Category Archives: Health Care Spending

Public Option A Bad Policy

I’m back!

In case you missed me, I have been busy with personal matters and preparing for a trip out of town. Now that I am back, I have decided to pick up where I left off, and re-post an article from The Nation by Himmelstein and Woolhander on why private insurance or the public option is a bad policy choice. This article comes courtesy of Don McCanne, so thanks go to him.

Here is the entire article:

The Nation
October 7, 2019
The ‘Public Option’ on Health Care Is a Poison Pill
Some Democratic candidates are pushing it as a free-choice version of Medicare for All. That’s good rhetoric but bad policy.
By David U. Himmelstein and Steffie Woolhandler
Health care reform has been the most hotly contested issue in the Democratic presidential debates. Bernie Sanders and Elizabeth Warren have been pushing a single-payer Medicare for All plan, under which a public insurer would cover everyone. They would ban private insurance, except for items not covered by the public plan, such as cosmetic surgery or private rooms in hospitals. The other Democratic contenders favor a “public option” reform that would introduce a Medicare-like public insurer but would allow private insurers to operate as well. They tout this approach as a less traumatic route to universal coverage that would preserve a free choice of insurers for people happy with their plans. And some public option backers go further, claiming that the system would painlessly transition to single payer as the public plan outperforms the private insurers.
That’s comforting rhetoric. But the case for a public option rests on faulty economic logic and naive assumptions about how private insurance actually works. Private insurers have proved endlessly creative at gaming the system to avoid fair competition, and they have used their immense lobbying clout to undermine regulators’ efforts to rein in their abuses. That’s enabled them to siphon hundreds of billions of dollars out of the health care system each year for their own profits and overhead costs while forcing doctors and hospitals to waste billions more on billing-related paperwork.
Those dollars have to come from somewhere. If private insurers required their customers to pay the full costs of private plans, they wouldn’t be able to compete with a public plan like the traditional Medicare program, whose overhead costs are far lower. But this is not the case: In fact, taxpayers—including those not enrolled in a private plan—pick up the tab for much of private insurers’ profligacy. And the high cost of keeping private insurance alive would make it prohibitively expensive to cover the 30 million uninsured in the United States and to upgrade coverage for the tens of millions with inadequate plans.
Public option proposals come in three main varieties:
§  A simple buy-in. Some proposals, including those by Joe Biden and Pete Buttigieg, would offer a Medicare-like public plan for sale alongside private plans on the insurance exchanges now available under the Affordable Care Act. These buy-in reforms would minimize the need for new taxes, since most enrollees would be charged premiums. But tens of millions would remain uninsured or with coverage so skimpy, they still couldn’t afford care.
§  Pay or play. This variant (similar to the plan advanced by the Center for American Progress and endorsed by Beto O’Rourke) would offer employers a choice between purchasing private insurance or paying a steep payroll tax (about 8 percent). Anyone lacking employer-paid private coverage would be automatically enrolled in the public plan. The public option would be a good deal for employers who would otherwise have to pay more than 8 percent of their payroll for private coverage—for example, employers with older or mostly female workers (who tend to use more care and incur high premiums) or with lots of low-wage workers (for whom 8 percent of payroll is a relatively small sum). But many firms employing mostly young, male, or highly paid workers (e.g., finance and tech) would likely stay with a private insurer.
§  Medicare Advantage for All. The public option approach favored by Kamala Harris would mimic the current Medicare Advantage program. Medicare Advantage plans are commercial managed care products currently offered by private insurers to seniors. The Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicare, collects the taxes that pay for the program and passes the funds ($233 billion in 2018) along to the insurance companies. Under this approach, the public option would operate alongside the private Medicare Advantage plans and compete with them, as the traditional fully public Medicare program currently does.
No working models of the buy-in or pay-or-play public option variants currently exist in the United States or elsewhere. But decades of experience with Medicare Advantage offer lessons about that program and how private insurers capture profits for themselves and push losses onto their public rival—strategies that allow them to win the competition while driving up everyone’s costs.
IN US HEALTH INSURANCE, GOOD GUYS FINISH LAST
A public option plan that facilitates enrollees’ genuine access to health care can’t compete with private insurers that avoid the expensively ill and obstruct access to care. Despite having overhead costs almost seven times that of traditional Medicare (13.7 versus 2 percent), Medicare Advantage plans have grown rapidly. They now cover more than one-third of Medicare beneficiaries, up from 13 percent in 2005. Greed has trumped efficiency, and the efforts of regulators to level the playing field have been overwhelmed by insurers’ profit-driven schemes to tilt it.
Private insurers employ a dizzying array of profit-enhancing schemes that would be out of bounds for a public plan. These schemes, which continually evolve in response to regulators’ efforts to counter them, boil down to four strategies that are legal, in addition to occasional outright fraud.
§  Obstructing expensive care. Plans try to attract profitable, low-needs enrollees by assuring convenient and affordable access to routine care for minor problems. Simultaneously, they erect barriers to expensive services that threaten profits—for example, prior authorization requirements, high co-payments, narrow networks, and drug formulary restrictions that penalize the unprofitably ill. While the fully public Medicare program contracts with any willing provider, many private insurers exclude (for example) cystic fibrosis specialists, and few Medicare Advantage plans cover care at cancer centers like Memorial Sloan Kettering. Moreover, private insurers’ drug formularies often put all of the drugs—even cheap generics—needed by those with diabetes, schizophrenia, or HIV in a high co-payment tier.
Insurers whose first reaction to a big bill is “claim denied” discourage many patients from pursuing their claims. And as discussed below, if hassling over claims drives some enrollees away, even better: The sickest will be the most hassled and therefore the most likely to switch to a competitor.
§  Cherry-picking and lemon-dropping, or selectively enrolling people who need little care and disenrolling the unprofitably ill. A relatively small number of very sick patients account for the vast majority of medical costs each year. A plan that dodges even a few of these high-needs patients wins, while a competing plan that welcomes all comers loses.
In the employer market, cherry-picking is easy: Private insurers offer attractive premiums to businesses with young, healthy workers and exorbitant rates to those with older, sicker employees. As a letter this summer to The New York Times put it, like casinos, health insurers are profitable because they know the odds of every bet they place—and the house always wins.
The CMS, in theory, requires Medicare Advantage plans to take all comers and prohibits them from forcing people out when they get sick. But regulators’ efforts to enforce these requirements have been overwhelmed by insurers’ chicanery. To avoid the sick, private insurers manipulate provider networks and drug formulary designs. Despite the ban on forcing enrollees out, patients needing high-cost services like dialysis or nursing home care have switched in droves from private plans to traditional, fully public Medicare. And as a last resort, Medicare Advantage plans will stop offering coverage in a county where they’ve accumulated too many unprofitable enrollees, akin to a casino ejecting players who are beating the house.
Finally, Medicare Advantage plans cherry-pick through targeted marketing schemes. In the past, this has meant sign-up dinners in restaurants difficult to access for people who use wheelchairs or offering free fitness center memberships, a perk that appeals mainly to the healthiest seniors. But higher-tech approaches are just around the corner. Will Oscar, the health insurer founded by Jared Kushner’s brother—with Google’s parent company as a significant investor—resist the temptation to use Google’s trove of personal data to target enrollment ads toward profitable enrollees like tennis enthusiasts and avoid purchasers of plus-size clothing or people who have searched online for fertility treatments?
§  Upcoding, or making enrollees look sicker on paper than they really are to inflate risk-adjusted premiums. To counter cherry-picking, the CMS pays Medicare Advantage plans higher premiums for enrollees with more (and more serious) diagnoses. For instance, a Medicare Advantage plan can collect hundreds of dollars more each month from the government by labeling an enrollee’s temporary sadness as “major depression” or calling trivial knee pain “degenerative arthritis.” By applying serious-sounding diagnoses to minor illnesses, Medicare Advantage plans artificially inflate the premiums they collect from taxpayers by billions of dollars while adding little or nothing to their expenditures for care.
Though most upcoding stays within the letter of the law and merely stretches medical terminology, the CMS’s (rare) audits of enrollees’ charts indicate that Medicare Advantage plans are collecting $10 billion annually from taxpayers for entirely fabricated diagnoses. And that’s only a small fraction of their overall take from upcoding. Private insurers keep most of this pilfered money for their profits and overhead, but they use a portion to fund added benefits (for example, eyeglasses or slightly lower co-payments for routine care) that attract new enrollees and help private plans to seemingly outcompete traditional Medicare.
§  Lobbying to get excessive payments and thwart regulators. Congress has mandated that the CMS overpay Medicare Advantage plans by 2 percent (and even more where medical costs are lower than average). On top of that, Seema Verma, Trump’s CMS administrator, has taken steps that will increase premiums significantly and award unjustified “quality bonuses,” ignoring advice from the Medicare Payment Advisory Commission that payments be trimmed because the government is already overpaying the private plans. And she has ordered changes to the CMS’s Medicare website to trumpet the benefits of Medicare Advantage enrollment.
In sum, a public option insurer that, like traditional Medicare, doesn’t try to dodge unprofitable enrollees would be saddled with more than its share of sick, expensive patients and would become a de facto high-cost, high-risk pool. The CMS’s decades-long efforts to level the playing field have been thwarted by insurers’ upcoding, belying their promises of fair competition. And insurance companies have used their political muscle to sustain and increase their competitive advantage over traditional Medicare. The result: The public plan (and the taxpayers) absorbs the losses while private insurers skim off profits, an imbalance so big that private plans can outcompete a public plan despite squandering vast sums on overhead costs, CEO salaries, and shareholder profits.
SINGLE PAYER WOULD SAVE, PUBLIC OPTION WON’T
This year alone, private insurers will take in $252 billion more than they pay out, equivalent to 12 percent of their premiums. A single-payer system with overhead costs comparable to Medicare’s (2 percent) could save about $220 billion of that money. A public option would save far less—possibly zero, if much of the new public coverage is channeled through Medicare Advantage plans, whose overhead, at 13.7 percent, is even higher than the average commercial insurer.
Moreover, a public option would save little or nothing on hospitals’ and doctors’ sky-high billing and administrative costs. In a single-payer system, hospitals and other health facilities could be funded via global, lump-sum budgets—similar to the way cities pay fire departments—eliminating the need to attribute costs to individual patients and collect payments from them and their insurers. That global budget payment strategy has cut administrative costs at hospitals in Canada and Scotland to half the US level. The persistence of multiple payers would preclude such administrative streamlining, even if all of the payers are charged the same rates. (Under Maryland’s mislabeled global budget system, the state’s hospitals charge uniform rates but continue to bill per patient; our research indicates that their administrative costs haven’t fallen at all, according to their official cost reports.)
Similarly, for physicians and other practitioners, the complexity involved in billing multiple payers, dealing with multiple drug formularies and referral networks, collecting co-payments and deductibles, and obtaining referrals and prior authorizations drives up office overhead costs and documentation burdens.
The excess overhead inherent to multipayer systems imposes a hidden surcharge on the fees that doctors and hospitals must charge all patients—not just those covered by private insurance. All told, a public option reform would sacrifice about $350 billion annually of single payer’s potential savings on providers’ overhead costs, over and above the $220 billion in savings it could sacrifice annually on insurers’ overhead.
Finally, a public option would undermine the rational health planning that is key to the long-term savings under single payer. Each dollar that a hospital invests in new buildings or equipment increases its operating costs by 20 to 25 cents in every subsequent year. At present, hospitals that garner profits (or “surpluses” for nonprofits) have the capital to expand money-making services and buy high-tech gadgets, whether they’re needed or not, while neglecting vital but unprofitable services. For instance, hospitals around the country have invested in proton-beam-radiation therapy centers that cost hundreds of millions of dollars apiece. (Oklahoma City alone now has two.) Yet there’s little evidence that those machines are any better for most uses than their far cheaper alternatives. Similarly, hospitals have rushed to open invasive cardiology and orthopedic surgery programs, often close to existing ones. These duplicative investments raise costs and probably compromise quality.
Meanwhile, primary care and mental health services have languished, and rural hospitals and other cash-strapped facilities that provide much-needed care spiral toward closure. As in Canada and several European nations, a single-payer system could fund new hospital investments through government grants based on an explicit assessment of needs, instead of counting on private hospitals to use their profits wisely. That strategy has helped other nations direct investments to areas and services with the greatest need and to avoid funding wasteful or redundant facilities. Public option proposals would perpetuate current payment strategies that distort investment and raise long-term costs.
Because a public option would leave the current dysfunctional payment approach in place, it would sacrifice most of the savings available via single-payer reform. The bottom line is that a public option would either cost much more or deliver much less than single payer.
WHY NOT IMPORT GERMAN, SWISS, OR DUTCH HEALTH CARE?
Public option proponents often cite Germany, Switzerland, and the Netherlands as exemplars of how private insurers can coexist with thriving public health care systems. But they ignore the vast differences between those nations’ private insurers and ours.
The nonprofit German “sickness funds,” which cover 89 percent of the population (only wealthy Germans are allowed to purchase coverage from for-profit insurers), are jointly managed by employers and unions—a far cry from our employer-based coverage. The government mandates identical premium rates for all the sickness funds, takes money from those with low-risk enrollees and subsidizes others with older and sicker ones, and directly pays for most hospital construction. All sickness funds offer identical benefit packages, pay the same fees, and cover care from any doctor or hospital.
Although the details differ, a similarly stringent regulatory regime applies in Switzerland, whose system descended from Otto von Bismarck’s original German model, and as in Germany, the government funds most hospital construction. While for-profit insurers can sell supplemental coverage, only nonprofits are allowed to offer the mandated benefit package.
Since 2006, the Netherlands has been transitioning from the German-style universal coverage system to a more market-oriented approach championed by corporate leaders. However, the government pays directly for all long-term care, and a strong ethos of justice and equality has pressured both public and private actors to avoid any erosion of social solidarity. The Netherlands has long enjoyed ready access to care, and its system hasn’t descended (yet) into an American-style abyss. But under the new regime, hospital administrative costs have risen nearly to US levels, overall health costs have increased rapidly, doctors complain of unsustainable administrative burdens, and even in such a small nation, tens of thousands of people are uninsured. Insurers spend massively on marketing and advertising, and private insurers’ overhead costs average 13 percent of their premiums. Moreover, the United States and the Netherlands aren’t the only places where for-profit insurers’ overhead costs are high: They average 12.4 percent in Switzerland, 20.9 percent in Germany, and 26.2 percent in the United Kingdom.
Transforming the immensely powerful, profit-driven insurance companies of the United States into benign nonprofit insurers in the Swiss or German mold would be as heavy a lift as adopting Medicare for All. Nor can we count on the cultural restraints that have thus far softened the Dutch insurers’ rapacious tendencies and prevented a reversal of that country’s long-standing health care successes.
A final point: While allowing private insurers to compete with a public plan amounts to a poison pill, the same isn’t true for supplemental private plans that are allowed to cover only those items excluded from the public benefit package. While Canada bans the sale of private coverage that duplicates the public plan’s benefits, it has always allowed supplemental coverage, and that hasn’t sabotaged its system.
The efficiencies of a single-payer system would make universal coverage affordable and give everyone in the United States their free choice of doctors and hospitals. But that goal will remain out of reach if private insurers are allowed to continue gaming the system. Preserving the choice of insurer for some would perpetuate the affordability crisis that has bedeviled the US health care system for generations. Proponents of the public option portray it as a nondisruptive, free-choice version of single payer. That may be good campaign rhetoric, but it’s terrible policy.
David U. Himmelstein, MD and Steffie Woolhandler, MD, MPH are Distinguished Professors of Public Health at the City University of New York at Hunter College and are co-founders of Physicians for a National Health Program.

KFF Health Tracking Poll – September 2019: Health Care Policy In Congress And On The Campaign Trail | The Henry J. Kaiser Family Foundation

This month’s poll probes Democrats’ views about the general approaches to expanding health coverage and lowering costs put forward by the candidates; the public’s health care prio…

Source: KFF Health Tracking Poll – September 2019: Health Care Policy In Congress And On The Campaign Trail | The Henry J. Kaiser Family Foundation

 

Comment by Don McCanne
According to this new poll, Democrats support Medicare-for-all (“a national health plan”), Independents are split, and Republicans are opposed. Also, Democrats and Independents both support a public option (“a government-administered health plan”), and Republicans are split. However, the public is confused as to whether Medicare-for-all and a public option are similar or different, and half have not heard much about Medicare-for-all and even more have not heard much about a public option.
It seems as if individuals do have an opinion on Medicare-for-all and on a public option even though many are confused as to what they are. The fact that the pollsters referred to one as “a national health plan” and the other as “a government-administered health plan” likely leaves many of those polled with little understanding of the refinements distinguishing the two models.
Features that people might be interested in include the following:
Everyone is automatically covered for life
Affordability is assured through equitable taxes based on ability to pay
Financial barriers such as high deductibles are eliminated
Choices of physicians and hospitals are assured through elimination of insurer networks
Hundreds of billions of dollars in administrative waste is recovered
Of course, these are features of the single payer model of Medicare for all and none would apply by merely adding a public option to our fragmented financing system of a multitude of public and private insurance programs.
When will the pollsters finally ask the following questions?
Should everyone be covered or just some of us?
Should insurance be automatic forever or should it depend on life circumstances?
Should payments into the system be made affordable based on income, or should many be left out because they can’t afford the premiums?
Should high deductibles and surprise medical bills be used to deprive individuals of health care that they should have?
Should patients have choices of their physicians and hospitals or shall we continue to allow private insurers to restrict choices to their networks?
Should we continue to tolerate wasting about half a trillion dollars in administrative excesses, or should we redirect those funds that so that we can pay for care for those currently uninsured or underinsured?
In other words, do we want a health care system that we can afford that takes care of all of us, or do we want to merely add a public option and a couple of tweaks to ACA that leaves our overpriced, highly dysfunctional system in place? People really need to understand the differences between Medicare-for-all (single payer version) and a public option. Let’s see that they do.

ACOs Do Not Improve Spending or Quality

Thank to Dr. McCanne, I am re-posting the following article from the Annals of Internal Medicine that was published Tuesday. I have written before about MSSPs, so I thought it would be a respite from talking about single payer.

Here is the article in its entirety:

Annals of Internal Medicine
June 18, 2019
Performance in the Medicare Shared Savings Program After Accounting for Nonrandom Exit: An Instrumental Variable Analysis
By Adam A. Markovitz, BS; John M. Hollingsworth, MD, MS; John Z. Ayanian, MD, MPP; Edward C. Norton, PhD; Phyllis L. Yan, MS; Andrew M. Ryan, PhD

Abstract

Background:
Accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP) are associated with modest savings. However, prior research may overstate this effect if high-cost clinicians exit ACOs.

Objective:
To evaluate the effect of the MSSP on spending and quality while accounting for clinicians’ nonrandom exit.

Design:
Similar to prior MSSP analyses, this study compared MSSP ACO participants versus control beneficiaries using adjusted longitudinal models that accounted for secular trends, market factors, and beneficiary characteristics. To further account for selection effects, the share of nearby clinicians in the MSSP was used as an instrumental variable. Hip fracture served as a falsification outcome. The authors also tested for compositional changes among MSSP participants.

Setting:
Fee-for-service Medicare, 2008 through 2014.

Patients:
A 20% sample (97 204 192 beneficiary-quarters).

Measurements:
Total spending, 4 quality indicators, and hospitalization for hip fracture.

Results:
In adjusted longitudinal models, the MSSP was associated with spending reductions (change, −$118 [95% CI, −$151 to −$85] per beneficiary-quarter) and improvements in all 4 quality indicators. In instrumental variable models, the MSSP was not associated with spending (change, $5 [CI, −$51 to $62] per beneficiary-quarter) or quality. In falsification tests, the MSSP was associated with hip fracture in the adjusted model (−0.24 hospitalizations for hip fracture [CI, −0.32 to −0.16 hospitalizations] per 1000 beneficiary-quarters) but not in the instrumental variable model (0.05 hospitalizations [CI, −0.10 to 0.20 hospitalizations] per 1000 beneficiary-quarters). Compositional changes were driven by high-cost clinicians exiting ACOs: High-cost clinicians (99th percentile) had a 30.4% chance of exiting the MSSP, compared with a 13.8% chance among median-cost clinicians (50th percentile).

Limitation:
The study used an observational design and administrative data.

Conclusion:
After adjustment for clinicians’ nonrandom exit, the MSSP was not associated with improvements in spending or quality. Selection effects — including exit of high-cost clinicians — may drive estimates of savings in the MSSP.

Primary Funding Source:
Horowitz Foundation for Social Policy, Agency for Healthcare Research and Quality, and National Institute on Aging.

In addition, here is an article from The Incidental Economist of June 17th on the same subject:

The Incidental Economist
June 17, 2019
Spending Reductions in the Medicare Shared Savings Program: Selection or Savings?
By J. Michael McWilliams, MD, PhD, Alan M. Zaslavsky, PhD, Bruce E. Landon, MD, MBA, and Michael E. Chernew, PhD.

Prior studies suggest that accountable care organizations (ACOs) in the MSSP have achieved modest, growing savings. In a recent study in Annals of Internal Medicine, Markovitz et al. conclude that savings from the MSSP are illusory, an artifact of risk selection behaviors by ACOs such as “pruning” primary care physicians (PCPs) with high-cost patients. Their conclusions appear to contradict previous findings that characteristics of ACO patients changed minimally over time relative to local control groups.

Conclusion

Monitoring ACOs will be essential, particularly as incentives for selection are strengthened as regional spending rates become increasingly important in determining benchmarks. Although there has likely been some gaming, the evidence to date — including the study by Markovitz et al. — provides no clear evidence of a costly problem and suggests that ACOs have achieved very small, but real, savings. Causal inference is hard but necessary to inform policy. When conclusions differ, opportunities arise to understand methodological differences and to clarify their implications for policy.

And finally, Don McCanne’s comment:

This important study in the highly reputable Annals of Internal Medicine concludes that accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) did not show any improvement in spending or quality when adjustments were made for selection effects, especially the non-random exit of high-cost clinicians (“I’m worth the extra money, and if you’re gonna cut my fees, I’m outta here.”)

The conclusions were immediately challenged by others in the policy community who have previously published studies indicating that “ACOs have achieved very small, but real, savings,” albeit admitting that “there has likely been some gaming.” And the savings were, indeed, very small. Others have suggested that the very small savings did not take into consideration the significant increase in provider administrative costs for technological equipment and personnel to run the ACOs, and certainly did not consider other unintended consequences such as the tragic increase in physician burnout.

Another problem with the infatuation for ACOs is that politicians and the policy community are insisting that we continue with this experiment in spite of the disappointing results to date. That simply postpones the adoption of truly effective policies, such as those in a single payer Medicare for All program, that would actually improve quality while greatly reducing administrative waste. The tragedy is that this also perpetuates uninsurance, underinsurance, and personal financial hardship from medical bills.

People are suffering and dying while the policy community continues to diddle with ACOs and other injudicious policy inventions. Enough! It’s long past time to reduce suffering and save lives! Single Payer Medicare for All!

(Yes, I’m angry, but even more I’m terribly anguished over the health care injustices that we continue to tolerate through our collective inaction.)

See, we can’t get away from Medicare for All after all.

 

The Free Market Utopian Fantasy

Whenever the subject of what to do about the cost of health care arises on the social media site, LinkedIn, invariably there is someone who attempts to deflect the discussion away from the logical solution of Medicare for All/Single Payer, to what I am calling the Free Market Utopian Fantasy.

Those of you who read my post, “Health Care Is Not a Market”, will understand that when it comes to health care, the rules of the market do not apply. That is why I have called the attitude and comments made by these individuals, the Free Market Utopian Fantasy. Because the free market in health care is a fantasy. It is usually the expression of economic libertarianism coming from the right-wing propaganda machine.

Simply put, the Free Market Utopian Fantasy states that if we only had a truly free market health care system, costs would regulate themselves through competition, as in other areas of the free market.

In fact, one observer recently said the following in a thread on LI: “This would not be the case IF there were created and implemented an ORDERLY market for health care services based upon free market enterprise principles whereby ALL costs are transparent to ALL parties.”

An orderly market? Are you serious? More of the same BS from the Free Market Utopians.

Then there is the idea that consumers, read that as patients, must educate themselves as to the best choice. Choice? When you are dying of a heart attack? Choice, when you only have a short time to live due to a serious illness like Cancer or Diabetes?

Folks, we are not talking about choosing between buying steak or chicken. This is not choosing to go to Italy next summer or to the Caribbean. We are talking about life and death. And the only choice is to do what will save your life, not choose between colors on a swatch.

This Free Market Utopian Fantasy has infected so many people in the health care industry, and they are trying to prevent the American people from receiving the same quality of care at lower cost than all the other Western and other nations already do for their people.

They claim that we can’t afford to do it. I ask, can we afford not to?

They cite statistics about Medicare like some cite similar statistics about Social Security, but they are wrong then, and they are wrong about Medicare for All, because it will be expanded to cover everyone and everything, not requiring separate insurance for things like vision and dental care, mental health, and long-term care.

Here is what one person said in the same thread cited above:

“We can barely afford Medicare for the 60 million current Medicare recipients. Adding another 270 million recipients would bankrupt the nation in short order. Latest data (2017) on Medicare shows an annual cost of $700 billion, and projections show the Medicare Trust Fund will be insolvent in 2026 – and by the way, Medicare actually only covers about half of the real cost because the rest is covered by supplementary insurances that have to be bought by the patient. If you assume that Medicare expansion was at the same cost rate as current Medicare, Medicare for all would cost at least $3.15 trillion in 2017 dollars. Total 2019 federal government revenue is estimated at $6.5 trillion, and estimated Medicare for all costs for 2019 would be $3.5 trillion. It is simply not feasible.”

Boy, they really know how to BS their way to keeping us the only Western nation that does not have universal health care. What they don’t realize is, there won’t be any private insurance, because it is private insurance that drives up the cost of health care with administrative costs and waste,

Well, it is high time we call BS on all of them, and their Free Market Utopian Fantasy. Until we stop listening to these folks who are protecting their careers and profits, no American will never have to worry if they or a loved one gets sick and cannot afford the needed medical care without going bankrupt or dying without ever receiving the care they so desperately need. I said as much in my other post, “By What Right”, where I took these folks to task for preventing the enactment of MFA/Single Payer.

These Free Market Utopians are not doing anyone any favors. They are only hurting millions of Americans, born or not-yet-born who will someday need a truly comprehensive, universal health care system, and it won’t be there thanks to them and their associates.

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.

Medicare for All Act of 2019

Yesterday, Sen. Bernie Sanders introduced the Medicare for All Act for 2019, along with 19 co-sponsors in the Senate.

This bill mostly follows the previous bill he introduced in 2017, yet it has one notable addition. The new bill is summarized as follows:

*  Eligibility: Covers everyone residing in the U.S.
*  Benefits: Covers medically-necessary services including primary and preventive care, mental health care, reproductive care (bans the Hyde Amendment), vision and dental care, and prescription drugs. This bill also provides home- and community-based long-term services and supports, which were not covered in the 2017 Medicare for All Act.
*  Patient Choice: Provides full choice of any participating doctor or hospital. Providers may not dual-practice within and outside the Medicare system.
*  Patient Costs: Provides first-dollar coverage without premiums, deductibles or co-pays for medical services, and prohibits balance billing. Co-pays for some brand-name prescription drugs.
*  Cost Controls: Prohibits duplicate coverage. Drug prices negotiated with manufacturers.
*  Timeline: Provides for a four-year transition. In year one, improves Medicare by adding dental, vision and hearing benefits and lowering out-of-pocket costs for Parts A & B; also lowers eligibility age to 55 and allows anyone to buy into the Medicare program. In year two, lowers eligibility to 45, and to 35 in year three.
According to the Physicians for a National Health Plan (PNHP), this bill can be improved by:
* Funding hospitals through global budgets, with separate funding for capital projects: A “global budget” is a lump sum paid to hospitals and similar institutions to cover operating expenses, eliminating wasteful per-patient billing. Global budgets could not be used for capital projects like expansion or modernization (which would be funded separately), advertising, profit, or bonuses. Global budgeting minimizes hospitals’ incentives to avoid (or seek out) particular patients or services, inflate volumes, or up-code. Funding capital projects separately, in turn, allows us to ensure that new hospitals and facilities are built where they are needed, not simply where profits are highest. They also allow us to control long term cost growth.
* Ending “value-based” payment systems and other pay-for-performance schemes: This bill continues current flawed Medicare payment methods, including alternative payment models (including Accountable Care Organizations) established under the ACA, and the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Studies show these payment programs fail to improve quality or reduce costs, while penalizing hospitals and doctors that care for the poorest and sickest patients.
* Establishing a national long-term care program: This bill includes home- and community-based long-term services and supports, a laudable improvement from the 2017 bill. However, institutional long-term care coverage for seniors and people with disabilities will continue to be covered under state-based Medicaid plans, complete with a maintenance of effort provision. PNHP recommends that Sen. Sanders include institutional long-term care in the national Medicare program, as it is in Rep. Pramila Jayapal’s single-payer bill, H.R. 1384.
* Banning investor-owned health facilities: For-profit health care facilities and agencies provide lower-quality care at higher costs than nonprofits, resulting in worse outcomes and higher costs compared to not-for-profit providers. Medicare for All should provide a path for the orderly conversion of investor-owned, for-profit health-care providers to not-for-profit status.
* Fully covering all medications, without co-payment: Sen. Sanders’ bill excludes cost-sharing for health care services. However, it does require small patient co-pays (up to $200 annually) on certain non-preventive prescription drugs. Research shows that co-pays of any kind discourage patients from seeking needed medical care, increasing sickness and long-term costs. Experience in other nations prove that they are not needed for cost control.
Any other legislation such as strengthening the ACA, or half-measures for Medicare such as
buy-ins or public options, or leaving private, employer-based insurance alone, will not solve the
problems we are having, which stem from the financing of health care, and not the providing of
health care.

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.