PNHP

Let the Games End!

Let the Games End!

Summary: Two unrelated news stories highlight ways that powerful actors in our healthcare system manipulate complex reimbursement rules and procedures, approaching and crossing legal boundaries. Detecting and stopping abuse in our complex profit-focused system is impossible. We need to end this gaming, with a simple fair payment system.

5 things about DOJ’s upcoding allegations against Kaiser, Modern Healthcare, October 26, 2021, by Alex Kacik

Kaiser Permanente allegedly coerced employees to upcode claims for Medicare Advantage beneficiaries, resulting in an estimated 75% error rate, according to a new complaint from the U.S. Justice Department.

The federal government intervened in six related lawsuits in July and filed a complaint Monday, outlining how Kaiser physicians allegedly changed medical records often months after care was provided to boost the Oakland, California-based integrated health system’s Medicare Advantage reimbursement. More than half of Kaiser physicians said they were forced to add diagnoses they did not consider, evaluate or treat, according to one of the whistleblowers and former Kaiser medical coder, Randi Osinek. …

5. Some of the diagnoses that Kaiser allegedly added via the chart reviews did not even exist; many allegedly did not require or affect patient care or treatment. These chart reviews were often added months or even a year or more after the visit so that Kaiser could get risk adjusted payments for the newly added diagnoses, according to the complaint.

Wall Street Is Pressing ER Docs To Fleece Patients, Daily Poster, October 27, 2021, by Maureen Tkacik

Robert McNamara, a Temple University medical school professor who has been working for decades to galvanize ER doctors in opposition to the “corporate practice of medicine,” had proposed a resolution that would essentially force all ER staffing companies seeking to do business with ACEP [American College of Emergency Physicians] to periodically furnish their physicians with data on the services and procedures the company had billed for under their license numbers.

… Unsurprisingly, the ACEP Board expressed extreme reluctance to adopting the proposal, noting that four separate attorneys it had consulted believed there was “substantial risk” …

“ACEP engaged outside counsel to advise on whether securing regular reporting of billing in a physician’s name could inadvertently subject that physician to potential liability under the False Claims Act [emphasis added], since provision of this information could now leave them considered to be ‘knowing,’” they wrote.

In other words: emergency room doctors are better off not knowing what their private equity overlords are billing under their license numbers, because they are less likely to go to jail for Medicare fraud if they didn’t actually know they were committing it.

Comment:

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

Our health system’s arcane payment rules + big-profit corporate mentality = the perfect medium for intensive gaming, both legal and illegal. These two stories illustrate different manifestations of the problem — albeit just the tip of the iceberg quantitatively, a faint hint of the true scale of abuse.

Kaiser Permanente is considered by many an admirable actor in the HMO world, with a history of innovative care models. Yet, in this article in Modern Healthcare, we learn that the US Department of Justice is taking KP to court for orchestrated efforts to increase physician disease severity coding – even to add false diagnoses – to bump Medicare Advantage revenues by tens of millions of dollars. HJM has covered “risk adjustment” exploitation before. The money at stake with exaggerated coding is astronomical, eliciting the worst behaviors among corporate actors in health.

Organizations like ACEP were founded to represent the interests of doctors, which should include fair and transparent billing. But the Daily Poster describes that ACEP has increasingly focused on preserving ER profit, including for private equity investments. It abets a corporate model that hides potentially fraudulent billing. HJM recently addressed the hazards of private equity. The new article describes deep ties that two former heads of ACEP have to PE. One even dismissed the problem of surprise billing – rampant in ERs staffed by private equity-funded companies which seek to profit from out-of-network charges. The doctors are coerced into being complicit, with plausible deniability.

How can we end this gaming, abuse, and extraction of resources from the health system? Single payer would use simple, fair rules. For example: annual global budgets for hospitals and their ERs. Ambulatory care doctors would typically be paid fee-for-service, with no need for exploitable risk adjustment data. If capitation is permitted (a discussion), it would rely on a standard clinically-focused electronic health record containing legitimate, consistent diagnostic information.

Let the billing games end!

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.

Medicaid Coverage Reduces Pre-Pregnancy Depression

Summary: This study compared perinatal mental health outcomes for low-income women in states that expanded Medicaid with states that did not. They found a substantial drop in pre-pregnancy depression, which they attribute to better diagnosis and treatment and/or reduced financial worry. Health coverage reduces morbidity.

Medicaid Expansion Associated with Some Improvements in Perinatal Mental Health, Health Affairs, October 2021, by CE Margerison et al.

Abstract: Poor perinatal mental health is a common pregnancy-related morbidity with potentially serious impacts that extend beyond the individual to their family. A possibly contributing factor to poor perinatal mental health is discontinuity in health insurance coverage, which is particularly important among low-income people. We examined impacts of Medicaid expansion on prepregnancy depression screening and self-reported depression and postpartum depressive symptoms and well-being among low-income people giving birth. Medicaid expansion was associated with a 16 percent decline in self-reported prepregnancy depression but was not associated with postpartum depressive symptoms or well-being. Associations between Medicaid expansion and prepregnancy mental health measures increased with time since expansion. Expanding health insurance coverage to low-income people before pregnancy may improve perinatal mental health.

From Methods: We used a difference-in-differences study design, which estimates the change in outcomes post–Medicaid expansion compared with preexpansion among pregnant people in expansion states compared with those in nonexpansion states. … data from the Pregnancy Risk Assessment Monitoring System (PRAMS) phases 7 (2012–15) and 8 (2016–18).

From Discussion: Potential mechanisms by which health insurance may improve mental health include increased diagnosis and treatment (whether pharmaceutical or behavioral) or reduced financial distress.

Comment:

By Isabel Ostrer, M.D.

Poor perinatal mental health affects between 13 and 25 percent of people who have recently given birth. The number is even high among those with lower incomes. Unfortunately, it is precisely this group that is at greatest risk of lacking health insurance coverage because of our convoluted, multi-payer health care system.

Although all low-income (defined as those earning < 133% of the federal poverty line) pregnant Americans are required to have access to health insurance, this same benefit doesn’t apply pre-conception in states that did not expand Medicaid. In fact, in the remaining 12 Medicaid non-expansion states, nonnpregnant, nondisabled adults without dependents must earn exactly $0 to qualify for Medicaid coverage. In many cases, the insurance that applies during pregnancy expires 60 days postpartum.

This study found, unsurprisingly, that Medicaid expansion was associated with a 22% increase in prepregnancy Medicaid insurance. But moreover, it found a significant decrease – 16% – in self-reported prepregnancy depression.

Health insurance coverage leads to improved mental health. This is particularly important for new parents. But all Americans deserve health insurance and the positive physical and mental health benefits that come with it. Single payer is the most straightforward way to achieve universal coverage.

http://healthjusticemonitor.org…

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

VA Privatization Worsens Care

Summary: A new study finds that knee replacement done at Veterans Affairs hospitals has better clinical outcomes than surgery farmed out by the VA to private providers in the community. The VA – socialized medicine – works well.

Comparing Complication Rates After Elective Total Knee Arthroplasty Delivered Or Purchased By The VA, Health Affairs, Aug. 1, 2021, by AH Harris et al.

From the abstract: The Department of Veterans Affairs (VA) both delivers health care in its own facilities and, increasingly, purchases care for veterans in the community…We compared risk-adjusted major postoperative complication rates for total knee arthroplasties that were delivered in VA facilities versus purchased from community providers. Overall, adjusted complication rates were significantly lower for arthroplasties delivered by the VA compared with those that were purchased.

From the article: Since the passage of the Choice Act [in 2014] the VA has evolved from a health care delivery system – with 90% of its budget allocated to providing care – into a deliverer and purchaser of care in the community…the VA has devoted 22% of its fiscal year 2021 health care funds to purchasing community care. This percentage may increase even further with the VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018 (also known as the MISSION Act).

Comment and graph:

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

Private hospitals and medical groups itching to get their hands on VA funds have used complaints about VA wait times to push Congress to ship VA dollars to private sector care, despite the fact that wait times are generally shorter at the VA’s own facilities.

Previous studies have found that VA care is generally better than care in the civilian sector. (see: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5215146/, https://www.hsrd.research.va.gov/publications/esp/quality.pdf, and https://www.rand.org/pubs/external_publications/EP67588.html). As shown in the chart below, this new study indicates that the outsourcing of knee replacement substantially increases patients’ complications.

The right way to address VA waits is to assure adequate funding, not to divert funds from superior VA facilities to inferior nearby community hospitals.

http://healthjusticemonitor.org…

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

How Private Equity Harms Health Care, Especially in Physician Practices

Summary: A far-reaching new review of private equity investment in physician practices makes clear that PE tactics – aggressive and sometimes illegal – extract money from the health care system, often without delivering quality in return. Concerns exist regardless of payment model.

Private Equity Investment As A Divining Rod For Market Failure: Policy Responses To Harmful Physician Practice Acquisitions, USC-Brookings Schaffer Initiative for Health Policy Report, October 2021, by Erin Fuse Brown et al

Private Equity and Health Care Delivery: Value-Based Payment as a Guardrail?, JAMA, August 11, 2021, by Brian W. Powers et al

How Private Equity is Ruining American Health Care, Bloomberg, May 20, 2020, by Heather Perlberg

Comment:

By Allison K. Hoffman, J.D. and Hannah Leibson

For the past few years, private equity investment in health care has been surging. To put numbers on this explosive growth, from 2000 to 2018, the valuation of private equity deals in the health care sector rose from $5 billion to over $100 billion.

This sharp rise has raised alarm bells among health policy researchers and policy makers concerned about the negative impact this investment may have on health care spending (especially for public programs like Medicare), quality outcomes, and patient care.

A recent JAMA article by Powers and co-authors seeks to quell blanket concerns with private equity investment, arguing that “context matters” and suggesting that value-based payment models might counterbalance the profit-seeking nature of outside investors. This piece draws attention to two health care delivery organizations, CareMore Health and Oak Street Health, operating under value-based payment systems. Both systems saw positive patient outcomes after private equity investments were secured.

The authors contrast these examples to fee-for-service payment systems, where they argue the impact of private equity investments is “likely to be unfavorable” because this investment only “amplifies” the negative incentives created when financial performance is not tied to quality of care.

Drawing from these two case studies and based, they say, on the lack of evidence otherwise, the authors argue that “private equity could have an important role in acceleration of value-based transformation in the health care system, as well as access to new models of care delivery.” The article’s optimism, based on these two case studies, is borne of simplistic thinking of what payment systems can actually produce—or, in this case, resist.

A thorough report on private equity and health care delivery issued this month by Erin Fuse Brown and others through the USC-Brookings Schaffer Initiative for Health Policy makes abundantly clear why. The report is cautious in its tone yet chronicles the many ways in which private equity investment produces or capitalizes on unattractive aspects of the payment and delivery systems, from surprise billing, to upcoding in the Medicare Advantage program, to outright fraud. The report describes that value-based models, in particular, can create incentives “to stint on care.”

Likewise, a Bloomberg article by Heather Perlberg notes that to get the quick results private equity investment demands cost-cutting becomes a major focus, telling stories of physicians struggling to obtain the bare minimum materials necessary to safely carry out their practice. In the worst case scenarios, private equity investors unsophisticated in the nuances of the businesses they enter can sink the very ships they try to buoy.

Unless outcome parameters in value-based models are precise and comprehensive—and maybe even then—sophisticated private equity players will find sweet spots where they can cut corners, while still checking all the value-based boxes. Years of evidence from these models that purport to drive value, from Medicare Advantage to ACOs to direct contracting, have largely not saved money or improved care as promised. But they have made it abundantly clear that developing good quality metrics is hard, and metrics can be gamed.

The USC-Brookings report recounts a historical example that provides just the kind of evidence from private equity investing that the JAMA article suggests does not exist. They recount the physician practice management companies, where investors, including private equity, bought up physician practices in the 1990s to take advantage of the rise of managed care. Attempting to generate economies of scale through rapid growth, they proved to be little more than a shell game of short-term revenue growth to increase the value of equity shares—value that deflated as quickly as it grew.

Even if there were zero empirical evidence, there is a fundamental structural problem with outside profit seeking investors in healthcare that should produce skepticism. The authors of the JAMA article note this problem in their intro and then too quickly set it aside. Private equity’s whole game is invest, profit, exit—typically in less than five years. And the profit potential must be quite rich to entice them to invest in the first place. Unless private equity radically transforms the quality of care, which seems unlikely, these companies become just another party looking to extract money from the health care system, including from public programs like Medicare, driving up costs without producing concomitant value.

The rising influence of private equity investments, especially in primary care, leave the American health care system increasingly beholden to parties who are ultimately not concerned with boosting patient care. One must have great, unwarranted, and blind faith in incentives to think that they can sufficiently counterbalance the motive to extract all possible profit before jumping ship.

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.

Heart Attack Care Better in Canada than the US

Summary: This study compared quality of care (eg, best clinical practices like prescribing the right medicines) for young adults (≤55) with an acute myocardial infarction. A low quality of care score was nearly 3 times more likely in the US than in Canada. So Canada, with inexpensive single payer, provides better care.

Variations in Quality of Care by Sex and Social Determinants of Health Among Younger Adults With Acute Myocardial Infarction in the US and Canada, JAMA Netw Open, October 20, 2021, by V. Raparelli et al.

From Abstract:

Design, Setting, and Participants: This retrospective cohort analysis used data from 4048 young adults (aged ≤55 years) receiving in-hospital and outpatient care for AMI at 127 centers in the US and Canada. Analyses were adjusted for biological sex and social determinants of health.

Results: … [B]eing treated in the US was associated with a low Quality of Care Score both in-hospital (OR = 2.93) and post-AMI (OR = 2.67).

Comment:

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

Today’s reflection is concise: Canada’s single payer system delivers higher quality of care, while saving money, compared with the U.S. Better care processes help explain this astounding graph from OECD countries, which shows the US diverging on costs and longevity from other wealthy countries.

Costs less, works better. “Dominant”, in cost-effectiveness jargon. “Tastes great, less filling”, to quote the famous 1973 beer commercial. How many ways do we need to say it and show it?

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.

Free Medications Increase Use and Lower Healthcare Costs

Summary: This important Canadian study found that making essential medicines free – removing financial barriers – raises adherence, lowers medical costs, and generally raises patient perceptions of well-being, including overall health.

Adherence at 2 years with distribution of essential medicines at no charge: The CLEAN Meds randomized clinical trial, PLOS Medicine, May 21, 2021, by N Persaud et al

From author summary:

What did the researchers do and find?

  • We conducted a randomized controlled trial of free essential medicines distribution in 786 people who reported trouble affording medicines in a setting where healthcare services are publicly funded.
  • Free medicine distribution improved adherence to medicines appropriately prescribed after 2 years (absolute risk difference, 10.1%; 95% confidence interval (CI) 3.3 to 16.9, p = 0.004).
  • Free distribution had inconsistent effects on surrogate health outcomes over 2 years and lowered total healthcare costs by a median of CAN$1,117 (95% CI CAN$445 to CAN$1,778, p = 0.006).

What do these findings mean?

  • Distributing a comprehensive set of essential medicines at no charge to primary care patients improved medicine adherence and reduced healthcare costs.

Comment:

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

Medicines work only if you take them.  As every doctor knows, many patients don’t take what we prescribe.  High costs are only one reason – a lesson sadly reinforced by experience with COVID-19 vaccinations – but they’re a big one.

Canada’s single payer health insurance system pays all doctor and hospital costs, but many Canadians lack coverage for prescription medications – a shortcoming that progressive activists and politicians have been pushing to fix.

This trial carried out in Ontario shows that full coverage for prescription medications would substantially increase the proportion of patients who take what we prescribe – increase “adherence” in doctor-speak.  Surprisingly, total health care costs were lower among patients in the free medication group – by 38%. As the authors note: “Healthcare spending in all categories except home care costs were lower in the free distribution group, and hospitalizations accounted for the largest share of spending.”

Moreover, for 10 of the 14 survey-based measures of patient-oriented outcomes the free med group did better, with 2 showing a non-significant trend to improvement with free meds and 2 showing no trend. “The 3 largest effects . . . were in the ability to ‘make ends meet’ or afford basic necessities (57.8% absolute increase; 95% CI 50.5% to 65.1%), care quality (31.5% absolute increase; 95% CI 23.7% to 39.2%), and overall health (30.9% absolute increase; 95% CI 22.8% to 39.0%).”

Canada needs to move ahead with universal drug coverage, which is known as Pharmacare in that nation.  In the U.S. we need Pharmacare, and the rest of the coverage that Canadians already enjoy.

http://healthjusticemonitor.org…

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

Public Health Capacity Needs a Major Boost

Summary: To achieve a healthy nation, we need not only single payer healthcare, but also robust public health practice. During COVID, an already underfunded and understaffed public health system suffered a buffeting while – and because – it was trying to do its job of mitigating the pandemic. It’s time to rebuild public health capacity.

Threats, Resignations and 100 New Laws: Why Public Health Is in Crisis, The New York Times, October 18, 2021, by Mike Baker and Danielle Ivory

State and local public health departments across the country have endured not only the public’s fury, but widespread staff defections, burnout, firings, unpredictable funding and a significant erosion in their authority to impose the health orders that were critical to America’s early response to the pandemic.

While the coronavirus has killed more than 700,000 in the United States in nearly two years, a more invisible casualty has been the nation’s public health system. Already underfunded and neglected even before the pandemic, public health has been further undermined in ways that could resound for decades to come. A New York Times review of hundreds of health departments in all 50 states indicates that local public health across the country is less equipped to confront a pandemic now than it was at the beginning of 2020.

“We have learned all the wrong lessons from the pandemic,” said Adriane Casalotti, chief of public and government affairs for the National Association of County and City Health Officials, an organization representing the nearly 3,000 local health departments across the nation. “We are attacking and removing authority from the people who are trying to protect us.”

Comment:

By Don McCanne, M.D.

A side bar indicated that Colin Powell died of Covid-19, in spite of having been vaccinated. Did those whose actions are promoting the dissemination of the Covid virus really want this to happen?

I am literally shedding tears for our nation.

We just want excellent health care and public health practice for everyone. Is that really too much to ask?

http://healthjusticemonitor.org…

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

Wall Street’s Latest Attack on Traditional Medicare

By Brenda Gazzar
Code Wack Podcast, October 18, 2021

Part 2 of a two-part podcast featuring Dr. Ed Weisbart, national board member and Missouri chapter chair of Physicians for a National Health Program, discussing the latest threat to traditional Medicare called “Direct Contracting Entities.” What are they? How do they make money? Why is this a problem? And what can we do about it?

Transcript

Welcome to Code WACK!, your podcast on America’s broken healthcare system and how Medicare for All could help. I’m your host Brenda Gazzar.

So what in the world are direct contracting entities and how might they affect the health care of American seniors? Will this pilot program ultimately help or hinder quality care? Dr. Ed Weisbart, a retired family physician, former chief medical officer of Express Scripts and a national board member of Physicians for a National Health Program, weighs in on this troubling development.

Welcome to Code WACK!, Dr. Weisbart.

Q: There’s a so-called innovation to traditional Medicare being introduced, a pilot program called direct contracting entities or DCEs. That sure doesn’t sound anything like health care. Can you tell us what a direct contracting entity is and why we should care about this?

Weisbart: As a recent article in Health Affairs blog said, this is Orwellian in the way it’s titled, so if you find that this new phrase ‘direct contracting entity’ is confusing to you, it’s the craziest way to call it, cause if you remember from the previous episode, traditional Medicare is very direct, right? Medicare has a direct relationship with doctors so that sounds like a direct contracting entity but that’s not at all what this means. This new name direct contracting entities is a program that was begun under the Trump administration overtly to introduce the private industry – venture capital and private equity and for profit insurance – to introduce them into the 60% of Medicare that they don’t have access to today.

So, most Medicare members have said, I don’t want the commercial industry. I don’t want a for-profit middle person intermediary. I just want Medicare. Most — 60% have said that. And so, the industry has said “well, you know, we want some of that game. We want a part of that pie” and so they persuaded the Centers for Medicare and Medicaid Innovation to start what’s still a pilot program, where much as in Medicare Advantage, or as in accountable care organizations or in a few other programs,  Medicare would no longer pay doctors and hospitals. If you are in a direct contracting entity, Medicare would no longer pay your doctor and hospital for the most part. Instead, they would pay these new for-profit, venture capital private equity or insurance company or publicly traded companies. All of your money for health care would go there, and then they would be in charge of doling out the payments to doctors and hospitals and such.

It’s a little bit more nuanced than that. There are some variations to this but, in general, direct contracting entities, in direct opposition to the way the name sounds, creates a new level of fiscal intermediaries, a new at-risk group, whose interest is in you not getting care, not in you getting care. It’s a dreadful concept, it’s a dreadful concept. It’s something that it’s still in the pilot phases right now so we can stop it before it gets crazy out of control and we need to stop this new initiative, direct contracting entities.

Q: I see. So what does it mean for someone who’s in a DCE?

Weisbart: If you’re in one, you still retain all of your traditional Medicare benefits. Direct contracting entities can’t tell you “no, you can’t go to the doctor or no, you can’t go to the hospital,” at least on paper, but we know that their game will be to nudge you, to guide you. Nobody is really responsible for making sure that you know you have all those choices. You might get a letter once telling you you have that but the direct contracting entity is not going to want to emphasize that so they’re going to be guiding you to fewer choices, fewer hospitals and getting in the way of health care.

Q: Hmmm. So it’s basically creating a middleman…

Weisbart: That’s exactly right.

Q: …that takes a cut of the money that should be going directly to the providers?

Weisbart: And venture capital, Wall Street, private equity, they know this. They’ve looked at this model and some folks call it the Medicare Gold Rush now you know having this incredible rush of money coming into new startup industries and ventures to take advantage of this new entity called direct contracting entities.

Wall Street wouldn’t be investing so incredibly heavily, so incredibly quickly as they are right now if there weren’t a way for them to make a ton of money off of this, and where does that money come from? They’re investing in it because they know that there’s still money left in the Medicare Trust Fund that they can drain. They think that they can get the premiums to go higher for Part B. I don’t know what they’re really thinking but they’re not investing this money because they’re out to improve public health so we’re all going to pay for this. We have to stop it before it’s gotten out of control.

Q: Hmmm. So Dr. Weisbart, to clarify, the DCEs then do operate with a capitation system?

Weisbart: Yes, direct contracting entities themselves are capitated for your care by the federal government. That’s the concept. The direct contracting entities receive varying degrees and varying scopes of capitation for your health care, a monthly fee or an annual fee to cover some or all of your healthcare expenses so it’s exactly what you said. The direct contracting entity gets the money in, and then every dollar that they have to pay out on health care, frankly, is a dollar away from their bottom line, from their profits, from their return on invested capital to Wall Street. Every dollar that they pay, that they have to pay out comes out of their capitation so they have a compelling business interest to maximize those capitations by gaming the system, and to minimize how much they pay out by either directly or indirectly interfering with your care. They can’t completely say “no you can’t go for that care”, they can’t do that, but they can really kind of make it seem like they can.

Q: Um, so when doctors get a set amount per patient, healthier patients cost them less to treat than unhealthy patients. Doesn’t this incentivize doctors to avoid taking on sick patients?

Weisbart: Yeah. The other side of that equation is one of the key reasons I went to medical school. I thought the idea that if you “capitate” physicians — if you pay doctors a certain amount per month to take care of people in general — that would mean that it’s to my advantage to keep you healthy. If I can keep you healthy, well then you’re going to cost less and I’ll be able to make more money. If I did something stupid to you that was you know expensive or harmful, you would then become more expensive to take care of, and I would be partially paying for that. So I thought capitation was a brilliant idea.

What I didn’t know, and what I know now, is that the way to make money under capitation is not by making people healthier. Healthcare prevention takes a decade to pay off. Really good preventive medicine takes a decade to pay off and then it’s not a business case for prevention. We should do it, but it’s not a big money maker. The way to make money under capitation is to not have sick people in your practice. That’s the way to make money so I think you’re right. Capitation rewards you for not having sick people.

And there’s ways to modify and adjust it, but it’s a game of Whack a Mole. You’re always staying a step ahead of that so there is no good way to pay doctors and so because no matter what you do, you’re going to have some kind of an issue, but the most important thing to do I think is to remove the perverse incentives. Stop having it so that we doctors can make more money by shunning the sick. You don’t want to put us in that situation and stop putting it so that we doctors can make more money by doing unnecessary expensive things. You want to get rid of those kind of perverse incentives.

Q: How then do you think that’s affecting patients?

Weisbart: Like I said I went to medical school because I believed in this model of capitation in one form or another so I used to live and practice within the largely capitated system, and I was in charge of I think there were about 10 medical offices scattered around Chicago and we had one in particular that like all the others was largely capitated and it was a terrific place. They did great care. They were top of the charts on patient satisfaction, and on mammograms and all that stuff and they were profitable. Hooray. It proves the case. Then they got one patient in with a very expensive form of hemophilia and it was going to cost a million dollars a year. Actually it did cost  a million dollars a year to treat this one person.

And so, of course, you pay that, you know, we had to figure out ways to come up with the money for it because it’s a lot of money but we did, but I was in charge of the group, right. So there was a business imperative on me to make him not like us. We didn’t do any of these things but I was thinking about you know let’s not answer the phone if we know it’s him. Let’s put him on hold.  You know if he comes in for his visit, let’s make him wait an hour or two. We didn’t ever do that but let’s lose his chart a little bit. Let’s not call him with those test results. Playing that through the intent would be that after six months or so he would say you know that used to be a great office you know, but I don’t know what’s happened to them but it’s gone downhill and I’m going to find me a new doctor.

And maybe he would call and threaten us and tell us, you know, how terrible things were and that he was going to get a new doctor and I’d say, “oh, I’m so sorry.” We didn’t do any of those things but I’m still atoning for the fact that I thought all that through because that was the business pressure, was to make a sick person not want to go to our doctors.

Q: Right and what do you think is at stake then for patients?

Weisbart: For patients, as Dixon from PNHP recently said, nobody – literally nobody – is asking for the system to get more complicated. Nobody is saying, you know, if we’re just a little bit more complicated, that would fix things. Nobody is saying that but that’s what this will do, so you won’t be able to follow the money, right. Who is it going to? You won’t be able to track where your money’s going. You’re gonna have somebody in the middle of your care with direct contracting entities, who will say they’re your advocate and ally trying to help you through the system, but in reality, the business pressure on them, their motivation is not quite the same as what your physician in the exam room usually is.

So from a patient point of view, I think it’s a whole new exposure to a whole new level of complexity that’s going to drive up the cost of your care with no reason to think it’s going to improve quality. There are all sorts of analyses that say there’s no reason to think that. It’s not going to make health care better. It’s going to make it more expensive and more profitable for the foxes that are raiding the chicken coop.

Q: And how do you think the DCEs and the pilot program, if it moves forward, would affect the Medicare for All movement?

Weisbart: It really complicates it. When the movement was really first kind of growing with that name, there was a movement to not call it Medicare for All, but to call it single payer, because structurally that’s what it is — it is one payer, you know, let’s just have one payer. Get rid of all of these insurance companies and just have one payer, and let it be Medicare, have one payer — single payer. It really simplifies things.

There was a movement to have it just be called the single-payer movement and that group lost out to the group that said no nobody knows what a payer is, nobody knows what single payer is. Everybody knows and loves Medicare. Medicare is pretty simple. Let’s kind of go straight with that. So let’s make it Medicare for All. It fits on the bumper sticker better. It’s nice. Well, the world has changed a lot, and the Medicare program is under such direct attack (with) Medicare Advantage now, with all these denials and referrals and prior authorizations and networks. Most people don’t really understand when they have Medicare Advantage that they really don’t even have Medicare, so the more we let traditional Medicare get corroded by things like Medicare Advantage or direct contracting entities, the more we corrode Medicare itself, the harder it is to say, you know, let’s get Medicare for All. We’ve always said improved Medicare right it’s always been improved Medicare. I myself have often run into people who say, why would I want Medicare for all you know the problems I’ve had? And they are almost always problems with Medicare Advantage, and so we’ve had to have the discussion of that’s not Medicare, and once they understand that then they’re much more happy with “oh, yeah, let’s get rid of all of that stuff.”

So, confound that by having a third stream in here, having people with Medicare Advantage, having people in direct contracting entities, and then an even smaller group that’s holding on to that precious for dear life traditional Medicare, it makes our message so much more complicated. Now there’s two things to say “no, that’s not what we mean” about. Yeah, we can go back to the language of single payer. We can emphasize the improved Medicare for All, but it makes our job more complicated and it puts us on the defense, right,  because now we’re talking about how do we protect Medicare, but I would say that every problem is potentially an opportunity.

It’s giving us a chance to get people to really try to understand what Medicare Advantage is and isn’t. We should stop “advantaging” Advantage. We should not let DCEs enter this new space so it’s giving us an opportunity to reinform and educate people and point out the absurd complexity, and point out the Gold Rush coming in to take our money away. I think there’s a whole new suite of organizing tools that we can develop because of these outrageous new attacks so I think it’s potentially galvanizing us.

Q: Thank you, Dr. Weisbart. Was there anything we didn’t touch on or anything else you wanted to mention?

Weisbart: If somebody’s really wonky and wants to read more, there’s two great new pieces in the Oct. 1 week of the Health Affairs blog on this. I think if you just go to the Health Affairs blog and look up direct contracting entities, you’ll find two really terrific pieces from Rick Gilfillan and Don Berwick. So read those. They are dense but are really important. So join us. Go to PNHP.org, even if you are not a doctor.

Thank you Dr. Ed Weisbart.

Find more Code WACK! episodes on ProgressiveVoices.com and on the PV App. You can also subscribe to Code WACK! wherever you find your podcasts. This podcast is powered by HEAL California, uplifting the voices of those fighting for health care reform around the country. I’m Brenda Gazzar.

https://heal-ca.org…

Activists Should Continue to Fight for National Single Payer Rather Than Taking Cues From the Democratic Party

We need to put our efforts together and force reluctant Democrats in Congress to pass what 80% of Democratic voters, and 60% of the entire electorate, already support: expansion of national, single payer, improved Medicare for all, not just for some.

By Claire M. Cohen, M.D.
Common Dreams, October 18, 2021

It is a mistake for activists to once again allow Democratic politicians corrupted by big money to determine the nature of the struggle for single-payer Healthcare. We must have a strong fight on the national level in order to win this. Otherwise, we are abandoning a struggle that has strong public support and giving Congress a free pass to do nothing.

The United States is not Canada. Due, in large part, to the racist culture of the United States, successful struggles for progressive policies on state levels do not automatically translate into national victories. In his article in Jacobin, Gerald Friedman’s main example, Medicaid, proves the point. The Medicaid Program, unlike Medicare, was set up so that states have great discretion and authority on how to implement their own programs. More “progressive” states in the Northeast and on the West Coast have had more coverage, fewer restrictions, and less means testing in their Medicaid programs for decades. States with more reactionary and racist governments, especially in the South, have had more means-testing and restrictions leading to less coverage. The better health outcomes of the more progressive states have not led the more reactionary states to see the error of their ways. If anything, these reactionary states have dug in their heals. In fact, as of this year, there are 12 states that are still refusing to expand Medicaid despite being offered large “carrots” by the Biden Administration. Also, my state Pennsylvania, which currently has a reactionary legislative majority, is taking its lead from those reactionary states, and going in a more regressive direction! Given the racial demographics of the states, it could well be that having some states successfully obtain single-payer would mean an increase in racial disparities nationwide.

The Southern states did not get rid of slavery or segregation because of the example of the Northern states. History shows that, if anything, they retrenched and fought steadfastly for their “peculiar” institutions. It was only when these struggles became national fights (the Civil War, the Civil Rights, and the Black Liberation struggle) that they were successful.

Furthermore, it was Medicare’s implementation as a national program that enabled it to have a powerful effect in ending segregation in medicine throughout the country. Yes, there were local struggles, but they were expected to meet the national mandates. It is a mistake to conflate local struggles for national goals with local struggles limited to local or state attainments.

Advocates for de-emphasizing the national struggle for single-payer (or even laying it down) in order to put the emphasis on achieving state single-payer programs seem to think that working for state single-payer programs will be a much easier battle. But peculiarities about the American governance system and HHS policy, in particular, are likely to make things more complicated and difficult. Secretary of Health and Human Services Becerra, with his reversals in order to be in line with Biden Administration health policy, has already shown that he can not be counted on to give favorable interpretations of section 1332 of the ACA, making it easier for states to implement their own single-payer programs. And even if Secretary Becerra decides to allow flexible interpretation of 1332, what is to stop states from being regressive (like Pennsylvania) instead of progressive?

Finally, there are two suggestions in the Friedman paper that appear confusing. In their paper, Friedman et al discuss states using Medicare Part C to establish a state single-payer system. But isn’t that in essence establishing a state Medicare Advantage? Is this what we want: the privatization of single-payer right off the gate? Also, they talk about not prohibiting employers from offering separate health insurance. Unless I’m missing something, I can see a multi-state company offering its employees United Healthcare, or CVS offering its employers Aetna, or even better yet, Walgreen offering its employees a DCE. My experience working as an employee in a big hospital chain is that it would not hurt them one bit to do this. So would that state really have a single-payer system?

The Democratic Party has been famous for watering down and derailing progressive struggles for at least fifty years. And activists have too often been complicit in their own failure by ceding to Democrats. Just because Biden lays down Medicare For All does not mean we have to or should. We need to do just like the Freedom Riders did during the Civil Rights movement, they forced the hands of the reluctant Kennedy brothers. We need to put our efforts together and force reluctant Democrats in Congress to pass what 80% of Democratic voters, and 60% of the entire electorate already support: expansion of national, single-payer, improved Medicare for all, not just for some. As Frederick Douglas said,” If there is no struggle, there is no progress. Power concedes nothing without a demand.” Let us not be so ready to concede in the face of President Biden’s obstinateness. Keep the struggle for national single-payer going until we win.

Dr. Claire M. Cohen is a black child psychiatrist in Pittsburgh who is a member of National Single Payer, PNHP and the Western PA Coalition for Single Payer Healthcare. You can contact her at cmcmd80@gmail.com.

https://www.commondreams.org…

Don’t Undermine Medicare via Means Testing in Build Back Better

Summary: Means test Medicare? What? Yes, suggested by a conservative Democrat for the proposed Medicare improvements in the huge social infrastructure bill in Congress. This would undermine the solidarity of support for a great program, and leave many elders without insurance or care. It must be stopped.

Means Testing is the Wrong Approach to Medicare Expansion, The Hill, October 11, 2021, by Max Richtman

The debate over Medicare expansion has hurled a bad idea back into the public square:  means-testing seniors’ health care benefits. This is something seniors’ advocates have long opposed, because it would hurt beneficiaries and undermine support for the Medicare program itself. Means-testing benefits should have no role in the expansion of Medicare to include dental, vision, and hearing coverage — which are part of President Biden’s Build Back Better Plan working its way through Congress.

These expanded coverages would plug a gaping hole in Medicare that has prevented millions of seniors from obtaining proper care for their eyes, ears, and teeth — the gateways to good health. But now some centrist members of Congress want to limit those crucial, new coverages to an income-restricted segment of beneficiaries. That amounts to means testing of benefits — something that has been anathema to Medicare since its inception.

Manchin’s Means-Testing and Work Requirements Are a Recipe for Building Back Worse, Common Dreams, October 13, 2021, by Nancy J. Altman

If Manchin forces work requirements and intrusive, demeaning means tests, it will be substantially easier for Republicans to drown Biden’s legacy in the bathtub once they are back in control.

Manchin’s demands for work requirements and means-testing would save money largely by making federal programs inaccessible to many who need them, including those who need them the most. Those most in need often have the most trouble navigating complicated and burdensome eligibility requirements, because they generally lack the necessary time, resources, and family support. Experience teaches that much of the money saved on benefits would be spent on wasteful and intrusive administration.

Comment:

By Eagan Kemp

The universal nature of Medicare coverage for seniors is one of the key reasons that it has often been referred to as the third rail of U.S. politics. Politicians have been loath to try to cut Medicare, even as they have sought to privatize it. Adding means testing would threaten the very foundation of Medicare and open it to future cuts and debasements. It would also impose administrative barriers, meaning many seniors would lose coverage (something we see regularly for Medicaid beneficiaries).

If Manchin and others worry that the wealthy will get benefits they could otherwise afford, then the better solution is for the wealthy to finally pay their fair share in taxes. A strong Medicare system is truly universal, one of the key reasons we fight for Medicare for All.

Under Medicare for All, funded by progressive taxation, we would finally guarantee that everyone gets the care they need, regardless of cost. And ensure that wealthier Americans contribute to financing while benefitting from high-quality care.

Although sufficient social solidarity is necessary to set up a universal healthcare system, it is also true that countries with universal healthcare systems develop a level of pride in their system far beyond what anyone would claim for our fragmented and profit-focused system. Means testing in Medicare would disrupt one of the few bright spots in our health coverage. We must do everything in our power to stop it from happening.

http://healthjusticemonitor.org…

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We can cut drug prices *and* foster innovation

Summary: As Congress considers enabling Medicare to negotiate down out-of-control drug prices, pharmaceutical companies warn that innovation will suffer. Not so, says the president of the Commonwealth Fund. And not so, experts agreed back in 2004. It’s time to empower the public purchaser!

The U.S. Can Lower Drug Prices Without Sacrificing Innovation, Harvard Business Review, October 1, 2021, by David Blumenthal (President, Commonwealth Fund), et al

With Congress considering legislation to allow Medicare to use its bargaining power to negotiate lower drug prices, large pharmaceutical companies are once again waging a campaign that contends that doing so would seriously harm the development of breakthrough drugs. This is not true. Smaller companies now account for the lion’s share of such breakthroughs. The key to supporting drug innovation is to increase NIH funding of the efforts that gives rise to these new companies, cut the costs and accelerate the speed of clinical trials, and reform patent law.

The United States needs an effective strategy for maximizing drug innovation and the huge benefits to humanity that it promises. Protecting the revenues of Big Pharma is not that strategy.

Border Wars: The Prescription Drug Battle with Canada, January 27, 2004 (yes, 2004!)

Debate excerpts:

James K. Glassman: Dr. McCanne, as a physician do you have concerns that if drug importation and re-importation forces down prices, that drug companies will cut back research, and that ultimately Americans will not be able to get the life-saving medicines that they have been getting over the last many decades?

Don McCanne, MD: We don’t think that we really need to re-import drugs from Canada. We think we need to import Canadian drug prices. Every other nation has some mechanism of controlling excessive prices. And we need to do the same thing. In Medicare we do that for physicians, hospitals, laboratories. And now that we’ve accepted prescription drugs as a part of Medicare, we need to do that with the prescription drug industry as well.

JKG: Top-down, command and control stifles innovation, writes someone sitting in front of me. I think that’s a pretty good proposition. How does Dr. McCanne expect innovation to occur?

DM: Well, just not top-down control, but funding. You know, price controls and budgeting and so forth. And that really is an important issue in innovation. But if we look at the history in technological innovation, probably two of the very greatest advances in the last half century have been MRI scans and CT scans. Each of those appropriately received the Nobel Prize for those developments. Where were they developed? Well, the Nobel Prize was shared with a British scientist. England has amongst the lowest rate of funding of their health care system, but that did not stop the technological innovation that occurred in the CT scanning and MRIs, and some of the other research that has taken place.

JKG: Disrupting that system in the way that you propose, many people think would stifle that kind of innovation. Where is this innovation going to come from if it’s not from drug companies wanting to make decent profits on developing new drugs?

DM: There’s no way the drug industry is going to walk away from $1.6 trillion, period.

JKG: Dr. Friedman, Congressman Gutknecht just said the best way to get drug prices down is to have the government negotiate on peoples’ behalf. Do you think that’s the best way to get drug prices down?

Nobel laureate Milton Friedman: No, I don’t think that would get drug prices down. You would still have the situation that a pharmaceutical company produces a drug, that drug involved a lot of cost in developing it. It has to get that money back. It’s going to charge a high price.

Congressman Gil Gutknecht: The idea that no research goes on in Europe is really a myth. And so the idea that somehow if we open up markets and allow more competition that research will somehow stop I think is really a myth and we need to discard it. The idea that you [need] billions of dollars in return, and especially when much of the research is essentially funded by the taxpayers. We’re going to spend this year, and I’m proud of this number, we’re going to spend $27 billion of your dollars on basic research from the federal government this year. And much of that will be given away to the pharmaceutical industry. And so this whole notion that unless we protect these exorbitant prices that Americans are forced to pay, that research won’t be done, I think that’s a myth. And I think there’s plenty of history to prove that.

JKG: Dr. Friedman?

MF: Of course research will be done. I think it is an exaggeration to say that the only source of research is the existence of patents. It isn’t. There’s been enormous progress in medical science over the last 100 years, most of it in ways that have very little or nothing to do with the patent system. They’re through universities, they’re through non-profit organizations, through government [things], so that the issue is not will there be any innovation or not? The issue goes back to the question of do you want to grant patents? And if you want to grant patents, what contracts which the patent owner makes are enforceable in the courts? That it seems to me is a straight-forward issue.

I’m not arguing that this is the be all or end all of innovation, it isn’t. But it is true that it costs a great deal of money, thanks to FDA provisions to bring a new drug to market, and that you have to face the question of how is that going to be financed? And is it going to be financed through patents or is it going to be financed through government subsidy? That’s I think the issue at bottom, it’s not an easy issue. Don’t misunderstand me. As I say, I personally had very mixed feelings to begin with about this issue.

JKG: Dr. Friedman, did you want to comment on the issue of the government doing more negotiating on prices for drugs?

MF: If the government is buying, it ought to be free to negotiate, I have no quarrel with that. I’m not trying to protect the pharmaceutical companies, they’re plenty good at protecting themselves.

Comment:

By Don McCanne, M.D.

Big Pharma (PhRMA) is currently heavily promoting the concept that if Medicare is allowed to negotiate drug prices with the pharmaceutical industry, there will be inadequate funding left to develop new pharmaceutical innovations that would enable the production of new breakthrough drugs. This is not a new concept as the debate excerpts above from a generation ago demonstrate. But also not new is the counter to that, stating that much of the cost of research is borne by other entities and not the pharmaceutical firms. The outrageous pricing of new drugs is not because of the costs of research, but rather it simply reflects the greed of the pharmaceutical industry.

Why does Pharma fear negotiation of drug prices? The full answer appears in the Harvard Business Review article cited above, but their primary concern is that it could bring an end to their lucrative, egregious price gouging.

Even Milton Friedman said that bringing a new drug to market could be financed through patents or through government subsidies, and he conceded that he had mixed feelings about this. History has confirmed that reliance on government subsidies has still led to price gouging, so there should be no more mixed feelings. Price negotiation has become an imperative. As Milton Friedman said, “If the government is buying, it ought to be free to negotiate.”

http://healthjusticemonitor.org…

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Access to Mental Health Care — US worst among wealthy countries

Summary: World Mental Health Day was October 10th. How is the US doing on access to care? Terribly. Therapists often don’t take insurance, and we lead wealthy nations in financial barriers to care: fully 50% of those in need. Single payer would provide a strong behavioral health benefit.

Why It’s So Hard to Find a Therapist Who Takes Insurance, The Wall Street Journal, October 5, 2021, by Andrea Petersen

Especially in big cities such as Los Angeles, New York and Washington, D.C., demand for mental-health care is so strong that many experienced therapists don’t accept any insurance plans, they say. They can easily fill their practices with patients who would pay out of pocket, they add. Therapists who do take insurance are often booked up. And in many smaller towns and rural areas, there are few mental-health professionals at all.

Mental Health Care Needs in US and 10 Other High-Income Countries, The Commonwealth Fund, October 8, 2021, by Reginald D. Williams II, Arnav Shah

The following charts show that, across the countries, large shares of people with mental health needs: … have high rates of cost-related problems accessing care, especially among US Black and Latinx/Hispanic adults.

Comment:

By Isabel Ostrer, M.D.

World Mental Health Day was on October 10, so we ought to look at mental health care access in the United States. The findings are, unfortunately, discouraging.

As the WSJ article points out, finding a therapist who will take your insurance is difficult. There’s no requirement for mental health providers to accept insurance. And, in fact, they often make more by not taking it, thus incentivized to accept only patients who have the means to pay out of pocket.

It’s no wonder that the US fares poorly among peer high-income nations when it comes to mental health. The Commonwealth Fund survey finds that white and Black US adults have the highest rates of mental health needs in these countries. And US adults with mental health needs were the most likely to report a cost-related problem accessing health care. Black US adults with mental health needs use the emergency room – a suboptimal setting – at disproportionately high rates.

As we reflect on World Mental Health Day, the US has plenty to learn from peer countries. Perhaps most fundamentally is that we must broaden access to mental health treatment and providers. A single payer system would achieve this by ensuring all Americans have access to a standardized package of behavioral health care services.

http://healthjusticemonitor.org…

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