Monthly Archives: April 2018

Five and a half years

Yesterday marked five and a half years since I began the blog.

To date, it has been viewed in over 100+ countries and had over 33,600 views, as shown in the image here:

The areas in grey represent those countries that have not viewed my blog, and as you can see they are mostly in Africa and part of the Mideast, especially Iran (but you would expect that).

Of course, there are exceptions, such as Greenland and those islands to the east of Greenland. Oh, and there is one other island that has not had any views: Cuba. And one nation that has been in the news of late: North Korea.

Still, I am very happy and grateful for all the views, wherever they come from, but some have surprised even me. Take for instance, the Palestinian territories, China, Vietnam, and those in the northeast part of Africa. Even Saudi Arabia (do they know I am Jewish?)

Thank you all for the past five and a half years, and once again, I’d like to invite you to reach out to me whenever you want to discuss an article, or have something to add. I want to get to know my readers better.

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US Hospitals Seek Expansion in China

In case you missed it, the Wall Street Journal had the following article last week about American hospitals looking to expand oversees to China.

https://www.wsj.com/articles/overseas-markets-beckon-u-s-hospital-firms-hungry-to-expand-1524394800

 

 

CMS’s Price Transparency Trick

Shoutout to Promed Costa Rica for the following article posted today on Facebook.

http://www.modernhealthcare.com/article/20180425/NEWS/180429939?utm_source=modernhealthcare&utm_medium=email&utm_content=20180425-NEWS-180429939&utm_campaign=am

CMS has been for decades the crux of the problem with the American health care system, Every model, program and scheme they have implemented addresses only the symptoms, but not the cause of the disease the patient is suffering from.

As I wrote yesterday, and the week before in my review of Health Care under the Knife, the real cause of the complexity, confusion, dysfunction and overall failures of the health care system is the system itself — meaning the economic system that has proletarianized physicians, commodified, corporatized, financialized, and monopolized health care in this country.

So now, this talk of price transparency, when the cost of care is already too high compared to other Western nations, is just a placebo being administered to a dying patient — the American health care system.

Remember these words:

“America’s health care system is neither healthy, caring, nor a system.”

Walter Cronkite

Obamacare: The Last Stage of Neoliberal Health Reform

In my recent review of the Introduction to Health Care under the Knife, the term “neoliberalism” was discussed as one of the themes the authors explored in diagnosing the root causes of the failure of the American health care system.

For review, the term neoliberalism refers to a modern politico-economic theory favoring free trade, privatization, minimal government intervention in business, reduced public expenditure on social services, etc. (Source: Collins English Dictionary – Complete and Unabridged, 12th Edition 2014)

As defined in Wikipedia, and as I wrote in my review, neoliberalism refers primarily to the 20th-century resurgence of 19th-century ideas associated with laissez-faire economic liberalism. Those ideas include economic liberalization policies such as privatization, austerity, deregulation, free trade and reductions in government spending in order to increase the role of the private sector in the economy and society. These market-based ideas and the policies they inspired constitute a paradigm shift away from the post-war Keynesian consensus which lasted from 1945 to 1980.

This recrudescence or resurgence gained momentum with the election of Ronald Reagan to the presidency, and with the Republican takeover of the House of Representatives in the 1994 midterm election, which made Newt Gingrich Speaker of the House, and implemented the Contract with America. (I’ve called it the Contract on America, for obvious reasons)

Yet, the full impact of neoliberalism was not felt until the rise of the TEA Party in the run-up to the passage of the Affordable Care Act, or Obamacare, and that led to the Freedom Caucus in the House that has tried unsuccessfully multiple times to repeal and replace Obamacare with basically nothing.

Economist Said E. Dawlabani, in his book, MEMEnomics, describes the period from 1932 to 1980, which includes the post-war Keynesian consensus, as the second MEMEnomic cycle, or “Patriotic Prosperity” MEME. The current period, from 1980 to the present, represents the third MEMEnomic cycle, or the “Only Money Matters” MEME.

It is in this period that the American health care system underwent a radical transformation from what some used to call a “calling profession” to a full-fledged capitalist enterprise no different from any other industry. This recrudescence of 19th century economic policies did not spring forth in 1980 fully formed, but rather had existed sub-rosa in the consciousness of many American conservatives.

In the early 1970’s, Richard Nixon’s administration came up with the concept of the Managed Care Organizations, or MCOs, as the first real attempt to apply neoliberalism to health care. As we shall see, this would not be the first time that neoliberal ideas would be implemented into health care reform.

In Chapter Seven, of their book, Health Care under the Knife, authors Howard Waitzkin and Ida Hellander, discuss the origins of Obamacare and the beginnings of neoliberal health care reform. They point to the year 1994 as a significant one for reform worldwide, as Colombia enacted a national program of “managed competition” that was mandated and partially funded by the World Bank. This reform replaced their prior health system and was based mostly on public hospitals and clinics.

1994 was also the year when then First Lady, Hillary Clinton spearheaded a proposal like the one Colombia enacted that was designed by the insurance industry. I am sure you all remember the Harry and Sally commercials that ran on television that sank her proposal before it ever saw the light of day?

What ultimately became Obamacare was the plan implemented in 2006 in Massachusetts by Mitt Romney, but that was later disavowed when he ran for President in 2012. Waitzkin and Hellander write that even though these programs were framed to improve access for the poor and underserved, these initiatives facilitated the efforts of for-profit insurance companies providing “managed care.”

Insurance companies, they also said, profited by denying or delaying necessary care through strategies such as utilization review and preauthorization requirements; cost-sharing such as co-payments, deductibles, co-insurance, and pharmacy tiers; limiting access to only certain physicians; and frequent redesign of benefits.

These proposals, the authors state, fostered neoliberalism. They promoted competing for-profit private insurance corporations, programs and institutions based in the public sector were cut back, and possibly privatized. Government budgets for public-sector health care were cut, private corporations gained access to public trust funds, and public hospitals and clinics entered competition with private institutions, with budgets determined by demand rather than supply. Finally, prior global budgets for safety-net institutions were not guaranteed, and insurance executives made operational decisions about services, superseding the authority of physicians and other clinicians.

The roots of neoliberal health reform emerged from the Cold War military policy, and the authors cite economist Alain Enthoven providing much of the intellectual framework for those efforts. Enthoven was the Assistant Secretary of Defense under Robert S. McNamara during both the Kennedy and Johnson administrations. While he was at the Pentagon, between 1961 and 1969, he led a group of analysts who developed the “planning-programming-budgeting-system” (PPBS) and cost-benefit analysis, that intended to promote more cost-effective spending decisions for military expenditures. Enthoven became the principal architect, the authors indicate, of “managed competition”, which became the prevailing model for the Clinton, Romney, and Obama health care reforms, as well as the neoliberal reforms around the world.

The following table highlights the complementary themes in the military PPBS and managed competition in health care.

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Sources: See note 11, page 273.

Enthoven continued to campaign for his idea throughout the 1970s and 1980s and collaborated with managed care and insurance executives to refine the proposal after being rejected by the Carter administration. The group that met in Jackson Hole, Wyoming, which included Enthoven and Paul Ellwood, was funded by the five largest insurance corporations, as well as the 1992 Clinton presidential campaign, and wife Hillary’s Health Security Act.

The authors state that Barack Obama, while a state legislator in Illinois, favored a single payer approach, but changed his position as a presidential candidate. In 2008, he received the largest financial contributions in history from the insurance industry, that was three times more the contributions of his rival, John McCain.

The neoliberal health agenda, the authors write, including Obamacare, emerged as one component of a worldwide agenda developed by the World Bank, the International Monetary Fund, and other international financial institutions. The agenda to promote market-driven health care, facilitated access to public-sector health and social security trust funds by multinational corporations, according to Waitzkin and Hellander. The various attempts in the US by the Republican Party to privatize Social Security is an example of this agenda.

An underlying ideology claimed that corporate executives could achieve superior quality and efficiency by “managing” medical services in the marketplace, but without any evidence to support it, the authors contend. Health reform proposals from different countries have resembled one another closely and conform to a cookie-cutter template. Table 2 describes the six features of nearly all neoliberal reform initiatives.

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† Sources: patients, employers, public sector trust (“solidarity”) funds (the latter being “contributory” for employed workers, and “subsidized” for low income and unemployed).
‡ Sources: patients, public sector trust funds – Medicaid, Medicare.

The six features of neoliberal health reform are as follows:

  1. Organizations of providers – large, privately controlled organizations of health care providers, operate under direct control or strong influence of private insurance corporations, in collaboration with hospitals and health systems, may employ health care providers directly, or may contract with providers in a preferred network. In Obamacare, they are called Accountable Care Organizations (ACOs), supported only in Medicare, but Obamacare accelerated organizational consolidation in anticipation of broader implementation.

In this model, for-profit managed care organizations (MCOs) offer health plans competitively. In reality, competition is restrained by the small number of organizations large enough to meet the new laws’ financial and infrastructure requirements, as well as by the consolidation in the private insurance industry. They contract with or employ large numbers of health practitioners. Instead, physicians and hospitals are absorbed into MCOs.

  1. Organizations of purchasers – large organizations purchasing or facilitating the purchase of private health insurance, usually through MCOs. Under Obamacare, the federal and state health insurance “exchanges”—later renamed “marketplaces” to reflect reality of private, government-subsidized corporations—fulfill a similar role.
  2. Constriction of public hospitals and safety net providers – public hospitals at the state, county, or municipal levels compete for patients covered under public programs like Medicaid or Medicare with private, for-profit hospitals participating as subsidiaries or contractors of insurance companies or MCOs. With less public-sector funding, public hospitals reduce services and programs, and many eventually close. Under Obamacare, multiple public hospitals have closed or have remained on the brink of closure. Note: This is a subject I have written about in prior posts about Medicaid expansion.
  3. Tiered benefits packages – defined in hierarchical terms, minimum package of benefits viewed as essential, individuals and employers can buy additional coverage, poor and near poor in Medicaid eligible for benefits that used to be free of cost-sharing, but since Obamacare passed, states have imposed premiums and co-payments. Under Obamacare, various metal names—bronze, silver, gold, platinum, identify tiers of coverage, where bronze represents the lowest tier and platinum the highest.
  4. Complex multi-payer and multi-payment financing – financial flows under neoliberal health policies are complex (see Chart 7.1). There are four sources of these various financial flows.
    1. Outflow of payments – each insured person considered a “head” for whom a “capitation” must be paid to an insurance company or MCO.
    2. Inflow of funds – funds for capitation payments come from several sources. Premiums paid by workers and their families, contributions from employers is a second source. Public-sector trust funds are a third source, co-payments and deductibles constitute a fourth source, and taxes are a fifth source.
  5. Changes in the tax code – neoliberal reforms usually lead to higher taxes because they increase administrative costs and profits, Obamacare reduces tax deductions and imposes a tax for so-called Cadillac insurance plans. In addition, it calls for penalties for those who do not purchase mandatory coverage, administered by the IRS. I was unable to get on the ACA because I had not filed a return in several years due to long-term unemployment because of the financial collapse of 2007/2008, and the subsequent jobless recovery.

Chart 7.1 Financial Flows under Neoliberal Health Reform

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*Purchase of insurance policies for employers and patients mediated by large organizations of health care purchasers.

What is the outlook for single payer in the US, the authors ask?

They cite national polls that show that about two-thirds of people in the US favor single payer. See Joe Paduda’s post here.

If the US were to adopt single payer, the PNHP proposal would provide coverage for all needed services universally, including medications and long-term care, no out-of-pocket premiums, co-payments, or deductibles; costs would be controlled by “monopsony” financing from a single, public source, would not permit competing private insurance and would eliminate multiple tiers of care for different income groups; practitioners and clinics would be paid predetermined fees for services without and need for costly billing procedures; hospitals would negotiate an annual global budget for all operating costs, for-profit, investor-owned facilities would be prohibited from participating; most nonprofit hospitals would remain privately owned, capital purchases and expansion would be budgeted separately, based on regional health-planning goals.

Funding sources would include, they add, would include current federal spending for Medicare and Medicaid, a payroll tax on private businesses less than what businesses currently pay for coverage, an income tax on households, with a surtax on high incomes and capital gains, a small tax of stock transactions, while state and local taxes for health care would be eliminated.

From the viewpoint of corporations, the insurance and financial sectors would lose a major source of capital accumulation, other large and small businesses would experience a stabilization or reduction in health care costs. Years ago, when I first considered single payer, I realized that if employers no longer had to pay for health care for their employees, they could use those funds to employ more workers and thus limit the impact of recessions and jobless recoveries.

So how do we move to single payer and beyond?

According to the authors, and to this reporter, the coming failure of Obamacare will become a moment of transition in the US, where neoliberalism has come home to roost. This transition is not just limited to health care. The theory of Spiral Dynamics, of which I have written about in the past, predicts that at the final stage of the first tier, or Existence tier, the US currently occupies, there will be a leap to the next stage or tier, that being the Being tier, where all the previous value systems have been transcended and included into the value systems of the Being tier.

We will need to address, the authors contend, with the shifting social class position of health professionals and to the increasingly oligopolistic and financialized character of the health insurance industry. The transition beyond Obamacare, they point out, will need to address also the consolidation of large health systems. Obamacare has increased the flow of capitated public and private funds into the insurance industry and extended the overall financialization of the global economy.

The authors conclude the chapter by declaring that as neoliberalism draws to a close, and as Obamacare fails, a much more fundamental transformation needs to reshape not just health care, but also the capitalist state and society.

To sum it all up, all the attempts cure the ills of health care by treating the symptoms and not the cause of the disease will not only fail, but is only making the disease worse, and the patient getting sicker. We need radical intervention before the patient succumbs to the greed and avarice of Wall Street, big business, and those whose stake in the status quo is to blame for the condition the patient is in in the first place.

Therefore, Obamacare is the last stage of neoliberal health care reform.

Single Payer Inevitable

You can ignore Bernie Sanders, you can ignore the progressives in the Democratic Party, but you can’t ignore my fellow blogger, Joe Paduda, who this morning posted the following article:

https://www.joepaduda.com/2018/04/25/single-payer-is-inevitable/#comment-7587

In-bound Medical Travel and Immigration

U.S. Domestic Medical Travel.com published the following article this morning that discusses the impact of in-bound medical travel on an individual’s immigration status.

http://medicaltraveltoday.com/spotlight-renata-castro-founder-of-castro-legal-group/

ACO’s Across the Pond: What Some Believe the US and England Can Learn From Each Other

It is amazing how experts in the field of health care are so wedded to ideas that are, with greater scrutiny, the real cause of the dysfunction and failures of providing health care to the citizens of a nation.

Such is the case with an article I found from the Commonwealth Fund, a well-respected organization in health care research, yet doubles down on the root causes of the crisis faced by the health care system in the US.

Late last month, Briggs, Alderwick, Shortell, and Fisher published the article entitled, “What Can the U.S. and England Learn from Each Other’s Health Care Reforms?

The focus of the article was on the idea of Affordable Care Organizations (ACO’s), which in the US were established in 2010 under the ACA. According to the authors, both countries are currently working toward better integrating health services, improving population health, and managing health care costs. They also said that both countries are developing their own versions of ACO’s to achieve these aims.

However, the authors point out, by way of listing previous links to articles they wrote, that results so far have been mixed, patient experience (you mean like having a great time at Disney World, that sort of experience?) and some quality measures have improved.

Yet, financial savings, they report, have been modest and data on outcomes is limited.

On the other hand, across the pond, the English NHS recently created 44 Sustainability and Transformation Partnerships (STPs) [Isn’t that what one puts in a motor car to make it run better?]

These STPs cover the entire country and are “place-based” partnerships of all NHS organizations and local government departments that purchase and provide health and long-term care services for a geographically defined population. They believe that organizations in STPs will work together to improve care and manage local budgets. Some payers are even considering American-style ACO contracting models.

Wait, if we are not having success with ACOs, what makes the Brits think they will do better? Interestingly enough, Himmelstein and Woolhandler, in “Health Care Under the Knife”, chapter 4, page 61, said the following when they were involved with drafting an new proposal for the Physicians for a National Health Program (PNHP):

“Recently, the emergence of huge integrated health systems incorporating multiple hospitals and thousands of physicians (so-called Accountable Care Organizations or ACOs), which dominate the care of entire regions, is causing us to again to talk about NHS models.”

So let me get this straight. We are not having much success with ACOs, yet, the Brits are moving in that direction. And the physician-led advocacy group in this country, the PNHP, that is pushing for single-payer, has been forced to consider models employed by the British NHS.

If that isn’t the definition of insanity, I don’t know what is.

Of course, the move towards ACOs in this country is due to the ACA and to the resurgence of 19th century economic liberalism, also known as neoliberalism, and its impact over the past thirty years on the American health care system. But in the UK, the move away from Labour Party socialism to the Conservative Party’s neoliberalism, is the reason why Britain is exploring the ACO model.

Maybe one day, both Anglo-oriented nations will wake up and stop believing in the fairy tale that the free market works for health care. It does for cars and other consumer goods, but health care is not a consumer good. It is a necessity of life.