Physicians For a National Health Care Plan
By Ted Van Dyk
Crosscut.com (Seattle), July 23, 2014
Seattle City Council member Kshama Sawant also was critical of Obamacare, arguing that the administration colluded with drug and insurance companies in framing it. Sawant spoke longest and most avidly at the meeting. She called on committed single-payer supporters to follow the example of those who sought a $15 minimum wage in Seattle, and bring tireless pressure to bear on Democratic officeholders in particular. Sawant is a committed socialist who often referred to “working class interests” and “corrupt corporations, banks, and hedge fund operators.”
Kshama Sawant (video at 4:45):
“Our discussion should be formulated not on the basis of whether or not the ACA delivered something good. Maybe it did, but that’s not the point. The point is, what are we not getting from it, and why didn’t we win single payer health care? That’s what I would like to focus on.”
Socialist Kshama Sawant, a member of the Seattle City Council, came to national attention by leading her fellow council members in passing a $15/hour minimum wage for their city. Having shown that political activism can still be effective, she has important advice for us in our efforts to enact single payer reform.
Currently attention has been diverted from single payer, as most progressives are celebrating the supposedly great successes in implementation of the Affordable Care Act (ACA). Even the Republicans in Congress who have voted several times to repeal ACA, are now suing President Obama for not implementing it fast enough.
Those of us who continue to adamantly support single payer are facing criticism for not joining the ACA bandwagon. This is where Sawant’s message is so important. Whether “ACA delivered something good” is not the point. The point is, we have to inform the public on “what are we not getting from it.” And what we are not getting is most of the goals of reform! The accomplishments are extremely modest compared to the reform that we need.
What are we not getting from ACA that we would be getting from single payer?
- Truly universal coverage
- Dramatic reduction in administrative waste
- Removal of financial barriers to care
- Coverage of all essential health care services
- Free choice of hospitals and health care professionals
- Removal of the interventions and excesses of the private insurers
- Taxpayer financing based on ability to pay
- Infrastructure reform that would slow spending to sustainable levels
And what successes are the ACA supporters touting (though using different rhetoric)?
- Coverage of only about half of the uninsured
- Shift to underinsurance products
- Guaranteed issue of these underinsurance products
- Deductibles that keep patients away from care by erecting financial barriers
- Insurance subsidies that are inadequate
- Ultra-narrow networks that take away choice
- Insurance marketplaces that increase administrative complexity and waste
- Inadequate cost containment policies (except for perverse higher deductibles)
Sawant delivers a very strong leftist message on social justice issues, and includes in her comments the failures of the Democratic Party to act. But this point on what we are not getting from ACA and why we need single payer is not a leftist message. It is a call for all of us from across the political spectrum who support single payer to take control of the message. We can no longer allow ourselves to be a meek voice silenced by those who, for noble and ignoble reasons, celebrate the paltry successes of ACA.
Again, the something good that ACA did is not the point. The point is what we are not getting from ACA and would be getting under a single payer system. Let’s drown out the message of the ACA supporters who wimped out on real reform.
By Michelle Andrews
Kaiser Health News, July 22, 2014
If all goes according to plan, next year many Arkansas Medicaid beneficiaries will be required to make monthly contributions to so-called Health Independence Accounts. Those that don’t may have to pay more of the cost of their medical services, and in some cases may be refused services.
Supporters say it will help nudge beneficiaries toward becoming more cost-conscious health care consumers. Patient advocates are skeptical, pointing to studies showing that such financial “skin-in-the-game” requirements discourage low-income people from getting care that they need.
Michigan and Indiana have already implemented health savings accounts for their Medicaid programs, modeled after the accounts that are increasingly popular in the private market. The funds, which may be supplemented by the state, can be used to pay for services subject to the plan deductible, for example, or to cover the cost of other medical services.
The program particulars in each state differ. But both states – and the Arkansas proposal — require beneficiaries to make monthly contributions into the accounts in order to reap certain benefits, such as avoiding typical cost sharing for medical services. Funds in the accounts may roll over from one year to the next, and participants may be able to use them to cover their medical costs if they leave the Medicaid program.
“We believe in consumerism,” says John Selig, director of the Arkansas Department of Human Services. By requiring Medicaid beneficiaries to make a monthly contribution to a Health Independence Account, “we think they’ll use care more appropriately and get a sense of how insurance works.”
Under the health law, states can expand Medicaid coverage to adults with incomes up to 138 percent of the federal poverty level (currently $16,105 for an individual). So far, about half have done so. But some conservatives have objected to the expansion of a government entitlement program, preferring a private market approach that they say encourages personal responsibility.
Arkansas and Iowa proposed and received approval from the federal Department of Health and Human Services for premium assistance programs that use federal funds to enroll the new Medicaid-eligible beneficiaries in marketplace plans.
For 2015, Arkansas is proposing to expand its experiment by introducing the Health Independence Accounts. Nearly all beneficiaries earning between 50 and 138 percent of the poverty level ($5,835 to $16105 for an individual) would have to participate through monthly contributions of between $5 and $25, depending on their income, or face cost-sharing requirements capped at 5 percent of income by Medicaid rules. In addition, Medicaid enrollees with incomes over the poverty level could be refused services if they don’t make their monthly contribution and don’t make a copayment. (This year, those with incomes between 100 and 138 percent of poverty already have co-pays.)
Under the new program, any of the private option enrollees would be able to avoid all cost sharing charges next year by making monthly contributions to their HIA.
Each month that a beneficiary makes a payment to his or her account, the state will contribute $15. Unused amounts will roll over from one year to the next up to a maximum of $200, which can be used by the beneficiary for health care costs if he or she leaves Medicaid for private coverage.
Advocates say they’re pleased that 175,000 Arkansans have gained coverage under the Medicaid expansion. But the proposal for next year gives them pause.
“There are concerns with adding cost sharing to those below the poverty level,” says Anna Strong, health care policy director at Arkansas Advocates for Children and Families.
Those concerns are well founded, say experts. “This is something that researchers have looked at a lot,” says MaryBeth Musumeci, associate director at the Kaiser Commission on Medicaid and the Uninsured. “Overarchingly, premiums and cost sharing have been shown to discourage or impede folks from getting needed care.”
Some experts note that at least 40 states already charge premiums or cost sharing for at least some beneficiaries. Beneficiaries have skin in the game already, they say, and they question the value of these special accounts that add a whole new layer of complexity for people who may not ever have had insurance before.
“We’re creating these incredibly complicated administrative structures, and I don’t think people will understand them,” says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.
Arkansas is demonstrating to us the irrationality of basing reform on ideological concepts divorced from health policy science. Let’s look closer at this proposal for “Health Independence Accounts,” their version of consumer directed health care for very low income individuals, using the concept of health savings accounts.
- “Nearly all beneficiaries earning between 50 and 138 percent of the poverty level ($5,835 to $16,105 for an individual) would have to participate through monthly contributions of between $5 and $25.”
- It seems to matter little that these individuals have no discretionary income since they do not have enough revenues to meet their basic needs, much less contribute to a savings account.
- If they are able to make their payments, then, according to this article, cost sharing is eliminated. Wasn’t a purpose of the savings accounts to help pay for cost sharing?
- So what do they suggest is the purpose of the health savings accounts? They “can be used by the beneficiary for health care costs if he or she leaves Medicaid for private coverage.” So this is a financing plan for Medicaid that won’t be used, but saved until after the person leaves Medicaid? How does that help?
- For those with incomes between 100 and 138 percent of the federal poverty level, failure to make a payment into the Health Independence Account could result in being refused health care services. Is this really a rational policy for trying to improve health care access for these low income individuals?
No, it’s not about improving health care access. According to John Selig, director of the Arkansas Department of Human Services, “We believe in consumerism. We think they’ll use care more appropriately and get a sense of how insurance works.”
This is ideology that is totally divorced from health policy science. Contrast that with ideology that is based on sound health policy science that results in everyone receiving the health care that they need within a system that is affordable for all. Of course, that would be a single payer national health program.
This is sometimes presented as an ideological divide between the “individual responsibility” and the “we’re all in this together” mindsets, but ideology cannot be divorced from policy science. Health care should not simply be teaching poor people about how insurance works. It should be about getting them the care that they need, when they need it.
By Al Dobson, Ph.D., Gregory Berger, M.P.P., Kevin Reuter, Phap-Hoa Luu, M.B.A. and Joan E. DaVanzo, Ph.D., M.S.W.
Dobson/DaVanzo, Report prepared for the Federation of American Hospitals, July 23, 2014
In recent reports we have outlined the continuing historic slowdown in the growth rate of health care spending driven in large part by emerging structural changes in the health care system. Recent evidence suggests that the cost curve has continued to bend, with health care spending declining in the first quarter of 2014. Despite this continuing trend in health care spending growth, consumers are increasingly concerned that they are ever-more financially burdened by spending on their own health care.
This consumer perception is largely a factor of the “new normal” being established through health insurance, which includes:
- Benefit plan designs, used by employers and insurers to shift greater financial risk to consumers through higher out-of- pocket spending (i.e., deductibles, co-payments, and co- insurance); and
- Health insurance premiums, which continue to rise faster than the average person’s income.
This trend of growth in out-of-pocket spending combined with increases in health insurance premiums that outpace increases in wages is not sustainable over the long term, and harms both patients and providers.
- In the first quarter of 2014, consumer spending on health care declined by 1.4%, representing the largest decline in over 30 years
- Almost 60% of Americans think that health care costs have been growing faster than usual in recent years, and more than 70% of consumers attribute responsibility for their perceived high and rising costs to health insurance companies
- Total premiums have increased substantially over the past decade, from 14.9% to 21.6% of median household income between 2003 and 20126
- Employee contributions to premiums and out-of-pocket spending have risen 23% faster than employee costs since 2009 (32% in cumulative growth vs. 26%)
- Cumulative growth in workers’ contributions to premiums between 2002 and 2013 was 114%, approximately four times higher than growth in workers’ average income (31%)
- Deductibles for family coverage increased more than 75% from 2006 and 2013 (from $1,034 to $1,854), while enrollment in plans with a deductible increased to 81% in 2013
- The percentage of workers enrolled in high-deductible plans ($1,000 or more) has increased more than five times over the past decade, from 4% in 2006 to 26% in 2014
- Overall, employees’ premium contributions and out-of-pocket expenses per capita have grown by 42% over the past five years, from $6,824 in 2009 to $9,695 in 2014
Payers and providers are both adjusting to a “new normal” in the marketplace through a variety of multi-year strategies aimed at improving quality, reducing costs, and minimizing financial risk within the evolving regulatory framework. Additional interventions or blunt policymaking, rather than allowing the market to respond to current reform efforts, could interfere with the system.
Both payers (including employers) and providers have prepared multi-year transition plans to adjust their business models, and require some level of predictability and capital reserves. Major disruptions to the operating environment for providers, payers and/or employers may generate uncertainty, which ultimately could flow down to consumers in the form of higher premium contributions and out-of-pocket spending.
This report describes the paradox of the “new normal” in which increases in health care costs have been slowing as payer/employers and providers adjust their business models to the marketplace, while the financial burden for health care on patient/consumers continues to increase. As this report states, “this trend of growth in out-of-pocket spending combined with increases in health insurance premiums that outpace increases in wages is not sustainable.”
This study was sponsored by the Federation of American Hospitals – the lobby organization for America’s private, investor-owned hospitals. To no surprise, they recommend that the marketplace be allowed to work its magic, avoiding disruptions or policy changes that could interfere with the system. They caution that such interference “could flow down to consumers in the form of higher premium contributions and out-of-pocket spending.”
What? They have just shown us how the market they want to protect is taking care of payer/employers and providers (including for-profit hospitals) while creating financial burdens for patient/consumers through “higher premium contributions and out-of-pocket spending.”
They haven’t gotten reform right, and they won’t as long as we allow the medical/industrial complex to remain in charge. Reform needs to be centered around the patient, yet it is the patient who is being dumped on. Single payer would fix that.
By Julliette Cubanski, Christina Swoope, Anthony Damico and Tricia Neuman
Kaiser Family Foundation, July 21, 2014
As part of efforts to rein in the federal budget and constrain the growth in Medicare spending, some policy leaders and experts have proposed to increase Medicare premiums and cost-sharing obligations. Today, 54 million people ages 65 and over and younger adults with permanent disabilities rely on Medicare to help cover their health care costs. With half of all people on Medicare having incomes of less than $23,500 in 2013, and because the need for health care increases with age, the cost of health care for the Medicare population is an important issue.
Although Medicare helps to pay for many important health care services, including hospitalizations, physician services, and prescription drugs, people on Medicare generally pay monthly premiums for physician services (Part B) and prescription drug coverage (Part D). Medicare has relatively high cost-sharing requirements for covered benefits and, unlike typical large employer plans, traditional Medicare does not limit beneficiaries’ annual out-of-pocket spending. Moreover, Medicare does not cover some services and supplies that are often needed by the elderly and younger beneficiaries with disabilities—most notably, custodial long-term care services and supports, either at home or in an institution; routine dental care and dentures; routine vision care or eyeglasses; or hearing exams and hearing aids.
Many people who are covered under traditional Medicare obtain some type of private supplemental insurance (such as Medigap or employer-sponsored retiree coverage) to help cover their cost-sharing requirements. Premiums for these policies can be costly, however, and even with supplemental insurance, beneficiaries can face out-of-pocket expenses in the form of copayments for services including physician visits and prescription drugs as well as costs for services not covered by Medicare. Although Medicaid supplements Medicare for many low-income beneficiaries, not all beneficiaries with low incomes qualify for this additional support because they do not meet the asset test.
Because people on Medicare can face out-of-pocket costs on three fronts—cost sharing for Medicare-covered benefits, costs for non-covered services, and premiums for Medicare and supplemental coverage—it is important to take into account all of these amounts in assessing the total out-of-pocket spending burden among Medicare beneficiaries. Our prior research documented that many beneficiaries bear a considerable burden for health care spending, even with Medicare and supplemental insurance, and that health care spending is higher among older households compared to younger households.
- Premiums for Medicare and supplemental insurance accounted for 42 percent of average total out-of-pocket spending among beneficiaries in traditional Medicare in 2010
- Out-of-pocket spending rises with age among beneficiaries ages 65 and older and is higher for women than men, especially among those ages 85 and older.
- As might be expected, beneficiaries in poorer health, who typically need and use more medical and long-term care services, have higher out-of-pocket costs, on average.
- Just as Medicare spends more on beneficiaries who use more Medicare-covered services, more extensive use of services leads to higher out-of-pocket spending.
- Among beneficiaries in traditional Medicare, those with a Medigap supplemental insurance policy pay more in premiums for this additional coverage, on average, than beneficiaries with employer-sponsored retiree health benefits ($2,166 vs $1,335, on average, in 2010).
- Analysis of ‘high out-of-pocket spenders’ finds a disproportionate share of certain groups, including older women, beneficiaries living in long-term care facilities, those with Alzheimer’s disease and ESRD, and beneficiaries who were hospitalized, in the top quartile and top decile of total out-of-pocket spending (including both services and premiums).
- Between 2000 and 2010, average total out-of-pocket spending among beneficiaries in traditional Medicare increased from $3,293 to $4,734, a 44 percent increase.
The typical person on Medicare in 2010 paid about $4,700 out of pocket in premiums, cost sharing for Medicare-covered benefits, and costs for services not covered by Medicare. Even with financial protections provided by Medicare and supplemental insurance, some groups of Medicare beneficiaries incurred significantly higher out-of-pocket spending than others, which could pose challenges for those living on fixed or modest incomes. Out-of-pocket spending tends to rise with age and number of chronic conditions and functional impairments, and is greater for beneficiaries with one or more hospitalizations, particularly those who receive post-acute care.
This KFF update on the financial burden placed on Medicare beneficiaries shows that average out-of-pocket costs are $4,734 when half of all people on Medicare have incomes of less than $23,500. Although Medicaid supplements Medicare for some low income beneficiaries, destitution is a prerequisite for qualifying for Medicaid. The wealthy should have no problems, but should affordable access to health care be granted only to those with modest or low incomes who must give up what little fungible assets they have been able to accumulate through life?
Another concern in this report is that those with a Medigap supplemental insurance plan pay considerably more in premiums than do those with an employer-sponsored retiree health benefit program. Although Medigap benefits are quite modest, the premiums charged make them one of the worst values in the health insurance market.
Medicare benefits need to be expanded to a level at which Medicare becomes a prepaid health care program. When you need health care, you get it.
By A. W. Gaffney
New Politics, Summer 2014
Among those working towards more fundamental health care change (for instance, as I’ll discuss below, a single-payer system), an assessment of the overall impact of the ACA is a frequent cause for disagreement. Is the law a (possibly wobbly) step in the right direction to be embraced and expanded, a harmful compromise to be denounced and discarded, or something in between? My own sense here is that global assessments are problematic and not that helpful: the massive law does many different things for many different people, and so is better dissected (and criticized) with respect to its specific effects and shortcomings rather than rejected or championed en toto.
Now if eliminating the problem of uninsurance was our only goal, it seems that the ACA would be at least be a clear step in the right direction. Unfortunately, however, there is another phenomenon that has been evolving for some time, that the ACA neither created nor fixed but to some extent codifies, and which confers a highly inegalitarian element to our health care system: underinsurance. Underinsurance is often defined as having insurance but still having substantial out-of-pocket costs for medical care (i.e. greater than 10 percent of family income after premiums); it’s clearly a growing problem, and it is by no means eliminated by the ACA. The plans on the exchanges, for instance, incorporate high levels of cost sharing, or copays, deductibles, and coinsurance. They are graded into four metallic tiers based on their actuarial value (i.e. the percent of your health care expenses that insurance covers), beginning at a paltry 60 percent for the “bronze plans.” Putting aside the deeply inegalitarian concept of dividing a population into different grades of metal (the allusion to Plato’s Republic has somehow not yet been made), such plans fulfill the long-held concern of health policy “experts” that patients need more “skin in the game” (i.e. cost exposure), such that they don’t whimsically procure medically unnecessarily procedures and diagnostic studies. Families will be subject to as much as $12,700 annually in additional out-of-pocket costs for health care (after premiums are paid) to keep the dreaded “moral hazard” of “free care” at bay.
Putting aside what happens to the level of strictly defined “underinsurance,” I would argue that there is a larger problem on the rise, which one might call “malinsurance,” namely insurance that compromises the physical and economic health of the bearer. Malinsurance encompasses an even broader scope of problematic insurance plans: insurance where the price of the premiums impinges on a reasonable standard of living; insurance with unequal and inferior coverage of services, drugs, or procedures; insurance with “cost sharing” that forces individuals to decide between health care and other necessities; insurance with inadequate and inequitable access to providers or facilities; and insurance that insufficiently protects against financial strain in the case of illness.
Today, many (if not most) of us could in some ways be considered underinsured, while most (or maybe all) of us might be considered malinsured. This will, unfortunately, remain the case in coming years, even with the full and unimpeded enforcement of the ACA.
Moving Forward: A Single-Payer Solution?
A “single-payer system” is probably the best-studied alternative for the United States. Conceptually, it is quite simple: national health insurance, with a single entity (the government) providing health insurance for the country. Its core principles (as generally agreed upon within the single-payer movement) can be briefly summarized. First, everyone in the country would be covered by national health insurance. Second, the system wouldn’t impose “cost sharing,” so health care would be free at the point of care, with underinsurance thereby eliminated (assuming an adequate level of funding). Third, it would drastically reduce spending on health care administration and bureaucracy through elimination of the fragmented multi-payer system, and also through the global budgeting of hospitals. It would also contain costs through health care capital planning, and through other measures like direct negotiations with pharmaceutical companies over drug prices. Putting this together, a single-payer system would constitute a markedly egalitarian turn in American health care. Access to health care would be made not only universal but also equal, with free choice of provider and hospital to everyone in the country, provided as a right.
The confluence of several of the following dynamics (and many others) may, for instance, create a political opening for such a project in the coming years.
First, dissatisfaction with our health care system will almost certainly rise, which I think will occur as we become more and more a “copay country,” with high-deductible, high-premium, and narrow-network health plans becoming the new normal. One could imagine considerable public outrage and mobilization against this new commodified status quo, just as there was against corporatized HMOs in the 1990s.
Second, though politics at the federal level may remain inhospitable to the cause for some time, single-payer campaigns at the state government level may provide an opening for the construction of more limited single-payer state systems, while also providing an opportunity for grassroots organizing and movement building that would, in turn, strengthen the larger national campaign.
Third, support for a single-payer system among physicians (which already has majority support in some polls) might be translated into more vocal outrage in coming years. In particular, as patients pay more and more out-of-pocket at the time of care, physicians will increasingly be forced into the role of “merchants of health,” basing medical decisions not only on clinical evidence, but on their patients’ income and wealth. I believe—and deeply hope—that such class-based medicine will be rejected by the profession.
Fourth, and perhaps most important, a broader mobilization against the politics of inequality now seems to be in the making. As it is perceived that the excessive costs of American health care are actually contributing to the problem of inequality—for instance, insofar as high premiums indirectly reduce income or as cost sharing directly consumes a greater portion of already stagnant wages—one can imagine that the drive for a single-payer system might become closely linked with a much larger, and more powerful, political mobilization.
As A. W. Gaffney points out in this article, underinsurance or “malinsurance” may drive us to demand single payer as we mobilize against the politics of inequality. The entire article is well worth downloading and reading when you have a free moment.
Note on word usage: Gaffney’s neologism, “malinsurance,” is sometimes used to refer to medical malpractice insurance. To avoid confusion, we should continue to use the already established term, “underinsurance,” as the label for the rapidly expanding menace of inadequate health care coverage.
By Call, Kathleen T. PhD; McAlpine, Donna D. PhD; Garcia, Carolyn M. PhD, MPH, RN; Shippee, Nathan PhD; Beebe, Timothy PhD; Adeniyi, Titilope Cole MS; Shippee, Tetyana PhD
Medical Care, August 2014
The Affordable Care Act provides for the expansion of Medicaid, which may result in as many as 16 million people gaining health insurance coverage. Yet it is unclear to what extent this coverage expansion will meaningfully increase access to health care.
The objective of the study was to identify barriers that may persist even after individuals are moved to insurance and to explore racial/ethnic variation in problems accessing health care services.
Data are from a 2008 cross-sectional mixed-mode survey (mail with telephone follow-up in 4 languages), which is unique in measuring a comprehensive set of barriers and in focusing on several select understudied ethnic groups. We examine racial/ethnic variation in cost and coverage, access, and provider-related barriers. The study adhered to a community-based participatory research process.
Surveys were obtained from a stratified random sample of adults enrolled in Minnesota Health Care Programs who self-report ethnicity as white, African American, American Indian, Hispanic, Hmong, or Somali (n=1731).
All enrollees reported barriers to getting needed care; enrollees from minority cultural groups (Hmong and American Indian in particular) were more likely to experience problems than whites. Barriers associated with cost and coverage were the most prevalent, with 72% of enrollees reporting 1 or more of these problems. Approximately 63% of enrollees reported 1 or more access barriers. Provider-related barriers were the least prevalent (about 29%) yet revealed the most pervasive disparities.
Many challenges to care persist for publicly insured adults, particularly minority racial and ethnic groups. The ACA expansion of Medicaid, although necessary, is not sufficient for achieving improved and equitable access to care.
This is yet one more study that shows that insurance alone will not achieve equitable access to care, particularly for minority racial and ethnic groups. Let’s provide a little bit more perspective.
When we say that health care should be equitable, what do we mean? Does that mean that we compromise the quality of care for those who are receiving the very best in order to free up resources for those who are experiencing barriers to access? No, it means that we should bring everyone up to the same high standard. One important step is to improve the performance of the financing system by eliminating much of the administrative waste. That would free up resources that could be used to reduce the barriers of cost, coverage and capacity – barriers that the populations in this and other studies face.
Does equitable health care mean that we should prohibit allowing individuals to buy their way to the front of the queue? No, it means that we should use regional planning, capacity adjustment, and queue management techniques so that we reduce excessive queues for everyone.
Often the claim is made that there are many other socioeconomic factors besides insurance coverage that result in impaired access to care. That is true. Merely providing optimal coverage will not in itself correct all of the other factors. But in that claim is the implicit suggestion that we should accept deficiencies in coverage and access because we can’t fix the access problems anyway. That view represents an unacceptable ethical compromise in our current dialogue on reform.
Insurance systems that include financial barriers to care due to both cost sharing and uncovered services, and that impair access due to limitations of networks and limitations in regional capacity are a major cause of inequitable access and coverage. Creating an equitable financing system is the first and perhaps most important step in improving access to high quality care for everyone. Society has an obligation to address the other socioeconomic issues, but not by tossing aside the assurance that health care will be there for those who need it.
By George J. Annas, J.D., M.P.H., Theodore W. Ruger, J.D., and Jennifer Prah Ruger, Ph.D., M.S.L.
The New England Journal of Medicine, July 16, 2014
The Supreme Court decision in the Hobby Lobby case is in many ways a sequel to the Court’s 2012 decision on the constitutionality of the Affordable Care Act (ACA). Like the 2012 case, the decision was decided by a 5-to-4 vote, but in the initial ACA decision, Chief Justice John Roberts acted to “save” the ACA. Not this time. To simplify, the choice facing the Court in the Hobby Lobby case was whether to favor the exercise of religion by for-profit corporations (whose owners believe contraceptives that may prevent fertilized eggs from implanting violate their religious beliefs) over the federal government’s attempt to create a uniform set of health care insurance benefits.
(This article goes on to discuss the issues in the Hobby Lobby decision, including the ACA and the Religious Freedom Restoration Act, religion and birth control, and religion and women’s health. The authors end with the following section on medical care and the ACA.)
Medical Care and the ACA
In terms of health care, the reaction of the American College of Obstetricians and Gynecologists (ACOG) to the Court’s opinion seems just about right to us: “This decision inappropriately allows employers to interfere in women’s health care decisions . . . [which] should be made by a woman and her doctor, based on the patient’s needs and her current health.” ACOG went on to underline that contraceptives and family planning are mainstream medical care and should be treated as such. In their words, “access to contraception is essential women’s health care.”
The Court’s ruling can also be viewed as a direct consequence of our fragmented health care system, in which fundamental duties are incrementally delegated and imposed on a range of public and private actors. The Court is correct on one dimension of its opinion: if universal access to contraceptives is a compelling societal interest, then the provision of such access ought to fall first and foremost on the national government and only secondarily be transferred to private parties. Our systemic reliance on health insurance that is based on private employment provokes just this sort of clash between public and private values.
Our incremental, fragmented, and incomplete health insurance system means that different Americans have different access to health care on the basis of their income, employment status, age, and sex. The decision in Hobby Lobby unravels only one more thread, perhaps, but it tugs on a quilt that is already inequitable and uneven. A central goal of the ACA was to repair some of this incremental fragmentation by universalizing certain basic health care entitlements. In ruling in favor of idiosyncratic religious claims over such universality, the Court has once again expressed its disagreement with this foundational health-policy goal.
George Annas: http://www.bu.edu/sph/profile/george-annas/
The last paragraph says it all:
“Our incremental, fragmented, and incomplete health insurance system means that different Americans have different access to health care on the basis of their income, employment status, age, and sex. The decision in Hobby Lobby unravels only one more thread, perhaps, but it tugs on a quilt that is already inequitable and uneven. A central goal of the ACA was to repair some of this incremental fragmentation by universalizing certain basic health care entitlements. In ruling in favor of idiosyncratic religious claims over such universality, the Court has once again expressed its disagreement with this foundational health-policy goal.”
Need we say, single payer?
By Hannah Guzik
California Health Report, July 14, 2014
Nearly 25 percent fewer physicians were signed up to treat low-income patients in the state’s insurance program this spring compared to a year prior, despite the surge in patients enrolled in Medi-Cal.
The drop in providers is due to the Department of Health Care Services’ efforts to remove doctors who haven’t complied with application requirements or billed the program in a year, spokesman Anthony Cava said.
“This has not resulted in a decrease in access to care,” he said.
More than 2 million people have signed up for Medi-Cal, the state’s low-income health plan, since the program was expanded under the Affordable Care Act. In total, 10.6 million people are enrolled — a quarter of the state’s population.
An additional 600,000 people are still waiting for the state to process their applications.
About 109,000 physicians were enrolled in Medi-Cal last spring, according to the Health Care department. But by this May, that number had dropped to 82,605.
Of the doctors enrolled in May, 38,845 were primary-care providers and 43,760 were specialists.
On its own, the agency’s list of providers isn’t necessarily a reflection of whether Medi-Cal patients have sufficient access to doctors. The list doesn’t specify whether the doctors are accepting new patients or how many they can accept, Cava said. While some doctors on the list may have up to 2,000 Medi-Cal patients, others might see only a handful or none.
Medi-Cal, California’s Medicaid program, serves as an example of the consequences of using Medicaid to expand coverage for the exceptionally poor. After the backlog of applications are processed, over 11 million people will be enrolled in Medi-Cal – about 29 percent of the state’s population. At the same time, 25 percent fewer physicians will be listed as Medi-Cal providers (a result of culling, not voluntary disenrollment). Further, many of the physicians enrolled already limit or exclude Medi-Cal patients from their practices. We should learn soon what impact this will have on access, and the news will not be good.
California has the additional problem that it has the lowest per patient Medicaid funding, with an additional 10 percent reduction in payment rates – a Great Recession cut which Gov. Brown refuses to restore. Think of the options that physicians have when they are being paid significantly less than their overhead expenses for taking care of these patients. None of their options are very good.
The latest CBO projections (April 2014) indicate that nationally 48 million people will be enrolled in Medicaid and CHIP – 13 million more than would have been enrolled had the Affordable Care Act (ACA) not been enacted. The number of uninsured will be 31 million – a number that includes those who would have been eligible for Medicaid had their governors not refused to expand Medicaid in their states. As if access for Medicaid patients were not bad enough, access for the uninsured will be much worse.
As has been said here before, building on the current system, as ACA did, is the most expensive and one of the least effective models of achieving reform goals. The least expensive comprehensive model, and one that achieves the desired goals, is single payer.
Although progressives are tooting their horns about how well ACA is working, the Medicaid program is only one example of how miserably short we have fallen in our efforts to achieve a premier performing system. Put away the horns and get to work.
By David Sterret, Ashley Bender, David Palmer
American University, Health Law & Policy Brief, Spring 2014
From the Introduction
This report will illustrate that the United States economy is currently hampered in numerous ways by having an inefficient, inequitable healthcare system. The research on which we relied was completed before the full implementation of the Patient Protection and Affordable Care Act (ACA). However, we expect that even if the law works as intended, it will not resolve the problems that we raise because the law largely preserves our employment-based healthcare system. In Part I, we discuss specific harms to the economy inflicted by our system’s reliance on employers to provide healthcare benefits. Part II examines how the United States economy compares through the lens of several indices, including some published by conservatives. These comparisons illustrate that most countries with more vibrant economies than the United States have government- directed, universal healthcare systems.
II. Implementing a Universal Care System Would Improve American Competitiveness Internationally
A. The United States Trails Many of Its Competitors by Various Economic Measures
B. How the Employer-Funded United States Healthcare System Harms Businesses
C. Why a Universal Care System Would Lessen Burdens on Businesses
No universal care systems, including pure single-payer systems, are a free lunch for businesses. In one way or another, often through a payroll tax, businesses end up providing at least some of the money to finance the system.
There are several reasons to believe that a universal care system would mitigate this impact on businesses. Primarily, such a system would cause future costs to be lower, or at least stem the trend of cost-increases far exceeding inflation. Secondly, businesses’ overall share of healthcare bills would likely be lower. Finally, a universal care system would distribute costs far more equitably among businesses.
If the United States were to implement a system to ensure universal care, American companies would no longer face a disadvantage in competing with businesses from countries, such as Canada, that provide national healthcare systems. Additionally, healthcare would cease to be a large factor guiding individuals’ career decisions. A national, universal care system would level the playing field among domestic businesses, and eradicate the free-rider problem. For all of the above reasons, economic growth would likely improve, which would yield additional self-perpetuating benefits.
There is an argument that the taxes to finance such a system would constrain business. This claim is seriously undercut by examples from around the world. For instance, Hong Kong, viewed by many as a “beacon of capitalism,” has universal healthcare. So does Denmark, which has higher levels of entrepreneurship than the United States. What is becoming increasingly clear now is that the current employer-sponsored healthcare system in the United States does hurt business.
The majority of Americans obtain their insurance through their employment. Business has a vital concern in the financing of health care. This report adds to the plethora of evidence that business owners would be better off if they were relieved of their responsibilities of providing health benefit programs for their employees. So why is there not an outcry to switch to a proven financing system that would serve their employees well? Is it ideology?
The Affordable Care Act (ACA) calls for a financial penalty for larger employers who do not provide health care coverage for their employees. Could that be the reason? No, the resistance to change existed before ACA was enacted. Further, there are now so many experts in the policy community across the political spectrum who are calling for repeal of the penalty that it is likely that it will be eliminated anyway.
If so, what are employers likely to do? We are already seeing much interest in private health insurance exchanges. If ACA requirements on employers were lifted, they may be willing to provide their employees with a voucher to purchase plans in the private exchanges. Since that converts the benefit into a defined contribution, that would pass on to their employees the burden of future health care inflation.
Another possibility is that they might want to give their employees raises and then let them select their own plans in the state-based ACA exchanges. That would remove the employer entirely from the responsibility of supporting a health benefit program.
A concern that employers might have is that health care costs are now too high and income inequality has increased to the level such that health care benefits must be progressively financed if people are to receive the care they should have. Employers could be concerned that their tax burden may be increased to pay for the higher subsidies that will be needed for premiums and cost-sharing in the exchange programs. Not knowing what that tax burden might be could cause some reluctance to change from a system that at least they understand.
Most employers are well aware of the inefficiencies and high costs of our private insurance-based system. Would employers be ready to embrace a more efficient government-financed and government-administered single payer system? This may be their greatest fear because the financing would no doubt be through explicit progressive tax policies. Most proposals would reduce total health spending for 95 percent of us, but would increase it for those in the top 5 percent of income.
Although some in the business community might be opposed simply because of ideology, for most it’s the money. We’ve learned the lessons that Thomas Piketty has for us, but we can’t apply them until we are willing to exercise democracy by changing the politics. That push for change will not come from the business community.
By Aaron E. Carroll
The New York Times, July 14, 2014
One of the most important facts about health care overhaul, and one that is often overlooked, is that all changes to the health care system involve trade-offs among access, quality and cost. You can improve one of these – maybe two – but it will almost always result in some other aspect getting worse.
You can make the health care system achieve better outcomes. But that will usually cost more or require some change in access. You can make it cheaper, but access or quality may take a hit. And you can expand access, but that will increase cost or result in some change in quality.
More people being able to get care was the point of the A.C.A. It’s possible that overall health care spending may remain flat or even decrease because of other changes to the health care system, or economic factors outside the system entirely. But with respect to emergency care, prevention and procedures, we should expect that increasing access will lead to more spending, not less.
It’s understandable that supporters of the law want it to increase access, increase quality and decrease spending all at the same time, but that’s very unlikely. Trade-offs occur; we need to be honest, and prepared, for what’s likely to happen.
The supposedly inevitable trade-offs between access, quality and cost ignore one important intervention regarding cost. The health care financing system in the United States is unique in its profound, costly administrative waste due to the highly inefficient, fragmented financing through a multitude private insurers and public programs (and no programs at all for the uninsured).
Merely changing to a universal single payer program or a national health service model dramatically reduces costs without having a negative impact on access and quality. The future trajectory of cost increases would be shifted downward – achieving that elusive bending of the cost curve. That is one way other nations provide truly universal health care at a per capita cost averaging only half of that of the United States.
In fact, the monopsonistic purchasing of a public program can actually improve quality by obtaining greater value in health care purchasing.
Some of the savings that would accrue by changing to a universal program such as an improved Medicare for all would be redirected to much needed improvements in access.
The important bottom line is that we really can achieve improved access, improved quality, and lower costs by structural reform of our highly dysfunctional financing system – a system that was only expanded by the Affordable Care Act.
By Julie Creswell
The New York Times, July 9, 2014
NORWALK, Conn. — For more than eight hours a day, seven days a week, 52 weeks a year, an assortment of ailments is on display at the tidy medical clinic on Main Avenue here. But all of the patients have one thing in common: No one is being treated at a traditional doctor’s office or emergency room.
Instead, they have turned to one of the fastest-growing segments of American health care: urgent care, a common category of walk-in clinics with uncommon interest from Wall Street. Once derided as “Doc in a Box” medicine, urgent care has mushroomed into an estimated $14.5 billion business, as investors try to profit from the shifting landscape in health care.
But what is happening here is also playing out across the nation, as private equity investment firms, sensing opportunity, invest billions in urgent care and related businesses. Since 2008, these investors have sunk $2.3 billion into urgent care clinics. Commercial insurance companies, regional health systems and local hospitals are also looking to buy urgent care practices or form business relationships with them.
The business model is simple: Treat many patients as quickly as possible. Urgent care is a low-margin, high-volume proposition.
Urgent care clinics also have a crucial business advantage over traditional hospital emergency rooms in that they can cherry-pick patients. Most of these centers do not accept Medicaid and turn away the uninsured unless they pay upfront. Hospital E.R.s, by contrast, are legally obligated to treat everyone.
Already, the race is on to build large chains with powerful, national brands — a McDonald’s or a Gap of health care. Wall Street money is driving the growth, but so are other forces. Millions of newly insured Americans are seeking care. Others are frustrated by long waits at E.R.s, or by having to conform to regular doctor’s hours.
The insurance giant Humana paid nearly $800 million in 2010 to buy Concentra, the nation’s largest group of urgent care centers, with about 300 currently. Two years later, Dignity Health, a San Francisco-based health system, acquired U.S. HealthWorks, a group that today has 176 centers.
Even hospitals are embracing the trend. Florida Hospital in Orlando, for example, has opened 24 Centra Care urgent care clinics.
But some of the most aggressive buyers have been private equity firms, according to data from a research firm, PitchBook.
In 2010, General Atlantic, a private equity firm, and Sequoia Capital, a giant in venture capital, acquired a stake in MedExpress Urgent Care, which operated 47 clinics in four states. today, MedExpress has 130 clinics in 10 states.
The growing popularity of urgent care centers is understandable. Patients can receive timely care with shorter waits, at a cost well below that of hospital emergency departments. These centers are working well for patients, for the health professionals who staff them, and for… yes, passive investors who have learned how to divert to their own coffers some of the $3 trillion that we are spending on health care.
That’s the thing about capitalism. When there is an opening that can provide a significant return on invested dollars, capitalists jump in, while socialists stand back and observe, especially since the machinery of government grinds very slowly.
In the case of urgent care centers, what approaches will provide the best return for the capitalists? Above all, locate them in wealthy communities. Do not ever consider placing them in communities with high poverty levels, even though the medical need may be great. Cherry pick your patients. You can turn away Medicaid and cashless uninsured patients and give them instructions on how to get to the nearest hospital emergency department, which is required by law to accept them. But cater to the insurance companies that are quite willing to pay your higher fees as long as they are lower that emergency department fees. In fact, maybe the insurers will even be willing to pay a premium to buy you out.
The record is in on for-profit health care facilities. Business principles trump patient service principles every time. Make the most money on insured patients that the market will bear, but avoid losses on uninsured and welfare patients by turning them away.
About those socialists who are standing back and observing, what are they to do? How do they move urgent care services into communities with high poverty? They know that the private investors want no part of that. What about primary care practices? Isn’t it unrealistic to expect physician offices to be staffed 24 hours a day? What about community health centers? On their tight budgets, can they provide 24hour/7day urgent care services? What about emergency departments of hospitals? Of course, they are already serving that function, but at very high fees that are used to support other money-losing services of the hospital – not to mention long delays at times other health care facilities are closed.
Under a single payer system, facilities would be established through central planning based on the health care needs of the community, not on what would be the most profitable. Passive investors would not be involved and thus would play no role in those decisions, as they shouldn’t.
Private sector investors move in rapidly at any opportunity, structuring their investments to get the most dollars they can from us while neglecting those without dollars. Government bureaucrats move much more slowly, but at least they get it right, making sure that health care is available for people when they need it. Single payer is what we need.
By Chad Terhune
Los Angeles Times, July 9, 2014
Amid growing scrutiny statewide, insurance giant Anthem Blue Cross faces another consumer lawsuit over its use of narrow networks in Obamacare coverage.
A group of Anthem policyholders sued California’s largest for-profit health insurer Tuesday in state court, accusing the company of misrepresenting the size of its physician networks and the insurance benefits provided.
A similar suit seeking class-action status was filed June 20 against Anthem, a unit of WellPoint Inc., The Times has reported.
In response to the two lawsuits, Anthem said “materials at the time of enrollment and in members’ explanation of benefits have clearly stated that the plan was an EPO plan which may not have out of network benefits.”
The company added that Blue Cross Blue Shield Assn. rules required the PPO designation on EPO member cards because coverage for emergencies is available in other states.
In May, two San Francisco residents sued Blue Shield in state court, accusing the company of misrepresenting that their policies would cover the full network.
Separately, California regulators are investigating whether Anthem and Blue Shield of California violated state law in connection with inaccurate provider lists and making it difficult for patients to obtain timely care.
To hold down premiums under the health law, Anthem and Blue Shield cut the number of doctors and hospitals available to patients in the state’s new health insurance market.
These exclusive-provider organization, or EPO, health plans have been particularly troublesome for some consumers who were accustomed to having more conventional preferred-provider organization, or PPO, policies.
One of the major differences is that patients with an EPO plan typically have little or no coverage if they see an out-of-network medical provider and they are often responsible for the full charges.
“EPOs will continue to play a role,” said exchange spokeswoman Anne Gonzales. “But we’re going to have to do a better job educating people about how these networks work. We recognize the EPO model can be confusing.”
Some supporters of the Affordable Care Act say the smaller size of the provider networks isn’t the problem so much as clear information about what doctors and hospitals are available.
“The problem has been the transparency and reliability of the networks,” said Micah Weinberg, a health-policy analyst at the Bay Area Council, an employer-backed group.
“That’s the problem that we need to fix. If we focus on narrowness we will be focusing on the wrong thing,” Weinberg added.
Micah Weinberg, a health-policy analyst at the Bay Area Council, an employer-backed group, says, “The problem (with exclusive provider organizations – EPOs) has been the transparency and reliability of the networks. That’s the problem that we need to fix. If we focus on narrowness we will be focusing on the wrong thing.” Really? Narrow networks are not the problem?
There is a general rule that when you are confronted with a problem you should provide a solution that corrects the problem at its origin rather than providing a solution that requires compliance by everyone else involved. In the case of EPOs it would have been far better to simply eliminate them and address cost issues by more effective policies rather than to try to get each individual to understand EPOs and comply with the restrictions on which health care providers will be covered – compliance which is sometimes impossible to achieve.
Once private insurers began using networks of contracted physicians and hospitals, compliance has been a problem for many reasons. The network lists are difficult to access. They undergo continual revisions. Frequently not all physicians providing coordinated health care services are contracted with the insurer. EPOs tend to use narrower networks to leverage more favorable contracts with those who do participate which further limits patients’ access and coverage. The individual’s selection of health plans often changes for a variety of reasons, and the networks change accordingly. This often disrupts continuity of care.
The only rationale for EPOs is for the insurer to negotiate lower prices. It is a terribly inefficient and disruptive way to do that. A far more effective way of pricing health care services appropriately would be to establish a single payer system. There would be no networks involved.
Much the same applies to PPOs. They differ from EPOs primarily in that they may cover a very modest portion of the charges outside of their networks, but they do not protect the patient from prices that are higher than the insurers’ usual contracted rates. By the rule that a problem should be corrected at its source, PPOs should be eliminated as well.
In fact, single payer advocates know that this applies to all private insurance plans. They should be eliminated and replaced with a single, publicly-financed and publicly-administered health program. You have eliminated the problem at its origin – the private insurers – and have replaced it with a program in which patient compliance is totally automatic – a single payer national health program.
By David Gore
California Healthline, July 5, 2014
Doctors Medical Center in San Pablo, about 10 miles north of Oakland, is slated to shut its doors at the end of July, unless some kind of deal can be worked out to keep it operating.
There are many contributing factors to the financial death spiral at Doctors Medical Center, according to said Eric Zell, chair of the West Contra Costa Healthcare District board of directors, which oversees Doctors Medical Center. But there is one fundamental and underlying reason it cannot remain economically viable:
“It’s the Medi-Cal and Medicare reimbursement rates,” Zell said. “The rates are just too low.”
Zell added, “The payer mix is 80% Medicare/Medi-Cal and about 10% uninsured. There’s only about 10% private pay, and that’s not enough to keep us going.”
According to hospital officials, Doctors Medical Center is paid 60 cents for every dollar it spends to treat each Medi-Cal patient and just 90 cents on the dollar for every Medicare patient.
When you’re looking at 100 patients a day and you lose money on 90 of them, the losses mount quickly, according to John Gioia, a longtime district supervisor on the Contra Costa Board of Supervisors.
Most medical facilities have a payer mix with a much higher percentage of people with commercial health insurance to mitigate the losses of their Medi-Cal, Medicare and uninsured patients, Gioia said.
And when you have such a large population of people living at poverty level, that also means the residents of western Contra Costa County don’t have much money to try to underwrite the hospital.
Doctors Medical Center is one of the few remaining stand-alone small district hospitals left in the state, Gioia said. “There have been many places like this, hospitals like this in similar circumstances,” he said. “Many have closed, dozens of them in California.”
“This hospital represents a larger problem and issue,” Gioia said, referring to the access issue that would emerge in the west county if Doctors does shut down. “This represents a larger problem and issue,” he said. “Is there a model that’s more sustainable?”
“I think this is a failure of our health care system,” (state Sen. Loni) Hancock said. “We need to have a single payer health system.”
But at its root, Hancock said, it shouldn’t be up to hospitals in the area to pick up the slack for low Medi-Cal and Medicare rates.
“Look, it’s a great health care system for employed, insured people,” Hancock said. “But this is not a health care system for people who are poor.”
Doctors Medical Center is owned and operated by the West Contra Costa Healthcare District.
Doctors Medical Center Has an Emergency
If it doesn’t get financial help in the next few months, it will close its doors permanently. More than 40,000 people use Doctors Medical Center for emergency room services every year. If you have a heart attack or stroke, or you are in an accident, the ER at DMC is often the first stop for an ambulance. Without it, an ambulance trip could take up to an additional hour. That time could mean the difference between life and death.
It does not take much intellect to understand that hospitals should be located where they are needed and that they should be financed by a system that would ensure that adequate funds would be available to pay for appropriate health care services for the community. Based on our current methods of hospital planning and financing, it may be intellect that is in short supply.
Today a hospital that is located in a community with high levels of poverty is dependent on income from Medicare and Medicaid. In California these programs, especially Medicaid (Medi-Cal), pay rates below costs of providing that care. Insolvency is inevitable. This is directly related to our dysfunctional, fragmented system of financing health care through a multitude of private insurers, public programs, and no programs at all.
With the private sector making decisions on hospital planning, areas with assurance of revenues will be selected – usually areas with a high percentage of privately insured patients plus Medicare patients with higher regionally adjusted payment rates. The private planners do not select areas with high poverty rates and high numbers of uninsured and Medicaid beneficiaries. Private planning decisions are based on money, not on local need.
Under a well designed single payer system, capital spending is budgeted separately. Hospitals are built in areas of need. The hospital operations are financed through global budgets, just as with our fire and police departments. Public financing obviates the need to consider wealth when establishing the location of health facilities.
If Doctors Medical Center is closed down, the billionaire who is passing through town and is critically injured in an accident may die if his ambulance has to drive past a padlocked emergency department and continue for another hour to a different facility. No amount of money will buy your way to the front of that queue.
We need to adopt a system that will provide both appropriate planning and appropriate financing. Our current fragmented system can’t do that.
California State Senator Loni Hancock is right. “This is a failure of our health care system. We need to have a single payer health system.”
By Luca Lorenzoni MSc, Annalisa Belloni MSc, Franco Sassi PhD
The Lancet, July 1, 2014
The USA has exceptional levels of health-care expenditure, but growth has slowed dramatically in recent years, amidst major efforts to close the coverage gap with other countries of the Organisation for Economic Co-operation and Development (OECD). We reviewed expenditure trends and key policies since 2000 in the USA and five other high-spending OECD countries (Canada, France, Germany, the Netherlands, and Switzerland). Higher health-sector prices explain much of the difference between the USA and other high-spending countries, and price dynamics are largely responsible for the slowdown in expenditure growth. Other high-spending countries did not face the same coverage challenges, and could draw from a broader set of policies to keep expenditure under control, but expenditure growth was similar to the USA. Tightening Medicare and Medicaid price controls on plans and providers, and leveraging the scale of the public programmes to increase efficiency in financing and care delivery, might prevent a future economic recovery from offsetting the slowdown in health sector prices and expenditure growth.
Health expenditure levels
The higher health spending reported in the USA is not simply a result of the country’s greater wealth or of the age structure of its population. Even the larger prevalence of risk factors — including obesity — explains only a small part of the reported differences. OECD Health Care Quality Indicators show that the US health-care system is doing well in several areas (eg, cancer care), but less well in others (particularly the primary care sector). Overall, the quality of the care provided does not seem to explain the higher health expenditure in the USA.
OECD work on comparative price levels in health suggests that the prices, rather than volumes, of health services contribute the most to explaining the higher US spending, in line with the conclusions of scholarly work.
Probable explanations for health price levels exceeding general price levels in the USA include a more intense use of health-related technologies, low productivity, decentralised price negotiations, fragmentation in the insurance market, and a high level of provider concentration. In a private insurance or provider model — as in the Netherlands and Switzerland (with compulsory insurance coverage), and the USA (with voluntary insurance coverage) — a high amount of choice is combined with weaker cost control. In particular, the USA — excluding Medicare — does not use a centralised authority to set health spending budgets or negotiate prices with providers. A public-contract model — as in Canada, France, and Germany — gives a central authority (national government or social insurance administration) more leverage over health-care providers, generally with lower administrative costs than multiple-payer systems.
From the Discussion
The USA is an outlier in the scenery of OECD health-care systems, for its staggering levels of expenditure, the extent of fragmentation of its system and the sheer complexity of its administration, the power of vested interests, and the large number of people left without adequate health insurance coverage. However, during the period examined in this paper, characterised by a long and severe recession with a fluctuating economy and employment rates, differences in growth rates between the USA and other high-spending countries were substantially reduced. Great efforts have been made to sustain coverage and lift the USA from the bottom of the OECD coverage league table. Efforts have also been made to contain further growth in health-care expenditure, with rates falling in line with those of other high-spending OECD countries. This progress is no reason for complacency, and more and bigger efforts are needed in the years to come, particularly in controlling the main driver of higher health-care expenditure in the USA — ie, health sector prices. The risk that a future sustained economic recovery, and the probable general price increases that would come with it, might offset the gains made in recent years is real and should be anticipated. Medicare and Medicaid price controls on plans and providers, such as adjustments in payments to Medicare Advantage managed care plans, or DRG base rate adjustments to account for expected productivity growth in the general economy, could be tightened further and extended, particularly for pharmaceutical products and physician fees, without resorting to measures affecting service use, which would restrict choice or coverage. More daring measures could be used in the hospital sector, such as all-payer fees negotiated at state level (eg, Maryland’s Health Service Cost Review Commission), global budgets, and reference prices, although these would involve major changes in the US health-care market approach. Examples of effective measures are available from other countries, which might bring the USA further in line, in terms of both health-care expenditure and coverage, notwithstanding the relatively smaller effect of policy changes in the USA, in view of the different relation between insurance or financing and delivery systems. Changes gradually introduced towards the end of the study period, which will probably affect expenditure growth in the future, include bundled payments, reference prices for hospital care, and the introduction of Accountable Care Organisations to realign provider incentives, with a potential for quality improvement, in addition to cost containment. However, more evidence is needed about the complex causal pathways that link health-care expenditure and use with health outcomes, to avoid possible detrimental effects on population health from tightened controls on health-care expenditure.
[The authors are from the Health Division, Organisation for Economic Co-operation and Development (OECD), Paris, France.]
Press release – The Lancet: “Dramatic slowdown in growth of US health expenditure over last decade closes gap between USA and other high-spending countries”:http://www.eurekalert.org/pub_releases/2014-06/tl-tld062714.php
Press release – OECD: “After Decline in U.S. Health Expenditure Growth, OECD Sees Risk of Spending Uptick in Recovery”: http://www.oecd.org/washington/lancet-health-unitedstates.htm
This OECD study comparing health care spending and health policy in the United States with five other high-spending OECD nations confirms that health care financing systems undergo continual revision. Yet the United States is unique in that our policy changes have not moved us from first position on per capita spending nor from last position on the proportion of the population that is covered.
As the authors state, “the USA is an outlier in the scenery of OECD health-care systems, for its staggering levels of expenditure, the extent of fragmentation of its system and the sheer complexity of its administration, the power of vested interests, and the large number of people left without adequate health insurance coverage.” Although some slowing in health care spending has occurred, future spending trends are uncertain.
The authors suggest some possibilities for reform, but they are based on maintaining the basic financing structure that was expanded but not fundamentally altered by the Affordable Care Act (ACA). In fact, some of their suggestions were derived from ACA.
This paper is helpful since it describes the dynamics of health financing policy in several wealthy nations. We can always learn from others, even if the lessons are on what not to do. On the latter point, other nations have had much to learn from us even if they have not applied the lessons well (e.g., unwise attempts at privatization schemes).
The obvious flaw in this paper is that the authors did not discuss more comprehensive reform proposals such as a single payer national health program. They do, however, note that the United States “does not use a centralised authority to set health spending budgets or negotiate prices with providers,” whereas a public-contract model used in other nations “gives a central authority (national government or social insurance administration) more leverage over health-care providers, generally with lower administrative costs than multiple-payer systems.”
Doesn’t it seem that this is the lesson we should be receiving from other nations? Doesn’t this cry out for single payer in the United States? Of course, we already knew that. Our policy failure is a political failure. We will not get the policy right until we change our politics.
By Austin Frakt
The New York Times, July 7, 2014
On Oct. 24, 1995, Newt Gingrich made an assertion about what would happen to Medicare if its beneficiaries could choose between it and private plans. Medicare is “going to wither on the vine because we think people are voluntarily going to leave it — voluntarily.” Though he later walked this statement back, many observers viewed it as an attack on the program.
In fact, over the nearly two decades since, Mr. Gingrich’s claim has undergone something of a test — and it has largely passed it.
In that time, Medicare beneficiaries have enjoyed various levels of access to private alternatives to traditional Medicare through the Medicare Advantage program and its predecessors.
Today, 30 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan, more than at any time in history.
The surge in Medicare Advantage enrollment seems surprising. With payments to plans cut by the Obama administration, history suggests enrollment should go down, not up. What, then, could explain the growing popularity of private Medicare plans?
One answer is that baby boomers, who are just entering Medicare-eligibility age, are more accustomed to the types of insurance Medicare Advantage offers, such as H.M.O.s, than their predecessors were.
Another answer is that prior generations of retirees may have been more likely to have had coverage from former employers that wrap around traditional Medicare, filling in its gaps. This coverage has become less common as employer-sponsored retirement benefits have eroded generally. Since Medicare Advantage plans generally offer extra benefits, financed by the generous government subsidies they receive relative to traditional Medicare, perhaps new retirees are turning to them in greater numbers for more complete coverage.
As Medicare Advantage grows, traditional Medicare necessarily shrinks and its influence on the American health care system weakens. If the trend continues, policies, including those in the Affordable Care Act, designed to use traditional Medicare as a tool to reshape health care delivery for all Americans may become less potent. Is there a tipping point at which traditional Medicare ceases to matter?
If so, we’re probably not there yet, but we may be moving toward it. Unless things change, the data suggest Mr. Gingrich may have been right in a way: Given a choice between traditional Medicare or more benefits from more highly subsidized private plans, Medicare beneficiaries may well be willing to let the former wither on the vine.
Although the higher payments to the Medicare Advantage plans are being reduced, the Obama administration, with encouragement from Congress (responding to AHIP’s intense lobbying campaign), has offset some of the reductions with innovative measures to increase payments to the private insurers.
That is perpetuating the blatant unfairness wherein taxpayers are paying more for those enrolled in the private plans than they are for those enrolled in the traditional Medicare program.
If it is right that we pay the private insurers more, then in all fairness we should be paying more for those in the traditional program so that everyone receives comparable benefits.
Fairness should be of the highest priority when our elected politicians are spending our tax dollars. Once we get that right, it will be no contest when it comes to comparing the traditional Medicare program with the private Medicare Advantage plans that divert a large portion of funds to profound administrative excesses, wasteful marketing, excessive executive compensation packages, and profits for superfluous passive investors, as they take away our choice of health care providers.
If we voters insist on fairness, it will be the private Medicare Advantage plans that will wither on the vine.
Further comment by Don McCanne
Maintaining the integrity of the traditional Medicare program is important because it serves as an example of the capabilities of the government in managing a public insurance program. If the reputation of Medicare is trashed it would provide powerful rhetoric for the opponents of single payer.
The Medicare plus Choice program was established to provide private health plan competition to the traditional Medicare program, supposedly bringing us higher quality at lower cost. The experiment proved to be a failure since it was clear that the private insurers were unable to deliver on that promise. The privatizers did not give up. The program was revitalized as Medicare Advantage, but with a new twist. To supposedly prove that the plans could provide higher quality at lower cost, Congress cheated. They gave the plans an extra 14 percent over the costs of traditional Medicare, thinking that we wouldn’t notice.
The plans became popular mainly because they could entice Medicare beneficiaries with extra benefits, though those benefits were only a small part of their extra payments. That was enough to lure more enrollees. Recognizing that the plans were being paid too much, and struggling to find ways to pay for the Affordable Care Act, Congress included in the Act a gradual reduction in these Medicare Advantage overpayments.
It did not take long for the insurance industry to organize protests against Obama’s “cuts to Medicare.” The Obama administration, under pressure from members of Congress, responded with three years of accounting gimmicks that would offset some of the reductions.
Not only is our tax money being unfairly diverted to the private insurers, while neglecting those in the traditional program, a portion of the Part D premiums paid by traditional Medicare beneficiaries is also being diverted to the provision of more benefits for the Medicare Advantage patients – benefits that those in the traditional program do not receive.
It is important that we publicize this injustice so that the blatant cheating will end. Once that happens, the Medicare Advantage plans will have proven to be a failed model of health care financing. Hopefully then people will listen when we show them that a publicly administered and financed program – a single payer system – provides much greater value in health care.
United States Government Accountability Office (GAO), June 2014
GAO found that Medicaid paid the lowest average net prices across a sample of 78 high-utilization and high-expenditure brand-name and generic drugs when compared to prices paid by the Department of Defense (DOD) and Medicare Part D. Specifically, Medicaid’s average net price for the entire sample was $0.62 per unit, while Medicare Part D paid an estimated 32 percent more ($0.82 per unit) and DOD paid 60 percent more ($0.99 per unit). Similarly, Medicaid paid the lowest net price for the subset of brand-name drugs in the sample, while DOD paid 34 percent more and Medicare Part D paid an estimated 69 percent more. Medicaid also paid the lowest net price for the subset of generic drugs, while Medicare Part D paid 4 percent more and DOD paid 50 percent more.
GAO found that multiple factors affected the net prices paid by each program. Specifically, a key factor for the entire sample and the brand-name subset was the amount of any post-purchase price adjustments, which are the refunds, rebates, or price concessions received by each program from drug manufacturers after drugs have been dispensed to program beneficiaries. These price adjustments ranged from about 15 percent of the gross price for Medicare Part D to about 31 percent for DOD, and nearly 53 percent for Medicaid across the entire sample. The gross prices each program negotiated with pharmacies and the magnitude of beneficiary-paid amounts also contributed to differences in net prices paid by the three programs, but to a lesser degree.
In some cases, VA beneficiaries can obtain drugs on a fee-for-service basis through non-VA facilities. These make up a very small proportion of VA drug expenditures (less than 1 percent in fiscal year 2010). Therefore we did not include VA in this report comparing prices paid to retail pharmacies.
The statutory framework allowing each program to obtain post-purchase price adjustments contributes to the wide range of percentages observed. Medicaid’s federally mandated rebates apply to virtually all drugs, while DOD’s refunds only apply to certain drugs (i.e., primarily brand-name drugs). Furthermore, we found that even when DOD received a refund for a given drug, DOD’s per-unit refund amount was less than Medicaid’s per-unit rebate for most of the drugs in our sample even though we applied only the federally mandated (i.e., URA-based) rebates for the calculation of Medicaid net prices. If we had been able to accurately apply the Medicaid state supplemental rebates, the per-unit Medicaid rebate amounts would be even larger (i.e., a greater percentage of the gross unit price) than we report. Finally, we found that Medicare Part D obtained the lowest per-unit price adjustments among the three programs. In contrast to the statutory authority allowing DOD and Medicaid to collect specific refunds and rebates, Medicare Part D plan sponsors rely on independent negotiations to obtain price concessions from drug manufacturers. As we have previously reported, plan sponsors have noted limitations on their ability to negotiate price concessions for some drugs due to formulary requirements set by CMS, lack of competitors for some drugs, or low utilization for some drugs that limit incentives for manufacturers to provide price concessions.
****Comparison of DOD and VA Direct Purchase Prices
United States Government Accountability Office (GAO), Apr 19, 2013
When GAO compared prices paid by the Department of Defense (DOD) and the Department of Veterans Affairs (VA) for a sample of 83 drugs purchased in the first calendar quarter of 2012, DOD’s average unit price for the entire sample was 31.8 percent ($0.11 per unit) higher than VA’s average price, and DOD’s average unit price for the subset of 40 generic drugs was 66.6 percent ($0.04 per unit) higher than VA’s average price. However, VA’s average unit price for the subset of 43 brand-name drugs was 136.9 percent ($1.01 per unit) higher than DOD’s average price. These results were consistent with each agency obtaining better prices on the type of drugs that made up the majority of its utilization: generic drugs accounted for 83 percent of VA’s utilization of the sample drugs and brand-name drugs accounted for 54 percent of DOD’s utilization of the sample drugs. DOD officials told GAO that in certain circumstances they are able to obtain competitive prices for brand-name drugs – even below the prices for generic equivalents – and therefore will often preferentially purchase brand-name drugs.
These two GAO reports explain prices that the federal government pays for drugs and the mechanisms for pricing of those drugs within the Department of Veterans Affairs, Medicaid, Department of Defense, and Medicare Part D programs. The mechanisms are complex, and you have to read the full reports to fully understand them.
The bottom line is that government agencies are far more effective in negotiating optimal pricing than are the private insurers that administer the Medicare Part D program. As an example, the Medicare Part D insurers paid 69 percent more for brand-name drugs than did Medicaid.
The private Part D plan sponsors tout their effectiveness in using market principles to obtain best prices – supposedly the reason for their existence – yet they complain that they have not been as effective as the government because of “formulary requirements set by CMS, lack of competitors for some drugs, or low utilization for some drugs that limit incentives for manufacturers to provide price concessions.”
Formulary requirements? The government agencies include in their formularies the drugs that patients need. The private insurers attempt to exclude from their formularies drugs that do not provide optimal profit opportunities. Complaining about “formulary requirements set by CMS” does not explain their inability to to obtain best prices for the government since the government has its own de facto formulary requirements for the VA, DOD and Medicaid programs.
Lack of competitors for some drugs? The government agencies also negotiate within the same pharmaceutical environment wherein there is a lack of competitors for some drugs.
Low utilization for some drugs that limit incentives for manufacturers to provide price concessions? The government agencies also include low utilization drugs in their formularies.
Medicare Part D was designed based on the fraudulent contention that private marketplace dynamics are more effective then government negotiation in obtaining maximum value – a position that wastes government/taxpayer funds by paying excessive prices in the private sector compared to the price concessions that the government can obtain. We would not be tolerating this fraud if we had a properly designed single payer national health program.
California Medical Association
CMA Alert, June 30,2014
In late March, the California Medical Association (CMA) began receiving complaints from physicians in San Diego, Orange and Bay Area counties about denials from Anthem Blue Cross. Practices reported that patients presented to their offices with Anthem ID cards that indicated they had a Covered California/mirror PPO product and subsequent eligibility verification also indicated the patient had a PPO product.
However, Anthem later denied the claims stating the services were not covered under the patients’ benefit plans because they received services from out-of-network providers.
CMA escalated the issue to Anthem and learned that while the Anthem ID card and eligibility verification indicated these patients had purchased PPO products, it was a mistake. These patients had actually purchased EPO products, with no out-of-network benefits.
While Anthem is offering a PPO product for their Covered California/mirror patients in most counties, they are only offering an EPO product in San Francisco, Los Angeles, Orange and San Diego counties. The Anthem EPO product does not provide any benefits if patients receive services from out-of-network physicians/facilities.
At CMA’s urging, Anthem corrected the affected patient ID cards and reissued new cards to EPO patients in May. Anthem also confirmed they have updated the information that displays when physicians verify eligibility to accurately reflect the correct product type.
CMA requested that Anthem automatically reprocess affected claims at the PPO rates, the product the ID card and eligibility information reflected, but Anthem was unwilling to do so. Instead they are requiring patients to appeal each individual claim to Anthem.
Anthem Blue Cross made a mistake in that they provided ID cards and eligibility verification for their EPO (exclusive provider) patients that indicated they were PPO (preferred provider) patients. PPO patients can obtain some care out-of-network but with reduced benefits. EPO patients are not eligible for any benefits out-of-network.
The California Medical Association has requested that Anthem Blue Cross reprocess those claims based on the PPO status that they had verified. Anthem has refused to do so, insisting that each claim be appealed individually. For an industry noted for administrative excesses and placing an administrative burden on health care providers, they are carrying it to an extreme wherein they are requiring much more administrative excesses to rectify their own error – punishing patients and providers for their own mistake.
How can this industry be so crass? Yet this industry, which should be placing patient service above all else, places its own business interests first. Such an insensitive response would never take place if our health care financing system were to be managed by our own public administrators. EPOs wouldn’t even exist. It’s time to replace the private insurers with a publicly-administered single payer system.
UnitedHealth Premium® Designation Program
The UnitedHealth Premium® physician designation program uses evidence-based, medical society, and national industry standards to recognize physicians for providing quality and cost efficient care.
The following designation results are displayed publicly in UnitedHealthcare’s physician directories (e.g., myuhc.com) to support informed decision-making by members when making health care choices and by physicians when making referrals.
Designation information is as follows:
- Quality & Cost Efficiency
- Cost Efficiency & Not Enough Data to Assess Quality
- Quality & Not Enough Data to Assess Cost Efficiency
- Quality & Did Not Meet Cost Efficiency
- Not Enough Data to Assess Quality & Did Not Meet Cost Efficiency
- Not Enough Data to Assess
- Not Evaluated
- Did Not Meet Quality & Cost Efficiency
Innovative Benefit Plan Designs
In addition, employers may offer health benefit programs (e.g., reduced cost-sharing or tiered benefit programs) that provide benefit incentives for members to use UnitedHealth Premium Tier 1 physicians.
Members in health plans that offer tiered benefits may pay lower co-pays and co-insurance amounts for services provided by UnitedHealth Premium Tier 1 physicians.
UnitedHealth Premium Tier 1 physicians have received one of the following Premium designations:
- Quality & Cost Efficiency
- Cost Efficiency & Not Enough Data to Assess Quality
UnitedHealth Premium® Physician Designation Program
The UnitedHealth Premium physician designation program uses clinical information from health care claims and other sources to assist physicians in their continuous practice improvement and to help consumers make more informed and personally appropriate choices for their medical care.
Evaluation for quality compares a physician’s observed practice to the UnitedHealthcare national rate among other physicians who are responsible for the same interventions. Cost efficiency is assessed by comparing the case-mix adjusted cost of care attributed to the physician to a benchmark and applying a statistical test to determine if the difference is statistically significant.
Quality is the fundamental measurement, demonstrating our commitment to evidence-based practice. The quality designation is separate from the cost efficiency designation. Although the quality and cost efficiency evaluations are performed separately, the results are used together to determine the physician’s designation.
Physicians who meet both the quality and cost efficiency designation criteria will receive the quality and cost efficiency designation. Physicians who meet the quality designation criteria will receive the quality designation regardless of their cost efficiency evaluation. Physicians who meet the cost efficiency designation criteria will receive the cost efficiency designation if they do not have enough data to assess quality.
A physician’s quality individual outcome is determined by comparing the number of times his/her patients received recommended care with a benchmark number based on the UnitedHealthcare national rate of the same recommended care for each quality measure.
Cost Efficiency Assessment
Episode cost measurement compares a physician’s observed costs for episodes of care to a peer group’s costs for similar episodes of care, with adjustments for the patient’s severity of illness and the physician’s case mix.
For both episode cost and population cost measurement, the physician’s costs within each set are evaluated against their peer group’s costs by ordering the costs from lowest to highest cost. The costs are converted into percentiles to allow comparison across different types of cases or patients.
Physicians’ costs must be statistically significantly lower than the peer group’s physicians at the 75th percentile performance for all physicians (measured in the same specialty for the same types of episodes in the same geographic area) in order to meet the episode cost measurement criteria.
UnitedHealthcare informs members that designations are intended only as a guide when choosing a physician and should not be the sole factor in selecting a physician. As with all programs that evaluate performance based on analysis of a sample, there is a risk of error.
The perennial promise of private health insurers is that their insurance products would bring us higher quality care at lower cost, even though there is a paucity of evidence to support such claims. UnitedHealth now claims to be serious about delivering on that promise with their new Premium Physician Designation Program. They say that “quality is the fundamental measurement.” But let’s sort through their program description to see what the truth really is.
You can consult the websites at the links above for the detailed descriptions of how determinations of quality and cost efficiency are made. Although they state that quality is the fundamental measurement, they combine that with cost efficiency measurements and then use this information to classify each physician in one of the eight categories listed above. There are really only two designations that physicians can receive: quality and cost efficiency. If the physician receives either one or both of these designations, then these honors are displayed publicly in UnitedHealth’s physician directories.
Those designations might be nice, but what the patient really wants to know is if their physician is a Tier 1 physician. In plans that offer tiered benefits – very commonplace today – plan beneficiaries pay lower co-pays and co-insurance when they use Premium Tier 1 physicians. So what determines whether on not a physician is in Tier 1?
Of the eight categories listed, only the first two will qualify the physician as Tier 1. Either the physician must receive the designations of “Quality & Cost Efficiency” or “Cost Efficiency & Not Enough Data to Assess Quality.” Although quality is the “fundamental measurement” and is determined before cost efficiency, it is important to note that the third category – “Quality & Not Enough Data to Assess Cost Efficiency” – will not qualify a physician for Tier 1. The only way to become a Tier 1 physician is to be cost efficient; quality does not count.
It is also important to understand that even if all or almost all physicians are actually cost efficient, they are compared to their peers. “Physicians’ costs must be statistically significantly lower than the peer group’s physicians at the 75th percentile performance for all physicians.” It is impossible, no matter how efficient they are, for all physicians to gain Tier 1 status.
Further, the health care market in the United States is by far the most expensive of all nations, not only because of our prices but also due to our inefficiencies, especially our profound administrative waste. Favoring prices at the lower end of a highly inflated health care market falls far short of what we need to do to improve efficiency in our health care purchasing.
Thus UnitedHealth, for Tier 1, is selecting the cheapest physicians in an overpriced and inefficient market, regardless of the quality of their care. “Higher quality at lower cost” is a fraudulent marketing slogan of the private insurance industry. We need to throw these con artists out and replace them with our own efficient, quality-driven single payer national health program. The sooner the better.
Supreme Court of the United States, June 30, 2014
BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. v. HOBBY LOBBY STORES, INC., ET AL.
CONESTOGA WOOD SPECIALTIES CORPORATION ET AL., PETITIONERS 13–356 v. SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.
Justice Alito delivered the opinion of the Court.
We must decide in these cases whether the Religious Freedom Restoration Act of 1993 (RFRA), 107 Stat. 1488, 42 U. S. C. §2000bb et seq., permits the United States Department of Health and Human Services (HHS) to demand that three closely held corporations provide health-insurance coverage for methods of contraception that violate the sincerely held religious beliefs of the companies’ owners.
In holding that the HHS mandate is unlawful, we reject HHS’s argument that the owners of the companies forfeited all RFRA protection when they decided to organize their businesses as corporations rather than sole proprietorships or general partnerships. The plain terms of RFRA make it perfectly clear that Congress did not discriminate in this way against men and women who wish to run their businesses as for-profit corporations in the manner required by their religious beliefs.
Since RFRA applies in these cases, we must decide whether the challenged HHS regulations substantially burden the exercise of religion, and we hold that they do.
Ginsburg, J., dissenting
Importantly, the decisions whether to claim benefits under the plans are made not by Hobby Lobby or Conestoga, but by the covered employees and dependents, in consultation with their health care providers. Should an employee of Hobby Lobby or Conestoga share the religious beliefs of the Greens and Hahns, she is of course under no compulsion to use the contraceptives in question. But “[n]o individual decision by an employee and her physician — be it to use contraception, treat an infection, or have a hip replaced — is in any meaningful sense [her employer’s] decision or action.” Grote v. Sebelius, 708 F. 3d 850, 865 (CA7 2013) (Rovner, J., dissenting). It is doubtful that Congress, when it specified that burdens must be “substantia[l],” had in mind a linkage thus interrupted by independent decisionmakers (the woman and her health counselor) standing between the challenged government action and the religious exercise claimed to be infringed. Any decision to use contraceptives made by a woman covered under Hobby Lobby’s or Conestoga’s plan will not be propelled by the Government, it will be the woman’s autonomous choice, informed by the physician she consults.
Allowing an employer to deny coverage of family planning services for employees, strictly on the basis of the employer’s own religion, is yet one more flaw in our highly dysfunctional system of health care financing – a system that is being perpetuated by the Affordable Care Act. If we had a single payer national health program, the employer would not be involved.
As Justice Ginsburg stated in her dissent, a woman’s use of family planning services should be “the woman’s autonomous choice, informed by the physician she consults.” If religious beliefs enter into that decision, it should be the religious beliefs of the individual and not anyone else.
By Trisha Greenhalgh, Jeremy Howick, and Neal Maskrey
for the Evidence-Based Medicine Renaissance Group
BMJ, June 13, 2014
It is more than 20 years since the evidence-based medicine working group announced a “new paradigm” for teaching and practicing clinical medicine. Tradition, anecdote, and theoretical reasoning from basic sciences would be replaced by evidence from high quality randomized controlled trials and observational studies, in combination with clinical expertise and the needs and wishes of patients. …
[M]any who support evidence-based medicine in principle have argued that the movement is now facing a serious crisis. … Below we set out the problems and suggest some solutions. …
The first problem is that the evidence based “quality mark” has been misappropriated and distorted by vested interests. In particular, the drug and medical devices industries increasingly set the research agenda. …
The second aspect of evidence-based medicine’s crisis … is the sheer volume of evidence available. … [T]he number of clinical guidelines is now both unmanageable and unfathomable. …
Risk assessment using “evidence-based” scores and algorithms … now occurs on an industrial scale, with scant attention to the opportunity costs or unintended human and financial consequences. …
Well intentioned efforts to automate use of evidence through computerised decision-support systems, structured templates, and point-of-care prompts can crowd out the local, individualised, and patient initiated elements of the clinical consultation. For example, when a clinician is following a template-driven diabetes check-up, serious non-diabetes related symptoms that the patient mentions in passing may not be documented or acted on. … Templates and point-of-care prompts also contribute to the creeping managerialism and politicization of clinical practice. …
[A]s the population ages and the prevalence of chronic degenerative diseases increases, the patient with a single condition that maps unproblematically to a single evidence-based guideline is becoming a rarity. … Multimorbidity … seems to defy efforts to produce or apply objective scores, metrics, interventions, or guidelines. Increasingly, the evidence-based management of one disease … may cause or exacerbate another. …
In this paper, Trisha Greenhalgh and two British colleagues present an intelligent review of the impediments encountered by the evidence-based medicine (EBM) movement. The impediments listed by the authors can be grouped into two categories: the distortion of research by drug and device manufacturers, and the misuse of guidelines.
The authors make the expected criticism of drug and device manufacturers. But inexplicably they fail to indict the culprits behind the misuse of guidelines, namely, managed care and pay-for-performance (P4P) proponents – those who think doctors should be subjected to rewards and punishment based on how well they perform according to guidelines.
The problem is that the authors have conflated EBM with managed care, or “creeping managerialism” as they put it. (In the U.K., “managerialism” appears to be synonymous with “managed care.”) That is regrettable but understandable. EBM has been appropriated by the managed care movement to justify shifting authority from doctors and patients to bureaucrats.
Since the formation of the EBM movement in the U.K. and North America in the early 1990s, managed care advocates have enthusiastically insisted that doctors abide by the principles of EBM, all the while refusing to impose upon themselves a similar set of standards. (Is it not odd that there is no analogous movement for evidence-based health policy?)
The EBM movement has been controversial from the beginning. At first blush, that seems odd. EBM’s architects defined EBM in seemingly nondebatable, mother-and-apple-pie terms. “Evidence-based medicine is the conscientious, explicit, and judicious use of current best evidence in making decisions about the care of individual patients,” wrote David Sackett, one of the founders of the movement in a 1996 paper for BMJ.
In that paper Sackett et al. made it clear they were not motivated by a desire to enforce “cook book medicine” on behalf of insurance companies and cost cutters. “Some fear that evidence based medicine will be hijacked by purchasers and managers to cut the costs of health care,” they wrote. “This would … be a misuse of evidence-based medicine. … Doctors practising evidence-based medicine … may raise rather than lower the cost of their [patients’] care.”
But the critics turned out to be correct: EBM was quickly “hijacked” by the managed care movement. By the early 2000s, P4P had become an influential managed care fad, and P4P proponents routinely cited EBM principles to justify P4P.
The solution is not to conflate EBM with P4P. The solution is to make a clear distinction between problems caused by the violation of the rules of science and those caused by managed care.
For example, if a group promotes a guideline based upon biased research (a problem caused by the violation of the rules of science), the bias should be publicized and the guideline should be recalled or amended. But if the problem is that a scientifically sound guideline (one based on EBM principles) has been hooked to a P4P scheme, and that scheme causes doctors to ignore patients’ priorities, the appropriate response is to criticize the P4P fad, not the guideline or EBM.
A recent BMJ paper co-authored by Greenhalgh illustrates the need for this distinction. The investigators observed nurse-led encounters with British patients to examine the effect of the U.K.’s P4P program on the nurse-patient encounter. The paper provided several examples of how the nurses’ need to check boxes on a computer screen interfered with their ability to respond to their patient’s concerns. Here is an example:
A frail-looking 86-year-old man struggled into the clinic, barely able to walk. He was very deaf. He hung his walking stick over his chair and grimaced as he sat down, looking as if he was in pain. The nurse said loudly “We’ve called you in to look at you from the heart point of view. I know you have a lot of other things going on but we’ve called you in to look at your heart.” She then asked “How often do you use the angina tablet under your tongue?’ The patient replied in a way which made his most pressing concern clear: “Not much … for the simple reason that I can only crawl like a tortoise.”
Nurse: “and the simvastatin?”
Patient: “no … I stopped that. I think it’s giving me diarrhoea. These hearing aids are not very good you know. I’ve had it adjusted several times but I’m really disappointed. I had hoped for better than this.”
The nurse’s statement, “I know you have a lot of other things going on but we’ve called you in to look at your heart” performs two contrasting functions. On the one hand, she acknowledges the difficulty inherent in separating out his ‘heart’ problem from his other illnesses and wider experiences, making it legitimate for the patient to frame his heart problems in a broader context. However, in the next part of her utterance “but we’ve called you in to look at your heart”, she exhibits what discourse analysts call a ‘scale jump’. She shifts quickly from an individual, unique ‘here and now’ framing (“I know you have …”) to a more general institutional framing (“we’ve called you in …”). This shift indexes what is most relevant and implies certain limits around what may happen in this consultation.
The patient responds by juxtaposing his prime concerns with the ‘core’ concerns of this clinic. First, he rarely uses his angina tablet – but only because his mobility problems outweigh his angina. Then his concern about simvastatin moves swiftly into a complaint about his hearing aids. Neither mobility nor deafness are pursued by the nurse (or recorded on the electronic record); they are ‘unremarkable’ problems in this (heart) clinic.
The problem here is not a scientific one – the issue is not whether evidence indicates patients with coronary artery disease should take statins. The problem is that the patient’s concerns were neither heeded nor documented because the nurse’s priorities were set by her computer, not her patient. The patient’s authority to set his own agenda was undermined by the U.K.’s massive P4P scheme.
One of the more cloying labels invented by the managed care movement in the last 15 years is the phrase “patient-centered care.” The great irony of this saccharine phrase is that it is promoted by groups that have undermined patient autonomy by promoting report cards and P4P.
The most preeminent among these groups is the Institute of Medicine (see Crossing the Quality Chasm, 2001). For a quarter century the IOM has also been promoting the use of electronic medical records (EMRs) and for the last 15 years the IOM has promoted P4P.
That combination – EMRs plus P4P – deserves a name. I propose “computer-centered care.” The story about the old man with heart disease I quoted above illustrates how computer-centered care (supported by the IOM) sabotages patient autonomy (aka “patient-centered care,” something the IOM also promotes).
The story illustrates why Greenhalgh et al. should have distinguished EBM from computer-centered care. EBM is not the problem. The problem is computer-centered care.
Kip Sullivan, J.D., is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program. His writing has appeared in The New York Times, The Nation, The New England Journal of Medicine, Health Affairs, the Journal of Health Politics, Policy and Law, and the Los Angeles Times.