qotd: Tyler Cowan: Obamacare not as egalitarian as it appears

The New York Times
November 6, 2015
Obamacare Not as Egalitarian as It Appears
By Tyler Cowen

The Affordable Care Act has generated an enormous amount of partisan
rancor, but with more access to data, it is worth taking stock of how it
has actually been working.

We can safely say that the policy is costing less than anticipated,
perhaps 20 percent less, according to a Congressional Budget Office
estimate, and that it has reduced the number of Americans without
insurance. But the numbers also suggest that by some measures, the
Affordable Care Act has had only a limited impact on economic
inequality. In fact, I view the policy as an object lesson in the
complexity of reducing the harmful consequences of inequality in the
United States.

The act has many parts, but let's focus on the mandate, a core feature
that requires those without insurance to buy it. It was intended to help
millions of Americans who did not have health care coverage. Under the
program, government subsidies are available for the needy, and there is
clear evidence that the poorest people, who receive the largest
subsidies, are better off under the health reform law.

In that sense, the program has been a success. But whether other
individuals subject to the insurance mandate — those who qualify for
lower subsidies or for none at all — are also better off is much harder
to say, some recent research has found.

Of course, this question may seem simple if you consider health care
coverage to be an essential component of a good human life, and perhaps
of social justice as well. If you begin with those assumptions, you
might conclude that when you require people to buy insurance coverage
you are improving their lives — even if they are not willing to pay for
the insurance without prompting from the government.

But there is another way of looking at it, one used in traditional
economics, which focuses on how much people are willing to pay as an
indication of their real preferences. Using this measure, if everyone
covered by the insurance mandate were to buy health insurance as the law
dictated, more than half of them would be worse off.

This may seem startling. But in an economic study, researchers measured
such preferences by looking at data known as market demand curves.
Practically speaking, these demand curves implied that individuals would
rather take some risk with their health — and spend their money on other
things — partly because they knew that even without insurance they still
would receive some health care.

One implication is that the preferences of many people subject to the
insurance mandate are likely to become more negative in the months
ahead. For those without subsidies, federal officials estimate, the cost
of insurance policies is likely to increase by an average of another 7.5
percent; even more in states like Oklahoma and Mississippi. The
individuals who are likely losers from the mandate have incomes 250
percent or more above the federal poverty level, the paper said. (That
figure is $29,425; the federal poverty level is $11,770 for a single
person, more for larger families). They are by no means the poorest
Americans, but many of them are not wealthy, either. So the Affordable
Care Act may not be as egalitarian as it might look initially, once we
take this perspective into account.

It is a matter of philosophy whether we should help people even if they
may not want to bear the costs, or instead should honor their individual
preferences, but either way there is a sustainability problem. Consider
that the health law was enacted to replace an unsustainable system in
which uninsured people relied on last-ditch emergency room care. Yet
enrollment projections suggest that the Affordable Care Act's insurance
mandate may face sustainability issues of its own.

In short, while numerous government programs redistributed income toward
the poor successfully in the past, successive improvements, as
exemplified by the Affordable Care Act, have become harder to
accomplish, as many of the easiest and most efficient opportunities have
already been exploited. We have ended up at margins where political
divisions and interest group capture make further progress harder to
carry out, no matter how good the proposed policies may seem on the
drawing board.

(Tyler Cowen is a professor of economics at George Mason University.)

http://www.nytimes.com/2015/11/08/upshot/obamacare-not-as-egalitarian-as-it-appears.html

***


Comment by Don McCanne

Is our health care system under Obamacare (ACA) an egalitarian system?
Although ACA includes numerous policies designed to improve health care
equity, it still falls far short. Conservative economist Tyler Cowen
agrees, although his proposed solutions may be somewhat different from ours.

For a health care system to be egalitarian, it must be equitable. A well
designed single payer system would achieve that equity. As an example,
the financial burden on middle-income families that Tyler Cowen and many
others have described would be lifted.

In the past, Cowen has supported "a Singapore-style system, with single
payer on the catastrophic side rather than mandates for private
insurance purchase." Thus he would move us toward a more egalitarian
system as well. But the many problems created by moving to the requisite
health savings accounts would threaten health care equity, and, thus,
threaten egalitarianism itself.

Single payer is the way to go, but let's make sure that the system
design maximizes egalitarianism.

qotd: OECD: Health at a Glance 2015

OECD
Health at a Glance 2015
OECD Indicators

This 2015 edition of Health at a Glance – OECD Indicators presents the
most recent comparable data on key indicators of health and health
systems across the 34 OECD member countries. For a subset of indicators,
it also reports data for partner countries.

From the Executive Summary

Health at a Glance 2015 presents cross-country comparisons of the health
status of populations and the performance of health systems in OECD
countries, candidate countries and key emerging economies.

The key findings of this publication are as follows.

New drugs will push up pharmaceutical spending unless policy adapts

Life expectancy continues to rise, but widespread differences persist
across countries and socio-demographic groups

The number of doctors and nurses has never been higher in OECD countries

Out-of-pocket spending remains a barrier to accessing care

Too many lives are still lost because quality of care is not improving
fast enough

Health at a Glance 2015 (Read online version - 220 pages):
http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/health-at-a-glance-2015_health_glance-2015-en

Health at a Glance 2015 (links to PDFs of each section):
http://www.oecd-ilibrary.org/social-issues-migration-health/health-at-a-glance-2015_health_glance-2015-en

***


Comment by Don McCanne

Opponents of health care reform frequently dismiss efforts with the
statement that the United States has the best health care system in the
world. We don't. This biennial report of OECD indicators provides
international comparisons with tables and graphs that can be very useful
in explaining why the United States needs to get serious with our health
care reform efforts. It is shameful that we fall far behind our peer
nations in so many of the crucial health indicators.

The second link above is particularly helpful since you can readily
select international comparisons on whichever topic you want, such as
infant mortality, overweight and obesity among children, international
migration of nurses, out-of-pocket medical expenditure, and so forth.

Fixing our health care financing system alone will not solve all of our
problems, but a single payer system would give us a much better
infrastructure on which to function.

qotd: Cancer care access and outcomes worse for Medi-Cal patients

UC Davis Health System
November 5, 2015
Statewide cancer report finds significant disparities in outcomes,
quality of care by insurer

A new report by the UC Davis Institute for Population Health Improvement
(IPHI) comparing quality of care and outcomes for breast, colon, rectal,
lung and prostate cancers according to source of health insurance
coverage has identified substantial disparities in stage of diagnosis,
providers' use of recommended treatment and survival rates.

According to Kenneth W. Kizer, IPHI and CalCARES director, while cancer
treatment has generally improved in recent years, disparities in quality
of cancer treatment and survival rates by health insurance remain a
significant population health problem.

"Our study found that there are substantial opportunities for improved
cancer care among all categories of payers, although the greatest
opportunities for improvement exist for patients with Medi-Cal coverage,
Medicare/Medi-Cal dual eligibility or no health insurance," Kizer said.
"These patients were diagnosed at more advanced stages of disease,
received lower quality of care and had poorer outcomes than persons
having private insurance or insurance coverage through Medicare, VA or DoD.

"Given that Medi-Cal is now the largest insurance program in California,
with enrollment increasing from 7 to over 12 million members over the
past three years and the estimated cost of cancer care for Medi-Cal
growing from $3 billion to well over $6 billion, we need to better
understand why Medi-Cal patients are not faring better," he said.

Other key report findings:

* Significantly larger proportions of Medi-Cal and uninsured patients
were diagnosed at an advanced stage of disease compared to patients with
other sources of health insurance.

* Medi-Cal and uninsured patients had generally less favorable five-year
survival rates.

* Medicare/Medi-Cal dual eligible patients were least likely to receive
recommended treatment for breast cancer and colon cancer.

* VA patients had the longest intervals between diagnosis and initiation
of treatment, but they were generally more likely to receive recommended
treatment, and their treatment outcomes compared favorably to patients
with other types of health insurance.

* Medi-Cal patients were diagnosed with advanced (stage 4) prostate
cancer more than three times as often as patients with private insurance.

http://www.ucdmc.ucdavis.edu/publish/news/newsroom/10522

Full IPHI report:
https://www.ucdmc.ucdavis.edu/iphi/resources/1117737_CancerHI_100615.pdf

***


Comment by Don McCanne

Medi-Cal is a chronically underfunded Medicaid health program for
low-income individuals in California. As such, these patients do not
receive as much support from the health care community as do otherwise
insured patients. This study confirms that cancer patients in the
Medi-Cal and in the Medicare/MediCal dual eligible programs have
impaired access and impaired outcomes almost comparable to those of
uninsured patients.

Of note is that Medicare patients with added Medi-Cal coverage fared
worse than did Medicare patients without Medi-Cal coverage. It may be
that their lower incomes were associated with other socio-economic
problems that result in worse outcomes. It may also be that California
has been moving dual eligible patients into Medicaid managed care
programs when there is question about how effective these programs are
in delivering essential services. Another possibility is that physicians
may be rejecting these patients simply because of the welfare stigma of
the Medi-Cal program, even though they are on Medicare.

The conservatives have been preaching that Medicaid is as bad as having
no insurance at all, and may be even worse. Although their position has
been largely refuted, they will surely add this study to their "proof"
of this hypothesis. Governors in states that refused to expand their
Medicaid programs will find solace in this report.

The solution is obvious. Improve Medicare so that it is a more
comprehensive program, and then provide it to everyone. Although other
socio-economic factors need to be addressed, at least we would be
removing the Medicaid welfare stigma that includes chronic underfunding
by our elected representatives.

qotd: Can the out-of-network problem be repaired with patches?

Kaiser Health News
November 6, 2015
Marketplace Plans Covering Out-Of-Network Care Harder To Find
By Michelle Andrews

Health plans that offer coverage of doctors and hospitals outside the
plan's network are getting harder to find on the insurance marketplaces,
according to two analyses published this week.

Two-thirds of the 131 carriers that offered silver-level preferred
provider organization plans in 2015 will either drop them entirely or
offer fewer of them in January, an analysis by the Robert Wood Johnson
Foundation found. Those cutbacks will affect customers in 37 states,
according to the foundation.

Preferred provider organization plans, or PPOs, typically offer coverage
for doctors and hospitals that aren't in the plan's network, but require
consumers to pay a larger share of the cost. In contrast, health
maintenance organizations, which make up roughly half of the plans
offered on the exchanges, generally don't cover any care provided
outside the plan's network.

Last year, many insurers shrunk the networks of providers in the plans
that they sold on the marketplace.

http://khn.org/news/marketplace-plans-covering-out-of-network-care-harder-to-find/

***

Health Affairs Blog
November 3, 2015
A Tale Of Two Deliveries, Or An Out-Of-Network Problem
By Erin Taylor and Layla Parast

As co-workers and first-time moms-to-be, we shared much of the pregnancy
journey together — including the same employer-sponsored health
insurance plan. We even delivered within weeks of each other at the same
hospital. For both of us, the key to managing the pain of labor and
delivery was the epidural delivered by our anesthesiologists.

When it came to paying the bill, our hospital experiences diverged in
one key way. Layla received an unexpected bill for $1,600 for
anesthesiology services and warned Erin to expect the same. Yet Erin's
bill never came. Layla happened to deliver on a day when an
out-of-network anesthesiologist was on call, while Erin was seen by an
in-network anesthesiologist.

Patients who have gone out of their way to ensure they receive care at
an in-network facility should not be surprised by bills for involuntary
out-of-network services. One solution would be to require that all
providers offering care at an in-network facility are included in the
plan's network. Absent that, a few policy changes in the current system
could be a step in the right direction.

Make It Transparent

Hospitals could have patients preregister for a planned stay and work
with the insurance company to provide each patient with the estimated
total expected charges.

The key change here is that the estimated charges would include
physician services for in- and out-of-network services. This approach
would require the hospital to be straightforward with prospective
patients regarding the likelihood of care being provided by
out-of-network physicians

Make It Simple

Physician bills and insurance statements need to be simplified.

Clearer explanations of charges, reasons the insurance company did not
pay the full amount, and why the patient is being charged would help
consumers better understand their bills — and help prepare them to pay them.

Make It Available

Researchers and policymakers have questioned the limited hospital and
physician networks in the ACA health insurance marketplaces, as these
networks provide access to a smaller set of providers.

Some states, such as Texas, New York, and Louisiana, are tackling
out-of-network billing, while legislation was recently introduced in
Congress that would place limits on the ability to bill patients for
out-of-network services provided at in-network hospitals.

Clearly spelling out expected health care costs, and the likelihood of
out-of-network charges, would go a long way toward reducing the economic
uncertainty associated with hospital stays — and help patients
understand the billing statements they receive after discharge.


Blog Comment by Don McCanne, submitted but not published:

Our particular model of health care financing - a dysfunctional,
fragmented, public and private multipayer system - is the most expensive
way to finance health care, characterized especially by profound
administrative waste. Trying to patch this system only adds further to
the administrative complexity - in this case, the effort to create
transparency and special handling of out-of-network charges and billing.

Modeling of health care financing systems has shown that the least
expensive and most efficient are the national health service and single
payer models. Considering our public support of Medicare, the single
payer model would be the most feasible for the United States.

With the high numbers of uninsured and under-insured, with the reduced
choice of care due to narrow networks, and with the increasing exposure
to financial hardship due to shifting of risk to patients, we really do
need to abandon the ACA experiment and move forward with a well-designed
single payer system.

http://healthaffairs.org/blog/2015/11/03/a-tale-of-two-deliveries-or-an-out-of-network-problem/

***


Comment by Don McCanne

One of the more nefarious methods that private insurers use to reduce
their responsibility to pay for health care is to refuse to pay for
health care services provided outside of the networks of contracted
physicians and hospitals that they, rather than the patient, have
selected. They have tightened the screws by shrinking these networks and
by dropping some of the PPO plans which permitted at least some
out-of-network coverage, but at reduced rates.

As the anecdote presented in the Health Affairs Blog indicates, limited
networks can be quite unfair. The two authors of the blog, a policy
researcher and a statistician employed by RAND, showed how the same
employer-sponsored plan covered obstetrical anesthesia for one but not
for the other, simply because by chance one anesthetist was in-network
and the other was not.

Recognizing the unfairness of this, the authors recommend some policy
changes. They recommend more transparency so you would at least know
that the services would not be covered, though it would require more
administrative services to obtain and communicate that information. They
recommend that bills and insurance statements be "simplified," though
they are actually asking that additional information be required to
clarify the network status of each provider involved - more
administrative activity. They also suggest that legislation be passed to
require special handling of out-of-network charges - yet more
administrative complexity.

Unfortunately, this demonstrates the flawed approach to problems with
our health care financing system that permeates the health policy
community today. They accept as a given our fragmented system of
financing health care, as modified by the Affordable Care Act. Their
policy approach avoids carefully defining the fundamental problem and
moves on with mere patches to our highly dysfunctional system. As this
example indicates, the patches typically compound the problems,
especially by adding more administrative tasks to our system that is
already sinking with administrative overload.

So what is the fundamental problem with narrow networks? It should be
obvious. They are designed to benefit the private insurer by shifting
more costs to patients who unavoidably or inadvertently obtain care
outside of networks. This is not for the benefit of patients; it is
detrimental to patient care. Health financing systems should be designed
to benefit patients, not multibillion dollar corporations.

So the fundamental problem is the existence of the narrow networks. They
need to be eliminated. Along with the narrow networks, all of the other
profound administrative excesses that uniquely characterize the American
health care financing system need to be eliminated as well. They need to
be replaced with an efficient single payer financing system.

Although the Health Affairs Blog posted numerous responses more or less
commending the authors for their astute policy recommendations, they did
not post my response which happened to be a proposal that would actually
prevent the out of network injustices. For that reason, I have included
it in today's message so that it would have at least some limited public
exposure. Fortunately, they did post a response by Thomas Cox PhD RN who
calls for a single national health insurer.

qotd: Higher spending is associated with fewer malpractice claims

BMJ
November 4, 2015
Physician spending and subsequent risk of malpractice claims:
observational study
By Anupam B Jena, Lena Schoemaker, Jay Bhattacharya, Seth A Seabury

Conclusions

Despite evidence that the majority of US physicians report practicing
defensive medicine, no evidence exists on the broader question of
whether greater resource use by physicians is associated with fewer
malpractice claims. Our findings suggest that greater resource use,
whether it reflects defensive medicine or not, is associated with fewer
malpractice claims.

Discussion

Despite evidence that many physicians practice defensive medicine to
reduce the risk of malpractice claims, no evidence exists on the broader
question of whether a greater use of resources by physicians is
associated with a reduced risk of such claims. We investigated the
association between average resource use by physicians and subsequent
malpractice claims. In six of seven specialties, we found that greater
resource use was associated with statistically significantly lower
subsequent rates of alleged malpractice incidents. For example,
internists in the highest fifth of patient risk adjusted resource use
were less than half as likely to face a future malpractice claim
compared with those in the lowest fifth. Among obstetricians, those with
higher caesarean rates — a procedure sometimes considered to be
defensively motivated — had lower subsequent rates of alleged
malpractice. These relations held even when we adjusted for patient
characteristics and accounted for time invariant physician
characteristics such as patient mix, clinical skills, or communication
skills.

http://www.bmj.com/content/351/bmj.h5516-0.full.pdf+html

***


Comment by Don McCanne

Much has been written about the high costs of defensive medicine -
excessive health care services that are delivered merely to protect
against the potential of malpractice lawsuits. This study tends to
reinforce the belief that there is a solid basis for defensive medicine
since higher spending on health care is associated with fewer
malpractice claims. But does this additional care represent defensive
medicine, or does it represent beneficial health care services that
prevent adverse outcomes?

Although physicians admit that they practice defensive medicine, do they
really do so strictly because of fear of lawsuits? Or do they do so
because there is a real possibility that the patient may experience a
significant adverse outcome because of the physician's failure to detect
or manage a serious medical condition? Invariably the latter concern
plays at least some role in the medical decisions made.

Imaging is probably the most common procedure that is thought all too
often to represent defensive medicine, especially when you consider how
many results are normal. But if the physician is 100 percent certain
that the imaging procedure will not demonstrate any pathology, then she
would not order it since she could not be sued for a condition that does
not exist. Imaging is ordered only when there is a real possibility of
an abnormal finding, even if the odds are low.

When physicians order low yield tests they often think of them as
defensive medicine. But as physicians back off on low yield testing, the
incidence of missed pathology increases, as does the risk of a
malpractice suit. Thus the test that picks up significant pathology is a
beneficial health care service and really should not be categorized as
defensive medicine only because it also has that benefit. The same
reasoning applies to a test that provides the benefit of reassurance
that the potential pathology is not demonstrated.

With concerns about the very high costs of health care, many recommend
that we do something to reduce all of this unnecessary defensive
medicine. The problem with that is, for the reasons mentioned, not much
of health care falls into the category of pure defensive medicine that
is of absolutely no clinical value. Therefore there is not much savings
to recover. You can talk about flat of the curve medicine or low yield
medicine, but as soon as you start eliminating care, you sacrifice the
health and well being of a few of your patients, not to mention that you
deprive many others of the reassurance they would have from a negative test.

Another point is that so called defensive medicine is a very small
percentage of the $3 trillion we are spending on health care, and we can
afford that. After all, much of it is still beneficial.

If we really want to reduce waste, we should eliminate the profound
administrative excesses of our dysfunctional, fragmented, multi-payer
system, by adopting a single payer national health program. We would
recover hundreds of billions of dollars that way. That is in contrast to
this study that shows that spending more on patients is associated with
a lower incidence of lawsuits. Whether we label that defensive medicine
or beneficial health care services, we are not going to find much
savings there.

qotd: CMS reneges on mandated 0.5% Medicare rate increase

Medscape Medical News
November 3, 2015
Physicians Decry Broken Promise of Medicare Raise in 2016
By Robert Lowes

The law that repealed Medicare's sustainable growth rate (SGR) formula
for physician pay called for an annual raise of 0.5% from 2016 through
2019 as part of a transition to value-based reimbursement.

When Congress passed the law in April, some leaders of organized
medicine noted that the modest raise lagged behind the inflation rate,
but said it was better than nothing. It was certainly better than the
disastrous 21% pay cut that the SGR formula would have triggered in
2016. Medical societies sold their membership on the legislation, called
the Medicare Access and CHIP Reauthorization Act (MACRA), in part by
saying it would stabilize Medicare rates for several years.

However, the promised raise of 0.5% turned into a 0.3% pay cut in the
fine print of the final 2016 Medicare fee schedule released last week.
The reason? The Affordable Care Act (ACA) and several other laws that
set Medicare reimbursement policy trumped MACRA.

Organized medicine isn't taking it too well.

"Physicians were told that they would get an increase, and they're not,"
said Wanda Filer, MD, president of the American Academy of Family
Physicians (AAFP). "It's a morale breaker."

In its 2016 fee schedule, the Centers for Medicare and Medicaid Services
(CMS) walked through the math that produced the tiny pay cut in 2016.
(For a fairly detailed explanation, click on the Medscape link below.)

Organized medicine saw the stealth pay cut coming in the 2016 fee
schedule when it was released in draft form last summer for public
comment. At that time, CMS said that its misvalued codes initiative had
reduced fee-for-service spending by roughly 0.25%. In response, medical
societies such as the AAFP, the American College of Physicians, and the
American Medical Association, as well as the Medical Group Management
Association (MGMA), urged CMS to tweak its methodology for essentially
repricing codes and calculating the savings so it could hit the 1%
target and avoid canceling the MACRA raise. MGMA called the agency's
approach "narrow." The association recommended, among other things, that
CMS base its calculations on a broader group of repriced codes than what
the agency used.

In the final fee schedule issued last week, CMS stood its ground. "We
continue to believe this approach is appropriate and compliant with
statutory directives," it said. The agency repeatedly stated that it was
bound by "current law" — in other words, MACRA, the ACA, PAMA, and ABLE.

Halee Fischer-Wright, MD, the president and CEO of MGMA, said her group
is "extremely disappointed that CMS failed to meet the [1%] target set
by Congress."

"Instead, CMS's inaction will result in an across-the-board cut to
physicians in 2016," Dr Fischer-Wright said in a statement given to
Medscape Medical News. "For all the ambitious plans touted by the agency
to move Medicare toward a value-based payment system for physicians, its
inability to adequately review misvalued codes under current
fee-for-service calls into question how CMS will be able to implement
far more sophisticated payment models in the future."

Primary care physicians will feel the 0.3% Medicare rate cut more keenly
than their specialist peers, said AAFP president Dr Filer.

"I think primary care physicians are working a minimum margin and
working frequently at a deficit," she said. "Practice costs haven't
declined, and primary care has been undervalued for a very long time.

"Any cut is a financial hit."

The comments from Dr Filer and Dr Fischer-Wright stand in contrast to
what the White House says about MACRA on its website: "At last, the
doctors who care for seniors and many Americans with disabilities will
no longer have to worry that about the possibility of an arbitrary cut
in their pay."

http://www.medscape.com/viewarticle/853878

***

Quote of the Day
March 24, 2015
SGR Fix: APMs threaten physician burnout (RAND)
Comment by Don McCanne

HR 1470, which Congress is scheduled to approve in only two days (March
26), would replace the flawed Sustainable Growth Rate (SGR) method of
determining Medicare payments with a new Merit-based Incentive Payment
System (MIPS). MIPS introduces considerable administrative complexity
which would be a great burden to physicians, but the legislation allows
physicians to opt out of MIPS by joining Alternative Payment Models
(APMs) such as Accountable Care Organizations (ACOs) or Patient Centered
Medical Homes (PCMHs). This RAND study of APMs reveals that physician
members of APMs are at very high risk of BURNOUT.

http://www.pnhp.org/news/2015/march/sgr-fix-apms-threaten-physician-burnout-rand

***


Comment by Don McCanne

Earlier this year medical societies celebrated their success in helping
to get Congress to eliminate the Sustainable Growth Rate (SGR) formula -
a formula that could have resulted in a 21% reduction in Medicare
payments - and replace it with a 0.5% yearly increase for the next few
years. There are two important stories here.

The first is that SGR would be replaced with a new onerous Merit-based
Incentive Payment System (MIPS) which would be used to push physicians
into Alternative Payment Models (APMs) such as Accountable Care
Organizations (ACOs) or Patient Centered Medical Homes (PCMHs). At that
time RAND warned that physician members of APMs are at very high risk of
burnout. Trading an SGR formula that was never enforced for a career in
misery is hardly a rational move. But at least they got a 0.5% raise, or
did they?

The second important issue is that CMS has reneged on the legislated
promise of a 0.5% increase and instead is reducing rates in the
traditional fee-for-service Medicare program by 0.3%. This is part of a
long-term strategy to control Medicare spending by keeping rate
increases below the rate of inflation. Over time, physicians have been
struggling to meet expenses of caring for their Medicare patients and
still have anything left to take home, with inflation eating away at
their payments.

But more than that, this decision appeared to represent one more example
of CMS supporting the privatization of Medicare. We have reported
several examples of CMS overriding the legislated mandate to reduce
overpayments to private Medicare Advantage (MA) plans. Each year they
have been able to use administrative chicanery to convert the mandated
reduction into an increase in payments for the private MA plans. But
this year they are also using administrative chicanery to convert the
legislatively mandated increase in payments into a decrease in the
traditional FFS Medicare program.

Another example is that the government has reneged on their mandate to
pay the costs that exceeded the risk corridors for the CO-OP plans,
contributing to the financial collapse of over half of them this year.
Although the CO-OPs were not Medicare plans, they were quasi-public
plans that were designed to compete with the private insurers. Do you
really believe that the government can readily find funds year after
year to shore up the private Medicare Advantage plans, but in the first
year of the CO-OPs they are incapable of finding more than 13% of the
mandated funds to support risk corridor losses for these organizations?

Our government, under the Obama administration, is actively moving
towards privatization of our public insurance programs. Under the
private insurers we are seeing higher costs, impairment of access,
financial hardship for patients, and no improvement in quality or outcomes.

We need single payer, but we also need to elect responsible stewards for
our public programs.

qotd: High midlife mortality in US white, non-Hispanics

Proceedings of the National Academy of Sciences
Published online before print on November 2, 2015
Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century
By Anne Case and Angus Deaton

Abstract

This paper documents a marked increase in the all-cause mortality of
middle-aged white non-Hispanic men and women in the United States
between 1999 and 2013. This change reversed decades of progress in
mortality and was unique to the United States; no other rich country saw
a similar turnaround. The midlife mortality reversal was confined to
white non-Hispanics; black non-Hispanics and Hispanics at midlife, and
those aged 65 and above in every racial and ethnic group, continued to
see mortality rates fall. This increase for whites was largely accounted
for by increasing death rates from drug and alcohol poisonings, suicide,
and chronic liver diseases and cirrhosis. Although all education groups
saw increases in mortality from suicide and poisonings, and an overall
increase in external cause mortality, those with less education saw the
most marked increases. Rising midlife mortality rates of white
non-Hispanics were paralleled by increases in midlife morbidity.
Self-reported declines in health, mental health, and ability to conduct
activities of daily living, and increases in chronic pain and inability
to work, as well as clinically measured deteriorations in liver
function, all point to growing distress in this population. We comment
on potential economic causes and consequences of this deterioration.

From the Discussion

Although the epidemic of pain, suicide, and drug overdoses preceded the
financial crisis, ties to economic insecurity are possible. After the
productivity slowdown in the early 1970s, and with widening income
inequality, many of the baby-boom generation are the first to find, in
midlife, that they will not be better off than were their parents.
Growth in real median earnings has been slow for this group, especially
those with only a high school education. However, the productivity
slowdown is common to many rich countries, some of which have seen even
slower growth in median earnings than the United States, yet none have
had the same mortality experience. The United States has moved primarily
to defined-contribution pension plans with associated stock market risk,
whereas, in Europe, defined-benefit pensions are still the norm. Future
financial insecurity may weigh more heavily on US workers, if they
perceive stock market risk harder to manage than earnings risk, or if
they have contributed inadequately to defined-contribution plans.

A serious concern is that those currently in midlife will age into
Medicare in worse health than the currently elderly. This is not
automatic; if the epidemic is brought under control, its survivors may
have a healthy old age. However, addictions are hard to treat and pain
is hard to control, so those currently in midlife may be a "lost
generation" whose future is less bright than those who preceded them.

Significance

Midlife increases in suicides and drug poisonings have been previously
noted. However, that these upward trends were persistent and large
enough to drive up all-cause midlife mortality has, to our knowledge,
been overlooked. If the white mortality rate for ages 45−54 had held at
their 1998 value, 96,000 deaths would have been avoided from 1999–2013,
7,000 in 2013 alone. If it had continued to decline at its previous
(1979‒1998) rate, half a million deaths would have been avoided in the
period 1999‒2013, comparable to lives lost in the US AIDS epidemic
through mid-2015. Concurrent declines in self-reported health, mental
health, and ability to work, increased reports of pain, and
deteriorating measures of liver function all point to increasing midlife
distress.

http://www.pnas.org/content/early/2015/10/29/1518393112.full.pdf

***


Comment by Don McCanne

In recent years concerns have been raised about the increases in death
rates from prescription pain medications, but the magnitude of the
problem was not recognized until this landmark study was released
yesterday. Midlife deaths from poisonings with alcohol and drugs or from
suicide of white, non-Hispanic men and women in the United States have
skyrocketed since 1999. Morbidity likewise has increased in this group.

The intensity of the problem can be easily visualized by clicking on the
link above and looking at Figure 1. The mortality curve of US white
non-Hispanics, ages 45-54, is moving upward as the curves for US
Hispanics and for residents of six other wealthy industrialized nations
are continuing downward.

Although the other nations have more egalitarian, accessible and
affordable health care systems, that alone cannot explain the
differences since Hispanics in the United States have not seen this same
isolated increase in mortality.

The authors suggest that the decline in economic security that began in
the early 1970s may be an important factor. Not only have wages
stagnated, but retirement security has diminished with a shift from
defined benefit to defined contribution pension plans. Lack of higher
education has been especially associated with this phenomenon of higher
mid-life morbidity and mortality.

A single payer system would help by improving access to preventive
health, mental health, and drug treatment services. But we need to do
more. We need public policies that distribute the gains in productivity
to the workers rather than to the rentiers, plus tax policies that
reduce the injustices of income and wealth inequality. We need to ensure
adequate education opportunities for all, including industrial arts and
training for the service industries, along with assurances of adequate
incomes in those fields. In general, we need policies that serve the
social good.

To do that we need political leaders who are dedicated to the health and
welfare of the people and who would enact policies to ensure that. We
need to displace our current political leaders who have dedicated
themselves to supporting the military-industrial complex (through more
warfare), the medical-industrial complex (through prioritizing support
of insurers and pharmaceutical firms above the interests of patients),
and the rentiers of Wall Street who are redistributing wealth from the
masses to the magnates.

qotd: The ACA insurance exchange model has failed

Bloomberg Business
October 30, 2015
Obamacare Premiums Climb, But Insurers Struggle for Profit
By Zachary Tracer

Many people shopping for health coverage this weekend on the websites
created by Obamacare are going to see double-digit percentage increases
in their premiums. That's still not enough for some insurers.

Anthem Inc. says there remain competitors in the government-run
marketplace offering premiums that aren't enough to profitably provide
the coverage patients will require. Prices in some areas probably will
have to climb in 2017 and even 2018 to reach levels that make sense,
according to Chief Financial Officer Wayne Deveydt. Meantime, Anthem
will sacrifice market share to keep its plans profitable, he said.

"When you have fewer national enrollees and you have price points that
we don't believe are sustainable, we've just made a conscious decision
we're not going to chase it," Deveydt told analysts on a conference call
on Wednesday. "We are going to need to be patient until this works
itself out."

Deveydt's remarks spotlight a problem for the Patient Protection and
Affordable Care Act's marketplaces as the third annual sign-up period
begins Sunday. Set prices too low to lure customers, and losses can
mount. Some smaller firms already have closed, and some bigger insurers
have withdrawn from markets -- such as Aetna Inc., which will offer
coverage in two fewer states this year.

The conundrum has led to this year's price increases, which have been
higher, on average, than last year's hikes. But the danger is that
premiums are now too expensive for some families to afford coverage,
especially the uninsured people the Obama administration is trying to
persuade to shop on the exchanges for the first time.

But the remaining uninsured are poorer and younger than those who've
already signed up, and they're more difficult to reach, Health and Human
Services Secretary Sylvia Mathews Burwell has said. That may mean slower
growth for the insurers.

Charles Gaba, who tracks the health law on ACASignups.net, estimates
that the rate increases across the U.S. will average about 12 percent to
13 percent, based on a weighted average of current enrollment.

"Some of the large carriers are having pretty significant rate
increases," said Jeff Smedsrud, who runs the private insurance shopping
site Healthcare.com.

Price isn't the only challenge for insurers, according to Shawn Guertin,
Aetna's CFO. Membership levels are lower than expected, and some
individuals are sticking with pre-Obamacare plans, cutting into the size
of the market. There's also been lots of churn -- customers signing up
and then dropping their policies throughout the year.

Aetna hasn't been turning a profit in Obamacare plans, the company has
said. Guertin said its price hikes range from high single digits to the
mid-teens, depending on the market. UnitedHealth Group Inc., the largest
U.S. health insurer, has said its premium increases are in the double
digits as well.

http://www.bloomberg.com/news/articles/2015-10-30/obamacare-premiums-jump-but-insurers-still-struggle-for-profit

***


Comment by Don McCanne

The performance of competing private insurance plans within the ACA
exchanges is not much different from the performance of the pre-ACA
private plans in the individual market. Trends in higher insurance
costs, greater cost sharing, and narrower choices were already
occurring, and they continue to grow progressively worse. Access and
affordability can only suffer.

Higher premium credits and out-of-pocket subsidies are helping
individuals with incomes near poverty levels, but, for middle-income
families, they are inadequate to provide much benefit.

Higher premiums and more cost-shifting to patients are adequate to
maintain profits for most larger insurers, but where even these measures
are inadequate, insurers are pulling out of the exchanges, and some of
the smaller insurers are even folding. Market manipulations create
instability.

The insurers show their true colors through statements such as that of
Anthem's Chief Financial Officer Wayne Deveydt. Reporting to Wall Street
analysts, Deveydt said about the market, "When you have fewer national
enrollees and you have price points that we don't believe are
sustainable, we've just made a conscious decision we're not going to
chase it."

Higher premiums, greater cost-sharing, narrower networks - the behavior
of the private insurers is not changing in spite of the promise of
higher value and lower costs through the ACA Marketplaces. The ACA
exchanges are a creeping failure that is growing worse. Congress
enacted the wrong model of reform. We need single payer.