Summary: Yesterday Elizabeth Holmes was convicted of four counts of fraudulently representing the capabilities of Theranos, her incredibly hyped lab tech company. Good; that was long overdue. What’s even more overdue is holding to account those who keep telling us to trust that private for-profit health insurance will efficiently bring us healthcare.

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The Epic Rise and Fall of Elizabeth Holmes, New York Times, Jan. 3, 2022, by David Streitfeld

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In Silicon Valley’s world of make-believe, the philosophy of “fake it until you make it” finally gets its comeuppance.

For a decade, Ms. Holmes fooled savvy investors, hundreds of smart employees, an all-star board and a media eager to anoint a new star.

Ms. Holmes had many rules at Theranos: “I am never a minute late. I show no excitement. ALL ABOUT BUSINESS. I am not impulsive. I know the outcome of every encounter. I do not hesitate. I constantly make decisions and change them as needed. I speak rarely. I call bullshit immediately.” …

Whenever anyone — a regulator, an investor, a reporter — wanted to know a little more about exactly how the Theranos machines functioned, the company cried “trade secrets.” The real secret, of course, was that Theranos didn’t have any trade secrets because its machines didn’t work. But her answer worked for a long time. …

“We focused on creating a customized medicine tool that could be used in the home by every patient, so that every day, a patient can get real-time analysis of their blood samples.”

Who could not applaud such an invention? Theranos was making a messy, uncertain and time-consuming medical process into something effortless and painless.” …

This is a credulous age.

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Comment:

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

Why is HJM noting a fraud conviction of the lab test huckster Elizabeth Holmes? Isn’t that just a Silicon Valley phenomenon? I wish …

The Holmes story, as nicely summarized in the NY Times, evokes the far larger deception being foisted on us with the increasing privatization of health insurance. The profiteers forge ahead relentlessly, perfecting business models that reap tens to hundreds of billions of dollars (far more than Theranos).

We are told repeatedly that private insurance is the path to health care efficiency and clinical effectiveness. Yet our health system performance is by far the worst in the wealthy world – the most expensive, with tenuous access to care, low life expectancy, and a unique American treat: massive medical debt.

Insurers and their political enablers say ignore those numbers, trust the secret sauce that we have (but can’t reveal the details of due to trade secrets).

We’re told that the next iteration of financial incentives to providers will improve quality and reduce costs. Data are delayed, deficient, and discouraging. But it’s ok, it’s working. Really.

Just like Elizabeth Holmes, the leaders of the dysfunctional private insurance edifice guide us down the primrose path.

Ms. Holmes was ultimately held to account. When will private insurers get their comeuppance?

http://healthjusticemonitor.org…

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Summary: The ACA is currently more generous and thus popular, but it’s time-limited. The “Build Back Better” bill proposes some incremental fixes, but they’re tenuous. Meantime individuals in medical and financial crisis resort to GoFundMe. Only in the US could the health care financing “system” so systematically fail.

If you haven’t already, see our Jan 1 post Single Payer Overview 2021 & 2022. Please email us with any further ideas to advance single payer in 2022, for an upcoming post.

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On More Generous Terms, Obamacare Proves Newly Popular, The New York Times, Dec. 22, 2021, by Margot Sanger-Katz

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A record number of Americans — 13.6 million — have signed up for health plans through the Affordable Care Act’s marketplaces for 2022. The major reasons for the rise appear to be: Congress lowered the cost of Obamacare insurance; the Biden administration increased advertising for the program; and the pandemic disrupted many Americans’ employer-provided coverage.

“What a great day it is to really see how the programs are working as they are intended,” Chiquita Brooks-LaSure, the administrator for the Centers for Medicare and Medicaid Services, told reporters on a conference call.

But those gains may be fragile. The enhanced subsidies are scheduled to expire at the end of 2022.

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Congress is on the brink of an immense health policy failure, Vox, Dec. 20, 2021, by Dylan Scott

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Covid-19 exposed many of the flaws in the US health care system. Congress might not do anything to fix them.

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Comment:

By Don McCanne, M.D.

Can we begin the new year by celebrating success in increased health plan enrollment through a temporary government program that expires at the end of the year?

We will still have tens of millions who are uninsured, even greater numbers who are underinsured due to excessive deductibles, copayments, coinsurance, and lack of covered services; limited access due to narrow physician networks; high prices reflected in insurance premiums, cost sharing, and higher taxes; and profoundly excessive administrative costs and profits that are wasted on the medical-industrial complex rather than directed to patients, all resulting in the most expensive health care system in the world with one of the poorest performances of all modern nations. Is this really cause for celebration?

But what is making the health care news now? Proposals for minor tweaks to the Affordable Care Act, many of which are being rejected anyway. So what reform should we be supporting, and what is the opposition?

Shouldn’t we be supporting health care coverage for everyone? Shouldn’t the system be designed primarily to serve patients rather than private corporate interests? Who would be opposed to that, and why?

Shouldn’t the system be designed to be comprehensive so that it provides all reasonable health care needs? If not, why not?

Shouldn’t we increase the value of that coverage by reducing the administrative waste of the superfluous insurance intermediaries. Shouldn’t we use more efficient public administration such as with Medicare? Besides the insurance industry, who else would be opposed, and why?

Shouldn’t we use effective economic tools such as modern monetary theory and progressive taxes to publicly fund the system so that it would be equitable and affordable for each individual? Who would be opposed to that, and why?

Obviously, for the new year, if we want to fix our health care financing system so it works well for everyone, the Affordable Care Act won’t do it, and we need to replace it with a system that will. A single payer, improved version of Medicare that covers everyone is just what we would need to meet all of these requirements.

The problem is that people keep telling us that they are opposed, yet they haven’t explained why, at least in a manner that is satisfactory to us. Since the model would provide us with the changes that we need, they owe us an explanation as to precisely why they are opposed. Political rhetoric is not an explanation, not when you have millions with medical needs that are unmet merely because we have rejected a morally superior system based on health care justice that would take care of all of us.

On a personal note, my nephew has metastatic gastrointestinal cancer, and “Health insurance hasn’t been on his side,” so he is now on GoFundMe. I really need to hear a good explanation on why we should not have a system that works well for all of us, and GoFundMe isn’t it.

http://healthjusticemonitor.org…

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Summary: The 2021-2022 transition invites contemplation of health reform over the past year and upcoming. We process last year via a perusal of HJM. We offer thoughts on the future. And we solicit comments from you — HJM readers. Email us. We’ll share your musings in early 2022. Meantime, Happy New Year!

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Comment:

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

How should we think about the 12 months past and next in the single payer movement? A review of HJM posts since our May launch guided me to key themes from 2021. I provide links to posts and a few other resources in case you want to dig in. Please also read and reflect on what might be in store for 2022. BTW I’m rather fond of alliterative triplets …

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2021 – Revelations, Resolve, Resistance

Revelations – What did we learn (or learn again)?

Our system is failing, more clearly than ever: We see it in health, cost, and welfare statistics as well as shocking stories. Lacking insurance is deadly. So is underinsurance: financial barriers such as high deductibles and medication cost-sharing cause deaths, and are rising in ACA plans. Quality of chronic illness care is slipping. Insurance complexity imposes huge care and cost burdens for patients, alongside ever-rising costs for work-based insurance. Medical debt now surpasses all other debts, likely further harming health. Overall, high costs and poor performance: we’ve got nothing to crow about.

The US compares dismally with other wealthy nations: The diverging longevity and cost lines are stunning. Even the US privileged fare worse than average elsewhere, with cross-national mortality differences and racial disparities increasing since 1990. Why? The US underperforms other countries on dozens of health system performance measures, provides worse critical care, charges for medications, and has poor access to mental health care. And although excess mortality drops after age 65, financial barriers are increasing for seniors.

COVID revealed & exacerbated the problems: Millions lost insurance due to layoffs. Among the insured, testing and care costs borne by patients have sometimes been huge, despite promises of protection … even as insurers profited immensely from lower overall care utilization. Pandemic control lags other countries, increasing life expectancy gaps, while vaccine profit margins soar.

Racial disparities in health care are pervasive: There are large racial differences in insurance rates, as well as access and mortality. A universal public program like Medicare lowers disparities. With current insurance patterns, medical debts are more common in Black households. Social stresses exacerbate health differences.

System tweaks accomplish nothing: “Fix the current system” approaches aren’t working. Even a much-hyped Buffett-Bezos-et al work-based insurance scheme bailed. Pay for performance burdens physicians, and its showcase Accountable Care Organizations failed to save money for Medicare. Posting care prices is chaotic and unusable at hospitals and even when patients know prices it doesn’t influence care choices.

A growing profit focus is largely to blame: For-profit ownership of insurers and providers increasingly permeates our system, and even large non-profits focus on financial gain. This produces broad and worrisome distortions of care. Negative consequences are pervasive: providers burn out at higher rates, quality of care suffers, mortality rises. Gaming the rules through aggressive & illegal billing and restructuring businesses shift hundreds of billions from care to investors. This private for-profit threat is massive in Medicare.

Medicare is under attack: Our huge and revered public insurance program is in extremis. Medicare Advantage continues to cost the government more over time in part by skipping out on end-of-life care and imposing financial burdens on sick patients. Reports of excessive and fraudulent billing using risk reporting multiply: cheating, cheating, and cheapness combined with massive overpayment. MA plans suffer from variable mortality rates without disclosure. And now traditional fee-for-service Medicare is profoundly threatened with privatization via Direct Contracting Entities (DCEs), which will import the extractive profit style of Medicare Advantage.

Resolve – How did we demonstrate ongoing broad commitment to single payer?

Counteracting the bad news about our health system are several inspiring nuggets in our battle for single payer.

First, new evidence demonstrated that public insurance works. It provides better access, financial protection, and satisfaction than private insurance. Medicaid improves health and saves money for society. Medicare, as noted above, lessens disparities among US populations over 65 years old and compared with other nations.

Second, public support for single payer remains high. California polls in 2021 indicated >50% – 75% support among voters and key stakeholder groups. Past national polls have been similar.

Third, public discussion about reform retains a robust single payer component. The Healthy California for All Commission, which will report in early 2022, has seen much evidence favoring single payer and has strong commissioner advocates for it. In Washington DC, Rep. Pramila Jayapal (D-WA) submitted the latest single payer bill, HR 1976 The Medicare for All Act of 2021, with a record 118 co-sponsors.

Finally, the Build Back Better Act, now in final negotiations, though it falls far short of single payer, includes provisions that move in the right direction, most notably Medicare drug benefit price negotiations (for a few drugs) and out-of-pocket limits, a hearing benefit, and better ACA exchange subsidies for the poor in non-Medicaid expansion states.

Resistance – Where did we fight back against anti-reform actions?

The huge threat in 2021 was – and remains – the CMS plan to replace traditional fee-for-service Medicare with mainly for-profit corporate DCEs using various financial designs including full capitation. If they can’t oppose “Medicare for All”, they’ll undermine Medicare. This is a complete shift from ACOs used in traditional Medicare, which although they didn’t work, at least focused on provider (non-investor) organizations and didn’t force enrollees to participate in capitation. DCEs started in the Trump administration, with corrupt corporate influence. Under Biden, the worst version (geographic) has been set aside, but CMS is forging ahead with other DCEs. PNHP, JustCare, and other groups are organizing public awareness and opposition.

Another, less immediate but more direct, threat to single payer is “Medicare Advantage for All”. This is a private insurance structure that will undermine the efficiency and generosity of public financing. We push back here.

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2022 – Persistence, Pursuit, Partnership

Where do we expect and want to go in 2022? Please email your ideas and suggestions … which we’ll share.

Persistence – in fighting DCEs and Medicare Advantage. Both undermine our most successful public insurance program for the general population. Learn more about DCEs in particular, since the issue is urgent — and actively support efforts to force CMS to reverse course.

Pursuit – of single payer, of course. We have (at least) one more year of a Democratic Congress. Once work on COVID response and social infrastructure is complete, we can expect Congressional progressives to return to HR 1976, a Senate bill, and associated activities – hearings in DC and elsewhere, discussion of potential state experiments, and policy research.

And we’ll pursue state opportunities. Here in California, that means building on Commission findings and the state single payer bill (currently AB 1400) – publicizing the single payer results, conducting relevant follow-up research, linking community and business organizations, organizing meetings and hearings, discussing and launching strategy.

Partnership – Alliances with other progressive social causes is natural and essential. So is working with the business community, though many in that quarter may need convincing. We’ll write on this issue in 2022.

http://healthjusticemonitor.org…

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Summary: A new study finds that financial incentives failed to raise clinical quality measures in Medicare Advantage plans. This completes HJM Medicare Advantage week, in which we highlighted the numerous serious problems arising from using private insurers as intermediaries for public health insurance.

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Next week we’ll relax our usual blogging pace. We’ll offer some reflections on the year past and what lies ahead. Happy Holidays! – JGK

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The Medicare Advantage Quality Bonus Program Has Not Improved Plan Quality, Health Affairs, December 6, 2021, by Adam Markovitz et al.

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In 2012 Medicare introduced the quality bonus program, linking financial bonuses to commercial insurers’ quality performance in Medicare Advantage (MA). Despite large investments in the program, evidence of its effectiveness is limited. We analyzed insurance claims from the period 2009–2018 from the nation’s largest MA claims database for 3,753,117 MA beneficiaries (treatment group) and 4,025,179 commercial enrollees (control group). Using a difference-in-differences framework, we evaluated changes in performance on nine claims-based measures of quality [for disease screening & monitoring, medication adherence] in both groups before and after the start of the bonus program and with adjustment for differential pre-period trends. We observed no consistent differential improvement in quality for MA versus commercial enrollees under the quality bonus program. Program participation was associated with significant quality improvements among MA beneficiaries on four measures, significant declines on four other measures, and no significant change in overall quality performance (+0.6 percentage points). Together, these results suggest that the quality bonus program did not produce the intended improvement in overall quality performance of MA plans.

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Comment:

By Isabel Ostrer, M.D.

Despite the federal government pouring $6 billion dollars into the quality incentive program for Medicare Advantage (MA) plans, the effectiveness of the program is sorely lacking.

A new study in Health Affairs finds that despite this huge investment, the program failed to actually improve the quality of MA plans. The authors state, “In this national study of the impact of the Medicare Advantage quality bonus program, we observed little evidence that the program was associated with incremental improvements to quality performance for MA beneficiaries.”

42% of Medicare beneficiaries, which translates to millions of elderly Americans, are now enrolled in MA plans. These plans are often billed as cheaper, more robust, and higher quality than other health plans. In his HJM piece earlier this week, Don McCanne debunked the claims that MA plans are cheaper than traditional Medicare plans and provide better benefits. This study debunks the final claim – even when offered billions of dollars in incentives, the quality of care in MA hasn’t budged.

It’s time to eliminate the MA quality incentive program. And while we’re at it, we should turn our focus towards streamlining health care delivery in the U.S. As Don wrote, “What we need is an equitable, publicly administered and publicly financed health care program for everyone: a single payer, improved Medicare for All.”

http://healthjusticemonitor.org…

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Summary: A recent commentary in JAMA proposed using private insurance health plans as intermediaries in a universal health insurance system, instead of direct payments from a public payer to providers, as under “traditional” Medicare for All / single payer. The supporting arguments, though perhaps appealing on a first read, don’t withstand scrutiny.

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Medicare Advantage for All: A Potential Path to Universal Coverage, JAMA, December 16, 2021, by Greg J. Zahner et al.

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Medicare Advantage (MA) for All—which would create a national guarantee for health insurance while maintaining private-sector involvement in health insurance administration—represents an alternative path to achieving universal health insurance that could mitigate many of the disadvantages of Medicare for All. This Viewpoint outlines what MA for All might look like and describes potential benefits, limitations, and risks.

MA for All: How It Might Work:

The MA program allows MCOs to provide coverage for Medicare-eligible populations and has become increasingly popular, with an estimated 42% of Medicare beneficiaries now enrolled in MA plans. At a high level, MA for All could be structured and funded as follows: all existing non-Medicare insurance funding (eg, employer-sponsored coverage, commercial insurance, Children’s Health Insurance Program, and Medicaid federal funding) would initially flow through CMS. Employers would pay a health benefit tax to CMS rather than directly pay for health insurance, and state contributions for Medicaid would shift to federal responsibility. Private health plans would then apply to become CMS-approved MA MCOs. These MCOs would provide coverage not just for Medicare beneficiaries but also for children, low-income individuals, and people previously insured through employer-sponsored plans.

Flexibility and Equity:

Unlike Medicare for All, which would restrict a person’s flexibility to choose the best health plan for them, MA for All could help ensure that individuals continue to have multiple options and the opportunity to select an MCO that covers their preferred clinicians or health care organizations. This model could accommodate regional differences in the health care landscape by continuing to enable flexibility in how payers and health care organizations work and partner together. For example, accountable care organizations could continue to grow, and local and state governments could retain a level of autonomy and apply for waivers to create MA plans for select populations (eg, individuals with low income).

Equity is also a key concern. Today’s environment, with commercial insurers paying significantly higher rates than public payers, incentivizes clinicians and health care entities to selectively pursue commercially insured patients. Greater payment parity, such as through comprehensive risk adjustment for all individuals, greater control over rates in noncompetitive markets, and greater rewards for offering plans that cover higher-risk populations, may help reduce these resultant disparities. Additionally, CMS could expand innovative programs that target high-need and underserved populations, such as clinically aligned payment models like the Program for All-Inclusive Care for the Elderly, which provides nursing home–level care at home, or special-needs plans designed to help patients with mental health and chronic conditions.

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Comment:

By Jim Kahn, M.D.

Zahner and colleagues propose that Medicare Advantage offers a good model for how to implement single payer. They point to lower care costs, some higher quality metrics, and political viability. Here I address their main assertions. Pardon the longer-than-usual comment.

Assertion #1: Insurance companies could serve a central role in a single payer system.

Structuring single payer around private insurers would garner their political support. However, doing so would fundamentally undermine single payer design.

Insurance companies are central to current health system problems. They earn and extract high profits based largely on limiting access through care denials and financial barriers (for the home health example, see Monday’s HJM). They fail to provide the detailed data that would reveal what’s working well or poorly for access and health.

Insurance companies as we know them are incompatible with efficient and generous health coverage. In some countries, insurers have a major role, but they are non-profit and effectively claims administrators, selling a single insurance product with standard medical necessity and payment protocols, unlike what’s proposed in the US.

Assertion #2: Medicare for All would remove important economic activity that people want.

Not true. Medicare for All (single payer without private insurers) would remove the dead weight of insurance profits and administrative burden, and largely replace that with clinical services, including much-needed increases in long-term care.

As for polls indicating support for keeping private insurers, it’s all in the wording. If respondents are provided a fair description of how single payer would work – including choice of any doctor and elimination of cost-sharing – they don’t pine for private insurers.

Assertion #3: Medicare Advantage for All would increase efficiency and equity.

MA4A might trim a small portion of the horrendous administrative bloat in our current system, and reduce inequitable coverage. But not nearly as much as true single payer.

Administrative costs at insurers would remain high, because it’s a lot of work to oversee care approvals and complex payment arrangements. Not to mention profits (oops, did mention that). Administrative costs for providers would drop a little, if indeed they dealt with fewer MA plans than the current morass of private and public payers. But most doctors and hospitals in this “single payer” system would have to deal with multiple MA plans, each with different rules.

Equity – more similar insurance across individuals – would be enhanced versus today. (How could it be worse?) But differences in benefits scope, coverage rules, provider network design, and payment levels and structures would leave ample room for disparities.

Economic feasibility would benefit from a muted rise in utilization, as colleagues and I published recently (and they cite). But that’s a stronger argument for true single payer – you can fully remove restrictions on care access and still avoid overwhelming utilization growth.

Assertion #4: Medicare Advantage for All would allow choice – of health insurance plan.

People want choice among doctors and hospitals, not insurance plans. This is especially important when they have complex medical conditions. And choice imposes costs.

Selecting among health plans is nerve-wracking and nearly impossible for people to optimize. Consumers have almost no usable information about plan rules and performance or out-of-pocket costs, and huge uncertainty about their own future health needs

And provider choice is sacrificed. MA plans usually sharply restrict choice of doctors, by relying on narrow provider networks and excluding many top referral doctors – all to trim costs.

Furthermore, the profusion of plan options is extremely disruptive. It forces doctors to deal with multiple payers (and payment models) and patients to change doctors if they switch plans (or doctor networks shift), creating costs and hassles, all distractions from optimal clinical care.

Assertion #5: Medicare Advantage has higher quality metrics.

MA plans know how to play to the measure – raise targeted quality metrics. But much more importantly, mortality is highly variable across MA plans, unrelated to quality ratings, with no way for beneficiaries to know. And quality is useless if MA enrollees experience financial barriers to care.

Assertion #6: Medicare Advantage reduces health care spending compared with traditional Medicare.

Finally, with gusto: Untrue in any meaningful way. Because:

First, reported savings are for medical care payments, not total costs. The care savings are more than offset by MA plan profits and administrative costs. Overall, MA increases insurance cost: medical spending down, profits and overhead up even more. This problem is accelerating in MA as private equity ramps up its role.

Second, savings in medical care costs are achieved by reducing service use in ways that are often harmful to patients. Plans deny care via prior authorization using obscure criteria. Small provider networks can mean the best care is out of network. And MA plans impose out-of-pocket costs, such as high deductibles and other cost-sharing, that is often unmanageable when people get sick and thus need more care.

Third, MA selects for lower cost individuals, leaving higher cost enrollees in traditional Medicare. The clearest recent evidence of this comes from a 2019 study of spending prior to MA enrollment.

Authors’ financial conflict of interest.

The authors disclose, as required by medical journals, significant financial connections to the private insurance industry. Does this influence their views? Impossible to say, but important to have this information.

Let’s stick with the plan: single payer, Medicare for All, with direct payment from the public funder to providers. No for-profit insurers in the mix. This is what works in all the other wealthy countries. It will work for us.

http://healthjusticemonitor.org…

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