PNHP

Health System Insanity Explained to Epidemiologists

Health System Insanity Explained to Epidemiologists

A short primer for experts in health and disease (epidemiologists) describes the fundamentally poor health of our health care system. Underlying cause: an excess of monetary incentives. Cure: expunge those incentives.

5 ways our health care system has become utterly insane, Your Local Epidemiologist, Nov. 12, 2025, by Katelyn Jetelina & Hayden Rooke-Ley

To me (KJ), the debate in Washington is far too small. The real story isn’t just whether subsidies stay or go – it’s how completely insane our health care system has become, and whether there will be a serious effort to address underlying costs in the system.

I know juuusssttt enough to get in trouble, so I partnered with the incredible Hayden Rooke-Ley, who is a leading national policy expert in this area, to break down the five ways the entire system has gone off the rails.

1. Costs vs. wages: A 20-year disconnect.

Over the past two decades, the cost of employer-sponsored health insurance has skyrocketed. Premiums, deductibles, and out-of-pocket costs have all soared – far faster than wages. More than half worry they’ll fall into debt any time they use the health care system.  More than 60% of those in medical debt have insurance.

2. We pay the most and get the least.

Outcomes: Despite record spending, Americans live shorter, sicker lives than peers. We underinvest in prevention, such as primary care and social supports like housing and nutrition.

Access: More than 100 million Americans live in a primary-care desert, while almost 60 million live in a pharmacy desert.

Clinician workforce: Health care workers are burning out or leaving the profession altogether.

3. Americans don’t “over consume” health care. Prices and private bloat drive costs.

Americans don’t visit the doctor more, we don’t go to the hospital more, and we don’t stay in the hospital for longer. The real difference is price.

Our system is drowning in private-sector bloat and bureaucracy, more so than any other country. Roughly one in four dollars spent on health insurance goes to something other than care, like marketing, billing, profits or middlemen.

4. Corporate and financial firms have taken over care.

Perhaps the most underappreciated transformation of the past 40 years is the corporate consolidation and financialization of medicine.

Private-equity firms now own everything from nursing homes and hospices, to emergency departments and physician practices. Their model is simple: buy up fragmented practices, cut labor costs, raise prices, and resell for profit.

5. Existing approaches have failed – and the latest proposals are more of the same.

The idea was to embrace more free market principles in health care.

  • Private insurers compete for patients: managed competition, pharmacy benefit managers, etc.
  • Over-reliance on economic incentives: pushing physicians into value-based care, and patients rationing through higher deductibles
  • Commercialization – converting public hospitals to for-profit chains

The current debate recycles the same logic: more private control, higher out-of-pocket costs, and less regulation of prices or profits. The latest idea is that deductibles need to be higher and patients don’t pay enough. … This approach has failed for 40 years. …

Bottom line

The U.S. health care system is uniquely dysfunctional. A different approach is entirely possible – if we have the will to boldly govern the health care system in the interests of patients, clinicians, and taxpayers. That means directly tackling prices, eliminating middlemen, and breaking up behemoths. It also means returning ownership of care delivery to clinicians and communities and pursuing a strategy that builds the workforce and capacity to meet America’s needs.

Health care touches everyone, and we need a system that works for us, not one that makes us work for it.

Comment:

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

Epidemiologists are sophisticated in thinking about the prevalence and spread of disease. However, they don’t understand much about health system financing and function. So this essay is a terrific primer for them. It’s an insightful status check on the unhealthy state of our health system. Impression (a medical term): Imbalanced, with excess money and a care deficit – especially for those short on money. High costs and poor performance make it obvious that we need a transformed approach. Treatment plan: Radical shift from money focus to medical care.

It’s clear what policies are needed — providing access to care for all, while keeping the system affordable overall and for each of us. This will require major shifts in approach. Ownership should be shifted to improve access and affordability for everyone, instead of increasingly guiding profits to the wealthy while impairing access and affordability for those with lower incomes – workers and especially the indigent.

The policies we need seem obvious, so it is consensus and collective action that is needed. We actually mainly share core values. We almost all agree that everyone should have the health care that they need. Likewise, that a financing system should be distributed to ensure that the system is affordable for everyone, even if this means that the very wealthy pay a larger amount (that they would never miss), in order to avoid extracting sums from lower income individuals that are needed to meet their most basic needs.

Step back and think about it. If we worked together, we could meet the goals of accessible, affordable health care for everyone without anyone suffering adverse consequences. We are not asking the wealthy to suffer the pains of poverty.

Hayden Rooke-Ley (this time with Katelyn Jetelina) explains how to get the health system to work in favor of everyone. Isn’t it time that we listened to them, to all of the other advocates for health care justice for all, and indeed to our clear collective values?

https://healthjusticemonitor.org…

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

Change in health care market a good thing

By George Bohmfalk, M.D.
Aspen (Colo.) Daily News, Letters, Nov. 8, 2025

Editor:

I was delighted to read Mr. Neubecker’s letter (“Seniors in ‘Happy Valley have few health care choices,” Nov. 6, Aspen Daily News) about the discontinuation of Medicare Advantage plans in Garfield County; I hadn’t known that UnitedHealthcare/Rocky Mountain Health had withdrawn from this market. Rather than mourning it, this change should be celebrated.

Most seniors who have been hoodwinked into joining an MA plan do not appreciate its many pitfalls. Sure, it seems free, and you might even go to a Silver Sneakers gym once or twice. And it may cover the inexpensive drugs you take today, if not more costly ones you may need next year. But at least two enormous red flags should give any senior pause before signing up.

First, all MA plans are run by private, for-profit insurance companies, not the government. They are not in it to serve seniors, but to take in — by various hooks and crooks — much more money and to pay out far less in actual health care costs than the original, government-administered Medicare. Their primary tactic in this is across-the-board, even AI-generated, demands for prior authorization and denials of care.

UHC is pulling out of markets like Garfield County because, even with these fraudulent tactics, they still can’t make enough profit to satisfy Wall Street’s expectations. They are doing this only to shore up their stock price.

The other major red flag is that while your present providers may be in their network, the doctors and hospitals you may need next year may not be, and you’ll be on the hook for huge out-of-network co-pays.

MA is great insurance, as long as you don’t get sick and need it. Yes, Medigap plans can cost a lot, but you may find a high-deductible one for under $50 per month. The real answer, to all of our health care problems, is for Trump to realize that his “concept of a beautiful plan” should be Improved Medicare for All, which would immediately solve all of this.

https://aspendailynews.com…

US Poll: Health Care Affordability Is Pervasive Concern

New national polling confirms widespread concerns about health care costs and access, and majority support for a leading federal government role in paying for health care. It’s time for a universal, public solution: single payer.

What Americans think about rising health care costs, according to a new AP-NORC poll, Associated Press, Oct. 21, 2025, by Ali Swenson & Linley Sanders

Most U.S. adults are worried about health care becoming more expensive. About 6 in 10 Americans are “extremely” or “very” concerned about their health costs going up in the next year, the survey from The Associated Press-NORC Center for Public Affairs Research finds.

The poll found that about 4 in 10 Americans are “extremely” or “very” concerned about not being able to pay for health care or medications they need, not being able to access health care when they need it, or losing or not having health insurance. Federal policies have left millions of people at risk of skyrocketing health insurance premiums or of losing their health insurance altogether.

About 8 in 10 U.S. adults say the issue of health care is “extremely” or “very” important to them personally. That includes about 9 in 10 Democrats and three-quarters of Republicans, and it puts health care next to the economy among Americans’ top issue priorities.

President Donald Trump’s mega-bill that passed this summer cuts more than $1 trillion from federal health care and food assistance over a decade. Republicans say the cuts will prevent people who don’t need aid from gaming the system, but the cuts will ultimately result in millions of people losing health insurance coverage, according to projections from the nonpartisan Congressional Budget Office.

In interviews, some Americans said they doubted government leaders would take the necessary action to address their concerns on health care. But the poll reveals a deep ideological divide over what the government’s role should be, with Democrats far more likely than Republicans to say it’s the federal government’s job to make sure all Americans have health coverage. About 8 in 10 Democrats say this, compared with about one-third of Republicans.

About 4 in 10 U.S. adults say they trust Democrats to do a better job handling health care, compared with about one-quarter who trust the Republicans more. About one-quarter trust neither party, and about 1 in 10 trust both equally.

Comment:

By Don McCanne, M.D.

Let’s see if we can make sense of the attitudes of Americans toward health care costs.

First, probably the most important fact is that 80% of Americans believe that health care is ‘extremely” or “very” important to them personally. This has clear bipartisan support – 90% of Democrats and 75% of Republicans.

Second, 60% of all Americans are concerned about health care costs going up next year, and 40% believe that health care and insurance will be unaffordable or inaccessible.

Across the board, Americans believe that some changes need to be made to assure that health care will be affordable and accessible. But then comes the partisan divide: whether Democrats or Republicans would be more capable of taking the necessary actions to address Americans’ concerns on health care.

Let’s break down the numbers. Fifty percent believe that the Democrats would do a better or at least a competent job in handling health care (40% better, 10% equivalent to Republicans). Thirty-five percent believe that the Republicans would do a better or competent (25% better, 10% equivalent to Dems).

So what have we learned from this poll? People are clearly worried about affordability and accessibility of health care now, and even more for the future. Although a majority of Democrats and a minority of Republicans believe that the Democrats would do a better job in fixing the system, it appears that we should seek solutions that would receive bipartisan support.

We now have many studies that show that a well-designed single payer system could both provide affordable and comprehensive care for everyone, while bridging political differences in reform ideologies. Here’s how:

Single payer design features would automatically include everyone while reducing the profound excess expenditures caused by private insurers and private equity that diverts patient care funds to the entrepreneurial intermediaries that have driven up costs and driven down system performance. These funds would be re-directed to the delivery system for the benefit of patients (and thus reduce moral injury for providers). By eliminating administrative waste and profits for passive investors, we would have sufficient funds to provide care for everyone.

How about the political differences? With preferences for Democratic policies outweighing Republican policies, we could sit down and agree that the taxes used to pay for the system would be progressive, based on the ability to pay. The vast majority of taxpayers – Dem & GOP – would find that those taxes are reasonable. Billionaires might object to the numbers on their tax forms, even though they would see no impact on their lifestyles.

Isn’t it about time that the Republicans, Democrats, and Independents decide to cooperate on striving for a better society for all of us – by sitting down to craft a health care system that would solve our current problems and work well for all of us? Efficient cooperation seems like a much better approach than expensive and inefficient bickering. That’s the wealthy nation standard; let’s get with the program!

https://healthjusticemonitor.org…

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

Dr. Diljeet Singh on NBC 4 Washington

PNHP president Dr. Diljeet Singh and immediate past president Dr. Phil Verhoef spoke to NBC 4 Washington for a news segment that was posted on November 3, 2025.

“Tens of thousands of people die every year because they do not have health insurance,” said Dr. Singh, who was leading a march and rally at the U.S. Capitol as part of PNHP’s first ever Advocacy Day in Washington, D.C.

Rachel Fox on CBS 9 Washington

SNaHP leader Rachel Fox spoke to CBS 9 Washington for a news segment that was posted on November 3, 2025.

“The corporate takeover of the health care system is unsustainable,” she said. “We’re here to fight for patient rights, and for our rights to practice.”

Over 200 doctors, medical students, and activists were in Washington, D.C. for a march and rally at the U.S. Capitol, as part of our first ever federal Advocacy Day.

Universal Healthcare is a Winning Strategy for the Dems & All of Us

Current political battles over health insurance focus on premium ACA subsidies and protecting Medicaid funding. The president of PNHP reminds us that the real answer lies in a grander vision, which has wide popular support: universal health insurance.

Universal Healthcare Will Save Lives… and Could Save the Democratic Party, Common Dreams, Oct. 22, 2025, by Diljeet K. Singh, MD, DrPH, president of Physicians for a National Health Program

As the only wealthy country without universal coverage, sticking to our current system is truly not “politically feasible.” Democratic leaders need to understand and embrace America’s desire for change.

The ongoing government shutdown, a standoff over health insurance premiums, is a missed opportunity to truly reform healthcare and revive the Democratic Party.

Democrats have been hyper focused on restoring Medicaid cuts and preserving Affordable Care Act (ACA) subsidies to blunt the harmful healthcare impact of the Republican budget. But this narrow strategy not only fails to address the core issues of the current system but ignores what most Americans want most: a system free from profit-driven conflicts of interest, prior authorizations, co-pays, deductibles, or the threat of bankruptcy. …

Americans want trustworthy, high-quality healthcare without conflicts of interest, co-pays, deductibles, or financial risk. A May 2025 Pew poll confirms this, with 68% of Americans, including 90% of Democrats and 45% of Republicans, believing the government should provide health insurance for all. A November 2024 Gallup poll shows 62% of Americans, including 90% of Democrats, 65% of Independents, and 32% of Republicans, think the federal government should guarantee health coverage for everyone. And a 2024 Marist Poll found 86% of Gen Z and 76% of Millennials also share the opinion that health insurance is the government’s responsibility. …

Meanwhile, Democrats are defending the status quo instead of fighting for the comprehensive health care reform that Americans need. Despite the unpopularity of much of what the Trump administration has done, support for the Democratic Party from its core members remains slim, with historically low voter registration and approval numbers. Championing universal healthcare gives Democrats a chance to move away from the status quo and win back frustrated voters, especially the youth.

Comment:

By Don McCanne, M.D.

Recently we pointed out that a health policy issue (ACA premium subsidies) is central to the federal budget battle and shutdown. Dems and voters favor retaining the subsidies.

In the above commentary, Dr. Singh – president of PNHP – emphasizes that maintaining a few subsidies isn’t going to cure our health insurance woes or help the Democrats. Instead, what’s needed is universal coverage – i.e., single payer, Medicare for All.

Dr. Singh states that “what most Americans want most: a system free from profit-driven conflicts of interest, prior authorizations, co-pays, deductibles, or the threat of bankruptcy.” And, “Americans from all parties agree that our political and economic systems need change.”

Yet neither major political party has it right in that the Republicans propose changes that would make our system worse, and the Democrats defend the status quo that has been so ineffective.

What both sides should agree on is that a comprehensive system progressively funded based on ability to pay, with billionaires contributing far more healthcare costs than they consume (but leaving them plenty for their extravagant lifestyles).

Bringing health insurance reform to the forefront now is timely with Dr. Singh leading the upcoming national meeting of PNHP, an organization that has long been a leader in the fight for comprehensive, accessible health care for everyone at a price that each of us can afford. She is correct that advocating for guaranteed, high quality, affordable health insurance that would boost the Democrats.

Yet, let’s look more broadly. Since we prefer that reform be based on sound policy rather than divisive politics, can we contemplate joining across parties in supporting health care justice for all, rather than battling ballrooms for billionaires vs. the unpopular status quo? There are plenty of Republicans, Independents, and Democrats who would unify on a government-financed health insurance approach that would guarantee all Americans “trustworthy, high quality health care without conflicts of interest, co-pays, deductibles, or financial risk.”

Let’s do it.

https://healthjusticemonitor.org…

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

“Last Week Tonight” on Medicare Advantage

“Last Week Tonight with John Oliver” aired a lengthy segment on the so-called “Medicare Advantage” program on October 26, 2025.

Oliver covered the many disadvantages of these corporate health plans masquerading as Medicare: limited provider networks, prior authorization requirements, surprise medical bills, and outright denials of care.

PNHP was one of the organizations briefing the show’s producers on the ins and outs of the “Advantage” program, including our comprehensive reports on overpayments, patient harms, and racial inequities.

Universal Healthcare Will Save Lives…and Could Save the Democratic Party

As the only wealthy country without universal health coverage, sticking to our current system is truly not “politically feasible.” Democratic leaders need to understand and embrace Americans’ desire for change.

By Diljeet K. Singh, M.D., Dr.P.H.
Common Dreams, Oct. 22, 2025

The ongoing government shutdown, a standoff over health insurance premiums, is a missed opportunity to truly reform healthcare and revive the Democratic Party.

Democrats have been hyper focused on restoring Medicaid cuts and preserving Affordable Care Act (ACA) subsidies to blunt the harmful healthcare impact of the Republican budget. But this narrow strategy not only fails to address the core issues of the current system but ignores what most Americans want most: a system free from profit-driven conflicts of interest, prior authorizations, co-pays, deductibles, or the threat of bankruptcy.

As a practicing gynecologic oncologist, I witness the human toll of this political timidity every day. I’ve seen patients on chemotherapy skip nausea medications because of co-pays, delay a surveillance PET scan because of the deductible, or substitute ineffective online elixirs for proven treatments because they cost less. As president of Physicians for a National Health Program, I have heard from thousands of physicians who are struggling to uphold their professional commitment to high-quality care because health insurance companies routinely deny coverage for medically recommended treatments.

What I hear in my clinic is also reflected in the polls and crosses party lines: Americans want trustworthy, high-quality healthcare without conflicts of interest, co-pays, deductibles, or financial risk. A May 2025 Pew poll confirms this, with 68% of Americans, including 90% of Democrats and 45% of Republicans, believing the government should provide health insurance for all. A November 2024 Gallup poll shows 62% of Americans, including 90% of Democrats, 65% of Independents, and 32% of Republicans, think the federal government should guarantee health coverage for everyone. And a 2024 Marist Poll found 86% of Gen Z and 76% of Millennials also share the opinion that health insurance is the government’s responsibility.

Today, more people, regardless of insurance status, are being forced to make difficult healthcare choices based on their finances. I have patients who regularly ignore pain and nausea because they are behind on medical bills and cannot afford to seek care. Consider that in America, 66% of bankruptcies are linked to medical issues, and 80% of those who went bankrupt had health insurance when they incurred the debt. In 2023, the average household medical debt was $10,570, and in 2024, about 20% of adults aged 18-49 borrowed money to pay for healthcare costs. A 2025 KFF poll found that 70% of adults worry about medical or dental bills leading to debt.

Americans from all parties agree that our political and economic systems need change, and most believe Republicans, not Democrats, can deliver it. According to an April 2025 Navigator poll, 74% of Americans (including 71% of Democrats, 78% of Independents, and 77% of Republicans) think our system “needs major changes,” with 12% feeling “the system needs to be torn down completely.” The same poll shows that 51% of Americans see Democrats as “focused on preserving the way government works,” including 54% of Democrats, 43% of Independents, and 54% of Republicans. Meanwhile, 65% of those surveyed believe Republicans are focused on changing the government, including 65% of Democrats, 57% of Independents, and 68% of Republicans.

Republicans are giving us change, but it’s not what Americans were hoping for. Their comprehensive efforts to reduce healthcare access, dismantle public health systems, and cut funding for essential medical research will have deadly consequences. Specifically, the mortality impacts of the Republican budget reconciliation bill—which includes deep cuts to Medicaid, the elimination of ACA subsidies, rollbacks to Medicare drug access, and weakening of nursing home safety standards—are estimated to cause 51,000 preventable deaths each year. This tragic number adds to the approximately 45,000 preventable deaths already linked to lack of insurance. While we can estimate the increased death toll among the millions losing healthcare coverage, the long-term effects of defunding the public health system and losing future lifesaving research are impossible to measure.

Meanwhile, Democrats are defending the status quo instead of fighting for the comprehensive health care reform that Americans need. Despite the unpopularity of much of what the Trump administration has done, support for the Democratic Party from its core members remains slim, with historically low voter registration and approval numbers. Championing universal healthcare gives Democrats a chance to move away from the status quo and win back frustrated voters, especially the youth.

The main arguments against universal healthcare are that it is unaffordable and politically unfeasible. However, the cost issue is challenged by basic economic analysis: We could afford to cover everyone if we weren’t actively wasting 25-30% of our healthcare spending on bureaucracy, overhead, and excessive profits for the health insurance industry. There is no evidence that these corporations improve healthcare or make any meaningful contribution. To the contrary, privatized Medicare (Medicare Advantage) wastes resources, costs more, and results in worse outcomes. In fact, when states deprivatize Medicaid, they save money and improve outcomes. For example, Connecticut shifted from privatized to public Medicaid in 2011, leading to a 4.7% increase in early cancer detection, an 8% increase in cancer survival, and savings of over $4 billion over 13 years.

The US spends more per person than other developed nations but has worse health outcomes, including lower life expectancy and higher maternal and infant deaths. As the only wealthy country without universal health coverage, sticking to our current system is truly not “politically feasible.” Democratic leaders need to understand and embrace Americans’ desire for change. They must fight for guaranteed universal healthcare—a system free from profit-driven conflicts, co-pays, deductibles, prior authorizations, and bankruptcy risks. Universal healthcare will save lives and may resuscitate the Democratic Party.

Dr. Diljeet K. Singh is a practicing integrative gynecologic oncologist and the president of Physicians for a National Health Program.

https://commondreams.org…

Government Shutdown Pivots on ACA Premium Subsidies

The federal budget stalemate and associated government shutdown are pivoting entirely on the role of the government in supporting ACA health insurance premiums. The Dems and voters say yes; the GOP says no. Is health reform building a big head of steam?

At Stake in the Shutdown Fight: Obamacare Prices That Could Rise by Thousands of Dollars, The New York Times, Oct. 1, 2025, by Margot Sanger-Katz & Alicia Parlapiano

Democrats say they will not vote to end the government shutdown unless Congress extends extra Obamacare subsidies that are set to expire next year. Republican leaders have said the subsidies shouldn’t be a part of legislation to reopen the government, though several individual lawmakers are open to the idea.

Should the extra subsidies expire, how much more will people with Obamacare plans pay?

The subsidies, first passed in 2021 and extended in 2022, make health insurance less expensive for nearly all those who buy their own coverage. Since the subsidies’ creation, enrollment in Obamacare markets has more than doubled.

Extending the subsidies would cost the federal government … about $350 billion over the next decade, according to estimates from the Congressional Budget Office. But, without them, many Americans will face much higher costs before the midterm elections next fall — in some cases, increases of more than a thousand dollars per month.

Despite Budget Concerns, Three-Quarters of Public Say Congress Should Extend the Enhanced ACA Tax Credits Set to Expire Next Year, Including Most Republicans and MAGA Supporters, KFF, Oct. 3, 2025

7 in 10 Marketplace Enrollees Say They Could Not Afford Coverage if Their Premiums Doubled; 4 in 10 Say They Would Expect to Be Uninsured

More than three-quarters (78%) of the public say they want Congress to extend the enhanced tax credits available to people with low and moderate incomes to make the health coverage purchased through the Affordable Care Act’s Marketplace more affordable, a new KFF Health Tracking Poll finds. That’s more than three times the share (22%) who say they want Congress to let the tax credits expire.

Comment:

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

For the last two weeks, my focus has been on a major medical issue facing my wife, so HJM has paused. We restart with this post on a health insurance issue currently central to US national politics, and will aim to maintain a steady flow moving forward.

In recent weeks, health insurance has been THE driving issue in the federal government shutdown, which was precipitated by a stalled budget bill for the 2026 fiscal year (started October 1). The sticking point is that the GOP failed to extend COVID-era Affordable Care Act premium subsidies benefiting 13 million individuals. The Democrats in the Senate – whose votes are needed to pass the bill – insist on maintaining the subsidies. They are convinced that highlighting this policy debate will harm the GOP, which appears indifferent to premium jumps of 100% or more. Public opinion polling suggests overwhelming support for extending the subsidies — 92% among Democratic voters and 59% among Republicans. If the budget passes without ACA subsidies, the GOP likely will be blamed for the jump in premiums, which will occur in January 2026 (years before Medicaid cuts passed earlier in 2025), perhaps influencing the 2026 congressional elections.

This is remarkable – a major showdown on federal government subsidies for health insurance. Unlike much of current US politics, it is actually a policy issue: Should the government broadly subsidize health insurance? The message from voters is an adamant “yes.” The GOP seems indifferent; the Dems seem determined.

Is this a pivotal moment where health insurance tips the political scales? It’s too early to say. In the short term, we don’t know who will win the budget bill fight, or what a compromise might look like. And we don’t know how the battle over subsidies will influence the 2026 congressional midterms. Or the 2028 presidential election.

Nonetheless, I’m quite encouraged by the stand that some politicians are taking in favor of broad health insurance, and the public’s extremely supportive reaction.

In an upcoming post, I’ll review how politicians are talking about health insurance. Lots of creative efforts there.

https://healthjusticemonitor.org…

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

Missouri can save money and improve care by cutting the middleman out of Medicaid

By Ed Weisbart, M.D.
Missouri Independent, Oct. 21, 2025

What would you say if I told you it’s possible to cut $250 million from the Missouri Medicaid budget while also improving the health of people on Medicaid? All we need to do is cut out the middleman by not renewing our state contracts with insurance corporations like Centene, Blue Cross and United Healthcare.

Over the past decade, the corporations running Medicaid nationally averaged an astronomical overhead rate of 13%. On top of that, Missouri spends untold millions of dollars overseeing these corporations.

All this waste disappears if we switch to an enhanced form of the fee-for-service model that Missouri Medicaid currently uses for our aged, blind and disabled people. Other states, such as Connecticut, have cut out the middleman and run their Medicaid programs with a total overhead of 4-6%. Since 2012, that tiny state has saved $4 billion.

Connecticut did this without a significant increase in state agency staffing by outsourcing much of the work to private commercial businesses called “Administrative Services Organizations” that are paid a flat fee for a defined service, avoiding the conflicts of interest inherent in so-called “managed care” organizations.

States like Missouri that allow insurance corporations to run their Medicaid program have consistently seen higher and more rapidly growing expenses. Between 2004 and 2015, counties that outsourced their Medicaid program to insurance corporations had their costs rise $1,584 per person per year above what was being spent in comparable counties that avoided this trap.

By switching to enhanced fee for service, we would have to absorb some of the administrative functions done by insurers, but we would also stop spending anything on insurance company overhead and oversight. On balance, we could expect a modest increase in administrative expenses but save between 10-17% of total costs.

In total, after accounting for the portion of savings that would go back to the federal government (they fund the majority of Medicaid), our state would save between 152 and 258 million dollars per year, in 2023 dollars.

We’re not the only state in this position. Nationwide deprivatization of Medicaid would annually save all states combined as much as $34 billion and the federal government as much as $43 billion, for a total of $77 billion for the country.

To be clear, that’s not enough to completely mitigate the recent federal cuts to Medicaid funding – but it would go a long way. Without this approach, we face a range of unpalatable alternatives.

We could instead cut the “optional” Medicaid benefits like pharmacy, dentistry, physical therapy, occupational therapy, and hospice care. Sadly, many states facing a budget crisis decide to cut long-term home health services, a self-defeating strategy as these are the very services that keep people from being institutionalized at even higher costs to the state.

Or we could cut more people from Medicaid.

Or we could cut back on what we pay doctors, though many people on Medicaid already have difficulty finding a physician who accepts Missouri’s paltry Medicaid fee schedule.

Or we could cut back on what we pay hospitals, but Missouri already has too many hospitals at risk of closure. Cutting their funding would accelerate the crisis, particularly in rural communities.

Or we could reduce state funding for other essential services, like education.

Or we could raise taxes.

None of these choices are acceptable. Removing managed care organizations from Medicaid would protect the entire healthcare system while saving us hundreds of millions of dollars per year.

As striking as those numbers are, it’s not just about money. Removing the insurance industry’s barriers to care has been shown to attract more physicians into Medicaid, increase early diagnosis of cancer, and improve overall health.

I worry about people like my 31 year-old patient with juvenile diabetes who works as a self-employed roofer. Before Missouri expanded Medicaid, he frequently resorted to taking his insulin every other day. No physician wants to see people go back to rationing a life-saving medication.

The politics seem daunting, given the prominence of large insurance corporations in Missouri. But remember, Connecticut found a way to do this in 2012, and that state is often considered “the insurance capital of the world.”

If they could figure out how to make it happen, Missouri can, too.

Dr. Ed Weisbart is a retired family physician in Olivette and board secretary of Physicians for a National Health Program.

https://missouriindependent.com…

We’re the Lucky Ones

Health insurance in America is fantastic … for me and a few others. It can and should be for everyone.

Comment:

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

My wife just got a very serious medical diagnosis.

We’re lucky:

  • World class clinical care at UCSF (with no network restrictions).
  • No financial worries. We have great insurance – $0 deductible, minimal copays.

Shouldn’t it be that way for everyone?

We know it’s affordable, as demonstrated repeatedly.

Let’s overcome the avarice and cruelty.

(This of course led to the HJM pause; will resume shortly.)

https://healthjusticemonitor.org…

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