and a past president of the Colorado Academy of Family Physicians.

https://tucson.com…

Biden’s Plan to “Commercialize” Covid Care Will Have Terrible Consequences

The administration expects to stop buying vaccines and treatment by year’s end, handing over these responsibilities to for-profit companies that are salivating at the opportunity.

By Adam Gaffney, M.D.
The New Republic, August 24, 2022

Last week, at an event held by the U.S. Chamber of Commerce Foundation, White House Covid-19 response coordinator Dr. Ashish Jha said that the Biden administration would begin shifting procurement of coronavirus tests and treatments from the federal government to the commercial sector. “One of the things we’ve spent a lot of time thinking about in the last many months 
 is getting us out of that acute emergency phase where the U.S. government is buying the vaccines, buying the treatments, buying the diagnostic tests,” Jha said, adding that by 2023, “you’re going to see the commercialization of almost all of these products.”

This coming commercialization is but the latest sign that American health care, after glimpses of something better during the pandemic, is returning to business as usual—that is, back to its usual dysfunctional, wasteful, and unequal state.

So much was wrong with America’s response to Covid-19 that it can be easy to forget what was right, including notable departures from usual operating procedures in American health care financing. Covid-related care was usually covered for the uninsured, at least until the program ran out of funds and became defunct in March. Insurers waived co-pays and deductibles for Covid-related hospitalizations—for a time, anyway; average out-of-pocket payments for a coronavirus hospitalization are now around $4,000 for the privately insured. The Families First Coronavirus Response Act, the emergency package that President Trump signed into law in mid-March 2020, helped prevent states from pushing people out of Medicaid, a lifeline that will be cut once the Federal Public Health Emergency is lifted (and an estimated five million to 14 million people lose Medicaid coverage). Finally, the federal government directly procured and provided billions of dollars of Covid tests, treatments, and vaccinations—an approach that will end with “commercialization.”

Of course, the vaccines have always been “commercial”: They are manufactured and sold by companies like Pfizer and Moderna. During the pandemic, however, the United States wisely did not relegate procurement of these products to the diverse slew of public and private insurance programs that cover most Americans. Instead, the federal government spent tens of billions on vaccine R&D, while also subsidizing drug firms’ manufacturing capacity and market risk, and it directly negotiated with companies and purchased these life-saving products so it could provide them to the public for free. This had important benefits in terms of the rapid delivery of the vaccines, their cost to society, and their provision in a relatively equitable fashion (within the U.S. only, alas). But as Covid-related care becomes like all else in American health care, those benefits will vanish.

For instance, it’s a truism that Americans get ripped off by drug companies: A 2021 RAND Corporation study found that U.S. drug prices were more than double those in  other nations. But the price differentials for Covid-19 vaccines were generally much smaller. According to a Washington Post analysis, relative to the U.S., the European Union paid 24 percent less for the Pfizer vaccine and 15 percent less for Johnson & Johnson but 20 percent more for Moderna. Once they are no longer negotiating with the U.S. government but instead with our jumble of for-profit private insurers, pharmacy benefit managers, state Medicaid programs, and Medicare Part D drug plans, pharmaceutical companies will jack up prices. Moderna CEO StĂ©phane Bancel said as much in an interview with Yahoo Finance: “So what we are doing as a company is to get ready for a private market situation,” he said, adding that the U.S. price of his firm’s vaccine in the “public setting” was, in his opinion, quite low and that he expects to increase it in “an endemic setting.” Pfizer’s CEO has also alluded to increasing vaccine prices.

We didn’t necessarily get great deals from these firms, however. The American public is—or should be—an owner of the Moderna vaccine: Taxpayers financed its development, and NIH scientists played a key role in inventing it. Also, it’s not as if these companies didn’t turn a hefty profit from their sales to governments: Pfizer and Moderna have taken in $79 billion in revenue for Covid-19 pharmaceuticals globally. To now hand the keys over to a hodgepodge of insurance intermediaries will drive up costs, which will be borne by the public. In addition to increasing health insurance premiums, this could have the effect of squeezing state Medicaid budgets and consequently the availability of funds for other care.

But this is not only about money. We should care about the shift Jha announced because achieving universal and equitable access to Covid-related care remains critical. So far, the government has not only provided the vaccine for free but forbidden providers from charging administrative fees or discriminating based on a patient’s immigration status. Covid therapeutics like monoclonals and oral antivirals (such as Paxlovid) have also been distributed free of charge. Some municipalities took innovative strategies to improve uptake of these agents, ranging from mobile vaccine outreach teams to free home delivery of Paxlovid in New York City—programs that would have been far more costly if health departments also had to buy the products. Yes, disparities in vaccine uptake nevertheless persisted, and inadequate access to health care has remained a barrier to Covid care. In one study, for instance, my colleagues and I found that the uninsured were much less likely to have a booster shot, perhaps because of lack of a trusting relationship with a primary care physician who could provide information and counsel (and the booster itself). That’s not a surprise: Single-disease-focused “vertical” programs are no substitute for comprehensive, universal, primary care–based systems. Still, it’s hard to imagine that the commercialization of Covid care won’t lead to a worsening of disparities.

It’s still unclear how the process of commercialization will unfold and whether steps will be taken to retain some access for the uninsured: The administration is meeting with pharmacists, drug firms, and health departments later this month to work out details. Additionally, under the Affordable Care Act, most insurers are required to cover certain forms of preventive care—including recommended vaccines—for free. In all likelihood, however, bringing these products into the fold of regular American health care will reduce access. Some Medicaid patients could see co-pays for Covid vaccines once they are commercialized—or not have access to these vaccines at all, according to a report from the Brookings Institute. Provision of vaccines to the uninsured, who are at increased risk of Covid, will almost certainly deteriorate when neither administration nor the products themselves are publicly funded. And co-pays and deductibles for treatments like Paxlovid will presumably pop up for the privately insured.

The partial decommercialization of the financing of Covid care was a departure from business as usual for American health care. Many were struck by the novelty of walking into a mass vaccination site and being able to get a vaccine free of charge without an insurance card, or of being able to order free Covid-19 tests online from the government. As a pulmonary physician, I’m more confident that the sorts of patients I see with advanced lung disease will be able to get Paxlovid or a Covid vaccine than, say, an expensive inhaler for asthma. So it is unfortunate, if unsurprising, to watch Covid become yet another illness inadequately covered by a faulty and fragmented financing system.

We will experience Covid waves for the foreseeable future, probably indefinitely, which means that it will remain a public health threat for some time: It was, that is to say, inevitable that financing care for this illness would ultimately be incorporated into the fabric of the American health care system. But rather than shift the way we finance Covid care so that it resembles everything else in American medicine, we should do the opposite: realize a universal, integrated, primary care–based national health program that more efficiently provides the full spectrum of health care—including prevention and treatment of Covid-19—on the basis of needs, not means.

Dr. Adam Gaffney is a pulmonary and critical care physician, an assistant professor at Harvard Medical School, the author of To Heal Humankind: The Right to Health in History, and the immediate past president of Physicians for a National Health Program.

https://newrepublic.com…

Taiwan: “Economic Dynamism” Paired with Single Payer

Summary: Recently House of Representatives Speaker Nancy Pelosi led a delegation to Taiwan, affirming US support for the country’s continued independence as China stridently pursues reunification. She praised Taiwan’s economic vitality, but forgot to highlight the country’s fine approach to health insurance: single payer.

Letters from an American, August 20, 2022, by Heather Cox Richardson

Pelosi 
 championed Taiwan as a leading democracy, “a leader in peace, security and economic dynamism: with an entrepreneurial spirit, culture of innovation and technological prowess that are envies of the world.” She explicitly said her visit was intended to reaffirm “our shared interests [in]
advancing a free and open Indo-Pacific region.” “By traveling to Taiwan, we honor our commitment to democracy: reaffirming that the freedoms of Taiwan—and all democracies—must be respected.”

Comment:

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

So, what kind of health insurance does Taiwan have?

Oh, yeah, single payer, since 1995.

Seems like having universal health insurance paid by the government doesn’t cripple the economy. Vibrant capitalism, supported by a generous and efficient social welfare foundation.

Who knew? (Lots of us, of course.)

Health care costs low, equity and longevity high. Part of the formula for economic robustness.

I wish Ms. Pelosi had made this point.

http://healthjusticemonitor.org…

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Amazon Pursues Profitable Medical Care Role

Summary: Amazon just entered the medical provider business, buying a large medical firm. Their goal: to make money by finding insured, well-off, and inexpensive patients. It’s a business model, to maximize profits. What we need is a health improvement model, to 
 maximize health!

Amazon’s acquisition of a medical firm may not disrupt healthcare, but could disrupt your life, Los Angeles Times, August 18, 2022, by Michael Hiltzik

Amazon plainly believes that there is profit to be made from the business model of One Medical.

One Medical aims its services, which amount to providing faster appointments, “wellness” services and “routine and preventive care,” at a relatively affluent market segment. It does so partially by charging an annual fee of $199.

Then there’s the firm’s practice of geographical segregation. One Medical says it places its offices in “locations convenient to where consumers work, shop and live.” This works to One Medical’s advantage by “limiting its exposure to uninsured, poor, and costly patients.”

“Amazon may be able to make this a viable business venture that returns a significant profit to their investors,” David Blumenthal, a primary care physician who is the Commonwealth Fund’s president, told me. But “unless they substantially change the model this will just be another selective deal serving a part of the population that is already favored by the current healthcare system.”

“Most of health care spending is on sick patients and can’t be easily reduced,” Amitabh Chandra, a healthcare expert at Harvard Business School, said in an interview on the school’s website after the Amazon announcement.

Amazon’s high-profile misstep was Haven, a joint venture with Jamie Dimon’s JPMorgan Chase & Co. and Warren Buffett’s Berkshire Hathaway, launched in a blare of publicity in 2018 and humiliatingly shut down in 2021.

Haven aimed to reduce American healthcare costs by focusing on “technology solutions,” but the Bezos/Dimon/Buffett triumvirate didn’t understand what healthcare economist Uwe Reinhardt and colleagues identified in 2003 as the main reason for high healthcare costs in America, with an article titled “It’s the Prices, Stupid.”

The key flaw in the American healthcare system is the encroachment of business principles into what used to be regarded as a public service, back when Blue Cross and Blue Shield were nonprofit insurers and most hospitals were nonprofit providers.

The structure that would be most likely to bring universal healthcare to Americans at an affordable price would be a single-payer system with the government as the payer. But even Medicare, which was once the quintessential single-payer program, has been moving away from that principle, thanks to the spread of private Medicare Advantage plans.

Comment:

By Don McCanne, M.D.

Whereas quite a few individuals are being served fairly well by our current health care system, far too many are not because of deficiencies and voids, especially in the way we pay for health care. Even though we spend more than other nations, we fall below many other wealthy nations in our health care outcomes, largely because of these deficiencies.

Part of the problem is demonstrated by the proposed Amazon acquisition of One Medical. It is structured as a business deal to make a profit for private investors (concierge fees, marketing to the healthy and wealthy, avoiding care for the sick and poor) while avoiding the public service concept of health care for all.

Now even our traditional public insurance programs are also being converted to cater to private investor interests as exemplified by private Medicare Advantage and ACO REACH models. We’re clearly headed in the wrong direction.

As Michael Hiltzik states, “The structure that would be most likely to bring universal healthcare to Americans at an affordable price would be a single-payer system with the government as the payer.”

http://healthjusticemonitor.org…

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Price Transparency (Alone) Is Not Enough

Summary: The New York Times recently posted a wonderfully produced video op-ed bemoaning hospitals’ failure to abide by federal price transparency rules. But price transparency is a market tool, and health care is far from a perfect market commodity. Other cost control tools are needed.

How Much Does Your M.R.I. Cost? Buy It First to Find Out. (video), New York Times, August 2, 2022, by Martin Schoeller

A federal rule that went into effect last year requires hospitals to post prices for their services, with the aim of removing the element of surprise for patients and perhaps even spurring price competition among health care providers.

But a recent study by PatientRightsAdvocate.org, a nonprofit group that works for price transparency, revealed that only about 14 percent of the 1,000 hospitals it surveyed were complying with the new rule. 


“We depend on hospitals in our communities to take care of us,” Mr. Schoeller said. “But our hospitals are putting profits before patients.”

The solution, he argues, is in stronger government enforcement of the transparency rule and stiffer penalties for those hospitals that don’t comply.

Comment:

By Kenneth A. ColĂłn

Price transparency is valuable, but by itself insufficient.

As a matter of principle, we deserve to know how much we will be paying for a particular good or service. This is the basis upon which all market transactions are built – learning the price for a particular item, and deciding if you are willing to pay that price.

The same must be demanded in healthcare, as long as we use a market-based system. I agree with the author, on principle, that we need stronger government enforcement and stiffer penalties for hospitals which don’t comply.

However, price transparency alone won’t produce the pressure on healthcare prices needed to bring them down.

Research shows that price transparency tools see low uptake and usage among patients when offered, with one study finding only 10% of those offered used the tools, and no overall reduction in spending. Furthermore, cost savings among tool users – where it was found at all – was limited to a few services, including MRIs/CTs and sleep studies.

This makes intuitive sense. You can shop around for prices only if the services you are shopping for are non-emergency. An MRI for your chronic knee pain? Sure, you may be able to shop around a bit. Surgery for your acute appendicitis? Not so much.

The Health Care Cost Institute estimates roughly 35% of out-of-pocket healthcare spending is spent on “shoppable” services, suggesting that roughly 65% of out-of-pocket spending would be difficult to alter.

There’s another issue. Higher healthcare prices are sometimes interpreted by consumers as a marker of high quality. This can mean that price transparency leads to higher costs.

So what’s the alternative? What should be done instead of or in addition to price transparency?

The Kaiser Family Foundation recently published a review of policy options to rein in healthcare costs. These include: price regulation (price setting, price caps, and price growth caps), global budgets, and spending growth targets. Ideally, these would be combined with a full transition to single-payer, which would shield consumers from substantial out-of-pocket costs.

Using any of these strategies alone or together is likely to have a far greater downward effect on healthcare prices and costs than price transparency alone ever could.

Kenneth A. Colón is a research affiliate at the Center for Infectious Disease Modeling and Analysis at the Yale School of Public Health. He earned his Master’s in Public Administration at the Maxwell School of Citizenship and Public Affairs at Syracuse University.

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Racism in the Inflation Reduction Act: No Medicaid Expansion

Summary: As noted in HJM yesterday, the IRA contains historic advances, including first-ever drug cost controls. Unfortunately, it also perpetuates historic injustices inflicted on people of color by omitting social benefit categories most used by them; in this instance, Medicaid. Single payer would end such discrimination and harm.

The health care coverage concessions made to strike a deal in the latest reconciliation package came at the expense of Black Americans, The Incidental Economist, August 15, 2022, by Gabriella Aboulafia

The recently passed Inflation Reduction Act (IRA) of 2022 is historic and unprecedented. In addition to making the most significant investments in the country’s history to address climate change, it also includes health care provisions that will meaningfully improve the affordability of health insurance and prescription drugs for millions of Americans. But one of the massive health care coverage concessions made during the negotiation process came at the expense of Black Americans; sacrificing certain demographic groups for the sake of political feasibility is not a new feature of the American policymaking process.

In 12 states, an estimated 2.2 million people are uninsured because they have no accessible health insurance options. People in the “Medicaid coverage gap” have incomes that are too high to qualify for Medicaid, but too low to qualify for premium assistance for Affordable Care Act (ACA) marketplace plans. Advocates have been sounding the alarm about this problem since 2014. And researchers have been beating the drum for at least as long, putting out study after study that underscore the positive effects of Medicaid expansion.

Not lost on these advocates and researchers is that states that have not expanded their Medicaid programs, mostly concentrated in the south, have some of the largest shares of Black people. States decisions’ about whether to expand follow a legacy of racialized politics.

Democrats had been trying to get this reconciliation package passed for over a year. To secure Senator Joe Manchin’s (D-WV) vote, they had to prioritize deficit reduction and strike certain provisions. But the health care coverage provisions that they chose to exclude would’ve had an outsized impact on Black people in particular. In addition to excluding a fix for the Medicaid coverage gap, policymakers also dropped the permanent expansion of postpartum Medicaid coverage, which would’ve required all states to extend Medicaid coverage for pregnant people from 60 days postpartum, up to a full year. This provision had the potential to meaningfully improve life outcomes, particularly for Black birthing people, who are three times more likely to die from pregnancy-related causes (52 percent of which occur up to one year after birth) than their white counterparts.

The exclusion of Black Americans from federal policy deals, ostensibly on the basis of political and administrative feasibility, is not new. To reach a deal with southern Democrats, agricultural and domestic workers were excluded from the Social Security and unemployment insurance programs. Many of the key federal policies designed to promote economic opportunity during the New Deal era up until the modern Civil Rights Movement, like the GI Bill, gave white people a leg up and effectively left Black Americans out.

During the debate on the reconciliation bill, Senator Raphael Warnock of Georgia, where over a quarter of a million people do not have health insurance because the state has refused to expand the program, introduced an amendment to address the coverage gap. Only five senators (Baldwin, Collins, Ossoff, Sanders, and Warnock) voted to consider the amendment.

Several Democratic senators came out and said they would be voting no on any and all amendments,  because they would distract, divide, and put the rest of the bill at risk. But choosing to sacrifice the same group of people, time and time again, sends a message about who we value and who we do not. Policy decisions will always entail tradeoffs, and negotiations will always include concessions. But when policy concessions continually come at the expense of the same group of people, it’s not reasonable to conclude it’s a coincidence. It’s reasonable to consider that it’s a defining feature of the political system.

Comment:

By Don McCanne, M.D.

Ouch!  (In contrast, single payer reform would be refreshingly colorblind.)

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Medicare Drug Features in the Inflation Reduction Act: Hints of Single Payer

Summary: The Inflation Reduction Act, the scaled-down version of “Building Back Better” now headed for presidential signature, has large health insurance provisions. These include multiple first-ever mechanisms for Medicare to control drug costs for CMS and beneficiaries. Let’s use this exciting set of gains as a stepping stone to single payer.

The Inflation Reduction Act is a Milestone Achievement in Lowering Americans’ Health Care Costs, The Commonwealth Fund Controlling Health Care Costs Blog, August 15, 2022, by Lovisa Gustafsson and Sara R. Collins

Increasing Access to Prescription Drugs

Through the IRA, Congress sought to make prescription drugs more affordable through reforms that will reduce the price of drugs and limit out-of-pocket costs for many Medicare patients. Currently, prescription drugs account for about 20 percent of Medicare patients’ out-of-pocket health care costs. Spending on prescription drugs continues to grow as other health spending has decreased.

The federal government was prohibited from directly negotiating drug prices in Medicare Part D, the prescription drug coverage program created in 2003. The IRA allows the government, under Medicare Parts B and D, to negotiate prices for 10 drugs with no generic or biosimilar competition starting in 2026, increasing to 20 [additional] drugs by 2029. In addition to lowering drug prices, Medicare negotiations are projected to reduce government spending by approximately $100 billion over 10 years.

The law also institutes inflation caps in Medicare Part D that limit price increases for drugs year over year. They are a response to drug price increases that far exceed inflation. Tax penalties would be levied on drugmakers that increase the prices of their products more than the rate of inflation. The caps are expected to reduce price growth over time.

While these provisions have the potential to help patients who take these specific drugs by lowering their out-of-pocket costs, the 48 million Medicare beneficiaries who get their drug coverage through Medicare Part D may see benefits as well if the lower drug prices translate into reduced Part D premiums.

The IRA also includes several other provisions that directly reduce some Medicare beneficiaries’ out-of-pocket costs. Most notably, it institutes a $2,000 annual cap for beneficiaries’ Part D spending (which currently has no cap), starting in 2025. Once this limit is reached, patients would have no cost-sharing requirement.

How Would the Prescription Drug Provisions in the Senate Reconciliation Proposal Affect Medicare Beneficiaries? Kaiser Family Foundation (KFF), July 27, 2022, by Juliette Cubanski, et al.

The prescription drug provisions in the Senate reconciliation legislation would reduce the federal deficit by $288 billion over 10 years (2022-2031), according to CBO. It would also reduce out-of-pocket spending by Medicare beneficiaries and limit increases in drug prices for Medicare and private insurance.

Requires the federal government to negotiate prices for some high-cost drugs covered under Medicare. Top-spending brands and biologic drugs without generic or biosimilar equivalents that are covered under Medicare Part D (retail prescription drugs) or Part B (administered by physicians) and are nine or more years (small-molecule drugs) or 13 or more years (biologicals) from FDA approval would be eligible for negotiation. The number of negotiated drugs would be limited to 10 Part D drugs in 2026, [plus] 15 Part D drugs in 2027, 15 Part B and Part D drugs in 2028, and 20 Part B and Part D drugs in 2029 
. CBO estimates $101.8 billion in Medicare savings from the drug negotiation provision


Imposes rebates on drug manufacturers that increase prices faster than inflation to limit annual increases in drug prices for people with Medicare. From 2019 to 2020, half of all drugs covered by Medicare had price increases above the rate of inflation over that period (1%, prior to the recent surge in the annual inflation rate), and among those drugs with price increases above the rate of inflation, one-third had price increases of 7.5% or more, the inflation rate in early 2022. The inflation rebate provision would be implemented beginning in 2023, using 2021 as the base year for determining price changes relative to inflation. CBO estimates a net federal deficit reduction of $100.7 billion over 10 years from the inflation rebate provision due to both reductions in spending and new revenues 


The Senate Finance Committee legislation also includes several provisions that would reduce out-of-pocket spending for Medicare beneficiaries 


Comment:

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

The Inflation Reduction Act (IRA) provisions for drug cost controls are substantial and laudable. The limits on Medicare Part D cost-sharing are a huge help to beneficiaries. The drug price controls (negotiations and limits to growth rate) are a precedent-establishing foot in the door for regulation. These features echo methods long used in universal coverage plans in other wealthy countries, if less comprehensive in scope.

Other IRA elements are also powerful. The extension of ACA subsidies will help millions. And the tax provisions – higher rates and better enforcement – start to mend our tax structure.

A dedicated health reform advocate might wonder – do these admirable changes undermine our campaign for single payer, or whet society’s appetite for comprehensive reform?

I’m betting on the latter. It’s easier to sell “Medicare for All” if Medicare is working well — conveying what properly designed health coverage looks and feels like. There are still SO many problems in our health care financing system, especially with private insurance and for the un- and under-insured. There is also much more to do within Medicare, outside of the drug realm, eg lowered cost sharing on all services. Thus, there is SO much to gain via single payer.

The reforms offered by the IRA – most notably the mechanisms for controlling drug costs – provide an enticing hint of the broad protections available for individuals and society with a comprehensive universal health insurance system. Let’s build on this success!

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Medicare for All Explained Podcast: Episode 83

Why Medicare For All Is Cool!

August 15, 2022

Podcast host Joe Sparks describes what makes single-payer Medicare for All cool ⁠— in a nutshell, it would allow people get the medical care and prescription drugs they need without having to worry about cost … and what could be cooler than that?

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

https://medicareforallexplained.podbean.com

AMA President-Elect Must Engage with Single Payer

Summary: The newly elected president of the American Medical Association is an accomplished physician, both civilian and military, a philanthropic leader, and a gay parent. He also has a history of opposing even consideration of single payer within the AMA. It behooves him to open his perspective to single payer, just as society has opened to accepting gay relationships.

Jesse M. Ehrenfeld, M.D., M.P.H., wins office of AMA president-elect, AMA, June 14, 2022

Jesse M. Ehrenfeld, M.D., M.P.H., an anesthesiologist in Wisconsin, was voted president-elect of the American Medical Association by the physicians and medical students gathered at the 2022 AMA Annual Meeting of the House of Delegates.

Following a year-long term as president-elect, Dr. Ehrenfeld will be installed as AMA president in June 2023. Dr. Ehrenfeld will be the first openly gay person to hold the office of president-elect, and also will be the first as AMA president.

Service to country and community, Jesse M. Ehrenfeld, M.D. ’04, M.P.H., advocates for impact, Medicine on the Midway, Spring 2021, by Kate Dohner

When Jesse Ehrenfeld began his education at the Pritzker School of Medicine, he expected he would return to his home state of Delaware to be “your average country doctor.” Yet, he has become much more—and far from “average.” 


Ehrenfeld divides his time between advocacy work, clinical practice and research. He is the immediate past chair of the American Medical Association and director of Advancing a Healthier Wisconsin Endowment, a $511 million endowment at the Medical College of Wisconsin. In this role, Ehrenfeld serves as a strategic investor in health, allocating grants to support research, education and community initiatives across Wisconsin. 


Despite his busy schedule, Ehrenfeld, 42, still finds time to dedicate to what is most important to him: family, including his husband, their 2-year-old son, and two rescue dogs.

Subject: Redefining AMA’s Position on ACA and Healthcare Reform, 2013 REPORT OF THE AMA BOARD OF TRUSTEES, presented by Jesse M. Ehrenfeld, M.D., M.P.H., Chair

Much of the current attention has been focused on single payer plans put forth in both the House and the Senate. The AMA continues to oppose this approach and remains focused on strengthening what works and expanding access to and choice of affordable, quality health insurance. Despite pressure from many members of the Democratic caucus, House leadership remains reluctant to take up single payer proposals. Polling has shown that while the concept of single payer, or “Medicare for All” proposals is popular, support falls off sharply when the implications of doing away with current coverage pathways is more closely examined. The AMA continues to support health insurance coverage for all Americans that is focused on pluralism, freedom of choice, freedom of practice and universal access for patients and will direct our advocacy efforts toward these goals.

Comment:

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

There are so many problems in health care in the United States today, that you would hope that the American Medical Association would select as their president-elect an individual who would be dedicated to addressing those problems. Although Jesse Ehrenfeld is highly qualified, the fact that he chaired the governing committee that rejected consideration of a truly effective method of ensuring affordable health care for everyone – single payer – does raise the question whether he is a good choice to be AMA president at this time.

Society has also been struggling with defining sexual roles and the family unit. Enlightened opinion provides for flexibility in relationships between consenting adults, and responsible parenting by two men is widely accepted. Kudos to the AMA for selecting a leader so openly in a non-traditional family structure. Social understanding, attitudes, and policies have changed, for the better.

Similarly, support for broad healthcare financing reform has strengthened. We certainly hope that Dr. Ehrenfeld has evolved in his thinking in the 9 years since the AMA reform policy report, with the continued deterioration of the healthcare system and growing AMA membership support for single payer.

As Sandy (she, her) and Don (he, his) celebrate a 62nd wedding anniversary on August 13th, and Rani (she, her) and Jim (he, his) celebrate 28 years on August 14th, our primary concern is about the social injustices in our nation, led by health care injustice. The AMA should be assuming a leadership role in ensuring health care justice for all, which they could do by advocating for single payer reform.

Don is a Life Member of the AMA (a special category no longer available), and certainly does not intend to resign because of Dr. Ehrenfeld’s position on Medicare for All, but does intend to speak up loud and clear. As will Jim (albeit from a non-AMA perch). We need comprehensive, accessible, affordable, equitable, quality health care for all, and the AMA needs to help pave the way.

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