The Physicians Foundation, survey completed October 2020

The Physicians Foundation’s 2020 Survey of America’s Physicians: COVID-19 And The Future Of The Health Care System finds physicians ranked a two-tiered system featuring a single payer option plus private pay as the best direction.

Q1 – Considering all relevant issues such as patient access, value and quality, health system efficiency, physician autonomy and compensation, and the COVID-19 public health response, what direction should the health care system take? Rank the options below 1-4, with 1 being the best approach.

Implement a two-tiered system (single payer available for all, with private pay/insurance option)

• 67% – Rank 1 or 2 (36% Rank this as first choice)
• 33% – Rank 3 or 4

Maintain/improve the current Affordable Care Act (ACA) influenced system

• 49% – Rank 1 or 2 (19% Rank this as first choice)
• 51% – Rank 3 or 4

Move to a market-driven system with Health Savings Accounts and catastrophic policies

• 45% – Rank 1 or 2 (30% Rank this as first choice)
• 55% – Rank 3 or 4

Implement single payer/Medicare for All system (government funded and administered)

• 40% – Rank 1 or 2 (19% Rank this as first choice)
• 60% – Rank 3 or 4

Q3 – In the near future (next two to five years) how important will each of the following steps be if the goal is to ensure high-quality, cost-efficient care for all?

Providing affordable health insurance coverage that ensures improved health care access

• 98% – Important
• <3% – Not important

Increasing the number of physician leaders in key decision making positions

• 96% – Important
• 4% – Not important

Establishing price transparency for medical services

• 95% – Important
• 5% – Not important

Clarifying the effect of Pharmacy Benefit Managers and the integration of insurance and pharmaceutical companies on drug costs

• 93% – Important
• 7% – Not important

Determining the impact of health systems/ hospital consolidation on health care cost and quality

• 93% – Important
• 7% – Not important

Reducing health inequity/inequality of access

• 92% – Important
• 8% – Not important

https://physiciansfoundation.org…

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Comment:

By Don McCanne, M.D.

Of the four choices of health care reform offered in this survey, the most popular amongst physicians was implementing “a two-tiered system (single payer available for all, with private pay/insurance option),” with 67% ranking this as their first or second choice, and the least popular was implementing “single payer/Medicare for All system (government funded and administered),” though 40% still ranked that as their first or second choice. Opinions were split on maintaining/improving “the current Affordable Care Act (ACA) influenced system,” and moving to “a market-driven system with Health Savings Accounts and catastrophic policies.”

Although there was very strong support for all of the policy features they asked about, it is reassuring that 98% agreed that “providing affordable health insurance coverage that ensures improved health care access” was important “to ensure high-quality, cost-efficient care for all.” Plus the 92% support of “reducing health inequity/inequality of access” was sort of reassuring as well, although the 8% who did not believe that this was important are likely in the wrong profession.

So there is agreement that we need to reform the system, but physicians seem confused as to how we do that. Their first choice of “a two-tiered system (single payer available for all, with private pay/insurance option)” is not a single payer system since single payer does not have two tiers and it does not include the option of private insurance since that would be a multipayer system. It is likely that this preference represents perpetuation of a market of private plans with the addition of a Medicare-like public option. This might represent Joe Biden’s position except that only half of physicians seem to support the Affordable Care Act – an essential element of Biden’s proposal.

The fact that both health savings accounts with catastrophic coverage and pure single payer/Medicare for All have split support suggests that physicians may be making their decisions based more on ideology than on rational policy. Having discussed these issues with many physicians from across the political spectrum, it seems that the impasse is inviolate. Here’s hoping that some of you can figure out how to break through.

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KFF, October 16, 2020

For many years, Kaiser Family Foundation has been tracking public opinion on the idea of a national health plan (including language referring to Medicare-for-all since 2017). Historically, our polls have shown support for the federal government doing more to help provide health insurance for more Americans, though support among Republicans has decreased over time (Figure 1). But this never translated into majority support for a national health plan in which all Americans would get their insurance from a single government plan until 2016 (Figure 2). A hallmark of Senator Sanders’ primary campaign for President in 2016 was a national “Medicare-for-all” plan and since then, a slight majority of Americans say they favor such a plan (Figure 3). Overall, large shares of Democrats and independents favor a national Medicare-for-all plan while most Republicans oppose (Figure 4). Yet, how politicians discuss different proposals does affect public support (Figure 5 and Figure 6). In addition, when asked why they support or oppose a national health plan, the public echoes the dominant messages in the current political climate (Figure 7). A common theme among supporters, regardless of how we ask the question, is the desire for universal coverage (Figure 8).

As Medicare-for-all becomes a staple in national conversations around health care and people become aware of the details of any plan or hear arguments on either side, it is unclear how attitudes towards such a proposal may shift. KFF polling finds public support for Medicare-for-all shifts significantly when people hear arguments about potential tax increases or delays in medical tests and treatment (Figure 9). KFF polling found that when such a plan is described in terms of the trade-offs (higher taxes but lower out-of-pocket costs), the public is almost equally split in their support (Figure 10). KFF polling also shows many people falsely assume they would be able to keep their current health insurance under a single-payer plan, suggesting another potential area for decreased support especially since most supporters (67 percent) of such a proposal think they would be able to keep their current health insurance coverage (Figure 11).

KFF polling finds more Democrats and Democratic-leaning independents would prefer voting for a candidate who wants to build on the ACA in order to expand coverage and reduce costs rather than replace the ACA with a national Medicare-for-all plan (Figure 12). Additionally, KFF polling has found broader public support for more incremental changes to expand the public health insurance program in this country including proposals that expand the role of public programs like Medicare and Medicaid (Figure 13). And while partisans are divided on a Medicare-for-all national health plan, there is robust support among Democrats, and even support among four in ten Republicans, for a government-run health plan, sometimes called a public option (Figure 14). Notably, the public does not perceive major differences in how a public option or a Medicare-for-all plan would impact taxes and personal health care costs. However, there are some differences in perceptions of how the proposals would impact those with private health insurance coverage (Figure 15). KFF polling in October 2020 finds about half of Americans support both a Medicare-for-all plan and a public option (Figure 16). So while the general idea of a national health plan (whether accomplished through an expansion of Medicare or some other way) may enjoy fairly broad support in the abstract, it remains unclear how this issue will play out in the 2020 election and beyond.

https://www.kff.org…

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Comment:

By Don McCanne, M.D.

Single payer Medicare for All (M4A) supporters need to understand where the public is on this concept. There is a partisan split. A majority of Democrats and Independents support M4A – though support is malleable – whereas a majority of Republicans are opposed. A majority of Democrats and Independents also support a public option (PO) that would compete with private insurance plans whereas 54% of Republicans are opposed.

Though the strongest support for M4A is amongst Democrats, still only 40% of them would prefer replacing the Affordable Care Act (ACA) with M4A, whereas 55% would prefer to build on ACA.

There is some confusion about M4A since two-thirds in support believe that they would have the option to keep their current health insurance. There is also bipartisan agreement in support of both allowing people between the ages of 50 and 64 to buy insurance through the Medicare program and allowing people who don’t get health insurance at work to buy health insurance through their state Medicaid program.

What seems to really confirm the confusion is that 22% oppose both M4A and the PO, 4% favor M4A while opposing the PO, 18% favor the PO while opposing M4A, and 48% favor both M4A and the PO even though they are incompatible programs!

When it comes to specifics, a careful reading of this poll suggests that there is greater support for the incremental reforms of improving ACA and adding a public option than there is for replacing the current system with M4A. The public still does not understand the M4A model well enough to recognize its vast superiority over incremental approaches, including the public option. We have work to do.

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By Alexander Sammon
The American Prospect, October 20, 2020

There is perhaps no component of health insurance where the private sector has failed more profoundly than long-term care, making this one of the worst and most rapidly faltering aspects of our impossibly expensive, wildly inefficient, and poorly performing health care system.

Common estimates say that about 50 percent of older adults will need long-term care at some point in their lives; for adults over 65, the odds shoot up to 70 percent. But, like much of our health care system, just because there’s demand doesn’t mean there’s supply. Though long-term care can be exorbitantly expensive, the percentage of Americans currently in possession of insurance coverage is just a small fraction of those who are likely to need it.

At its peak in 2002, about 750,000 individuals successfully purchased LTC insurance in a single year. By 2018, that number had plummeted to 57,000, a more than tenfold contraction.

Part of that trend is explained by a wild mispricing error by the insurance industry, which severely underestimated the cost of such plans.

Meanwhile, insurers have strained to deny policies to as many people as possible. Any combination of two or more chronic conditions is grounds for near-automatic disqualification, as are diseases like AIDS and multiple sclerosis, a history of strokes, or diabetes requiring insulin shots.

Yet despite rates rocketing up, and plans being increasingly difficult to even qualify for, claim losses have still managed to exceed expectations since 2008, as insurers have found it impossible to structure a long-term care program in a profitable way.

The Affordable Care Act did initially include a provision for a national, public long-term care insurance system, called the Community Living Assistance Services and Supports (CLASS) Act. A pet program of the late Sen. Edward Kennedy, CLASS would have allowed all working adults to apply for insurance that would provide up to $50 a day in cash benefits, money that could be used to help with in-home assistance or nursing home care.

CLASS was derided as an accounting feint rather than a serious attempt to manage the long-term care problem. Because the program collected premiums for the first decade before paying out any benefits, it was scored as saving $70 billion inside the ten-year budget window. By 2011, it became clear that the Obama administration had no intention of actually pursuing it.

CLASS was formally repealed in the American Taxpayer Relief Act of 2012, replaced by a Federal Commission on Long-Term Care. The commission went on to complete its study, replete with some of the data seen in this article and a handful of suggestions for limiting costs. And that was that.

The end result has been a powerful combination of denial, wishful thinking, and severe financial shock.

Medicaid, meanwhile, currently the single-largest source of funding for long-term services, only kicks in at a point of financial ruin. But forcing people into penury to get assistance to feed and bathe themselves robs the elderly of dignity. Many are forced into nursing homes because they can no longer afford living on their own.

There’s no reason to believe any of these trends will reverse on their own. The cost of policies will continue to skyrocket, the amount those policies pay out will continue to drop, the number of people in need will continue to grow, and the number of applicants rejected will continue to increase in lockstep.

Long-term care is a market-breaker; there’s no meaningful way for it to conform to market principles, or to keep it from losing money. But the need for long-term care is an absolute certainty, and herding a huge percentage of our fast-aging population into the corral of bankruptcy is not a solution either.

Some policymakers are finally coming around to this reality. Washington state passed a long-term care social-insurance program last year, which reimburses at $100 per day for in-home care up to a fixed lifetime maximum that translates to one year of daily support. But as with any expensive and necessary public-health program, piecemeal solutions at the state level are not likely to be sufficient. It will take federal commitment to get it done.

https://prospect.org…

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Report to the Congress

U.S. SENATE, Commission on Long-Term Care, September 30, 2013

The Commission sought to address the challenges of delivering and financing LTSS (long-term services and supports) for both older and younger people with significant cognitive or physical functional limitations.

Chapter III: Recommendations

Part Three: Financing

The Commission considered very different approaches regarding the mechanisms needed to make this vision possible. The Commission did not agree on a financing approach, and, therefore, makes no recommendation.

Alternative Approaches

• Approach A: Strengthen LTSS financing through private options for financial protection.
• Approach B: Strengthen LTSS financing through social insurance.

http://ltccommission.org…

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Comment:

By Don McCanne, M.D.

Anyone who has had to deal with the financing of long-term care in the United States knows that it is a disaster. It is expensive and yet many who have developed a need for it do not have the funds to pay for it. In typical American fashion, we’ve tried to develop a market of private insurance plans that would cover long-term care. That has been a total failure. It is one more example of Kenneth Arrow’s lesson to us that markets do not work in health care.

For those individuals who absolutely require long-term care but do not have the funds to pay for it, Medicaid – a health financing program for those who live in poverty – is available. But, as Alexander Sammon states in The American Prospect article, Medicaid “only kicks in at a point of financial ruin,” and “forcing people into penury to get assistance to feed and bathe themselves robs the elderly of dignity.” The last thing a civilized society should do is rob the elderly and disabled of dignity. We have to find a solution.

Sen. Ted Kennedy fought for the Community Living Assistance Services and Supports (CLASS) Act, and it was included in the Affordable Care Act. Unfortunately it was converted into a financing gimmick by requiring voluntary premiums to be paid for ten years before any benefits would be paid out. It is more or less representative of the compromises that were made in putting together the patchwork of Obamacare, which explains why we continue to have so many health care financing problems (and will continue to do so under Biden’s proposed incremental tweaks). The Obama administration saw that CLASS wouldn’t work and so they made no effort to implement it.

In place of the Class Act, the Commission on Long-Term Care was established. Although they covered several aspects of long-term care, the really important one was how would it be financed? The politically diverse members of the Commission could not agree on a financing approach and thus they made no recommendation. In fact they voted 9 to 6 as to whether they would even submit the report as an agreement of the Commission. However, they did submit two alternative approaches that could be considered, even if not recommended by the Commission.

Approach A was basically financing long-term care through private options. That is essentially the disaster that we have now. They did suggest market and consumer-style gimmicks such as tax deductible long-term care savings accounts that would work for the wealthy, much like health savings accounts. But Approach A can be rejected flat out since markets have not worked and will not work to meet the need.

Approach B was to establish a social insurance program to cover long-term care, as has been successful in other nations. In fact, it is part of the single payer model of an improved Medicare for All.

For decades we’ve been discussing the disaster of financing long-term care, and now the answer is sitting right there in front of us: single payer Medicare for All. Would a public option work? Absolutely not. It would collapse just as the market for private long-term care plans has collapsed.

We need to start working on this in January, right after the inauguration.

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By Reed Abelson
The New York Times, October 20, 2020

New York State accused a major Christian group on Tuesday of deceiving customers by illegally offering health insurance to as many as 40,000 residents since 2016.

The state filed civil charges against Trinity Healthshare, the Christian group, and Aliera, a for-profit company that markets the plans.

The state insurance regulators’ complaint included a list of charges, which said Trinity and Aliera “aggressively marketed and sold their products to consumers in the health insurance marketplace, preying on people who were uninsured and deceiving consumers into paying hundreds of dollars per month for what they were led to believe was comprehensive health coverage.”

New York regulators said patients were often left with thousands of dollars in unpaid medical bills. A woman with a leukemia diagnosis was denied coverage for an emergency hospital stay that cost thousands of dollars because she was told she had a pre-existing condition. Aliera denied a $15,000 claim for breast cancer treatment, according to regulators, while another patient said even routine doctor’s visits were not covered by Trinity.

Obamacare plans still remain too costly for some people, who look for cheaper options with much lower premiums even if they do not provide robust coverage. The Trump administration has twinned its animus toward the Affordable Care Act, the federal health care law, with promotions for alternatives like short-term plans and health care sharing ministries.

The Christian groups can offer low rates because they are not classified as insurance, and are under no legal obligation to pay medical claims. Some people have paid hundreds of dollars a month, and then have been left with hundreds of thousands in unpaid medical bills in several states where the ministries, which are not subject to regulation as insurers, failed to follow through on pooling members’ expenses.

https://www.nytimes.com…

Trinity HealthShare:
https://www.trinityhealthshare.org

Aliera:
http://alierahealth.com…

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Comment:

By Don McCanne, M.D.

Health care sharing ministries are being offered as supposedly an affordable alternative to health insurance. Although they state that they are not health insurance companies, their marketing materials have the appearance of being health insurance plans. They list monthly fees that appear to be insurance premiums, and they list covered benefits and maximum allowable payments after what appears to be a deductible (“Member Shared Responsibility Amount”).

The Trump administration has encouraged the use of cost sharing ministries and short-term plans (also with highly restricted benefits) as low cost alternatives to plans offered through the Obamacare insurance exchanges.

Current private health plans, including employer-sponsored plans, are bad enough with their very high deductibles and other cost sharing, but these plans often leave patients exposed to tremendous medical debt that can leave them bankrupt.

“Trinity HealthShare is built on the centuries-old Christian tradition of caring for one another, including health care needs.” Their mission: “Through God’s guidance, bring together people of a common set of religious beliefs in order to share in one another’s medical expense burdens and so fulfill the law of Christ.”

Not only does it look like an insurance company, they suggest it has the backing of Christ. Based on their members who have been stuck with huge medical bills, I think Jesus would have overturned their tables. “‘My house will be called a house of prayer,’ but you are making it ‘a den of robbers.’” – Matthew 21:13

(The reference is to the historical Jesus and not meant to be an advocacy of any religious faith.)

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CMS.gov, October 15, 2020

Today, the Centers for Medicare & Medicaid Services (CMS), under the leadership of President Trump, announced action it has taken to advance an innovative package of state-led reforms that were crafted in response to the guidance and unprecedented flexibility offered by the Trump Administration.

Specifically, CMS announced the approval of Georgia’s new Medicaid section 1115 demonstration called “Pathways to Coverage.” The demonstration is designed to create a pathway for working-age Georgia adults who are ineligible for Medicaid to opt into Medicaid coverage by participating in qualifying activities like work and education, as well as meeting premium and income requirements.

Georgia’s Medicaid section 1115 demonstration “Pathways to Coverage” applies to individuals who are between the age of 19 through 64, with income up to and including 100 percent of the federal poverty level (FPL) and is effective today through September 30, 2025, with implementation beginning July 1, 2021. Those who already qualify for Medicaid today will not be directly affected, and it is estimated that over 30,000 individuals will receive Medicaid coverage during the first year of the demonstration and nearly 65,000 Georgians will enroll in Medicaid or receive Medicaid premium assistance for coverage through Employer Sponsored Insurance (ESI) over the five-year demonstration.

In order to qualify for this program, individuals must comply with specific requirements, including participating in 80 hours a month of work or other qualifying activities. Most individuals with income between 50 and 100 percent of the FPL will be required to make initial and ongoing monthly premium payments. Applicants and beneficiaries with disabilities requiring reasonable accommodation will have options available to complete and report their qualifying activities and hours. The state is providing support to those not already working to encourage and enable those beneficiaries to obtain employment and take part in other education and job-supporting activities.

Georgia is also pursuing complementary reforms of its individual health insurance market through a section 1332 State Relief and Empowerment Waiver, also referred to as a section 1332 waiver. This waiver is designed to put Georgia on a path to change the systemic issues with the state’s individual health insurance market—with the goal of reducing premiums, providing greater access and promoting a more competitive private insurance marketplace.

Under the Georgia Access Model, consumers will shop for and compare available plans through private sector partners, including web brokers, health insurance companies, and traditional agents and brokers.

https://www.cms.gov…

CMS details of “Georgia Pathways to Coverage” (51 pages):
https://www.medicaid.gov…

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Comment:

By Don McCanne, M.D.

CMS administrator Seema Verma worked with Vice President Mike Pence when he was governor of Indiana to attempt to convert their Medicaid program into a consumer-directed program with phony health savings accounts. She brought with her to CMS her ideology aimed at privatizing the government health programs.

Under a section 1115 waiver, she has granted Georgia changes that will allow qualified individuals with incomes between 50 and 100 percent of the federal poverty level to enroll in Medicaid providing they meet an 80 hour per month work/education requirement and “pay” a premium for their Medicaid coverage (a complicated process described in the 51 page CMS document – link above). Failure to meet the requirements can result in expulsion from the program.

They are also in the process of privatizing the ACA exchange function by allowing private insurance brokers to provide that function.

Seema Verma says, “I’m thrilled to support this comprehensive state-led reform that will help thousands of working adults in Georgia gain access to coverage for the first time in a way that addresses both their health and socio-economic needs.” “Socio-economic needs” means finding and holding jobs in a depressed economy that has caused many to lose their employment.

These people have incomes below the federal poverty level. How can Verma expect them to function on a socio-economic level comparable to individuals with average incomes?

We have tremendous problems – many of them being due to ever widening income and wealth inequality. These problems cry out for public solutions. In health care, the solution is easy – simply enact and implement a well designed, single payer model of an improved Medicare for All. Each person can meet their individual responsibility that Verma demands by paying their equitable share of progressive taxes that would fund the system (though solidarity-based responsibility is not what Verma has in mind).

In a couple of months there should be new management at HHS/CMS. Let’s just hope that they do not put in charge more neoliberals who would maintain a dominant role for the private insurers that keep shifting responsibility (risk) to patients. We can get this right if we all join together and work on it.

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By David M. Cutler
Health Affairs Blog, October 2, 2020

This post explores the possibility of saving money by reducing the administrative costs of health care.

Reducing administrative costs is attractive for several reasons. Administrative costs are high, perhaps a quarter of health spending, so reductions in administrative costs could yield a good deal of savings. Further, the goal of medical care is clinical care, so reducing administrative staff likely has a smaller effect on quantity and quality of care than would reductions in clinical staff. Finally, excess administrative hassles adversely affect peoples’ ability to receive care, so reducing administrative hassles could improve the timeliness of care received.

Employment data show the magnitude of administrative expense in health care. Clinical occupations account for two-thirds of health care employment; administrative occupations account for 22 percent; the remainder is a small amount of other occupations, including cooks and security guards. There are nearly four administrative workers for every physician and dentist. Even the 22 percent estimate is an understatement of the administrative burden, as physicians and nurses spend part of their time doing administrative work. The vast bulk of people employed in insurance companies are administrative workers.

Most of the administrative costs in health care are in billing and insurance related services (BIR). Every time a patient wants to see a provider, the patient’s insurance eligibility needs to be checked, the appropriate co-pay or co-insurance needs to be determined, and prior authorizations need to be adjudicated. After the visit, the service needs to be correctly coded, the coding must be reviewed by both the provider and the payer, and payment must be made. All this requires people. Other areas requiring significant administrative time include regulatory compliance and measuring and reporting quality metrics. In Medicare alone, there are over 2,000 quality metrics.

What Could Be Saved?

The natural question is how much could be saved by undertaking administrative restructuring. An exact answer is hard to determine, but some outlines can be estimated. Single-payer systems involve the least administrative expense, perhaps two-thirds below the US level. Many single-payer systems involve very little documentation. Of course, single payer involves many other tradeoffs that may not be appealing.

There seems to be a very good economic case for a significant and sustained campaign to reduce the administrative cost of US health care, and it is an especially fruitful and timely pursuit during the COVID-19 pandemic.

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Health Affairs Comment:

By Don McCanne, M.D.

“Of course, single payer involves many other tradeoffs that may not be appealing.”

Single payer trades the uninsured for universal coverage.

Single payer trades underinsurance through excessive cost sharing for elimination of financial barriers to care.

Single payer trades inequitable premiums and cost sharing for equitable progressive taxation that makes health care affordable for each of us.

Single payer trades inefficient, costly, excessive administration caused primarily by a fragmented financing system heavily dependent on private insurers for a highly efficient, single publicly-administered system.

Single payer trades market-based infrastructure expansion based on enhancing the medical-industrial complex (business model) for central planning of infrastructure expansion based on regional health care needs (patient service model).

Single payer trades unsustainable growth in global costs due to dependence on markets for single payer economic tools of cost containment that bend the cost curve to sustainable levels.

Where are the tradeoffs that are so unappealing that they largely offset these clear single payer advantages?

https://www.healthaffairs.org…

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Additional Comment:

By Don McCanne, M.D.

Many highly respected members of the academic health policy community, such as Harvard’s David Cutler, seem to acknowledge the efficiency of the single payer model of health care financing in that it would greatly reduce the profoundly wasteful administrative excesses uniquely characteristic of the U.S. health care financing system. But then the model is usually dismissed, often with unintentionally glib comments such as “single payer involves many other tradeoffs that may not be appealing.” The standard policy approach today is to reflexly dismiss single payer Medicare for All as soon as it is mentioned.

Cutler rightly explains that the “paper tiger” in health care needs to be tamed. But what are the tradeoffs that he seems to feel are so lacking in appeal that the single payer model can be dismissed outright? In my response to his Health Affairs article I list several tradeoffs, but they should be exceptionally appealing since they make the health care system work well for all of us as patients. I really can’t think of other tradeoffs that are so unappealing that they would even begin to offset the positive tradeoffs listed.

We need to work on the policy community to get them to reject the knee-jerk reaction of dismissing single payer Medicare for All at its mere mention. It is their rejection that we need to reject so that we can all have an honest dialogue on the clear advantages of Medicare for All.

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By Harris Meyer
Health Affairs Blog, October 13, 2020

Last month’s Rand Corporation report on the prices paid for inpatient and outpatient services to more than 3,000 US hospitals in 49 states is the latest salvo in an escalating battle to reduce health care spending through transparent pricing and greater market competition.

But stakeholders, including employers, workers, and state and federal policy makers, have a daunting task ahead to squeeze down hospital and physician prices, by far the highest in the world, in the face of fierce resistance to price transparency from both providers and insurers.

“The actors charging these prices are doing everything they can to keep prices secret,” said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents large self-insured employers. “That crazy, outrageous pricing persists because of the lack of information.”

Despite industry opposition, the secret-pricing system has to change, particularly if policy makers insist on preserving a market-based health care system rather than shifting to a government-run model with regulated prices such as Medicare for All or public-option health plans. The continued failure of the market model to hold down costs gives ammunition to Joe Biden and the Democrats, if they win the November elections, to establish a price regulation system.

A Legislative Approach

Ultimately, Congress has to get involved to make transparency happen because more than 100 million non-elderly Americans are covered by health plans that can only be regulated by the federal government. Lawmakers should backstop the Trump administration’s court-endangered transparency rules by passing legislation requiring hospitals and health plans to publish their negotiated prices.

Legislation also should limit providers’ monopoly pricing power by capping hospitals’ and physicians’ out-of-network charges at a reasonable percentage of Medicare rates, perhaps 125 percent. That would weaken providers’ negotiating trump card of threatening to stay out of an insurer’s network.

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Health Affairs Comment:

By Don McCanne, M.D.

The emphasis on price transparency stems from the belief that the health care consumer can control spending through price shopping. It’s as if we’ve forgotten Kenneth Arrow’s classic lesson on how markets do not work in health care. Price shopping is effective only for marginal services and can have very little impact on our total national health expenditures.

Our health care financing system should be designed to assist patients in obtaining the care that they need. Yet our insurance innovations erect financial barriers to care through high deductibles and other cost sharing and by preventing coverage of out-of-network providers. Even the Trump administration’s expansion of short term plans exposes patients with health care needs to higher costs because of a reduction in covered benefits. And health savings accounts are strictly a tax gimmick for higher income individuals and not a ticket to health care.

Having medical problems is a burden enough without the additional burden of assessing greater financial penalties for accessing health care (out-of-pocket cost sharing and payment for services not covered).

Other wealthy nations cover nearly everyone at an average per capita cost of about half of what we spend while we leave tens of millions with inadequate health coverage and tens of millions more with no coverage at all. We already have more consumer-directed health care than most other nations, and our very high spending is proof that it is a flawed concept.

Rather than relying on patient-consumer shopping we should rely on government administered pricing since that has been effective in many other nations. Through a single payer, improved Medicare for All that uses negotiated prices, bulk purchasing, global budgets for institutions such as hospitals, separate budgeting of capital improvements based on need, and a dramatic reduction in wasteful administrative services, we can control excess spending while ensuring adequate capacity in the system. Everyone is included in an equitably financed system that is affordable for each of us. Price transparency can’t do that, not even close.

Wasting time and more excessive administrative services on price transparency will only further delay the comprehensive reform that we desperately need.

https://www.healthaffairs.org…

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Additional Comment:

By Don McCanne, M.D.

In advocating for using price transparency to enable price shopping in the marketplace, the author also recommends “capping hospitals’ and physicians’ out-of-network charges at a reasonable percentage of Medicare rates, perhaps 125 percent.” This is an obvious concession that Medicare has been far more effective in controlling prices than has the marketplace. Further, why should we limit government price controls to the current Medicare program plus health care spending outside of private insurer provider networks? Why shouldn’t we all receive the benefit of government administered pricing?

Price increases have been far greater under the private insurers than they have through Medicare. Some of that has been due to excessive administrative waste of the insurers themselves and from the costly administrative burden they place on the health care delivery system. Much of that administrative waste could be recovered by using single payer economic tools as listed in my comment posted to the Health Affairs article above.

For those who have Medicare, when you review your explanation of benefits, were you aware of the listed prices before you received the services, or were you aware of the amount of the allowed charges and the adjustments for which neither you nor the government would be responsible? Of course not. Price transparency plays no role in determining Medicare payments. Government administered pricing is far more effective than price transparency in the health care marketplace could ever be.

We do need to improve Medicare so that we can get pricing right. Payments need to be adequate to cover legitimate expenses of the health care delivery system plus provide a fair margin for those delivering health care (profit, salary, or whatever is appropriate for the financial structure under which the health care services are being provided). Yet judicious use of our public funds would also require that price gouging be prevented. Other countries do that well. We can too.

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By Robert King
Fierce Healthcare, October 13, 2020

Seema Verma, the head of the Centers for Medicare & Medicaid Services (CMS), said that some value-based care payment models did not generate enough savings and quality outcomes.

Her remarks Tuesday during HLTH’s virtual conference come a few weeks after other Trump administration officials reported mixed results for bundled payment models in producing savings. Verma did tout models that required providers to take on financial risk at a faster pace, potentially alluding to the direction CMS wants to steer value-based care models.

“I think the issue we have in value-based care is that many of our models unfortunately are not working the way we would like them to,” she said. “They are not producing the types of savings the taxpayers deserve.”

It has been a “very poor return in investment,” Verma added.

Verma also gave praise to CMS’ Pathways to Success model that overhauled the program managing accountable care organizations (ACOs).

Pathways required ACOs to take on financial risk at a shorter period than the Medicare Shared Savings Program created under the Obama administration. This meant that ACOs had to pay back Medicare if it did not meet certain savings targets.

“We are already seeing significant savings and increases in quality,” Verma said of Pathways, which started in 2019.

Verma said that CMS isn’t shying away from value-based care, but she hinted at what direction the next wave of payment models could entail.

“I think it is important for providers to have skin in the game,” she said. “Just having upside risk doesn’t really produce the type of savings and quality measures that we want to see.”

https://www.fiercehealthcare.com…

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Comment:

By Don McCanne, M.D.

The policy community still seems to be fixated on the rhetoric of paying for value instead of volume, as they continue to support value-based models such as ACOs. CMS administrator Seema Verma now concedes that value-based models have provided a “very poor return in investment.”

Verma, who is driven more by ideology than by health policy that is designed to serve patients first, is not exactly giving up on value-based care, but rather she is focusing on a model design “for providers to have skin in the game.” She wants value-based models that are designed for providers “to take on financial risk at a faster pace.” Instead of emphasizing upside risk that rewards providers with Medicare dollars, she is now emphasizing downside risk that penalizes providers who then have to return money to Medicare.

Verma has long supported consumer-driven health care that requires patients to assume greater risk when accessing health care, but now she also wants to transfer even more risk from the government to the providers of health care. Forget patient care; it really is about the money.

Lack of affordability is one of the greatest problems in health care today. Making health care even less affordable by transferring more risk to the patient, such as with increased deductibles and not paying for out-of-network providers, is the opposite of the direction in which we should be headed. Government programs are noted for their parsimonious payment policies, often paying less than costs of care, and thus shifting more risk to the providers can threaten especially the safety-net system – again, the wrong direction on policy.

Many decades ago Nobel laureate Kenneth Arrow explained why markets do not work in health care, and yet the wish-they-would-work ideologues keep pushing their concepts on us. Our insistence on using markets in health care, such as our heavy reliance on private health plans, has resulted in the most expensive health care system yet one of the poorest performing when considering the tens of millions with inadequate insurance or no insurance at all. Our very high spending with poor performance is proof that, in health care, the markets are not bringing us high quality at low cost.

If we had a single payer Medicare for All system, we wouldn’t have to rely on the marketplace to manage costs since the government would use patient-friendly and provider-friendly administered pricing. Those who still contend that the government can’t do it right have to recognize that all other wealthy nations are providing health care for essentially everyone at an average per capita cost of half of what we spend.

More “skin in the game” punishes those who already are suffering the burden of having medical disorders. Our health care financing system should be designed to help relive those burdens, not cause more.

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Centers for Medicare and Medicaid Services, October 9, 2020

Introduction

This report provides data on enrollment trends for people who purchased on- and off-Exchange individual market health insurance plans, both with and without federal advanced premium tax credit (APTC) subsidies. These data are based on an analysis of individual market plans that participated in the risk adjustment program established under section 1343 of the Patient Protection and Affordable Care Act (PPACA) and Health Insurance Exchange effectuated enrollment data. The data provided in this report include state-specific, average monthly enrollment covering plan years 2014 to 2019. Over that period, average monthly enrollment in the individual market—including both subsidized and unsubsidized enrollment—peaked in 2016, reaching 14.5 million. Enrollment then declined by 10 percent in 2017, 7 percent in 2018, and 3 percent in 2019. Enrollment among the unsubsidized, who do not receive APTC subsidies, saw a considerable decline of 9 percent from 2018 to 2019, compared to a decrease of 1 percent in APTC subsidized enrollment. From its peak in 2016, unsubsidized enrollment declined by 2.8 million people by 2019, a 45 percent drop nationwide. From 2016 to 2019, unsubsidized enrollment declined by more than 70 percent in Arizona, Georgia, Iowa, Missouri, Nebraska, New Hampshire, Oklahoma, Tennessee, and West Virginia.

Key Findings

This report provides data on individual health insurance market enrollment trends for people who purchase health insurance with (subsidized) and without (unsubsidized) advanced premium tax credits (APTC).

• From plan years 2016 to 2019, unsubsidized enrollment declined by 2.8 million people, representing a 45 percent drop nationally. At the state level, the percentage change in unsubsidized enrollment over this period ranged from a 4 percent drop in Rhode Island to a 90 percent drop in Iowa.
• The most recent year of enrollment data shows that average monthly enrollment across the individual market nationally decreased by 3 percent between 2018 and 2019.
• Eighty percent of the decrease in enrollment between 2018 and 2019 occurred among people who did not receive APTC subsidies. Unsubsidized enrollment declined by 9 percent, compared to only a 1 percent decrease in subsidized enrollment, from 2018 to 2019.
• Though unsubsidized enrollment continued to decline in 2019, the rate of decline was substantially lower than the 24 percent drop in 2018 and the 20 percent drop in 2017. This lower rate of decline occurred as premium rates leveled off in 2019, after increasing by double-digits in 2017 and 2018.
• Looking at state-level enrollment trends between 2016 and 2019 also shows the link between enrollment and premium trends. States with larger declines in unsubsidized enrollment tended to experience a larger increase in average premiums.
• Review of state-level data also shows that trends in declining enrollment began from 2015 to 2016 for 10 states. Declining enrollment occurred in 44 states from 2016 to 2017, 43 states from 2017 to 2018, and 39 states from 2018 to 2019.
• Average monthly enrollment in the subsidized portion of the market grew substantially in comparison to the unsubsidized market. The subsidized portion of the market was 140 percent larger than the unsubsidized portion in 2019, up from 122 percent larger in 2018 and 61 percent in 2017.

https://www.cms.gov…

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Comment:

By Don McCanne, M.D.

To no surprise, as premiums increased in the plans offered through the ACA exchanges, the enrollment by individuals who received no subsidies (advanced premium tax credits) declined by 45%. They found the premiums to be simply unaffordable.

In contrast, the percentage of enrollees who received subsidies increased dramatically (though the actual numbers enrolled didn’t increase much – see Figure 3 at link above). In 2015, the subsidized enrollment was 24% larger than the unsubsidized enrollment, whereas, by 2019, the subsidized enrollment had grown to 140% larger.

When it was decided to reject a universal public insurance program and instead enact an exchange (market) of private insurance plans to help fill the void in coverage, the authors of the legislation rejected the efficiency and effectiveness that had already been demonstrated in our Medicare program and instead relied on the fragmented and highly dysfunctional private insurance model – a model that has not served us well.

It is understandable why people would accept private insurance when the government is providing generous subsidies for its purchase. Likewise, it is also certainly understandable why the private plans would be rejected when the enrollees were required to pay the full unaffordable premiums. Why would they want to pay hard-earned money for a private plan that had unaffordable deductibles, limited provider networks, and wasteful, costly administrative excesses? A more pertinent question is why would Congress insist on offering such a defective model of health care financing when we could have an efficient, equitable, affordable, single payer Medicare for All program that includes everyone?

The near future looks grim. Both presidential candidates have rejected the single payer model, and the likely victor has suggested more of the same, with perhaps an increase in subsidies and the addition of a private-style option which has been mislabeled as Medicare.

Our clearly dysfunctional system is working poorly for too many of us and not at all for far too many more. Why would we simply want to throw more subsidies at it when all of us could have a far better deal through a single payer program of Medicare for All?

Joe Biden keeps saying to us, “Here’s the deal.”

It’s time for us to say, “No! Here’s the deal we demand.”

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By Joan Alker, Alexandra Corcoran
Georgetown University, Health Policy Institute, Center for Children and Families, October 8, 2020

Introduction

For many years, the United States was on a positive trajectory in reducing the number and rate of uninsured children; in 2016, the nation attained a historic low of 3.6 million uninsured children. This progress occurred as a result of expansions of public coverage—primarily Medicaid and the Children’s Health Insurance Program (CHIP)—and was accelerated by the implementation of the Affordable Care Act’s (ACA) major coverage expansions in 2014. As employer-sponsored insurance became increasingly unaffordable for dependents, public coverage ameliorated the impacts of private coverage losses for children. However, the number of uninsured children began to increase in 2017 as Medicaid enrollment began to decline and reached 4.4 million in 2019. This represents an increase of 726,000 children during this three-year period. The rate of uninsured children rose a full percentage point from 4.7 percent to 5.7 percent. Much of the gain in coverage that children made as a consequence of the ACA’s major coverage expansions has now been eliminated. Moreover, the most recent year of data (2018 to 2019) shows the biggest one-year loss in children’s coverage during this time period, with 320,000 more children becoming uninsured. These coverage losses occurred in a healthy economy with the lowest unemployment rate in decades prior to the economic shocks and job loss associated with the COVID-19 pandemic.

Key Findings

• After reaching a historic low of 4.7 percent in 2016, the child uninsured rate began to increase in 2017, and as of 2019 jumped back up to 5.7 percent. This increase of a full percentage point translates to approximately 726,000 more children without health insurance since the beginning of the Trump Administration when the number of uninsured children began to rise. Much of the gain in coverage that children made as a consequence of the Affordable Care Act’s major coverage expansions implemented in 2014 has now been eliminated.
• The number of uninsured children increased every year during the Trump Administration. The largest increase was observed between 2018 and 2019 when, despite a continued strong economy, the number of children without health insurance rose by 320,000. This increase in the number of uninsured children was the largest annual jump seen in more than a decade. Moreover, since this data was collected prior to the pandemic, the number of uninsured children is likely considerably higher in 2020, as families have lost their jobs and employer-sponsored insurance, though it is impossible to know yet by precisely how much.
• One-third of the total increase in the number of uninsured children from 2016 to 2019 live in Texas. The state saw by far the greatest coverage loss over the period with an estimated 243,000 more children living without health coverage. Florida has the next biggest loss, adding about 55,000 children to the uninsured count over the three-year period. As a consequence, 41 percent of children’s coverage losses during the Trump Administration occurred in Texas and Florida. Twenty-nine states experienced an adverse change for children from 2016 to 2019. The only state that bucked national trends and significantly reduced its number of uninsured children during this three-year time period was New York.
• These coverage losses were widespread across income, age, and race/ethnicity, but were largest among White and especially Latino children (who can be of any race).

https://ccf.georgetown.edu…

Full report:
https://ccf.georgetown.edu…

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Comment:

By Don McCanne, M.D.

There is a special place for children in the hearts of Americans. For the last half century an extra effort has been made to provide health care coverage for children, especially through the Medicaid and CHIP programs, but also through private plans through the ACA exchanges and employer-sponsored plans that also cover dependents.

However, the reluctance to support a universal national health program inevitably left many children without coverage. American style of health care reform – incremental patches – did have some effect in reducing but not eliminating the number of children uninsured, but this has changed during the last three years – not coincidentally the years of the Trump administration. An additional 726,000 children are now without health insurance (totaling 4.4 million in 2019), and that does not include more recent losses in coverage due to job loss during the Covid pandemic, due to the threat of the public charge rule against immigrants who are here legally, and due to increased administrative barriers to enrollment in the public programs. Apparently not all Americans hold in esteem children who represent the future of our nation. But it really is disconcerting to see some of our public stewards struggle to take health care away from children.

Think again about a single payer system of improved Medicare for All… health care… for everyone… for life… health care that is affordable for each of us. Imagine an America where each year we wouldn’t find ourselves compelled to count up the number of children uninsured due to the failure of our politicians to ensure health care for everyone who needs it. Yes, the uninsured children… think of them and what that represents, and then extrapolate that to the rest of us.

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