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Thanks Giving

Summary: In recognition of this week’s US holiday, today’s post offers heartfelt thanks. First, for a terrific documentary film. Second, to all the groups contributing to the pursuit of single payer health care justice. All best wishes for the day.

Sex, Drugs, & Bicycles
2020
Directed by Jonathan Blank

Award-winning documentary about the Netherlands that exposes the nightmare [not!] of paid vacations, universal healthcare & windmills [among other attractions].

Film’s perspective on US healthcare: “I recently bought secondary health insurance to cover the depression and anxiety caused by my primary insurance.”

Comment by: Jim Kahn

Huge thanks (and kudos!) to the director and production team for this amazing film, which I watched recently with my wife. Captivating live footage, informative and entertaining narration and interviews, fabulous graphics often reminiscent of Monty Python, and stellar original music. And a powerful message: a country (the Netherlands) can combine democracy, progressive personal freedoms, and well-designed social programs to yield economic well-being, excellent health, and happiness. Comprehensive universal healthcare is central. We in the US need to keep absorbing success stories like this to further inspire our progressive change agenda.

Great holiday viewing with your family. You might even do a singalong with this blockbuster “I Love Healthcare”.

Now I’d like to riff on this week’s holiday theme, offering my gratitude to allies in the progressive health reform movement. My “thanks giving” is for:

Elected officials in DC and the states who lead the legislative charge for single payer.
Progressive lobbyists and activists who work with the elected officials and staff.
Healthcare provider groups pushing for single payer.
Prominent media voices beating the single payer drum.
Pollsters who document the broad public support for government-paid health care.
Community organizations that channel and organize public support.
>30 wealthy nations which demonstrate daily the elegance of “health care for all”.
Policy researchers who quantify the health and financial advantages of single payer.
Journalists who distill powerful stories and truth from the blizzard of daily events.
Colleagues in HJM, for their principled and incisive tracking of health justice issues.
Family members and colleagues who offer ongoing encouragement in this quest.
Finally, YOU, the readers of HJM, who join us in the fight for single payer.

(Hope I haven’t missed any groups. Please excuse my not listing individuals … we’ll save that for the official single payer history!)

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Charity Doesn’t Fill the Health Care Void

Summary: St. Jude Children’s Hospital in Memphis TN promises not to bill families for medical care. And they don’t. But parents travel long distances to get this free care, incurring new living expenses and losing job income. Even as St. Jude amasses huge reserves from highly effective charitable fund-raising. With single payer, everyone could get needed care, usually locally. Isn’t that more charitable?

St. Jude Hoards Billions While Many of Its Families Drain Their Savings
ProPublica
November 12, 2010
By David Armstrong and Ryan Gabrielson

St. Jude Children’s Research Hospital promises not to bill families. But the cost of having a child at the hospital for cancer care leaves some families so strapped for money that parents share tips on spending nights in the parking lot.

St. Jude is the largest and most highly regarded health care charity in the country. Each year, the Memphis hospital’s fundraisers send out hundreds of millions of letters, many with heart-wrenching photographs of children left bald from battling cancer.

Last year, St. Jude raised a record $2 billion. U.S. News & World Report ranked it the country’s 10th-best children’s cancer hospital, and St. Jude raised roughly as much as the nine hospitals ahead of it put together. It currently has $5.2 billion in reserves, a sum large enough to run the institution at current levels for the next four and a half years without a single additional donation.

But for many families, treatment at St. Jude does not relieve all the financial burdens they incur in getting care for their children, including housing, travel and food costs that fall outside the hospital’s strict limits, a ProPublica investigation has found.

While families may not receive a bill from St. Jude, the hospital doesn’t cover what’s usually the biggest source of financial stress associated with childhood cancer: the loss of income as parents quit or take leave from jobs to be with their child during treatment. For many families, the consequence is missed payments for cars, utilities and cellphones. Others face eviction or foreclosure because they can’t keep up with rent and mortgage payments.

A substantial portion of the cost for treatment is paid not by St. Jude but by families’ private insurance or by Medicaid, the government insurance program for low-income families. About 90% of patients are insured, bringing in more than $100 million in reimbursements for treatment a year.

Parents at St. Jude have exhausted savings and retirement accounts, borrowed from family and friends or asked other charities for aid.

Comment by: Don McCanne

Although the United States has a very well-funded health care system, its financing is highly dysfunctional. Too many are left either partially or completely out of the system. This is particularly tragic when a child with cancer is left uncovered, but at least some of us have charitable instincts. This accounts for the success of the nation’s most comprehensively funded children’s cancer hospital: St. Jude.

This is the best we have to offer those of limited means. But, based on this comprehensive report by ProPublica, it is still clearly insufficient, leaving many families destitute. Rather than relying on charity, wouldn’t it be better for the nation to join together and restructure our health care financing system so that it works for all of us, where we live? We certainly have enough funds. We merely need to establish an equitable, single payer, Medicare for All system.

Google “Charity.” The first item that comes up is St. Jude. With no increase in our current national spending, the first item that could come up in our hearts might be “a single payer national health program that covers everyone.” Wouldn’t that be much more effective in fulfilling our charitable aspirations?

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Working Families and Businesses Need Medicare for All Now

Summary: Job-based health insurance premiums increased twice as fast as inflation over the past year, despite 2020 being a year of very low medical payouts and very high profits for insurers. Both employees and employers continue to struggle with the current work-based system. It’s time to separate insurance from the workplace.

2021 Employer Health Benefits Survey
Kaiser Family Foundation
November 11, 2021 

In 2021, the average annual premiums for employer-sponsored health insurance are $7,739 for single coverage and $22,221 for family coverage. The average single and family premiums increased 4% over the past year. During this period, workers’ wages increased 5% and inflation increased 1.9%.

The average premium for family coverage has increased 22% over the last five years and 47% over the last ten years.

Most covered workers make a contribution toward the cost of the premium for their coverage. On average, covered workers contribute 17% of the premium for single coverage and 28% of the premium for family coverage. Covered workers in small firms on average contribute a higher percentage of the premium for family coverage than covered workers in large firms (24% vs. 37%). Covered workers in firms with a relatively large share of lower-wage workers have higher average contribution rates for family coverage than those in firms with a smaller share of lower-wage workers (35% vs. 27%). 

Comment by: Eagan Kemp

Every year we see the cost of insurance go up for working families and businesses of all sizes. The most recent increases highlight that even after a year where many insurers were able to avoid major health costs because many people were forced to put off elective care, insurers are still massively raising rates. 

With more than 155 million Americans at the whim of employer-sponsored insurance, it is no wonder people are fed up with the current system and demanding Medicare for All. Seeing more and more of your paycheck eaten up by the cost of health care is depressing enough, without knowing that it is primarily lining the pockets of corporate CEOs making tens of millions of dollars a year while denying Americans the care that they need. 

And as the recent fight of Biden’s Build Back Better Act showed, corporations are more than willing to throw around cash to stop reforms that would make it cheaper and easier for people to get the care they need.

These growing costs aren’t hurting just families, they are making it harder for businesses that are already struggling with the losses sustained due to the COVID-19 pandemic, a key reason more business leaders are banding together to fight for Medicare for All. 

The only people that want to keep the status quo are those that are profiting from it. It is time to put people over profit by making Medicare for All the law of the land.

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Aducanumab As a Lens on US Healthcare

Summary: The June 2021 FDA approval of Aducanumab for Alzheimer’s, despite absent evidence of clinical benefit, and now a sharp increase in Medicare Part B premiums, reflects much of what’s wrong with our healthcare system: huge profits enabled by flawed medical care policies and extortionate prices, racism in clinical trial design, and financing burdens transferred to those who can least afford them.

‘Reckless’ FDA and Big Pharma Greed Blamed for Medicare Premium Hike
Common Dreams; November 16, 2021; By Jake Johnson

Medicare Part B recipients will soon be hit with one of the biggest premium increases in the history of the government program, a hike driven in large part by the Food and Drug Administration’s scandalous approval of a costly—and, according to many experts, dubious—Alzheimer’s drug.

“Medicare’s inability to negotiate lower drug prices means that Big Pharma companies can charge whatever they want.” Last week, the Centers for Medicare and Medicaid Services (CMS) announced that monthly Medicare Part B premiums will be raised to $170.10 in 2022, up from this year’s level of $148.50.

While CMS officials cited several factors in their explanation of the premium boost—including costs imposed by the coronavirus pandemic—they attributed roughly half of the increase to “additional contingency reserves due to the uncertainty regarding the potential use of the Alzheimer’s drug, Aduhelm™ (aducanumab), by people with Medicare.”

Medicare is currently in the process of deciding whether to cover the drug, which is priced at a staggering $56,000 per year.

A June analysis by the Kaiser Family Foundation estimated that if 500,000 Medicare recipients are prescribed Aduhelm, total spending on the drug in a single year would be close to $29 billion—”an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending.”

The FDA’s accelerated approval of aducanumab sparked outrage among public health experts and prompted the resignations of several agency advisers, who said there was not enough evidence showing the drug actually works to slow Alzheimer’s-induced cognitive decline.

On top of concerns about the treatment’s lack of effectiveness as well as potentially unlawful coordination between the FDA and manufacturer Biogen throughout the approval process, advocacy groups warned the decision to greenlight the exorbitantly priced drug “threatens to bankrupt the Medicare program.”

Dr. Michael Carome, director of Public Citizen’s Health Research Group [said] “To protect the many Medicare beneficiaries who cannot afford the unacceptable 15% jump in Part B premiums, CMS must promptly announce that it will exclude aducanumab from coverage under the Medicare program until there is definitive evidence that the drug provides substantial evidence of cognitive benefit to Alzheimer’s disease patients.”

F.D.A. Approves Alzheimer’s Drug Despite Fierce Debate Over Whether It Works
New York Times; June 7, 2021; By Pam Belluck and Rebecca Robbins

Aducanumab, or Aduhelm, is the first new Alzheimer’s treatment in 18 years and the first to attack the disease process. But some experts say there’s not enough evidence it can address cognitive symptoms.

Nothing is right about the approval of aducanumab—and nothing’s new
The BMJ Opinion; November 4, 2021; By Nancy Olivieri

[More on the science and on flawed FDA regulatory history]

What the Aducanumab Approval Reveals About Alzheimer Disease Research
JAMA Neurol; October 4, 2021: By Jennifer Manly and Maria Glymour

FDA approval was based on trials that were not inclusive of the people who bear a disproportionate burden of disease. Only 0.6% of participants (ie, 19 individuals) identified as Black … Older Black adults are estimated to have AD incidence up to double the rates in older White people. Despite this, Biogen reported that only 6 Black people were randomized to the treatment dose approved by the FDA.

Instead of wasting money on aducanumab, pay for programs proven to help people living with dementia; J American Geriatrics Society; August 2021; By Lauren Hunt et al.

[W]e are heartbroken at the opportunity cost that may result from spending of limited resources on aducanumab versus the many ways we could help PLWD [persons living with dementia] … we expand on several specific approaches that we believe could have the highest yield in improving care for PLWD and their caregivers. Home-based Personal Care … Comprehensive Dementia Care … Community-Based Palliative Care.

Comment by: Jim Kahn

Here’s how health policy is supposed to function, IMHO: new interventions are demonstrated effective in relevant populations, and then added to the healthcare toolkit, with all efforts made to assure affordability for patients and the system.

Here’s what happened with aducanumab: the intervention doesn’t work (according to clinical trials), it wasn’t tested in high risk black populations, and it was approved by the FDA anyway, with undue manufacturer influence. The Medicare program is not permitted to negotiate prices, so the drug is sold at a massive price per patient per year (enriching the manufacturer Biogen), and the cost is passed along to Medicare enrollees, coming out of their social security income. Programs for PLWD that are known to work remain unfunded.

Note – these big price boosts are for traditional Medicare, thus enhancing the marketing position of private Medicare Advantage plans. The CMS officials in the thrall of private insurers didn’t mind that a bit, no doubt.

Under single payer, aducanumab would be reimbursed only once shown effective, and only once the price was negotiated down to an affordable level. Meantime, proven community programs would be funded.

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We Cringe When Hospital “CMO” Means “Chief Marketing Officer”

Summary: Big academic hospitals like Harvard’s Mass General Brigham now mount huge marketing efforts, similar to those of consumer products corporations. The message is clear: big academic hospitals are big business. Many health care providers wince.

Mark Bohen, Chief Marketing Officer
Hired September 2020
Mass General Brigham
Website accessed Nov 15, 2021

Mark Bohen, MBA is the Chief Marketing Officer for Mass General Brigham. He is responsible for building and leading a world class marketing and communications organization and ensuring that people in the nation and around the globe know about the world class research, clinical care, innovations and education taking place throughout the Mass General Brigham system. Mark is also bringing classical marketing principles, science, and discipline to the organization. In addition, Mark is leading all marketing and communication functions, including brand management, data analytics, consumer research and insights, digital/social, service line and hospital marketing, marketing strategy, and internal and external system-wide communications.   

Prior to joining Mass General Brigham in September 2020, Mark spent the previous four years at Beaumont Health, the largest health system in Michigan, where he led all marketing and communications strategies and tactics. While at Beaumont, Mark built and developed new marketing capabilities for better patient outreach while also focused on continued enhancement of Beaumont’s reputation and position in the state’s competitive health care marketplace. He also brought together three legacy marketing and communication departments and created system capabilities and roles that offered his team exciting growth opportunities. Mark led brand management at Beaumont after the merger of three health systems and built a new brand architecture. He has partnered with hospital, physician, and service line leaders to create marketing plans that drive growth.

Previously, Mark was the Senior Vice President of Marketing and Innovation at Assurant, Inc., and he spent more than ten years in the consumer-packaged goods industry, including time at Nabisco where he worked on some of the world’s best-known brands like Oreos and Ritz crackers. Mark earned his BS degree in Marketing from Syracuse University and his MBA from Duke University.

Comment by: David Himmelstein and Steffie Woolhandler

Partners Health Care, the amalgamation of Boston’s Massachusetts General and Brigham and Women’s Hospitals – “non-profits” that are major teaching hospitals for Harvard Medical School – recently spent $100 million rebranding itself as “Mass General Brigham”.  Meanwhile, in the past 9 months the system’s two banner hospitals had “surpluses” (AKA profits) of $223 million (Brigham) and $147 million (Mass General).  

We doubt that the hospitals’ patients or communities would see rebranding or marketing as priorities. But this otherwise grim story has a humorous twist. Toward the end of the CMO’s bio we learn of his previous experience marketing Ritz Crackers and Oreos.  

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Veterans Health Administration Under Attack

Summary: Veterans Day weekend is the perfect moment to contemplate actions from Washington that threaten the Veterans Health Administration, one of the finest elements of the US healthcare system. The VHA is government single payer, providing very high access to and quality of care. Or was until recent aggressive privatization started to undermine it. The VHA must be saved. Our veterans deserve nothing less.

Broken promises: Veteran health care is being replaced by the private sector
The Hill

November 5, 2021
By Russell B. Lemle and Suzanne Gordon

In 2018, Congress passed then-President Trump’s signature veterans’ legislation, the VA MISSION Act, which was designed to shift many more patients from the Veterans Health Administration (VHA) to the private sector through a newly formed Veterans Community Care Program (VCCP). Lawmakers assured wary stakeholders that the VCCP would “supplement, not supplant” the VHA. This law was about options, they were told, not privatization.

Three years on, it’s clear that those were empty promises. VHA services are being rapidly replaced by private-sector care, even as studies continue to confirm that non-VA care generally is of lower quality and higher costs.

A recent study reveals the situation has become dire. Between April 2019 and December 2020, VHA’s total monthly encounters shrank by 25 percent. Over that same period, VCCP continued its non-stop expansion, rising to 34 percent of all care delivered to veterans at taxpayer expense. …

The hollowing out of the VHA is a direct result of MISSION Act provisions that were then exploited by the Trump administration in developing eligibility regulations for private sector care. When the VCCP was implemented in 2019, one-third of all veteran patients suddenly became automatically eligible for non-VA care if driving to a VHA facility takes more than a half-hour. A referral is offered even if a VHA clinic/hospital is geographically closer than a non-VA one, which is often the case.  

Although wait times in the VHA are typically shorter than those in the private sector, regulations nonetheless cause massive numbers of veterans to be sent to the private sector if the VHA cannot schedule an appointment within 20 or 28 days. … Once in the VCCP, which has no wait time requirement, veterans often languish for months to be seen.

VHA Caregivers Provide Privatization Reality Check
The American Prospect
September 30, 2021
By Suzanne Gordon

[J]ust as MISSION Act critics predicted, using private-sector contractors is no guarantee that veterans will get equivalent or better care in more timely fashion.

Two small but important surveys of well-informed VHA caregivers, along with interviews conducted by the Prospect itself, confirm that “community care” is neither quicker nor subject to effective federal oversight, despite its ballooning cost to the VHA. …

While some veterans haven’t experienced long delays to see a private-sector provider, most are waiting between one and four months for mental-health, medical, and surgical appointments, according to VHA nurses who answered the NOVA survey. When patients do end up going outside the VHA, nurses often don’t receive required progress reports from private-sector providers.

Mental-health services are particularly at risk under the CCN. Some observers who have been following VA mental health are concerned by reports that, in some VA medical centers around the country, hundreds of veterans who were referred to private-sector mental-health professionals were waiting for up to three months for just a telehealth appointment.

One nurse surveyed by NOVA reported that their teams may be spending from 10 to 60 hours a week trying to monitor private-sector care, which means they can’t provide direct care to veterans. In some facilities, one or two mental-health professionals may be shifted from taking care of veterans to chasing down information from private-sector providers.

Comment by: Jim Kahn

The Veterans Health Administration is a fine example of single payer, indeed of a national health service, like in the United Kingdom. It has a long history of high quality of care.

But Washington is eager to privatize, especially aggressively with Trump administration regulation manipulations. As reported by these two recent articles, the rules used to guide veterans to the private sector are irrational and biased. And the result is diverting critical resources – funding and staff time – from VHA clinical capacity. Care is shunted to inferior private sector providers; as we recently reported, clinical outcomes suffer.

There are efforts to protect the VHA. Suzanne Gordon, author of both reported articles today and Wounds of War: How the VA Delivers Health, Healing, and Hope to the Nation’s Veterans, is a senior analyst at the Veterans Healthcare Policy Institute (VHPI), which provides detailed analysis of legislation affecting VHA and studies the benefits provided by the nation’s largest government-run healthcare system. She also works with Save Our VA Project (SOVA), which issues Calls to Action (CTAs) — letters to Congress and the administration on issues crucial to halting and reversing the privatization of VHA.

In honor of the veterans, support the high quality VHA care.

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ACA Private Plans Financial Barriers Rising

Summary: The Affordable Care Act uses private plan Marketplaces and tax subsidies to try to make insurance affordable for middle class families. New research shows that from 2015-2019, low cost Bronze plans increased in net cost, with combined premiums and deductibles reaching 26.6% of median income. ACA financial protections, already weak, are eroding.

ACA Marketplaces Became Less Affordable Over Time For Many Middle-Class Families, Especially The Near-Elderly
Health Affairs
November 2021
By Paul D. Jacobs and Steven C. Hill

from Abstract:

As a measure of affordability, we calculated potential [Affordable Care Act] Marketplace premiums as a percentage of family income among families with incomes of 401– 600 percent of poverty. In 2015 half of this middle-class population would have paid at least 7.7 percent of their income for the lowest-cost bronze plan; in 2019 they would have paid at least 11.3 percent of their income. By 2019 half of the near-elderly ages 55–64 would have paid at least 18.9 percent of their income for the lowest-cost bronze plan in their area. The American Rescue Plan Act temporarily expanded tax credit eligibility for 2021 and 2022, but our results suggest that families with incomes of 401–600 percent of poverty will again face substantial financial burdens after the temporary subsidies expire.

Comment by: Jim Kahn

A major element of the Affordable Care Act (ACA) was to establish “Marketplaces” or “Exchanges” to facilitate access to regulated private insurance plans for the middle class – those earning too much to qualify for Medicaid, lacking workplace insurance, and not wealthy enough to go it alone.

This strategy has a number of problems. It’s inefficient, just like (even more than) all private health insurance, with administrative and profit costs. It’s a government hand-out to private insurers – after all, the subsidy is really to the insurers, passing through the insured. And the plan designs are flawed, with inconsistent coverage rules and for low-cost plans (Bronze especially) consistently high deductibles.

This new research shows that initially (2015) for families at 400-600% of the Federal Poverty Level (currently $69,680–$104,520 for a family of two), the premium represented 7.7% of income for a Bronze plan, and this reached 18.3% when including the deductible – potentially a significant financial burden and barrier to care. By 2019, these costs rose to 11.3% and 26.6% of income, respectively. For those 55-64 years old, the premium alone is now 18.9% of income.

Sorry for the deluge of geeky percentages. They reflect real financial barriers to insurance and to medical care. The fact that the portion of income is substantial and increasing should add to evidence that the ACA is a flawed overlay patch to our fundamentally dysfunctional health insurance system.

It’s time to end the overlay patches, and adopt a simple, direct, understandable, efficient, and equitable system, one that has been demonstrated to work in dozens of countries around the world. Single payer.

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US Ranks 36th Out of 37 Nations on COVID-19 Mortality

Summary: A new study quantifies the loss in life expectancy due to COVID-19 in nations around the world. The US is in the worst tier, with a drop of nearly two years. Blame lays at the feet of mishandling by Trump, but also long-term degradation of public health and primary care access. Both must be rebuilt.

Effects of covid-19 pandemic on life expectancy and premature mortality in 2020: time series analysis in 37 countries.
BMJ
November 3, 2021
By Nazrul Islam et al.

From abstract:

“Reduction in life expectancy was estimated as the difference between observed and expected life expectancy in 2020 using the Lee-Carter model. . . .

Results: Reduction in life expectancy in men and women was observed in all the countries studied except New Zealand, Taiwan, and Norway, where there was a gain in life expectancy in 2020. No evidence was found of a change in life expectancy in Denmark, Iceland, and South Korea. The highest reduction in life expectancy was observed in Russia (men: −2.33; women: −2.14), the United States (men: −2.27; women: −1.61), Bulgaria (men: −1.96; women: −1.37), Lithuania (men: −1.83; women: −1.25), Chile (men: −1.64; women: −0.88), and Spain (men: −1.35; women: −1.13)”

[Note: All figures are in years; confidence intervals deleted to enhance readability]

Comment and Graph by David Himmelstein and Steffie Woolhandler

These data provide further evidence of the criminal mishandling of the COVID-19 pandemic in the US.  By another measure – years of life lost per 100,000 population – the US was better only than Bulgaria, Russia and Lithuania. Donald Trump’s denialism and malfeasance bear much of the blame for the US’ sorry record on COVID-19. But the gutting of public health capacity, which occurred under both Democrats and Republicans, and our defective health care system, which obstructs access to care and discourages trusting relationships, were and remain major contributors.

6% of health spending should go for public health, double the current proportion. Further, we need to erase access barriers, and build a real and universal primary care infrastructure. 

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When will we transform our deadly insurance system?

Summary: New research with vital statistics data finds that since 1990 overall US mortality has increasingly worsened compared with other OECD countries, in poorer and richer geographic areas alike. The differences attenuate after age 65, when Medicare eligibility begins. The toll for Black Americans is worse, despite gains. These findings suggest that insurance shortfalls lead to hundreds of thousands of excess deaths per year.

Inequality In Mortality Between Black and White Americans By Age, Place, and Cause, and In Comparison To Europe, 1990-2018
NBER Working Paper No. 29203
September 2021
By
Hannes Schwandt et al.

From Abstract:

Inequalities in life expectancy are starker in the U.S. than in Europe. In 1990 White Americans and Europeans in rich areas had similar overall life expectancy, while life expectancy for White Americans in poor areas was lower. But since then even rich White Americans have lost ground relative to Europeans.

Life expectancy for both Black and White Americans plateaued or slightly declined after 2012, but this stalling was most evident among Black Americans even prior to the COVID-19 pandemic.

From Results:

Comment by: Jim Kahn

This excellent comprehensive research on mortality in the US vs European countries since 1990 has several compelling lessons:

1) Black American mortality still greatly exceeds White American mortality, despite a shrinking gap over 30 years.

2) Overall US mortality exceeds European country mortality by increasing margins over the last 30 years. We’re falling further behind.

3) These mortality differences are present across low to high poverty geographic areas (in the US, counties). The differences are larger in poor areas.

4) The US-Europe mortality differences are proportionally much larger age 20-64 than age 65-79 – when Medicare coverage is near universal.

5) I did a calculation. The US excess mortality age 20-64 is about 1.4 per 1000 per year. Some of that is due to non-insurance factors. If 1.0 per 1000 is attributable to insurance, applied to the 190 million in this age range, that’s 190,000 extra deaths per year.

6) However, in 2018 (after the rise of Medicare Advantage with harder to obtain care for the sick) US mortality 64-79 exceeds European levels. This suggests more insurance-related deaths.

Our insurance system is inefficient, inequitable, and deadly. Enough reason yet for radical transformation?

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Insurers Avoid Loss Ratio Limits by Shifting Profits to Provider Subsidiaries

Summary: Insurers don’t appreciate limits on their profits. So, to circumvent federal “medical loss ratio” rules, they buy up medical providers and send the excess revenues there. Voila, huge profits retained.

Profits swell when insurers are also your doctors.
Axios
July 16, 2021
By Bob Herman.

The big picture: Federal law caps health insurance profits to 15-20% of collected premiums, depending on the type of market. But there are no limits to how much profit a provider can keep. So if an insurer can steer its members toward its own providers, the company is able to keep a lot more of those premium dollars.

The bottom line: Insurers keep more of the premiums they collect when they also own the medical providers that are paid those premium dollars. And no insurer has expanded as aggressively into care delivery over the years as UnitedHealth.

Comment and Graph by: David Himmelstein and Steffie Woolhandler

UnitedHealth and other large health insurance firms have been buying up doctors’ practices and other health providers (e.g. Aetna’s merger with CVS). That lets insurers ship profits to their provider subsidiaries, skirting federal standards for medical loss ratios – the share of premiums they’re allowed to spend on administration and profit. In essence, allowing insurers to own providers is a loophole that makes loss ratio requirements meaningless.

As indicated in the graph below (based on the data Bob Herman reports), over the past decade – and especially since 2019 – UnitedHealth has greatly amped up its payments to itself.

For detail on the mechanics of how insurers’ double dipping is pushing up Medicare’s costs and accelerating its privatization see the September 30, 2021 HJM post on Medicare Advantage and DCEs.