By Lindsey Dawson, Matthew Rae, and Jennifer Kates
KFF, November 30, 2020

Background

The legal and policy landscape regarding protections based on sexual orientation and gender identity in health care and other areas has shifted markedly in the last decade. Most recently, on June 15, 2020 in Bostock vs. Clayton County, the Supreme Court of the United States ruled that, under Title VII of the Civil Rights Act of 1964, it is unlawful sex discrimination for an employer (with at least 15 employees) to fire an employee because of their sexual orientation or gender identity. It is likely that this ruling will have implications for employers’ decisions regarding health insurance coverage for employees with same-sex spouses, among other areas of employment.

Conclusion

These findings indicate that access to employer coverage for same-sex spouses is increasing in the U.S., though it still is less than access to opposite sex spousal coverage. Coverage varies substantially by employer size, with employees at small firms having less access while those at the largest firms have almost uniform access to this benefit. In some cases, lack of access could be a policy decision, though that appears to be on the decline, with smaller shares of firms saying explicitly that they do not offer same-sex spousal coverage. Moreover, it is likely that the Bostock decision will have further implications for same-sex spousal coverage, with more firms being required to offer this benefit under the sex protections in Title VII. However, Title VII nondiscrimination protections do not apply to the 5% of employees at firms with less than 15 employees. Further, the Bostock court cautioned that employers could potentially secure religious liberty exemptions from extending sex protections to encompass sexual orientation and gender identity and it is yet to be seen how such exemptions interact with Title VII.

https://www.kff.org…

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Comment:

By Don McCanne, M.D.

Most people agree that everyone should have health care coverage, but there is considerable disagreement on the role that government should play in ensuring coverage for all. In today’s example, coverage for same-sex spouses is not assured in employer-sponsored plans. Why should we have any policies that would exclude individuals from coverage if the goal is to cover everyone?

Tens of millions of Americans do not have health care coverage today, not to mention tens of millions more who have inadequate coverage. We can fix this with one single policy: cover absolutely everyone with a national health program – a single payer improved Medicare for All.

Why do we keep beating around the bush? Let’s do it.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Anirban Basu, Peter J. Neumann, Sean Sullivan
Health Affairs Blog, December 2, 2020

Pharmaceutical pricing is a perpetually contentious policy issue. Branded drug list prices grew annually by 9.1 percent over the last decade. The growth rate in net prices (reflecting discounts and rebates) was lower, at around 4.5 percent, but still much higher than gross domestic product (GDP) growth.

Recent legislative proposals, including US Senate Bill S.2543, US House of Representatives Bill HR 3, and various Trump Administration proposals and plans, have advanced some form of international reference pricing (IRP) to lower drug prices. As its name suggests, IRP seeks to benchmark US drug prices to prices of similar or comparable drugs in other counties. On November 20, the Trump Administration issued an Interim Final Rule on its IRP plan that it refers to as a “most-favored-nations-rule.” Compared to the proposed rule the Administration issued in 2018, several changes were advanced. In our view, the assorted IRP policies are misguided attempts to address the real issue of aligning drug prices with value in the US.

Failure To Align American Drug Prices With Value

American drug pricing policy rewards large capital investments and risks the biomedical industry undertakes in bringing innovations to the market by allowing companies to charge temporary monopoly prices. Because most Americans have insurance and face a fraction of the monopoly price, demand is greater than it would otherwise be in a market without insurance. Consequently, insurers pay for drugs at monopoly prices, a practice that fuels industry profits and raises premiums to employers and out-of-pocket costs to patients. Health plans, especially public ones, would want patients who might benefit from a drug to receive it, subject to budget constraints. Therefore, in principle, they should aggressively negotiate a lower price that still maintains appropriate incentives for manufacturers to innovate. However, the private health insurance market in the US is heavily regulated in ways that limit the full power of such negotiations, such as through imposition of requirements that all drugs in a protected class be covered, even though not all drugs within a class show similar value. Public health insurers, like Medicare, are sometimes expressly prohibited from negotiating prices, and, in the Part D outpatient drug benefit, Medicare has ceded this role to private managed care organizations.

In contrast, most public-funded health care systems worldwide engage in rigorous negotiations, often supported by transparent value assessment processes. Their prices, which the US plans to reference, are a product of these processes. The US’s fundamental challenge has been the lack of political will to formally address drug pricing using any form of national value assessment that explicitly considers drugs’ relative costs and benefits, and informs prices accordingly. Cost-effectiveness analysis, one of the methodological tools of value assessments, is effectively prohibited for major federal payers and evaluators under the Affordable Care Act. The US Congress does not allow the Centers for Medicare and Medicaid Services (CMS) to consider explicitly any value assessment inclusive of costs and prices to determine coverage for drugs or services.

The IRP proposals are misguided as they do not address these central limitations of US statutes – the barriers to systematic use of value assessment and negotiation in drug pricing.

A Recipe For Inaction

Two vocal camps tend to dominate the US drug pricing debate, and neither supports IRP. The first supports explicit consideration of a drug’s value (costs in relation to benefit) in setting prices.

The second camp defends the status quo of free pricing (with certain restrictions) and rejects formal value assessments or government price negotiations.

An IRP policy would fail to satisfy either faction, leading to continued inaction on drug pricing.

The Dynamics Of IRP

It is also naïve to think that observed low prices in other countries would remain low (or even transparent) once the US implements IRP. This is especially true under the most-favored-nations model, which targets only one country’s price for any particular drug as the reference (i.e., the OECD country with the lowest price for that drug — as long as the country has a GDP per capita of at least 60 percent of the US level). Recently, researchers estimated that Medicare Part D plans could save $73 billion in 2018 if their prices for single-source brand-name drugs that had been on the market for at least three years reflected prices from UK, Japan, and Ontario (Canada). However, such hypothesized savings are unlikely to be realized. Unfettered IRP will lead to increases in market prices for the countries referenced, which may align with the goal of having other countries pay a bigger share of pharmaceutical development expenditures. More importantly, it should be expected that the referenced countries will resist this price creep in their own country by hiding their negotiated prices, while letting list prices equate to those of US prices. The real losers of such an outcome would be lower-income countries that do not have the resources and expertise to implement their own value assessment practices and must rely on negotiated prices from other counties. We believe it is highly dubious that IRP, in the long-run, would reduce US drug prices and, more importantly, reduce patient out-of-pocket burden.

Conclusions

The latest bills and proposals that promote IRP fail to learn from the experience of public purchasers, such as the Veterans Administration (VA) and Medicaid, that often achieve lower prices through negotiation and best-price rules. For example, the federal supply schedule drug prices, or the prices available to the “Big Four” (VA, Department of Defense, Public Health Service, and Coast Guard), often resemble prices in European counties. The Veterans Administration contracting mechanism often beats Big Four prices, although it comes with access restrictions.

Any serious attempt to address drug prices in the US – whether through negotiation or some other means – should start by establishing a national center for health technology assessment. This center would be charged with developing a transparent, scientifically rigorous, and deliberative process of assessing drug value, taking into account the US population preferences and benchmark value-based prices for price negotiations proposed in the current bills. Without such a formal mechanism, drug prices will continue to be misaligned with their value for the US.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

With U.S. politicians and policymakers being obsessed with catering to the medical-industrial complex, we continue to pay excessive prices for our drugs. Right now there is a movement to introduce international reference pricing as a means to reduce excessive drug spending, but the authors explain why that is not a good idea, for us or for the reference nations.

More importantly, they explain that we can “learn from the experience of public purchasers, such as the Veterans Administration (VA) and Medicaid, that often achieve lower prices through negotiation and best-price rules.” Of course, this is what is proposed for the single payer model of Medicare for All. Only instead of limiting reform to pharmaceutical pricing, we should go for the full package and enact and implement Medicare for All.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Claudio Lucarelli, Molly Frean, Aliza S. Gordon, Lynn M. Hua, and Mark Pauly
National Bureau of Economic Research, November 2020

Abstract

The growth of health care spending has been a longstanding policy concern. Over the years, several innovations have been proposed to lower levels of health care spending; however, their impact has been limited and not sustained over time. Costly new technology, while often an improvement to existing care, has been identified as a principal driver of health care spending growth. Recent literature has shown that high deductible health plans (HDHP) can have an immediate impact on levels of health care spending, but their medium- and long-run effects on spending growth remain unknown. In this paper, we use multiple-employer-group claims data from a large national insurer to (i) study whether HDHPs reduce the growth in spending over four years compared to lower deductible alternatives; and (ii) explore the mechanisms behind any reductions in growth by looking at whether HDHPs reduce the use of low- vs. high-value treatments. We find that HDHPs have a limited effect on spending growth, with a statistically significant reduction observed only for prescription drugs. HDHPs are not associated with significantly lower growth in spending on highly cost-effective medicines in a sample of drugs but do reduce spending growth for less cost-effective drugs.

From the Introduction

The overall pattern in our data therefore is one of no effect on aggregate spending growth for all insured care, and modest but potentially efficiency-improving effects on spending growth for drugs. High deductibles do not curb runaway medical spending, but may lead to more selective choices among drugs that better balance health benefits and cost. It appears that HDHPs do not have as much potential for long-term cost containment as their advocates contend, nor do they pose as much risk to the use of effective and cost-effective care as their detractors fear.

https://www.nber.org…

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The Economics of Moral Hazard: Comment

By Mark V. Pauly
The American Economic Review, June 1968

When uncertainty is present in economic activity, insurance is commonly found. Indeed, Kenneth Arrow has identified a kind of market failure with the absence of markets to provide insurance against some uncertain events. Arrow stated that “the welfare case for insurance of all sorts is overwhelming. It follows that the government should undertake insurance where the market, for whatever reason, has failed to emerge.” This paper will show however, that even if all individuals are risk-averters, insurance against some types of uncertain events may be nonoptimal. Hence, the fact that certain kinds of insurance have failed to emerge in the private market may be no indication of nonoptimality, and compulsory government insurance against some uncertain events may lead to inefficiency. It will also be shown that the problem of “moral hazard” in insurance has, in fact, little to do with morality but can be analyzed with orthodox economic tools.

The particular type of insurance for which the argument will be presented is that of insurance against medical care expenses, for it was in discussion of medical care expenses that Arrow framed the propositions cited above.

https://www.jstor.org…

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Comment:

By Don McCanne, M.D.

In 1968, Mark Pauly shook up the health policy world by noting, paraphrased, that the “moral hazard” of insurance created an inefficiency in which individuals would obtain health care that they would have otherwise declined if they had to pay for it. This moral hazard then has supposedly contributed to the very high health care spending in the United States.

Cost sharing in the form of deductibles, copayments and coinsurance were supposed to counter moral hazard by exposing patients to the costs of health care. Of course, costs continued to rise, so high deductibles were introduced to increase patient sensitivity to the costs, as one feature of the move to consumer-directed health care designed to make patients better shoppers of health care.

Now we have many studies that confirm that high deductibles have caused patients to forgo not just marginal care but also beneficial health care services. So it is interesting to see what Mark Pauly and his colleagues have found in studying the long-term effects of high deductibles.

The most important finding of this study: “The overall pattern in our data therefore is one of no effect on aggregate spending growth for all insured care.” They did show that there was some decrease in spending on less cost-effective drugs but not on highly cost-effective medicines, but that effect was so minimal that it produced no statistically significant change in spending growth in health care.

One of the reasons that this debate over moral hazard has been so important is found in the excerpt from The American Economic Review of June 1968. Kenneth Arrow states, “the government should undertake insurance where the market, for whatever reason, has failed to emerge.” Mark Pauly states, “compulsory government insurance against some uncertain events may lead to inefficiency.” So far, the Pauly camp has prevailed. Our insurance market failures have not led to universal government insurance, but, rather, we have turned to the market for private insurance “efficiencies” such as high deductible health plans. Yet Pauly now shows us that high deductibles have had no effect on aggregate spending growth.

There is one massive natural experiment that demonstrates that there is an effective method of slowing aggregate spending growth. The curves in the growth of health care spending in the United States and Canada were the same until Canada implemented their single payer provincial health programs. Since that time, the growth of U.S. health care costs has continued on the same high trajectory whereas Canada bent the cost curve down towards more sustainable levels. U.S. private insurers with their high deductibles and other market innovations have failed not only in controlling costs but also in achieving other crucial goals such as universality and equitable access and coverage for all.

So let’s say no to deductibles and the private insurance industry that has foisted them off on us. Let’s say yes to single payer improved Medicare for All.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

PNHP, November 30, 2020

Dear single-payer supporter,

While the dust settles from the elections, many PNHP members are thinking about what the coming year means for Medicare for All. As your new national president, I want to share with you my top five priorities for 2021, both for PNHP as an organization and for our broader movement for health care justice.

1. Set the standard for health care reform: As a new President and Congress prepare to take office, PNHP must be at the forefront of the national debate on health care reform by continuing to provide evidence-based policy solutions. For decades, PNHP has set the gold standard for reform with the Physicians’ Proposal for Single-Payer Health Care Reform and our Prescription for Reform pharma proposal. We must clearly communicate why single-payer Medicare for All — and not incremental reform that preserves private insurance — is the only way to solve people’s health care problems.

2. Move the medical profession towards Medicare for All: The momentum is growing: In 2020 alone, PNHP members have been instrumental in passing single-payer resolutions in the American College of Physicians, the Society of General Internal Medicine, and the Vermont Medical Society, as well as resolutions in several major cities and counties. In 2021, we will expand our resolutions campaign to every specialty society and state and local medical society with PNHP members. We must also strengthen PNHP as the home base for physicians who want to fight for single payer by recruiting more physicians, medical students, and activists to join our organization. We will encourage members to increase their activism and financial support.

3. Confront institutional racism in all forms, and especially in health care: As our Annual Meeting keynote speaker Dr. Rhea Boyd said, “Racism kills, but equality saves lives.” The U.S. health system is plagued with inequity: Compared to whites, people of color are more likely to be uninsured, face discrimination that creates barriers to care, and suffer from preventable health conditions and early death. PNHP must fight not only for equitable and universal coverage, but for the eradication of racism in all forms.

4. Build the grassroots movement by supporting the work of PNHP and SNaHP chapters: The number one takeaway from our Annual Meeting was this: We can only win Medicare for All by continuing our grassroots movement across the nation. That work is already being done by the 100+ local chapters of PNHP and SNaHP. We must support that work by connecting and mentoring chapter leaders and amplifying their local campaigns.

5. Expand our alliances and coalitions: PNHP will never win Medicare for All on our own. We must build power by joining forces with allies at the national and local levels (many PNHP chapters already do this well!). We now work closely with groups like National Nurses United, Public Citizen, HeathCare-NOW, and the Center for Popular Democracy, but we must bring many, many more allies into the fold.

The coming year will bring us extraordinary challenges and opportunities for change. I look forward to working closely with PNHP members to grow our organization and our movement. If you have ideas for me, please don’t hesitate to reach out at pres.rogers@pnhp.org.

Let’s get to work!

In solidarity,

Susan Rogers, M.D.
President

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Comment:

By Don McCanne, M.D.

People want to know what we can do to advance the cause of single payer Medicare for All. For a couple of decades these Quote of the Day messages have repeatedly called for education, coalitions, grassroots efforts, and, more recently, addressing institutional racism. These approaches are so fundamental that PNHP’s president, Susan Rogers, has independently come up with the same list. As she says, “Let’s get to work!”

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Clare Fauke
PNHP, November 23, 2020

The Vermont Medical Society (VMS) overwhelmingly endorsed a resolution supporting a single-payer national health program, also known as Medicare for All, at its annual meeting on Saturday, Nov. 7. The VMS, which represents 2,400 Vermont physicians and physician assistants, is only the second state medical society in the U.S. after Hawaii to formally endorse a national single-payer health care program.

The historic vote by VMS follows a year of rapid movement among physicians and other health professionals towards single-payer reform. In January 2020, the 159,000-member American College of Physicians announced its endorsement of Medicare for All, along with a “universal public choice” reform model. In August, the 3,300-member Society of General Internal Medicine endorsed a similar resolution. Meanwhile, more than 50 municipalities have passed resolutions endorsing Medicare for All, including major cities such as Philadelphia, Detroit, Seattle, San Francisco, Minneapolis, and Cook County, which includes Chicago. These resolutions reflect growing public support for a national health program: Last week, a Fox News election exit poll found that 72% of voters now favor Medicare for All reform.

The VMS resolution was introduced by Dr. Jane Katz Field, a pediatrician and vice president of the Vermont chapter of Physicians for a National Health Program (VTPNHP). “The need for universal single-payer health care has never been more urgent,” said Dr. Katz Field. “Thirty million Americans were already uninsured before the COVID-19 pandemic, and millions more continue to lose coverage as they lose their jobs. Today the Vermont Medical Society recognizes the need to move away from a broken health system that ties health care to employment, and towards a system of equitable and universal coverage.”

https://pnhp.org…

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Comment:

By Don McCanne, M.D.

It has been a long, slow process, but we are now seeing support for single payer reform moving into the leadership of organized medicine – the state medical associations and even the AMA. Young physicians and medical students recognize the serious deficiencies in health care in the United States, and they are determined to do something about it. With their efforts, we may soon see formal endorsement of Medicare for All by their delegate bodies, eventually including the AMA. It can’t come too soon.

At this Thanksgiving time, we can be thankful that this movement for health care justice for all is coming from our future health care professionals. We will be in good hands.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Video by Adam Westbrook and Emily Holzknecht
The New York Times, November 25, 2020

The Fauci Awards (6 minute video):
https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

As a resident of Orange County, California, I want to give my special thanks to Dr. Nichole Quick, who appears in this video.

Our home looks down on Dana Harbor, which is our favorite place to walk. Signs are posted indicating that face masks are required, as is social distancing. To no surprise in this conservative county, compliance is relatively poor. In response, I designed the following T shirt:

In spite of my sincerity, I decided that I could face repercussions by wearing this shirt, so I don’t. Instead, we walk in our own neighborhood which has light traffic because of the dead end streets. Though we wear our masks and maintain social distancing, it is still a pleasure to greet our neighbors as we walk by, something new for us this year since previously our schedules had been too full for neighborhood walks. We can add to our list our thanks for the nice neighbors we have.

And may the spirit move us to achieve health care justice for all.

Happy Thanksgiving!

(Perplexed? Me too.)

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Nathan J. Robinson
Current Affairs, November 21, 2020

Everyone has health, everyone needs healthcare. It is in all of our interest to have as good of healthcare as possible, delivered as inexpensively as feasible. We should all want it to be easy to get the care we need, and for nobody to fret about money when they go to the doctor.

I want to explain as clearly and simply as possible, then, why having for-profit private health insurance companies is fundamentally irrational and harmful.

(The author describes, with diagrams, how money flows in health care now, and how it would eventually flow in a single payer Medicare for All system.)

We have made sure in this model that the pool of money collected from the people who need healthcare is the same as the pool used to buy healthcare, by routing these funds through a different kind of artificial legal construct called a government, which operates by different rules and has a mandate of securing the common good of all the little dot-people on the left rather than a particular subset of wealthy people. Even better, because there is only one government, instead of many insurance companies, the monopoly on health financing gives greater power to bargain with the providers for better rates. The government is essentially a “corporation” comprised of everybody that can exercise the collective will of the people on the left as determined through a democratic process.

From your perspective as one of the magenta dots, what you care about is not whether the flow of funds is called a “tax” or a “premium,” but what the size of the green arrow going from you to the healthcare financing institution is (i.e. how much you pay) and what the size of the arrow coming back from the providers is (i.e. what you get in return). If you get a better deal under the single-payer system, it doesn’t matter how much it raises your taxes, because that amount is more than canceled out by the savings you get through not paying premiums and copays anymore.

Under no sensible theory do we want private, for-profit institutions diverting money that should be spent keeping you well. (I should note, too, that government spending already constitutes a huge part of American healthcare. We are simply talking about eliminating the part of national healthcare spending that is not conducted in the public interest, by switching it from being routed through a badly-designed institution to being routed through a well-designed one.)

I have presented my explanation here in a very simple way, and you may think this is all a thunderingly obvious point that does not need little graphics with dots in order to grasp. But there are plenty of people in the country who either do not understand it or are lying about it. Consider Pete Buttigieg, one of the main Democratic candidates for president this year. Pete Buttigieg criticized a single-payer health plan on the grounds that it would raise taxes and cost trillions of dollars. As you can see, while Buttigieg’s criticisms sound real, they are actually irrelevant. We are talking about which type of institution our healthcare dollars should flow through. Should they be called “premiums” and skimmed by insurance companies with no institutional mandate to care about everyone, or should they be called “taxes” and routed through a democratic, collectively-owned institution that has a mandate to serve universal needs?

Try to think less about words like “taxes” and “trillions of dollars” and more about what is actually going on and what it means for you.

Let’s have some clarity and ask the questions that matter, the most important of which is: how does a for-profit health insurance industry make any rational sense at all? The answer to which is clear from thinking about the basics of how it works. It doesn’t make sense. It doesn’t.

https://www.currentaffairs.org…

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Comment:

By Don McCanne, M.D.

How often have you heard people say that we can’t afford the taxes to pay for single payer Medicare for All? Even President-elect Joe Biden said during the campaign, “How are you going to pay for it?”

Regular readers here understand the efficiencies of funding our entire health delivery system through equitable taxes, but it is sometimes difficult to explain that to individuals who are hung up on the concept that taxes are bad. Although the full article is somewhat long, it is very useful to explain to those willing to read it why paying for health care through the tax system is a vastly superior method to our current inefficient and inequitable method of financing health care.

The full article should be shared with those who still think that private insurance is a better way to fund health care when clearly public financing is the right way to go.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Momentum is gathering for telemedicine, which could alleviate a longstanding problem: wait times.

By Austin Frakt
The New York Times, November 23, 2020

The pandemic may present an opportunity to reshape the future of emergency medicine.

The coronavirus has already prompted health care leaders to rethink how to deliver care to make the most of available resources, both physical and digital. If the shift to greater use of telemedicine continues after the pandemic, it could reduce reliance on the emergency room, where crowding has long been a problem.

This could happen if telemedicine increases the ability for doctors to see more patients more quickly.

Of course, telemedicine isn’t a solution for every health problem. And patients with limited digital fluency and access may get left behind as reliance on telemedicine grows. But the potential payoff is large: A review of medical records of older patients found that 27 percent of emergency room visits could have been replaced with telemedicine.

On average, a patient visiting an emergency room will wait about 40 minutes. Although that’s down from about an hour a decade ago, 17 percent of patients visiting an emergency department in 2017 waited over an hour. About 2.5 percent waited more than two and a half hours.

As many studies have documented, longer wait times can be harmful. Longer waits can also increase costs.

Additionally, many people end up waiting in the emergency department on the advice of other medical providers, though they may not need to. Their problems could be handled elsewhere.

Once the pandemic fades, the momentum from telemedicine may continue, with the possibility of making progress on a problem that shouldn’t wait.

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NYT Reader Comment:

By Don McCanne, M.D.

How should an acute problem be managed? By telephone? By telemedicine? By an urgent primary care office visit? By an urgent care center? By an emergency department? Should a private insurance company be dictating the approach? Should a less appropriate approach be dictated by the source of payment whether due to a lack of insurance or through very high deductibles, or due to restrictions of provider networks established by private insurers?

Sorting these approaches through triage based on clinical circumstances can improve the efficiency of our health care system, but it would be far more effective if we remove one important stumbling block: disrupting entrance into the health care system based on our dysfunctional, fragmented system of financing health care.

If we had a well designed, single payer improved Medicare for All system that removed the dictates of private insurance bureaucrats, with their provider networks and prior authorization requirements, then we could improve the flow within our health care delivery system, obtaining the appropriate care at the appropriate place at the appropriate time for the appropriate patient. Addition of the option of telemedicine can only improve this flow when it is appropriate for the clinical circumstances.

https://www.nytimes.com…

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