Wednesday, April 30, 2014

Fwd: qotd: Technical correction: Ezekiel Emanuel’s “Reinventing American Health Care”

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Technical correction: Ezekiel Emanuel's "Reinventing
American Health Care"
Date: Wed, 30 Apr 2014 07:18:43 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

In the comment in the April 29 Quote of the Day on Ezekiel Emanuel's
"Reinventing American Health Care," I wrote, "In his current book,
Reinventing American Health Care, he made no mention of single payer."
Technically, this was incorrect in that single payer was mentioned in
passing in his discussion of the history of the reform effort, although
he never elaborated on it as a serious option for reform. This statement
has been removed from the version posted on the PNHP website.

His references to single payer:

Page 150 - "Union support (of Clinton's Health Security Act), however,
was lukewarm; they preferred a single-payer plan over the Health
Security Act's more market friendly approach, but they did not want to
oppose a Democratic president openly."

Page 151 - "This (Representative Dan Rostenkowski's scandal) was
especially significant because it limited his ability to keep
Representative Pete Stark (D-California), a vociferous single-payer
advocate on the Ways and Means Committee, from derailing Clinton's bill."

Page 152 - "Representative Jim McDermott (D-Washington) and Senator Paul
Wellstone (D-Minnesota) sponsored a single-payer plan."

Page 154 - "In addition, unions and liberal groups loathed the
market-based Health Security Act, still hoping and campaigning behind
the scenes for a single-payer national health insurance plan."

Page 156 - "The left's insistence on single payer and unwillingness to
rally around a more market-based Democratic plan has contributed to the
defeat of more moderate but important universal-coverage proposals both
in 1974 and 1993."

Page 161 - "Liberals always preferred a single-payer approach, whether
it is called a national health insurance plan or Medicare for all."

Friday, April 25, 2014

Fwd: qotd: Single payer in the next presidential term?

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-------- Original Message --------
Subject: qotd: Single payer in the next presidential term?
Date: Fri, 25 Apr 2014 10:51:46 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Fox News Poll
April 13-15, 2014

14. I'm going to read a list of potential candidates for the 2016
Democratic nomination. Please tell me which one you would like to see as
the Democratic presidential nominee.

69% Hillary Clinton
14% Joe Biden
6% Elizabeth Warren
2% Andrew Cuomo
1% Martin O'Malley
- (Other)
4% (None of the above)
3% (Don't know)

15. I'm going to read a list of potential candidates for the 2016
Republican nomination. Please tell me which one you would like to see as
the Republican presidential nominee.

15% Chris Christie
14% Jeb Bush
14% Rand Paul
9% Paul Ryan
8% Marco Rubio
7% Ted Cruz
5% Scott Walker
5% Rick Santorum
5% Rick Perry
2% Bobby Jindal
1% (Other)
6% (None of the above)
9% (Don't know)


California Medical Association
CMA Alert
April 21, 2014
Clinton urges move away from fee-for-service payment model; says current
system is not serving physicians, or patients, well

Former Secretary of State Hillary Rodham Clinton addressed 700
physicians, practice managers, medical students and others at the
Western Health Care Leadership Academy in San Diego. Delivering the
keynote address live via satellite, Secretary Clinton urged the
California Medical Association to work with other like-minded
organizations to help advance meaningful health care delivery and
payment reform, instead of continuing to "rejigger" a broken system.

"At some point, we have to move away from fee for service payment for
medical care," said Secretary Clinton. "It is not serving physicians
well, or any other health care providers, and I don't believe it's
serving patients well."

Secretary Clinton told attendees that she shares physicians' frustration
with Congress's inability to make any progress on fixing the current
broken payment system. She said she would like to see more systemic
reform so that physicians are fully reimbursed for everything that goes
into the care of patients. "It is deeply bothersome to me that it is
still not accepted that a lot of what constitutes wellness—things that a
physician can be promoting with his or her patients—should be reimbursed
by Medicare," Clinton said. "When a physician sits down with a patient
and says 'I'm going to give you a nutrition regimen. I'm going to have
my nurse or my PA check in on you to make sure that you're walking every
day.' These are all things that would keep that patient out of the
operating room for a bypass or a stent or some other expensive

"We're never going to resolve the injustice, the unpredictability, the
unfairness that unfortunately permeates the current system," she said.
"We need to move away from this very narrow approach to reimbursing

"At some point, I hope we're going to be able to take a look at the
broad base of funding streams, both public and private, that go into
funding health care–particularly physicians' pay—and look more at who
the patient is and what the doctor is providing that patient, instead of
what the program is and how we can keep trying to put square pegs in a
round hole."

Secretary Clinton also held up California's implementation of the
Affordable Care Act as a model for the nation. "We're going to be
watching closely what happens in California. Seeing what works, and what
doesn't. States like California, intent on covering more citizens and
fostering bold experimentation to improve outcomes and reduce costs,
will not only lead the way, but help everyone else find the way."

Secretary Clinton also urged all stakeholders to work together to keep
pushing for improvements to the health care system. "The transparency
called for under the Affordable Care act is going to reveal a lot of
information. Some of it may be surprising. And some of it may even be
quite troubling," said Clinton. "But for the first time, we're going to
see information. And everyone will be able to look at the same
information. We can then try and figure out 'Is there a problem that
needs to be fixed?'"

The data collected under the Affordable Care act will, according to
Clinton, will allow us to ask questions that will give us much better
insight into how we can move towards a more efficient, quality driven
health care system.

"I think this is a great opportunity, if we do it with that kind of open
attitude of 'let's learn what works, let's make this better.' Let's hear
from physicians and nurses and pharmacists, you name it. Everyone come
to the table. What do you think needs to be changed?"


PNHP California
April 9, 2014
Position Statement on the Affordable Care Act (ACA)


Recognizing that we share core principles with those who worked hard to
implement the ACA, including the desire for a healthcare system that is
truly universal, affordable and provides comprehensive benefits with one
standard of high quality care, we resolve to:

• Build bridges to ACA supporters to forge strong alliances for
continued reform.

• Work with our partners towards the successful implementation of ACA
and to find solutions for the 3-4 million Californians who are still
left out of the system, including the undocumented.

• Support efforts to provide healthcare as a basic human right rather
than a commodity available only to those who can afford it.


Comment by Don McCanne

Considering the difficulty that President Obama has experienced in
passing and then implementing the Affordable Care Act (ACA), it is clear
that he is in no position to advocate for single payer reform before he
leaves office. Thus it seems reasonable to consider the prospects of
enacting single payer reform during the term of our next president. What
are the prospects?

As people gain more experience with the ACA reforms, it is likely that
many will be disappointed. The marketplace (exchange) plans that most
people are selecting have relatively low actuarial values with high
deductibles, thus many will experience financial hardship should they
have significant health care needs. Also many will be disappointed with
the narrow provider networks which will often prevent patients from
having their choice of physicians and hospitals. Since employers are now
adopting some of these same insurance innovations, many who previously
were satisfied with their employer-sponsored coverage may also become
much less content with their coverage.

It is thought that, by 2017, enough people will have become dissatisfied
with our high-cost, administratively inefficient, dysfunctional system
that many of them will be ready for an improved Medicare for all. That
happens to be the year that our next president will take office. Will we
have a president who is willing to support a vastly superior alternative
- a single payer national health program?

Obviously we cannot predict the results of a presidential election this
far in advance, but we can take a look at the political climate - a
climate which is unlikely to change dramatically in the next few years.

Looking at the Fox poll and other recent polls, the clear front runner
is Hillary Clinton. Although it is possible that the Republican Party
could rally around a candidate that would be a serious challenge to
Clinton, currently she outpolls each of the Republicans under consideration.

Suppose Hillary Clinton were elected president, what could single payer
advocates expect? The report on her speech to physicians in California
is reproduced above in its entirety, mainly to show what was left out of
her message. There is certainly no mention of single payer nor expanding
Medicare. She does mention moving away from fee-for-service payments,
and expanding payments for "wellness-things," while holding up
California's implementation of ACA as a "model for the nation." She also
touted information transparency. In her last run for the presidential
nomination she had displaced her previous failed proposal with the
current ACA model. Based on her comments, it is highly likely that her
efforts at reform would be limited refinement of the ACA model, if she
can get past the crippling partisan divide in Congress.

Should a Republican be elected, it is likely that efforts would be
directed to replacing some elements of ACA with policies supporting less
regulation of insurance products, limitation of mandates, and ability of
individuals to purchase insurance products in less regulated states. No
serious potential Republican candidate supports single payer.

So, no single payer will be coming from the top. Then what can we do? We
should intensify our efforts to educate the public at large - so they
understand why ACA does not seem to be working well for them, while
showing them how single payer is precisely the model we need. We need to
create a critical threshold of support coming from the general public.
If the demand is intense enough, the politicians will follow.

But a caveat. The single payer message must be loud and clear. People
must understand that the ACA model is fundamentally flawed and must be
superseded by a single payer system. Many single payer supporters
abandoned the cause and chose to support the "progressive" alternative -
Obamacare. They continue to be involved in the implementation of this
highly flawed model (better than nothing but still highly flawed).
Fortunately, there are still organizations, such as PNHP, that are not
willing to compromise and dilute the single payer message. Doing so
would merely continue us down the incremental path of reform, when there
are no incremental steps that bridge the gap between a fragmented system
of private and public payers and a single payer system.

PNHP California has adopted a position statement calling for "work(ing)
with our partners towards the successful implementation of ACA." Most of
the progressive community is already engaged in supporting ACA, and they
really do not need more help. Muddling the message of the single payer
purists that remain can only perpetuate inertia in the single payer
movement. Some sincerely believe that helping the ACA supporters will
result in reciprocal support for our efforts on single payer. Really?
They are going to help us disassemble a system that they worked so hard
on to build?

Let's not adulterate our single payer message.

Thursday, April 24, 2014

Fwd: qotd: Reaping rewards for medical product innovation

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Reaping rewards for medical product innovation
Date: Thu, 24 Apr 2014 10:38:54 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Fox Business
April 22, 2013
Gilead Profit Triples, Hepatitis C Drug Revenue Reaches $2.3B

Gilead Sciences Inc (GILD), which ignited a fierce debate over
prescription drug prices, said its new $1,000 hepatitis C pill generated
quarterly sales of $2.27 billion, helping the company's quarterly net
profit nearly triple.


April 23, 2014
MIA In The War On Cancer: Where Are The Low-Cost Treatments?
By Jake Bernstein

Increasingly, Big Pharma is betting on new blockbuster cancer drugs that
cost billions to develop and can be sold for thousands of dollars a
dose. In 2010, each of the top 10 cancer drugs topped more than $1
billion in sales, according to Campbell Alliance, a health-care
consulting firm. A decade earlier, only two of them did. Left behind are
low-cost alternatives, including generics, that have shown some merit
but don't have enough profit potential for drug companies to invest in
researching them.

The predominant focus of cancer drug development today is on "targeted
therapies" that are both innovative and lucrative. These drugs block the
growth and spread of cancer by interfering with specific molecules
involved in tumor growth. Fashioning these targeted therapies involves
costly molecular and genetic experimentation, but once patented the
investment can translate into enormous drug company profits.


RAND Corporation
April 22, 2014
Healing Medical Product Innovation
By Steven Garber, Susan M. Gates, Emmett B. Keeler, Mary E. Vaiana,
Andrew W. Mulcahy, Christopher Lau, Arthur L. Kellermann

Previous studies aimed at reining in spending on technology have focused
on changing how existing medical technologies are used. But what about
also encouraging the creation of technologies that could improve health
and reduce spending, or that provide large-enough health benefits to
warrant any extra spending? A recent RAND study focused on policies that
could help change which medical products—drugs, devices, and health
information technologies—get invented in the first place.

To spur inventors to create medical products that lower health care
spending and promote health, policymakers need to address the perverse
financial incentives that lead inventors and investors in the opposite
direction. Currently, large profits are most often available from
creating increasingly expensive products that boost spending, whether or
not they also substantially improve health. In contrast, inventors face
relatively weak incentives to create products that would help decrease

The RAND research team developed ten high-priority policy options that
could change the costs, rewards, and risks that inventors and investors
face. We synthesized information from scientific, trade, and popular
literature; conducted interviews with more than 50 national experts from
a variety of fields; sought input from a panel of accomplished technical
advisors; and developed illustrative case studies of eight medical products.

Ten Policy Options for Healing Medical Product Innovation

1. Enable More Creativity in Funding Basic Science

2. Offer Prizes for Inventions

3. Buy Out Patents

4. Establish a Public-Interest Investment Fund

5. Expedite FDA Reviews and Approvals for Technologies That Decrease

6. Reform Medicare Payment Policies

7. Reform Medicare Coverage Policies

8. Coordinate FDA and CMS Processes

9. Increase Demand for Technologies That Decrease Spending

10. Produce More and More Timely Technology Assessments

Because the stakes in reining in health care spending are so high, and
the need to get more health benefits from the money we spend is so
great, we believe all of these options should be considered—the sooner
the better.

RAND Research Brief


Comment by Don McCanne

New technology and drug development is being driven by profits in the
private sector - massive profits. Even those of us fortunate enough to
not have to use the new technology are still paying for it through taxes
to support government health programs and through higher premiums for
private insurance plans.

As the nation with the highest health care spending it has become an
imperative that we do something about this. The drive to obtain lower
prices in health care will not come from the private sector since its
first priority is massive profits. Change will have to come from our

RAND has published a Research Brief listing ten policy options for
"healing medical product innovation." The list includes some reasonable
concepts and some ideas that perhaps are not so hot. What is important
is that policy wonks are thinking about the problem and pushing us to do
something about it. Especially important is the concept that innovation
should be targeted to reducing costs when possible, not to deliberately
designing products to be more expensive.

RAND's suggestions do include a major role for the private sector, but
give them too much control, in my opinion. More control should lie with
government entities such as the NIH. The private sector wants better
products at higher prices whereas the government should incentivize
better products at lower prices. As long as the private sector would be
willing to provide us with greater value, they should receive legitimate
costs plus fair margins.

The benefits of medical product innovation should accrue primarily to
the people, both as improvements in health technology, and as reductions
in costs. It is the consumers who ultimately pay for the development
costs who should be reaping most of the benefits - not Wall Street,
Madison Avenue, passive investors, nor the superabundance of
administrators that permeate our health care system.

The point is that we can do something about this misdirection of our
funds. We need to place a priority on the ethics of health care spending
- the same type of priority that would also lead to a single payer
financing system - thereby creating much greater value in health care
for all of us.

Wednesday, April 23, 2014

Fwd: qotd: Health spending expected to accelerate again

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Health spending expected to accelerate again
Date: Wed, 23 Apr 2014 08:38:52 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The New York Times
April 22, 2014
Acceleration Is Forecast for Spending on Health
By Eduardo Porter

The Affordable Care Act may well be on track to meeting its primary goal
of providing coverage for most uninsured Americans and protecting
everyone against the risk of losing their insurance. But for all its
innovative proposals to flush waste out of the system, reining in health
care spending still appears well beyond the grasp of Obamacare.

"We have been consistently bending the cost curve over the last 20
years, but the kinds of things that we do don't tend to be permanent,"
said Charles Roehrig, who runs the Center for Sustainable Health
Spending at the Altarum Institute, a nonprofit based in Washington. "It
will take a lot of work just to stay on the same curve we have been on
for a while."

The evolution of the American medical-industrial complex has been driven
by two critical dynamics. The first is the development of new
technologies. The second is our willingness to pay for them.

Most health care economists agree that the Affordable Care Act, along
with other forces, will help reduce waste, pushing the industry to drop
the "fee for service" model that encourages doctors and hospitals to
spend more whether it is useful or not.

Last November, President Obama's Council of Economic Advisers issued a
hopeful analysis, which posited that structural changes flowing from the
act were helping push the growth in health care spending to its slowest
on record.

David Cutler of Harvard points to studies that suggest that
straightforward changes, such as improving the dismal management of
American hospitals, could cut health care costs by 25 to 50 percent.
"Getting better is not rocket science," he said.

But that optimism might be premature. Mr. Roehrig argues that the
decade-long slowdown in spending growth reflects a response to the two
recessions that provided the economic bookends to the first decade of
the new century; not a fundamental shift in the way the system operates.

During that period, employers pushed workers to take insurance with
higher out-of-pocket payments, which discouraged use. Medicaid in
financially troubled states has cut provider fees and limited access to
high-cost services. And, of course, many unemployed workers who lost
their company health insurance cut back on visits to the doctor.

These effects, Mr. Roehrig noted, have by now mostly petered out. As the
economy recovers, spending growth will resume its climb, reinforced even
more by the understandable demands from the eight million newly insured
Americans under the health law for services they couldn't afford
previously. He forecasts that health spending will grow substantially
faster than G.D.P. in the near future, but expects the gap to shrink
gradually to below one percentage point over time. In the long run, he
projects that health care spending could consume 30 percent of G.D.P.

Mark McClellan, a former administrator for the Centers on Medicare and
Medicaid Services under George W. Bush, and Alice Rivlin, a former vice
chairwoman of the Federal Reserve, point out that innovations that
improve health or reduce the cost of medical services may also increase

"It would be a mistake to assume that slow growth in health care
spending will continue," they wrote, "or that spending reflects
high-value care and therefore, health care delivery reform is no longer
an urgent priority."

Over the last 40 years or so, health care spending has been growing 2.4
percentage points faster than the economy, on average.

But that slowdown still isn't good enough. By 2032, health care will
consume almost a quarter of the nation's economic production, taking an
even bigger bite from workers' wages and either forcing taxes up to pay
the government's share, adding more to the national debt, or squeezing
other important public services.

So, if Americans really want to win the health care spending war, it may
take more than reform. It may still take a revolution.


Comment by Don McCanne

There has been much speculation about the causes of the recent slowdown
in health care spending, but, more importantly, about whether the more
recent uptick indicates a return to greater health care inflation and,
even more importantly, whether new innovations - especially those in the
Affordable Care Act (ACA) will be capable of slowing the increases in

Nobody can reliably predict the future. But the policy community can
take a careful look at the facts we do have on hand and make decisions
that would improve the odds of achieving a goal of more efficient
spending in health care.

Almost every article supportive of the cost containment measures in ACA
mentions vague concepts such as no longer paying for volume in health
care services but paying for quality instead. If they make an attempt to
explain how we might do that, they often invoke accountable care
organizations, which, at best, seem to be more loosely designed managed
care organizations that so far have failed the tests of greater
efficiency and higher quality, other than a few reports of positive but
negligible impacts that could never "bend the cost curve" nor truly
improve quality.

What we do know is that our administrative waste is profound and that
the excesses are readily recoverable - a crucial point that was omitted
from this and most other current articles on the causes of our high
health care costs. A single payer system would have a major impact on
reducing waste in health care spending. We also know that health care
prices in the United States are outrageous, and public administration
through a single payer system would bring prices down to a level that
pays legitimate costs plus fair margins.

We do know that there are excesses in high tech medicine. Again, a
single payer system could use objective data, such as comparative
effectiveness studies, to make decisions on eliminating payment for
useless or harmful services. Also, capital planning can reduce excess
capacity which would ameliorate its supply side-driven overutilization.
The savings may be offset by improving access to beneficial services for
underserved populations, but that spending would increase the overall
quality of care provided by the health care delivery system - quality
meaning getting the right care to the right people at the right time.

So, as far as predicting health care cost containment in the future we
know that a single payer system would have a dramatic effect. But we can
also predict quite reliably that dinking around with the meager
wish-list policies of ACA will only distract us from moving forward with
single payer policies that would really work.

Eduardo Porter writes that it may take a revolution to win the health
care spending war. The battle would be between the American people and
the economic elite that drive policy (Gilens and Page) and concentrate
wealth (Piketty). Obviously non-violent civil action through the
democratic process would be vastly preferable to a violent coup, but
people are going to have to get off their duffs and initiate citizen action.

Tuesday, April 22, 2014

Fwd: qotd: ACO patients receive two-thirds of their specialized care outside of their assigned ACO

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: ACO patients receive two-thirds of their specialized
care outside of their assigned ACO
Date: Tue, 22 Apr 2014 08:26:50 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

JAMA Internal Medicine
April 21, 2014
Outpatient Care Patterns and Organizational Accountability in Medicare
By J. Michael McWilliams, MD, PhD; Michael E. Chernew, PhD; Jesse B.
Dalton, MA; Bruce E. Landon, MD, MBA, MSS

In this study of 145 organizations participating in the Medicare ACO
programs, over one-third of beneficiaries attributed to an ACO in 2010
or 2011 was not assigned to the same ACO in both years. Thus, in any
given year, a substantial share of patients for whom an ACO is held
accountable may be newly or transiently assigned. Although healthy
beneficiaries using little primary care contributed to this instability,
unstably assigned beneficiaries were more likely than stably assigned
beneficiaries to be in several high-cost groups that may be targeted for
care management, including the top decile of total spending.

Much of the outpatient specialty care for patients assigned to ACOs,
particularly higher-cost patients with more office visits and chronic
conditions, was provided by specialists outside of patients' assigned
organizations, even among more specialty-oriented ACOs. In contrast,
leakage of office visits with PCPs for ACO-assigned patients was
minimal. In addition, less than 40% of outpatient Medicare spending
billed by ACO physicians was for care provided to beneficiaries assigned
to the billing ACO. This percentage was much lower for
specialty-oriented than for primary care–oriented organizations,
suggesting that ACOs currently provide substantial amounts of specialty
care to patients receiving primary care elsewhere. Thus, at least
initially, incentives in traditional Medicare for organizations
participating in ACO programs may continue to be largely fee-for-service
in nature, particularly for outpatient specialty care.


Comment by Don McCanne

In this study of Medicare Accountable Care Organizations (ACO), 66.7% of
office visits with specialists were provided outside of the assigned
ACO, especially for higher-cost patients with more office visits and
chronic conditions. That hardly represents a model designed to control

Some suggest that tighter relationships need to be established between
Medicare patients and ACOs, but that already exists in the Medicare
Advantage plans - a model proven to increase costs. It is clear that the
nebulous ACO concept has only been a wish on the part of policymakers
that physicians and hospitals could somehow organize themselves to
provide better, cheaper care. But we now have enough evidence to state
that ACOs also are a failure.

The vested interests have indicated that they are going to continue to
try to improve the model when it really needs to be replaced. The
direction that they are headed is towards more managed care. What we
need instead is a financing model that is already proven to reduce waste
and improve quality - a single payer national health program. The ACO
advocates need a strong dose of disruption, or they will continue
leading us down the wrong path.

Monday, April 21, 2014

Fwd: qotd: Gilens and Page: Average citizens have little impact on public policy

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Gilens and Page: Average citizens have little impact on
public policy
Date: Mon, 21 Apr 2014 06:42:38 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Perspectives on Politics
forthcoming Fall 2014

April 9, 2014
Testing Theories of American Politics: Elites, Interest Groups, and
Average Citizens
By Martin Gilens and Benjamin I. Page


Each of four theoretical traditions in the study of American politics –
which can be characterized as theories of Majoritarian Electoral
Democracy, Economic Elite Domination, and two types of interest group
pluralism, Majoritarian Pluralism and Biased Pluralism – offers
different predictions about which sets of actors have how much influence
over public policy: average citizens; economic elites; and organized
interest groups, mass-based or business-oriented.

A great deal of empirical research speaks to the policy influence of one
or another set of actors, but until recently it has not been possible to
test these contrasting theoretical predictions against each other within
a single statistical model. This paper reports on an effort to do so,
using a unique data set that includes measures of the key variables for
1,779 policy issues.

Multivariate analysis indicates that economic elites and organized
groups representing business interests have substantial independent
impacts on U.S. government policy, while average citizens and mass-based
interest groups have little or no independent influence. The results
provide substantial support for theories of Economic Elite Domination
and for theories of Biased Pluralism, but not for theories of
Majoritarian Electoral Democracy or Majoritarian Pluralism.

American Democracy?

Each of our four theoretical traditions (Majoritarian Electoral
Democracy, Economic Elite Domination, Majoritarian Interest Group
Pluralism, and Biased Pluralism) emphasizes different sets of actors as
critical in determining U.S. policy outcomes, and each tradition has
engendered a large empirical literature that seems to show a particular
set of actors to be highly influential. Yet nearly all the empirical
evidence has been essentially bivariate. Until very recently it has not
been possible to test these theories against each other in a systematic,
quantitative fashion.

By directly pitting the predictions of ideal-type theories against each
other within a single statistical model (using a unique data set that
includes imperfect but useful measures of the key independent variables
for nearly two thousand policy issues), we have been able to produce
some striking findings. One is the nearly total failure of "median
voter" and other Majoritarian Electoral Democracy theories. When the
preferences of economic elites and the stands of organized interest
groups are controlled for, the preferences of the average American
appear to have only a minuscule, near-zero, statistically
non-significant impact upon public policy.

Interest groups do have substantial independent impacts on policy, and a
few groups (particularly labor unions) represent average citizens' views
reasonably well. But the interest group system as a whole does not.
Over-all, net interest group alignments are not significantly related to
the preferences of average citizens. The net alignments of the most
influential, business oriented groups are negatively related to the
average citizen's wishes. So existing interest groups do not serve
effectively as transmission belts for the wishes of the populace as a whole.

Furthermore, the preferences of economic elites (as measured by our
proxy, the preferences of "affluent" citizens) have far more independent
impact upon policy change than the preferences of average citizens do.
To be sure, this does not mean that ordinary citizens always lose out;
they fairly often get the policies they favor, but only because those
policies happen also to be preferred by the economically elite citizens
who wield the actual influence.

What do our findings say about democracy in America? They certainly
constitute troubling news for advocates of "populistic" democracy, who
want governments to respond primarily or exclusively to the policy
preferences of their citizens. In the United States, our findings
indicate, the majority does not rule -- at least not in the causal sense
of actually determining policy outcomes. When a majority of citizens
disagrees with economic elites and/or with organized interests, they
generally lose. Moreover, because of the strong status quo bias built
into the U.S. political system, even when fairly large majorities of
Americans favor policy change, they generally do not get it.

A possible objection to populistic democracy is that average citizens
are inattentive to politics and ignorant about public policy; why should
we worry if their poorly informed preferences do not influence policy
making? Perhaps economic elites and interest group leaders enjoy greater
policy expertise than the average citizen does. Perhaps they know better
which policies will benefit everyone, and perhaps they seek the common
good, rather than selfish ends, when deciding which policies to support.

But we tend to doubt it. We believe instead that – collectively –
ordinary citizens generally know their own values and interests pretty
well, and that their expressed policy preferences are worthy of respect.
Moreover, we are not so sure about the informational advantages of
elites. Yes, detailed policy knowledge tends to rise with income and
status. Surely wealthy Americans and corporate executives tend to know a
lot about tax and regulatory policies that directly affect them. But how
much do they know about the human impact of Social Security, Medicare,
Food Stamps, or unemployment insurance, none of which is likely to be
crucial to their own well-being? Most important, we see no reason to
think that informational expertise is always accompanied by an
inclination to transcend one's own interests or a determination to work
for the common good.

Despite the seemingly strong empirical support in previous studies for
theories of majoritarian democracy, our analyses suggest that majorities
of the American public actually have little influence over the policies
our government adopts. Americans do enjoy many features central to
democratic governance, such as regular elections, freedom of speech and
association, and a widespread (if still contested) franchise. But we
believe that if policymaking is dominated by powerful business
organizations and a small number of affluent Americans, then America's
claims to being a democratic society are seriously threatened.


Comment by Don McCanne

Martin Gilens and Benjamin Page present historical data that show that
average Americans, even when represented by majoritarian interest
groups, have negligible influence in shaping public policy. In sharp
contrast, the economic elites and their business-oriented interest
groups wield tremendous influence in public policy.

Thomas Piketty and Emmanuel Saez have shown that the flow of income to
the top has resulted in a concentration of wealth that is not only
self-sustaining but likely to perpetuate the transfer of more wealth to
the wealthiest, at a cost to everyone else.

This combination - a concentration of wealth at the top with the
domination of policymaking by the economic elite, does not bode well for
new policies that would be established for the common good.

In health care reform, the common good would have been served by
improving coverage through the removal of financial barriers to care and
by expanding coverage to everyone. Instead, the interests of the
economic elite were served by increasing the market for private
insurance products that, for the majority, increased financial barriers
to care and reduced choice of providers, while leaving tens of millions
of the most vulnerable without any coverage. More wealth moves to the
passive investors at the top, while the deterioration in coverage
requires average Americans to spend more out-of-pocket through higher

We desperately need a well-designed single payer system if we want
everyone to have the health care that they should have. At this point it
appears that the economic elites are not going to allow single payer,
and we will have no say.

Even though our Constitution laid the plans for a democracy, by fiat we
now have a plutarchy (plutocratic oligarchy). Although Gilens and Page
have shown that our Majoritarian Electoral Democracy has "only a
minuscule, near-zero, statistically non-significant impact upon public
policy," perhaps the people can still change that. Although recent
history demonstrates citizen inertia, that does not necessarily lock in
the future. Think of Social Security, Medicare, and the Civil Rights Act.

A decade ago, in a book review for the NEJM on "Universal Coverage: The
Elusive Quest for National Health Insurance" by Rick Mayes, I wrote the
following: "Mayes does give us hope. Although he acknowledges that
critical junctures are rare, he notes that they do occur, especially in
response to unmet social needs. Perhaps the deterioration in insurance
coverage that has taken place may have brought us much closer to our
next critical juncture than most of us realize."

So what can we do to reverse the process under which "policymaking is
dominated by powerful business organizations and a small number of
affluent Americans"? Will citizen action through education, coalitions
and grassroots efforts be adequate? In spite of such ongoing efforts, we
have certainly fallen short so far.

History has taken us to a point wherein the economic elite rules. Can
the people revitalize democracy, or is the wealthy ruling class too
powerful? If the elite are not responsive to our needs, will our nation
be ripe for civil unrest? At the moment, citizen inertia continues to
empower the economic elite.

Friday, April 18, 2014

Fwd: qotd: U.S.’s unique approach to health care pricing

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-------- Original Message --------
Subject: qotd: U.S.'s unique approach to health care pricing
Date: Fri, 18 Apr 2014 13:59:39 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

International Federation of Health Plans
Accessed April 18, 2014
IFHP publishes 2013 Price Report

The International Federation of Health Plans (IFHP) today released its
2013 Comparative Price Report, detailing its annual survey of medical
prices per unit. Designed to showcase the variation in healthcare prices
around the world, the report examines the price of medical procedures,
tests, scans and treatments in nine countries. This year the survey also
shows pricing for five specialty prescription drugs. As in prior years,
the survey data shows that the United States continues to have the
highest fees of those countries surveyed for drugs and various medical

IFHP's Chief Executive Tom Sackville explained why he believed to the
data to be important.

"First, it gives the lie to the idea that some countries spend more on
health as a result of higher utilization. It is all about unit price,"
he said. "Second, we have looked here at a number of procedures and
products which are identical across the markets surveyed. The price
variations bear no relation to health outcomes: they merely demonstrate
the relative ability of providers to profiteer at the expense of
patients, and in some cases reflect a damaging degree of market failure."

Prices examined in the study included those from Argentina, Australia,
Canada, England, Netherlands, New Zealand, Spain, Switzerland and the
United States. The data for the report was gathered from participating
IFHP member organizations in each country. Prices in the U.S. were
based on prices negotiated between private health plans and health care

2013 Comparative Price Report


April 17, 2014
These 15 charts show our health care prices are totally insane
By Sarah Kliff

(The International Federation of Health Plans) published Thursday its
annual look at international variation in health care prices. For all
but one item they studied, from Nexium to MRI scans to bypass surgery,
the United States is always the most expensive.

Americans spend more for health care largely because of the prices.

Most other countries have some central body that negotiates prices with
hospitals and drug manufacturers. Tom Sackville (chief executive of the
International Federation of Health Plans) who used to work for Britain's
health care system, recalls that it would have a unit of 14 people whose
whole job was getting drug manufacturers to give the country a better
deal on prescription medications.

That unit of 14 is essentially buying in bulk for a country of 63
million people – and can successfully ask for steep discounts in return.

The United States doesn't have that type of agency. Every insurance plan
negotiates individually with hospitals, doctors and pharmaceutical
company to set their own prices. Insurers in the United States don't, as
these charts show, get a bulk discount. Instead, our fragmented system
means that Americans pay more for every type of health care that IFHP

"You could say that American health care providers and pharmaceuticals
are essentially taking advantage of the American public because they
have such a fragmented system," said Sackville. "The system is so
divided, it's easy to conquer."


The New York Times
April 17, 2014
Cost of Treatment May Influence Doctors
By Andrew Pollack

Saying they can no longer ignore the rising prices of health care, some
of the most influential medical groups in the nation are recommending
that doctors weigh the costs, not just the effectiveness of treatments,
as they make decisions about patient care.

The shift, little noticed outside the medical establishment but already
controversial inside it, suggests that doctors are starting to redefine
their roles, from being concerned exclusively about individual patients
to exerting influence on how health care dollars are spent.

In practical terms, new guidelines being developed by the medical groups
could result in doctors choosing one drug over another for cost reasons
or even deciding that a particular treatment — at the end of life, for
example — is too expensive. In the extreme, some critics have said that
making treatment decisions based on cost is a form of rationing.

Traditionally, guidelines have heavily influenced the practice of
medicine, and the latest ones are expected to make doctors more
conscious of the economic consequences of their decisions — even though
there is no obligation to follow them. Medical society guidelines are
also used by insurance companies to help determine reimbursement policies.

Generally, Medicare is not supposed to consider cost effectiveness in
coverage decisions, and other government attempts to do so are
susceptible to criticism as rationing. Insurers do perform cost
analyses, but they also risk ire from patients and doctors.

Dr. Steven D. Pearson, a visiting scientist in the ethics department at
the National Institutes of Health, said the move by some societies to
incorporate economic analysis "heralds an important shift in the way
doctors in America are talking about cost and value."

He said that having societies do such evaluations was better than having
a doctor make such trade-offs while treating an individual patient,
which is sometimes called bedside rationing.

Still, it is unclear if medical societies are the best ones to make cost
assessments. Doctors can have financial conflicts of interest and lack
economic expertise.

The cardiology societies, for instance, plan for now to rely on
published literature, not commission their own cost-effectiveness
studies, said Dr. Paul A. Heidenreich, a professor at Stanford and
co-chairman of the committee that wrote the new policy.

They plan to rate the value of treatments based on the cost per
quality-adjusted life-year, or QALY — a method used in Britain and by
many health economists.

The societies say that treatments costing less than about $50,000 a QALY
would be rated as high value, while those costing more than $150,000 a
QALY would be low value.

"We couldn't go on just ignoring costs," Dr. Heidenreich said.


Comment by Don McCanne

The International Federation of Health Plans represents private health
insurers in 25 nations. Its members include several U.S. health insurers
plus AHIP - the powerful insurance lobby in the United States. Although
many would argue that it is this industry that is tasked with the
responsibility of negotiating fair prices for health care services and
products, in this release they contend that the very high prices in the
United States "merely demonstrate the relative ability of providers to
profiteer at the expense of patients, and in some cases reflect a
damaging degree of market failure."

What a remarkable statement. We are paying the insurers massive sums for
their very expensive administrative services while they inflict
tremendous administrative burdens on the health care delivery system,
plus they take away from patients their choices in health care,
especially choices of their health care professionals. They concede that
they cannot control the "ability of providers to profiteer," nor can
they correct this market failure. They have become a profoundly
expensive but useless appendage to the health care system - an appendage
that should be severed.

Nevertheless, prices are still too high in the United States, so what
can be done? Consolidation of hospitals and physicians has been
anti-competitive, but prices were already high before the recent wave of
consolidations began. Some providers offer services that make them "must
have" participants in the insurer networks. They have a greater ability
to stand firm on high prices, thus it is unlikely that antitrust
enforcement could have more than a negligible impact on reducing prices.

Physicians seem to be more sensitive to cost barriers for their patients
than do the hospitals and pharmaceutical firms, though both of the
latter do have programs for selected indigent patients. The New York
Times article describes how physician organizations are beginning to
address the issue of high prices, though much of the effort seems to
target the pharmaceutical firms rather than the physicians themselves.
What is really remarkable though is that some physicians are now willing
to look at assigning a monetary value to a quality-adjusted life-year

Do physicians really want to assume the role of telling their patients
that they will deny care that may be of some benefit but exceeds an
arbitrary cost threshold assigned to a QALY? Physicians traditionally
have not been the payers for their own patients' health care. That is
usually an insurer, the government, or the patient paying in cash.
Shouldn't the payer be making the spending decisions instead of the

The insurers have a terrible track record - often paying too much, but
also creating access barriers to care. The government has done a better
job with Medicare, but with Medicaid they have often underfunded care
which also creates financial barriers to care. With today's very high
health care costs, most patients are unable to pay cash if they face
major medical expenses, so a third party payer is required.

Some models today would place the physician at least partially in the
role of insurer. What is surprising is the relative silence on the
ethical violation that such a role entails. The physician should never
be placed in a position in which he profits by withholding beneficial
health care. The MBAs in health care do not seem to understand the
fundamental ethical compromise of such an arrangement.

The IFHP report on international health care prices does show that other
nations are much more effective in controlling prices. They all have in
common the fact that the government plays a major role in administering
or tightly regulating prices. In general, governments seem to get it
right. If we had a single payer system, we would get it right as well.
In doing so we would also eliminate the profound waste caused by the
private insurers, and we would ensure that financial barriers to care
are removed for everyone.

What about defining the value of a QALY as ranging from $50,000 to
$150,000? That should not be the role of the physician who should always
be in a position to advocate for what is right for the patient. That
should be the role of the public administrator who negotiates health
care prices. A better term than negotiation would be price
administration, implying that the government should have an "unfair" or
unbalanced clout when it comes to getting prices right. Right prices
means legitimate costs plus fair margins. No other country will be
paying $84,000 for a twelve week course of Sovaldi to treat hepatitis C.
We wouldn't either if we had a single payer system.

Wednesday, April 16, 2014

Fwd: qotd: Maldistribution of the physician supply

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Maldistribution of the physician supply
Date: Wed, 16 Apr 2014 04:10:49 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

OECD Health Working Papers No. 69
April 3, 2014
Geographic Imbalances in Doctor Supply and Policy Responses
By Tomoko Ono, Michael Schoenstein, James Buchan

Doctors are distributed unequally across different regions in virtually
all OECD countries, and this causes concern about how to continue to
ensure access to health services everywhere. In particular access to
services in rural regions is the focus of attention of policymakers,
although in some countries, poor urban and sub-urban regions pose a
challenge as well. Despite numerous efforts this maldistribution of
physician supply persists. This working paper first examines the drivers
of the location choice of physicians, and second, it examines policy
responses in a number of OECD countries.

The choice of practice location is complex, but across the examined OECD
countries, several key factors have emerged in studies of doctors and
medical students in recent years. First, the relative unattractiveness
as places to live and work is the root of an unequal distribution of
physicians across regions and areas. Second, the mode of employment and
payment for physicians set the frame for their options for location
choices. Third, while incomes for general practitioners in rural regions
are higher than those in urban regions in some counties, it may not be
sufficient compensation as they work for longer hours and in generally
more difficult working conditions. Furthermore, professional prestige
plays a role as more prestigious specialties tend to be concentrated in
urban areas and by default making rural practice less attractive.
Finally rural origins and experience in rural settings are influential
factors as doctors who are from rural regions are much more likely to go
and practice in rural setting compared to those with an urban upbringing.

While a truly comprehensive regional development policy is helpful to
tackle the maldistribution of physicians across regions, policymakers in
the health sector have three broad strategies to respond to imbalances
in physician distribution.

* The first strategy is to target future physicians to maximize the pool
of physicians available for practice in relatively underserved regions.
This means increasing the number of qualified physicians who are
interested in practice in underserved regions, and/or the number of
working hours they are willing to provide. The crucial focal point of
action for this strategy is the selection and education of medical students.

* The second strategy is to target current physicians to maximise the
share of physicians in the health system who practice in underserved
regions. This requires a suitable incentive system, which may include
both "carrots and sticks", i.e. not only financial incentives, but also
suitable regulatory measures to influence physicians' location choices.

* The third strategy is to do with less, i.e. accept that staffing
levels will be lower in some regions and focus on service re-design or
configuration solutions. This can be done through expansion of
involvement in health service delivery by non-physician providers.
Service delivery innovations can also make a difference, by the use of
technology (e.g. through better use of telemedicine), better management
of human resources and their workload, or a combination thereof.

Policymakers in most countries will have to blend a range of elements of
these three strategies, and review this mix over time. The best mix of
such strategies will depend on various factors: patient needs,
demography of the population and the physician workforce, health system
characteristics, the budgetary situation, and the overall health reform
context. While broad characteristics of interventions can be identified,
more robust evaluations are required to improve the evidence basis for
these policies and strategies in order to support policymakers to make
better informed choices.


Comment by Don McCanne

All OECD countries experience maldistribution of the physician supply.
Of particular concern is the distribution of primary care physicians,
especially the lack of their presence in underserved regions. This OECD
working paper describes the problem and suggests some approaches to
improve distribution.

Currently I am in San Francisco, participating in the National
Conference on Primary Health Care Access presented by the Coastal
Research Group. The chief of adult medicine of a highly respected
California family medicine residency that is noted for training
physicians who would more likely practice in community health centers in
underserved communities told me that though their program is initially
very successful, their graduates experience burn-out, typically after
about three years of practice. This is a very serious problem that
obviously requires the attention of public policymakers. This OECD
report suggests some strategies that could help.

The fact that all OECD nations experience these problems indicates that
the health care financing system alone cannot be expected to correct
these deficiencies. However, a public financing system, such as single
payer, should improve the flexibility to work with the health care
delivery system to drive improvement in the distribution of health care
professionals. Our current fragmented financing system provides little
opportunity to incentivize strategies that might help.

We do need a single payer national health system, but also we need to
elect public officials who believe in better health care for all.
Although correcting maldistribution will always remain a challenge,
there is much that can be done, but we need people in charge who will
want do it.

Tuesday, April 15, 2014

Fwd: qotd: ACO incentives exceed efficiency gains

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: ACO incentives exceed efficiency gains
Date: Tue, 15 Apr 2014 05:46:01 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

April 2014
Structuring Incentives Within Organizations: The Case of Accountable
Care Organizations
By Brigham Frandsen, James B. Rebitzer

Accountable Care Organizations (ACOs) are new organizations created by
the Affordable Care Act to encourage more efficient, integrated care
delivery. To promote efficiency, ACOs sign contracts under which they
keep a fraction of the savings from keeping costs below target provided
they also maintain quality levels. To promote integration and facilitate
measurement, ACOs are required to have at least 5,000 enrollees and so
must coordinate across many providers. We calibrate a model of optimal
ACO incentives using proprietary performance measures from a large
insurer. Our key finding is that free-riding is a severe problem and
causes optimal incentive payments to exceed cost savings unless ACOs
simultaneously achieve extremely large efficiency gains. This implies
that successful ACOs will likely rely on motivational strategies that
amplify the effects of under-powered incentives. These motivational
strategies raise important questions about the limits of ACOs as a
policy for promoting more efficient, integrated care.


Comment by Don McCanne

The growth in the number of accountable care organizations (ACOs) has
been phenomenal considering that they are primarily only a wish on the
part of the policy community and bureaucrats that such organizations
would increase efficiencies to reduce health care spending, especially
when earlier results have been very disappointing. This study has added
to the doubts about ACOs by showing that incentive payments that they
receive will exceed cost savings unless the ACOs "achieve extremely
large efficiency gains" - an extremely unlikely outcome.

The policy literature is saturated with these "wish they would work"
reports and recommendations to further expand the use of ACOs. The
experiment has already failed, and we are meandering back into the
disdained managed care organization model disguised as ACOs. The tragedy
is that this has distracted our politicians and bureaucrats from moving
forward with a model that actually would increase efficiencies, not to
mention meeting other goals such as universality and removing financial
barriers to care - a single payer national health program.

Monday, April 14, 2014

Fwd: qotd: Lessons from British Columbia

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Lessons from British Columbia
Date: Mon, 14 Apr 2014 04:27:05 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Surrey Now
April 8, 2014
Health-care changes seem to be paying off in B.C.
By Keith Baldrey

Have we finally wrestled that voracious gobbler of tax dollars - the
public health-care system - to a standoff, if not to the ground? By that
I mean the days of the system automatically devouring increasingly large
amounts of money every year to feed itself may be drawing to a close, at
least in British Columbia.

Of course, I don't mean the health-care system will stop being the
biggest area of government spending by far (the health-care budget this
year is pegged at $16.9 billion, out of a budget of $44.4 billion).

But the rate of growth in spending is slowing down significantly. The
annual hike is down to 2.6 per cent this year, compared to just several
years ago when it was above five per cent.

Now, there are those who think this is bad news. After all, shouldn't we
be plowing even more money into the system rather than less? If we
don't, won't health-care standards suffer? The answers are: a) not
necessarily and b) no.

The ideological defenders of the public health-care system (who think
the answer to everything is to blindly spend gargantuan amounts of more
money) think the only measuring stick worth anything is per capita
spending. In other words, B.C. should spend more dollars per person than
anywhere else, and things will take care of themselves.

But those with experience in the system, who study it and come up with
good ideas for change, point to another and far better measurement:
health outcomes.

And in that regard, B.C. ranks the highest in the country. While we sit
second-to-last in per-capita spending, (only Quebec ranks lower) we beat
most other provinces in all kinds of areas: best cancer survival rates,
lowest heart attack rate, longest life expectancy, lowest smoking rate,
lowest infant mortality rate, etc.

When it comes to wait times for certain surgeries (an admittedly
frustrating situation for many people on those wait-lists), they've been
mostly going down and not up. The median wait time for a hip joint
replacement has declined to 13 weeks from 19 weeks over the last 10
years, while a knee joint replacement has gone from 25 weeks to 18 weeks
over the same time period.

None of this is to suggest the health-care system does not need constant
up-keeping and reform (crowded emergency rooms, for example, seem to be
a chronic problem, and we could always use more nurses). But it is
encouraging that blind yearly spending hikes are being replaced by
newer, innovative ways of spending that are both efficient and lead to
healthier outcomes for the users of the system.

Not being able to count on big increases in funding every year has
brought some much-needed discipline to the system, and employing some
different models has also helped.

One of the most significant changes that is paying off is the
government's relationship with doctors.

In the past, physicians were viewed as costly, self-interested cogs in
the system.

Now, however, they are viewed as equal partners who have real
responsibilities when it comes to running the health-care system.

For example, several joint committees have been established with the
Doctors of B.C. (formerly called the B.C. Medical Association) where
doctors and the government shape policies that are aimed at improving
patient health, rather than protecting the financial interest of either

One committee is for general practitioner services (overseeing
improvements to the primary care system), another is for specialist
services (aimed at improving access for specialist care) and a third is
for shared care (focused on better integration of all levels of care).

As well, something called the Divisions of Family Practice has been
created. It links family doctor practices and is designed to improve
common healthcare goals in a particular region (improved maternity
coverage, for example).

Committees such as these were unheard of a decade ago. They appear to be
improving patient care by focusing on smart, evidence-based decisions
rather than on simply demanding more money, either for doctors' pay
packets or a health authority's budget.

The Canada Health Accord between the provinces and the federal
government died last week. It means Ottawa will be cutting in half its
annual transfer of money to pay for health care.

The fact the B.C. government hardly said a peep about the accord's
demise is evidence of how much the system has changed in the past few years.


Comment by Don McCanne

Evidence based health care. Why should that be controversial? Yet it is.
It provokes accusations of "cook book medicine," or "bureaucrats
interfering with your health care." Current efforts in British Columbia
can provide us with a more rational perspective than is being provided
by these negative memes.

Physicians from the B.C. medical association (Doctors of B.C.) and the
government are cooperating on efforts to improve patient health in
manners other than by simply increasing spending (though that should not
be neglected when there is an obvious imperative). Such efforts to spend
better rather than simply spending more will be particularly important
now that the federal government is being run by individuals who promised
to protect Canada's medicare but instead cut federal spending on the
program in half.

Although single payer systems are often criticized for being bogged down
by government inflexibility and laggardly progress, the activities in
B.C. demonstrate that such processes need not be an inevitability. In
fact, B.C. is showing us that their single payer system does have the
flexibility to make needed improvements.

In the United States we are currently using models, such as accountable
care organizations, supposedly to achieve higher quality at a lower
cost. Unfortunately, the model seems to have been misdirected away from
efforts to improve health care based on evidence to efforts granting
nominal awards based on penny pinching and a few negligible
teach-to-the-test measures. Under our fragmented, multipayer system it
is difficult achieve widespread adaptation of systemic improvements,
simply because it is our unique, dysfunctional financing system that is
so inflexible.

This is not to belittle the efforts of AHRQ toward expanding the use of
evidence based medicine. Rather it is to make the point that government
efforts such as those of AHRQ can be more effective if we get the
dysfunctional financing system out of the way, especially the intrusive
private insurers, and allow AHRQ and other public entities to cooperate
more effectively with the people actually delivering health care.

Wednesday, April 9, 2014

Fwd: qotd: New patient? What insurance do you have?

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-------- Original Message --------
Subject: qotd: New patient? What insurance do you have?
Date: Wed, 9 Apr 2014 14:48:54 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

JAMA Internal Medicine
April 7, 2014
Primary Care Access for New Patients on the Eve of Health Care Reform
By Karin V. Rhodes, MD, MS; Genevieve M. Kenney, PhD; Ari B. Friedman,
MS; Brendan Saloner, PhD; Charlotte C. Lawson, BA; David Chearo, MA;
Douglas Wissoker, PhD; Daniel Polsky, PhD

The goal of the current study was to simulate the experience of
nonelderly adults with 1 of 3 insurance types—private, Medicaid, and
uninsured—seeking new patient appointments in 10 diverse states to
obtain precise estimates of primary care access before the ACA coverage

Between November 13, 2012, and April 4, 2013, we made 12,907 calls to
7788 primary care practices requesting new patient appointments. Across
the 10 states, 84.7% of privately insured and 57.9% of Medicaid callers
received an appointment. Appointment rates were 78.8% for uninsured
patients with full cash payment but only 15.4% if payment required at
the time of the visit was restricted to $75 or less.


Comment by Don McCanne

This study reveals the success rates in obtaining a primary care
appointment as a new patient by non-elderly adults, prior to full
implementation of the Affordable Care Act. So what was it like then,
what will the Affordable Care Act do for that, and what would single
payer have done to change the results?

Being privately insured provided the greatest probability of success in
obtaining an appointment - 85% were able to do so. Close to that - at
79% - were new patients who would pay cash in full at the time of the
visit. Medicaid patients had more difficulty - with only 58% being able
to make an appointment. Worst of all was for those who would pay cash,
but no more than $75 at the time of the visit - only 15% were successful.

Of course, this is what we've known all along. Privately insured
patients have good access, Medicaid patients have poorer access by
virtue of being covered by an underfunded welfare program, and uninsured
patients with limited resources have the worst access of all. Those
willing to pay cash in full may have been covered by a high-deductible
plan but, in any event, were likely to to have the means to pay upfront
charges. So money or good insurance will open the doors, whereas
Medicaid is dependent on the willingness of the primary care provider to
participate in the Medicaid program, and being poor and uninsured… well,
good luck.

What will happen now that ACA is well on its way to full implementation?
The answer is complex, which is no surprise because the ACA model is
itself complex. Let's look at each category of coverage.

For the very wealthy who are quite willing to pay full fees in cash, and
the scheduling staff of the primary care practice understands that,
access should approach 100%. If any queues exist, those individuals
likely can buy their way to the front of the queue.

For privately insured individuals, whether obtaining coverage through
employment or through individually purchased plans within or outside of
the exchanges, access may be less than it is now since insurers with the
new narrower networks exclude many primary care professionals from their
panels. Most individuals will not want to select an out-of-network
primary care professional, especially since out-of-pocket costs could be
staggering since the cap applies only to in-network care (except for
certain emergencies).

Even those employer-sponsored plans that ACA was designed to protect are
now moving in the direction of higher deductibles, narrower networks,
and even private exchanges with a shift to defined-contribution
vouchers. Although the percentage of practices accepting specific
insurance plans will decline because of the doctor being excluded from
the networks, patients will probably still choose private plans as being
their best option. It's just that they will have to shop more before
they find practices that accept their specific insurance.

Finding primary care practices that accept Medicaid may be more
difficult. Although there is a temporary increase in primary care
evaluation and management payments, that will end very soon. It is
likely that there will not be much of an increase in the number of
physicians who will agree to accept the low Medicaid payment rates. If
those who do accept Medicaid find that the increased volume is crowding
out their privately insured patients, then they may feel that they have
to cut back or eliminate accepting new Medicaid patients as well.

With an increase in Medicaid managed care organizations, Medicaid
patients may have this option, but then that limits their access since
they must go to the managed care providers. Also the low payment rates
for Medicaid managed care organizations may result in relatively spartan
care merely because of the insufficiency of funds. Another possibility
is that federally-qualified health centers may be able to increase their
capacity because of new funds authorized by ACA. Hopefully these two
expansions will provide enough capacity to ensure access of Medicaid
patients to at least some form of primary care.

Access for the low-income uninsured - and there will be tens of millions
of them - will certainly continue to be impaired. If Congress further
expands the funding of federally-qualified health centers, then the
uninsured will have that option. But specialized care will likely be out
of reach for most.

So, in general, access to primary care is unlikely to change to any
major degree as the result of the provisions of ACA. Patients will have
less choice of providers, more exposure to out-of-pocket costs, but an
increase in funding should improve access to other options such as
Medicaid managed care organizations or federally-qualified health
centers - especially important for low-income individuals.

What if we had a single payer system instead? Primary care practices
would never have to ask a new patient what insurance they had, or
whether they intended to pay cash. Patients would never have to check
network lists to see whom they could call. (There would still be some
"networks" such as Kaiser Permanente, but they would be integrated
health systems that patients would choose because of their own preferences.)

With single payer, never again would a new patient have to hear this
response from a receptionist: "New patient? What kind of insurance do
you have? Oh, I'm sorry. The doctor isn't able to accept any new
patients now."

Tuesday, April 8, 2014

Fwd: qotd: Correction of automated word insert, with other minor revisions

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Correction of automated word insert, with other minor
Date: Tue, 8 Apr 2014 12:13:56 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Comment by Don McCanne

In an effort to privatize Medicare, conservatives in Congress enacted
legislation to provide private Medicare Advantage plans with a 14
percent overpayment in order to unfairly compete with the traditional
Medicare program. The Affordable Care Act included measures to gradually
eliminate this overpayment. CMS appears to be thwarting the intent of
Congress to correct this injustice.

Because of pressure from the insurance industry, the Obama
administration used chicanery in the first two years of the ACA
implementation to maintain higher Medicare Advantage rates. This year
the reduction was to have been 1.9 percent. So the insurance industry
initiated an intensive campaign to reverse these reductions. Once again,
CMS has used more chicanery to convert their reduction into a 0.4
percent gain - reassuring private insurers that they can continue to
expand their private takeover of Medicare.

There are numerous gimmicks that were used, and some of them are quite
obscure. Perhaps the most important revision was in the "normalization
factors." Because of the influx of baby boomers into the Medicare
program, it was decided to use "a quadratic functional form fit to risk
scores from 2010 through 2013" in the CMS Hierarchical Condition
Category. To provide "transparency around the calculation of the
normalization factors," they showed "the risk scores used to calculate
the normalization factors for 2015." Glad that's clear.

Seriously, CMS has used innovative accounting to increase payments to
Medicare Advantage plans based on the fact that there is an influx of
baby boomers - a subset of Medicare beneficiaries that is younger,
healthier, and less expensive than the older beneficiaries already
enrolled. Taxpayers will pay more for lower cost beneficiaries. I
remember the quadratic equation, but I don't remember it ever being used
to cheat taxpayers and reward the private insurer rentiers.

Rentiers? Those are individuals whose income is derived from capital,
and now capital is being concentrated in the top centile. If you missed
yesterday's Quote of the Day on Thomas Piketty's "CAPITAL," you should
not bother reading the CMS song and dance above, but instead read
yesterday's message.

Congress and the Obama administration are serving the interests of the
rentiers, and this Medicare Advantage payment scam is only one example.
It is time for the people to take control. As Thomas Piketty wrote, "if
we are to regain control of capitalism, we must bet everything on

qotd: Thomas Piketty - "CAPITAL in the Twenty-First Century"

Fwd: qotd: Private Medicare Advantage insurers are scamming the nation again

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Private Medicare Advantage insurers are scamming the
nation again
Date: Tue, 8 Apr 2014 11:45:07 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

(Unless you are a masochist, skip down to the comment at the end. The
following excerpts from the CMS documents are merely to provide
verification for the statements in the comment.)

April 7, 2014
CMS Ensures Higher Value and Quality for Medicare Health and Drug Plans

Today, the Centers for Medicare & Medicaid Services (CMS) issued the
2015 rate announcement and final call letter for Medicare Advantage and
prescription drug benefit (Part D) programs.

Payments to Medicare Advantage Plans:

* CMS estimates that the overall net change to plan payments between
2014 and 2015 to be +0.4 percent, compared to the estimated overall net
change to plan payments of -1.9 percent for the proposals in the Advance
Notice Individual plan payments will vary by plan based on, but not
limited to, its location and star rating.

* Before the Affordable Care Act, Medicare Advantage plans were paid
more than 10 percent compared to traditional Medicare, costing the
program more than $1,000 per person each year, while quality and health
outcomes were similar to those enrolled in traditional Medicare. The
changes underway reduce excessive payments to Medicare Advantage plans,
while incentivizing quality improvements by basing part of Medicare
Advantage payment on plan quality performance.

* To provide for continued stability in the Medicare Advantage program,
CMS will implement a new phase-in schedule for the Part C risk
adjustment model introduced in 2014. In addition, to improve payment
accuracy, CMS has refined its risk adjustment methodology to account for
the impact of the influx of baby boomers. In addition, for 2015, CMS
will not finalize the proposal to exclude diagnoses from enrollee risk


April 7, 2014
Announcement of Calendar Year (CY) 2015 Medicare Advantage Capitation
Rates and Medicare Advantage and Part D Payment Policies and Final Call

Key Changes from the Advance Notice:

Growth Percentages
CMS-HCC Risk Adjustment Models for CY2015
Medicare Advantage Enrollee Risk Assessments
Normalization Factors
RxHCC Risk Adjustment Model
International Classification of Diseases-10 (ICD-10) Code Sets and
Diagnosis Data Sources for 2015 Risk Scores:

Attachment III

Section A. Final Estimate of the National Per Capita Growth Percentage
and the Fee-for- Service (FFS) Growth Percentage for Calendar Year 2015

Comment: Several commenters had concerns about the magnitude of changes
proposed in the Advance Notice and the potential impact to Medicare
beneficiaries and plans. Commenters raised concerns that the payment
reductions described in the Advance Notice would lead to significantly
higher MA premiums, significantly reduced benefits, or both. Some
commenters argued that these cuts would lead to MA plans exiting the
market. Some providers noted that the reductions to MA contained in the
Advance Notice would seriously threaten their ability to provide high
quality care to beneficiaries. We also received comments that the cuts
would lead to market contraction, less competition, and ultimately less
access for beneficiaries. Commenters requested that we keep Medicare
Advantage revenue flat for 2015.

Response: We are committed to a strong, stable Medicare Advantage
program and to continued access to high quality plan choices for
Medicare beneficiaries. Over the past several years, even as the
Medicare Advantage program transitioned to payments that are more
aligned with FFS Medicare costs, enrollment in Medicare Advantage has
increased to an all-time high of approximately 15 million beneficiaries.
Today, nearly 30 percent of Medicare beneficiaries are enrolled in a
Medicare Advantage plan and benefits remain stable. We believe that the
proposals outlined in the Advance Notice will continue the transition to
payments that are more comparable to FFS costs, while at the same time
continuing the trend toward greater enrollment in high quality plans.

Section G. CMS-HCC (Hierarchical Condition Category) Risk Adjustment
Model for CY 2015

Comment: We received a few comments opposing our proposal to use a blend
of the 2013 CMS-HCC model and 2014 CMS-HCC model in 2015, and supporting
instead calculating risk scores using exclusively the 2013 CMS-HCC
model. Many commenters were in support of continuing to use a blend of
risk scores from two different models. Two commenters were in favor of
ending the phase-in of the clinically revised model introduced in 2014
and calculating risk scores in 2015 using only this model.

Response: As we remain committed to the clinically revised model
introduced for the 2014 payment year, we will not use risk scores
exclusively from the 2013 CMS-HCC model as recommended by some
commenters. Because we still believe that additional time to transition
to the 2014 model is needed, we also will not use risk scores from the
2014 model exclusively as recommended by two commenters, and will
continue for 2015 payment year to blend the risk scores calculated using
the 2013 CMS-HCC and 2014 CMS-HCC models.

In light of the impact of the final payment updates and changes for
2015, however, we are concerned that the use of the 2014 blend
percentages of 75% and 25% that we proposed to continue in the Advance
Notice would not have the same effects on payment stability that they
had last year, and that we assumed they would have when proposing them
this year. As in 2014, we will continue to blend the risk scores from
the old and new models, in order to both support our intention to move
to the updated model while also providing time for plans to transition
to its use in payment. Thus, to further our goal of promoting stability
and given concerns about the impact of payment changes for 2015, we will
blend the two scores using a 67 percent and 33 percent blend,
respectively. Specifically, we will blend the risk scores calculated
using the 2014 CMS-HCC model with risk scores using the 2013 CMS-HCC
model, each appropriately normalized, weighting the normalized risk
scores from the 2013 model by 67 percent and the normalized risk scores
from the 2014 model by 33 percent. These risk scores from the 2013 and
2014 CMS-HCC models will include the risk scores calculated from the
community, institutional, new enrollee, and C-SNP new enrollee segments
of the model and will be used in Part C payment for aged/disabled
beneficiaries enrolled in MA plans. See Section II.G of the 2014 Advance
Notice and Section III.D of the 2014 Rate Announcement for more details
on the clinically revised CMS-HCC model.

Section H. Medicare Advantage Enrollee Risk Assessments

Comment: Many commenters opposed the proposal to exclude diagnoses that
resulted from home visits, including enrollee risk assessments, unless
there was a subsequent clinical encounter.

Response: CMS continues to support the use of enrollee risk assessments
for wellness, care coordination, and disease prevention; however, we
remain concerned that many home visits are being used primarily for the
gathering of diagnoses for payment rather than to provide treatment
and/or follow-up care to beneficiaries. We recently instituted a new
requirement for MA organizations to identify, in the diagnoses they
submit to CMS, which diagnoses are from home visits. These new data will
enable CMS, for the first time, to evaluate how many diagnoses are
identified in home visits and to assess what effect the home assessments
have on the care provided to beneficiaries. In order to allow our policy
to be informed by this analysis, we have decided not to implement the
proposal to exclude diagnoses from home visits for 2015 payments. We
will study the data submitted by MA organizations to determine
appropriate policy options for consideration for 2016 and future years.

Section J. Normalization Factors

Comment: The majority of commenters supported CMS' proposal to calculate
the normalization factors for the CMS-HCC and RxHCC risk scores using a
methodology to better capture the increased proportion of younger
beneficiaries known as the "baby boomers." Several commenters
recommended that CMS make retroactive adjustments to the normalization

Response: We appreciate the support for modifying the normalization
factor methodology to account for the influx of baby boomers to the
Medicare population. CMS uses historical data to develop normalization
factors prior to a payment year in order to promote stability for
bidding purposes. Given this policy, CMS will not retroactively change
the normalization factors for prior years. However, we did consider
whether using more historical data could better inform the calculation
of the 2015 normalization factors (in the Advance Notice we proposed
using 2012 and 2013 risk scores to estimate annual trends for the
CMS-HCC models). By using a quadratic functional form fit to risk scores
from 2010 through 2013, the normalization factors will better reflect
more recent changes in the population trends. Thus, we are finalizing
the 2015 normalization factors for the CMS-HCC and RxHCC models as shown
in Table III-2:

Excerpts from Table III-2 2015 Normalization Factors:

0.992 CMS-HCC model implemented in 2013
0.978 Clinically revised CMS-HCC model implemented in 2014

Comment: A number of commenters asked for more transparency around the
calculation of the normalization factors.

Response: In Table III-3. below, we show the risk scores used to
calculate the normalization factors for 2015.

Excerpts from Table III-3. 2010-2013 Risk Scores Used to Calculate 2015
Normalization Factors

CMS-HCC model implemented in 2013
2010 0.986
2011 0.977
2012 1.009
2013 1.008

Clinically revised CMS-HCC model implemented in 2014
2010 0.978
2011 0.988
2012 0.997
2013 0.995

To access this 154 page announcement, at the following link select
"Announcements and Documents" from the left column, and then select
""2015 Announcement" with a release date of "2014-04-07":


Quote of the Day
April 3, 2014
Washington insiders crossing the line in defense of Medicare Advantage

The Affordable Care Act included provisions to reduce these overpayments
to levels comparable to the costs of patients in the traditional
Medicare program. AHIP has already used its influence to convince the
administration to use chicanery to reduce the cutbacks in the first two
years of the reductions (by issuing phony quality awards and by using
accounting gimmickry with the scheduled but deferred SGR adjustments).
Since the administration seems to be resisting further chicanery (we'll
soon find out) AHIP has intensified its public campaign using some of
Washington's "finest."


Comment by Don McCanne

In an effort to privatize Medicare, conservatives in Congress enacted
legislation to provide private Medicare Advantage plans with a 14
percent overpayment in order to unfairly compete with the traditional
Medicare program. The Affordable Care Act included measures to gradually
eliminate this overpayment. CMS appears to be thwarting the intent of
Congress to coronet this injustice.

Because of pressure from the insurance industry, the Obama
administration used chicanery in the first two years of the ACA
implementation to maintain higher Medicare Advantage rates. This year
the reduction was to have been 1.9 percent. So the insurance industry
initiated an intensive campaign to reverse these reductions. Once again,
CMS has used more chicanery to convert their reduction into a 0.4
percent gain - reassuring private insurers that they can continue to
expand their private takeover of Medicare.

There are numerous gimmicks that were used, and some of them are quite
obscure. For instance, perhaps the most important revision was in the
"normalization factors." Because of the influx of baby boomers into the
Medicare program, it was decided to use "a quadratic functional form fit
to risk scores from 2010 through 2013" in the CMS Hierarchical Condition
Category. To provide "transparency around the calculation of the
normalization factors," they showed "the risk scores used to calculate
the normalization factors for 2015." Glad that's clear.

Seriously, CMS has used innovative accounting to increase payments to
Medicare Advantage plans based on the fact that there is an influx of
baby boomers - a subset of Medicare beneficiaries that is younger,
healthier, and less expensive than the older beneficiaries already
enrolled. Taxpayers will pay more for lower cost beneficiaries. I
remember the quadratic equation, but I don't remember it ever being used
to cheat taxpayers and reward the private insurer rentiers.

Rentiers? Those are individuals whose income is derived from capital,
and now our nation's capital is being concentrated in the top centile.
If you missed yesterday's Quote of the Day on Thomas Piketty's
"CAPITAL," you should not bother reading the CMS song and dance above,
and instead read yesterday's message.

Congress and the Obama administration are serving the interests of the
rentiers, and this Medicare Advantage payment scam is only one example.
It is time for the people to take control. As Thomas Piketty wrote, "if
we are to regain control of capitalism, we must bet everything on

qotd: Thomas Piketty - "CAPITAL in the Twenty-First Century"