Category Archives: Federal Government

Medicare for All and Its Rivals | Annals of Internal Medicine | American College of Physicians

Richard’s Note: A shout-out to Don McCanne for posting this today from the Annals of Internal Medicine, which is providing the full article for free. The authors, Steffie Woolhandler and David Himmelstein, both MDs, should be familiar to readers as two of the authors I covered in my review of the Waitzkin, et al. book, Health Care Under the Knife: Moving Beyond Capitalism for Our Health. In the spirit of the AIM, I am posting the entire article below with link to the original. It is that important.

Medicare for All and Its Rivals: New Offshoots of Old Health Policy Roots

The leading option for health reform in the United States would leave 36.2 million persons
uninsured in 2027 while costs would balloon to nearly $6 trillion (1). That option is called the
status quo. Other reasons why temporizing is a poor choice include the country’s decreasing life
expectancy, the widening mortality gap between the rich and the poor, and rising deductibles
and drug prices. Even insured persons fear medical bills, commercial pressures permeate
examination rooms, and physicians are burning out.
In response to these health policy failures, many Democrats now advocate single-payer,
Medicare-for-All reform, which until recently was a political nonstarter. Others are wary of
frontally assaulting insurers and the pharmaceutical industry and advocate public-option plans
or defending the Patient Protection and Affordable Care Act (ACA). Meanwhile, the Trump
administration seeks to turbocharge market forces through deregulation and funneling more
government funds through private insurers. Here, we highlight the probable effects of these
proposals on how many persons would be covered, the comprehensiveness of coverage, and
national health expenditures (Table).

Table. Characteristics of Major Health Reform Proposals as of March 2019

Medicare for All

Medicare-for-All proposals are descendents of the 1948 Wagner–Murray–Dingell national health
insurance bill and Edward Kennedy and Martha Griffiths’ 1971 single-payer plan (2). They would
replace the current welter of public and private plans with a single, tax-funded insurer covering
all U.S. residents. The benefit package would be comprehensive, providing first-dollar coverage
for all medically necessary care and medications. The single-payer plan would use its
purchasing power to negotiate for lower drug prices and pay hospitals lump-sum global
operating budgets (similar to how fire departments are funded). Physicians would be paid
according to a simplified fee schedule or receive salaries from hospitals or group practices.
Similar payment strategies in Canada and other nations have made universal coverage
affordable even as physicians’ incomes have risen. These countries have realized savings in
national health expenditures by dramatically reducing insurers’ overhead and providers’ billing-
related documentation and transaction costs, which currently consume nearly one third of U.S.
health care spending (3). The payment schemes in the House of Representatives’ Medicare-for-
All bill closely resemble those in Canada. The companion Senate bill incorporates some of
Medicare’s current value-based payment mechanisms, which would attenuate administrative
savings. Most analysts, including some who are critical of Medicare for All, project that such a
reform would garner hundreds of billions of dollars in administrative and drug savings (4) that
would counterbalance the costs of utilization increases from expanded and upgraded coverage.
Reductions in premiums and out-of-pocket costs would fully offset the expense of new taxes
implemented to fund the reform.

 

“Medicare-for-More” Public Options

Public-option proposals, which would allow some persons to buy in to a public insurance plan,
might be labeled “Medicare for More.” Republicans Senator Jacob Javits and Representative John
Lindsay first advanced similar proposals in the early 1960s as rivals to a proposed fully public
Medicare program for seniors. This approach resurfaced during the early 1970s as Javits’
universal coverage alternative to Kennedy’s single-payer plan and gained favor with some
Democrats during the 2009 ACA debate.
Policymakers are floating several public-option variants, most of which would offer a public plan
alongside private plans on the ACA’s insurance exchanges. Although a few of these variants
would allow persons to buy in to Medicaid, most envision a new plan that would pay Medicare
rates and use providers who participate in Medicare. Positive features of these reforms include
offering additional insurance choices and minimizing the need for new taxes because enrollees
would pay premiums to cover the new costs. However, these plans would cover only a fraction
of uninsured persons, few of whom could afford the premiums (5); do little to improve the
comprehensiveness of existing coverage; and modestly increase national health expenditures.
The Medicaid public-option variant, which many states might reject, would probably dilute
these effects.
Medicare for America, the strongest version of a public-option plan, would automatically enroll
anyone not covered by their employer (including current Medicare, Medicaid, and Children’s
Health Insurance Program enrollees) in a new Medicare Part E plan. It would upgrade
Medicare’s benefits, although copayments and deductibles (capped at $3500) would remain.
The program would subsidize premiums for those whose income is up to 600% of the poverty
level, and employers could enroll employees in the program by paying 8% of their annual
payroll. The new plan would use Medicare’s payment strategies and include private Medicare
Advantage (MA) plans (which inflate Medicare’s costs [6]) and accountable care organizations.
Medicare for America would greatly expand coverage and upgrade its comprehensiveness but
at considerable cost. As with other public-options reforms, it would retain multiple payers and
therefore sacrifice much of the administrative savings available under single-payer plans.
Physicians and hospitals would have to maintain the expensive bureaucracies needed to
attribute costs and charges to individual patients, bill insurers, and collect copayments. Savings
on insurers’ overhead would also be less than those under single-payer plans. Overhead is only
2% in traditional Medicare (and 1.6% in Canada’s single-payer program [7]) but averages 13.7%
in MA plans (8) and would continue to do so under public-option proposals. Furthermore, as in
the MA program, private insurers would inflate taxpayers’ costs by upcoding as well as cherry-
picking and enacting network restrictions that shunt unprofitable patients to the public-option
plan. This strategy would turn the latter plan into a de facto high-risk pool.

The Trump Administration White Paper and Budget Proposal

Unlike these proposals, reforms under the Trump administration have moved to shrink the
government’s role in health care by relaxing ACA insurance regulations; green-lighting states’
Medicaid cuts; redirecting U.S. Department of Veterans Affairs funds to private care; and
strengthening the hand of private MA plans by easing network-adequacy standards, increasing
Medicare’s payments to these plans, and marketing to seniors on behalf of MA plans. A recent
administration white paper (9) presents the administration’s plan going forward: Spur the
growth of high-deductible coverage, eliminate coverage mandates, open the border to foreign
medical graduates, and override states’ “any-willing-provider” regulations and certificate-of-
need laws that constrain hospital expansion. The president’s recently released budget proposal
calls for cuts of $1.5 trillion in Medicaid funding and $818 billion in Medicare provider payments
over the next 10 years.
Thus far, the effects of the president’s actions—withdrawing coverage from some Medicaid
enrollees and downgrading the comprehensiveness of some private insurance—have been
modest. His plans would probably swell the ranks of uninsured persons and hollow out
coverage for many who retain coverage, shifting costs from the government and employers to
individual patients. The effect on overall national health expenditures is unclear: Cuts to
Medicaid, Medicare, and the comprehensiveness of insurance might decrease expenditures;
however, deregulating providers and insurers would probably increase them.
In 1971, a total of 5 years after the advent of Medicare and Medicaid, exploding costs and
persistent problems with access and quality triggered a roiling debate over single-payer plans.
As support for Kennedy’s plan grew, moderate Republicans offered a public-option alternative,
1 of several proposals promising broadened coverage on terms friendlier to private insurers.
Kennedy derided these proposals by stating, “It calms down the flame, but it really doesn’t meet
the need” (10). President Nixon’s pro market HMO strategy—a close analogue of the modern-
day accountable care strategy—ultimately won out, although his proposals for coverage
mandates, insurance exchanges, and premium subsidies for low-income persons did not reach
fruition until passage of the ACA.
Five years into the ACA era, there is consensus that the health care status quo spawned by
Nixon’s vision is unsustainable. President Trump would veer further down the market path.
Public-option supporters hope to expand coverage while avoiding insurers’ wrath. Medicare-
for-All proponents aspire to decouple care from commerce.

Why Are Republicans So Mean? – An Exploration

Revelations this week that the Orangutan Administration is going ahead with plans to repeal the ACA, as reported by myself and Joe Paduda, as well as the announcement by Education Secretary Betsy (I have ten yachts) DeVos, that her budget calls for cutting $18 million from Special Olympics, raises the question, “why are Republicans so mean?” and why do they hate the poor and those not like them?

This article will explore this question from an economic, ideological, political and sociological perspective, citing several previously published articles asking the same question as the title above. It is certainly not definitive, but does suggest some possible explanations.

To begin with, a little history. The Republican Party was formed due to the inability of the Whig Party to deal with the question of slavery and the disappointment many Northern Democrats had with their Southern brethren over this issue, one that occupied a central focus in the second quarter of the first half of the 19th century.

While that twenty-five year period ended in 1850, it is important to note that the GOP was founded in 1854, which is still in the range of the time frame.

After the Civil War, the Republican Party was made up of two wings: the Radical Republicans who favored Reconstruction and harsh treatment of former Southern Confederates (this will have a bearing on our discussion later) and the conservatives who were aligned with the Eastern bankers and industrialists.

In fact, it was the conservatives who, as pointed out in the Spielberg motion picture, “Lincoln”, that made it possible for the passage of the 13th Amendment when they were assured by the President that there were no Southern negotiators in Washington (They were on a riverboat in Virginia being guarded by African-American Union soldiers).

However, after the election of 1876, when Rutherford Hayes became President by promising the South to end Reconstruction, the Radical Republicans were slowly replaced by more conservative Northern Republicans loyal to the industrialists who would dominate the second quarter of the second half of the 19th century, and thus lead to future calls for reform and addressing of the effects industrialization had on the working class.

So as their wealth increased, so too did the misery and poverty of the working class, and this led to the rise within the GOP of a progressive movement, and a likewise movement among the rural population in the Midwest in the form of populism.

With the ascendancy of Theodore Roosevelt to the Presidency in 1901, progressivism took off, and many Republicans led the way for political, economic, and social reform. A brief return to the past in the 1920s under three successive Republican Presidents was followed by the election of FDR and the Democrats controlling Congress for decades to come, making more reform possible, and creating the largest middle class in history.

By the mid-20th century , the Republican Party had three wings: conservatives, moderates, and liberals. Barry Goldwater’s run in 1964, and Robert Taft’s in 1952 sort to change the dynamics in favor of the conservatives, but only meant they lost the battle, but won the war.

Then came Reagan, the first celebrity President. He brought victory to the conservatives and into government. Remember, he said that government was not the solution, government was the problem, and thus, that is how the GOP would operate when they took over.

Turning to the economic aspect of why Republicans are mean, let us look at something written a hundred years ago, Max Weber’s essay, The Protestant Ethic and the Spirit of Capitalism.

According to Wikipedia,

“capitalism in Northern Europe evolved when the Protestant (particularly Calvinist) ethic influenced large numbers of people to engage in work in the secular world, developing their own enterprises and engaging in trade and the accumulation of wealth for investment. In other words, the Protestant work ethic was an important force behind the unplanned and uncoordinated emergence of modern capitalism.

So in this context, Protestantism, or rather its Calvinist form, which influenced the Puritans of New England, formed the moral and ethical basis for the rise of modern capitalism, and while the descendants of the Puritans today in New England are decidedly more liberal than in the past, due to evangelical missionaries in the late 18th and throughout the 19th centuries, in what historians call the Great Awakenings, these values were transmitted to people in the South and Midwest, or were carried with them during western expansion.

As for the South, as mentioned earlier, the debate over slavery has some bearing on why many of today’s Republican leaders in Congress are Southerners, and what that means for the country’s direction these past thirty years or so.

Sara Robinson’s article in Salon.com, attempts to answer why this is so, and sheds light on the difference between North and South. To begin with, despite the rise of Capitalism from Calvinist Protestantism, seen originally among the Puritan settlers, Robinson states that,

For most of our history, American economics, culture and politics have been dominated by a New England-based Yankee aristocracy that was rooted in Puritan communitarian values, educated at the Ivies and marinated in an ethic of noblesse oblige (the conviction that those who possess wealth and power are morally bound to use it for the betterment of society).”

On the other hand, Robinson relates that the New England-based aristocracy is opposed by,

…the plantation aristocracy of the lowland South, which has been notable throughout its 400-year history for its utter lack of civic interest, its hostility to the very ideas of democracy and human rights, its love of hierarchy, its fear of technology and progress, its reliance on brutality and violence to maintain “order,” and its outright celebration of inequality as an order divinely ordained by God.

Robinson cites David Hackett Fisher who,

described just how deeply undemocratic the Southern aristocracy was, and still is. He documents how these elites have always feared and opposed universal literacy, public schools and libraries, and a free press.

In addition, Robinson cites Colin Woodward, who wrote that,

…From the outset, Deep Southern culture was based on radical disparities in wealth and power, with a tiny elite commanding total obedience and enforcing it with state-sponsored terror. Its expansionist ambitions would put it on a collision course with its Yankee rivals, triggering military, social, and political conflicts that continue to plague the United States to this day.

However, Robinson writes that the most destructive aspect of the Southern’s worldview,

is the extremely anti-democratic way it defined the very idea of liberty. In Yankee Puritan culture, both liberty and authority resided mostly with the community, and not so much with individuals. Communities had both the freedom and the duty to govern themselves as they wished (through town meetings and so on), to invest in their collective good, and to favor or punish individuals whose behavior enhanced or threatened the whole (historically, through community rewards such as elevation to positions of public authority and trust; or community punishments like shaming, shunning or banishing).”

Robinson continues,

Individuals were expected to balance their personal needs and desires against the greater good of the collective — and, occasionally, to make sacrifices for the betterment of everyone. (This is why the Puritan wealthy tended to dutifully pay their taxes, tithe in their churches and donate generously to create hospitals, parks and universities.) In return, the community had a solemn and inescapable moral duty to care for its sick, educate its young and provide for its needy — the kind of support that maximizes each person’s liberty to live in dignity and achieve his or her potential. A Yankee community that failed to provide such support brought shame upon itself. To this day, our progressive politics are deeply informed by this Puritan view of ordered liberty.”

Conversely, Robinson states,

In the old South, on the other hand, the degree of liberty you enjoyed was a direct function of your God-given place in the social hierarchy. The higher your status, the more authority you had, and the more “liberty” you could exercise — which meant, in practical terms, that you had the right to take more “liberties” with the lives, rights and property of other people.”

Anytime a Southern conservative talks about “losing his liberty”, Robinson follows with, the loss of this absolute domination over the people and property under his control — and, worse, the loss of status and the resulting risk of being held accountable for laws that he was once exempt from — is what he’s really talking about. In this view, freedom is a zero-sum game. Anything that gives more freedom and rights to lower-status people can’t help but put serious limits on the freedom of the upper classes to use those people as they please. It cannot be any other way. So they find Yankee-style rights expansions absolutely intolerable, to the point where they’re willing to fight and die to preserve their divine right to rule.”

This would appear to not only apply to the justification for the South’s secession from the Union in the 19th century, but for the way Southern politicians, both Democrats (remember, many were Southerners who were promised committee chairmanships by FDR to get the New Deal passed) and Republicans after passage of the Civil Rights Act in 1964 led to Southerners fleeing the Democratic Party for what LBJ said would be for a generation, have acted towards any legislation that would cause them to lose their liberty. Today, we call that White Privilege.

For an ideological perspective, Marc-William Palen, in Foreign Policy in Focus, provides us with a clear understanding that the Republican Party is not merely a party of classical liberalism, but something different from what it was when it was founded.

According to Palen,

From its mid-nineteenth-century founding, the Republican Party was the party of big government, high tariffs, and government-subsidized internal improvements. The exceptions to this rule were the Gilded Age Liberal Republicans. In their vocal calls for laissez faire principles, these Liberal Republicans quickly became the independent thorns in the side of the Republican elephant throughout the first decades following the Civil War. When the big-government Republican majority continued to prove intractable, these Liberal Republicans became known as the “Mugwumps” when they ultimately switched their support to the Democrats in 1884.

Palen writes that classical liberalism was founded on moral sentiments, and that these moral sentiments, “are almost non-existent within the Republican rank and file, especially since the ultra-nationalist party draped itself in the red, white, and blue following 9-11, and led the jingoistic charge into Afghanistan and Iraq.

Nor is morality to be found amid the incessant Republican demands to cut social spending,” he says, pointing out what Grover Norquist, the driving force behind the GOP’s anti-tax, small government ideology when he said in 2001,  he wanted to

shrink government to the point where he “could drag it into the bathroom and drown it in the bathtub.

Palen suggests that if the Republicans current ideology is not found in classical liberalism, then where does it come from? Palen says, Ayn Rand’s pronounced atheism and intellectual elitism certainly does not align with the ideological outlook of most Republicans. And, he says, there is perhaps an element of a Social Darwinian “survival of the fittest” ethos—although no Republican politician is likely to admit to subscribing to anything associated with the theory of evolution.

So where does it come from?

…a large part of Republican ideological inspiration stems from fear. In particular, it is a reactionary ideological response to the turbulent upheavals inherent in an increasingly globalizing world. Such fears—let’s call it “globaphobia”—are frequently expressed on issues such as immigration, global terrorism, global warming, and American participation in international institutions like the United Nations. The massive federal intervention in the so-called free market following the global financial meltdown invariably exacerbated Republican fears that government intrusion in the market— and Keynesian economics more generally—would eventually undermine American individualism, citing Douglas LaBier.

However, Palen says it is not entirely satisfactory. According to Palen,

their fear-driven ideological inspiration dovetails with the philosophy of Thomas Hobbes, who predated Adam Smith by a century and who expounded on an amoral philosophy of self-interested individualism, counterbalanced by acquiescence to authoritarianism. Hobbes believed that a strong state prevented “war of every man against every man,” a chaotic type of warfare that Republicans believe is contained within al-Qaeda’s radical philosophy.

As we have seen, there is no one answer to why Republicans are mean. It seems to be a combination of factors all valid and relevant to today’s political climate in Washington and in the nation at large.

But nothing ever is just as simple as being mean. since we are dealing with human beings and not machines.

For our purposes, health care is just one more “liberty” conservatives are afraid of losing, so therefore, they will deny it to others, so that they can have more of it. Any discussion of universal coverage in a single payer health care system is a threat to their liberty, and therefore must be opposed. Add to that, the economic loss of profit and gain by those in the medical-industrial complex, and you get a clearer picture of the problem.

But to answer the question raised at the beginning, why are the Republicans so mean? It’s because it is in their DNA passed on from one generation of conservatives to another like our genes are passed down from our parents, grandparents, and so on.

Now the question is, what to do about it?

 

Trump Regime to Repeal ACA

From the Overnight News Desk:

Both CNN and The Washington Post reported yesterday that the Justice Department will back a full repeal of the Affordable Care Act (ACA), after a federal judge in Texas ruled the law unconstitutional in December.

If this repeal takes effect, millions of Americans will lose their healthcare. Those of you employed in the medical-industrial complex, and related industries, must face the fact, that if the Republicans succeed in their long-held promise to destroy healthcare for Americans who could never afford it before, or had limited coverage, there will be no other alternative left to provide healthcare than to have an Improved Medicare for All/Single Payer system.

There are those who believe that Medicaid for All is a better option, but given that many states that expanded Medicaid elected GOP governors and legislatures, or could in the future, Medicaid in those states could also be taken away from those who receive expanded coverage.

Many of you are employed by the very same insurance companies, pharmaceutical companies, device manufacturers, and other businesses that are allied with the healthcare system, and it is these companies that are gearing up to fight passage of any Medicare for All/Single Payer health care bill.

Do you really want your fellow Americans to die because they cannot generate huge profits for your employers and for Wall Street investors and shareholders?

if the Orangutan gets his way, that is what will happen. Also, our hospital ERs will once again be clogged with patients who need immediate medical attention, and the quality of health care will deteriorate even further.

The only logical solution is Medicare for All/Single Payer, because the only option left will be Medicare for All/Single Payer.

Lower Prescription Drug Prices Lure Americans To Mexico To Buy Meds : Shots – Health News : NPR

Good morning all.

Thanks go out to Josef Woodman who tweeted the following today from NPR about prescription drugs and going across the Mexican border to buy them at lower cost.

This is in addition to the article I recently posted, Run for the Border (Not a Taco Bell Commercial).

So wall, or no wall, Americans are going to look for cheaper prescription drugs, either in Mexico or Canada, or elsewhere, until we allow the government to negotiate prices for medications under an improved and expanded Medicare for All.

But thanks to a former Louisiana congressman who left Congress to become the President and CEO of PhRMA, a pharmaceutical company lobbying group, Congress passed a bill that prevents Medicare from negotiating lower drug prices and bans the importation of identical, cheaper, drugs from Canada and elsewhere.

But it does not have to be this way. We can lower drug prices, but by allowing the government to negotiate them, and not giving the pharmaceutical industry huge giveaways.

Here is NPR’s article:

Faced with high U.S. prices for prescription drugs, some Americans cross the border to buy insulin pens and other meds. At least 1 insurer reimburses flights to the border to make such purchases easy.

Source: Lower Prescription Drug Prices Lure Americans To Mexico To Buy Meds : Shots – Health News : NPR

Free Medical School Tuition Could Solve Physician Shortage

Earlier this week, Elizabeth Rosenthal , former correspondent of the New York Times, and now the editor in chief of Kaiser Health News, wrote an opinion piece in response to the announcement by New York University’s School of Medicine’s decision to eliminate tuition for all current and future medical students.

Rosenthal, an emergency room doctor who became a journalist, stated that the goal of the free tuition was to eliminate a financial barrier for medical school applicants, and to address a crucial imbalance in the country’s physician work force.

She indicated that research had proven that the burden of medical school debt discourages doctors from going into practices that are poorly paid, such as primary care, or working in places where many patients are on Medicaid.

Rosenthal notes that there is a shortage of doctors working in these areas. Readers will recall that I have posted several articles on the predicted physician shortage. Those articles suggested medical travel could be an alternative solution in workers’ comp cases.

Even though the US has about the same number of doctors for our population as does Canada, Britain, and Japan, Rosenthal noted — American doctors are more likely to be paid more in subspecialties such as orthopedic surgery, rather than primary care.

Rosenthal cites N.Y.U.’s Law School when she points out that the medical school got it wrong as having a better solution.

Instead of making medical school free for everyone, Rosenthal states, N.Y.U., and all medical schools, should waive tuition for those students who commit to work where they are needed most.

The law school is a model and has a program that attracts the best and brightest to the low-wage corners of the legal profession. Students who commit to a career in public service, pay no tuition; those who go to corporate law pay the full amount.

Rosenthal recommends that medical schools should commit to so that students entering medical school, and who are not sure of their path, is to forgive or paying back the loans of doctors who go into lower-paying fields or set up a practice in underserved areas.

The government, she writes, could demand a system from academic medical centers as a precondition for receiving subsidies and payments.

Also, if a doctor chooses to deliver babies in rural Oklahoma or practice pediatrics in the South Side of Chicago, they should keep their salary.

The government, military, and some states already subsidize tuition, or pay back loans in exchange for limited-time service commitments, as my younger brother did when he graduated medical school.

The real goal, Rosenthal says, is to enable and support young doctors who feel that medicine is a calling, not as we know it today — as a means to get to the top 1 percent.

As the idea for free tuition for public colleges and universities is debated, doing so for medical school will alleviate the predicted physician shortage, allow more lower income minority students to attend without debt hanging over them when they graduate, and will improve the health of those in underserved and poorer neighborhoods.

That will likely impact the overall cost of health care as more people can see a doctor in their neighborhood, and not in an emergency room.

P.S. I am a graduate of N.Y.U.’s Graduate School of Arts and Sciences, and took out loans that were paid back more than ten years later. Perhaps one day, that will also be a thing of the past.

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.
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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.

Immigrants and Health – Two Studies

The following two articles come from Dr. Don McCanne’s Quote of the Day blog.

International Journal of Health Services
August 8, 2018
Medical Expenditures on and by Immigrant Populations in the United States: A Systematic Review
By Lila Flavin, Leah Zallman, Danny McCormick, and J. Wesley Boyd

Abstract

In health care policy debates, discussion centers around the often-misperceived costs of providing medical care to immigrants. This review seeks to compare health care expenditures of U.S. immigrants to those of U.S.-born individuals and evaluate the role which immigrants play in the rising cost of health care. We systematically examined all post-2000, peer-reviewed studies in PubMed related to health care expenditures by immigrants written in English in the United States. The reviewers extracted data independently using a standardized approach. Immigrants’ overall expenditures were one-half to two-thirds those of U.S.-born individuals, across all assessed age groups, regardless of immigration status. Per capita expenditures from private and public insurance sources were lower for immigrants, particularly expenditures for undocumented immigrants. Immigrant individuals made larger out-of-pocket health care payments compared to U.S.-born individuals. Overall, immigrants almost certainly paid more toward medical expenses than they withdrew, providing a low-risk pool that subsidized the public and private health insurance markets. We conclude that insurance and medical
care should be made more available to immigrants rather than less so.

From the Discussion

Many Americans, including some in the health care sector, mistakenly believe that immigrants are a financial drain on the U.S. health care system, costing society disproportionately more than the U.S.-born population, i.e., themselves. Our review of the literature overwhelmingly showed that immigrants spend less on health care, including publicly funded health care, compared to their U.S.-born counterparts. Moreover, immigrants contributed more towards Medicare than they withdrew; they are net contributors to Medicare’s trust fund.

Our research categorized immigrants into different groups, but in all categories, these studies found that immigrants accrued fewer health care expenditures than U.S.-born individuals. Among the different payment sources – public, private, or out-of-pocket – public and private expenditures were lower for immigrants, with immigrants spending more out-of-pocket. Differences decreased the longer immigrants resided in the United States.

While annual U.S. medical spending in 2016 was a staggering $3.3 trillion, immigrants accounted for less than 10% of the overall spending – and recent immigrants were responsible for only 1% of total spending. Given these figures, it is unlikely that restrictions on immigration into the United States would result in a meaningful decrease in health care spending. To the contrary, restricting immigration would financially destabilize some parts of the health care economy, as suggested by Zallman and colleagues, who found that immigrants contributed $14 billion more to the Medicare trust fund than they withdrew.

Fiscal responsibility is an important reason for the United States to provide insurance for newly arrived immigrants, as they could continue to enlarge the low-risk pool of healthy individuals that helps offset the cost of insuring high-risk individuals. Currently, under the ACA, undocumented immigrants cannot enroll in the state health care exchanges. If we are seeking to minimize costs, which would seem a major factor in the reasoning of policymakers who would deny immigrants care, then it makes financial sense to enroll individuals who will (on average) contribute more to the health care system than they withdraw. Healthy, young immigrants are precisely whom we should target for Medicaid enrollment, state exchanges, or private health insurance.

http://journals.sagepub.com/doi/full/10.1177/0020731418791963

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The New England Journal of Medicine
August 1, 2018
A New Threat to Immigrants’ Health — The Public-Charge Rule
By Krista M. Perreira, Ph.D., Hirokazu Yoshikawa, Ph.D., and Jonathan Oberlander, Ph.D.

The United States is making major changes to its immigration policies that are spilling over into health policy. In one such change, the Trump administration is drafting a rule on “public charges” that could have important consequences for access to medical care and the health of millions of immigrants and their families. The concept of a public charge dates back to 19th-century immigration law. Under current guidelines, persons labeled as potential public charges can be denied legal entry to the United States. They can also be prevented from adjusting their status from a nonimmigrant visa category (e.g., a student or work visa) to legal permanent resident status. In addition, if they become public charges within the first 5 years after their admission to the United States, for reasons that existed before they came to the country, in rare cases they can be arrested and deported. Immigrants and their families consequently have strong incentives to avoid being deemed public charges.

In evaluating whether a person is likely to become a public charge, immigration officials take account of factors such as age, health, financial status, education, and skills. The use of cash assistance for income maintenance (e.g., Supplemental Security Income or Temporary Assistance for Needy Families) and government-funded long-term care are considered in making these determinations. Other noncash benefits such as health and nutrition programs are specifically excluded from consideration, and use of cash-assistance benefits by the immigrant’s dependents is not currently factored in.

The Trump administration is proposing sweeping changes to these guidelines. A draft rule from the Department of Homeland Security (DHS) would substantially expand the definition of a public charge to include any immigrant who “uses or receives one or more public benefits.” Not just cash assistance but nearly all public benefits from federal, state, or local governments would be considered in public-charge determinations, including nonemergency Medicaid, the Children’s Health Insurance Program (CHIP), and subsidized health insurance through the marketplaces created by the Affordable Care Act (ACA); Medicare would be excluded. The DHS draft notes that in making these determinations, “having subsidized insurance will generally be considered a heavily weighted negative factor.” The broadened definition of public charge would also encompass food assistance (the Supplemental Nutrition Assistance Program [SNAP] and the Women, Infants, and Children Program [WIC]), programs designed to assist low-income workers (e.g., the Earned Income Tax Credit [EITC]), housing assistance (Section 8 vouchers), and the Low Income Home Energy Assistance Program. Moreover, not only immigrants’ use of public assistance but use of these programs by any dependents, including U.S.-born citizen spouses and children, would also be considered.

The potential impact of these changes is enormous. In 2016, about 43.7 million immigrants lived in the United States. If enacted, the new regulations would affect people seeking to move to the United States to be reunified with family members and to work, as well as lawfully present immigrants who hope to become legal permanent residents (green-card holders). One estimate suggests that nearly one third of U.S.-born persons could have their use of public benefits considered in the public-charge determination of a family member. This includes “10.4 million citizen children with at least one noncitizen parent.” Notably, unauthorized immigrants are not the primary target of the draft rule, since they are already ineligible for most federally funded public assistance. Instead, lawfully present immigrants would bear the brunt, as well as persons living in “mixed-status” families (those in which some members are citizens and others are not) and persons living abroad who wish to immigrate to the United States.

We believe that the draft public-charge regulation represents a substantial threat to lawfully present immigrants’ access to public programs and health care services. What modifications may be made is uncertain — after the rule is formally proposed, there will be a public comment period, and revisions could be made before it is finalized. But if this rule takes effect, it will most likely harm the health of millions of people and undo decades of work by providers nationwide to increase access to medical care for immigrants and their families.

https://www.nejm.org/doi/full/10.1056/NEJMp1808020?query=featured_secondary