Category Archives: ACO

Those Damn Models Again – Health Care As An Experiment in Bait & Switch

Another shout out to Dr. McCanne, who posted today about a study sponsored by the AMA and conducted by RAND that basically said that alternative payment models (APM) are affecting physicians, their practices and hospitals.

Here is the RAND Summary with key findings:

RAND
October 24, 2018
Effects of Health Care Payment Models on Physician Practice in the United States
By Mark W. Friedberg, et al
This report, sponsored by the American Medical Association (AMA), describes how alternative payment models (APMs) affect physicians, physicians’ practices, and hospital systems in the United States and also provides updated data to the original 2014 study. Payment models discussed are core payment (fee for service, capitation, episode-based and bundled), supplementary payment (shared savings, pay for performance, retainer-based), and combined payment (medical homes and accountable care organizations). The effects of changes since 2014 in the Affordable Care Act (ACA) and of new alternative payment models (APMs), such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program (QPP), are also examined.
Key Findings
Payment models are changing at an accelerating pace
Physician practices, health systems, and consultants find it difficult to keep up with the proliferation of new models, with some calling for a “time out” to allow them to better adapt to current APMs.
Payment models are increasing in complexity
Alternative payment models have become increasingly complex since 2014. Practices that have invested in understanding complex APMs have found opportunities to earn financial awards for their preexisting quality — without materially changing patient care.
Risk aversion is more prominent among physician practices
Risk aversion among physician practices was more prominent. Risk-averse practices sought to avoid downside risk or to off-load downside risk to partners (e.g., hospitals and device manufacturers) when possible.
RAND press release

https://www.rand.org/news/press/2018/10/24.html

Here is the comment by Don McCanne:

There is much more here than a casual glance might imply. The search for value-based payment in health care, as opposed to paying for volume, has led to various payment models such as shared savings, accountable care organizations, bundled payments, pay for performance (P4P), medical homes, and other alternative payment models. How well is that working?
To date, most studies have been quite disappointing. Claims of cost savings are belied when considering the additional provider costs of information technology and human manpower devoted to these models, not to mention the high emotional cost of burnout. This RAND study shows that these models are increasing in complexity, making it difficult for the health delivery system to keep up. Even worse, they are inducing risk aversion. The health care providers are trying to avoid those who most need health care – the opposite of what our health care system should be delivering.
Much of the experimentation in delivery models has been centered around reward or punishment. But, as Alfie Kohn writes, “intrinsic motivation (wanting to do something for its own sake)… is the best predictor of high-quality achievement,” whereas “extrinsic motivation (for example, doing something in order to snag a goody)” can actually undermine intrinsic motivation. It has been observed by others that the personal satisfaction of achievement of patient health care goals is tremendously rewarding, whereas the token rewards based on meager quality measurements are often insulting because of the implication that somehow token payments are a greater motivator than fulfilling Hippocratic traditions. Even more insulting are the token penalties for falling on the wrong side of the bell curve simply as a result of making efforts to care for patients with greater medical or sociological difficulties.
Quoting Alfie Kohn again, “carrots or sticks… can never create a lasting commitment to an action or a value, and often they have exactly the opposite effect … contrary to hypothesis.” The RAND report suggests slowing down and working with these models some more while increasing investment in data management and analysis with the goal of increasing success with alternative payment models. No. These models are making things worse. It’s time to abandon them and get back with taking care of our patients. The payment model we need is an improved version of Medicare that takes care of everyone. Throw out the sticks and carrots.

 

But however we see it, from the point of view of carrots and sticks as not able to change behavior, or by introducing ever newer models of alternative payments, the end result is the same.

Health care suffers because of the wasteful, bureaucratic, and arbitrary imposition of models that only serve to make life for physicians and hospitals harder, and makes health care more expensive and complex.

As Dr. McCanne says above, throw out the carrots and the sticks. Get rid of the models that don’t work and go to a single payer system that is streamlined and less bureaucratic and arbitrary.

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Again, With the Models?

Today’s post from Don McCanne revives an old issue readers of this blog are familiar with — the introduction of new models or the revising of old models for value-based care such as Accountable Care Organizations (ACOs) and the Medicare Shared Savings Program.

CMS Administrator Seema Verma attempts to defend these models and gives an overview of a new proposal called “Pathways to Success.” Don’t you just love these cute names they give to future failures? Instead of scraping them altogether and going to single payer, they keep re-inventing a broken wheel.

At any rate, I am posting Verma’s article from Health Affairs blog, along with Kip Sullivan’s response, and lastly, Don McCanne’s brief comments on both. Enjoy!


Health Affairs Blog
August 9, 2018
Pathways To Success: A New Start For Medicare’s Accountable Care Organizations
By Seema Verma
For many years we have heard health care policymakers from both political parties opine about the need to move to a health care system that pays for the value of care delivered to patients, rather than the mere volume of services.
From the moment I became Administrator of the Centers for Medicare & Medicaid Services (CMS), I have been committed to using every tool at my disposal to move our health care system towards value-based care.
One set of value-based payment models that CMS has been closely reviewing are initiatives involving Accountable Care Organizations (ACOs).
In this post I will unpack key features of Medicare’s ACO initiatives and provide an overview of CMS’s new proposal for the Medicare Shared Savings Program, called “Pathways to Success.”
Upside-Only Versus Two-Sided ACOs
The majority of Medicare’s ACOs – 460 of the 561 or 82% of Shared Savings Program ACOs in 2018 – are in the upside-only “Track 1” of the Shared Savings Program, meaning that they share in savings but do not share in losses.  Currently, ACOs are allowed to remain in the one-sided track for up to six years.
The results show that ACOs that take on greater levels of risk show better results for cost and quality over time. (See Kip’s comments.)
The current combination of six years of upside-only risk, which involves bonus payments if spending is low but no risk of losses if spending goes up, along with the provision of waivers may be encouraging consolidation.  Such consolidation reduces choices for patients without controlling costs.  This is unacceptable.
The proposed changes included in Pathways to Success would shorten the maximum amount of time permitted in upside-only risk to allow a maximum of two years, or one year for ACOs identified as having previously participated in the Shared Savings Program under upside-only risk.
Streamlining the program, extending the length of agreements, and accelerating the transition to two-sided risk would result in reduced administrative burden and greater savings for patients and taxpayers.
Looking Forward
ACOs can be an important component of the move to a value-based system, but after six years of experience, the program must evolve to deliver value.  The time has come to put real “accountability” in Accountable Care Organizations.
—————————————————————————————————————————————–
The Health Care Blog
August 21, 2018
Seema Verma Hyperventilates About Tiny Differences Between ACOs Exposed to One-and Two-Sided Risk
By Kip Sullivan, JD
There is no meaningful difference between the performance of Medicare ACOs that accept only upside risk (the chance to make money) and ACOs that accept both up- and downside risk (the risk of losing money). But CMS’s administrator, Seema Verma, thinks otherwise. According to her, one-sided ACOs are raising Medicare’s costs while two-sided ACOs are saving “significant” amounts of money. She is so sure of this that she is altering the rules of the Medicare Shared Savings Program (MSSP). Currently only 18 percent of MSSP ACOs accept two-sided risk. That will change next year. According to a proposed rule CMS published on August 9, ACOs will have at most two years to participate in the MSSP exposed to upside risk only, and after that they must accept two-sided risk.
That same day, Verma published an essay on the Health Affairs blog in which she revealed, presumably unwittingly, how little evidence she has to support her decision. The data Verma published in that essay revealed that one-sided ACOs are raising Medicare’s costs by six-one-hundredths of a percent while two-sided ACOs are cutting Medicare’s costs by seven-tenths of a percent. Because these figures do not consider the expenses ACOs incur, and because the algorithms CMS uses to assign patients to ACOs and to calculate ACO expenditure targets and actual performance are so complex, this microscopic difference is meaningless.
As pathetic as these figures are, they fail to take into account ACO start-up and operating costs. CMS doesn’t know or care what those costs are. The only relevant information we have are some undocumented statements by the staff of the Medicare Payment Advisory Commission (MedPAC) to the effect that ACO overhead is about 2 percent of their benchmarks (their predicted spending). I suspect 2 percent is low, but let’s take it at face value and do the math. If, as Verna’s data indicates, two-sided ACOs save Medicare seven-tenths of a percent net (that is, considering both CMS’s shared-savings payments to some ACOs and penalties other ACOs that lose money pay to CMS), but these ACOs spend 2 percent doing whatever it is ACOs do, that means the average two-sided ACO is losing one percent.
The good news is that Verma may have hastened the demise of a program that isn’t working. Whether Congress ultimately pulls the plug on the ACO project will depend on whether ACO advocates will concede at some point that the ACO fad was based on faith, not evidence, and has failed to work. I predict they will refuse to admit failure and will instead peddle another equally ineffective solution, for example, overpaying ACOs (as the Medicare Advantage insurers and their predecessors have been for the last half-century). I base my prediction on the behavior of ACO advocates. The history of the ACO movement indicates ACO proponents don’t make decisions based on evidence.
Facing the Evidence
Evidence that the ACO project is failing is piling up. All three of CMS’s two-sided ACO programs – the PGP demo, the Pioneer demo, and the Next Generation program – saved only a few tenths of a percent, while CMS’s mostly two-sided program, the MSSP, raised costs by a smidgeon. All four programs have raised costs if we take into account the ACOs’ start-up and operating costs and CMS’s cost of administering these complex programs. Evidence indicting the other major “value-based payment” fads – medical homes, bundled payments, and pay-for-performance schemes – is also piling up. The simultaneous failure of all these fads to cut costs spells trouble ahead for the Affordable Care Act (because it relies on “value-based payment reforms” for cost containment), MACRA (because it also relies on “value-based payment” theology), and our entire health care system (because the big insurance companies and the major hospital-clinic chains are spending more money on “value-based payment” fads than those fads are saving, and because these 1,000-pound gorillas are using the establishment’s endorsement of ACOs, medical homes etc. as an excuse to become 2,000-pound gorillas).
The root cause of our nation’s chronic inability to adopt effective cost-containment policies is the chronic inability of the American health policy establishment to make decisions based on evidence, not groupthink. Seema Verma’s decision to bet the farm on two-sided-risk ACOs is the latest example of this problem.
——————————————————————————————————————————————
Comment by Don McCanne
We can thank Seema Verma for showing us that all of the talk about value-based payment – paying for value instead of volume through the establishment of accountable care organizations – was never really about value. Her insistence in shoving providers into downside risk reveals that it was always about reducing federal spending on Medicare. But that hasn’t changed her deceptive rhetoric about value and accountability.
Thank goodness we have astute analysts such as Kip Sullivan. The excerpts from his critique of Verma’s views as expressed in her Health Affairs Blog article should tempt you to read his entire critique at The Health Care Blog (link above).
The nonsense about ACOs has to go so we can get down to fixing the real problems with our health care financing system – the inequities, lack of universality, and lack of affordability for far too many individual patients. So let’s turn up the volume on a well designed, single payer, improved Medicare for all.

Physician practices seek help in transition to value-based care | Healthcare Dive

Follow-up to the last post and yesterday’s regarding CMS’ initiative for quality reporting.

See the link:

The report also found physicians are moving more toward independent and physician-led group practices after a six-year trend of doctors moving to hospitals.

Source: Physician practices seek help in transition to value-based care | Healthcare Dive

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.

_____________________________________

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.

_______________________________

† 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

_______________________________

*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.

What’s Really Wrong With Health Care?

Book Review

Health Care Under the Knife: Moving Beyond Capitalism for Our Health

by Howard Waitzkin and the Working Group on Health Beyond Capitalism

Monthly Review Press
e-book: $18.00
Paperback: $27.00
Hard cover: $45.00

Americans commemorated the assassination of Martin Luther King fifty years ago on Wednesday. Two years earlier, Dr. King, in March 1966, said the following during a press conference in Chicago at the second convention of the Medical Committee for Human Rights (MCHR):

“…Of all the forms of inequality, injustice in health is the most shocking and the most inhuman because it often results in physical death.”

The part of the quote up to the word ‘inhuman’ begins the Introduction of a new book I just began reading called, Health Care Under the Knife: Moving Beyond Capitalism for Our Health by Howard Waitzkin and the Working Group on Health Beyond Capitalism, published by Monthly Review Press, the publishing arm of the Monthly Review, an Independent Socialist magazine.

Those of you who know me, and those of you who have read many of my previous posts, know that my educational background is in the Social Sciences, as my B.A, is in Political Science and History, with Sociology and African-American Studies thrown in, along with some Humanities coursework. My M.A. is in History, with emphasis on American Social History, especially post-Civil War until the mid to late 20th century. In addition, I also have a Master’s degree in Health Administration (MHA).

But what you may not know is that my leanings have been to the far left, and I am still proudly and defiantly so, even if I have tempered my views with age and new insights. I think that is called wisdom.

So, as I set out to read this book, much of the material presented in it will not be new to me, but will be perhaps new to many of you, especially those of you who got their education in business schools, and were fed bourgeois nonsense about marketing, branding, and other capitalist terms that are more apropos for selling automobiles and appliances and such, but not for health care, as this book will prove.

In this book, there will be terms that many of you will either find annoying, depending on your own personal political leanings, or that you are unfamiliar with. Words such as alienation of labor, commodification, imperialism, neoliberalism, and proletarianization may make some of you see red. So be it. Change will not occur until many of you are shaken out of your lethargy and develop your class consciousness.

“Capital is reckless of the health or length of life of the laborer, unless under compulsion from society.” Karl Marx

While the publisher of the book is an independent socialist foundation, it is no means a Marxist or Communist organization. And from my perusal of the names of the contributors to the chapters of the book, I have found that they are all health care professionals or academics, as well as activists.

Two of the contributors of one chapter, David Himmelstein and Steffie Woolhandler, are familiar to many in the health care industry, as they have co-authored many peer reviewed articles in health care journals that I have cited in my previous blog posts.

Be warned. This book may piss you off. Too bad. The future of health care is at stake, as is the health of every man, woman, and child in the U.S. and around the world.

This will probably be true no matter what part of the health care industry you work in. Physicians, insurance company personnel, pharmaceutical company executives, Wall Street investors and money managers, service providers, vendors, consultants and many others will discover inconvenient truths about the businesses that provide their livelihood. As stakeholders in the status quo, you will be resistant to the prescriptions the writers offer for correcting the mistakes of the past, and the recommendations they suggest for the future of health care.

This book will not only be relevant to the health care industry, but also to the workers’ compensation and medical travel industries, as each is a subset of health care.

And if you do get upset or angry at me for what I have to say about health care, then you are part of the problem as to why health care in the U.S. is broken. Those of you around the world will also learn that your own countries are moving in a direction that sooner or later will result in your health care system mirroring our own, as the authors will point out.

This is a book that will shake you to your core. So, sit back, relax, and keep an open mind. It’s about to be blown.

The book is divided into five parts, with each part containing at most five chapters, as in Part Five, or two chapters, as in Part Two. Parts Three and Four, each contain four chapters. Part One deals with Social Class and Medical Work, and focuses on doctors as workers, the deprofessionalization and emerging social class position of health professionals, the degradation of medical labor and the meaning of quality in health care, and finally, the political economy of health reform.

Throughout the book, they ask questions relating to the topics covered in each chapter, and in Part One, the following questions are asked:

  • How have the social-class positions of health workers, both professional and non-professional, changed along with changes in the capitalist global economy?
  • How has the process of health work transformed as control over the means of production and conditions of the workplace has shifted from professionals to corporations?

These questions are relevant since medicine has become more corporatized, privatized, and financialized. The author of the second chapter, Matt Anderson, analyzes the “sorry state of U.S. primary care” and critically examines such recently misleading innovations such as the “patient-centered medical home”, “pay for performance”, the electronic medical record, quantified metrics to measure quality including patient satisfaction (“we strive for five”), and conflicts of interest as professional associations and medical schools receive increasing financial support from for-profit corporations.

Part One is concludes with Himmelstein and Woolhandler responding to a series of questions put to them by Howard Waitzkin about the changing nature of medical work and how that relates to the struggle for a non-capitalist model of a national health program. Himmelstein and Woolhandler comment on the commodification of health care, the transformation that has occurred during the current stage of capitalism, the changing class position of health professionals, and the impact of computerization and electronic medical records.

Part Two focuses on the medical-industrial complex in the age of financialization. Previous posts of mine this year and last, reference the medical-industrial complex, so my readers will be familiar with its usage here. In this section, the authors tackle the following questions:

  • What are the characteristics of the current “medical industrial complex,” and how have these changed under financialization and deepening monopolization?

Two corollary questions are raised as follows:

  • Are such traditional categories as the private insurance industry and pharmaceutical industry separable from the financial sector?
  • How do the current operations of those industries reflect increasing financialization and investment practices?

Once again, Matt Anderson authors the first chapter in Part Two, this time with Robb Burlage, a political economist and activist. Anderson and Burlage analyze the growing similarities and overlaps between the for-profit and so-called not-for-profit sectors in health care, considering especially the conversion of previously not-for-profit corporations such as Blue Cross and Blue Shield to for-profit.

The second chapter in Part Two is authored by Joel Lexchin, an emergency care physician and health policy researcher in Canada and analyzes monopoly capital and the pharmaceutical industry from an international perspective.

Part Three looks at the relationships between neoliberalism, health care and health. Before I go any further, let me provide the reader with a definition of neoliberalism in case the authors assume that those who read this book understand what it is.

According to Wikipedia, Neoliberalism or neo-liberalism 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.

These neoliberal policies have been associated in the U.S. with the Republican Party and the Conservative movement since the election of Ronald Reagan. In the UK, the rise of Thatcherism ended the long dominance of the Labor Party’s left-wing until Tony Blair’s New Labor took over. Bill Clinton’s election in the U.S. in 1992, diminished some of these policies, and implemented others such as welfare reform, a goal Republicans had wanted to achieve for decades.

Returning to Part Three, the questions asked here are:

  • What is the impact of neoliberalism on health reforms, in the United States and in other countries?
  • What are the ideological assumptions of health reform proposals and how are they transmitted?
  • What are the effects of economic austerity policies on health reform and what are the eventual impacts on health outcomes?

In the next chapter, Howard Waitzkin and Ida Hellander, a leading health policy researcher and activist, trace the history of the Affordable Care Act initially developed by economists in the military during the Vietnam War. International financial institutions, the authors say, especially the World Bank, promoted a boilerplate for neoliberal health care reforms, which focused mainly on privatization of services previously based in the public sector and on shifting trust funds to private for-profit insurance companies.

Colombia’s health reform of 1994, Hillary Clinton’s in that year as well, Mitt Romney’s plan in Massachusetts in 2006, which led to the ACA, are examples cited by the authors. The chapter also clarifies the ideological underpinnings of the neoliberal model and shows that the model has failed to improve access and control costs, according to the authors.

Economic austerity is closely linked to neoliberalism and have led to drastic cutbacks in health services and public health infrastructure in many countries. As I have recently written in my post, Three Strategies for Improving Social Determinants of Health, economic austerity policies have also affected health outcomes through increased unemployment, food insecurity, unreliable water supplies (Flint, MI), and reduced educational opportunities. Recent teacher protests in West Virginia, Oklahoma and other states are examples of this.

In the second chapter in Part Three, Adam Gaffney and Carles Muntaner, focus on social epidemiology, especially the impacts of economic policies on health and mental health outcomes. They also document the devastating effects of austerity in Europe, focusing on Greece, Spain and England. The authors analyze four dimensions of austerity:

1) constriction of the public-sector health system, 2) retreat from universalism, 3) increased cost sharing, and 4) health system privatization.

This trend would seem to have a negative effect on medical travel from Europe and to Europe, as Europe’s health care systems, long touted as a less expensive alternative to medical care in the U.S., begins to suffer.

Part Four examines the connections between health and imperialism historically and as part of the current crises. The question in this part is:

  • What are the connections among health care, public health, and imperialism, and how have these connections changed as resistance to imperialism has grow in the Global South?

The authors are referring to those countries in the Southern hemisphere from Africa, Asia, and Latin America as the Global South. The Global North refers to Europe and North America, and some other industrialized and advanced countries in the Northern hemisphere.

The authors in Part Four focus on the forces and institutions that have imposed a top-down reform of health care in the Global South. Such organizations as the Carnegie, Rockefeller, and Gates foundations, the World Bank and International Monetary Fund, trade agreements such as NAFTA, CAFTA, TPP, TiSA, and health organizations as the World Health Organization (WHO) and the Pan American Health Organization (PAHO) are all termed “philanthrocapitalism” by the authors, and have implemented policies that have weakened public health standards and favored private corporations.

The final part, Part Five focuses on the road ahead, i.e., the contours of change the authors foresee and the concrete actions that can contribute to a progressive transformation of capitalist health care and society.

The authors address these questions:

  • What examples provide inspiration about resistance to neoliberalism and construction of positive alternative models in the Global South?
  • Because improvements in health do not necessarily follow from improvements in health care, how do we achieve change in the social and environmental determinants of health?
  • How does progressive health and mental health reform address the ambiguous role of the state?
  • What is to be done as Obamacare and its successor or lack of successor under Trump fail in the United States?

Howard Waitzkin and Rebeca Jasso-Aguilar analyze a series of popular struggles that focused on the privatization of health services in El Salvador, water in Bolivia, as well as the ongoing struggle to expand public health services in Mexico. These struggles are activities David and Rebeca participated in during the past decade.

These scenarios demonstrate an image of diminishing tolerance among the world’s people for the imperial public health policies of the Global North and a demand for public health systems grounded in solidarity rather than profit.

In the U.S., the road ahead will involve intensified organizing to achieve the single-payer model of a national health program, one that will provide universal access and control costs by eliminating or reducing administrative waste, profiteering, and corporate control.

Gaffney, Himmelstein, and Woolhandler present the most recent revision of the single-payer proposal developed by Physicians for a National Health Program (PNHP). They analyze the three main ways that the interests of capital have encroached on U.S. health care since the original proposal:

1) the rise of for-profit managed care organizations (MCOs); 2) the emergence of high-deductible (“consumer-directed”) health insurance, and 3) the entrenchment of corporate ownership.

The authors offer a critique of Obamacare, explain and demystify innovations as Accountable Care Organizations, the consolidation and integration of health systems, something yours truly has discussed in earlier posts as they relate to workers’ comp, and the increasing share of costs for patients.

The next two chapters concern overcoming pathological normalcy and confronting the social and environmental determinants of health, respectively. Carl Ratner argues, that mental health under capitalism entails “pathological normalcy.” Day-to-day economic insecurities, violence, and lack of social solidarity generates a kind of false consciousness in which disoriented mental processes become a necessary facet of survival, and emotional health becomes a deviant and marginalized condition.

Such conditions of life as a polluted natural environment, a corrupt political system, an unequal hierarchy of social stratification, an unjust criminal justice system, violent living conditions due to access of guns, dangerous working conditions, and so forth, Ratner dissects as the well-known crises of our age in terms of the pathologies that have become seen as normal conditions of life.

Next, Muntaner and evolutionary biologist Rob Wallace show how social and environmental conditions have become more important determinants of health than access to care. They emphasize struggles that confront social determinants through changes in broad societal polices, analyze some key environmental determinants of health including unsafe water (Flint again), capitalist agribusiness practices, and deforestation in addition to climate change. And they refer to the impact these have on emergent and re-emergent infectious diseases such as Ebola, Zika and yellow fever.

Lastly, Waitzkin and Gaffney try to tackle the question of “what is to be done.” They outline four main priorities for action in the U.S. and other countries affected by the neoliberal, corporatized, and commodified model of health care during the age of Trump:

  • a sustained, broad-based movement for a single-payer national health program that assures universal access to care and drastically reduces the role of corporations and private profit, 2) an activated labor movement that this time includes a well-organized sub-movement of health professionals such as physicians, whose deteriorated social-class position and proletarianized conditions of medical practice have made them ripe for activism and change, 3) more emphasis on local and regional organizing at the level of communal organizations…and attempted in multiple countries as a central component in the revolutionary process of moving “beyond capital”, and 4) carefully confronting the role of political parties while recognizing the importance of labor or otherwise leftist parties in every country that has constructed a national health program, and understanding that the importance of party building goes far beyond electoral campaigns to more fundamental social transformation.

In their book, the authors try to answer key and previously unresolved questions and to offer some guidance on strategy and political action in the years ahead. They aim to inform future struggles for the transformation of capitalist societies, as well as the progressive reconstruction of health services and public health systems in the post-capitalist world.

Throughout this review, I have attempted to highlight the strengths of the book by touching upon some of the key points in each chapter.

If there is a weakness to the book, it is that despite the impressive credentials of the authors, they like many other authors of left-of-center books, cling to an economic determinism as part of their analysis, which is based on theories that are more than one hundred years old.

As I stated in the beginning of this review, my views have been tempered by examining and incorporating other theories into my consciousness. One theory that is missing here is Spiral Dynamics.

Spiral Dynamics is a bio-psycho-social model of human and social development. It was developed by bringing together the field of developmental psychology with evolutionary psychology and combines them with biology and sociology.

In Spiral Dynamics, biology is concerned with the development of the pathways of the brain as the adult human moves from lower order thinking to higher order thinking. The social aspect is concerned with the organizational structure formed at each stage along the spiral. For example, when an individual or a society is at the Beige vMeme, or Archaic level, their organization structure is survival bands, as seen in the figure below.

At the Purple vMeme, or Mythic level, the organizational structure is tribal, and so on. There is, among the authors of the book, an evolutionary biologist, but it is not clear if he is familiar with this theory and what it can bring into the discussion at hand.

It would not only benefit the authors, but also the readers to acquaint themselves of this valuable theory which would present an even more cogent argument for better health care. As the book concludes with a look at the future of health care after capitalism, knowing the vMemes or levels beyond current levels will enhance the struggle.

As I continue reading the book, I hope to gain greater insight into the problems with privatized, corporatized, free-market capitalist health care. My writings to date in my blog has given me some understanding of the issues, but I hope that the authors will further my understanding.

I believe that anyone who truly wants to see the U.S. follow other Western nations who have created a national health program, whether they are politicians like Bernie Sanders, his supporters, progressives, liberals, and yes, even some conservatives who in light of the numerous attempts to repeal and replace the ACA, have recognized that the only option left is single-payer. Even some business leaders have come out and said so.

I recommend this book to all health care professionals, business persons, labor leaders, politicians, and voters interested in moving beyond capital and realizing truly universal health care and lower costs.

 

Federal Spending Increased Due to Medicare ACO’s

Once again, a topic previously discussed here has raised its head.

This time, it is the Medicare Shared Savings Program (MSSP), Medicare’s largest alternative payment model (APM).

Readers of this blog will recall previous posts about this topic. The first, from September 2015, Shared Savings ACO Program Reaps the Most for Primary-care Physicians reported that primary-care physicians were benefiting the most from the shared savings.

The next post, Challenges Remain in Physician Payment Reform, which followed on the heels of the first, discussed the challenges that remained in reforming physician payment, after then President Barack Obama (the good ole’ days) signed the Medicare Access and CHIP Reauthorization Act (MACRA) back in April.

MACRA repealed the Sustainable Growth Rate (SGR) mechanism of updating fees to the Physician Fee Schedule (PFS), and had been blamed for causing instability and uncertainty among physicians for over a decade, and that led to 17 overrides of scheduled fee cuts, at a cost of over $ 150 billion.

In Models, Models, Have We Got Models!, I suggested, rather strongly that all these models were not living up to their promise and was only creating more complexity, confusion, and dysfunction in an already dysfunctional health care system.

A post from January 2017, Illogical!, reported on yet another asinine model introduction by CMS at the Health Care Payment Learning and Action Network (LAN) Fall Summit by Adminstrator Seema Verna.

So when I received an email today from Dr. Don McCanne, former president of the Physicians for a National Health Plan (PNHP) that mentioned a press release from Avalere Health indicating that Medicare ACO’s have increased federal spending despite projections that said they would produce net savings.

According to the press release, the Medicare Shared Savings Program (MSSP) has performed considerably below the financial estimates from the CBO that was made in 2010 when the MSSP was enacted as part of the ACA.

Avalere’s press release said that this has raised questions about the long-term success of Medicare’s largest alternative payment model (APM).

The MSSP has grown from 27 ACO’s in 2012 to 561 in 2016, and most of them continue to select the upside-only Track 1, the release continued, which does not require participants to repay CMS for spending above their target.

As seen in the figure below, Avalere’s research found that the actual ACO net savings have fallen short of initial CBO projectios by more than $2 billion.

However, in 2010, the CBO projected that the MSSP would produce $1.7 billion in net savings from 2013 to 2016. Yet, it actually increased federal spending by $384 million over that same period, a difference of more than $2 billion.

Josh Seidman, senior vice president at Avalere said, “The Medicare ACO program has not achieved the savings that CBO predicted because most ACO’s have chosen the bonus-only model.”

Avalere also found that while the MSSP was overall a net cost to VMS in 2016, there is evidence that individual ACO performance improves as they gain years of experience. Avalere found that MSSP ACO’s in their fourth year produce net savings to the federal budget totaling $152 million, as shown in the next figure.

Avalere’s analysis also showed that the downside-risk models in the MSSP experienced more positive financial results overall. This indicates that there is potential for greater savings over time to CMS as the number of downside-risk ACO’s increase.

The upside-only model increased federal spending by $444 million compared to the downside-risk ACO’s $60 million over 5 years.

“While data do suggest that more experienced ACO’s and those accepting two-sided risk may help the program to turn the corner in the future, the long-term sustainability of savings in the MSSP is unclear. ACO’s continue to be measured against their past performance, which makes it harder for successful ACO’s to continue to achieve savings over time,” said Avalere’s director, John Feore.

The weird part is that despite the MSSP increasing federal spending, ACO’s are still reducing spending compared to projected benchmarks.

If you are increasing spending, then how can you at the same time be reducing spending? Isn’t this a health care oxymoron?

Which brings me back to my previous posts. CMS is a clusterfudge of programs, models, rules, regulations, and schemes that have done nothing to improve the health care system in the US. In point of fact, it has only added to the confusion, complexity, dysfunction, and wastefulness of a system no other nation has.

When are we going to wake up from this nightmare and deep six the market-driven disaster that is the American health care system? There are saner alternatives, but we are so mentally ill and obsessed with profiting from people’s illnesses that nothing changes.

Einstein was right. The definition of crazy is doing the same thing over and over again and expecting different results. We are crazy to continue with this mess.

Illogical!

Picking up where I left off last week with my post, Regulation Strangulation, regarding too much regulation, a series of articles from earlier this week, published in various health care journals and magazines, discussed a new scheme the good folks at CMS have cooked up to make our health care “system” better. (Or worse, depending on whether you have drunk the kool-aid yet)

You may recall my post from late last year, Models, Models, Have We Got Models!, that reported that CMS was launching three new policies to continue the push toward value-based care, rewarding hospitals that work with physicians and other providers to avoid complications, prevent readmissions and speed recovery.

In that article, I mentioned the various models CMS was implementing. My view then, as it remains today, is that these models have not worked, and have only made matters worse, not better.

So when CMS unveiled their latest scheme recently when Administrator Seema Verma spoke at the Health Care Payment Learning and Action Network (LAN) Fall Summit, this is what she said:

The LAN offers a unique and important opportunity for payors, providers, and other stakeholders to work with CMS , in partnership, to develop innovative approaches to improving our health care system. Since 2015, the LAN has focused on working to shift away from a fee-for-service system that rewards volume instead of quality…We all agree that quality measures are a critical component of paying for value. But we also understand that there is a financial cost as well as an opportunity cost to reporting measures…That’s why we’re revising current quality measures across all programs to ensure that measure sets are streamlined, outcomes-based, and meaningful to doctors and patients…And, we’re announcing today our new comprehensive initiative, “Meaningful Measures.”

Let’s dissect her comments so we can understand just how complicated this so-called system has become.

  1. Develop innovative approaches? How’s that working for you?
  2. Improving our health care system? Really? What planet are you living on?
  3. Financial cost? Yeah, for those who can afford it.
  4. Revising current quality measures? Haven’t you done that already after all these years?
  5. “Meaningful Measures”. Now there’s a catchy phrase if I ever heard one. You mean they weren’t meaningful before?

You have to wonder what they are doing in Washington if this is the level of insanity and inanity coming out of the bureaucracy on top of our health care system.

In an article in Health Data Management, Jeff Smith, vice president of public policy for the American Medical Informatics Association stated the following regarding the new CMS initiative.

According to Smith, “the goals are laudable, but the talking points have been with us for several years’ now…measurement depends on agreed-upon definitions of quality, and in an electronic environment, it requires access to and use of computable data. If CMS is going to turn these talking points into reality, it will need to put forth far more resources and commit additional experts to a complete overhaul of electronic quality measures for value-based payments.”

Mr. Smith’s comments are at least an indication that not everyone goes along with CMS every time they unveil some new initiative, model, or program, but again we see the words associated with the consuming of health care being used in discussing the current state of affairs. Terms like “value-based payments”, and “quality measures”, and “financial/opportunity cost”, etc., only obscure the real problem with our health care system. It is a profit-driven system and not a patient-driven system.

Let’s push on.

A report mentioned Monday in Markets Insider showed that 29% of total US health care payments were tied to alternative payment models (APMs) in 2016, compared to 23% in 2015, an increase of six percentage points. These APMs were discussed previously in Models, Models, Have We Got Models!,

The report was issued by the LAN, and is the second year of the LAN APM Measurement Effort (try saying that three times fast). They captured actual health care spending in 2016 from four data sources, the LAN, America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association (BCBSA), and CMS across all segments, and categorized them to four categories of the original LAN APM Framework. (Boy, you must be tired trying to remember all these acronyms and titles!)

Here are their results:

  • 43% of health care dollars in Category 1 (traditional FFS or other legacy payments)
  • 28 % of health care dollars in Category 2 (pay-for-performance or care coordination fees)
  • 29% of health care dollars in a composite of Categories 3 and 4 (shared savings, shared risk, bundled payments, or population-based)

Speaking of shared savings, an article in Modern Healthcare reported that CMS’ Medicare shared savings program paid out more in bonuses to ACO’s than the savings those participants generated.

As per the report, about 56% of the 432 Medicare ACOs generated a total of $652 million in savings in 2016. CMS paid $691 million in bonuses to ACOs, resulting in a loss of $39 million from the program.

Chief Research Officer at Leavitt Partners, David Muhlestein said, “Medicare isn’t saving money.”

This is attributed to the fact that 95% of the Medicare ACOs (410) participated in Track 1 of the Medicare Shared Savings Program. Only 22% participated in tracks 2 and 3.

Two more articles go on to discuss a Medicare bundled-pay initiative and the Medicare Merit-based Payment System (MIPS) .

What does this all mean?

It has been long apparent to this observer that the American health care system is a failure through and through. Sure, there are great strides being made daily in new technology and therapies. A member of my family just benefited from one such innovation in cardiac care. But luckily, they have insurance from Medicare and a secondary payor.

But many do not, and not many can afford the second level of insurance. From my studies and my writing, I have seen a system that is totally out of whack due to the commercialization and commodification of health care services.

And knowing a little of other Western nations’ health care systems, I find it hard to believe that they are like this as well. We must change this and change this now.

If Medicare is losing money now, with the limited pool of beneficiaries, perhaps a larger pool, with little or no over-regulation and so many initiatives, models, and programs, can do a better job. Because what has been tried before isn’t working, and is getting worse.

The logical thing to do is to make a clean break with the past. Medicare for All, or something like it.