Category Archives: PNHP

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

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

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

 

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

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

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

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

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

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

But what about health care, McDonough asks again?

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

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

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

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

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

Stay safe everyone.

Public Health Emergencies and Health Care

In light of recent protests and violence, especially the state-sponsored violence that was unleashed by a fascist would-be dictator last night in the nation’s capital for a political photo-op that cleared peaceful protesters with tear gas and flash bombs, we must stop defending an economic system that believes that human rights such as health care are a priviledge of one’s pocketbook, and not their humanity. This attitude is not limited to health care, but in the midst of a pandemic, it is imcumbent on us to begin somewhere.

The statement below from Dr. Adam Gaffney, President of the Physicians for a National Health Program (PNHP) rightly states that police violence and racism are public health emergencies, must be understood from an historical perspective as well.

In my post, Why The US Doesn’t Have Universal Health Care – It Is Not What You Think, the reluctance of the US to implement universal health care is tied to Southern White racism.

So, those whose career or jobs depend on the status quo, and you know who you are, are  standing in the way of change or defend the status quo, are the ones who can bring change, or else change will be made without you.

Here is the statement:

June 2, 2020

Statement from Physicians for a National Health Program:

The horrific murder of George Floyd at the hands of Minneapolis police has sparked protests nationwide. Physicians for a National Health Program (PNHP), an organization of more than 23,000 doctors who support Medicare for All, denounces police brutality and racism in all forms; demands immediate steps to ensure racial justice at all levels of government; and calls for racism and racial health inequity to be treated as public health emergencies.

“The murder of Floyd,” said Dr. Adam Gaffney, president of PNHP, “is yet the latest example of the pervasive racism that sickens our nation. It is emblematic of the deeply entrenched system of institutionalized racism that afflicts both our criminal justice and health care systems.”

Police violence is a public health emergency.

Police violence is a leading cause of death for young men of color. Black men in particular face a 1 in 1,000 chance of being killed by police, and are 2.5 times more likely to be killed by police than are white men. Over-policing in communities of color and sentencing disparities mean that in the U.S. — which has the highest rate of incineration in the world — Black Americans are incarcerated at a rate that is 5.1 times that of whites.

Mass incarceration imposes a particular threat to health during the COVID-19 pandemic given crowding and poor access to health care in these facilities. PNHP has previously joined other groups in calling for immediate actions to safeguard the health of prisoners during the COVID-19 pandemic, including early release.

Racism is a public health emergency.

The current COVID-19 pandemic has laid bare the deep inequalities in our health system, as Black Americans are more than twice as likely (and in some states seven times as likely) to die from the virus than whites.

“Racial inequities have, for too long, been tolerated and accepted as normal in this country,” stated Dr. Susan Rogers, president-elect of PNHP. “The overt brutality displayed by police makes this clear, but these inequities extend to health care, housing, and education.”

Compared to whites, people of color are more likely to be uninsured, face barriers to care, and suffer and die from preventable health conditions like diabetes, heart disease, and cancer. Black families are also three times more likely to live in poverty compared to white families, and twice as likely to be food insecure, factors known to contribute to poor health.

PNHP is committed to fighting all forms of racial inequity, including the structural racism that puts Black people at substantially higher risk of police violence and incarceration, and a broken health care system that denies patients of color the right to health and health care.

Now more than ever we must speak out against all acts of racial injustice. Here are a few ideas for what you can do today:

  • Support racial justice organizations in your community with your time or financial resources.
  • Educate yourself about racial disparities in health care by exploring PNHP’s TOOLKIT on racial health inequities, which includes materials for hosting webinars, a guide for writing letters and op-eds, talking points, and materials to share on social media.
  • Commit to educating your colleagues on racial justice with this slide show and with tools for a Grand Rounds presentation.

Please join me in demanding an end the scourge of police violence, as well as racism and discrimination in all its forms.

Sincerely,

Adam Gaffney, M.D., M.P.H.
President

If Not Now, When?

Don McCanne posted the following article from Health Affairs by Adam Gaffney, President of Physicians for a National Health Plan (PNHP). The full text and exhibits can be found at the link at the bottom.

Health Affairs Blog

March 9, 2020

Medicare For All: If Not Now, When?

By Adam Gaffney

The rise of Medicare for All has triggered mixed reactions.  Supporters see it as a cause for hope — the culmination of decades of research, education, and advocacy.  President Donald Trump, on the other hand, is dyspeptic, fuming in his recent State of the Union that single-payer would “bankrupt our nation,” and vowing not to “let socialism destroy American healthcare.”  A third group expresses sympathy for the goals of Medicare for All, and even acknowledges its policy merits, but sees the political obstacles as insurmountable — and advises that advocacy for such reform should be abandoned because it risks undermining beneficial, and more realistic approaches.

A clear-eyed assessment of institutional realities that will face the next presidential administration, Billy Wynn recently argued in the Health Affairs blog, should temper Democrats’ demands. He cautioned that Democratic victories in federal elections are far from secure; that Medicare for All may not be passable via budget reconciliation even if Democrats take the Senate with only a simple majority; and that Democratic legislators are, in any event, hardly unified in support of Medicare for All.  Similarly, John E. McDonough recently warned that comprehensive healthcare reform has, in the past, required an elusive “super-majority Trifecta” — Democratic control of the House, Senate (with 60-seats), and Presidency.  Even under such favorable conditions, he contends, our political capital might be better invested elsewhere.

While the hurdles are certainly formidable, steep political odds hardly compel us to abandon Medicare for All.  Indeed, advice to drop the push for such reform rests on a misunderstanding of the dynamics of political change.  History suggests that movements organized around ambitious demands can, over time, create the conditions for their passage — and that demands for radical change often advance, rather than undermine, the prospects for more incremental progress in the interim.  As important, the life-and-death urgency of single-payer healthcare reform – too often underemphasized by its critics – has the potential to bring together a coalition of supporters across cultural, geographic and even class lines.  It may, in other words, trigger a movement that could accomplish the unexpected.

The Dynamics of Political Change: Lessons from History

The institutional barriers that critics describe are real enough, and cannot be waved away.  But they are also not immutable: throughout history, energizing issues have changed political contexts.

Consider, for instance, the passage of Medicare and Medicaid in 1965.  Democrats had been stymied since the Truman administration in their efforts to pass a public national health insurance plan, obstructed in part by members of Congress intent on accommodating the insurance industry. John McDonough is right to emphasize that, from a narrow perspective, a super-majority Trifecta made Medicare achievable.  1964 saw a historic electoral shift, that, as Ted Marmor has noted, all but “guaranteed the passage of legislation on medical care for the aged.”  But the achievement was only possible because people had been laying the groundwork for Medicare for years prior to the pivotal election.  Senior citizen groups, progressive activists, organized labor, and allies in the civil rights movement forced it onto the national political agenda, holding politicians feet to the fire year after year — a point made by Natalie Shure in the Nation.  Moreover, it required years of legislative efforts and coalition building to ready the ground for the final push. Had supporters not done so — had everyone waited to design and advocate for Medicare until the political chess pieces were in perfect position — the window would have opened, the window would have closed, and Medicare might very well not have come to be.

The same can be said for almost every sweeping political change in US history. The abolition of slavery, the reforms of the New Deal era, the civil rights legislation of the 1960s, and the legalization of gay marriage — none would have happened if reformers had patiently waited for the proper political alignment in the halls of Congress before envisioning, designing, and demanding change.  The 2020 elections may or may not cause a political earthquake on par with 1964, but it hardly follows from this that we ought to lower our sights.  After all, nobody can accurately predict when the pivotal shift will come.  We do know, however, that if we wait for it happen, we will already be too late.

The Urgency of National Health Insurance

(Use the link below to access this important section of the article.)

Medicare for All — unlike other reforms — would alleviate such widespread and unnecessary suffering not merely by covering the uninsured, but by eliminating financial barriers to care.  Rising costs from higher care utilization will be offset by large savings from simplifying administration. Indeed, a recent systematic review found that some 19 out of 22 economic analyses of Medicare for All predicted overall savings in the first year as a result of such efficiencies.  Transforming healthcare financing is what makes such an unprecedented coverage expansion economically— and hence politically — feasible.

The policy advantages of Medicare for All, in other words, aren’t mere minutiae: they are part of the force for political change.

Medicare for All: The Link Between Policy and Politics

Yet policy and politics are linked in another, more fundamental way.  The experience of illness and of medical care is almost universal.  This means that in the United States, encounters with our dysfunctional healthcare financing system are also near universal.  How many have never had a spell of being uninsured, dealt with an onerous copay or deductible, contended with a medical bill or collections agency, gone without needed care because of cost, or faced a denial of care from their insurer?  It is not merely uninsured Americans who have much to gain from single-payer reform, but also those with chronic conditions who pay a tax for their illness in the form of cost-sharing; those with Medicare coverage who lack dental and long-term care benefits; those with Medicaid who must hurdle administrative barriers to remain covered and face frequent “churn” out of the program, and who sometimes have inferior access to care.  Indeed, even those satisfied with their employer-sponsored coverage know that they are but one sickness — and consequent job loss — away from losing it.

All of which is to say that at the end of the day, the vast majority of the nation could benefit from single-payer reform — and that fact makes it winnable.  Above all, however, we can be sure of one thing: not bothering to push for Medicare for All today will guarantee that it doesn’t happen tomorrow.

The author serves as President of Physicians for a National Health Program (PNHP), a non-profit organization that favors coverage expansion through a single payer program.

https://www.healthaffairs.org/do/10.1377/hblog20200309.156440/full/

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.

Beware Billionaires Against Medicare for All

This week, the former CEO of everyone’s favorite coffee house and time waster, Starbucks, declared that he was considering a run for president next year as an independent.

This announcement brought immediate response from both wings of the Democratic Party, as they said it would result in the re-election of the current occupant of the White House.

Even former NYC Mayor, Michael Bloomberg, another billionaire, said that he should not run.

However, as this is a blog about medical care, and not politics, I will leave the discussion as to the efficacy of an independent run for president by another billionaire for others.

What I do want to focus on is this overpaid former barista’s belief that the US cannot afford a Medicare for All, single-payer health care system.

Incidentally, this is also Bloomberg’s view as well.

But I do not think their opposition is based solely on the belief that Medicare for All, single-payer is too expensive. Rather, I believe they are afraid that after the results of last November’s midterm elections, the Democratic Party is poised to win back the White House and possibly the Senate, and that Medicare for All, in whatever form it takes, will be enacted.

I have written about the health care industry’s efforts to derail Medicare for All in previous posts. (See the following: https://wp.me/p2QJfz-QIyhttps://wp.me/p2QJfz-Jki, and https://wp.me/p2QJfz-WI5)

While I cannot accuse Schultz and Bloomberg of being in the pocket of the healthcare industry, it does look suspicious that now that the Democrats control the House, they are coming out against a health care plan that many Americans voted for when they voted for Democrats.

But billionaires should not be the ones deciding whether or not we enact Medicare for All. That should be up to the voters (patients and non-patients), their elected representatives, and most importantly, those in the medical profession who believe the time has come for Medicare for All, single-payer.

One such group are physicians themselves, as reported back in August in the magazine of the Physicians for a National Health Program (PNHP), which I was informed of this morning by a high school alumnus who posted the article on another alum’s Facebook post.

The article was originally posted in Jacobinmag.com.

Here is the link to the article by Meagan Day.

One caveat to progressives: Don’t assume that every American voter who is undecided, declared themselves as an independent, or are unhappy with their choice in the last presidential election, and his behavior and actions, will vote for your chosen candidate. That is why Schultz is contemplating running. And he can do a lot of damage to your plans for 2020.

 

 

Single Payer A Bargain

Another shout out to Don McCanne for the following.

On Friday, the Nation published an article by Steffie Woolhandler, David Himmelstein, and Adam Gaffney.

You may recall these folks from my book review, “Health Care Under the Knife,” and it’s conclusion, “Some Final Thoughts on ‘Health Care Under the Knife.'”

Rather than regurgitate it for you, I am letting you read it in its entirety. But before I do, let me bring to your attention, an issue that is flying under the radar and has serious consequences for the country, our rights, and for the future of health care and other social programs.

Those lovable brothers from the Midwest, Charles and David Koch, are funding a group called ALEC, the American Legislative Exchange Council. One of the goals of ALEC is to call an Article V (of the Constitution, for those of you not familiar with the document) that allows for the creation of a convention in the event the government gets too much power.

I recommend you read up on it because it will radically alter our system of government for the benefit of the corporations and wealthy. Say goodbye to Social Security, Medicare, Medicaid, and direct election of Senators, to name a few goals.

That brings me to a quote I must let you read from a man who has no clue what he is talking about, and is emblematic of the dysfunction of his party. That man is former Oklahoma Sen. Tom Coburn, himself a physician who said the following regarding a convention and why he and others feel it is necessary.

“We’re in a battle for the future of our country…We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free.”

In case you missed that, let me repeat it:

“We’re in a battle for the future of our country…We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free.” Violent, ain’t he?

Pray tell, what country in western Europe is Marxist? Last I heard, none. Folks, these guys not only want to take away health care, they are still fighting the Cold War and godless, Marxist Communism.  No, what they are really about is defending a system, both economic and health care-wise, that cannot be sustained.

Here is the article in full:

Last week, Charles Blahous at the Koch-funded Mercatus Center at George Mason University published a study suggesting that Bernie Sanders’s single-payer health-care plan would break the bank. But almost immediately, various observers—including Sanders himself—noted that according to Blahous’s own estimates, single payer would actually save Americans more than $2 trillion over a decade. Blahous doubled down on his argument in The Wall Street Journal, and on Tuesday, The Washington Post’s fact-checker accused Democrats of seizing “on one cherry-picked fact” in Blahous’s report to make it seem like a bargain.
The Post is wrong to call this a “cherry-picked fact”—it’s a central finding of the analysis—but it is probably right that single-payer supporters shouldn’t make too much of Blahous’s findings. After all, his analysis is riddled with errors that actually inflate the cost of single payer for taxpayers.
First, Blahous grossly underestimates the main source of savings from single payer: administrative efficiency. Health economist Austin Frakt aptly demonstrated the “bewildering complexity of health care financing in the United States” in The New York Times last month, citing evidence that billing costs primary-care doctors $100,000 apiece and consumes 25 percent of emergency-room revenues; that billing and administration accounts for one-quarter of US hospital expenditures, twice the level in single-payer nations; and that nearly one-third of all US health spending is eaten up by bureaucracy.
Overall, as two of us documented recently in the Annals of Internal Medicine, a single-payer system could cut administration by $500 billion annually, and redirect that money to care. Blahous, in contrast, credits single payer with a measly fraction of that—or $70 billion—in administrative savings.
Our profit-driven multi-payer system is the source for this outlandish administrative sprawl. Doctors and hospitals have to negotiate contracts and fight over bills with hundreds of insurance plans with differing payment rates, rules, and requirements. Simplifying the payment system would free up far more money than Blahous estimates to expand and improve coverage.
Next, Blahous lowballs the potential for savings on prescription drugs. He assumes that a single-payer system couldn’t use its negotiating clout to push down drug prices, ignoring the fact that European nations and the US Veterans Affairs system achieve roughly 50 percent discounts relative to the US private sector. (Single payer’s only drug savings, he argues, will come from shifting 15 percent of brand-name prescriptions to generics.) Hence Blahous foresees only $61 billion in drug savings in 2022, even though tough price negotiations would likely achieve threefold higher savings.
Third, Blahous underestimates how much the government is already spending on health care. For instance, he omits the $724 billion that federal agencies are expected to pay for employees’ health benefits over the 10 years covered by his analysis, which would simply be redirected to Medicare for All. He also leaves out the massive savings to state and local governments, which would save nearly $3.6 trillion on employee benefits and another $5.3 trillion on Medicaid and other health programs. Hence, much of the “new money” needed to fund Sanders’s reform is already being collected as taxes.
Yes, there will need to be some new taxes—albeit much less than Blahous estimates. But those new taxes would just replace—not add to—current spending on premiums, co-pays, and deductibles. Additionally, at least some of the new taxes would be virtually invisible. For instance, the $10 trillion that employers would otherwise pay for premiums could instead be collected as payroll taxes. Similarly, Medicare for All would relieve households of the $7.7 trillion they’d pay for premiums and $6.3 trillion in out-of-pocket costs under the current system.
It’s easy to get lost in the weeds here. But at the end of the day, even according to Blahous’s errant projections, Medicare for All would save the average American about $6,000 over a decade. Single payer, in other words, shifts how we pay for health care, but it doesn’t actually increase overall costs—even while providing first-dollar comprehensive coverage to everyone in the nation. The Post’s fact-checker is wrong: Single-payer supporters can and should trumpet this important fact.
Of course, the most important benefits of single payer are altogether invisible in economic analyses like the one performed by Blahous. No matter what injury or illness we faced, we would be forever freed from one great worry: the cost of our care. It’s hard to put a price tag on that kind of freedom. Yet, paradoxically, even the slanted analysis of a libertarian economist provides evidence that it would be fiscally responsible.

Obamacare: The Last Stage of Neoliberal Health Reform

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

_____________________________________

Sources: See note 11, page 273.

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

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

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

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

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

The six features of neoliberal health reform are as follows:

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

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

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

Chart 7.1 Financial Flows under Neoliberal Health Reform

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

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

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

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

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

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

So how do we move to single payer and beyond?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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