Summary: Recent news highlights the stark choice we face. Bernie Sanders’ updated Medicare for All bill was introduced in the Senate. Meanwhile, a JAMA Health Forum article reveals another way that corporations (this time, Pharma) manipulate prices to maximize profits on the financial backs of patients. The choice is clear!

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Bernie Sanders Reintroduces Medicare for All Bill, Saying Healthcare Is a Human Right, Democracy Now, May 13, 2022

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Vermont independent Senator Bernie Sanders has revived his bill to provide Medicare for all U.S. residents. The measure has 15 Senate co-sponsors, all of them in the Democratic Caucus. Sanders unveiled his proposal Thursday at a hearing of the Senate Budget Committee, which he chairs.

Sen. Bernie Sanders: “It is not acceptable to me nor to the American people that over 70 million Americans today are either uninsured or underinsured. As we speak, right now, this moment, there are millions of people in our country who would like to go to a doctor, who have to go to the doctor, but simply cannot afford to do so. This is unacceptable. This is un-American. And this cannot be allowed to happen in the wealthiest country on Earth.”

Bernie’s tweet here, and below:

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Health care is a right to all in:

If every other major country can guarantee health care as a right to all its people, why can’t we? Yes, it’s time for Medicare for All.

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Trends of Prescription Drug Manufacturer Rebates in Commercial Health Insurance Plans, 2015-2019, JAMA Health Forum, May 6, 2022, by Elizabeth Plummer et al.

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[T]his economic evaluation show[s] that from 2015 to 2019, the growth of prerebate prescription drug costs (used for patients’ cost sharing) outpaced the growth of postrebate drug costs for all 3 commercial plan types.

[In the figure, Drug cost PCL = annual drug spending per covered life (per beneficiary)]

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Comment:

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

The contrast is clearly captured by the two graphics:

Bernie’s flags highlight that Medicare for All bill would finally place the US into the world of wealthy nations, which guarantee health care.

Plummer’s figure shows how drug companies and pharmacy benefit managers (PBMs) manipulate the payment system to increase their profits:

1. Both sets of bars show the relentless rise in drug costs;
2. The blue bars show how pre-rebate spending rises especially fast. This is the basis for patient cost-sharing.
3. The beige bars show how post-rebate spending rises more slowly. This is the cost to insurers.
4. The blue line shows how the rebate rises rapidly from 11% to 19%. This creates a gap between prices seen by consumers and real prices.

The result is rapidly rising cost-sharing for consumers, more slowly rising costs for insurers (though ultimately paid by consumers via premiums!), skyrocketing profits for drug companies, and booming profits for PBMs, a relatively new and superfluous intermediary.

This subterfuge represents the system’s large players colluding (in effect, if not by formal grand plan) to shift more costs onto patients while padding already huge profits.

The choice is really very clear.

http://healthjusticemonitor.org…

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Summary: This JAMA commentary supports doubling down on “value-based care” despite a dismal record of failed demonstrations, and doing so in the context of our dysfunctional multi-payer system. Make no mistake – this is all about enriching corporations that increasingly control our health system. They’re winning, but single payer can still come from behind.

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The Center for Medicare and Medicaid Innovation — Toward Value-Based Care, JAMA, May 9, 2022, by John E. McDonough and Eli Y. Adashi

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Section 3021 of the ACA established the Center for Medicare and Medicaid Innovation (CMMI), replete with $10 billion in guaranteed federal appropriation for 2010 through 2019. Ensconced within the Centers for Medicare & Medicaid Services (CMS), the CMMI was to expand the scope and accelerate the pace of learning with an eye toward hastening the transition from fee-for-service payment models to value-based care.

Since its inception, the CMMI has launched more than 50 model tests involving 28 million patients and more than 528,000 health care practitioners. These efforts at transitioning to value-based care involved Medicare, Medicaid, the Children’s Health Insurance Program, and commercial payers. Of the greater than 50 models tested during CMMI’s first decade, only 6 generated significant savings for Medicare and thereby for taxpayers. Despite this limited record of success and continuing political disagreements regarding Medicaid expansion and other aspects of the ACA, the drive for value-based care remains widely endorsed by both political parties and across most segments of the health care sector.

The first strategic objective of the CMMI, to “drive accountable care,” continues and accelerates this core initiative. CMMI’s new strategy sets an ambitious goal according to which “[A]ll Medicare beneficiaries with Parts A and B will be in a care relationship with accountability for quality and total cost of care by 2030,” as will “the vast majority of Medicaid beneficiaries.”

The second strategic objective of the CMMI, to “advance health equity,” will assume a much higher profile in CMMI’s second decade than it did in its first. Specifically, the CMMI will “require participants to collect and report the demographic data of their beneficiaries.”

The third strategic objective of the CMMI, to “support care innovations,” elevates and operationalizes the incorporation of social determinants of health into the “daily DNA” of the work of the CMMI.

The fourth strategic objective of the CMMI, to “improve access by addressing affordability,” seeks to reduce by 2030 the percentage of beneficiaries who forgo necessary care because of cost.

The fifth and final strategic objective of the CMMI invites opportunities to “partner to achieve health system transformation” by aligning priorities and policies across CMS, and by engaging “payers, purchasers, providers, states, and beneficiaries to improve quality, achieve equitable outcomes, and to reduce health care costs.” Under this strategic objective, all new CMMI models are to make multipayer alignment achievable by 2030.

The value-based care transformation of the US health care system as launched by the ACA is now more than a decade old. Some components of the ACA were the subject of intense and lengthy political conflict. However, the value-based care movement enjoyed near-universal support from federal leaders and key physician, hospital, and other health system organizations despite heretofore mediocre outcomes on both cost and quality. The new CMMI review and planning initiative is a welcome opportunity to renew and reinvigorate this vital national project, especially with the heightened profile of health equity as a core goal.

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Comment:

By Don McCanne, M.D.

We now have a decade of “value-based care” experimentation through the Center for Medicare and Medicaid Innovation (CMMI) involving 28 million patients and over a half million health care practitioners. Eighty-eight percent of the VBC models clearly failed and the other twelve percent “successes” were dubious or minimal. Yet the contention is that “value-based care” is widely endorsed and thus the transition should be hastened. The strategic objectives planned over the next decade appear to be intensification of the same questionable policies.

Particularly ominous is the plan to have our entire health care system locked into multi-payer alignment of all new CMMI models by 2030, obviously precluding consideration of a single payer Medicare for All model. That should give the multibillionaires and their private equity enough time to acquire our entire health care delivery system. It will be interesting to see how they implement their value-based care as we pass our health care trillions to the billionaires.

Perhaps we, the people, in an effort to revitalize our movement, should consider adopting a virtual mascot, a pony named Single Payer. We could give it a trial run against a field of ponies representing private equity, corporations, billionaires, industry-supported politicians and deaf government bureaucrats. Since they all operate in secrecy, for this test run we could give our pony the lucky pseudonym Rich Strike (sound on, full screen) … from behind, Rick Strike (Single Payer) wins!

Okay, just a pretend virtual reality, but if they are going to tell us that we want value-based care for all in the form of privatized Direct Contracting/REACH and then force it upon us, can’t we, as the people, force single payer onto the billionaires, bureaucrats, and politicians – for the benefit of all of us? I’d like to ride that virtual pony!

http://healthjusticemonitor.org…

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Summary: A JAMA viewpoint published in December advocated Medicare Advantage for All, ignoring the sordid record of Medicare Advantage plans. Those plans extract tens of billions in profits, avoid and eject unprofitable patients, decrease funds available for medical care, have a worrisome quality record, and constrain patient choice of providers. Inserting private insurers into Medicare for All would fatally undermine such reform.

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Letter to the Editor, JAMA, April 26, 2022, by Drs. Adam Gaffney, David Himmelstein, and Steffie Woolhandler

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[A recent JAMA viewpoint by Zahner et al advocates] Medicare Advantage (MA) for all over single payer reform. Zahner acknowledges that Medicare Advantage plans raise Medicare’s costs but offers no estimate of the excess expense (and waste) entailed in subcontracting universal coverage to private insurers. The 2020 national health expenditure estimates, coincidentally released the day before this Viewpoint, offer insight into this waste.

In 2020, private insurers’ overhead totaled $301.4 billion, vs. $236.6 billion in 2019. Privately administered Medicare plans accounted for $63.4 billion of the total (up 41.2% from 2019); $55.5 billion (up 64.9%) went for overhead of privately administered Medicaid plans. Overhead consumed 15% of Medicare Advantage premiums in 2020, eight-fold higher than traditional-Medicare’s 1.9% overhead, implying that subcontracting to private plans raised Medicare’s overhead by $55 billion.

Medicare Advantage plans’ high overhead explains the paradox that they cost 4% more, yet pay-out less to doctors and hospitals than traditional Medicare. While profits per se account for some excess overhead, much reflects the bureaucracy erected to garner profits – e.g. network management, utilization review and referral restrictions – bureaucracy that cuts both high- and low-value services. Additional billions go for upcoding and other schemes that Medicare Advantage plans have used to outmaneuver CMS’ risk adjustment efforts for decades, belying Zahner’s prediction that tweaks to risk adjustment will eliminate overpayments.

Zahner asserts that Medicare Advantage plans offer better quality, citing an exploratory study encompassing mainly lower-cost services and patients, a profitable group that Medicare Advantage plans structure their benefits to attract. Yet MedPAC cautions that the lack of data precludes definitive quality comparisons. Moreover, the exodus from Medicare Advantage of patients needing high-cost services like dialysis, skilled-nursing or home care, offers “revealed-preference” evidence that Medicare Advantage poorly serves unprofitably-ill patients.

Patients want good coverage and unrestricted choice of doctors and hospitals, not – as Zahner suggests – choice of which insurance plan processes the bill. Traditional Medicare offers virtually unrestricted choice, but its coverage, which leaves many with large uncovered bills, needs improvement. The Congressional Budget Office estimates that an expanded and upgraded version of traditional Medicare could provide universal, first-dollar coverage, while achieving administrative savings that would reduce overall costs, even while expanding clinical spending and patients’ choices. In contrast, Medicare Advantage for all would perpetuate the upward spiral of healthcare spending, divert more medical resources to insurers and restrict choice.

Far from looking to Medicare Advantage as a model for reform, we should question whether it should play any role at all.

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Comment:

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.

Private insurers now get the majority of their total premium revenues from Medicare Advantage (MA) and Medicaid managed care. And their overhead from those programs is enormous; in 2020, MA overhead averaged $2,256 per enrollee. Because that overhead is pushing the 15% limit mandated by the Affordable Care Act, MA insurers have been shifting profits to the provider groups and prescription management firms they own, whose profit/overhead is not capped; UnitedHealthcare, the biggest MA insurers, also controls more than 60,000 clinicians and paid $90 billion to its non-insurance subsidiaries in 2021. They are further boosting income and profits through diagnostic upcoding.

So expect to hear a rising chorus of calls (orchestrated by the private insurance industry) to expand Medicare Advantage and similar programs. CMS has is already implementing one such program, Direct Contracting Entities, although protests by patients and providers forced it to rebrand that program as “REACH”. REACH would auto-assign (without their knowledge or consent) most remaining traditional Medicare enrollees to managed care plans, many of them owned by the same firms that dominate MA. HJM has critiqued REACH, most recently here.

Health reform must eject the insurance middlemen who are draining resources from care.

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: Friends around the world watch in disbelief as the US is mired in democratic crisis, hoping we re-normalize soon. The frailties of our political system are on display, challenging its core strengths. This battle is paralleled in the health system, with similar dynamics and perhaps linked futures.

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Comment:

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

A European colleague texted me, in response to the news about Roe v. Wade and the divisive implosion of our politics: “I so don’t get your country. Nor do I understand my constant curiosity about it. It’s like watching a video of a car crash – you can’t look away but you cringe throughout!”

I think I know why: the US embodies the best and worst of political systems. This fraught duality is echoed in our health system. Indeed, health reform has the potential to mitigate our political ills.

Here’s my theory:

The best: The US is a beacon of modern democracy – the first (late 18th century), and the global defender (most notably World War II, and most recently in Ukraine). The US has no other fundamental societal identity – it is comprised almost entirely of immigrants to a land of freedom and opportunity. Meantime global democratic forces are weakening (India, China, Russia, Turkey, Hungary, Brazil, Myanmar, Nicaragua, etc), so the US as the last large democracy takes on special meaning. Observers from around the globe root for the continued success of our inspiring democratic example.

Yet: The US is guilty of horrendous systematic oppression of people of color through centuries of enslavement, marginalization, and in recent decades mass incarceration. Women have been subjugated and objectified, by law and culture. Despite formal separation, religious values influence state rhetoric and laws. Beyond our borders, the US has an inexcusable history of abusing its vast global reach. Many of us are deeply embarrassed by these flaws; reversing them is an ongoing struggle.

US history is a cycling battle between two fundamental values: Liberty (free of government control, especially national) vs. Community (government protecting the vulnerable). Since “Community” typically entails spending for the middle and lower classes, “Liberty” is often motivated by protection of wealth. Post-Great Depression and -WWII, “Community” triumphed, with FDR’s New Deal and LBJ’s Great Society, known as the “post-war liberal consensus”. But in 1980 Reagan started decades of deconstruction of social programs and lowering of taxes. Now “Liberty” is ascendent, as in the 1920s and 1850s. Enabling this, our “democracy” is procedurally flawed via the over-representation of small states, such that a minority can wield control. Historic wealth inequality reinforces the “Liberty” trend.

The looming reversal of Roe v. Wade reflects this ascendancy. As previously discussed in HJM, the current conservative Supreme Court reflects how aggressively, undemocratically, and even fraudulently the controlling minority succeeded in creating a court to do its bidding. The vast majority of US adults support retaining a 50-year-old decision protecting the right for women to choose abortion. It doesn’t matter: the packed court represents the minority in power.

Likewise, the dysfunction of our health system – with extravagant costs and excess deaths – represents this ascendancy of a minority. It reflects how aggressively, undemocratically, and even fraudulently the controlling minority – corporate health insurers, providers, and drug manufacturers – succeeded in creating federal legislators and bureaucracy to do its bidding. The vast majority of US adults support having the federal government pay for health care (as long as new taxes are offset by savings in premiums and out-of-pocket costs). It doesn’t matter: the packed federal decision-makers represent the corporate shareholders.

See the parallel?

The US sticks out like a sore thumb on health care. All other wealthy nations and many developing ones implement the principles of solidarity and human rights in health. A universal right to health has been uncontroversial. American exceptionalism in this context is especially mystifying and embarrassing.

There are more similarities: Just like our democracy has core strengths and appalling weaknesses, so does our health system. We excel on research and specialty medical care, but fall far short on financing methods, access, and primary care. We don’t vacillate between competing financing models, instead we combine them in an unwieldy mix that shifts over time.

An appealing link is in the solution: Reforming health care would lay the groundwork for a much-needed political calming and normalization. Single payer is the perfect cross-political policy. The progressives get the “community” they want – caring & equity. The conservatives get the “liberty” they want – shed the morass of divergent public and private insurer requirements we currently endure in favor of a simpler and less burdensome payment system. Estimated daily savings in electronic health record time for doctors: 1-2 hours. Free choice of providers. Straight up competition for patients, based on quality of service. I recognize that selling single payer to conservatives is a heavy lift, because the dreaded government will pay. But dozens of countries demonstrate that for providers and patients, it is loved and taken for granted, even with conservative governments.

Will real health reform treat our democratic malaise? Sharing the joys of universal health care access, with a renewed focus on clinical care instead of financial issues, while controlling costs through stripping away of administrative hassles and corporate profits – that’s bound to lower our democratic hypertension.

It won’t be easy. It’s the change struggle to end our democratic struggle.

To my colleague, I say: “It does look like a car crash, but maybe we’ll regain control just in time.”

http://healthjusticemonitor.org…

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Summary: Medicare’s funder is defending its plan to yield control of the traditional fully public side of Medicare to private investors. The evidence they present is flawed, and the story they tell is misleading. This is abetting a corporate Medicare money grab.

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Expanding Accountable Care’s Reach among Medicare Beneficiaries, by Douglas Jacobs, Purva Rawal, Liz Fowler, and Meena Seshamani, New England Journal of Medicine, April 27, 2022

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The CMS Medicare ACO [Accountable Care Organization] portfolio consists of the Center for Medicare’s Shared Savings Program and the Center for Medicare and Medicaid Innovation’s ACO models. The Shared Savings Program, now 10 years old, includes 483 ACOs serving more than 11 million Medicare beneficiaries and more than 525,000 participating clinicians. Such ACOs have been found to perform better on certain patient-experience and performance measures than physician groups participating in the Merit-Based Incentive Payment System (see table). The Innovation Center has tested several ACO models, of which the Pioneer ACO and ACO Investment Models have achieved net savings; others, including the Advance Payment ACO Model and the Next Generation ACO Model, have not. …

The Innovation Center is currently testing the Global and Professional Direct Contracting Model, which has been redesigned as the ACO Realizing Equity, Access, and Community Health (ACO REACH) Model. This model will examine the effects of new risk-sharing arrangements in traditional Medicare, additional flexibility for beneficiaries (such as the ability to receive in-home care management), provisions for advancing health equity, and reduced administrative burdens for providers on quality of care and Medicare’s costs.

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Comment:

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

This is a defense by CMS (the Medicare funder) of the new ACO REACH program, the relabeled “Direct Contracting Entities”. Dr. Fowler runs CMMI, the part of CMS that oversees these programs. HJM has already critiqued REACH. And this new defense is unconvincing. Scrutinize the key assertions:

Assertion 1: ACO programs saved $6 billion for CMS over five years

Sounds like a lot of money, but it’s only 0.3% of relevant Medicare spending in that period.

And, it’s imaginary, for three reasons:

(a) It’s based on a strain-credulity extrapolation from data pre-2016 to after 2018. That is, it’s a structured guess.

(b) The estimated small savings pre-2016 come from ACOs that remained in the Pioneer program, yet the ACOs that dropped out – and thus were omitted from calculations – had near zero savings (see here, page 74). In medical research, that’s called biased attrition, and violates “intention to treat” analysis standards. It exaggerates the effect, even creates an effect where there isn’t one.

(c) To make matters worse, we have very good evidence that ACOs upcode diagnoses. This is another way to create apparent savings when there aren’t any.

Assertion 2: ACOs improved quality

The table lists some quality improvements. However, note the small (and mostly statistically non-significant) differences between ACOs and the comparison group. More importantly, note that only 10 measures are listed out of at least 40 — cherry-picking the favorable findings.

Assertion 3: REACH builds on this ACO success

Even if ACOs did work (unlikely, see above!), to equate DCEs and ACOs is ridiculous.

ACOs were predominantly medical provider organizations. In contrast DCEs are predominantly investors – private equity. They are flocking to this business opportunity because they see big dollar signs. They can upcode diagnoses to raise payments from Medicare, reduce care, and keep all of the net savings up to 25% (and more after that).

REACH, though packaged more cleverly than DCEs, is also designed for and dominated by investors. REACH highlights equity, but the fundamental profit-taking structure is intact.

CMS is slanting the playing field toward corporate investors, enabling private companies to steal hundreds of billions from Medicare right in front of our eyes.

When will we say, “Medicare is for patients, not profits?” When will we say, “Medical care is for patients, not profits?” When will we say, “Time for 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.