Thursday, April 28, 2016

qotd: Paul Ryan does not seem to understand high-risk pools

April 27, 2016
Ryan wants to end Obamacare cost protections for sick consumers
By David Morgan

U.S. House of Representatives Speaker Paul Ryan called on Wednesday for an end to Obamacare's financial protections for people with serious medical conditions, saying these consumers should be placed in state high-risk pools.

In election-year remarks that could shed light on an expected Republican healthcare alternative, Ryan said existing federal policy that prevents insurers from charging sick people higher rates for health coverage has raised costs for healthy consumers while undermining choice and competition.

The rule, a cornerstone of President Barack Obama's Affordable Care Act, has been praised by patient advocates for providing access to medical care for people who previously could not afford private health insurance. The Affordable Car e Act also bars insurers from excluding coverage for pre-existing conditions.

"Less than 10 percent of people under 65 are what we call people with pre-existing conditions, who are really kind of uninsurable," Ryan, a Wisconsin Republican, told a student audience at Georgetown University.

"Let's fund risk pools at the state level to subsidize their coverage, so that they can get affordable coverage," he said. "You dramatically lower the price for everybody else. You make health insurance so much more affordable, so much more competitive and open up competition."

High-risk pools, which existed before the healthcare law, are state-level entities that guarantee coverage for people with health problems. Analysts say they can be prohibitively expensive and offer less than optimal health coverage.


Comment by Don McCanne

House Speaker Paul Ryan has promised to produce the Republican alternative to the Affordable car Act, likely before the Republican convention in July. In his comments at Georgetown University yesterday he discussed what would be the most important policy supposedly designed to control health care spending for the vast majority of Americans: Establish state level risk pools for the 10 percent of people with the greatest health care needs. Let's see what that means.

The top 10 percent of individuals in spending account for 65 percent of health care costs. By removing them from the standard insurance pools that means that the other 90 percent would have to pay insurance premiums that funded only 35 percent of total health care. Ryan says that this would lower insurance premiums through competition, but that is nonsense. Premiums would be much lower because two-thirds of health care costs are pulled out of the insurance plans in the marketplace. Surely most Americans would be happy with private insurance premiums that were one-third of what they would be if everyone were included. It would be a very popular program, and the Republicans would take credit for it.

But what about the 10 percent of people who account for two-thirds of our health care costs. Their premiums would have to be about 7 times what the premium would be if everyone were covered under a common risk pool, or about 20 times what everyone else is paying. As Paul Ryan says, they are "really kind of uninsurable." So he proposes high-risk pools at the state level, with subsidized premiums. Expecting the states to subsidize two-thirds of our health care costs is a non-starter. Without massive increases in taxes, which are opposed by the Republicans anyway, the states would not be able to fund those pools.

We already have considerable experience with state high-risk pools. In recent decades, thirty-five states established such pools, and overall they were a spectacular failure. Also, the Affordable Care Act authorized temporary Pre-Existing Condition Insurance Plans (PCIP) which were also high-risk pools. These plans proved to be prohibitively expensive to administer, prohibitively expensive for consumers to purchase, and offered much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.

It is so obvious on the face of it. Most of us might be happy with our low premiums, but we would be very unhappy with the massive increases in regressive state taxes that would be enacted to pay for this. Vermont's reform effort failed once the tax consequences were recognized, and that wasn't even for high-risk pools.

As I wrote in a previous Quote of the Day, "With a single payer system this problem disappears. Funding is based on ability to pay, through the tax system, and not on the basis of anticipated medical expenses. Everyone receives the care they need, regardless of their health status. The fragmented plans supported by the repeal and replace people cannot do that."

Wednesday, April 27, 2016

qotd: Who benefits from an “improved” medical loss ratio?

April 26, 2016
Health insurer Centene's profit beats as medical costs fall
By Amrutha Penumudi

U.S. health insurer Centene Corp (CNC.N) reported a better-than-expected quarterly profit, helped by lower medical costs in certain patient populations and the acquisition of rival Health Net.

The company's health benefits ratio, or the amount it spends on medical claims compared with its income from premiums, improved to 88.7 percent in the first quarter from 89.9 percent a year earlier.


April 27, 2016
Anthem Falls As Medicaid, Obamacare Results Pressure Margins
By Zachary Tracer

Anthem Inc., the No. 2 U.S. health insurer, fell in New York trading as costs tied to its Medicaid and Affordable Care Act businesses pressured margins.

The shares fell 2.8 percent to $142.91 at 11:24 a.m. Wednesday. Anthem spent 81.8 cents of every premium dollar on medical claims in the first quarter, up from a medical-loss ratio of 80.2 percent a year earlier, according to a statement.


Comment by Don McCanne

Today's message is just a reminder of one of our problems that the Affordable Care Act (ACA) did not fix. A well-functioning health care financing system should be designed to obtain maximum value by spending our funds on health care and not wasting them on excessive administrative services and on profits that add no value to health care. Yet ACA perpetuates policies that turn these priorities upside down, to the pleasure of Wall Street.

Centene is reporting greater profits attributed to a lower percentage of revenues spent on health care compared to the year before - the medical loss ratio decreased from 89.9 percent to 88.7 percent. A comparable medical loss ratio for Medicare would be about 98 percent - only 2 percent is used for administrative services, and there are no profits. Spending less on patient care and retaining more for Centene's own administrative services and for profits, Wall Street deems to be an improvement.

In contrast, the percent of revenues that Anthem spent on health care increased - the medical loss ratio increased from 80.2 percent to 81.8 percent. For insurers to spend more on health care is considered to be bad news on Wall Street, and thus they punished Anthem by bidding down the price of their shares.

Since these insurers are giving us the opposite of what we want, why are we leaving them in charge of our health care dollars? Let's fix Medicare and expand it to cover everyone. Yes, we would have a very high medical loss ratio - with 98 percent of our Medicare tax revenues spent on patient care - but it would be a much better deal for all of us - except for the insurance executives and Wall Street rent-seekers.

Tuesday, April 26, 2016

qotd: External validity through structured speculation

National Bureau of Economic Research
April 2016
Working Paper 22167
Decision Theoretic Approaches to Experiment Design and External Validity
By Abhijit Banerjee, Sylvain Chassang, and Erik Snowberg


A modern, decision-theoretic framework can help clarify important practical questions of experimental design. Building on our recent work, this chapter begins by summarizing our framework for understanding the goals of experimenters, and applying this to re-randomization. We then use this framework to shed light on questions related to experimental registries, pre-analysis plans, and most importantly, external validity. Our framework implies that even when large samples can be collected, external decision-making remains inherently subjective. We embrace this conclusion, and argue that in order to improve external validity, experimental research needs to create a space for structured speculation.

Formats for structured speculation

In all external decision making problems, inference is unavoidably subjective. In structural modeling, the source of subjectivity is the model itself.


Comment by Don McCanne

This highly technical paper is a difficult read, but it provides important lessons for design and application of health policy research. The subjective design of the research model and subjectivity of the resulting decision making impacts the external validity of the experiment. That is, can the results of the experiment be applied generally outside of the experimental model?

Perhaps the most famous example is the RAND Health Insurance Experiment. It demonstrated that employees and their families who had to pay part of the costs of their health care used less health care than did those who had no out-of-pocket spending, yet both groups had equally good health care outcomes (except for hypertensives). This conclusion was internally valid for this group, and it has been applied to the population at large. But is it really externally valid?

Employees and their families are a comparatively healthy sector of society, and in the RAND HIE they were studied during a healthy period of their lives. These results would not apply to the population at large that includes less healthy individuals who help run up our three trillion dollar national health care bill. Yet we have accepted the results of the RAND HIE as gospel even though other studies have confirmed that cost sharing does cause individuals to forgo beneficial health care services.

In the Oregon Experiment individuals with no insurance were compared with individuals who received Medicaid benefits by lottery. The conclusions published in the NEJM were that "Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years," and this has been interpreted widely to mean that Medicaid does not improve health. The internal validity was regarding three measurements - BP, cholesterol and HbA1c during only two years. How could that possibly have external validity for the low-income population at large with innumerable infirmities that we know respond to beneficial health care services?

The subjectivity of sectors of the policy community is at question here. Model design is subjective and inference is subjective. Studies can be designed and interpreted to obtain the results desired. Cost sharing can be shown to reduce spending without having any adverse effect on health. Medicaid can be shown to have no benefit on health outcomes.

And what do we have now? Apparently policy science is so advanced that we are putting in place measures that do not require research to confirm their effectiveness. Narrow provider networks can reduce spending by deterring patients who, after all, really do not need care, they say. High deductibles can reduce spending without adversely affecting health, except for those who deferred the health care that they should have had. They say accountable care organizations will improve quality and significantly reduce spending, even though experience to date has largely failed to confirm that. The Merit-Based Incentive Payment System (MIPS) will convert the volume of health care delivery to the elusive concept of value, they hope, though the limited evidence indicates otherwise.

What is the purpose of health policy research? To improve quality? Isn't quality determined by studying the diagnostic, therapeutic and preventive interventions in heath care - i.e, medical research? Is the purpose of policy research to control spending? Except by creating detrimental financial and logistical (network) barriers to beneficial care, policy studies have been remarkably ineffective. Public policies such as establishing a single payer system have been far more effective in controlling spending.

The authors of this NBER paper state, "in order to improve external validity, experimental research needs to create a space for structured speculation." Haven't we had enough of this structured speculation of the health policy community? Isn't it time to adopt public policies that have been proven to effective?

Monday, April 25, 2016

qotd: ColoradoCare to face industry onslaught

The Intercept
April 22, 2016
Health Care Industry Moves Swiftly to Stop Colorado's "Single Payer" Ballot Measure
By Lee Fang

The campaign in Colorado to create the nation's first state-based "single payer" health insurance system, providing universal coverage and replacing insurance premiums with higher taxes, has barely begun.

But business interests in Colorado are not taking anything for granted, and many of the largest lobbying groups around the country and in the state are raising funds to defeat Amendment 69, the single-payer ballot question going before voters this November.

The Council of Insurance Agents & Brokers, a national trade group, is mobilizing its member companies to defeat single payer in Colorado. "The council urges Coloradans to protect employer-provided insurance and oppose Proposition 69," the CIAB warns. The gro up dispatched Steptoe & Johnson, a lobbying firm it retains, to analyze the bill.

Lobby groups that represent major for-profit health care interests in Colorado, including hospitals and insurance brokers, are similarly mobilizing against Amendment 69. The Colorado Association of Commerce & Industry — a trade group led in part by HCA HealthOne, a subsidiary of HCA, one of the largest private hospital chains in the country — is soliciting funds to defeat single payer. The business coalition to defeat the measure also includes the state's largest association of health insurance brokers.

I asked Sean Duffy, a spokesperson for "Coloradans for Coloradans," an ad hoc coalition against the single-payer ballot measure, how the state should address high health care costs and those struggling to afford health insurance premiums.

"We are focused on sharing with Coloradans the numerous questions, ambiguities, and concerns with Amendment 69," said Duffy. He noted that "motivations for universal coverage are shed by many in Colorado" but that making Colorado a "one-state experiment, and the cost of doubling our state budget, potentially diminishing the accessibility and quality of care and creating an unaccountable, massive bureaucracy is just not a good idea for Colorado."

As other states consider proposals to lower costs and expand coverage, health care interests keen to protect some of the largest profit margins in the economy will be sure to mobilize quickly to snuff them out.

MSNBC's Chris Hayes interviews reporter Lee Fang (4 minutes):


Email message
April 21, 2016
From T. R. Reid, author of "The Healing of America":


As you know, there's a citizens' initiative on the ballot in Colorado this November to create a state-specific plan that will cover everybody, eliminate deductibles, and let the patient, not the insurance company, choose the doctor, chiropractor, hospital, etc. If "ColoradoCare" passes, it can be a model and an incentive for other states where people like you are working to get health care for all.

I'm happy to report that our early polls show us ahead statewide.  I'm unhappy to tell you that our lead is not big enough to withstand the expected onslaught from our opponents. The insurance companies have funded a huge "No" campaign. The Koch Brothers are already running TV ads that say for-profit insurance is the ideal way to pay for health care.

So we need help. We need money…


Comment by Don McCanne

Without additional enabling federal legislation, Colorado is not able to enact a bona fide single payer system. However, their ballot measure - Amendment 69, ColoradoCare - would improve efficiency, equity and coverage through the health care financing system in their state. Strong opposition is expected since ColoradoCare could be disruptive to some of the well-financed stakeholders, especially the private insurance industry.

The advocates of ColoradoCare are now seeking support for their effort (link above). It will be difficult to educate the public on the facts behind their reform proposal. Even when saturated with facts, the public often remains dubious because of the prevailing anti-government and anti-tax rhetoric. It is a massive project to convert the majority of the voters into passionate supporters of such a cause.

In the meantime, the opponents know that their task does not involve educating the public on the facts. They do not have to engage the other side in a information battle over the truth. They merely have to appeal to the passion of the voters. Simple rhetorical soundbites are usually enough to convince the voters that they do not have to waste their time studying some complicated government scheme in order to know how to vote on it. Just look at some of the rhetoric of the opposition group, Coloradans for Coloradans: "doubling the state budget," "diminishing accessibility and quality," and "creating an unaccountable, massive bureaucracy." Who would support that? No need to try to find out the truth.

This is not just theoretical, as single payer activists supporting ballot measures in California and Oregon can attest to. In both cases, early polling was favorable, as it is now in Colorado. But closer to election time, intensive campaigns were launched by the opponents using simplistic sound bites and slogans, and the results were a disaster. California's Proposition 186 lost by a 3 to 1 margin and Oregon's Measure 23 lost by 4 to 1.

So what should we do? I have three suggestions.

1.  Contribute to their effort in any way you can. (Today I made a donation through their website.)

2.  If the effort should fail (and I hate to say that), then be sure that everyone understands that this was not a failure of single payer, especially since it is not even a bona fide single payer proposal. Rather it will have been a failure in mobilizing a social movement.

3.  Above all, do not let up in the least in your advocacy for a single payer national health program - an improved Medicare for all. That is the ultimate goal, and it could be accomplished in a single step without having to first enact compromised systems in several states. Difficult? Of course. But, in spite of many attempts, how many states have enacted single payer? In this age of advanced communications, mobilizing a social movement on a national basis makes more sense than trying to do it in selected individual states.

(ColoradoCare is not a project of PNHP since we are a single issue organization supporting a single payer national health program. But most members are individually very supportive of the Colorado effort as a beneficial interim measure to fill in until we can enact a national Medicare for all program.)

Friday, April 22, 2016

qotd: MACRA and the ethics of physician burnout

Health Affairs
Health Policy Briefs
April 21, 2016
Medicare's New Physician Payment System

An overwhelming body of research in recent years found that medical care in the United States was neither efficient nor as effective as it could be. Inappropriate and excessive care is common even as rising health care costs burden government, business, and families.

Against this backdrop, government and private-sector leaders have resolved to transform how physicians are paid in a way that holds them more accountable for the care they deliver. The latest salvo in this effort was the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, signed into law April 16, 2015.

What's in the law?

Initially, physicians can choose a program called the Merit-Based Incentive Payment System (MIPS) or join an alternative payment model such as an accountable care organization or patient-centered medical home. If they make no choice or are deemed to be ineligible for an alternative payment model incentive payment, they will be assigned to MIPS.

At the same time, three existing payment incentive and quality improvement initiatives will be dissolved as separate programs and melded into MIPS. They are the Physician Quality Reporting System, Meaningful Use, and the Physician Value-Based Payment Modifier.

Physicians in MIPS must report performance measures to CMS. They'll then be graded on four factors: quality of care (30 percent); resource use (30 percent); meaningful use of EHRs (25 percent); and clinical practice improvement activities (15 percent).

High-scoring physicians will get a bonus, and low-scoring physicians will see their fees reduced.

Physicians choosing the alternative payment model path will have to join an accountable care organization or an approved patient-centered medical home, or otherwise be in an alternative payment model entity where payment is at least partly based on quality performance and on total spending. Payment tied to performance must be 25 percent of a doctor's or group practice's Medicare revenue in 2019, increasing to 75 percent in 2022.

Volume to value'--slogan or sound policy?

Some critics argue that the volume-to-value movement is, for now, based more on faith than on strong evidence. For example, they cite the experience of countries in Europe that control spending primarily through regulating prices and fees in fee-for-service systems, instead of through performance measurement and payment incentives.

Critics also argue that "value" in medicine is an elusive concept and not one likely to be pinned down through a single composite score. As yet, these critics further allege, value has not been clearly pegged or produced by accountable care organizations, patient-centered medical homes, or integrated health care systems.


The Health Care Blog
April 21, 2016
The Mess That is MACRA
By Kip Sullivan

MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.

The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA's defects. The transcripts of MedPAC's October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won't tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as "principles" and wait for MACRA's inevitable failure before offering more useful advice.

MIPS: Measuring the unmeasurable

The MIPS program was designed for doctors who can't or won't join the ACO-medical-home bandwagon. MIPS inflicts huge rewards and penalties (up to 9 percent of the average annual Part B payout per physician) based on a single "value" score (a score derived by the capricious jamming of crude quality and cost measures into one number) for each doctor. As commissioner Gradison put it, MIPS was designed for "the laggards, the people who stand for the status quo," the knuckle-draggers who just won't get with the Managed Care 2.0 program. 

Sand castles on top of sand castles: The APM program

I suspect the reason Congress did not populate the APM compartment with clearly defined entities is that Boehner et al. knew full well that the first iteration of "value-based" entities – the ACOs and "medical homes" authorized by the Affordable Care Act – have not panned out. We know that MedPAC understands that. In its reports to Congress, and in statements by staff and members, MedPAC has clearly indicated they understand that ACOs and "homes" are saving little or no money and are having at best minor and mixed effects on quality.

It is fair to say, then, that MedPAC understands that Congress has essentially instructed CMS to build a new layer of undefined, unproven APMs on top of the existing layer of poorly defined and unproven ACOs and "homes," in other words, a second layer of sand castles over an existing layer of sand ca stles.

Congress and CMS don't need to hear any more abstract and wishful remarks about MACRA. They need to hear useful feedback. MedPAC should tell Congress MACRA is an unworkable mess and must be repealed or amended.


March 4, 2016
Physician Burnout Is a Public Health Crisis, Ethicist Says
By Arthur L. Caplan, PhD

We've got a problem in this country with doctors. It's kind of an epidemic, but no one is talking about it. It is burnout. A recent study from the Mayo Clinic showed that in 2011, 45.5% of doctors reported that they felt burned out, and that number has now risen to 54.4% in 2014.

This is really trouble. It's trouble because a doctor who feels this way can commit more errors. They suffer from compassion fatigue, or just not being able to empathize with others because they have their own emotional issues. They may retire early, thereby reducing the workforce. They may have problems managing their own lives; 400 doctors committed suicide last year, which is double the rate of the population average. There's trouble for patients in having a workforce that's burned out. There's trouble for doctors in terms of their own health and well-being.

When we institute new software or when we have new bureaucratic regulations, I think somebody ought to ask what this does to the workforce. If one more doctor complains to me about Epic and other types of electronic record keeping and billing forms, it'll be one doctor too many. It takes a lot of energy. It makes people unhappy. A lot of the software and computer assistance that's out there doesn't seem to help the doctor; it makes more work or makes them frustrated. It also seems to me that if you look at what's going on with respect to regulations and administrative or bureaucratic requirements, nobody is saying, "Hey, is this user-friendly? What's the burden that it's putting on the doctor?" It's just done to save money or allow people to collect bills more reliably, but it's not asking what it's taking out of our workforce.

Arthur L. Caplan, PhD is from the Division of Medical Ethics at the New York University Langone Medical Center.


Comment by Don McCanne

We now have an epidemic of physician burnout. It has become a crisis not only because of what it does to physicians' well-being but also because of a deterioration in the all-important physician-patient relationship and in the medical practice environment.

A major contributor to burnout is the subversion of physician independence to the massive misdirected oversight interposed by public and private insurance bureaucracies. Little need be said about the private insurance bureaucracies that waste tremendous resources while creating havoc in our health care delivery system. We merely need to eliminate the private insurers and replace them with a single payer national health program.

Our government has established policies that result in Medicare gradually being shifted to the private Medicare Advantage insurers and Medicaid being shifted to private managed care organizations. In the past we've covered the reasons why privatization is a terrible idea, and we won't go into that now. We'll merely say that moving on to single payer should eliminate the privatization schemes.

Today's message is more narrowly targeted to the problem that the public bureaucracies are creating, especially Medicare. MACRA with its MIPS (merit-based incentive payment system) and its APMs (alternative payment models) epitomize the bureaucratic interference of the federal government in our public programs. For more details, you should read the full articles cited today. These are concepts thought up by the policy community working with our government bureaucrats. They are relying on intuition since there is little in policy science to support MIPS and APMs. Initial results have been quite disappointing yet they are moving full steam ahead with these programs.

The burden on physicians and other health professionals will be great and can only exacerbate current trends leading to burnout. Public policies that make health care worse are unethical policies - the gist of today's message.

We need to expand policies that serve the public in their need to have affordable access to health care. On May 5 we will be releasing an update of the Physicians' Proposal which describes the policies we need to ensure comprehensive health care for everyone, in a pleasant environment that optimizes the health care experience. Watch for it.

Once we have that system in place it will be imperative for us to exercise continuing due diligence in ensuring that our political and policy stewards support the ideology of health care justice for all through public policies, while dismissing would-be stewards who support Randian you're-on-your-own ideology that dominates the private arena.

Thursday, April 21, 2016

qotd: Giving health care consumers what they don’t want
April 17, 2016
Robin Wright King on Consumer Reactions to HDHPs

Robin Wright King, MBA, of Blue Cross Blue Shield of Massachusetts, discusses consumer reactions to high-deductible health plans, which ask them to shoulder more of the burden of the cost of their healthcare.

How do consumers react to the new health plans that ask them to shoulder more costs?

I don't believe members are excited, generally, about the concept of having to shoulder more of the cost, but these high-deductible health plans are here to stay. And employers are trending towards engaging in these higher deductible health plans more and more. As a matter of fact, many employers are moving to these plans as full replacement plans. Again, we really have the responsibility — and many employers want us as a health plan to be more involved — to help their members understand their plans.


Comment by Don McCanne

Blue Cross Blue Shield members are not excited about having to shoulder more of the cost through high-deductible health plans, but these plans are here to stay. So much for consumer choice.


Wednesday, April 20, 2016

qotd: Lessons from the Swiss rejection of single payer

International Journal of Health Services
2016, Vol. 46(2) 331–345
What Can US Single-Payer Supporters Learn From the Swiss Rejection of Single Payer?
By Claudia Chaufan


On September 27, 2014, Swiss voters rejected a proposal to replace their system of about 60 health insurance companies offering mandatory basic health coverage with a single public insurer, the state, which would offer taxpayer-funded coverage of all medically necessary care. The Swiss and the U.S. media, academia, and business sectors, from conservative and liberal camps, interpreted the results to mean a rejection of single payer and a preference for a privately run system, with important implications for health reform in the United States. While on the surface mainstream interpretations appear reasonable, I argue that they have little basis on fact because they rely on assumptions that, while untrue, are repeated as mantras that conveniently justify the continuation of a model of health insurance that is unraveling, less conspicuously in Switzerland, dramatically in the United States. To make my case, I describe the dominant narrative about Swiss health care and mainstream interpretations of the latest referendum on health reform, unpack the problem within these interpretations, and conclude by identifying what lessons the Swiss referendum contains for single payer advocates in the United States in particular and for those who struggle for social and economic rights more generally.

Lessons to be Learned

Why, then, was single payer defeated? What, if anything, can single payer supporters learn from this defeat? First, we must grant that the state of Swiss health care may be of concern for the Swiss (who seem to have lower tolerance for being deprived of health care than Americans), but is still not bad enough. People w ho experience the greatest barriers to care, in Switzerland as elsewhere, are the most politically disenfranchised—young, poor, women, and immigrants, much like they are in the United States—so the problem has yet to strike the so- called middle classes badly enough.

Yet the Swiss case can help single payer supporters, and other social justice advocates, experience and gauge the extraordinary power of propaganda of the corporate class, in health care matters as in others. The scare tactics against single payer displayed by corporate interests in Switzerland have been extraordinary, in both 2007 and this latest referendum. As the BBC timidly suggested, one reason for the failure "may be the power of the insurance sector and of the big pharmaceutical companies in Switzerland [...] Both have strong lobby groups." And yet, none of the single payer or other relevant referenda indicate that love of private health insurance is increasing. If anything, they la y bare the reality that even in the land of direct democracy, as in Switzerland, the attempt to achieve health care justice through a system of "competing private insurers" is a delusion. They also indicate that more political education is necessary to achieve single payer. This, I believe, is as true for the Swiss as it is for the American people.

The Swiss referendum also teaches activists that corporate propaganda is vicious not only when it comes to portraying the presumed evils of single payer or beauty of private health insurance. It is also vicious when it comes to interpreting, and communicating to the public, voting patterns and preferences in health care matters.

The power of corporate propaganda matters because its self-serving interpretation can operate like a self-fulfilling prophecy. The narrative that "the people" prefer the status quo, and the dubious assumption that the people's will is the key driver of policy, especially in America, can lead public health care advocates to conclude that those who struggle for greater social justice are more alone than they really are, rather than interpreting the resilience of current power structures as indicating that the corporate class owns, and controls, the means of communication as much or more than it owns and controls the means of production, and is thus able to shape the public debate to suit their interests. As a result of this, advocates may give up the fight too soon, or worse, retreat and accommodate to the boundaries of change as set by this corporate class.

In concluding, I propose that the Swiss referendum teaches us that: 1) We need to sharpen our analytic tools, i.e., to improve our understanding of what the ACA is really about, what the real challenges (and enemies!) are, and what our alternatives could and should be; 2) We must increase our outreach to those sectors of society who do not have a voice, or whose voices are suppressed, or who do not think that their voices make a difference; and finally 3) We must work on improving the political education of those we wish to reach, rather than investing in "improving the message" (as many political "experts" recommend). This is usually a message of sound bites without substance which more often than not leads to attempts to fit social change within the boundaries of the "politically feasible" as defined by that same corporate class.

As Americans celebrate this year the 50th anniversary of Medicare, and many, even insured, continue to forgo needed care, they are being told that "Medicare was enacted in a very different environment than we live today" and that some privatization is inevitable and even desirable. However, the results of the Swiss referendum teach us that we need more, not less — nor more accommodating — struggle for single payer and health care justice, in the words, albeit not in t he spirit, of Milton Friedman, until the "politically impossible becomes politically inevitable."*

* "Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable."
— Milton Friedman

Claudia Chaufan, MD, PhD, is an associate professor at the University of California San Francisco and a member of Physicians for a National Health Program.


Quote of the Day
October 24, 2011
OECD/WHO report on the Swiss health system
Comment by Don McCanne, MD

"It is not clear why so many in the U.S. are enamored of the Swiss health insurance system when this OECD/WHO report confirms that it is highly inefficient and fragmented, with profound administrative waste, inequitably funded, with regressive financing and with wide variations in premiums, has the highest out-of-pocket costs, has an increasing prevalence of managed care intrusions, and is controlled by a private insurance industry that has learned how to game risk selection at significant cost to those on the losing end."


Comment by Don McCanne

At a time of renewed interest in single payer reform in the United States, it might be helpful to look again at why the voters of Switzerland rejected single payer reform in September, 2014. Although their financing system is superior to ours, it does have several serious deficiencies that would be addressed by converting to a single payer system. In this article, Claudia Chaufan discusses lessons that we can learn from the Swiss that may help us in our advocacy for reform.

Tuesday, April 19, 2016

qotd: Debunking Republican and Democratic health care myths

The New York Times
April 19, 2016
Debunking Republican Health Care Myths
By The Editorial Board

"Disaster." "Incredible economic burden." "The biggest job-killer in this country."

Central to the presidential campaigns of Donald Trump and Ted Cruz has been the claim that the Affordable Care Act has been a complete failure, and that the only way to save the country from this scourge is to replace it with something they design.

It's worth examining the big myths they are peddling about the Affordable Care Act and also their ill-conceived plans of what might replace it.

Millions of people have lost their insurance: In January, Mr. Cruz claimed that "millions of Americans" had lost their health insurance because of the health reform law. He even claimed to be one of them, saying "our health care got canceled " because Blue Cross Blue Shield left the individual market in Texas.

Insurers did stop offering some plans after the law took effect, including those that didn't provide required benefits like maternity care or that charged higher premiums to older or sicker people. But people with those plans had the opportunity to sign up for others. And over all, the law has drastically reduced the number of Americans who lack health insurance. According to the Census Bureau, the number of uninsured Americans dropped by 10 million between 2010, when the law passed, and 2014. While critics said employers might stop offering health insurance because of the law, three million people actually gained coverage through their employers between 2010 and 2014.

Incidentally, Mr. Cruz never lost his health insurance. Blue Cross Blue Shield did cancel his particular plan, but it automatically moved him and his family to a new one. A Cruz spokeswoman said the senator had been misinformed by his insurance broker.

Millions of people have lost their jobs: Mr. Cruz has called the Affordable Care Act "the biggest job-killer in this country" and said "millions of Americans have lost their jobs, have been forced into part-time work" because of it. This is false. The unemployment rate has fallen since the law took effect, PolitiFact notes, as has the number of people working part time when they would rather work full time. A 2015 study using data from the Current Population Survey found that the law "had virtually no adverse effect on labor force participation, employment or usual hours worked per week through 2014."

Reduce costs by weakening state regulations: Mr. Trump frequently talks about his plan to "get rid of the lines around the states" to foster competition among insurance companies. Customers in states where insurance is heavily regulated, the thinking goes, would be able to save money if they could purchase coverage from insurers based in states with fewer rules. Mr. Cruz, too, supports allowing people to buy insurance across state borders — it's one of the few proposals he's offered for replacing the health law if it is repealed.

But the biggest obstacle stopping insurers from setting up in more states is not regulation; it's the difficulty of establishing a network of providers in a new market. And such a structure would destroy the longstanding ability of states to regulate health insurance for their populations. Some states, for instance, require coverage for infertility treatment and others have chosen not to. Allowing cross-border plans would encourage insurers to base themselves in low-regulation states, and the result might be a proliferation of poor-quality plans.

The Affordable Care Act is not perfect. Premiums for plans on the exchanges rose between 2015 and 2016 and are likely to rise again next year. A few insurers have left the exchange market, raising concerns in some quarters that more companies might follow.

But the law has helped millions of Americans, especially low-wage workers like cashiers, cooks and waiters who previously struggled to pay for coverage. In inventing problems that don't exist and proposing solutions that won't help, Donald Trump and Ted Cruz show that they don't care about helping Americans get health care, which has never been their interest. They want to trash the Affordable Care Act, and they're willing to mislead the public any way they can.

Reader Comments - NYT Picks:

Don McCanne 
San Juan Capistrano, CA 

How about debunking the Democratic ACA myths?

ACA is universal, except for 29 million left out.

ACA is affordable, except for the premiums and deductibles.

ACA provides choice, within narrower networks.

ACA replaces quantity with quality, except we haven't figured out how to do that.

ACA doesn't force us into a one-size-fits-all plan, though we are relieved when we are finally eligible for Medicare.

In fact, when the Democrats were in control, they rejected the plan that would have worked for all of us - a single payer, improved version of Medicare for all.


Comment by Don McCanne

The Republicans keep talking about coming up with a plan to replace the Affordable Care Act (ACA). But as this New York Times editorial explains, their criticisms of ACA are often not fact-based and the proposals they have telegraphed in net would leave us much worse off. Yet, as the Democrats tout the successes of ACA, it is clear that their model falls far short of the high performance system that we deserve.

The health policies that we need are straightforward and are found in a well designed, single payer Medicare for all program. It is the politics that has botched up our health care system.

In a recent Quote of the Day, Jonathan Oberlander's NEJM article was cited as he explained why the political prospects for single payer are dismal. To change that, we need to listen to and act on his words: "Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers."

The politicians will not lead on single payer; the people must.

Monday, April 18, 2016

qotd: Medicaid has a positive impact on financial well-being

National Bureau of Economic Research
April 2016
NBER Working Paper No. 22170
The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Well-Being
By Luojia Hu, Robert Kaestner, Bhashkar Mazumder, Sarah Miller, and Ashley Wong


We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on financial outcomes using credit report data for a large sample of individuals. We employ the synthetic control method (Abadie et al., 2010) to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low income, uninsured individuals. Our estimates imply a reduction in collection balances of around $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use.

From the Introduction

In 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (ACA) into law, which included a provision to expand Medicaid eligibility to low-income adults, many of whom were previously ineligible. A major motivation for this expansion was to provide financial security to individuals if they experience a sudden deterioration in their health and cannot afford to pay for their medical expenses.

Indeed, the financial consequences of not having health insurance can be severe for individuals who become seriously ill or injured. Studies using survey data suggest that the uninsured often have difficulty paying medical expenses, become delinquent on their medical and non-medical bills, and are more likely to be contacted by collection agencies.

Our main finding is that Medicaid expansions that began in 2014 significantly reduced the number of unpaid non-medical bills and the amount of non-medical debt sent to third-party collection agencies among people living in zip codes that are most likely affected by the expansions. Our baseline intention-to-treat (ITT) estimates indicate that the Medicaid expansions are associated with a decrease in the amount of unpaid balances in collections of between $51 and $85. This effect is an average over the entire sample and includes many individuals who did not obtain Medicaid insurance coverage through the expansion. Rescaling this estimate based on the fraction of the target population who were likely to have obtained insurance coverage yields estimates of the effect of treatment on the treated (ToT) of between $600 and $1,000.

From the Conclusion

The financial protection provided by health insurance is arguably its most important function. This is particularly true in the case of Medicaid because of the relatively high prevalence of disease among low-income individuals and the substantial financial burden that illness imposes on those who become seriously ill or injured. Indeed, a major justification for the Patient Protection and Affordable Care Act (ACA) of 2010 was to provide such financial protection.

While these results show that the ACA Medicaid expansions had important financial impacts outside of health care use, they are also consistent with recent work documenting that much of the incidence of these financial effects falls on third parties as much as the uninsured themselves. Given that the ACA Medicaid expansions decreased unpaid bills, the financial benefits of the ACA expansions appear to fall at least partially on third-party creditors. As a result, those individuals who gained coverage through the ACA Medicaid expansions may have better access to credit markets in the future.


Comment by Don McCanne

The results of this study are intuitive. Low-income individuals who obtain Medicaid insurance coverage not only are protected from medical bills when they must access health care, they also have a reduction in other unpaid bills and a lower incidence of account referral to collection agencies - a benefit to both the patients and their potential third-party creditors.

The authors state, "The financial protection provided by health insurance is arguably its most important function. This is particularly true in the case of Medicaid because of the relatively high prevalence of disease among low-income individuals and the substantial financial burden that illness imposes on those who become seriously ill or injured."

Individuals who face large deductibles and other cost sharing in individual plans and employer-sponsored plans or who have inadequate subsidies for cost sharing in the ACA exchange plans are frequently exposed to financial hardship. It is the near absence of cost sharing (deductibles, copayments and coinsurance) in the Medicaid program that has made it so effective in protecting the personal finances of otherwise vulnerable individuals - in sharp contrast to the increasing financial burdens resulting from the inadequacies of the private plans.

Medicaid does have other problems. Too many physicians refuse to accept Medicaid patients because of the very low payment rates, especially specialists, thus access may be impaired. Also many states are shoving patients into Medicaid managed care plans to save even more money, and early experience suggests that there is a further deterioration in patient access and service. Thus merely expanding Medicaid is not a satisfactory solution to filling in our voids in health care today.

The lesson from this study is not that Medicaid should be expanded but rather that health insurance should provide complete financial protection from health care costs. That is proposed as one of the more important improvements in an Improved Medicare for All - a single payer national health program. Everyone could have health care without causing financial hardship for anyone. Costs would be controlled in a more patient-friendly manner by application of other important single payer policies.

Friday, April 15, 2016

qotd: Cost sharing in employer plans increasing more rapidly

Peterson-Kaiser Health System Tracker
April 12, 2016
Payments for cost sharing increasing rapidly over time
By Gary Claxton, Larry Levitt, Michelle Long

Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years.  For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,077 between 2006 and 2015.

To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.

From 2004 to 2014, the average payments by enrollees towards deductibles rose 256% from $99 to $353, and the average payments towards coinsurance rose 107%, from $117 to $242, while average payments for copays fell by 26%, from $206 to $152.  Overall, patient cost-sharing rose by 77%, from an average of $422 in 2004 to $747 in 2014. During that period, average payments by health plans rose 58%, from $2,748 to $4,354. This reflects a modest decline in the average generosity of insurance – large employer plans covered 86.7% of covered medical expenses on average in 2004, decreasing to 85.3% in 2014. Worker's wages, meanwhile, rose by 32% from 2004 to 2014.

Individuals in the top 15 percent of health spenders (who together account for 74.8% of total health benefit costs for the sample), had substantially higher out-of-pocket costs, averaging $2,679 in 2014, including $1,249 in coinsurance payments, $928 in deductible spending, and $502 in copays.

As of 2014, 5.5% of all enrollees had deductible payments that exceeded $1,500 and 7.8% had overall cost-sharing payments that exceeded $2,500.

A limitation of these data is that they reflect cost sharing incurred under the benefit plan and do not include balance-billing payments that beneficiaries may make to health care providers for out-of-network services or out-of-pocket payments for non-covered services.

While average payments towards deductibles are still relatively low in the context of total household budgets, they have increased quite rapidly. Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers are showing concern about their out-of-pocket costs for care. Although health insurance coverage continues to pay a large share of the cost of covered benefits, patients in large employer plans are paying a greater share of their medical expenses out-of-pocket. And, while health care spending has been growing at fairly modest rates in recent years, the growth in out-of-pocket costs comes at a time when wages have been largely stagnant.


Comment by Don McCanne

This is yet one more study that shows that deductibles and coinsurance are increasing quite rapidly in employer-sponsored health plans - plans that have been protected and encouraged by the Affordable Care Act (ACA) as they are the most common source of health care coverage in the United States. This increase in cost sharing is causing financial hardship, especially for those who have greater health care needs.

Avid supporters of ACA say that all we have to do is build on the system we have. Yet instead coverage is deteriorating, and insurers certainly show no inclination towards filling in the gaps at the cost of driving premiums further up into unaffordable ranges.

It will get worse since insurance innovations are designed to slow spending increases by directly or indirectly shifting more costs to the patients.

Under a well designed single payer system costs can be controlled without resorting to financial penalties for using care. How hot does the cauldron we are in have to get before we're ready to jump out and go to Medicare for All?

Thursday, April 14, 2016

qotd: Jonathan Oberlander on the prospect for single payer

The New England Journal of Medicine
April 14, 2016
The Virtues and Vices of Single-Payer Health Care
By Jonathan Oberlander, Ph.D.

The 2016 U.S. presidential campaign has produced many surprises. One unexpected turn is the reemergence of single-payer health insurance on the public agenda. Senator Bernie Sanders has made Medicare for All a centerpiece of his platform. His opponent for the Democratic party's presidential nomination, former Secretary of State Hillary Clinton, has criticized Sanders's plan as unrealistic. An old debate has thus reopened. What are the virtues and vices of single-payer reform? Is it a realistic option for the United States or a political impossibility?

First, a note on language. "Single payer" is often used loosely to refer to everything from Canadian national health insurance to the British National Health Service (NHS) and even Obamacare — though depicting the Affordable Care Act (ACA) as a "slippery slope" to single payer is bizarre, given that it relies on private insurance. U.S. observers often mistakenly lump all foreign health systems together under the single-payer label — a classification that grossly oversimplifies the range of models in place elsewhere. In some rich democracies (Germany, the Netherlands, and Switzerland among them) people enroll in multiple insurance plans, which are typically highly regulated and are operated by private companies or nonprofit associations. Alternatively, in the NHS, the government traditionally owned most hospitals and directly employed many physicians.

Most U.S. single-payer advocates instead have in mind emulating Canada, where all legal residents in each province or territory receive coverage from one government insurance plan for medically necessary hospital and physician services. Canadians can obtain private policies for supplemental services not covered by the government plan. The government does not directly employ most doctors, nor does it own most hospitals, though their payments come from the single provincial insurance program. Canadian national health insurance arrangements — and Taiwan has a similar system — resemble traditional U.S. Medicare, with public financing for privately delivered services. Sanders is not the only presidential candidate to find this model appealing. Donald Trump has praised the Canadian program, though recently he suggested it wouldn't work here.

Proposals for U.S. single-payer reform have a long history. A 1943 bill subsequently endorsed by President Harry Truman in 1945 envisioned national health insurance funded through payroll taxes. That bill and subsequent efforts by the Truman administration to pass universal insurance went nowhere. However, Medicare, conceived in the 1950s and enacted in 1965, embodied the single-payer model. Medicare's architects saw it as the cornerstone of a national health insurance system. They believed that Medicare would eventually expand — with children perhaps the next group to join the program — to cover the entire population. That aspiration was never realized. Meanwhile, Congress created Medicaid as a separate program for some categories of low-income Americans, including families with dependent children, further fragmenting the insurance pool.

Single payer enjoyed strong support during the early 1970s among liberal Democrats such as Senator Ted Kennedy (D-MA), yet it never came close to passing. Subsequently, its political fortunes faded. Democratic policymakers increasingly pursued incrementalism (primarily through Medicaid expansion) and more conservative models that relied on private insurance (managed competition) as the only feasible reform routes. Medicare itself underwent a transformation as the role of private insurers in the program grew substantially. The 2010 ACA represented both a landmark achievement in expanding access to insurance and the culmination of a turn away from single payer. In 2009, the House of Representatives did pass legislation creating a Medicare-like government insurance program that would be available to the uninsured in competition with private plans. But this "public option" couldn't clear the Senate. Even with a Democratic president and large Democratic congressional majorities, a narrow remnant of single payer failed to pass.

Nevertheless, the single-payer approach enjoys a dedicated following among groups such as Physicians for a National Health Program, and Sanders's embrace has generated renewed attention for the idea. Regardless of the outcome of the 2016 election, the single-payer debate will persist. The enduring appeal of Medicare for All is understandable, given the fragmented, inequitable, costly, profit-driven, and wasteful non-system that prevails in the United States. The ACA's shortcomings are sufficiently serious, single-payer adherents argue, that Obamacare has left unsolved many of U.S. medicine's major problems. For all the ACA's considerable achievements, health insurance and medical care are still unaffordable for many people. In a country where nearly 30 million persons remain uninsured, where health insurance is increasingly thinned out by rising deductibles and cost sharing, where even insured patients face staggering bills and the prospect of medical bankruptcy, where myriad insurers and payment systems generate astonishing complexity, and where more money is spent on administration than on heart disease and cancer, it's no surprise to hear calls for sweeping change.

The lessons of Canadian national health insurance are as straightforward as they are neglected. Having a single government-operated insurance plan greatly reduces administrative costs and complexity. It concentrates purchasing power to reduce prices, enables budgetary control over health spending, and guarantees all legal residents, regardless of age, health status, income, or occupation, coverage for core medical services. Canadian Medicare charges patients no copayments or deductibles for hospital or physician services. Controlling medical spending does not, the Canadian experience demonstrates, require cost sharing that deters utilization. The Canadian system is hardly perfect. All countries struggle with tensions among cost, access, and quality; at times, Canada has grappled with fiscal pressures, wait lists for some services, and public dissatisfaction. Yet its problems pale in comparison to those in the United States.

The substantive virtues of single-payer programs are compelling. But so are their political liabilities. Medicare for All, which aims to constrain health care spending, faces intense opposition from insurers, the medical care industry, and much of organized medicine. It would t rigger fierce resistance from conservatives and the business community and anxiety in many insured Americans fearful about changing coverage and the specter of rationing. The ACA's comparatively conservative reform approach inspired false charges of "socialized medicine," "pulling the plug on grandma," and "death panels." It takes only a little imagination — or a look back at the history books — to predict the reactions that an actual single-payer plan would evoke.

Single payer would also require the adoption of large-scale tax increases. Although Americans would save money by not paying premiums to private insurers, the politics of moving immense levels of health care spending visibly into the federal budget are daunting, given the prevailing anti-tax sentiment. Furthermore, converting our long-established patchwork of payers into a single program would require a substantial overhaul of the status quo, including the ACA. Then there are the familiar institutional barriers to major reform within U.S. government, including the necessity of securing a supermajority of 60 votes in the Senate to overcome a filibuster.

In short, single payer has no realistic path to enactment in the foreseeable future. It remains an aspiration more than a viable reform program. Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers. The pressing question is not about whether Medicare for All can be enacted during the next presidential administration — it can't — but where health care reform goes from here.

It's possible that some states could, through waivers that begin in 2017, consider adding a public option to their marketplaces or even adopt single-payer systems. Yet Vermont's recent struggles to make a modified single-payer plan work underscore the challenges to state action. At the federal level, incremental steps toward Medicare for All, such as expanding program eligibility to younger enrollees, are conceivable — though challenging in this political environment. Moreover, the fight over Obamacare is not over. Preserving and strengthening the ACA, as well as Medicare, and addressing underinsurance and affordability of private coverage is a less utopian cause than single payer. I believe it's also the best way forward now for U.S. medical care.

NEJM Interview with Dr. Jonathan Oberlander

Closing comments:

When we look at the entire patchwork of the American medical care system and our insurance system there're still so many holes in it, there's so much redundancy, and it's so inefficient. And that's why the single payer idea is going to resonate far beyond whatever the outcome of the 2016 election is. Because when you have a health insurance that leaves tens of millions uninsured, tens of millions underinsured, that is beset by administrative complexity and is governed too often by profit, there's going to be an appetite for sweeping change. And whatever its political fortunes are, and I don't think they're particularly good, single payer is going to continue to speak to those who are disaffected by what's going on in American medical care and are looking for something different, something better.

(The full 8 minute audio can be accessed for free at the link above.)


Comment by Don McCanne

Although single payer advocates may be disappointed with Professor Oberlander's conclusion that the best way forward now is to strengthen ACA and Medicare and to address underinsurance and the affordability of private coverage, we need to keep in mind that he has described the clear superiority of the single payer model, and that it still has widespread popular support. His pessimism is based on current political realities, which have been confirmed by over half a century of failure to advance comprehensive, universal single payer legislation.

Since single payer seems to be an imperative, why has it not been enacted? Oberlander writes, "Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers."

He's right, based purely on results to date. We have a lot of work to do.

Wednesday, April 13, 2016

qotd: NYT journalists discuss status of Obamacare

The New York Times
April 13, 2016
News About Obamacare Has Been Bad Lately. How Bad?
By Reed Abelson and Margot Sanger-Katz

Ever since passage of the Affordable Care Act, a fierce debate has been waged over whether the law would work as advertised. While advocates promised that the design of new insurance markets would transform the way consumers buy health insurance, critics warned that the new market would never succeed. Reed Abelson and Margot Sanger-Katz have had front-row seats to the debate, and the two reporters took a few minutes to discuss when — and if — the market would stabilize.

Margot Sanger-Katz:  Every time I write a story about the health law, I get comments and emails from people just above the income cutoff for subsidies. These are the people who have been most hurt by the health law. Plans on the exchanges are just really expensive for them, and o ften come with big deductibles, too. And if premiums keep rising, they'll keep getting squeezed. Analysts from the Urban Institute have done the math and found that some of them are paying more than 25 percent of their income on health care now. Still, it is awfully hard to imagine Congress approving massive new spending to make Obamacare more generous. Hillary Clinton has some proposals about affordability, but they don't include expanding subsidies.

Reed Abelson:  One of the strengths of the law, and its main weakness, is its emphasis on keeping the status quo. While President Obama may have overpromised when he said you can keep your plan if you like it, the insurance isn't radically different. The only way companies can seem to bring down prices is by narrowing networks of hospitals and doctors or hiking deductibles. While Bernie Sanders seems to be offering the most dramatic change by proposing that everyone switch to a government plan like Medicare, I'm still looking for a market response — some real change in how care is delivered that is much less expensive or at least more effective.

Margot Sanger-Katz:  This is the thing I say whenever anyone asks me what I think about the health law. It basically baked in all of the complexity and dysfunction of the pre-existing American health care system.

Reed Abelson:  We're heading into the season when insurers and state regulators start talking about next year. Any thoughts on what we might expect?

Margot Sanger-Katz:  I'm expecting them to ask for rate increases! The insurance companies are doing everything they can to broadcast their intentions to charge more. There are reasons we should expect the plans to do so even if the markets were already stable. Some of the early training-wheel programs set up by the law expire, which means the plans have to pay out more claims for really expensive patients.


Comment by Don McCanne

Six years after the Affordable Care Act was signed into law we hear opinions ranging from what a phenomenal success it has been to what a miserable disaster it is. This brief excerpt from a discussion between two respected journalists who have followed the process closely, and who are well versed on the policy issues, provides us with a perspective on where we actually are on reform.

It is somewhat sobering. There have been some trade-offs such as expanding nominally the numbers insured but with insurance products that further limit provider choice and shift more costs to the patients. Margot Sanger-Katz says that the health law "basically baked in all of the complexity and dysfunction of the pre-existing American health care system."

Most of the system has remained about the same while the deficiencies introduced offset much of the gains. We are still left with tens of millions uninsured, tens of millions more who are underinsured, and costs that continue to increase in spite of the expansion of blunt financial barriers to beneficial health care services. Even employer-sponsored plans are beginning to deteriorate, especially because of higher deductibles and narrower networks.

Reed Abelson says that he is looking for "a market response — some real change in how care is delivered that is much less expensive or at least more effective." Yet it has been confirmed over the last half century that markets do not work in controlling health care spending. Nothing in the Affordable Care Act will change that in spite of wishes that feeble policy measures such as ACA exchange competition, ACOs, shared shavings, bundling, wellness programs, meaningless rhetoric of quality over quantity, and other ACA concepts would revolutionize health care. The revolution is not happening.

So claims of phenomenal success or miserable disaster can be ignored since we really have not fundamentally changed the infrastructure of our system. But with that background, we actually have failed: We failed to enact an Improved Medicare for All which would have met our goals for reform. We can still do it, you know.

Tuesday, April 12, 2016

qotd: Costs in individual insurance market skyrocketing

S&P Dow Jones Indices
S&P Healthcare Claims Index Monthly Report
April 2016

The "S&P Healthcare Claims Index Monthly Report" provides the latest results for the S&P Healthcare Claims Indices – a comprehensive measure of the change in U.S. healthcare costs based on actual expenses paid by consumers through their commercial health plans – with the goal of providing the public and policymakers with credible, timely and independent data on the cost of healthcare in the U.S.

This Report summarizes data from the October 2015 indices – the latest to be published.

October 2015 In-brief

* National healthcare costs in the commercial market increased by 6.47% year/year
      Medical services costs increased by 4.24%
     Drug costs increased by 16.12%
        Brand-name drug costs in creased by 19.31%
        Generic drug costs increased by 7.37%

* Individual market costs increased by 27.41% year/year

* Monthly costs per covered member (PMPM costs) in the individual market reached an average of $497.55 – about 8.1% more than the employer-provided market (large group and ASO/self-insured)

Monthly costs per covered member in the individual market reached an average of $497.55 in October 2015 – $37.28 more on average than the $460.27 monthly cost of a covered member within the employer-provided healthcare market (large group and ASO/self-insured).

The graph below charts the PMPM (per member per month) cost by LOB (Lines of Business - individual; large group; and Administrative Services Only/self-insured). This graph demonstrates that PMPM healthcare costs in the individual market appear to have firmly caught up to per member costs in the employer-based market (large group and ASO/self-insured), a result widely anticipated with enactment of the Affordable Care Act (ACA). Whether individual market costs will begin tracking with the employer-based market, or instead continue their rise and diverge to a more costly plateau, is yet to be definitively seen. The next few months of data should be telling.



Comment by Don McCanne

The costs per enrollee in the individual health insurance plans are skyrocketing as a result of the enactment of the Affordable Care Act (ACA). This was expected si nce the plans could no longer reject individuals with preexisting conditions, and the required benefits are more comprehensive than they were previously.

ACA was designed to protect employer-sponsored plans - primarily large group insurance plans and self-insured (administrative services only) plans - which had been functioning well prior to reform. In order to keep premiums affordable, plans in the individual market frequently had skimpier benefits (excluding maternity benefits, mental health services, etc.), and excluded individuals with preexisting conditions. ACA, in correcting these deficiencies, brought costs in the risk pools for the individual plans up to the costs of the more comprehensive and inclusive employer-sponsored plans.

But look at what has happened. The cost trajectory for those covered in the individual plans shot upward and has now exceeded the cost for those in employer plans by 8 percent. This higher cost could b e due to adverse selection - more people enrolling in the individual plans who already have health care needs, or because those declining to enroll are healthier individuals who would otherwise dilute the costs of the risk pools.

But there is one other possibility that may be an important factor why the costs in the individual market are higher. Enrolling individuals and families in plans selected from a marketplace requires greater administrative services than does wholesale enrollment of employees in a group plan (and much more administrative effort than with automatic, one-time, life-long enrollment in a program like Medicare).

Once the risk pools stabilize, it is likely that the curve for individual plans will parallel that of employer plans, but at a higher trajectory. Thus we will be spending more than that part of the market that was supposedly working well - the employer-sponsored plans. When our health care system is infamous for its profound administrative waste, we are adding even more waste through the provisions of ACA.

We can still fix this - with an improved Medicare for all.

Monday, April 11, 2016

qotd: Luntz’s poll shows CEOs support affordable care for American families

The Center for Media and Democracy/PRWatch
April 4, 2016
Highlights of Luntz Poll of American CEOs Shows Broad Support for Progressive Policies
By Mary Bottari

When considering American CEOs as a category, "empathetic" is not the first word that comes to mind. Yet, the fact that these top executives have empathy for their workers is a major take-away from a closed-door webinar about a new poll taken by LuntzGlobal, the polling firm of prominent GOP pollster Frank Luntz.

The polled executives want to raise the wage, expand paid sick and maternity leave, and support predictive scheduling. Their desire to "keep health care costs low for American families" far outstrips their opposition to the Affordable Care Act.

CMD was provided with a copy of the poll which was shared with business lobbyists, who were instructed on how to manipulate th e public debate over those policies rather than implement the views of the business executives who were polled.

The poll was commissioned by Council of State Chambers (COSC) is a little-known association that helps the top lobbyists for state chambers of commerce get on message about the national political agenda of the U.S. Chamber of Commerce, one of the largest and most influential lobbying forces in America.

There is no force in America that has spent more time and effort to keep wages low than the U.S. Chamber of Commerce and the state chambers that aggressively lobby against increasing the minimum wage.

Health Care

"Keeping health care costs low for American families" was a key concern for CEOs. Significantly, it far outstripped "replacing ACA" or "making health care affordable for small businesses" as a priority.


A top take-away for the pollsters? CEOs have empathy for their workers and society as a whole.

Based on the directives to state chamber lobbyists in the webinar, COSC is eager to help chambers of commerce overcome that empathy and continue to oppose legal policies strongly supported by both the American people and the business executives the chambers tell the press and public that they represent.


LuntzGlobal topline

Q19/20. All of these issues may be important, but when it comes to where an elected official stands, which issue is the MOST important to you as a business leader? [Combined]

36%  Economic development and tax incentives
32%  Workforce development and education issues relating to the availability of qualified workers
31%  Employer mandates such wages, paid leave, and predictive scheduling
25%  Finding state solutions to rising healthcare costs
20%  Civil rights issues such as non-discrimination acts and the Religious Freedom and Restoration Acts (RFRA)
19%  Climate issues such as environmental regulations and clean power
16%  The impact the legalization of marijuana has on employers maintaining a safe workplace
11%  Transportation issues including roads, infrastructure, and gas taxes
10%  State pre-emptions of local mandates

Q31/32. You said healthcare costs are most important. Which of the following issues do you care about the most? [Combined]

38%  Keeping healthcare costs low for American families
30%  Replacing the Affordable Care Act
29%  Giving employees more choices and control over their healthcare options
25%  Making healthcare costs more affordable for small businesses
20%  Finding state-based solutions to healthcare coverage issues
19%  Promoting innovation in the healthcare sector to reduce costs and save lives
18%  Expanding access and coverage to more people
10%  Reducing government regulation and red tape
10%  Freedom to decide whether to provide benefits like birth control


Healthcare at the Tipping Point

A documentary produced by businessman Richard Master

This documentary takes an in-depth look into how our dysfunctional health care system is damaging our economy, suffocating our businesses, discouraging physicians and negatively impacting on the nation's health, while remaining un-affordable for a third of our citizens.

Free internet access to the full 58 minute documentary is now available at this link:


Comment by Don McCanne

This poll provides us with the reassuring (and not surprising) finding that CEOs of U.S. businesses "have empathy for their workers and society as a whole." Regarding health care, they give the highest priority to "keeping health care costs low for American families."

The poll was conducted by LuntzGlobal - the firm of Republican pollster and wordsmith Frank Luntz. It was commissioned by the Council of State Chambers to help state Chambers of Commerce get on message with the U.S. Chamber of Commerce. This is ominous.

In their new book, "American Amnesia," Jacob Hacker and Paul Pierson describe how the U.S. Chamber of Commerce has been one of the most powerful organizations in suppressing the appropriate role of government in our mixed economy - an economy that functions best for the private sector when the government is doing what it does best though its services and regulations.

This poll does show that there is significant support for progressive policies amongst these empathetic business executives, including support for health care for American families. But what is really alarming is that the poll is not being used to advocate for the policies supported by these executives, rather it is being used "to help chambers of commerce overcome that empathy and continue to oppose legal policies strongly supported by both the American people and the business executives the chambers tell the press and public that they represent." How nefarious.

American businesses would fare much better if we had a health care system that would ensure access and affordability for both their employees and their customers. Healthy employees and healthy customers who are not burdened by health care debt are key to business success. Businessman Richard Master has produced "FIX IT" - "a powerful new documentary that reaches across the political and ideological divide to expand support for major healthcare reform." The documentary can be accessed for free at the link above.

So your homework assignment is to read "American Amnesia" and to view "FIX IT" if you have not yet done so. Doing one will get you a C- and doing both will qualify for a C+. For an A, you need to share these with as many individuals and organizations as possible. Not only will you receive an A, but finally our entire health care system will as well - and what greater reward could you ask?

Friday, April 8, 2016

qotd: Jacob Hacker and Paul Pierson: American Amnesia

American Amnesia
How the War on Government Led Us to Forget What Made America Prosper
By Jacob S. Hacker and Paul Pierson

This book is about an uncomfortable truth: It takes government - a lot of government - for advanced societies to flourish.

But Americans have never been good at acknowledging government's necessary role in supporting both freedom and prosperity. And we have become much less so over the last generation. We live in an era of profound skepticism about government. Contemporary political discourse portrays liberty and coercion as locked in ceaseless conflict. We are told that government is about "redistribution" and the private sector about "production," as if government only reshuffles the economic deck rather than holding many of the highest cards. We are told "free enterprise" and "big government" are engaged in a fierce zero-sum battle ( one side's gain is the other's loss), when, in fact, the modern partnership between markets and government may well be humanity's most impressive positive-sum bargain (making both sides better off). We are told the United States got rich in spite of government, when the truth is closer to the opposite: The United States got rich because it got government more or less right.

We suffer, in short, from a kind of mass historical forgetting, a distinctively "American Amnesia."


Like other advanced democratic nations, the United States has what economic analysts call a "mixed economy." In this public-private arrangement, markets play the dominant role in producing and allocating goods and innovating to meet consumer demand. Apple brings us iPhones, and it earns sizable profits by doing so.

Alongside companies like Apple, however, government plays a dominant or vital role in the many places where markets fall short.


Although the modern robber barons can be found in many parts of our economy, three stand out: health care, finance, and energy. Other sectors have barons, but none rivals these big three in the scale of the tolls they extract or the scope of their political influence.


No doubt the United States is doing something with the extra trillions it has poured into the medical sector over the last few decades. On the available evidence, however, what it is mainly doing is paying higher tolls to the robber barons.


To reverse this spiral, we must reestablish a government with the capacity to foster broad prosperity. We need to ensure that ordinary voters and diffuse interests are capable of triumphing over concentrated interests, And we need to rescue the ideal of the mixed economy from the mists of American Amnesia. Many changes have swept the American economy since the 1970s. Yet our biggest problem is not a lack of attractive policy options. Our biggest problem is our politics. The mixed economy is as necessary as ever - indeed, in a world of increased interdependence and complexity, more than ever. And despite all the changes of recent decades, it is still within our grasp. We need better policies to restore its potential. But above all, we need a better politics.


But we should also recognize just how valuable the mixed economy is, how fundamental the role of government is within it, and how badly we are served by the misleading juxtapositions that dominate public debate: markets versus the state, freedom versus tyranny, free enterprise versus big government. From a more realistic and historically grounded starting point, we can have more vigorous, reasoned, fact-based debates that reflect the diversity of our values and priorities as well as the inevitable uncertainties about the best ways to tackle complex problems. We can seek positive-sum bargains and broad consensus about how to improve the mixed economy and address new challenges, learning over time how to adjust the nimble fingers of the market and the strong thumb of government to best grasp our future.


A government that effectively promotes human flourishing is a government worth fighting for. More than ever, the problems we face demand a sustained and principled defense of a vital proposition: The government that governs best needs to govern quite a bit. Americans must remember what has made America prosper.




Comment by Don McCanne

When you read this exceptional book by Jacob Hacker and Paul Pierson, it becomes clearer why we have such an expensive health care system that is only mediocre in its performance.

They remind us how half a century ago we had a well-functioning "mixed economy" wherein both the government and the private sector fulfilled their appropriate roles in facilitating a vibrant economy.

In recent decades there has been a shift toward believing that we need to cut back on big government and rely more on the marketplace. But in health care, the market works very well for the modern robber barons (higher costs) but not so well for patients (mediocrity). Conservatives, neoliberals and an accommodating press perpetuate the conviction that private insurers, private Medicare Advantage plans, and private Medicaid managed care plans all ensure better care than the government is capable of providing. Although the government still remains the largest source of health care funds, the "concentrated interests" (plutocracy) and their legislative lemmings place with the private sector much greater control on how those funds are spent.

As long as we have an imbalance in our mixed economy that disproportionately favors the private sector, while suppressing those functions provided well only by the government, we cannot expect to achieve the health care reform goals of true universal coverage, universal access, universal comprehensiveness, efficiency, and, most importantly, equity. Governments do these well, whereas the private sector acting alone does them poorly, if at all.

It is important to understand that the private sector performs better when the government is functioning well under a public-private partnership. To address our American amnesia, everyone should read this book. Liberals, progressives, and moderates will surely understand. Many conservatives in the business community will understand after this refresher course on why we do want the government involved in those activities that only the government does well. Hard Randians (amoral or cold-hearted libertarians) likely will not, but there is nothing we can say that would ever satisfy them since they are lost in their ill-conceived fictional utopia created by Ayn Rand.

Randians aside, we need to remember the words of the authors: "A government that effectively promotes human flourishing is a government worth fighting for."