Physicians For a National Health Care Plan
By Ariana Eunjung Cha
The Washington Post, December 9, 2013
The nation’s new health-care law says insurers can’t turn anyone away, even people who are sick. But some companies, patient advocates say, have found a way to discourage the chronically ill from enrolling in their plans: offer drug coverage too skimpy for those with expensive conditions.
Some plans sold on the online insurance exchanges, for instance, don’t cover key medications for HIV, or they require patients to pay as much as 50 percent of the cost per prescription in co-insurance — sometimes more than $1,000 a month.
“The fear is that they are putting discriminatory plan designs into place to try to deter certain people from enrolling by not covering the medications they need, or putting policies in place that make them jump through hoops to get care,” said John Peller, vice president of policy for the AIDS Foundation of Chicago.
As the details of the benefits offered by the new health-care plans become clear, patients with cancer, multiple sclerosis, rheumatoid arthritis and autoimmune diseases also are raising concerns, said Marc Boutin, executive vice president of the National Health Council, a coalition of advocacy groups for the chronically ill.
“The easiest way [for insurers] to identify a core group of people that is going to cost you a lot of money is to look at the medicines they need and the easiest way to make your plan less appealing is to put limitations on these products,” Boutin said.
Insurers say that such accusations are unfounded, and that the drug coverage is more than adequate, with many plans exceeding the minimum levels required by the Affordable Care Act. But they acknowledge that to keep premiums low, they must restrict the use of some costly drugs if there are alternatives. And they say that when high-priced medications must be used, it’s reasonable to expect patients to pick up more of the cost.
But people who expected the new plans to provide pharmaceutical coverage comparable with that of employer-sponsored plans have been disappointed. In recent years, employers have compelled workers to pick up a growing share of the costs, especially for brand-name drugs. But insurers selling policies on the exchanges have pared their drug benefits significantly more, according to health advocates, patients and industry analysts.
Robert Zirkelbach, a spokesman for American’s Health Insurance Plans, an industry group, said the exchange plans are designed “to try to give consumers better value for their health-care dollars.”
It is no surprise that private insurers would use every devious trick to try to limit their payments for expensive drugs, including requiring the patient to pay more through higher cost sharing, or by omitting expensive drugs from their formulary altogether. From the insurers’ perspective, that’s just good business. What is really nefarious is that they are now using this to discourage patients with expensive disorders from even enrolling in their plans.
Patients with HIV/AIDS, multiple sclerosis, rheumatoid arthritis, lupus, cancer, hepatitis C, and other disorders who are on long term therapy with expensive drugs will go elsewhere for their coverage when they find that their current drug regimens would leave them with intolerable costs under these plans.
A provision of the Affordable Care Act – guaranteed issue – requires that insurers accept all applicants, no matter how expensive their care is anticipated to be. But Obamacare did not change the nature of the private insurance beast. Insurers will always find more ways to circumvent requirements such as guaranteed issue.
Insurers boast to their shareholders about innovation in insurance product design. The problem for us is that the innovations are not designed to improve access and affordability for the insured. The innovations are to improve the bottom line of the insurers.
Just think of the innovations we are already seeing – higher deductibles, more limited provider choice through narrower networks, limited benefits within each of the ten categories of required benefits, and greater financial barriers to care such as these outrageous cost sharing requirements for drugs.
The insurers are not through. When the insurance lobbyists are saying that they are trying to “give consumers better value for their health-care dollars,” they really mean keeping insurance premiums low enough to compete in the marketplace. They do that by paying as little as possible for health care, shifting ever more of the costs to patients. The sky is the limit on innovations when they are driven by greed.
We have the wrong people in charge – the insurers. We need our own public financing system that is designed to help patients get care by removing financial barriers. That’s what an improved Medicare that covered everyone would do for us.
Enough of this, “Boy, do we have a plan for you, and it’s cheap, but if you have anything wrong, study this plan carefully since you’ll find that it won’t cover what you need (and then go away kid, you bother me).”
Senator Bernie Sanders
Introduced in the Senate, December 9, 2013
Summary of S. 1782, The American Health Security Act of 2013
The American Health Security Act of 2013 (S. 1782) provides every American with affordable and comprehensive health care services through the establishment of a national American Health Security Program (the Program) that requires each participating state to set up and administer a state single payer health program. The Program provides universal health care coverage for the comprehensive services required under S. 1782 and incorporates Medicare, Medicaid, the Children’s Health Insurance Program, the Federal Employees Health Benefits Program and TRICARE (the Department of Defense health care program), but maintains health care programs under the Veterans Affairs Administration. Private health insurance sold by for-profit companies could only exist to provide supplemental coverage.
The cornerstones of the Program will be fixed, annual, and global budgets, public accountability, measures of quality based on outcomes data designed by providers and patients, a national data-collection system with uniform reporting by all providers, and a progressive financing system. It will provide universal coverage, benefits emphasizing primary and preventive care, and free choice of providers. Inpatient services, long term care, a broad range of services for mental illness and substance abuse, and care coordination services will also be covered.
A seven-member national board (the Board) appointed by the President will establish a national health budget specifying the total federal and state expenditures to be made for covered health care services. The Board will work together with similar boards in each of the fifty states and the District of Columbia to administer the Program.
A Quality Council will develop and disseminate practice guidelines based on outcomes research and will profile health care professionals’ patterns of practice to identify outliers. It will also develop standards of quality, performance measures, and medical review criteria and develop minimum competence criteria. A new Office of Primary Care and Prevention Research will be created within the Office of the Director of the National Institutes of Health (NIH).
The Program is designed to provide patient-centered care supported through adequate reimbursement for professionals, a wealth of evidence-based information, peer support, and financial incentives for better patient outcomes. The Program seeks to ensure medical decisions are made by patients and their health care providers.
The Program amends the tax code to create the American Health Security Trust Fund and appropriates to the Fund specified tax revenues, current health program receipts, and tax credits and subsidies under the Affordable Care Act. While the final structure of the financing component is still under consideration and is subject to change, the tax revenues in the draft include a new health care income tax, an employer payroll tax, a surcharge on high income individuals, and a tax on securities transactions.
The federal government would collect and distribute all funds to the states for the operation of the state programs to pay for the covered services. Budget increases would be limited to the rate of growth of the gross domestic product. Each state’s budget for administrative expenses would be capped at three percent.
Each state would have the choice to administer its own program or have the federal Board administer it. The state program could negotiate with providers and consult with its advisory boards to allocate funds. The state program could also contract with private companies to provide administrative functions, as Medicare currently does through its administrative regions. State programs could negotiate with providers to pay outpatient facilities and individual practitioners on a capitated, salaried, or other prospective basis or on a fee-for service basis according to a rate schedule. Rates would be designed to incentivize primary and preventive care while maintaining a global budget, bringing provider, patients, and all stakeholders to the table to best determine value and reimbursement.
Finally, the Program also relieves businesses from the heavy administrative burdens of providing health care coverage, puts all businesses on an even playing field in terms of healthcare coverage, and increases the competitiveness of American companies in the global marketplace. Every other industrialized nation has been able to use the power of a public authority to provide universal health care. The American Health Security Act of 2013 seeks to do just that for all Americans and their businesses.
S. 1782, The American Health Security Act of 2013 (189 pages): http://www.sanders.senate.gov/download/american-health-security-act-of-2…
Introduction of another single payer bill – S. 1782, The American Health Security Act of 2013 – is very timely. Here’s why.
Implementation of the Affordable Care Act is proceeding, and a handful of citizens are pleased to finally gain entrance to an insurance market that they’ve been locked out of. Nevertheless, dissatisfaction is widespread because of a mandate to purchase insurance products that are expensive, that leaves individuals exposed to excessive out-of-pocket costs should they need health care, and that reduces health care choices by reducing the number of providers allowed in the insurance networks. Those with employer-sponsored plans are beginning to see the same changes that reduce both financial security and choices of physicians and hospitals. People are not happy.
The rocky rollout of the exchanges created more smoke than fire, but it did cause people to think more about whether Obamacare is a wise solution to the problems with our health care financing system. On the left, there is a loud and clear call to move forward with enactment of a single payer system – an improved Medicare for all. On the right, there is a loud clamor that Obamacare is so bad that we might end up with a single payer system. By some on the right, that’s posed as a threat, but by others it seems to be a dispirited acknowledgement that Obamacare is so bad, and the proposed Republican reforms are so ineffective, that people will demand a system that works – single payer.
Because increased awareness of the flaws in Obamacare, and because of the intensification of the national dialogue on single payer, along with the recent endorsement of respected thought leaders, now is the perfect time to introduce a new single payer bill. Sen. Bernie Sanders has introduced S. 1782 in the Senate, and Rep. Jim McDermott is sponsoring the sister bill in the House.
Some might be concerned that introduction of another single payer bill into Congress when we already have Rep. John Conyers’ single payer bill – H.R. 676 – could muddle the politics by diverting attention of potential supporters to the two bills, with a contest to decide which is the better legislation. There are differences in the bills, but it is crucial to understand that they are simply two expressions of the one single payer concept. The differences that we should be discussing in public are not the differences in these two bills, but rather the differences between an effective and efficient single payer model that achieves our goals, and our current highly inefficient, dysfunctional multi-payer model that falls far so short – the flawed model that Obamacare perpetuates.
When it becomes time to move the legislation forward, the details can be worked out. Proven single payer policies would be inviolate, but the markup would be directed more to crafting appropriate legislative language rather than to sabotaging beneficial single payer principles.
While there is a lot of noise and dissatisfaction, now is the time to push the single payer message. When we have people like Colin Powell, John Podesta, Steven Nissen and Donald Berwick willing to speak up, then we know it’s time for us to get to work.
Public Meeting of the Medicare Payment Advisory Commission (Medpac)
November 7, 2013
From the transcript:
MR. [GLENN] HACKBARTH [CHAIR, MEDICARE PAYMENT ADVISORY COMMISSION]: Okay. It is time to begin….
Our first topic today is synchronizing Medicare policy across the options that Medicare beneficiaries will face in the future….[Medpac staff] Julie [Lee] is going to lead the way on this topic. Julie, it is all yours.
DR. LEE: Good morning. In recent months, the Commission has been thinking about the relationship between … ACOs, Medicare Advantage plans, and traditional fee-for-service….
In the past, the Commission has expressed a general desire to “move away from fee-for-service.” In today’s presentation, we want to clarify what you mean by “moving away” and by “synchronizing” Medicare policy across delivery systems…. [pp 3-4]
The title of this presentation says, “Synchronizing Medicare policy across delivery systems,” but we haven’t defined what we mean by “synchronizing.” Does it mean payment neutrality across delivery systems? In other words, would Medicare pay the same amount for the same beneficiary whether she gets her Medicare through fee-for-service, ACO, or MA? …. Alternatively, if not neutrality, does synchronizing mean moving toward one system over another? For instance, would Medicare policy create incentives to move away from traditional fee-for-service? If so, what would that entail? ….[pp 13-14]
DR. [MICHAEL] CHERNEW [VICE CHAIR]: My view is that we have to start with fiscal neutrality…. [p 62]
DR. CHERNEW: I’ve heard … broad consensus [from other commission members] around the notion of some type of fiscal neutrality…. [p 72]
[MEDPAC STAFF] MS. [KATELYN] SMALLEY: … CMS reported [ACO Pioneer] program savings of about 0.5 percent…. The ACOs we spoke with confirmed that the cost of running the ACO was about one to two percent….[p 164]
MR. HACKBARTH: If your ultimate goal is to try to move everybody
or a high percentage of care delivery into this new [ACO] model,
then I think … you’ve got to have a clear, explicit strategy for how you’re going to make fee-for-service increasingly uncomfortable. [p 222]
By Kip Sullivan, J.D.
The Medicare Payment Advisory Commission (Medpac) has set an impossible task for itself. Even though the traditional fee-for-service (FFS) Medicare program is indisputably less expensive than the Medicare Advantage (MA) program and probably less expensive than the new ACO pilot programs, the commission wants to move doctors and patients out of the FFS program and into the MA and ACO programs while still maintaining “fiscal neutrality,” that is, while paying the same amount per beneficiary regardless of whether the beneficiary is enrolled in the FFS, MA, or ACO program.
Medpac has been weaving the intellectual trap it now finds itself in for many years. On the one hand, Medpac has been urging Congress for decades to honor the rule of fiscal neutrality in deciding how much to pay MA plans vis a vis the FFS program and, specifically, to stop paying MA plans more per beneficiary than it pays for FFS beneficiaries. As the excerpts above indicate, there appears to be a consensus among commission members to make fiscal neutrality a fundamental criterion in deciding how much to pay ACOs as well.
On the other hand, over the last decade Medpac has taken the position that Medicare’s FFS program encourages unnecessary services and must either be shrunk (“moved away from”) or transformed from a “volume-based” program to a “value-based” program by somehow subjecting doctors to the managed care methods – the financial incentives, report cards and third-party oversight – used by MA insurers and ACOs.
The statements by commissioners Chernew and Hackbarth, quoted above, capture the tension created by Medpac’s conflicting goals. Dr. Chernew notes a consensus among commission members that Medicare should not pay more per beneficiary to the ACO program than it pays to the FFS program, but Mr. Hackbarth, a former HMO executive, argues that unless Medpac is prepared to recommend making doctors in the FFS program “uncomfortable,” that is, make them suffer financially for staying in the FFS program, doctors won’t migrate into ACOs.
To sum up Medpac’s dilemma: They want to “move away from the FFS program” and “toward” the ACO and MA programs, and they know they can’t do that unless they starve the FFS program and fatten the ACO and MA programs, but they don’t want to starve FFS and fatten the ACO and MA programs because that would violate fiscal neutrality.
To those who are unfamiliar with the groupthink that currently dominates the debate about the American health care crisis, this dilemma seems unnecessary, even nonsensical. It would seem that Medpac has it backwards – that Medpac should support “moving away from the MA and ACO programs” and “toward” the FFS program unless and until the MA and ACO programs can demonstrate they cost no more than the FFS program. If Medpac were to adopt this goal, it could also honor the fiscal neutrality rule. That is, Medpac could simply recommend fiscal neutrality and know that fiscal neutrality would bankrupt all or most MA insurers, and would probably bankrupt all or most ACOs, and thereby “move Medicare toward” the FFS program.
But Medpac gives no sign of taking that position despite decades of evidence indicating MA insurers are less efficient than FFS providers, and a small but growing body of evidence that ACOs are also less efficient than FFS providers. As the excerpt above indicates, Katelyn Smalley, a member of the Medpac staff, reported to the commission that the latest results from the Pioneer ACO program indicate ACOs raise rather than lower health care spending. Ms. Smalley said CMS reported last summer that the 32 ACOs participating in the Pioneer ACO pilot cut total spending by Medicare by half a percent but expenditures by the ACOs rose by one to two percent. Neither Ms. Smalley nor any commission member pointed out the obvious: While Medicare may have saved a half percent, the health care system as a whole suffered an increase in total spending on the order of half to one-and-a-half percent.
Medpac appears to suffer from a split personality. One personality has the integrity to follow the evidence wherever it leads. It is this personality which constantly calls on Congress to stop overpaying MA plans. But Medpac’s other personality suffers from two delusions that afflict much of the US health policy establishment: (1)the delusion that volume, not price and the administrative waste which contributes to high prices, is the main cause of the US health care crisis; and (2) the delusion that the managed care tools pioneered by HMOs will someday demonstrate their ability to reduce volume and thereby lower medical costs more than the managed care tools themselves cost.
Medpac is an influential voice in the US health policy wars. We must hope that Medpac will soon recognize that the evidence does not support an endless experiment with managed care and that what America really needs is to move Medicare “toward” a true single-payer system, not just for the elderly and the disabled but for all Americans.
By Valerie Bauman
Puget Sound Business Journal, December 5, 2013
Former Secretary of State and longtime Republican Colin Powell is calling for a universal health care solution in the U.S.
“We are a wealthy enough country with the capacity to make sure that every one of our fellow citizens has access to quality health care,” he said Thursday at a Seattle fundraiser for prostate cancer. “(Let’s show) the rest of the world what our democratic system is all about and how we take care of all of our citizens.”
The retired four-star general, a prostate cancer survivor, spoke at the Prostate Cancer Survivors Celebration Breakfast, organized by UW Medicine and the Fred Hutchinson Cancer Research Center.
Powell took the opportunity to share some of his own experiences and to publicly call for a health care solution similar to those in Canada, Japan and other countries that have a universal, single-payer system.
“I am not an expert in health care, or Obamacare, or the Affordable Care Act, or however you choose to describe it, but I do know this: I have benefited from that kind of universal health care in my 55 years of public life,” Powell said. “And I don’t see why we can’t do what Europe is doing, what Canada is doing, what Korea is doing, what all these other places are doing.”
Colin Powell’s is a very welcome voice in the groundswell of support for single payer. As people better understand single payer, that support will grow until we reach a threshold where even Congress will join in.
By Todd Neale
MedPage Today, December 5, 2013
What’s the biggest barrier to practicing medicine today? That’s just the first of 10 questions the MedPage Today staff is asking leading clinicians and researchers to get their personal views on their chosen profession. In this series we share their uncensored responses. Here, answers from Steven Nissen, MD, of the Cleveland Clinic.
There, Nissen is chair of the Robert and Suzanne Tomsich Department of Cardiovascular Medicine. A past president of the American College of Cardiology and former chair of the FDA’s Cardiovascular Renal Drugs Advisory Committee, he has had a leading role in highlighting potential risks associated with certain drugs, including rofecoxib (Vioxx) and rosiglitazone (Avandia). In 2007, Nissen was included on Time Magazine’s list of “100 men and women whose power, talent, or moral example is transforming the world.”
1. What’s the biggest barrier to your practicing medicine today?
The lack of a single-payer system. We waste enormous amounts of time and energy dealing with insurance companies, whose major goal is figuring out how not to cover patients.
A couple hundred thousand physicians are closet single payer supporters. If only we could get more of them to out themselves, as Cleveland Clinic’s Steven Nissen has done here, maybe the public would understand that we really could have an improved Medicare for everyone since so many doctors agree.
Center for Studying Health System Change, November 21, 2013
From the conference transcript:
Paul Ginsburg (President, Center for Studying Health System Change): Let me move on to network innovations. And one thing that came up a little bit in our first session was narrow- or limited-network products. And let me start by asking about how are plans building limited networks? I mean, in a sense, what are they looking for as far as which providers would they like to have? How sophisticated are they in assessing the value of different providers?
Carl McDonald (Director and Senior Analyst, Citi Investment Services): I can go quick: Price. I’m done.
Paul Ginsburg: Okay. Actually, how sophisticated is the price?
Carl McDonald: Sorry? “How sophisticated…”
Paul Ginsburg: How sophisticated is the price? Is it price per episode? Is it simply, you know, unit prices?
Carl McDonald: Yes, I mean, generally it’s going to be the unit price, or price per episode.
Matthew Borsch (Vice President, Goldman Sachs): Let me just offer one thing that’s happening. This is not quite to the tiered-network strategy, or narrow-network strategy, per se, but it’s topical right now in that you’ve seen some of the health plans in Medicare Advantage taking some pretty strong steps to narrow their networks. On the physician side, it’s been the most notable. In fact, there was a, there’s been some communication about that. There was a letter that was posted yesterday from the health insurance industry to CMS, stressing how important it was for the plans to be able to make these network exclusions. But obviously, for doctors who’ve been, you know, contracted in Medicare Advantage to suddenly be, to be terminated, where, in most cases, they continue to participate on the commercial side, has created some real blowback.
Paul Ginsburg: I had noticed that, and was wondering, it sounded to me that this was different way that a plan pursues a more limited network.
Matthew Borsch: It is.
Paul Ginsburg: It seems as though, and I saw The Wall Street Journal article a week or two ago about United, and it almost seemed as though they were trying to get their star quality scores up by culling out the physicians who contribute to low scores. And is that what it’s about, Matt?
Matthew Borsch: Well, the truth is we don’t really know.
Paul Ginsburg: Yeah.
Matthew Borsch: You know, that, that is, from our perspective, somewhat of a black box, in terms of the decision making there. There are multiple criteria. There’s how each physician group feeds into the star quality scores. There are utilization, efficiency metrics that they can run on a broad, you know, larger companies can run on a broad set of claims data.
There’s also, frankly, the consideration of which Medicare Advantage members are assigned to those physician groups. And again, I’m not pointing to any one of these three as a factor but there you could possibly have some effort to change the risk distribution of the underlying membership.
Sheryl Skolnick (Managing Director & Co-Head of Research, CRT Capital Group): So, just to put this in context, Medicare Advantage rates are coming down very significantly next year. They’re actually going down next year from United’s perspective, what? about 3 1/2 percent or so.
And when your rates go down, some of your plans, and some of your providers in those plans will have to be terminated, because you need to essentially shrink to a profitable size, or a sustainable size. So that’s part of what you’re seeing, is instead of the proactive “We’re introducing a new benefit plan, we’re going to build a narrow network,” now you’re seeing the reactive effect of United’s always been a very inclusive and broad based network. They’ve had some issues of adverse publicity in St. Louis and some other places when they’ve tried to narrow the network based on quality. There is a lot less push back on that sort of thing now.
But they’re getting some push back on this one because in Connecticut alone, for example, it’s 2,000 providers. That’s a lot in Connecticut. It’s not that big a state.
So, what you’re seeing is, first, the unwinding. Second, I agree with you completely, I think it is absolutely a strategy to get their star scores up, because they’re a major embarrassment. And they’re clearly, from their last conference calls, a focus of the company strategy for Medicare Advantage for the next couple of years, is to get the star scores up.
But I also, I agree with Matt, that there are many other factors at work, most notably that they need to get all of these markets that they’ve expanded rather broadly to get rid of the marginal plan, to get rid of the marginal provider and, in some cases, the high cost member.
Robert Berenson (Institute Fellow, The Urban Institute): But I think it’s important to point to a major difference between the Medicare managed care situation and commercial, which is that in Medicare, out of network services are paid at Medicare rates, so that changes the whole leverage situation. And it’s the reason, I think, that hospitals basically are in network at Medicare rates, or near to Medicare rates, because they don’t have the leverage.
Balance billing is a whole different situation. I’m actually surprised that MA plans weren’t more aggressive in the past, because they have the protection for the out of network care. And others, there won’t be such push back from the beneficiaries hit with the complete balance bill, if their physician is not in network, or something like that.
Paul Ginsburg: So, getting into the employer based, the commercial space, you know, it looks like there’s been substantial growth in small group plans to have narrow networks. And, of course, so many of the products of the exchanges are narrow networks.
And, any comments about that strategy, how it’s going, is there going to be, is there going to be push back by the public?
Sheryl Skolnick: For a long time the hospitals were telling us that while Wall Street was busy talking about the narrowing of networks, they weren’t actually seeing it.
It was only when the exchange contracts came up that, even in the beginning, there was some concern that some of the contracts that were being signed weren’t narrow-network contracts, in the very beginning of the contracting. Towards the end of the contracting for reform these are commercial, by the way, these are fundamentally commercial contracts. So, by the end of the contracting, though, almost all of the contracts being signed were for some sort of a narrowed network.
So, I think there was a very quick evolution in the thought process of the plans in negotiating these things, where they very quickly realized: This is one of the very few levers we have, we better pull it.
Paul Ginsburg: Yes. And, to what extent, as they form these networks, to what extent are the savings going to come from keeping high cost providers out, or getting discounts from providers?
Sheryl Skolnick: Yes. Yes.
Paul Ginsburg: Which is the dominant piece, or are they both very important.
Sheryl Skolnick: Very important.
Paul Ginsburg: Okay. That’s the answer.
If insurers were marketing products designed primarily to get their clients the health care that they need, you would think that they would do their best to make sure that they cover essentially all of the physicians that their clients would select. But they don’t, and they are narrowing even further their lists of contracted providers. Why? Wall Street understands. It’s not about quality or access. It’s about the money.
By Evan Soltas
Bloomberg View, December 3, 2013
For an industry that’s supposed to be burdened by the launch of Obamacare, the health-care business is doing pretty well. Stocks of health-care companies are up almost 40 percent this year, the strongest performance of any sector in the S&P 500.
How about the medical-technology manufacturers that were slapped with an excise tax? Doing just fine. The hospital chains that face lower reimbursement rates from Medicare patients? They’re doing well, too.
Health care is a business, and businesses are supposed to make money. Still, it’s a bit concerning that health-care investors are so upbeat just as President Barack Obama’s health-reform law goes into effect.
The law will give the insurance industry millions of new customers and subsidizes its products. It brings millions of others into the market for health-care services through its Medicaid expansion. If health-care investors are throwing a party, it might be because the rest of us are paying for it.
To pass the Affordable Care Act, President Obama was convinced that he had to gain the support of the health financing and health care industries. He did. Look who’s profiting.
Who loses? Those who will have to pay much more out of pocket for health care because of higher deductibles. Those who lose choice of their physicians and hospitals because of narrower provider networks, and end up losing catastrophic protection because of care inadvertently received out of network. Those who will be contributing through taxes or insurance premiums far more than they should have to because of the profoundly wasteful administrative excesses of our dysfunctional financing system. That’s most of us. The improvements in insurance plans for the few – guaranteed issue and community rating – do not begin to offset the deterioration that is beginning to take place in the employer-sponsored plans where most of us receive our health care coverage.
There are a few of us who will gain, some by being enrolled in Medicaid and some by receiving subsidies for exchange plans, but the numbers of us who will lose is far greater than the numbers who will win.
We could have had reform in which we would all be winners – an improved Medicare that covers everyone. Even those who will gain through Medicaid or subsidies would gain much more under a single payer system. But no, political feasibility dictated that the vested stakeholders of the medical-industrial complex be the ones who get the money, while the rest of us pay more and get less.
By Sally Satel
Bloomberg View, December 1, 2013
Locating a marrow donor is often a needle-in-a-haystack affair. The odds that two random individuals will have the same tissue type are less than 1 in 10,000, and the chances are much lower for blacks.
Allowing compensation for donations could enlarge the pool of potential donors and increase the likelihood that compatible donors will follow through. So the ruling by a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit was promising news for the 12,000 people with cancer and blood diseases currently looking for a marrow donor.
Shaka Mitchell, a lawyer in Nashville, Tennessee, and co-founder of the nonprofit MoreMarrowDonors.org… invited a team of economists to evaluate the effects of the ruling on people’s willingness to join a registry and to donate when they are found to be a match. The researchers were to specifically assess whether cash payments would be any more or less persuasive than noncash rewards or charitable donations.
Now comes the bad news. On Oct. 2, the U.S. Department of Health and Human Services proposed a new rule that would overturn the Ninth Circuit’s decision. The government proposes designating a specific form of bone marrow — circulating bone-marrow stem cells derived from blood — as a kind of donation that, under the 1984 National Organ Transplant Act, cannot be compensated.
The strongest opposition to compensation comes from the National Marrow Donor Program, the Minneapolis-based nonprofit that maintains the nation’s largest donor registry. Michael Boo, the program’s chief strategy officer, says of reimbursement, “Is that what we want people to be motivated by?”
HHS is presumably under pressure from the National Marrow Donor Program. The department does not otherwise explain its proposed rule except to claim that compensation runs afoul of the transplant act’s “intent to ban commodification of human stem cells” and to “curb opportunities for coercion and exploitation, encourage altruistic donation and decrease the likelihood of disease transmission.”
Each year, 2,000 to 3,000 Americans in need of marrow transplants die waiting for a match. Altruism is a virtue, but clearly it is not a dependable motive for marrow donation.
(Sally Satel, is a psychiatrist and a resident scholar at the American Enterprise Institute.)
Imagine trading bone marrow in the commodities market. It could be very lucrative. In no time at all, the prices could be driven over what we are now paying for the newer cancer drugs – $100,000 and more – maybe much more. And don’t stop at bone marrow. Think of the trade that could be generated in other human organs.
Is there no end to the commodification of health care? How did we end up here? Is the compulsion to look for market solutions so great that we abandon all sense of humanity?
People who think like this – do they have a soul?
By Louise Radnofsky
The Wall Street Journal, November 26, 2013
Physicians groups told Obama administration officials Tuesday that they are worried that new insurance plans under the Affordable Care Act offer only limited networks of providers and low reimbursement rates for doctors, and that could make it difficult for millions of those enrolled to actually get health care.
As the Journal has reported, some health plans don’t include big brand-name health providers in their networks and are slashing how much they’ll pay medical practices for treating the newly covered.
Representatives from the major physician lobbying groups raised these issues Tuesday in a White House meeting with health officials including Chris Jennings and Jeanne Lambrew of the White House, and Chiquita Brooks-LaSure of the Centers for Medicare & Medicaid Services.
“Some of the things were not a surprise to them… they’re acutely aware,” Shawn Martin, a top lobbyist for the American Academy of Family Physicians, said after the noon meeting.
The American Medical Association, the American Academy of Family Physicians, American Academy of Pediatrics, and American College of Physicians, the American Osteopathic Association, the American Medical Group Association and the American Association of Nurse Practitioners were among the groups present, participants said.
The new health plans to be offered in the exchanges are avoiding excessive premium increases by using narrow networks of physicians and by lowering payment rates for health services. The leaders of our nation’s leading organizations of health care professionals are concerned enough about what this might do to patient access that they met with Obama administration officials at the White House.
The administration officials were already “acutely aware” of these problems. Of course, they were. They result from fundamental design flaws in the financing model of the Affordable Care Act. The model was designed by and for the private insurance industry.
It is likely that members of these professional organizations are not only concerned about the patients, narrow networks and lower payments have a direct effect on their livelihoods. In a well designed system, patients must always come first, but the professionals taking care of the patients should be content as well. Grumpy doctors and nurses detract from an optimal patient care environment.
There will be more discontentment as the Obamacare model of high-deductibles, narrow networks, and payment restrictions extend to employer-sponsored private plans. These trends will no doubt expand with the proliferation of private insurance exchanges catering to employers – exchanges outside of the government-operated Obamacare exchanges. Even the private Medicare Advantage plans are being modified in response to their overpayments being pared back. UnitedHealth, the nation’s largest private insurer, has notified thousands of physicians that they are being dropped from their Medicare Advantage network.
Do we really want to keep headed in this direction?
The traditional Medicare program does not use narrow networks. Patients have their choice of their health care professionals. Medicare payment rates are higher than the rates expected to be offered by most of the exchange plans. It would not take much to improve Medicare, and then it would be an ideal program for covering everyone.
You can bet that the representatives of these professional groups didn’t ask for single payer to be put on the table. Too bad.
OECD, November 21, 2013Editorial: From expenditure growth to productivity growth in the health sector
By Stefano Scarpetta, Director for Employment, Labour and Social Affairs
Almost six years since the start of the global financial and economic crisis, economic conditions vary widely across OECD countries, with the United States, Canada and Japan on a path to recovery, while the economic prospects of many European countries remain subdued. After a period in which, as part of the stimulus packages, greater resources were channelled to welfare and social protection programmes, the shift towards restoring sound fiscal conditions has often implied substantial cuts in public spending. Like other government programmes, health care has been the target of spending cuts in many OECD countries.
The crisis has had a profound impact on the lives of citizens across the world, and has tested the resilience of many families as they see their wealth and incomes decline. Millions of people have joined the ranks of the unemployed and millions more are experiencing financial stress. The combined effects of the crisis with the associated recent expenditure cuts as well as health care reforms have led to uncertainty about the impact on the health and well-being of the population. The most recent OECD health statistics, presented in this edition of Health at a Glance, provide a comprehensive picture of how health systems have evolved during the crisis and the challenges which lie ahead.
Growth in health spending has slowed markedly in almost all OECD countries since 2008. After years of continuous growth of over 4% per annum, average health spending across the OECD grew at only 0.2% between 2009 and 2011. Total health spending fell in 11 out of the 34 OECD countries between 2009 and 2011, compared to pre-crisis levels. Not surprisingly, the countries hit hardest by the economic crisis have witnessed the biggest cuts in health expenditure growth.
In order to limit or reduce public health expenditures, countries have worked to lower the prices paid for publicly financed health care, including cutting the price of medical goods, particularly pharmaceuticals. Governments have targeted hospital spending through budgetary restrictions and cuts to wages. Several countries including Greece, Ireland, Iceland and Estonia have reduced nursing wages in response to the crisis as well as those of salaried GPs. Expenditure on prevention and public health has also been cut since 2009. Further, in several OECD countries, patients are now expected to assume a greater share of health costs.
There is evidence that more people in countries such as Greece and Italy are foregoing medical care due to financial constraints, reflecting reduced household incomes, but also perhaps rising out-of-pocket costs. Low-income groups are the worst affected, although they are likely to have the highest health care needs, and they may be foregoing necessary care such as medicines or routine medical check-ups for chronic conditions. This may have long-term health and economic consequences for the most vulnerable groups in society.
Many of the reforms implemented since the start of the crisis have had an immediate impact on public expenditure. Some have been controversial, with considerable unrest and political pressure from industry groups, and some may also have had undesirable consequences for access, outcomes and equity. For example, greater out-of-pocket costs are likely to reduce health care use among those in highest need, leading to greater inequity and inefficiency over the longer term.
In the new, more constrained, fiscal climate, the challenge for health care policy makers is to preserve quality health care coverage for the whole population while converting a system built on notions of unconstrained growth to one that is based on greater productivity and fiscal sustainability. This challenge is not new. Countries have pursued the twin objectives of efficiency and equity in health for decades. The economic crisis means that health care policy makers must swiftly and convincingly adopt a health care productivity agenda.
Health at a Glance 2013 – OECD Indicators (213 pages): http://www.oecd.org/els/health-systems/Health-at-a-Glance-2013.pdf
The 2013 edition of OECD’s “Health at a Glance,” in text, graphs and tables, provides updates of international comparisons of indicators of health and health systems. The graphs are likely familiar to many of you. This report is worth downloading just to have the updates.
The editorial discusses the stresses on health systems resulting from the Great Recession, and the government responses to those stresses. A trend that should alarm us all is that “patients are now expected to assume a greater share of health costs.” Further, more people are forgoing medical care due to financial constraints. There is concern that the responses may be having undesirable consequences for access, outcomes and equity.
The editorialist emphasizes that nations should pursue the objectives of efficiency and equity by adopting a new health care productivity agenda. Improving productivity is fine, but for the United States, it is imperative that we immediately adopt a financing infrastructure that ensures equity. All other OECD nations are light years ahead of us on that.
The Real News, October 1, 2013
JESSICA DESVARIEUX, TRNN PRODUCER: With us to discuss the Affordable Care Act are Dean Baker and Dr. Margaret Flowers. Dr. Flowers joins us in-studio. She’s a pediatrician in the Baltimore area and the Maryland chapter of Physicians for a National Health Program cochair, and she’s the secretary of health for the Green Shadow Cabinet… And joining us from Washington, D.C., is Dean Baker. He’s the codirector of the Center for Economic and Policy Research.
DEAN BAKER, CODIRECTOR, CEPR: There’s lots of grounds for criticizing the ACA. But this is a huge step forward. We’re going to have tens of millions of people that will be able to get insurance who haven’t had it previously. And, again, for the 100-plus million who are now insured, they will actually have real insurance, because if they do get sick, lose their job, they’ll still in most cases be able to get affordable insurance through the exchanges. So I have to see that as a big step forward.
DESVARIEUX: Okay. Let’s have Dr. Flowers respond to that. Do you see that as a step forward?
DR. MARGARET FLOWERS, COCHAIR, PNHP: No, I actually see the Affordable Care Act as a step backwards. It takes us farther in the direction of privatized health care. And the way that we really need to go is towards greater–a publicly financed universal health care system. That’s the most efficient and most equitable way to provide health care…
BAKER: Well, it’d be great to have, you know, universal Medicare, but that wasn’t about to be coming. So basically our choice is having health care provided through private insurers or not having it at all. And the fact is, we have 100-plus million people who get most of their health care through private insurers now. And yeah, they do lots of bad things, but the alternative is not getting it all. So I can’t somehow tell people they’re better off not getting health care than having it provided through private insurers, as much as I may not like them.
DESVARIEUX: But is that true? Is that really the alternative? We only have two choices here?
FLOWERS: No. And, actually, during the health reform debate, a point that we were making, especially towards the end when it looked like the Affordable Care Act was going to go through, was don’t give hundreds of millions of dollars in subsidies to private insurance companies where they’re going to hang on to a lot of that and still deny people care. We should be giving that to our public programs to expand them more and really shift us in the direction we need to go, towards a greater publicly financed health care system.
Part of the reason that the Affordable Care Act went through is that it wasn’t challenged by people on the left, by people that supported single-payer. People were told, well, this is all that we can get, and so they accepted that.
By Nancy Folbre
The New York Times, November 25, 2013
Rush Limbaugh’s take on the disastrous rollout of the Affordable Care Act could, ironically, warm the hearts of those at the other end of the political spectrum. He contends that President Obama knew all along that the Affordable Care Act would crash and burn, but pushed it through so that the conflagration would clear the way for single-payer health insurance.
Yet one of the greatest advantages of a single-payer system — its relatively low administrative costs — has been thrown into sharp relief by problems registering with the new health exchanges.
In theory, competition and choice should increase efficiency. In practice, health insurance companies are able to take advantage of the complexity and uncertainty surrounding health care choices to make comparison shopping very difficult.
The process of negotiating relationships with new health care providers because old ones are “out of network” is physically and emotionally exhausting. Insurance companies benefit from promoting policies that are difficult to understand and make consumers fearful of any change in their coverage.
David Himmelstein and Steffie Woolhandler, co-founders of Physicians for a National Health Program, regularly assert that elimination of the huge paperwork and overhead imposed by private insurance companies could save enough to cover the estimated 31 million of Americans who will remain uninsured under the Affordable Care Act.
My fellow Economix blogger Uwe E. Reinhardt, expanding on this theme, notes that the Institute of Medicine of the National Academy of Sciences recently estimated excess administrative costs of $191 billion, again more than enough to attain truly universal health care coverage.
Most such estimates are limited to the monetary costs incurred by insurers, doctors and hospitals and don’t include the value of the time that health care consumers must devote to managing a torrent of inscrutable paperwork that can become truly frightening for the critically ill.
A single-payer insurance system, whether based on an extension of Medicare or on the Canadian model, promises many profoundly important benefits. Right off the mark, it promises simplicity.
No wonder conservative pundits are afraid of it.
(Nancy Folbre is professor emerita of economics at the University of Massachusetts, Amherst.)
Experts across the political spectrum have long understood how much more effective a single payer system would be in achieving our goals of universality, comprehensiveness and affordability than is our current financing infrastructure that was left in place by the Affordable Care Act. When this fact was so obvious at the time reform was being crafted, even to President Obama, then why did we reject single payer in favor of our highly flawed system?
It was the progressive community, of all people, that took it off of the table. The words of Dean Baker echo the prevailing view of many progressives at that time: “Well, it’d be great to have, you know, universal Medicare, but that wasn’t about to be coming. So basically our choice is having health care provided through private insurers or not having it at all.”
So the view was, single payer is the system that will work for us, so let’s choose between expanding our current dysfunctional system of private insurers or let’s have nothing at all. Talk about a non sequitur!
Two developments stem from this unwise choice in reform, both related to how unsatisfactory the policies are – costly but all too ineffective. On the one hand, the conservatives opposed to any effective reform are telling us that things are in such a mess that we will have to resort to single payer to bail us out. On the other hand, many progressives, like Professor Nancy Folbre, are now motivated to speak up in favor of single payer since the Affordable Care Act clearly is going to fall intolerably short of our goals. Most moderates and even some conservatives understand the imperative of single payer.
The point is that now is the time to talk about single payer, with a loud and clear voice. As the deficiencies in the Affordable Care Act become ever more obvious to the public at large, they need to know that there is a way out. Let’s hear it, loud and clear now: We should have gone for single payer… and we still can!
By Trudy Lieberman
Columbia Journalism Review, October 31, 2013
I have a question for all the reporters busy asking whether Obama misled Americans with his oft-repeated line that “if you like your health plan, you can keep it”: Where have you been? You should have challenged this claim well before now. You should have been reporting that some people in the individual insurance market might receive cancellation letters … well before it started happening to them….
By Richard Kirsch
Huffington Post, November 1, 2013
There are good reasons why President Obama’s leading message on health care during the 2008 campaign … was “if you like your health insurance, you can keep it.” That message was created to overcome the fear-mongering that had blocked legislative efforts to make health care a government-guaranteed right in the United States for a century….
As one of the people who engaged early on in building the effort that led to the passage of the Affordable Care Act, I am keenly aware of this history. …
As we predicted, the opponents of reform used fear-mongering … to try to kill the Affordable Care Act….
The opponents of reform have used reckless, baseless charges to try to kill reform. I’m glad that President Obama used a slight exaggeration to finally provide secure health coverage for all Americans.
As Trudy Lieberman noted in her article for Columbia Journalism Review, and as some noted as early as 2008 (1), it has been known for a long time that millions of Americans would not be able to keep their health insurance under the Affordable Care Act. Yet President Obama and many other proponents of the ACA claimed this would not happen. They said people who liked their health insurance could keep it.
If Obama et al. had made this claim once or twice in the heat of a debate, few would be questioning their integrity now. But they made this claim repeatedly, both before and after the ACA was enacted. The chickens are coming home to roost. Obama and other Democrats are taking a terrible beating for having made a promise they knew or should have known they couldn’t keep.
What explains such irrational behavior?
In his essay for the Huffington Post, Richard Kirsch takes a stab at an answer. Kirsch is in an ideal position to give us one. He was present at the creation of the marketing strategy that was supposed to neutralize the inevitable attacks on the ACA from the right. Kirsch was the chairman of the “health policy refinement committee” of the Herndon Alliance, a coalition formed in 2005 to promote whatever it was the Democrats decided to put forward in the name of “health care reform,” and he later became the campaign director for Health Care for America Now, the leading organization in the fight to enact whatever it was the Democrats decided they could get through Congress.
Kirsch tells us the mantra was invented to “overcome … fear-mongering” that he and the entire rest of the world predicted conservatives would use to stop the ACA. But this argument merely begs another question: Why would the public be reassured by an argument that was so easily rebutted, at first by commonsense and eventually by reality as well? Why wasn’t it obvious to Kirsch et al. that inaccurate statements would come back to haunt the makers of those statements?
The answer can be found in the “framing” and “messaging” craze that erupted late in 2004 after John Kerry lost to George Bush.(2) George Lakoff and other “framing” gurus claimed that conservatives were winning elections liberals should have won because conservatives were “messaging” better than liberals. More specifically, the argument was that voters respond to emotions, not “facts,” and if voters and conservatives don’t care about facts, liberals shouldn’t either. Instead, liberals should convene focus groups and conduct polls to determine what buzzwords and claims “resonate” with voters’ emotions – their “frames” – and use those buzzwords and make those claims.
In this comment I don’t propose to take sides on whether Lakoff and other “framing” proponents were promoting science or pseudoscience. I do argue that “framing” theology was easily interpreted as an excuse to say anything regardless of the evidence, regardless of whether a proposal or legislation actually existed, and, after legislation had been introduced, regardless of the actual language in that legislation. I argue that that’s what happened to Kirsch, the Herndon Alliance, and other advocates of the ACA.
Consider this memo published by the Herndon Alliance and others in June 2008.(3) The memo urged advocates of “health care reform” to claim that “reform” (“reform” was not explained) would:
• guarantee “choice among plans,”
• guarantee that Americans could “keep our current doctor,”
• “make insurance companies compete to keep costs down and quality up,”
• stop insurance companies from “overriding doctors’ decisions about what their patients need,”
• keep “deductibles low,” and
• save “billions by cutting administrative waste and moving to electronic medical records.”
The memo made no attempt to document the truthfulness of these claims. That is not surprising, because not one of these claims was accurate then, and not one is accurate now.
So how did the Herndon Alliance et al. justify urging advocates to make these claims? They cited “framing” theology. They said these claims had been “market-tested” on focus groups and “online dial groups” of “swing voters” to determine what “frames” lurked in the minds of the participants and what “messages” were consistent with those “frames.” In short, the Herndon Alliance et al. convinced themselves that misrepresentation is moral and effective if the misrepresentation has been shown to elicit positive responses in focus groups and surveys.
Several factors contributed to the widespread acceptance of this flimsy rationale for inaccuracy among the leaders of the pro-ACA movement. One was the failure of the media to question the buzzwords and claims concocted by the Herndon Alliance and promoted by HCAN and eventually Obama and members of Congress. Trudy Lieberman criticized the media for this failure even before the ACA was enacted. In a 2009 article she called the Herndon Alliance’s buzzwords “hollow as straw” and “Orwellian” and recommended that reporters “avoid quoting someone who uses those words unless they have something more significant to say.”(4)
But the media did not do that, and the Herndon Alliance’s claims quickly mutated into conventional groupthink among leaders of the pro-ACA movement. To those leaders and members of Congress who could have warned Democrats not to repeat “if you like your health insurance etc.” and now lament the fallout from the constant repetition of that canard, I repeat Ms. Lieberman’s question: Where have you been?
By Jason Furman
The White House, November 20, 2013
The Affordable Care Act (ACA) was passed against a backdrop of decades of rapid growth in health care spending, and one of the ACA’s key goals was to root out serious inefficiencies in the United States health care system that increase costs and compromise patients’ quality of care. Recent data show that health care spending and prices are growing at their slowest rates in decades; it appears that something has changed for the better. While this marked slowdown likely has many causes, and these causes are not yet fully understood, the available evidence suggests that the ACA is contributing to these trends, and, moreover, is helping to improve quality of care for patients. Today the White House Council of Economic Advisers released a new report analyzing recent trends in health costs, the forces driving those trends, and their likely economic benefits.
Executive Office of the President of the United States, November 2013
While final conclusions about the causes of the recent slow growth and its persistence await additional data and analysis, some conclusions are possible with the data currently available.
The Role of the 2007-2009 Recession
Some have identified the 2007-2009 recession and its aftermath as a potential driver of system- wide changes.
However, the theory that the slowdown in the growth of health care costs is simply a result of the recession is inconsistent with several pieces of evidence.
* The slowdown has persisted well beyond the end of the recession.
* The slowdown appears in Medicare, which is more insulated from the business cycle, not just the private sector.
* The slowdown appears in health care prices in addition to health spending.
Other factors driving slower growth in health spending unrelated to the ACA
* Increased cost-sharing may be reducing utilization in private plans
* Many blockbuster drugs are coming off patent
The Role of the Affordable Care Act
* Reductions in Medicare overpayments to providers and health plans
* Deployment of new payment models to increase efficiency and improve quality of care
* Penalties for hospitals with high readmission rates
* Accountable Care Organizations
The evidence is clear that recent trends in health care spending and price growth reflect, at least in part, ongoing structural changes in the health care sector. The slowdown may be raising employment today, and, if continued, will substantially raise living standards in the years ahead. The evidence also suggests that the ACA is already contributing to lower spending and price growth and that these effects will grow in the years ahead, bringing lower cost, higher quality care to Medicare and Medicaid beneficiaries and to the health system as a whole.
Full report (28 pages): http://www.whitehouse.gov/sites/default/files/docs/healthcostreport_fina…Drew Altman, Obamacare’s ref
By Patt Morrison
Los Angeles Times, November 19, 2013
Drew Altman, President and CEO of the Henry J. Kaiser Family Foundation:
“We are in a historic slowdown in healthcare spending right now, mostly due to the weak economy but also due to changes in health delivery — more cost-sharing, higher deductibles, more out of pocket. Nobody knows when healthcare spending will shoot up again and by how much.”
By Jason Furman
Democracy, Summer 2006
In the final diagnosis, the tax code is literally making America sick – squandering taxpayer dollars on a health care subsidy system that is failing to provide quality health care to all Americans.
A single-payer national health care system would, by definition, remedy the problem, but it is unlikely to happen any time soon, if ever at all. Beyond the political limitations, it is also an open question whether a single-payer system would be the most efficient way to provide quality health care for all Americans. In the meantime, reforming health care will come down to a set of incremental changes that build on the current system.
The White House has released a new report from the Council of Economic Advisers, chaired by Jason Furman, celebrating the fact that health care spending has finally come under control, and it is due primarily to implementation of the Affordable Care Act, or so it seems that is what they want us to believe.
Although there are multiple factors why health care spending has slowed, the two most important are those mentioned by Kaiser Foundation’s Drew Altman: the weak economy that persists since the Great Recession, and the expansion of health insurance products that place more of the burden of paying for health care on patients themselves.
Prices and volume determine the level of spending. The continuing weakness in the economy has created a reluctance to increase prices, and the cost sharing barriers such as high-deductibles have decreased the volume of services accessed. Spending slows.
Furman tends to minimize these two important factors as he touts the great benefits of the Affordable Care Act. He cites the reduction in Medicare overpayments while remaining silent on the fact that HHS used two devious schemes to offset some of those reductions (overpaying quality bonuses, and using an accounting gimmick that will provide a 3.3% increase in Medicare Advantage payments, replacing a scheduled 2.2% decrease – a 5.5% net gain). He cites new payment models such as value-based purchasing, the shared savings program, innovation experimentation, and outcomes research, all of which are largely experimental and could not have had any significant impact to this date on slowing spending. He cites the penalties for hospital readmissions, but Medicare readmissions have been reduced from 19% to 18%, a very small percentage of overall Medicare admissions and hardly an explanation for any significant reduction in the rate of spending increases (not to mention that he fudges the numbers to predict another undocumented 0.5% decrease). And, finally, he cites the great promise of spending reduction – the accountable care organizations. Though he touts their success, only 13 of the 32 Pioneer ACOs saved enough money to receive shared savings from CMS. ACOs simply do not explain the slowing of spending on health care.
We need to understand that Jason Furman is an avowed incrementalist who, in 2006, was dismissive of single payer reform. As such, he has become a great “company man” for President Obama. Rather than being dismissive of single payer, we can be dismissive of Jason Furman. If we really want spending control, we need to adopt the proven model of a single payer national health program – an Improved Medicare for All.
So should we nevertheless be celebrating the slowdown in health care spending? Let’s look at the score sheet:
Protracted weak economy – No celebration
Impaired access to care through cost barriers - No celebration
Ineffective policies of the Affordable Care Act – No celebration
By Roni Caryn Rabin
Kaiser Health News, November 19, 2013
Many doctors are disturbed they will be paid less — often a lot less — to care for the millions of patients projected to buy coverage through the health law’s new insurance marketplaces.
Some have complained to medical associations, including those in New York, California, Connecticut, Texas and Georgia, saying the discounted rates could lead to a two-tiered system in which fewer doctors participate, potentially making it harder for consumers to get the care they need.
“As it is, there is a shortage of primary care physicians in the country, and they don’t have enough time to see all the patients who are calling them,” said Peter Cunningham, a senior fellow at the nonpartisan Center for Studying Health System Change in Washington D.C.
If providers are paid less, “are [enrollees] going to have difficulty getting physicians to accept them as patients?”
Physicians are uncomfortable discussing their rates because of antitrust laws, and insurers say the information is proprietary. But information cobbled together from interviews suggests that if the Medicare pays $90 for an office visit of a complex nature, and a commercial plan pays $100 or more, some exchange plans are offering $60 to $70.
Insurance officials acknowledge they have reduced rates in some plans, saying they are under enormous pressure to keep premiums affordable. They say physicians will make up for the lower pay by seeing more patients, since the plans tend to have smaller networks of doctors.
Insurers will be paying physicians less through their exchange plans than they do through their existing commercial plans. If the rates turn out to be typically 30 or 40 percent less, as this article suggests, they will have problems maintaining adequate provider networks. An insurance card is of little value if you cannot find physicians who will accept it.
As we said from the start, those designing health care reform were making a terrible mistake when they decided to make health insurance premiums affordable while largely ignoring health care costs.
Look what they did:
* They assigned very low actuarial values to the plans that most individuals will select, leaving 30 to 40 percent of health care costs to be paid by the patient, though some will receive inadequate subsidies.
* They designed plans with very high deductibles, causing the large percentage of patients who need less care to receive virtually no sickness or injury benefits from their plans.
* They reduced the size of their provider networks which will reduce spending by making care less accessible, especially specialized care.
* Now it appears that they will be reducing provider payments to levels that will be rejected by many physicians. Although employer-sponsored plans are moving in the same direction, it is likely that many physicians will limit their practices to these plans and cash-paying patients, while avoiding patients in the exchange plans and the chronically-underfunded Medicaid program.
* As part of the SGR fix, legislators are considering not allowing any inflationary increases in the Medicare program for the next ten years – keeping the payment rates flat. If so, physicians are apt to leave the Medicare program as payment rates approach that of Medicaid.
As we approach $3 trillion in health care spending, this is criminal! For that kind of spending, everyone could have high quality health care. Instead, we get a system that perpetuates disparities in health care while creating financial burdens for precisely those individuals who most need health care.
The entire health care system will not collapse, but this experiment will perform so miserably that most will consider it to be a failure. We don’t need to go back to the drawing boards. We merely need to enact a system that we already know will achieve our goals – an improved Medicare for all.
By Joy Wilke
Gallup, November 18, 2013
Poll: Do you think it is the responsibility of the federal government to make sure all Americans have healthcare coverage, or that it is not the responsibility of the federal government?
Year Yes No
2001 62 34
2002 62 35
2003 59 39
2004 64 34
2005 58 38
2006 69 28
2007 64 33
2008 54 41
2009 47 50
2010 47 50
2011 50 46
2012 44 54
2013 42 56
(Polls were taken in November each year)
The 56% of U.S. adults who now say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage continues to reflect a record high. Prior to 2009, a clear majority of Americans consistently had said the government should take responsibility for ensuring that all Americans have healthcare.
The most recent data were collected in Gallup’s annual Health and Healthcare poll, conducted Nov. 7-10. The percentage of U.S. adults who said it is the federal government’s responsibility to ensure all Americans have healthcare coverage peaked at 69% in 2006. Attitudes began to shift significantly in 2007, and continued to change through the time President Barack Obama took office in 2009. Americans who feel healthcare coverage is not the federal government’s responsibility have been in the clear majority the past two years.
Attitudes across all three partisan groups have shifted away from the view that ensuring healthcare coverage is a proper role of government, but most significantly among Republicans and independents. In September 2000, 53% of Republicans believed the government should not be responsible for ensuring all Americans had health coverage; today, 86% feel that way, an increase of 33 percentage points in 13 years. Over the same period, the percentage of Republicans believing the government should ensure healthcare coverage for all has fallen from 42% to 12%.
Fifty-five percent of independents currently say the government should not be involved with healthcare — an increase of 28 points since 2000.
The percentage of Democrats who hold this view is now 30%, its highest level since Gallup first asked the question and an 11-point increase since 2000 — with the largest change in opinion occurring between 2006 and 2008.
Americans’ attitudes toward the government’s role in ensuring all Americans have access to affordable healthcare have changed substantially over the past decade. These changes began before the Affordable Care Act was passed in 2010, and concurrently with the financial crisis of 2008 and Obama’s first presidential campaign and election. Although Democrats are now somewhat more likely compared with 2000 to say the government should stay away from healthcare, much of the shift in attitudes against government intervention has stemmed from changes among Republicans and independents. It is possible that this sharp change has been caused by a politicization of the issue as it became a major part of Obama’s campaign platform, and as he and other Democratic leaders pressed for and passed the ACA, sometimes called “Obamacare,” in 2010.
The continuing implementation of the ACA over the coming months and years will surely continue to shape Americans’ attitudes toward the federal government’s role in this area. It is not clear how the ACA’s troubled rollout to date will affect attitudes over the next year. But as the debate about the implementation of the new healthcare law has unfolded, Americans have become less likely than ever to agree that the federal government should be responsible for making sure that all Americans have healthcare.
Link for graph of trend since 2000: http://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/P…Obama’s Gift to the Republicans
By Robert Kuttner
Huff Post Politics, November 17, 2013
The Affordable Care Act, as a government mandate for people to purchase private insurance with an array of possible subsidies, had too many moving parts. It was an accident waiting to happen.
As many of us wrote at the time, Medicare for All would be simpler to execute, easier to understand, and harder for Republicans to oppose.
But this was not to be. Instead we got a program that was poorly understood by the public because it was almost impossible to explain and even harder to execute.
At the time the law was passed, administration leaders and many commentators compared the Affordable Care Act to Social Security and Medicare. The analogy was never apt. These great achievements are public programs, efficient to administer and testament to the fact that government can serve social objectives far more effectively than the private sector.
Obamacare, by contrast, is the inefficiency of “public-private partnerships” at its worst. It is a public subsidy for the private insurance industry. No fewer than 55 separate contractors were hired to design the software. Yet though it is not a true public program worthy of the name, Obamacare is being used to discredit government.
Although we always have to be careful that we don’t read too much into polls, this particular result showing that a majority of Americans have decided that health care is not the responsibility of the federal government does provide support to Robert Kuttner’s statement, “Obamacare is being used to discredit government.”
Looking at the graph (link above, or use the columns of numbers above), in November of 2009 opinions shifted. This was close to the completion of the enactment of the Affordable Care Act, following a summer of vicious, partisan and tea party “death panel” attacks on the proposed reform legislation. In the past two years, as opponents kept up their shrill attack on Obamacare, the divide became even greater. The last poll showing a 14 percent margin for those believing that health care coverage should not be a responsibility of the federal government was taken one month after the bungled rollout of Healthcare.gov.
Many have suggested that once the computer glitches are ironed out, people will be very pleased with Obamacare, and the surge in anti-government views will subside. Anyone who has followed the reform process knows that couldn’t be true. Anger will increase when people find out that their deductibles are unaffordable, that some of their hospitals and physicians have been shut out of the provider networks, and that costs will continue to escalate for lack of adequate policies to contain costs.
For us to remain on the sidelines to let this play out can only intensify the view of the public that the federal government should not be involved, considering how badly our leaders have screwed up this effort. Especially at this time of intense anger and disgust over the botched rollout, it is imperative that we immediately intensify our efforts to get the public to understand that they are right when they critique Obamacare. Much more importantly, we need for them to understand the differences between good governance, bad governance, and too little governance, when it comes to health care.
Decades of too little governance is why our health care system is in the mess it is. Further reducing the role of government can only compound the problems of high costs, poor quality, and impaired access. We need government to be involved, but in the right way, not the wrong way.
Since the neo-liberals took over the Democratic party, “the era of big government is over.” They rejected a model based on the most popular health care program this nation has seen – Medicare. They decided that we needed a public/private solution – private insurance with a welfare program for those who couldn’t financially support the insurance industry. The progressives lost their spine and joined in, realizing that the neo-liberals controlled their party. This set us up for bad governance. The blame does not lie with the institution of government, but it lies with bad decisions made by the people we selected to run the government.
So what should our message be to those who say that it is not government’s responsibility? The private insurers have had over half of a century to prove their worth, and they’ve failed us miserably. We need the government, but it needs to be OUR government. We need to demand Medicare for all from our politicians, or, failing that, we need to replace them.
We need the support of the people – the majority who now believe that the government isn’t the solution. Our most intensive efforts must be directed to educating people that they are spending far too much on the private insurers for too little in return. In contrast, Medicare offers us a much better deal, but it can be improved. After all, it is our government, and we should have control.
The responsibility lies with the people. We need to exercise that responsibility through a government that is of the people, by the people and for the people. We need to dump the anti-government rhetoric because we’re talking about ourselves.
By Paul Howard & Yevgeniy Feyman
Bloomberg View, November 18, 2013
The Patient Protection and Affordable Care Act is floundering.
Conservatives who take satisfaction in that should be careful not to get ahead of themselves. The rollout problems – however serious and continuing – shouldn’t be confused with the law’s outright collapse.
The reality is that large constituencies are in place to work to preserve Obamacare.
What strategy, then, would move us closer to the patient and consumer-focused health-care system that conservatives desire while also recognizing the facts on the ground?
The answer might be simple: Propose changes that will make plans more affordable and drive enhanced competition among insurers and providers. In other words, make Obamacare a Trojan horse for conservative health-care reform. The administration of President Barack Obama has quietly introduced regulatory decisions that have made the exchanges a viable market for high-deductible, health-savings-account-eligible health plans.
Shortly after the law passed, it looked like the administration would use regulatory rule-making to kill health savings accounts. But subsequent rules clarified that HSA-qualified plans were actually the default structure for bronze plans on the exchanges. (Some silver plans qualify, too.)
Far from being driven to extinction, high-deductible, HSA-eligible plans have an opportunity to capture significant new market share on the exchanges.
Conservatives aren’t going to repeal or replace Obamacare anytime soon. But they can propose smart fixes that build on the HSA-friendly exchange architecture to make the law more consumer- and patient-friendly. Reform from the inside can set the stage for even bigger changes in the not-too-distant future.
In recent months, many conservatives have been attacking Obamacare as being a Trojan horse that will open up health care to single payer, even though actually it has taken us further in the wrong direction to a private insurance-dominated market. This article from the Manhattan Institute more accurately describes Obamacare as a Trojan horse taking us to high-deductible, health-savings-account-eligible health plans, often referred to as consumer-directed health plans. But let me clarify that.
The low actuarial value plans that will dominate the Obamacare exchanges are high-deductible plans that already are or with very little tweaking will be eligible for associated health savings accounts (HSAs). HSAs work well for wealthier people who can take advantage of the tax incentives, and who remain healthy so that they can use the accumulated tax-advantaged funds in retirement. But families with more modest incomes will be selecting the low-actuarial value bronze and silver plans only because of the lower premiums. They will receive little or no tax benefit, and if major illness strikes, they may not be able to afford the out-of-pocket expenses, even if qualified for subsidies.
From a health policy perspective, the HSA component can be ignored. Except for tax incentives for the rich, the HSA is really only cash to be used for out-of-pocket payments. Even if funded by the employer, it is still paid by the employee in the form of forgone wage increases. So it is the high-deductible and not really the HSA that has such perverse consequences – patients forgoing care because of not having the money to pay the deductible, – whether having an empty pocket or an empty HSA.
What is particularly disconcerting is that it always was intended that the exchange plans be high-deductible plans, simply to control premium costs. Also, employers are now rapidly converting to high-deductible plans for the same reason. The consumer-directed advocates no longer need to hide in a Trojan horse since the deductibles are already highly visible. Right before our eyes, it has been the Trojan army of deductibles that has been conquering our health security, placing those with health care needs in servitude.
The Trojan horse came, and the neo-liberals pretend they didn’t even see it.
By Harvey Fernbach, M.D.
“I just enrolled in Medicare. It took me 5 minutes. Single payer anyone?”
– John Podesta, Twitter, Nov. 14, 2013
The delays, glitches, complexity and time involved in enrolling in Obamacare is in sharp contrast to a America’s largest and premiere government financed and privately delivered health insurance program — Medicare.
With a reliable track record since 1965, Medicare quietly enrolled over 1.8 million people in 2012 — that’s over 150,000 per month, nearly 5,000 per day.
Medicare enrollment has been increasing as the American population ages.
From the 2012 numbers, Medicare enrolled at least 225,000 in the six weeks since ACA’s health exchanges went live on Oct. 1.
That is more than twice as many as those who enrolled in private insurance through the exchanges, as U.S. Department of Health and Human Services reported this week.
Enrolling all U.S. residents in Medicare — and expanding its benefits as proposed by the “Expanded and Improved Medicare for All Act,” a bill in Congress (HR 676) — would be relatively simple.
Polls report that a majority of people want the kind of program H.R. 676 offers: lifelong comprehensive coverage for outpatient visits, inpatient care, laboratory tests, dental care, mental health services and more (all necessary care).
The idea that people “like their health insurance” is a myth. People want health care, not insurance policies.
An improved Medicare for All would eliminate hundreds of billions of dollars now wasted on insurance company, hospital and clinic overhead. Those billions would be redirected to delivering actual care. It would also be much more effective in controlling rising health costs, using its bargaining clout to negotiate lower prices for drugs and other medical supplies.
Medicare for All would be much easier to administer nationally, would be accessed individually by patients, eliminate hassle for providers as well as employers.
Numerous economic studies comparing this approach to the current health care plan in America demonstrate huge saving and economical advantages for the nation.
No wonder John Podesta, former chief of staff for President Clinton and founder of the Center for American Progress, joyfully tweeted: “I just enrolled in Medicare. It took me 5 minutes. Single payer anyone?”
The answer is a resounding, emphatic, loud “Yes!” We need single payer for the health of everyone!”
Harvey Fernbach, M.D., M.P.H., is a member of Physicians for a National Health Program. He resides in Bethesda, Md.
By Cathy Schoen, Robin Osborn, David Squires, and Michelle M. Doty
Health Affairs, December 2013 (online November 13, 2013)
The United States is in the midst of the most sweeping health insurance expansions and market reforms since the enactment of Medicare and Medicaid in 1965. Our 2013 survey of the general population in eleven countries — Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States — found that US adults were significantly more likely than their counterparts in other countries to forgo care because of cost, to have difficulty paying for care even when insured, and to encounter time-consuming insurance complexity. Signaling the lack of timely access to primary care, adults in the United States and Canada reported long waits to be seen in primary care and high use of hospital emergency departments, compared to other countries. Perhaps not surprisingly, US adults were the most likely to endorse major reforms: Three out of four called for fundamental change or rebuilding.
Insurance Design And Affordability
In this study, US adults — both the insured and the uninsured — were more likely than adults in other countries to report going without care because of costs, having high out-of-pocket costs, and having difficulty paying medical bills.
Reforms scheduled under the Affordable Care Act provide for subsidies to lower cost sharing for those with incomes below specified thresholds as well as reductions in premiums for people with low or modest incomes. However, by international standards, cost-sharing exposure will remain high for those with low incomes. Also, states will have considerable leeway in insurance design for middle- and high-income families, with annual out-of-pocket maximums and deductibles that will continue to be high compared to those in other countries. For people with chronic, ongoing conditions, the result could be continued high medical cost burdens.
Insurance And Primary Care
Insurance design and payment policies also matter for access and countries’ primary care infrastructure.
The high rates of ED use associated with long waits for primary care in the United States (including among insured patients) and several other countries underscore the importance of 24/7 primary care coverage in terms of overall system cost and resource allocation.
The experiences of patients and physicians in other countries regarding the time-consuming complexity of insurance also provide potential insights for the United States.
A recent Institute of Medicine study estimated that administrative layers throughout the US health insurance and care system add as much as $360 billion per year to the cost of health care — and much of that sum was deemed to be wasted, with little or no return in value. Evidence from other countries suggests opportunities to reduce such costs.
A key challenge for the United States is its already high level of health spending, which is 50–167 percent higher per capita than in the other study countries. These costs undermine the financial protections offered by insurance and drive premiums up.
Support For Reform
Polls in the United States show mixed public support and lack of knowledge about the provisions of the Affordable Care Act. Yet in the survey most US adults called for major change, with a minority preferring the status quo. People who had experienced problems with access to or affordability of care or who had time-consuming insurance problems had more negative views than people who had not had such problems.
This 2013 survey sponsored by the Commonwealth Fund is very helpful during the Affordable Care Act transition because it tells us how the United States is doing compared to ten other industrialized nations with universal systems. Our results are terrible, and when we look ahead at the changes yet to be implemented, it is clear that they will have an almost negligible impact on correcting the serious deficiencies in the United States.
Our per capita costs will remain far higher than those of other nations. Our insurance products will remain very expensive yet highly flawed in design since they leave those individuals who have significant health care needs with high medical cost burdens. The excessive complexity of our insurance products will continue to waste hundreds of billions of dollars that could be used on health care. Measures intended to provide much needed reinforcement of our primary care infrastructure are all too meager, so timely access to care will remain impaired for too many.
Three-fourths of Americans believe that we need fundamental changes or complete rebuilding of our health system. We have a far greater percentage dissatisfied than are in the other developed nations. Although it will be several weeks before the exchange plans and the Medicaid expansions will be in effect, most Americans will not be able to detect any improvements in their health care financing and access.
In fact, many will have greater out-of-pocket costs because of increased shifting of costs to patients through measures such as high deductibles, and others will lose access to their current health care professionals and institutions because of the greater use of narrow provider networks – further reducing choices in health care. In spite of the noble intentions of the Affordable Care Act, most of us will not see any correction of the serious flaws demonstrated in this international survey which shows how costly and dysfunctional our system is, and too many of us will be even worse off.
As we watch the 2014 implementation unfold, we have to keep in mind that it didn’t have to be this way. We could have had and still can have a single payer national health program – an improved Medicare covering everyone. With what we spend, we should be at the top in these international comparisons. Single payer would get us there.
America’s Health Insurance Plans (AHIP), November 14, 2013
America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement on today’s announcement by the administration related to policy cancellations:
“Making sure consumers have secure, affordable coverage is health plans’ top priority. The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today.
“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.”
President Obama’s decision today to allow individuals to keep the insurance they have has devastating policy implications. It is no wonder that AHIP released this statement only minutes after the President’s announcement.
The insurance plans that were to be cancelled are plans that have fewer benefits than are now required by the Affordable Care Act. If the replacement plans have more comprehensive benefits, then why would people want to keep their old plan?
Individuals place a high priority on the premium to be paid when they select their plans. They will almost always select the plan with the lowest premium that at least superficially seems to meet their needs. If they have major health care needs, they will select plans with more comprehensive benefits, even if they are more expensive. On the other hand, healthy individuals who are watching their budgets will often select the cheapest plan – their old plan in this case, even though it has fewer benefits.
So what will happen when people are allowed to keep their old plans? Younger, healthier individuals will stay with those plans whereas older individuals with greater heath care needs will move into the new plans available in the exchanges. This adverse selection that concentrates expensive patients in the new plans will drive premiums up. When the premiums go up, more will drop out, causing the premiums to go up even further – so high that the plan has to be pulled from the market – the death spiral of adverse selection.
Karen Ignagni is right when she says that allowing people to keep the insurance they have will destabilize the insurance market and cause premiums to rise, but only for the new insurance marketplaces (exchanges) that the insurance industry is counting on for their expanded business opportunities, made possible by the insurance-industry-designed Affordable Care Act.
Although the spinmeisters are busy trying to discredit the President and his administration for the false promise of allowing you to keep your insurance, and for the rollout of the exchange website before it was ready, this noise is a distraction from the real problem here. The Affordable Care Act is an irreparably flawed model of financing health care, and no amount of patching is going to fix it. It is and always will be an unstable, expensive and inequitable model of financing health care.
You know what is stable? Medicare. And it is less expensive and more equitable. Yes, it needs continual oversight and refinements, but it has the support of the public. If it were our only health care financing program, in an improved single payer version, virtually all of us would be demanding to keep the insurance that we would then have – an Improved Medicare for All.
By David I. Auerbach, Hangsheng Liu, Peter S. Hussey, Christopher Lau, and Ateev Mehrotra
Health Affairs, October 2013
“[P]roponents hope that ACOs will deliver better quality and outcomes … and have lower costs. Independent analysts have projected savings for ACOs [endnote 3], and a recent evaluation of an ongoing private prototype has found evidence of savings and quality improvement [endnote 4].”
Endnote 3: “Congressional Budget Office, Budget options, volume 1: health care: CBO;2008 Aug…..”
Endnote 4: “Song Z, …, et al. The “Alternative Quality Contract,” based on a global budget, lowered medical spending and improved quality. Health Aff (Millwood). 2012;31:1885-94.”
By Kip Sullivan, J.D.
The “accountable care organization” is the latest health policy fad to captivate lawmakers. The term was invented at a meeting of the Medicare Payment Advisory Commission on November 9, 2006. Despite the vague definition of ACO, and despite the absence of any evidence supporting claims made for ACOs, Congress included in the Affordable Care Act provisions authorizing the Centers for Medicare and Medicaid Services to initiate an ACO program. CMS has designated some 250 entities as Medicare ACOs.
The two sentences quoted above indicate that even as of mid-2013, seven years after the ACO label was invented and four years after Democrats inserted ACO provisions into the legislation that was to become the Affordable Care Act, ACO proponents must either leave their praise for ACOs undocumented or misrepresent the research on ACOs. The authors of these two sentences chose the latter approach. They cited a study by the Congressional Budget Office which found that ACOs would have almost no impact on Medicare spending, and they cited a study of an ACO-like entity in Massachusetts which found the entity is generating higher, not lower, total health care spending.
The two sentences quoted above are from a paper by David Auerbach and colleagues designed to determine where the 250 Medicare ACOs are forming. They reported they are more likely to form where provider consolidation is higher, notably the Midwest and the Northeast. Because the paper simply asked where ACOs are forming, there was no need for the authors to praise ACOs. However, as the quote above indicates, the authors chose to do so. And, given the state of the research on ACOs, they were reduced to exaggerating one study and misrepresenting another in order to “document” their praise.
The first study cited by Auerbach et al. was the 2008 report to Congress by the Congressional Budget Office. In that report, the CBO analyzed 115 health care reform proposals or “options.” Option number 37 was the ACO, although CBO didn’t label it that way. CBO called it a “bonus-eligible organization.” The CBO stated: “Under this option, groups of providers meeting certain qualifications would have the opportunity to participate … in Medicare as bonus-eligible organizations (BEOs). The concept of BEOs is similar to the accountable care organization models proposed by some researchers” [p. 72]. After describing the BEO in the terms CMS would use several years later when it announced its definition of an ACO, the CBO concluded: “This option would reduce Medicare spending … by $5.3 billion over the 2010-2019 period” [p. 73]. http://www.brookings.edu/~/media/events/2009/3/11%20aco/cbohealthoption3…
Auerbach et al. should have known that five billion dollars is a minuscule portion of a decade of Medicare spending. The 2010 National Health Expenditure Accounts estimated total Medicare spending over the 2010-2019 period would be more than 7 trillion dollars — $7,135,000,000 to be more precise (my calculation using the numbers shown for Medicare in Table 3
http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trend…) If we divide $5.3 billion into $7.135 trillion, the savings CBO said ACOs would achieve turns out to be less than one-tenth of one percent of Medicare spending.
The second paper Auerbach et al. cited – a 2012 paper published in Health Affairs by Song et al. – has already been the subject of two letters published in Health Affairs as well as a comment by Don McCanne on this blog http://www.pnhp.org/news/2013/june/academyhealths-ill-judged-choice-of-t…. The letter writers (I was one of them) pointed out an extremely obvious defect in the Song paper: The title of the paper claimed the ACO-like entity was saving money when the text stated it wasn’t. Despite the two letters and Don’s comment, Auerbach et al. chose to misrepresent the Song paper, and the editors of Health Affairs let them do it.
Auerbach et al.’s misuse of research is not an isolated example. Over the last several decades, a culture of permissiveness has developed within the US health services research community. This culture tolerates exaggeration and misrepresentation, especially when the exaggeration or misrepresentation promotes the managed care ideology that dominates the health policy debate in this country. As we contemplate how President Obama and the Democrats find themselves burdened by an Affordable Care Act that is not affordable, we should begin our analysis with this question: What role did the US health policy community play in causing policy-makers to think ACOs would make the ACA affordable?