PNHP

CBO on Single Payer Benefits to the Economy

CBO on Single Payer Benefits to the Economy

Summary: The Congressional Budget Office just released a powerful report, highlighting multiple ways in which single payer would strengthen the economy. That’s right, not just health, but also general economic productivity and well-being. Efficiently financed universal health care improves health and reduces financial burdens, boosting economic performance.

Economic Effects of Five Illustrative Single-Payer Health Care Systems, Congressional Budget Office, February 2022, by Jaeger Nelson, with assistance of CBO Staff

This paper builds on previous studies published by the Congressional Budget Office about single-payer health care systems.

We analyze six channels through which a single-payer system would affect the economy:

  • The composition of workers’ labor compensation would change because employers would no longer provide health care benefits and would pass along the savings to employees, increasing their taxable wages.
  • Households’ health insurance premiums would be eliminated, and their out-of-pocket (OOP) health care costs would decline.
  • Administrative expenses in the health care sector would decline, freeing up productive resources for other sectors and ultimately increasing economywide productivity.
  • Reduced payment rates to providers would increase productivity and efficiency in providing health care; however, some of the reduction in payment rates would be passed through to workers’ wages in the health care sector and throughout the supply chain.
  • Longevity and labor productivity would increase as people’s health outcomes improved.
  • [Long-term care] benefits would further reduce OOP spending, provide payments for care that is currently unpaid, increase wages among workers providing care, and allow some unpaid caregivers to increase their hours worked at their primary occupation.

[W]orkers would choose to work fewer hours, on average, despite higher wages because the reduction in health insurance premiums and OOP expenses would generate a positive wealth effect that allowed households to spend their time on activities other than paid work and maintain the same standard of living.

Moreover, that wealth effect would boost households’ disposable income … Although hours worked per capita would decline, … under most policy specifications [there would be] an increase in economywide productivity, an increase in the size of the labor force, an increase in the average worker’s labor productivity, and a rise in the capital stock. … nonhealth consumption per capita would rise by about 11.5 percent by 2030.

Pigs fly! CBO admits Medicare for All will aid people, businesses, economy, Medium, February 25, 2022, by Ira Dember

  • BIGGER PAYCHECKS. “…employers would no longer provide health care benefits and would pass along the savings to employees, increasing their taxable wages.”
  • NO PREMIUMS. “…health insurance premiums would be eliminated, and [families’ out-of-pocket] health care costs would decline.”
  • LESS WASTE. “Administrative expenses in the health care sector would decline, freeing up productive resources for other sectors and ultimately increasing economywide productivity.”
  • LOWER COST. “Reduced payment rates to providers would increase productivity and efficiency in providing health care…”
  • LIVE LONGER. “Longevity and [economywide] labor productivity would increase as people’s health outcomes improved.”

The Government Just Admitted An Inconvenient Truth, The Daily Poster, February 25, 2022, by David Sirota and Aditi Ramaswami

Every now and then, federal officials admit some truths that are inconvenient to the corporations that own the government — and this latest admission is pretty explicit: Scrapping corporate health care and creating a government-sponsored medical system would boost the economy, help workers, and increase longevity.

Those are just some of the findings from the Republican-led Congressional Budget Office (CBO) in a new report that implicitly tells lawmakers just how the existing corporate-run health care system is immiserating millions of Americans — and how a Medicare for All-style system could quickly fix the catastrophe.

Comment:

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

It is consistently stunning to us that political forces in our country do not coalesce around single payer, since it would provide equitable, comprehensive health care for all of us while saving money. Congress and the President apparently do not believe that it is their responsibility to ensure our health.

So, just what purpose do these politicians believe they serve? We frequently hear them advocate for helping the economy. Well, now they can read this report from Congress’s own economic advisory body, the Congressional Budget Office, to see that ensuring health will also help the economy.

The CBO says that a single payer system will reduce the economic burden of health care on families and employers; eliminate administrative waste and put those funds to productive use; increase disposable income, elective consumption, and savings; and raise productivity through better health, among other benefits. All that while fixing our broken health care system.

We link to two excellent op-eds about this powerful new analysis. This is very important news.

Congress has the report in hand, and they should use it. The President can jump on the bandwagon.

Better health, better economy. A twofer.

http://healthjusticemonitor.org…

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‘Band-Aid on a Tumor’: Critics Blast Biden Rebrand of Trump’s Medicare Privatization Scheme

"Changing the name doesn't change the fact that the Direct Contracting program is backdoor privatization of Medicare," said one progressive advocate.

By Jake Johnson
Common Dreams, February 25, 2022

Rejecting pressure to terminate the program in its entirety, the Biden administration on Thursday announced it is redesigning a Trump-era experiment that physicians and progressive lawmakers have criticized as a scheme to fully privatize Medicare.

Instead of ending what’s known as the Direct Contracting model, which the Trump administration officially launched in 2020, the Centers for Medicare and Medicaid Services (CMS) gave the program a new name: ACO REACH, which stands for Accountable Care Organization Realizing Equity, Access, and Community Health.

In addition to the name change and fresh veneer—a step in line with the healthcare industry’s call for a “rebranding”—CMS said the program will now span four years instead of eight and will include requirements aimed at ensuring “transparency” and “equity.”

The changes are slated to take effect on January 1, 2023.

Physicians for a National Health Program (PNHP), a doctor-led group that has spearheaded the opposition to Direct Contracting, was far from satisfied with the Biden administration’s changes, which the organization argued are more cosmetic than substantive.

“ACO REACH is Direct Contracting in disguise,” said Dr. Susan Rogers, an internal medicine physician and president of PNHP. “This new model doubles down on Direct Contracting’s fatal flaws, inserting a profit-seeking middleman between beneficiaries and their providers.”

Under Direct Contracting, so-called Direct Contracting Entities (DCEs) were paid monthly by CMS to cover a specified portion of a patient’s medical care. DCEs—the majority of which are currently controlled by investors, not healthcare providers—are allowed to pocket funds they didn’t spend on care.

In a statement, PNHP—which has implored the Department of Health and Human Services (HHS) to fully halt the program—outlined how the revamped pilot “perpetuates the dangerous flaws” of the Trump administration’s Direct Contracting experiment:

  • First, like the DC model, ACO REACH will pay middlemen a flat fee to “manage” seniors’ health, allowing them to keep 40% of what they don’t spend on care as profit and overhead.
  • Next, Traditional Medicare beneficiaries will still be automatically enrolled into ACO REACH entities without their full understanding or consent, and once enrolled cannot opt out of an ACO REACH entity unless they change primary care providers.
  • Like DCEs, the ACO REACH program has virtually no limits on what type of company can participate; entities can be owned by commercial insurers, private equity investors, and other profit-seeking firms, including current Direct Contracting entities.
  • The new program increases provider governance from 25% to 75% (with loopholes built into the application process), but ACO REACH entities are ultimately accountable to investors.

“You can’t slap a band-aid on a tumor and call it cured,” said Rogers. “Direct Contracting—and now ACO REACH—threatens the health of beneficiaries and the future of Traditional Medicare. As physicians committed to the health of our patients, we urge HHS to abandon this rebranding effort and focus the agency’s efforts towards strengthening and protecting Traditional Medicare.”

CMS unveiled its raft of changes to the Medicare experiment just over a week after a coalition of industry groups—including active participants in the Direct Contracting program—requested that the Biden administration “fix” the model instead of ending it.

The industry organizations suggested that “a rebranding and name change would… help communicate how this model is part of the evolution to accountable care.”

CMS is headed by Elizabeth Fowler, who has previously worked at Johnson & Johnson and WellPoint, Inc.—now known as Anthem, one of the largest private health insurance companies in the United States.

While CMS said Thursday that it took into account “feedback received from participants and stakeholders,” the new ACO REACH program is more in line with industry demands than those of physicians, grassroots advocacy groups, and progressive lawmakers.

“Changing the name doesn’t change the fact that the Direct Contracting program is backdoor privatization of Medicare,” Alex Lawson, executive director of Social Security Works, said in a statement. “This dangerous experiment must be stopped before it further harms the health of vulnerable seniors, eats into the Medicare Trust Fund, and destroys traditional Medicare.”

“DCEs and their investors—which include private equity firms—are focused on generating profits,” added Lawson. “They are incentivized to deny and delay care as much as possible. There are no changes that can address that fundamental flaw at the heart of the program. President Biden must protect older adults and people with disabilities by ending the direct contracting program immediately.”

Rep. Pramila Jayapal (D-Wash.), who earlier this month led more than 50 House Democrats in urging Biden to cut off the program, said Thursday that she will “continue to fight tooth and nail against any and all efforts to privatize Medicare.”

“Trump-era Direct Contracting is a major threat to Medicare coverage, hidden in bureaucracy,” said Jayapal, the chair of the Congressional Progressive Caucus. “While I’m glad to see the administration taking steps to redesign this flawed program, I am disappointed that these changes will not be enacted for 10 months and that there are no limits on how many seniors are funneled into this experimental model. More needs to be done.”

https://www.commondreams.org…

Ukraine Crisis

Summary: The world is roiling, with a Russian invasion of Ukraine. This appears to be the largest post-Cold War crisis in Europe, with huge risks. This is indeed a health issue, and a justice issue.

Vladimir Pozner: How the United States Created Vladimir Putin, 2018 talk at Yale, YouTube, October 2, 2018

[no excerpt – video]

Pozner, a prominent French-American-Russian television journalist for many decades, argues that the US and NATO made a major diplomatic error after the Cold War, treating Russia as a small and marginal state, and making promises of NATO expansion restraint that were not honored. This punitive approach, he says, injured Russian pride and raised legitimate security concerns, thus stoking nationalism and creating political dynamics leading to Ukraine tensions and conflict. He’s a not a Putin fan, he says, just providing critical historical context.

Vladimir Putin’s Revisionist History of Russia and Ukraine, The New Yorker, February 23, 2022, by Isaac Chotiner

The historian Serhii Plokhy discusses the Russian President’s “very imperial idea” of his country, and the potential for Ukrainian resistance.

How far back do you trace a type of Ukrainian identity that we would recognize today?

It depends on what element of that identity you are speaking of. If you are talking about language, that would be pretty much primordial. In terms of an identity with religious components, that would be more than a thousand years old. But the first modern Ukrainian political project started in the mid-nineteenth century, as with many other groups. [V]ery early, the Russian Empire recognized the threat posed by a separate and particularly literary Ukrainian language to the unity of the empire. So, starting in the eighteen-sixties, there was a more than forty-year period of prohibition on the publication of Ukrainian, basically arresting the development of the literary language. …

Why was Russia so threatened by Ukrainian identity and, specifically, language? Was it just typical imperial distrust and dislike of minority groups or languages?

The Russians were looking at what was happening in Europe at that time… What is specific and certainly resonates today is the idea that there is this one big Russian or Slavic nation, with maybe different tribes, but, basically, they are the same nation. That is the model, from the nineteenth and beginning of the twentieth century, which Vladimir Putin now subscribes to when he says Ukraine has no legitimacy as a nation.

Letters from an American, Substack, February 23, 2022, by Heather Cox Richardson

[Putin] promised to provide for the ”denazification” of Ukraine, a harking back to the period after World War II when Nazis and those who had worked with them were purged from society. Putin has repeatedly referred to Ukrainian leaders as Nazis, a charge Zelensky, who is of Jewish heritage, has pleaded with Russians to reject, citing Ukraine’s losses in World War II and his own grandfather’s service in that war. Putin’s chilling word here suggests that he intends to purge from Ukraine all those who worked with the Zelensky government.

He warned: “Anyone who tries to interfere with us, or even more so, to create threats for our country and our people, must know that Russia’s response will be immediate and will lead you to such consequences as you have never before experienced in your history.” This sweeping and vague threat seems to encompass everything from massive cyber attacks to nuclear war, but at this point it seems mostly to be an effort to deter resistance.

Comment:

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

Russia’s invasion of Ukraine is a global crisis, evoking decades-old Cold War tensions between the USSR and NATO, as well as issues of ethnic identity and national sovereignty. While not a typical HJM topic, these events threaten the health of millions of people – in the region and, with nuclear weapons available in abundance, throughout Europe and even the US.

Who is to blame? In my view, in the short term, Putin is culpable. As the New Yorker article discusses, the history of Ukraine’s treatment by Russia and then the Soviet Union reads like cultural oppression interdigitated with political gamesmanship. This article paints the Russians as power-hungry oppressors, with periods of cultural genocide.

The YouTube video of Vladimir Pozner’s 2018 Yale talk is fascinating, worth the long listen. Pozner presents a compelling argument that the aggressive & dismissive US/NATO post-Cold War stance toward Russia led to today’s problems. This dynamic was anticipated by many when in 1992 the US articulated an aggressive policy toward the new Russia, including by George Kennan, author of the lauded US Cold War containment policy. Pozner’s historical insights don’t negate the fact that the current Russia is abysmally about authoritarianism and kleptocracy, but does suggest a counterfactual history in which those developments could have been staved off with an approach like the Marshall Plan after WWII.

Heather Cox Richardson’s reflections suggest that Ukrainian-Russian history and NATO post-Cold War political blunders aside, Putin has morphed into quite a heinous figure. The Ukraine invasion unequivocally fosters authoritarianism and militarism, and damages democracy. Hitler too was provoked by an unwise and unfair treaty ending WWI, but we don’t excuse his actions on that basis.

Let’s hope that calm minds prevail, Russia and NATO will compromise, and the crisis will dissipate. Then we can return to relatively mundane issues like removing financial barriers to health care in the US.

http://healthjusticemonitor.org…

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Physicians to HHS: Rebranding Won’t Fix Direct Contracting’s Fatal Flaws

PNHP vows to fight back against CMS' rebranding of DC model to ACO REACH

FOR IMMEDIATE RELEASE: Feb. 24, 2022

Media Contact: Clare Fauke, Physicians for a National Health Program communications specialist, clare@pnhp.org

Today, the Centers for Medicare and Medicaid Services (CMS) announced the agency will terminate the controversial Medicare Direct Contracting (DC) program four years ahead of schedule, and replace it with a virtually identical pilot called the ACO REACH model. Physicians for a National Health Program (PNHP), an organization of 25,000 doctors that support Medicare for All and oppose Medicare privatization, rejected the ACO REACH model and called on CMS and Health and Human Services (HHS) to eliminate all profit-seeking in Medicare.

“ACO REACH is Direct Contracting in disguise,” said Dr. Susan Rogers, an internal medicine physician and president of PNHP. “This new model doubles down on Direct Contracting’s fatal flaws, inserting a profit-seeking middleman between beneficiaries and their providers.”

PNHP identified several ways that ACO REACH perpetuates the dangerous flaws of Direct Contracting.

First, like the DC model, ACO REACH will pay middlemen a flat fee to “manage” seniors’ health, allowing them to keep 40% of what they don’t spend on care as profit and overhead. “The ACO REACH payment model establishes a dangerous incentive for middlemen to restrict patient care, an incentive that has never previously existed in Traditional Medicare,” said Dr. Rogers.

Next, Traditional Medicare beneficiaries will still be automatically enrolled into ACO REACH entities without their full understanding or consent, and once enrolled cannot cannot opt out of an ACO REACH entity unless they change primary care providers. “Changing primary care providers is a burden for anyone on Medicare, but especially for those in rural and other underserved communities,” added Dr. Rogers.

Like DCEs, the ACO REACH program has virtually no limits on what type of company can participate; entities can be owned by commercial insurers, private equity investors, and other profit-seeking firms, including current Direct Contracting entities. 

The new program increases provider governance from 25% to 75% (with loopholes built into the application process), but ACO REACH entities are ultimately accountable to investors. In response, Dr. Rogers said, “Investors want a return on their investment, creating a dangerous incentive for ACO REACH middlemen to both maximize revenues through upcoding, and minimize expenditures by restricting patient care.”

Dr. Rogers explained that the ACO REACH pilot will be haunted by the ghosts of Direct Contracting, which was problematic even before it began: “Direct Contracting was designed by industry insiders like Adam Boehler, who had previously founded Landmark Health, later approved as a Direct Contracting Entity (DCE). HHS then ignored its own General Counsel’s ethics warning that the program was being designed to benefit specific companies, which has haunted the program ever since.”

Rep. Pramila Jayapal (WA-07) joined PNHP in calling for an end to the program. “Trump-era Direct Contracting is a major threat to Medicare coverage, hidden in bureaucracy,” said Congresswoman Jayapal. “While I’m glad to see the administration taking steps to redesign this flawed program – I am disappointed that these changes will not be enacted for 10 months and that there are no limits on how many seniors are funneled into this experimental model. More needs to be done, and I will continue to fight tooth and nail against any and all efforts to privatize Medicare.”

“You can’t slap a band-aid on a tumor and call it cured,” added Dr. Rogers. “Direct Contracting — and now ACO REACH — threatens the health of beneficiaries and the future of Traditional Medicare. As physicians committed to the health of our patients, we urge HHS to abandon this rebranding effort and focus the agency’s efforts towards strengthening and protecting Traditional Medicare.”

Physicians for a National Health Program (pnhp.org) is a nonprofit research and education organization whose more than 25,000 members support single-payer Medicare for All reform.

Paul Farmer, Medical Visionary

Summary: Paul Farmer, an inspirational leader in global health, passed away, too young at 62. His powerful vision for social justice in health should guide us to single payer in the US and to use the resulting huge savings to improve health around the world.

Paul Farmer, Pioneer of Global Health, Dies at 62, New York Times, Feb. 21, 2022, by Ellen Barry and Alex Traub

Paul Farmer, a physician, anthropologist and humanitarian who gained global acclaim for his work delivering high-quality health care to some of the world’s poorest people, died on Monday on the grounds of a hospital and university he had helped establish in Butaro, Rwanda. He was 62.

“There are so many people that are alive because of that man,” Dr. Rochelle P. Walensky, director of the Centers for Disease Control and Prevention, said in a brief interview, adding that she wanted to compose herself before speaking further.

Dr. Anthony S. Fauci, President Biden’s top medical adviser, broke down in tears during an interview, in which he said he and Dr. Farmer had been like “soul brothers.”

Quotes from Paul Farmer, Oct. 26, 1959 – Feb. 21, 2022

“I critique market-based medicine not because I haven’t seen its heights but because I’ve seen its depths.”

“I mean, everybody should have access to medical care. And, you know, it shouldn’t be such a big deal.”

“But if you’re asking my opinion, I would argue that a social justice approach should be central to medicine and utilized to be central to public health. This could be very simple: the well should take care of the sick.”

Comment:

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

Paul Farmer was a determined and inspiring moral leader in global health. I had the pleasure of knowing Paul a little, and the rough experience once of taking a more pragmatic view than Paul’s unyielding belief that everyone deserves world class medical care, wherever they live. He set the bar high, and millions benefited from that perspective. He was brilliant, indefatigable, and kind. I mourn his passing, and dearly hope that his vision derives broader support from the accolades that are already being offered.

In the United States, with its vast resources, there is no excuse for not providing universal health coverage. As Paul wrote, market medicine sinks to unacceptable depths; everybody should have access to medical care; and social justice should be central to medicine.

With single payer, the argument sometimes offered by economists like me that we can’t afford to do everything falls away. Because, as you all know, single payer shifts the waste in our health care market into meeting all care needs for everyone. And indeed, we would achieve enough extra savings to massively boost US support for global health efforts.

Let’s honor Paul Farmer by passing single payer in the US, and by multiplying medical resources for needy countries around the world.

http://healthjusticemonitor.org…

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Single Payer 20/20 Vision: Advantages & Obstacles

Summary: Today we summarize what single payer offers, and the challenges to achieving it, using the arbitrary framework of 20-item lists. (With President’s Day on Monday, perhaps Lincoln’s “Four score …” sent a subliminal message.) The incredible advantages justify continued struggle to overcome the daunting obstacles.

Comment:

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

Advantages:

  1. Everyone has high quality health insurance, with broad benefits. Forever.
  2. You never need to choose or change insurance.
  3. Health coverage is highly equitable: everyone has the same insurance.
  4. You can see any doctor or other licensed provider (eg therapist).
  5. Physical and mental health are equally well-covered.
  6. Dental, vision, and hearing are covered.
  7. Long-term care is covered.
  8. No more financial barriers to care: deductibles are gone, with no or minimal copays.
  9. No more out-of-network financial penalties for patients.
  10. No more bankruptcies due to medical bills.
  11. Wasteful insurance paperwork disappears, leaving more money for medical care.
  12. Insurer profits disappear, leaving more money for medical care.
  13. Sky-high drug prices disappear, leaving more money for medical care.
  14. The doctor-patient relationship is paramount.
  15. Your doctor has no financial incentives to minimize care.
  16. There are no health insurers to interfere with your care.
  17. The electronic health record is stripped of billing complexity, so it’s easy to use and focused on clinical care.
  18. The US treats healthcare as a public good, not a private commodity.
  19. People in the US are proud of our excellent insurance and healthcare.
  20. Full access to care reduces deaths by 100,000 per year.

Obstacles:

  1. Insurers will lose their healthcare business and profits.
  2. Many pharmaceutical companies will lose sky-high profits.
  3. Some large hospitals and provider systems will lose market power and profits.
  4. Doctors worry that they’ll lose income (they won’t, and most will make more).
  5. Some high-paid specialist physicians may earn less.
  6. Insurers make huge donations to politicians and lobby (including against single payer).
  7. Pharmaceutical companies make huge donations to politicians and lobby …
  8. The American Medical Association makes huge political donations and lobbies …
  9. Hospitals make huge political donations and lobby …
  10. The massive healthcare financing enterprise (which consumes 3% of our national income) will need to reorganize, shrink, and shift its resources to clinical care.
  11. The even more massive healthcare industry (nearly 1/5 of our economy) will need to transform its values system – from profit maximization to universal care access.
  12. People like their doctors, and don’t realize that under single payer they can keep that doctor.
  13. People worry about losing what they have with their current insurance.
  14. People don’t know how well health insurance works in other wealthy countries.
  15. Health insurers run a huge ongoing public relations campaign to extol the wonders of private insurance.
  16. Health insurers promote “choice” – but that means choice of insurance, not doctor.
  17. The health system is so complex it’s nearly impossible to understand and explain.
  18. Opponents of single payer spread misinformation about it.
  19. The myth of the healthcare market persists, despite being discredited repeatedly.
  20. People often have trouble remembering all the ways that our system fails us daily, and how single payer would fix those problems. When they do understand, they see huge barriers to change. They just hope that they’ll be ok. Single payer seems out of reach.

The advantages of single payer are formidable, and so are the obstacles. Working in our favor is majority popular support for the idea. Achieving single payer would be transformative, both in the health care it provides and the triumph of community and democracy over profit and rule by the wealthy few.

http://healthjusticemonitor.org…

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Hospital Price Skirmishes vs. Solidarity-Driven Transformation

Summary: In Connecticut, a large hospital system is being sued to stop anti-competitive practices that raise prices for insurers, employers, and patients. Good, as far as it goes. But it’s just minor tweaking of a profoundly dysfunctional market-based system. Where’s the needed transformation?

Patients are coming after hospital monopolies, AXIOS, Feb. 16, 2022, by Bob Herman

A group of citizens in Connecticut is suing Hartford HealthCare, alleging the large hospital system has amassed monopoly power “to extract higher prices from insurers, employers, and patients.”

Why it matters: This is another class-action lawsuit arguing hospital consolidation has crushed everyone’s bank accounts and has led to the rise of anti-competitive contracts that force insurers and employers to accept take-it-or-leave-it terms.

“Even if you don’t live in Connecticut, you should be worried about [these hospital behaviors], because you’re paying for this through your insurer,” said Ellen Andrews, head of the consumer advocacy group CT Health Policy Project.

Driving the news: People with commercial insurance in Connecticut allege Hartford HealthCare, a $5 billion hospital system, has scooped up hospitals throughout the state and rolled that leverage into insurance contracts, including:

“All-or-nothing” contracts. Insurers exclude hospitals from networks if hospitals have lower quality or higher prices, but Hartford allegedly required insurers to include all of its hospitals — including more expensive ones in more competitive areas — in networks.

“Anti-steering” contracts. Insurers may entice people to go to lower-cost or higher-quality hospitals by making out-of-pocket costs lower for those facilities, but Hartford allegedly mandated insurers not to make those kinds of “steering” provisions (or to make them weaker).

Comment:

By Don McCanne, M.D., M.P.H.

There is general agreement that we are in drastic need of health care reform that will benefit patients – all patients. So what “reform” activities are taking place? Those that will benefit one portion or another of the medical-industrial complex and their investors – overall to the detriment of the patients.

What is missing? Social solidarity on the community level…Give this some thought, and it won’t seem so cryptic.

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.

A Call for Antiracist Action

By David A. Ansell, M.D., M.P.H.; Brittani James, M.D.; and Fernando G. De Maio, Ph.D.
New England Journal of Medicine. February 16, 2022

On January 22, 2022, neo-Nazis marched on Boston’s Brigham and Women’s Hospital, with a banner claiming that the hospital “kills Whites” and flyers featuring photos of Drs. Michelle Morse, a Black woman, and Bram Wispelwey, a White man, who have led antiracism work at the hospital. The group denounced the physicians and the hospital for “creating preferential health care treatment policies for non-White patients.” This was not the first time that Morse and Wispelwey were attacked for their work.

On March 17, 2021, the two physicians published “An Antiracist Agenda for Medicine” in the Boston Review.1 The article described the historical failure of color-evasive (or what many term “colorblind”) solutions to racial inequity in health care and offered a race-conscious approach they named “The Healing ARC.” They called for a structural shift in racial equity work toward holding health care institutions accountable, contending that only race-explicit programs will directly address the underlying causes of racial health inequities and mitigate the current impact of racism in medicine.

With other colleagues, Wispelwey and Morse uncovered racial inequities in the treatment of patients with cardiac failure at the Brigham.1 They found that Black and Latinx patients were less likely than White patients to be admitted to the cardiology service, which was associated with better outcomes. Wispelwey and Morse implemented changes to rectify these practices. Their efforts to correct this disparity led them to rethink the approach to racial justice in medicine.

The Healing ARC has three components: acknowledgment, redress, and closure. Health care providers must acknowledge how racism has contributed to unequal health outcomes; redress the damage by providing restitution to the population that has been harmed, which involves offering pathways for access to services and care that have historically been denied; and facilitate closure, achieving reconciliation with the community that has been harmed by the health care system and reaching agreement that the harm has been redressed.

The framework applies the principles of applicative justice to racial health inequities at the level of the health system. It recognizes the need for race-conscious approaches in medicine. While it affirms that race is a sociopolitical construct with no biologic basis, a race-conscious approach allows the identification and rectification of long-standing racial health inequities. This effort is not about race-preferential treatment, as the neo-Nazis and others on the political right have claimed, but about eliminating obstacles to care that harm systematically excluded populations. The Healing ARC builds on the work of William Darity, Jr., and A. Kirsten Mullen calling for federal reparations for Black descendants of formerly enslaved people,2 acknowledging that race-conscious approaches are necessary in medicine because colorblind approaches have not closed racial gaps in health outcomes.

Predictably, there was backlash. Fox News was the first major U.S. news source to attack the article and the authors in 2021. Extremist social media figures including an editor and supporters of Quillette — a known source of White supremacist hatred and discredited, racist “science” — amplified the Fox attack. Morse has been subjected to repeated racial slurs, harmful rhetoric, and threats to her safety.

In 2020, as racial gaps in Covid-related mortality and murders of Black people touched the national conscience, more than 200 health care organizations, including the American Medical Association (AMA), declared racism a public health crisis. They pledged to take steps to eliminate racial health inequities by removing systemic barriers that block people of color from achieving better health outcomes. This is a critical moment for health care leaders to publicly reaffirm their support through organizational actions for antiracism in medicine. The AMA and the Massachusetts Medical Society have issued statements, and a group of physicians and health care workers have signed a petition of support, but we believe that more leaders of national health care organizations should publicly express their support for Drs. Morse and Wispelwey and their antiracism efforts — and then put their words into actions.

The neo-Nazi protest in Boston is a reflection of reactionary efforts in both medicine and broader society to deny that racism exists or invalidate antiracism efforts as “anti-White.” A 2021 Commonwealth Fund survey found that 53% of Americans do not believe racism is a problem in the United States.3 Yet one out of three Black or Latinx survey respondents reported experiencing discrimination in health care during the previous year.3

Efforts to embed racial justice in medicine and advance health equity have been launched — and critiqued. There have been concerted attacks on critical race theory, whose precepts are central to health equity work: critical race theory acknowledges that race is a social construct, identifies the mechanisms by which racism is embedded throughout society’s systems and policies, and opposes colorblind solutions to racial inequities. Most recently, the mainstream media has promulgated attacks on the language of health equity, contributing to an environment in which extremism can thrive. In the days leading up to the neo-Nazi protest, right-wing media mischaracterized tenets of race-conscious medicine, claiming that efforts to overcome inequities would result in White people being denied medical care.

Since the first scientific study of poor health outcomes among Black Americans was published by W.E.B. Du Bois in 1899 (The Philadelphia Negro: A Social Study),4 deep and persistent inequities in health outcomes between Black Americans and White Americans have been well documented. Today, the toll of structural racism on the life expectancy of Black Americans is revealed in devastating statistics, with large inequities in the leading causes of death, including heart disease and cancer. The racial and ethnic disproportionality in hospitalizations and deaths during the Covid pandemic has highlighted the long-standing structural and social fault lines that have always divided our nation.

The Commonwealth Fund recently reiterated the persistent reality that in most states where data are available, Black people, American Indians, and Alaska Natives are more likely than White people to die early in life from conditions that are treatable with timely access to high-quality health care (see graph).5 A large body of literature demonstrates that these gaps in health according to race and ethnicity reflect racism, rather than genetic or biologic differences. Even analyses that control for socioeconomic status confirm that Black people in the United States have worse health outcomes than their White counterparts. A race-conscious approach to eliminating health care inequities is thus required across all our health care institutions.

White supremacism has proved resistant to eradication over centuries. It appears in different forms — as denial of structural racism, in simplistic narratives of individualism and meritocracy, in stories that lay the blame for health inequities on the beliefs, behavior, or biology of historically marginalized people. And yes, White supremacism appears in the swastikas and uniforms of “freedom” protests against vaccination mandates and antiracist doctors.

Martin Luther King, Jr., noted that, “In the end, we will remember not the words of our enemies but the silence of our friends.” The neo-Nazi march on the Brigham and our physician colleagues and the attacks on health equity interventions are stark reminders of the obligation of physicians, particularly White physician leaders of our national health care organizations, to denounce White supremacism and reaffirm race-conscious antiracism efforts. We recommend three immediate actions: publicly defending Drs. Morse and Wispelwey and others who have become targets of hatred and rancor because of their antiracism work; implementing and evaluating race-conscious, intersectional interventions such as the Healing ARC, especially given that colorblind approaches have failed to achieve meaningful gains in health equity; and publicly reporting progress toward achieving racial equity in health outcomes. Inaction in the face of White supremacism must not be an option.

https://www.nejm.org…

References

  1. Wispelwey B, Morse M. An antiracist agenda for medicine. Boston Review. March 17, 2021
  2. Darity WA, Mullen AK. From here to equality: reparations for Black Americans in the 21st century. Chapel Hill: University of North Carolina Press, 2020.
  3. Commonwealth Fund. Confronting racism in health care delivery: an imperative to improve the public’s health. Boston: Harvard T.H. Chan School of Public Health September 28, 2021
  4. Du Bois WEB. The Philadelphia Negro: a social study. Philadelphia: University of Pennsylvania Press, 1995.
  5. Radley DC, Baumgartner JC, Collins SR, Zephyrin L, Schneider EC. Achieving racial and ethnic equity in U.S. health care: a scorecard of state performance. New York: Commonwealth Fund, November 18, 2021

Joe Biden Is Quietly Pursuing the Creeping Privatization of Medicare

The Biden administration has quietly decided to continue a Trump administration scheme whose ultimate goal is the privatization of Medicare. Americans would be outraged — if anyone knew about it.

By Branko Marcetic
Jacobin, February 16, 2022

Last November 30, a collection of physicians and activists were in Washington, DC, its federal buildings still largely closed for business thanks to the pandemic and fear of another Trumpist uprising. They were there to protest what they warned was an attempt to end Medicare as we know it.

Physicians for a National Health Program (PNHP), the leading group behind the effort, had been trying for some time to make its displeasure about the “direct contracting” program known. After collecting more than thirteen thousand signatures for a petition opposing the initiative, they’d asked repeatedly for a meeting with Health and Human Services (HHS) secretary Xavier Becerra to hand it to him. They called, emailed, left voice messages, all to no avail. The most they got was a single response from a staffer, sent the night before their DC visit, promising to set up a meeting sometime in the future.

The next day, the group marched into HHS headquarters, petition in hand, only to be stopped by security and told that was as far as they could go without an appointment. They’d have to ask someone to come downstairs and pick it up — only to learn there was no one available in the offices to do it. After close to an hour, the group left the petition with security and departed, having been blocked from carrying out one of the most basic and foremost rights enumerated in the constitution.

Locked doors, unreturned emails, a large crowd with no one around to hear it — nothing more perfectly captured the struggle of public health care advocates to raise the alarm about direct contracting, a pilot program begun under Donald Trump and continued under Joe Biden.

In the middle of a pandemic, and during what pundits describe as a fundamental shift in Americans’ views of the government’s role in their lives, an initiative to shoehorn for-profit companies between retirees and their Medicare coverage should in theory have prompted a public outcry. The only problem is, no one seemed to know it was happening.

“A Corporate Goldmine”

Over the past year, seniors around the country have been getting letters from the Centers for Medicare and Medicaid Services (CMS) informing them that they needn’t worry, but their doctor was now part of something called a direct contracting entity (DCE). “Your Medicare Benefits have not changed,” the letters stress no less than twice. “NO ACTION NEEDED,” they blare.

If you take it from CMS, DCEs are simply a collection of different health care providers “who agree to work together to keep you healthy” — an innovative new payment model to keep health care costs down and raise the quality of care up. For its critics, the initiative is something far less benign.

“What direct contracting does is turn the public side of Medicare into a corporate goldmine,” says Diane Archer, president of Just Care USA.

Under traditional Medicare, when a beneficiary gets care from a doctor, a hospital or any other health care provider, the program reimburses that provider directly at a set rate. Direct contracting adds a third party into the mix: Medicare makes a monthly payment to a DCE, which then decides what care a beneficiary will get, and uses that money to cover a specified part of their medical expenses — pocketing whatever they don’t spend as profit. While making cost-saving efficiencies usually means cutting out the middleman, direct contracting adds one in.

Critics like PNHP warn that the program comes with the same kinds of pitfalls as Medicare Advantage, the program that for the first time carved out a role of private insurers in the public Medicare system, when it was passed as part of a Reagan-era deficit reduction bill forty years ago. One is “upcoding,” the notorious practice where Medicare Advantage insurers make their patients appear less healthy than they really are, the better to drive up the payments they get from Medicare.

As a result, according to the very congressional agency set up to give policy advice on Medicare, the risk scores for patients under the semi-privatized system are 8 percent higher than for those on traditional Medicare, something one analysis determined cost taxpayers more than $106 billion in overpayments from 2010 to 2019.

After puffing up their profits at the taxpayer’s expense, Medicare Advantage insurers then tend work aggressively to minimize the costs on their end. A 2018 HHS inspector general report found inappropriate denial of care was rampant in the program, and a Kaiser Family Foundation analysis determined Medicare Advantage enrollees tended to pay more for longer hospital stays. It’s all well and good until you get seriously ill, at which point your out-of-pocket costs start soaring.

“The insurance companies are making twice as much money from Medicare Advantage than they do form employer-sponsored health insurance,” says Dr Ana Malinow, professor of pediatrics at the University of California San Francisco. “Workers have no more money, employers don’t, but who does? The government.”

Privatized by 2030

Malinow and others say that despite the similarities, direct contracting is even more pernicious than Medicare Advantage. That’s because direct contracting specifically targets those who have rejected this semi-privatized model, and chosen to stay in traditional Medicare. Those beneficiaries get a letter in the mail, open it up, and learn their doctor, and by extension, they, are now in a DCE. They’re assured all the while that everything is fine — that they’ll soon be getting “better quality care,” even — and never told if they can opt out, or how.

When DCE opponents won a Zoom meeting with Center for Medicare and Medicaid Innovation (CMMI) director Liz Fowler last December, she assured them it was possible to opt out — as long as you switched primary care providers. The attendees were shocked. Finding a new doctor is disruptive for anyone, let alone seniors who may have spent years with one they trusted, and it was deeply unpopular. Just think back to Barack Obama’s insistence that “you can keep your own doctor” under Obamacare, one of the most potent attacks on that health care reform effort. Besides that, it’s something easier said than done in rural areas short on health care choices.

But the 54 percent of the nearly $900 billion Medicare budget that’s still devoted to the program’s traditional version is too tempting to simply leave untouched by the for-profit health care industry. “The largest national insurers are positioning to become DCEs,” former CMS administrators Richard Gilfillan and Donald M. Berwick wrote last year.

That includes companies like Aetna, Alignment Health, Humana, and Clover Health, backed by Google parent company Alphabet. This isn’t the half of it, according to PNHP, which charges that virtually any company, even a venture capital firm, can apply to be a DCE and doesn’t need Congress to be approved. All are eager to take advantage of the looser rules around DCEs: while Medicare spending on administrative costs is in the single-digit percentages, and Medicare Advantage plans are forbidden by law from putting more than 15 percent of their premium revenue toward paying them, direct contracting has no such limit.

Critics also see something even more nefarious behind the initiative.

“The goal is to privatize all of Medicare through this program,” says PNHP president Susan Rogers.

It echoes the warnings of Gilfillan, Berwick, and virtually every other critic of direct contracting. Though a pilot program for now, CMS has made clear it wants to eventually move all enrollees of traditional Medicare into “a care relationship with accountability for quality and total cost of care by 2030” — vague jargon that nevertheless echoes the language direct contracting proponents use to talk about the program.

In other words, if the government has its way, by the end of the decade, every beneficiary of the traditional, entirely public Medicare will have a private, for-profit entity jammed between them and their health care. The largest remaining segment of the US health care system not dominated by corporate hands will becoming something else.

Paved With Corporate Greed

The road to this point has been paved by multiple administrations from both parties. CMMI, the CMS “innovation center” that came up with direct contracting, was created by the Affordable Care Act (ACA), the Obama administration’s corporate-shaped, flagship health care reform effort. Originally meant to devise new health care payment models that would fix the spiraling costs and quality of care issues endemic to US health care, its mission was ripe for hijacking by the corporate interests that find a way to infiltrate every well-meaning government agency.

That moment came in 2018, when Trump’s HHS secretary appointed health care executive Adam Boehler to head CMMI, where he soon set the plans for direct contracting into motion. According to the Intercept, Boehler designed direct contracting with specific companies in mind, including Oxeon, the venture capital firm that had backed a number of DCEs-to-be, including the very start-up Boehler had left to join CMMI — and which he contracted with to staff the agency as it developed the initiative.

One would have thought the Trump program would have been nixed by the Biden administration, particularly with talk of the new president’s Rooseveltian ambitions and a coming revival of activist government. Instead, the administration simply canceled one iteration of direct contracting, and went ahead with a different one in April 2021, with more set to roll out this year.

The administration remains financially in thrall to the for-profit health sector. Biden’s campaign had been backed from the very start by the for-profit health care industry, and by the end of the general election, Biden had out-raised Trump among health care executives, insurance companies, and pharmaceuticals.

That includes the very officials responsible for direct contracting’s continuation. Fowler, the head of Biden’s CMMI, played a key role in drafting the insurer-friendly ACA, and had gone to work for pharmaceutical giant Johnson & Johnson prior to this current stint in Washington. Before all that, she’d served for two years as vice president of public policy for health insurer WellPoint. In 2014, WellPoint changed its name to Anthem — one of the big insurers involved in the direct contracting pilot through its subsidiary, CareMore.

Yet even Fowler appears to privately understand the folly of deepening the for-profit sector’s involvement in Medicare. Judy Albert, an ob-gyn and a clinical assistant professor at the University of Pittsburgh, recalls Fowler telling her and other DCE critics in December that a single-payer system would be the best solution — if they were starting from scratch.

“I think part of that is they were playing to the audience,” she says. “But why don’t they try that for a model?”

Action Needed

For a long time, hardly anyone even knew about direct contracting, whether the public, the press — or even members of Congress. Members of PNHP recalled briefing eight lawmakers and their staffers about DCEs late last year, who were shocked to learn the program existed, let alone that the Biden administration had chosen to keep it going.

Since then, momentum for pushing back has gradually built. Archer says she and other DCE opponents began educating members of Congress about it early last year, and she credits Representatives Mark Pocan (D-WI), Katie Porter (D-CA), Lloyd Doggett (D-TX), and Bill Pascrell, Jr (D-NJ) with acting “swiftly and effectively,” writing a letter to HHS secretary Becerra in the middle of the year, to which he replied in August.

After the anti-DCE coalition’s briefing, Congressional Progressive Caucus cochair Pramila Jayapal (D-WA) gathered more than fifty signatures for another letter to Becerra this January, this one demanding an end to direct contracting and returning things to the status quo by the first of July this year. To kick off February, Senator Elizabeth Warren (D-MA) used her position as chair of the Senate finance subcommittee on fiscal responsibility and economic growth to denounce the program, warning of the “fiscal disaster” of inviting the “corporate vultures … already scamming Medicare” to skim more from the program, and calling on Biden to stop it.

But as welcome as they are, these are still relatively isolated actions, considering the stakes.

“What should be happening right now in Congress is not happening,” says Archer.

Meanwhile, with the issue gaining prominence, the health care industry is mounting its own pushback, reaching out to lawmakers to correct what they say is misinformation about the program, which they claim is simply focused on bringing “the virtues of organized groups into what is really a fragmented and dysfunctional model.”

On February 14, the National Association of ACOs (Accountable Care Organizations), an industry trade group representing DCEs, delivered to Becerra its own letter, calling on CMMI to “fix, don’t end, the direct contracting model.” Its suggestions include limiting the kinds of DCEs that can take part in the program, and a “rebranding and name change.” In turn, PNHP countered with its own letter arguing the opposite, one signed by twenty-four thousand health professionals.

It is still an uphill battle for the opponents of DCEs. Money talks in Washington, and past, current, and prospective DCEs have spent $2 million in 2021 alone lobbying Congress, CMS, HHS, and other bodies on issues that include direct contracting. That includes names like Oak Street Health, Clover Health, agilon health, and America’s Physician Groups, the DCE trade group that has been reaching out to lawmakers. Tenet Healthcare, a massive hospital operator, spent more than $4 million alone lobbying on a variety of issues this year, including direct contracting.

To beat back such well-funded efforts, opponents need to muster public outrage. But DCE opponents say it’s been slow going trying to get the national press to cover the issue, and even now, it continues to fly largely under the radar, with only a handful of mainstream outlets covering it. Should the issue pick up more champions in Congress, and inspire more coverage in the press, Americans learning about the risks of direct contracting may be inspired to pick up the phone and demand to their local representatives that CMS gets its government hands off their Medicare.

Joe Biden was elected on the promise of building on the progress of the Great Society. We may have to settle for simply preventing him from gutting one of its greatest legacies.

https://jacobinmag.com…

Physicians Slam Industry Push to ‘Fix’—Not End—Medicare Privatization Scheme

“The industry thinks they can save it with minor tweaks and cosmetic fixes. But we won't back down until Direct Contracting is shut down, for good,” one doctor said of the Trump-era program.

By Jake Johnson
Common Dreams, February 16, 2022

Physicians and progressive advocates on Tuesday urged the Department of Health and Human Services to reject an industry appeal to tweak and rebrand—not end altogether—a Medicare privatization scheme known as Direct Contracting, which the Trump administration launched in 2020.

Members of Physicians for a National Health Program (PNHP), which represents 24,000 doctors and other health professionals, has been working for months to bring lawmakers’ attention to the DC program and pressure the Biden administration to terminate it while it’s still in an experimental phase.

As a result of PNHP’s efforts, dozens of Democrats—including Rep. Pramila Jayapal (D-Wash.) and Sen. Elizabeth Warren (D-Mass.)—have spoken out against the DC pilot, opposition that appears to have caught the notice of healthcare industry groups that stand to benefit from the program.

In a letter sent earlier this week, more than 220 healthcare organizations—including active participants in the DC program known as Direct Contracting Entities (DCEs)—implored HHS Secretary Xavier Becerra “to not cancel” the privatization scheme and dismissed recent criticism of the experiment as “misleading and flat out false.”

“Fix, don’t end, the Direct Contracting Model,” reads the letter. “For example, you can limit participation to certain types of DCEs, such as provider-led DCEs, and place additional guardrails and add more beneficiary protections. A rebranding and name change would also help communicate how this model is part of the evolution to accountable care.”

But PNHP countered in a letter of its own on Tuesday that such “superficial tweaks and cosmetic changes will not alter DC’s fundamental flaws.”

The industry coalition’s proposal to increase provider control over DCEs—the majority of which are currently controlled by investors—would do little to alter the DC program’s core imperatives, PHNP president Dr. Susan Rogers argued in the new letter to Becerra.

“Even with more provider governance, DCEs are ultimately accountable to investors, which include private equity firms and commercial insurers active in [Medicare Advantage],” Rogers wrote. “Investors want a return on their investment, creating a dangerous incentive for DCEs to both maximize revenues through upcoding, and minimize medical expenditures by restricting patient care.”

As for the industry recommendation of additional “guardrails” for the DC program, Rogers wrote, “Our experience from Medicare’s other managed care experiment, Medicare Advantage, shows that when regulators install new guardrails that threaten profits, the industry will simply build a bigger truck to run them over.”

“The DCE industry represents its own interests and that of its investors, and does not speak for physicians,” Rogers continued. “As physicians, we urge you to end the dangerous DC program and work tirelessly to strengthen and protect Traditional Medicare, both for today and for generations to come.”

The Trump administration quietly announced the DC pilot in April 2019 despite internal legal concerns about the program, under which the federal government pays DCEs to cover a specified portion of a patient’s medical care.

DCEs are allowed to keep as profit the funding they don’t spend on care, a set-up that critics say incentivizes DCEs to skimp on patients.

“Direct contracting is nothing more than privatizing Medicare,” Alex Lawson, executive director of the progressive advocacy group Social Security Works, said in a statement Tuesday. “It inserts a corporate bureaucrat between a patient and their doctor in order to deny care and make Wall Street money. The Biden administration must completely eliminate Direct Contracting—nothing less than that is acceptable.”

The DC experiment, which the Biden administration has thus far refused to cancel, was developed by Adam Boehler, who served as director of the Center for Medicare and Medicaid Innovation (CMMI) during Donald Trump’s presidency.

Prior to his tenure at CMMI, Boehler was the CEO of Landmark Health, a venture capital-backed startup that was selected in late 2020 to participate in the DC pilot.

CMMI is currently headed by Elizabeth Fowler, the former vice president of public policy and external affairs for WellPoint, Inc.—a firm that later became Anthem, one of the largest for-profit insurance companies in the U.S. and a major player in the Medicare Advantage industry.

“We can’t afford even more for-profit middlemen getting between America’s seniors and the care they need, especially seniors that chose to avoid Medicare Advantage for a variety of reasons,” argued Eagan Kemp, a health policy advocate for Public Citizen. “HHS should be working to strengthen Medicare, not pushing seniors into an untested program where for-profit companies can benefit by denying care. There are much more savings to be had by cracking down on Medicare Advantage than through pushing seniors into Direct Contracting.”

Advocates and healthcare professionals fear that if the DC program is allowed to run its course, traditional Medicare could be fully privatized by the end of the decade—without the consent of patients or a vote in Congress.

“Direct Contracting Entities and their Wall Street investors hoped they could fly under the radar of seniors, healthcare advocates, and members of Congress,” Rogers said in a statement Tuesday. “Now that HHS is feeling pressure to end this backdoor privatization of Medicare, the industry thinks they can save it with minor tweaks and cosmetic fixes. But we won’t back down until Direct Contracting is shut down, for good.”

https://www.commondreams.org…

Doctors and Health Advocates to HHS Sec. Becerra: End Medicare Direct Contracting, Don’t Tweak It

Physicians, seniors, and health advocates reject industry-proposed fixes to the Trump-era pilot program and demand an immediate end to the privatization of Traditional Medicare

FOR IMMEDIATE RELEASE: Feb. 15, 2022

Media Contact: Clare Fauke, Physicians for a National Health Program communications specialist, clare@pnhp.org

Today, a group of 25,000 physicians and health professionals sent a LETTER to Health and Human Services (HHS) Secretary Xavier Becerra, demanding that he reject proposed changes to the controversial Direct Contracting (DC) pilot program and instead end it immediately.

The doctors, members of Physicians for a National Health Program (PNHP), were joined by leaders from Pubic Citizen, Social Security Works, and Just Care USA in calling on Sec. Becerra to end the program.

“Direct Contracting Entities (DCEs) and their Wall Street investors hoped they could fly under the radar of seniors, health care advocates, and members of Congress,” said Dr. Susan Rogers, president of PNHP, an organization of 25,000 physicians who support Medicare for All and oppose Direct Contracting. “Now that HHS is feeling pressure to end this backdoor privatization of Medicare, the industry thinks they can save it with minor tweaks and cosmetic fixes. But we won’t back down until Direct Contracting is shut down, for good.”

On Monday night, members of the DCE industry sent a letter to Sec. Becerra, asking him not to cancel the DC program but to “improve” it by, among other things, implementing unspecified “guardrails.”

In response to the industry’s letter, PNHP reminded Sec. Becerra that DC has tarnished the reputation of HHS, and ending the program would demonstrate a commitment to improved integrity and the best interests of beneficiaries. The letter points to the conflicts of interest present at the program’s inception: DC was developed in 2019 by Adam Boehler, who, prior to leading the CMS Innovation Center (the agency responsible for the DC program), was founder and CEO of Landmark Health, which later won a DC contract. After leaving the administration, Boehler was co-founder of Rubicon Partners, which is now partnering with physician practices to join DC or Medicare Advantage (MA) programs.

PNHP also explained that as long as the program provides a profit motive for DCE middlemen, they will find a way around proposed “guardrails” on abuse. “Our experience from Medicare Advantage (MA) shows that when regulators install new guardrails that threaten profits, the industry will simply build a bigger truck to run them over,” the letter said, noting that despite government efforts to rein in fraud, it overpaid MA insurers by more than $106 billion from 2010 through 2019.

Several other advocacy groups called on Sec. Becerra to end, not tweak, the DC program.

“Direct contracting is nothing more than privatizing Medicare,” said Alex Lawson, Executive Director of Social Security Works. “It inserts a corporate bureaucrat between a patient and their doctor in order to deny care and make Wall Street money. The Biden administration must completely eliminate Direct Contracting — nothing less than that is acceptable.”

“We can’t afford even more for-profit middlemen getting between America’s seniors and the care they need, especially seniors that chose to avoid Medicare Advantage for a variety of reasons,” added Eagan Kemp, the Health Policy Advocate for Public Citizen. “HHS should be working to strengthen Medicare, not pushing seniors into an untested program where for-profit companies can benefit by denying care. There are much more savings to be had by cracking down on Medicare Advantage than through pushing seniors into Direct Contracting.”

Diane Archer, President of Just Care USA, which advocates for seniors and caregivers, said, “Medicare Advantage data show that putting insurers between patients and their doctors threatens patients’ health and drives up costs,”  “Direct Contracting is another version of Medicare Advantage, but worse, because it overrides people’s choice of Traditional Medicare. We need to end it now, before it destroys Medicare.”

PNHP’s letter to Sec. Becerra is available HERE. 

Physicians for a National Health Program (pnhp.org) is a nonprofit research and education organization whose more than 25,000 members support single-payer Medicare for All reform.