Category Archives: Costs

COVID-19 and the End of the Neoliberal Era in Health Care

The subject of neoliberalism has been discussed in this blog five times between 2018 and 2019, and is the focus of an article in The Milbank Quarterly, by John E. McDonough, professor of public health practice at Harvard’s TH Chan School of Public Health.

In the article, Professor McDonough points to a Commonwealth Fund chart (see below) that shows the growth in gross domestic product (GDP) for health care, comparing the US to 10 other high income nations. The chart shows that from 1980 to 2018, spending by the US was among the highest 40 years ago, but that in the early 1980s, US spending leapt above the others. and growing wider over four decades.

 

He then asks, “what happened to US health care in the early 1980s-and since then?”

McDonough responds by pointing to two New York Times columns by Austin Frakt, Medical Mystery: Something Happened to U.S. Health Care Spending After 1980 and Reagan, Deregulation and America’s Exceptional Rise In Health Care Costs.

McDonough suggested that a big part of the answer involves the broad economic and political trade winds of the late 1970s and 1980s, often called “Reaganomics” or “supply-side economics”, because Reagan ushered in a new era in the US. Some, like George H. W. Bush, running for President in 1980 for the Republican nomination, called it “voodoo economics.” However. as McDonough states, and as my previous posts on the subject calls it, it is “neoliberalism.”

This term evokes Adam Smith, but the 20th century version owes itself more to the works of Friedrich Hayek and Milton Friedman, among others. According to McDonough, the neoliberal agenda consists of cutting taxes, repealing regulations, shrinking or privatizing government (remember Grover Norquist’s desire to shrink government to fit in his bathtub and strangle it), suppressing labor, encouraging free-market trade, accepting inequality as price for economic freedom (something that has come under fire this year and since the 2016 election, making people receiving services and benefits pay as much as possible, and reorienting corporate thinking and behavior to promote return on equity as their only goal.

The New Deal era that was replaced by neoliberalism, McDonough states, lasted 48 years, from 1933 to Reagan’s inauguration in 1981. The neoliberal era, he points out, is 40 years old and showing signs of rust, cracks, and failing systems. Signs of this are Trump’s war on trade, deficit-exploding tax cuts for the wealthy and corporations,, anger over “deaths of despair” from opioid and other addictions and economic distress, awareness and revulsion about rising levels of inequality across society, and spreading rejection of absolutist “shareholder capitalism.”

In addition, recent protests over the deaths of African-American males at the hands of police, coupled with the Corona virus pandemic, are all signs that something is terribly wrong.

But what about health care, McDonough asks again?

Reiterating what he said above, US health care between 1980 and 2020 saw spending rise far above US economic growth, while growth in insurance premiums and cost-sharing increased well beyond advances in household incomes. On key indicators, he reports, the US performs worse than most nations on life expectancy, infant and maternal mortality, chronic disease mortality, levels of overweight and obesity, suicides, and gun violence, as well as glaring systemic health inequalities, as has been discussed during the BLM protests as one factor in people taking to the streets.

Despite the advances in technology and high spending, Americans give their system the lowest satisfaction ratings.

Yet, between 1965 and the 1980s, major infusions of investor capital has gone to all corners of our health care system, courtesy of shareholder-owned for-profit companies who often cut long-lasting ties with local communities, according to McDonough. It did not help that in 1986, the Institutes of Medicine, instead of convicting for-profits of “killing” health care, released a 600 page report on “For-Profit Enterprises in Health Care, that identified pluses and minuses that called for greater monitoring.

Finally, McDonough concludes that the US need to look outward, not inward, as is usually the case to solve big problems with health care. One such study, in 2018 from the William and Flora Hewlett Foundation, Beyond Neoliberalism, is a clarion call for a new policy sphere forming in think tanks, academia, advocacy and activist groups, and the legal community, as well as some Republican/conservative quarters as Marco Rubio, who rejects shareholder primacy. He says the search is on for a new paradigm, and hopes the election in November will bring it forth.

He doesn’t have to look far. Bernie Sanders, Elizabeth Warren, the PHNP, and others have the paradigm. It is Medicare for All/Single Payer. But first we have to rid ourselves of the baboon in the Oval Office and his economic minions, Mnuchin the Mieskeit, and Kudlow the Meshuggeneh.

Stay safe everyone.

The Further Adventures of Ashley Furniture in Medical Travel

Readers of this blog will remember two previous articles I linked to back in October 2017 and November 2017 about the Ashley Furniture Company’s foray into Medical Travel.

Now comes a new article, courtesy of Kaiser Health News, that shows just how American patients are saving money by having surgery in Cancun, Mexico for procedures such as knee surgery (are you listening, Workers’ Compsters?)

Not only are the patients traveling to Cancun, but so are the physicians from the US.  As pictured below, Donna Ferguson, the wife of one of Ashley’s employees, is shown in the hospital in Cancun, along with her doctors, one of whom will be performing knee replacement surgery. As stated in the article, all she had to do was walk out of her hotel, and into the Galenia Hospital through a short hallway.

Donna Ferguson, center, of Ecru, Miss., had no contact with Milwaukee surgeon Dr. Thomas Parisi, left, before meeting him in Cancun the day before he performed her knee replacement surgery. (Rocco Saint-Mleux for KHN)

Donna’s surgeon, Dr. Thomas Parisi, from Milwaukee, had flown to Cancun the day before. To get this surgery, which she was getting for free, she would also receive a check when she got home. (I’ve said this before, but you never listened)

According to the article, the employees of Ashley receive a $5,000 payment from the company, and all their travel costs are covered. They use this option because they have no out-of-pocket copayments or deductibles, so it made financial sense for both a highly trained orthopedist and a patient from Mississippi to leave the US and meet at an upscale Mexican hospital. (Let’s see Trump try to built a wall to stop that!)

Dr. Parisi spent less than 24 hours in Cancun, so no one could accuse him of slacking off to play golf, and was paid $2,700, which as the article stated, was three times what he would have gotten from Medicare. The cost of the surgery for Ashley was less than half of what it would have been in the US.

To understand better, just why Ashley is doing this for their employees and their families, let’s look at what the average knee replacement would cost in the US: about $30,000 — sometimes double or triple that; whereas in Mexico, at Galenia, it was only $12,000. according to Dr. Gabriela Flores Teón, the hospital’s medical director.

The standard charge for the night at Galenia is $300, compared to an average of $2,000 at US hospitals, said Dr. Flores.

But besides the big savings on the surgery, there was also savings on the cost of the medical device, made by a subsidiary of the Band-Aid people, J&J, in New Jersey. The implant cost $3,500 in Mexico, but nearly $8,000 in the US, Flores continued.

In case you WC hotshots were wondering, Galenia Hospital is not some fleabag hospital on the cheap. It is accredited by the international affiliation of the Joint Commission (JCI). They set the standards for hospitals in the US.

However, so that doctors and patients could feel comfortable with surgery, NASH (North American Speciality Hospital) based in Denver, and who has organized treatment for dozens of American patients at Galenia since 2017, along with Galenia, worked to go beyond those standards.

In the two SPOTLIGHT articles referenced above, the manager of global benefits and health at Ashley, Marcus Gagnon said, “We’ve had an overwhelming positive reaction from employees who have gone,”

The company has also sent about 140 employees or dependents for treatments at a hospital in Costa Rica, and together, the foreign medical facilities have saved Ashley $3.2 million in health care costs, said Gagnon. (Wake up, you WC guys! Why are you being so stubborn?)

Gagnon continued, “Even after the incentive payments and travel expenses, we still save about half the cost of paying for care in the United States,” “It’s been a nice option — not a magic bullet — but a nice option.”

So, if Ashley can do it, and if HSM could do it too, the so could you. Not all the hospitals outside of the US are fleabags. Galenia in Cancun is one example. Bumrungrad in Thailand is another, and there are plenty more around the world that cater to medical travel.

The whole point of my advocacy for medical travel and workers’ comp was so that American workers and their dependents like Donna could travel abroad and see what the world is really like, so that political, hate-filled rallies and incidents we are seeing everyday since the election of a white supremacist to the presidency, would not take place.

How else will the American worker learn about the real world beyond his borders if not this way? Certainly not from Fox News.

“Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.”

― Mark Twain, The Innocents Abroad / Roughing It

 

Opinion | Universal Health Care Might Cost You Less Than You Think – The New York Times

Today’s New York Times Opinion piece on universal health care is a timely one, given the attempts by the medical-industrial complex and their allies to derail any move towards health care for all. It is even more important now that the 2020 Democratic primary campaign is gaining momentum.

Medical Mystery: Something Happened to the U.S. Health System After 1980 | The Incidental Economist

Good morning all. While perusing my LinkedIn feed, I found this article from May of last year, and thought it would be a perfect addition to the series of articles posted last week about Medicare for All/Single Payer, and why opposition to it is more harmful than the alleged or imagined fear-mongering we are seeing from many quarters.

This is especially significant in light of my post last week, Health Care Is Not a Market, and as the article below suggests, the US health care system diverged exactly at the time of the election of Ronald Reagan in 1980, and the introduction of pro-market forces, supply-side economics.

So it is no coincidence that as Austin Frakt writes, that prices went up, while health outcomes went down, and that socioeconomic status and other social factors exert larger influences on longevity.

Here is the article:

The following originally appeared on The Upshot (copyright 2018, The New York Times Company). Research for this piece was supported by the Laura and John Arnold Foundation.

Source: Medical Mystery: Something Happened to the U.S. Health System After 1980 | The Incidental Economist

National Health Expenditure Projections, 2018–27: Economic And Demographic Trends Drive Spending And Enrollment Growth | Health Affairs

Health Affairs.com published the following research article yesterday projecting national health expenditures from 2018 to 2027.

According to the article, national health expenditures are projected to grow at an average annual rate of 5.5 percent for 2018–27 and represent 19.4 percent of gross domestic product in 2027.

In addition, spending growth during 2018–27 is expected to be driven primarily by long-observed demographic and economic factors fundamental to the health sector.

Prices for health care goods and services are projected to grow 2.5 percent per year, on average, for 2018–27—faster than the average price growth experienced over the last decade—and to account for nearly half of projected personal health care spending growth.

Average annual spending growth in Medicare (7.4 percent) is expected to exceed that in Medicaid (5.5 percent) and private health insurance (4.8 percent) over the projection period, mostly as a result of comparatively higher projected enrollment growth, according to the article abstract.

And finally, the insured share of the population is expected to remain stable at around 90 percent throughout the period, as net gains in health coverage from all sources are projected to keep pace with population growth.

Yet, Don McCanne states in his comment, that the authors anticipate that a decade from now we will still have tens of millions uninsured.

So, it is vital that we continue to push to enact Single Payer/Medicare for All, and bring down the cost of health care, and the increases in spending that the current broken for-profit system generates.

Here is the link to the abstract and article:

Research Article Health Affairs Vol.0 No.0 National Health Expenditure Projections, 2018–27: Economic And Demographic Trends Drive Spending And Enrollment Growth

Source: National Health Expenditure Projections, 2018–27: Economic And Demographic Trends Drive Spending And Enrollment Growth | Health Affairs

And here is the link to another article from Healthcare Dive.com that summarizes what Health Affairs.com’s article discusses:

https://www.healthcaredive.com/news/us-healthcare-spending-growth-to-hit-55-by-2027-cms-predicts/548795/

Could Medicare for All Solve the healthcare cost problem? – Managed Care Matters

Following on the heels of yesterday’s post from Joe, today’s post covers the cost of healthcare, and what Medicare for All could do to solve it.

Recently, two billionaires, Former NY Mayor Michael Bloomberg and former barista-in-chief Howard Schultz have both said that the US cannot afford Medicare for All/Single Payer health care.

But if we look at Joe’s article, and his subsequent ones later this week, can we afford not to?

You decide.

Here’s Joe’s article:

This week we are unpacking Single Payer/Medicare for All to better understand the many variations of SP/MFA and now they are different, how those variations might work, and whether some version is a) politically viable and b) would solve the … Continue reading Could Medicare for All Solve the healthcare cost problem?

Source: Could Medicare for All Solve the healthcare cost problem? – Managed Care Matters

Prices — not use — drive higher healthcare costs, HCCI says | Healthcare Dive

The following article from Healthcare Dive is in line with other recent articles on the subject of health care costs and spending. And if that is true, then perhaps going to a more equitable, more inclusive and expanded single payer system that has been proven to provide lower costs and better quality is the right way to fix our expensive and broken health care system.

Prices are increasing for the sole purpose of squeezing more and more profit out of a system that should not be guided by supply and demand laws, but rather out of the idea that all citizens need health care at some point, so it should be available to them without having to go bankrupt, or to defer paying bills, or forgoing care altogether.

Anyway, here is the Healthcare Dive article:

Inpatient utilization dropped, but higher prices increased inpatient spending by 10% between 2013 and 2017. Meanwhile, outpatient surgery prices and higher emergency room use and prices led to more outpatient costs.

Source: Prices — not use — drive higher healthcare costs, HCCI says | Healthcare Dive

Low Wage Workers Pay More For Health Care Than High Wage Workers « Workers Comp Insider

Tom Lynch, of LynchRyan, posted this last week, but due to a technical error, it did not reach his audience. This article should be cited by anyone who encounters libertarian know-it-all’s on the Internet who put the blame of our expensive health care system on such individuals as lawyers, as one such person I recently debated. Also, the chart from the OECD should be cited over and over again when defending the subject of improved Medicare for All single payer health care. However, Tom does not support Medicare for All, which is understandable, but not a viable position given the overwhelming support it has among many Americans.

Here is Tom’s article:

Anyone who can rub two brain cells together knows America spends more, much more, on health care than any other developed nation, as this chart from the Organization for Economic and Cooperative De…

Source: Low Wage Workers Pay More For Health Care Than High Wage Workers « Workers Comp Insider

Health Insurance Costs Accelerating for Workers | HealthLeaders Media

This is a follow-up to my previous post, Health Care Costs Rising for Workers. My post then cited a Kaiser study; this article references the University of Minnesota’s State Health Access Data Assistance Center.

On Monday, I reported that there is an effort underway to discredit the move towards single payer by various groups, and even Howard Schultz, the outgoing Chairman of Starbucks said the following back in June:

“It concerns me that so many voices within the Democratic Party are going so far to the left. I say to myself, ‘How are we going to pay for these things,’ in terms of things like single payer [and] people espousing the fact that the government is going to give everyone a job. I don’t think that’s something realistic. I think we got to get away from these falsehoods and start talking about the truth and not false promises.”

So, if these two studies are accurate, and there is no way to prove they aren’t, then both Mr. Schultz and the various groups attempting to derail single payer, are only going to make things worse for workers, and for everyone else.

Oh, and by the way, there have been studies that indicated that we could afford single payer health care, especially a report sponsored by a Koch Brothers backed think tank, Mercatus.

So, consider the following from this Health Leaders article back in October of this year.

The average premium for employer-sponsored plans rose $267, or 4.4% between 2016 and 2017, which is twice the increase recorded between 2015 and 2016.

Source: Health Insurance Costs Accelerating for Workers | HealthLeaders Media

At the Bottom: A Work Comp Perspective on the Need for Single Payer

It is rare when someone from the work comp blogosphere crosses into health care and advocates that the US learn from other countries that have universal health care, in whatever form it takes in those countries.

Tom Lynch of Lynch Ryan’s Workers’ Comp Insider blog, did just that with a very detailed analysis of the US health care system compared to that of other Organization for Economic and Cooperative Development (OECD) countries.

Here is Tom’s article:

What does a nation owe its citizens with respect to health care?

For nearly all members of the Organization for Economic and Cooperative Development (OECD), the answer is guaranteed, high-quality, universal care at reasonable, affordable cost. For OECD founding member America, the answer seems to have become an opportunity to access care, which may or may not be of high-quality at indeterminate, wildly fluctuating and geographically varying cost.

It is indisputable that the US devotes more of its GDP to health care than other countries. How much more? For that answer we can turn to many sources, roughly all saying the same thing. The OECD produces annual date, as does the World Health Organization, among others. Another reliable and respected source is The Commonwealth Fund, which conducted a study of eleven high income OECD members including the US. The collection of health care cost data lags, so data from this study is mostly from 2014. Here is the cost picture:

As you can see, in 1980, US spending was not much different from the other ten OECD countries in the study. While high, it was at least in the same universe. But now, at 50% more than Switzerland, our closest competitor in the “how much can we spend” sweepstakes”, we might be forgiven for asking, “What in the name of Hippocrates happened?” As if this weren’t enough, the 2014 GDP percentage of spend, 16.6%, has now risen to nearly 18%, according to the CMS.

So, what do we get for all that money? We ought to have the highest life expectancy, the lowest infant mortality rate and the best health care outcomes in the entire OECD. But we don’t.

For many readers, it is probably galling to see both the UK and Australia at the top of the health care system performance measure and at the bottom of the spending measure. In the early 2000s, each of these countries poured a significant amount of money into improving its performance, and the results speak for themselves.

Consider all of this mere background to the purpose of this blog post.

Last week, we wrote about the terrible, 40-year stagnation of real wage growth in the US, pointing out that in that period real wages in 1982-1984 constant dollars have risen only 4.5%. But, as we have seen, health care spending did not follow that trajectory. This has resulted in tremendous hardship for families as they have tried to keep pace with rising health care costs. For, just as US health care spending has risen dramatically since 1980, so has what families have to pay for it.

To put this in perspective, consider this. Since 1999 the US CPI has risen 54%, but, as the chart above shows, the cost of an employer offered family plan has risen 338%. If a family’s health care plan’s cost growth had been inflation-based, the total cost to employer and employee would be $8,898 in 2018, not $19,616. In 2018, the average family in an employer-based plan pays 30% of the plan’s cost ($6,850), plus a $2,000 deductible, plus co-pays that average $20 whenever health care is accessed, plus varying levels of co-pays for drugs.

On top of all that is the enormous difficulty people have in trying to navigate the dizzying health care system (if you can call it that). American health care is a dense forest of bewildering complexity, a many-headed Hydra that would make Hesiod proud, a labyrinthine geography in which even Theseus with his ball of string would find himself lost.

With wages and health care costs growing ever farther apart, America has a crisis of epic proportion. Yet all we can seem to do is shout at each other about it. When do you think that will end? When will we begin to answer the question that this post began with: What does a nation owe its citizens with respect to health care? When will our nation’s leaders realize we can actually learn from countries like Australia, the UK, Switzerland and all the other high performing, low cost members of the OECD? Continuing on the present course is no longer a viable option.

 

Note: You may be questioning The Commonwealth Fund’s research. To put your mind at ease about that, here are the study sources:

Our data come from a variety of sources. One is comparative survey research. Since 1998, The Commonwealth Fund, in collaboration with international partners, has supported surveys of patients and primary care physicians in advanced countries, collecting information for a standardized set of metrics on health system performance. Other comparative data are drawn from the most recent reports of the Organization for Economic Cooperation and Development (OECD), the European Observatory on Health Systems and Policies, and the World Health Organization (WHO).

Link: http://workerscompinsider.com/2018/11/at-the-bottom-looking-up/