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Profit Obsessed US Health System Drives Physician Burnout

Summary: A physician-anthropologist highlights the conflict plaguing today’s medical profession: the contradiction of medical values and a profit-focused health care system. He advocates collective action for universal health care following the single payer model.

Doctors Aren’t Burned Out From Overwork. We’re Demoralized by Our Health System.
New York Times
Feb. 5, 2023
By Eric Reinhart (Political anthropologist and physician, Northwestern University.)

The United States is the only large high-income nation that doesn’t provide universal health care to its citizens. Instead, it maintains a lucrative system of for-profit medicine. For decades, at least tens of thousands of preventable deaths have occurred each year because health care here is so expensive.

What’s burning out health care workers is less the grueling conditions we practice under, and more our dwindling faith in the systems for which we work. What has been identified as occupational burnout is a symptom of a deeper collapse. We are witnessing the slow death of American medical ideology.

During the pandemic, physicians have witnessed our hospitals nearly fall apart as a result of underinvestment in public health systems and uneven distribution of medical infrastructure. Long-ignored inequalities in the standard of care available to rich and poor Americans became front-page news.

According to an investigation in The New York Times, ostensibly nonprofit charity hospitals have illegally saddled poor patients with debt for receiving care to which they were entitled without cost and have exploited tax incentives meant to promote care for poor communities to turn large profits. Hospitals are deliberately understaffing themselves and undercutting patient care while sitting on billions of dollars in cash reserves. Little of this is new, but doctors’ sense of our complicity in putting profits over people has ‌grown more difficult to ignore.

From at least the 1930s through today, doctors have organized efforts to ward off the specter of “socialized medicine.” We have repeatedly defended health care as a business venture against the threat that it might become a public institution oriented around rights rather than revenue.

This is in part because doctors were told that if health care were made a public service, we would lose our professional autonomy and make less money. For a profession that had fought for more than a century to achieve elite status, this resonated.

For example, a system of billing codes invented by the American Medical Association as part of a political strategy to protect its vision of for-profit health care now dictates nearly every aspect of medical practice, producing not just endless administrative work, but also subtly shaping treatment choices.

Addressing the failures of the health care system will require uncomfortable reflection and bold action. Any illusion that medicine and politics are, or should be, separate spheres has been crushed under the weight of over 1.1 million Americans killed by a pandemic that was in many ways a preventable disaster. And many physicians are now finding it difficult to quash the suspicion that our institutions, and much of our work inside them, primarily serve a moneymaking machine.

Doctors can no longer be passive witnesses to these harms. We have a responsibility to use our collective power to insist on changes: for universal health care and paid sick leave but also investments in community health worker programs and essential housing and social welfare systems.

Neither major political party is making universal health care a priority right now, but doctors nonetheless hold considerable power to initiate reforms in health policy. If we can build an organizing network, then proposals to demand universal health care through use of collective civil disobedience via physicians’ control over health care documentation and billing, for example, could move from visions to genuinely actionable plans.

Regardless of whether we act through unions or other means, the fact remains that until doctors join together to call for a fundamental reorganization of our medical system, our work won’t do what we promised it would do, nor will it prioritize the people we claim to prioritize. To be able to build the systems we need, we must face an unpleasant truth: Our health care institutions as they exist today are part of the problem rather than the solution.

Comment by: Don McCanne

Eric Reinhart already said what I have to say, “Until doctors join together to call for a fundamental reorganization of our medical system, our work ‌won’t do what ‌we promised it would do, nor will it prioritize the people we claim to prioritize.”

Of course, the model on which we can all work together and which will prioritize all of the people is single payer.

The House of Representatives this month passed a ridiculous resolution condemning “socialism” when it should have passed a resolution supporting public policy while condemning divisive politics. This would have provided a bipartisan pathway to bring us single payer. I tell you, it would have cured my burnout.

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Shameless Business Tactics to Bilk Medicare and Medicaid

Summary: Two KHN stories illustrate how nursing homes and Medicare Advantage health plans share a business rapacity, using no-holds-barred tactics to funnel public health insurance funds to the pockets of shareholders.

Nursing Home Owners Drained Cash During Pandemic While Residents Deteriorated
KHN
By Jordan Rau
February 1, 2023

After the nursing home where Leann Sample worked was bought by private investors, it started falling apart. Literally.

Part of a ceiling collapsed on a nurse, the air conditioning conked out regularly, and a toilet once burst on Sample while she was helping a resident in the bathroom, she recalled in a court deposition.

“It’s a disgusting place,” Sample, a nurse aide, testified in 2021.

The decrepit conditions Sample described weren’t due to a lack of money. Over seven years, The Villages of Orleans Health & Rehabilitation Center, located in western New York near Lake Ontario, paid nearly $16 million in rent to its landlord — a company that was owned by the same investors who owned the nursing home, court records show. From those coffers, the owners paid themselves and family members nearly $10 million, while residents injured themselves falling, developed bedsores, missed medications, and stewed in their urine and feces because of a shortage of aides, New York authorities allege.

At the height of the pandemic, lavish payments flowed into real estate, management, and staffing companies financially linked to nursing home owners throughout New York, which requires facilities to file the nation’s most detailed financial reports. Nearly half the state’s 600-plus nursing homes hired companies run or controlled by their owners, frequently paying them well above the cost of services, a KHN analysis found, while the federal government was giving the facilities hundreds of millions in fiscal relief.

In 2020, these affiliated corporations collectively amassed profits of $269 million, yielding average margins of 27%, while the nursing homes that hired them were strained by staff shortages, harrowing injuries, and mounting covid deaths, state records reveal.

Government Lets Health Plans That Ripped Off Medicare Keep the Money
KHN
By Fred Schulte
January 30, 2023

Medicare Advantage plans for seniors dodged a major financial bullet Monday as government officials gave them a reprieve for returning hundreds of millions of dollars or more in government overpayments — some dating back a decade or more.

The health insurance industry had long feared the Centers for Medicare & Medicaid Services would demand repayment of billions of dollars in overcharges the popular health plans received as far back as 2011.

But in a surprise action, CMS announced it would require next to nothing from insurers for any excess payments they received from 2011 through 2017. CMS will not impose major penalties until audits for payment years 2018 and beyond are conducted, which have yet to be started.

While the decision could cost Medicare plans billions of dollars in the future, it will take years before any penalty comes due. And health plans will be allowed to pocket hundreds of millions of dollars in overcharges and possibly much more for audits before 2018.

Comment by: Jim Kahn

In these two stories, KHN highlights the aggressive tactics employed by recipients of Medicare and Medicaid funding to maximize profits without regard to effects on patients or taxpayers.

Nursing home owners create supplier companies which then charge the nursing homes inflated prices. This depletes the nursing home budgets and results in dangerous under-staffing and patient harm. The supplier companies are highly profitable, so the owners of these linked entities make out like bandits. Shareholders win, patients lose, Medicaid (and private) payers lose.

Meanwhile, Medicare Advantage plans threaten to sue CMS about an eminently fair rule that diagnostic upcoding and overcharges found in intensive audits should be extrapolated to all patients in that plan. After years of rule-making, CMS backs down, foregoing reimbursement of hundreds of millions or billions of dollars in excessive charges. Once again, the legal and political muscle of insurers enables massive larceny from taxpayers.

A health system based on inadequately regulated private for-profit corporations cannot work. See our recent discussion on the corrosive effects of profit in US health care.

Single payer would dump the private insurers and control the providers.

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Pervasive Greed Destroying US Health Care

Summary: Esteemed medical care quality leader Donald Berwick condemns the pervasive and crippling role of financial gain-seeking in US health care. As he said recently, single payer is the solution.

Salve Lucrum: The Existential Threat of greed in US Health Care
JAMA
January 30, 2023
By Donald M. Berwick

The grip of financial self-interest in US health care is becoming a stranglehold, with dangerous and pervasive consequences. No sector of US health care is immune from the immoderate pursuit of profit, neither drug companies, nor insurers, nor hospitals, nor investors, nor physician practices.

Rapidly increasing pharmaceutical costs are now familiar to the public. Eye-popping prices for new, essential biological and biosimilar drugs, enabled by the failure of any serious drug price regulation, have yielded enormous profits for drug companies even though much of the basic biological research funding has come from governmental sources.

Particularly costly has been profiteering among insurance companies participating in the Medicare Advantage (MA) program. By gaming Medicare risk codes and the ways in which comparative “benchmarks” are set for expected costs, MA plans have become by far the most profitable branches of large insurance companies. According to some health services research, MA will cost Medicare over $600 billion more in the next 8 years than would have been the case if the same enrollees had remained in traditional Medicare.

Hospital pricing games are also widespread. Hospitals claim large operating losses, especially in the COVID pandemic period, but large systems sit on balance sheets with tens of billions of dollars in the bank or invested. Hospital prices for the top 37 infused cancer drugs averaged 86.2% higher per unit than in physician offices.

Recent New York Times investigations have reported on nonprofit hospitals’ reducing and closing services in poor areas while opening new ones in wealthy suburbs and on their use of collection agencies for pursuing payment from patients with low income.

Windfall profits also appear in salaries and benefits for many health care executives.

Avarice is manifest in mergers leading to market concentration, which, despite pleas of “economies of scale,” almost always raise costs. That is what is happening as hospital consolidations proceed largely unchecked in many urban markets and as physician practices are purchased by for-profit firms. Mergers, acquisitions, and public offerings have been occurring throughout health care, often at valuations that defy logic.

Profit may have its place in motivating innovation and higher quality in health care, as in any industry. But kleptocapitalist behaviors that raise prices, salaries, market power, and government payment to extreme levels hurt patients and families, vulnerable institutions, governmental programs, small and large businesses, and workforce morale. Those behaviors, mostly legal but nonetheless wrong, have now accumulated to a level that poses an existential threat to a sustainable, equitable, and compassionate health care system.

What to do about greed? No answer is easy, not least because of the political lobbying might of individuals and organizations that are thriving under the current laxity. The cycle is vicious: unchecked greed concentrates wealth, wealth concentrates political power, and political power blocks constraints on greed.

Health care professionals in all disciplines need to become noisier about the conflict between unchecked greed and the duty to heal.

The glorification of profit, salve lucrum, is harming both care and health. Health care should not be an engine for excessive private gain.

Comment by: Don McCanne

Considering that we have by far the most expensive heath care system in the world, yet one with mediocre outcomes by international standards and one that shamefully leaves so many without coverage and a great many more with unacceptable exposure to financial hardship, we should certainly take a serious look at the role of greed in producing this despicable performance. If we would simply eliminate the impact of greed and apply the proceeds to the operation of a well-crafted, universal, equitable, health care financing system – a single payer system – we would have a system that would be the envy of all nations.

What an idea. Having so much good come out of the elimination of an evil such as greed. How could anyone not join that bandwagon, except maybe for the greedy, who we can certainly do without.

Single payer… not only health care for all, but finally unifying the people to end the greed that has been permeating health care.

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Single Payer Savings for Households: Calculator Results

Summary: Four thousand individuals reporting current healthcare spending and income reveal that … nearly 9 in 10 will save money, more than $5000 per year on average, with single payer.

At a time of inflation, California should take a bold step to tame rising health care costs
Viewpoints
Sacramento Bee
January 11, 2023
By James G. Kahn & Michael Lighty

The word of the year for 2022 could have been “inflation.” Air travel prices rose nearly 40% from a year earlier. Grocery, housing, energy and other prices are also up. And once again, the cost of health care, which makes up nearly a fifth of our economy, is rising sharply.

Most health insurers in the individual market are expecting premium increases between 5% and 14% this year, according to Axios, and family out-of-pocket health care costs have jumped 10%.

But health care is different from other elements of the consumer price index. There is a way to control health care inflation while providing everyone with high-quality coverage.

Universal public financing of health care — often called single-payer coverage or “Medicare for all” — can cure what ails us both medically and financially.

Single-payer coverage would control health care inflation by eliminating the excessive profits and charges, outrageous drug prices and bureaucratic waste inherent in our current system of private health insurance.

Want proof? We have it.

The single-payer advocacy coalition Healthy California Now and the National Union of Healthcare Workers recently developed a household health care cost calculator for use by individuals and families who live in California. It’s designed to compare the costs associated with a single-payer program to current health care expenses.

So far, 4,000 households have tried it. Users enter their premium payments for the prior year, employer premium contributions, out-of-pocket expenses and annual income. The calculator then compares their costs under the current system to projected single-payer taxes at their income level.

Eighty-seven percent of those who used the calculator found average annual savings of more than $6,000 per household. Medicare beneficiaries were more likely to achieve net savings at a slightly lower average, $5,150 per household. The 13% of households that wouldn’t enjoy net savings generally had very low current premium and out-of-pocket expenses due to extremely generous health plans or annual incomes exceeding $350,000.

Take five minutes and try this exercise for yourself at Healthy California Now’s website. …

Our leaders in Sacramento … have the power to make single-payer a reality for the state.

The Healthy California for All Commission, formed by Gov. Gavin Newsom and the Legislature last year, defined a “unified financing” plan offering universal coverage and comprehensive benefits for everyone. Under this plan, out-of-pocket costs and cost-sharing would be eliminated. Rather than payments to private insurers, the funding would come from a progressive tax that can easily generate the necessary funds.

The tax plan used in the calculator includes a 2% sales tax on nonessential items plus a payroll tax that starts at incomes of at least $75,000 and a personal income tax that starts at $300,000 a year. Additional taxes would be levied on the state’s wealthiest individuals and corporate profits.

It’s true that some well-paid professionals would be at risk of paying more for single-payer coverage, and the super-wealthy would have to share some of the burden. But in exchange, all Californians would get a system that guarantees excellent coverage, including for long-term care, and a health plan that efficiently and equitably covers health care costs for everyone.

We can fight health care inflation while providing quality care for all, and California can show the way. The words on everyone’s lips this year should be “Medicare for all.”

Comment by: Jim Kahn

Developing and deploying this online cost calculator was very gratifying. We knew from past research that single payer saves money for the health system (see here). We also knew that funding single payer – collecting the revenue needed to cover all costs via the public budget – could be done with progressive taxes, i.e., a heavier burden on the rich.

What we didn’t know was how diverse households would fare. That is, how savings (ending current premiums and out-of-pocket costs) would compare with new taxes based on income. So we decided to ask. To estimate taxes, we designed a progressive mix of sales, payroll, income, wealth, and corporate profit taxes that yield the $223 billion needed in California for a no cost-sharing version of single payer (per the Health California for All Commission).

We found that nearly 9 out of 10 individuals who used the calculator would save money with single payer. That is, new taxes would be less than current spending on premiums (including wage effects of the employer portion) and out-of-pocket such as deductibles, copays, and uncovered services. The average savings are more than $5000 per year.

This is very encouraging in terms of public support for single payer. It’s not the last word on the topic – out-of-pocket burden is rising, so savings may grow over time, and different tax proposals will alter the exact numbers.

Still, the fundamental message is powerful: a progressively financed single payer proposal will financially benefit the vast majority of households. And (need I say?) do so while providing access to care with any provider.

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Collector Rolex vs. Progressive Taxes to Foster Egalitarian & Cohesive Society

Summary: $18 million for a pre-owned Rolex watch vs. tax rates that redress our astounding, historically high economic inequality, in pursuit of social cohesion and equality. Which message do we believe in?

Rolex Now Has a Resale Program. The Watch World Quakes.
New York Times
Jan. 18, 2023
By Victoria Gomelsky

There is a saying in the high-end watch trade that there are only two kinds of watchmakers: Rolex and everyone else.

Rolex is an even bigger juggernaut in secondary channels, where its pre-owned watches often fetch twice their retail value, and sometimes far more. (Many watch insiders cite the 2017 auction of Paul Newman’s Rolex Daytona for $17.8 million as the start of the current mania for collectible timepieces.)

Joseph Stieglitz: tax high earners at 70% to tackle widening inequality
The Guardian
Jan. 22, 2023
By Rupert Neate

Joseph Stiglitz, the Nobel prize-winning Keynesian economist, has called for … a special worldwide income tax rate of 70% on the highest earners …

“People at the top might work a little bit less if you tax them more. But on the other hand, our society gains in having a more egalitarian, cohesive society,” the former World Bank chief economist, 79, told Oxfam’s Equals podcast.

Stiglitz said that while an increase in the top rate on income would help lead to a more equal society, introducing wealth taxes on the fortunes accumulated by the world’s wealthiest over many generations would have an even bigger impact.

He described proposals by the US senator Elizabeth Warren for a 2% tax on people with assets of more than $50m and 3% on those with more than $1bn as “very reasonable” and said they “would really go a long way to raising revenues that could alleviate some of our country’s problems”.

Research published by Oxfam last week showed almost two-thirds of the new wealth amassed since the start of the pandemic has gone to the richest 1%. The charity found the best-off had pocketed $26tn (£21tn) in new wealth up to the end of 2021. That represented 63% of the total new wealth, with the rest going to the remaining 99% of people.

Oxfam said for the first time in a quarter of a century the rise in extreme wealth was being accompanied by an increase in extreme poverty. [See also: Oxfam 5 ways billionaires are bad for the economy]

More than 200 members of the super-rich elite last week called on governments around the world to “tax us, the ultra rich, now” to help address the inequality crisis.

The group of 205 millionaires and billionaires called on world leaders and business executives meeting in Davos for the World Economic Forum to urgently introduce wealth taxes to help tackle “extreme inequality”.

Comment by: Don McCanne

Let’s see now. Would we rather have a society in which a privileged few could accumulate much of the monetary work product of the rest of us in order to be able to satisfy personal whims such as being able to pay $17.8 million for a used wristwatch? Or would we rather have an egalitarian society in which people are rewarded appropriately for their work while being assured that their basic needs, such as health care, would be automatically met without having to face financial hardship? (As a reminder, post-WWII, a period of rapid economic growth, the US taxed top income brackets at 90%. High taxes and rising prosperity are mutually compatible.)

No contest: egalitarian values. So let’s get on with it. We all already have access to the time of day; let’s now achieve access to comprehensive health care for everyone in a system that’s affordable for all: single payer!

Editor: Preview of related forthcoming HJM post: our online cost calculator finds that single payer financed via taxes focused on higher earners, the wealthiest, and corporate profits lowers healthcare spending for 9 out of 10 households.

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How Not to do Universal Coverage

Summary: An appealing-sounding proposal for universal health insurance envisions a “social floor” “basic bundle” of medical care, to be supplemented by those that can afford more. It thus needlessly sacrifices the efficiency, equity, and unity available with single payer.

Achieving Universal Health Insurance Coverage In The United States: Addressing Market Failures Or Providing A Social Floor?
National Bureau Of Economic Research
January 2023
By Katherine Baicker, Amitabh Chandra, Mark Shepard

Abstract

The United States spends substantially more on health care than most developed countries, yet leaves a greater share of the population uninsured. We suggest that incremental insurance expansions focused on addressing market failures will propagate inefficiencies and are not likely to facilitate active policy decisions that align with societal coverage goals. By instead defining a basic bundle of services that is publicly financed for all, while allowing individuals to purchase additional coverage, policymakers could both expand coverage and maintain incentives for innovation, fostering universal access to innovative care in an affordable system.

Approaches grounded in addressing market failures in the current system are perhaps the path of least resistance in the short run, minimizing disruptions to care while marginally increasing coverage. But it’s worth noting both the limited effectiveness of such approaches over the last 50 years and the shortcomings that such patches would perpetuate.

Rather than beginning with the presumption that the main need is addressing market failures, an alternative approach to expanding coverage begins with the explicit presumption that covering everyone with some form of insurance is a social goal.

We discuss three key policy decisions in a system of guaranteed universal basic coverage: 1) What health care does the basic bundle cover, and how generous is that coverage? 2) What mechanisms are used to limit spending, and who decides? 3) Are people permitted to purchase top-up or supplementary coverage beyond the basic bundle? One goal of this article is to provide a framework that may help guide future research to help inform answers to these questions.

Few would argue that the current US health care system is serving everyone well. We are surely spending too much on the provision of health care that is delivering too little benefit to too few people. Reconceptualizing what we mean by universal coverage to ensure that public resources are devoted to care with high health benefit offers the opportunity to ensure universal access to innovative care in an affordable system.

Comment by: Don McCanne & Jim Kahn

Off hand, it seems that the question addressed by this paper has an obvious answer.  We have been attempting to expand health insurance coverage for everyone by addressing market failures, and it has, in itself, been a failure. Providing a social floor in health care coverage for everyone should lead to just the results we have been seeking. So where have these academics missed the target in describing the much needed pathway to health care justice for all?

Their first step in recommending abandoning those approaches that have led to market failures is certainly correct. Then establishing a social floor for coverage for everyone is also correct. That basically is what the PNHP single payer proposal is. The problem is that they define the social floor as covering the “basic bundle” for everyone,  and, then, “Once the parameters of a basic, guaranteed plan are established, a policy decision needs to be made about the allowability of supplemental plans for private purchase.” There could be a wide variety of benefits that could be “topped up” including patient cost sharing, add-on services such as dental or vision, private providers beyond those in narrow networks included in the basic bundle, or other important products or services considered to be beyond basic. That is, the basic bundle should not have to be topped up to reach the level of routine health care.

The idea of a “basic bundle” fails. First, how do you decide what to exclude? Is dental care really optional? Are narrow networks satisfactory for those who need a specialist? Second, how do you administer it efficiently? The authors propose capitation or ACOs to control spending. These have a dismal track record, and using for-profit intermediaries (as in Medicare Advantage) substantially increases overall costs while reducing care.

It’s not only inefficient, it’s inequitable. Topping up would allow wealthier individuals to receive the higher level of care to which everyone should be entitled. Instead of receiving greater benefits, they should be receiving the same comprehensive benefits as everyone else, but they should be paying a higher amount through progressive taxes. The extra funds that the wealthy put into the health care system should not be paying for privilege, but they should be funding an egalitarian health care system instead.

We’d all benefit together. Single payer bringing us together. An antidote for current political divisiveness.

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Galluping In the Wrong Direction: Higher Cost Barriers & Lower Quality

Summary: National polls show that the US is losing ground on two major indicators of health system performance: access to care and perceived quality. Who thought it could get worse? Gallup shows we’re galloping to disaster.

Record High in U.S. Put Off Medical Care Due to Cost in 2022
Gallup
January 17, 2023
By Megan Brenan

The percentage of Americans reporting they or a family member postponed medical treatment in 2022 due to cost rose 12 points in one year, to 38%, the highest in Gallup’s 22-year trend.

Americans were more than twice as likely to report the delayed treatment in their family was for a serious rather than a nonserious condition in 2022. In all, 27% said the treatment was for a “very” or “somewhat” serious condition or illness, while 11% said it was “not very” or “not at all” serious. [This] 16-point gap in the perceived seriousness of forgone treatment in 2022 is the second largest on record …

Americans Sour on U.S. Healthcare Quality
Gallup
January 19, 2023
By Lydia Saad

For the first time in Gallup’s two-decade trend, less than half of Americans are complimentary about the quality of U.S. healthcare, with 48% rating it “excellent” or “good.” The slight majority now rate healthcare quality as subpar, including 31% saying it is “only fair” and 21% — a new high — calling it “poor.”

Americans’ evaluations of the quality of healthcare they personally receive are also at a low ebb — albeit higher than their U.S. rating — with 72% giving it excellent or good marks. This low reading has been two years in the making, with the metric falling six points to 76% in 2021 and another four points in the past year.

Comment by: Jim Kahn

This pair of national Gallup polls demonstrates our health care is headed in the wrong direction. The care is less affordable and lower quality.

Why less affordable? In brief, under-insurance. As the Kaiser Family Foundation showed in its 2022 annual survey of job-based insurance, deductibles continue increasing (Fig. 7.18), even as employee premium contributions rise or stay flat (Fig. 6.23). Drug prices are extraordinarily high due to the industry’s relentless pursuit of profit, and cost controls in the Inflation Reduction Act are anemic. A commentary from last week noted that drug cost-sharing under the now ubiquitous pharmacy benefit managers (PBMs) can be devastating for patients who depend on expensive brand-name medicines with no generic options. Two main causes: First, a shift from fixed co-payments to percentage-of-cost coinsurance, which is based on inflated list prices. Second, exclusion of manufacturer patient assistance from deductible credit. The difference for patients can be tens of thousands of dollars a year (see sample calculations here). Wendell Potter wrote recently on the painful results for patients.

Financial barriers have clinical consequences. Research by Gaffney et al in late 2022 found rationing of insulin by 17% of patients or 1.3 million US adults. Research by Chandra et al in 2021 found that a 34% ($10) rise in out-of-pocket cost for seniors reduces drug use by 23% and increases mortality by one-third, specifically for statins and antihypertensives.

Why lower quality? It’s multi-factorial. Clearly COVID has burdened health care capacity, leading to worker stress, burnout, and staffing shortages. But I believe patient frustration also carries over from the financial challenges. When people have to pay more – which they can barely afford – they demand and expect more.

When the system is failing in multiple ways, it feels like it’s completely falling apart. Which it is.

Saddle up for single payer.

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Martin Luther King and Health Justice

Summary: The holiday honoring Martin Luther King is the perfect day to revisit the problems of racism still afflicting our health care system and indeed our health. Today we rely on the thoughtful commentary of our colleague Wendell Potter. 

The health care injustices that Dr. King spoke about are still here. And growing.
Wendell Potter NOW
Jan 16, 2023

How Long, Oh Lord, How Long?

The top story in yesterday’s Los Angeles Times brought to mind one of the most-cited Martin Luther King, Jr. quotes about health (and health care) in the United States. It is usually this version–slightly but significantly altered by someone who must have thought his exact words might offend some folks–that we see and hear:

“Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” …

[B]ecause California’s Medicaid program (called Medi-Cal) pays doctors and hospitals so little compared to what Medicare and private insurers pay, MLK hospital had a net loss of almost $43 million for care provided in the hospital’s emergency department last year.

[Read the full post. It is informative and compelling.]

Comment by: Jim Kahn

Thanks to Wendell for his excellent piece today. I couldn’t do better, so won’t try. To read HJM’s Juneteenth 2022 review of the many racist elements of US healthcare and health, see here. And see here a subsequent report on how hospitals serving Black patients are paid less, as also described in Wendell’s piece.

For this and other reasons, single payer would substantially (if incompletely) mitigate racial inequalities in health. Imagine that, a system that saves money, assures care for everyone, and eliminates financial inequality in health care. Keep imagining it, and working toward it, until it becomes true.

We’ve been on an impromptu break since January 6th. Back soon in usual form.

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The Problems with Job-Based Insurance

Summary: The Chamber of Commerce uses the results of its online poll to claim overwhelming worker support for job-based health benefits. However, the methods and reporting are biased. Survey findings by the Commonwealth Fund tell a far more worrisome story.

New Poll of American Workers Reveals Tremendous Value Placed on Workplace Health Benefits
U.S. Chamber of Commerce
December 15, 2022

Health insurance is the most important benefit an employer can offer workers and their families, according to a new survey on how American workers view employer-sponsored health coverage. Workers report that they overwhelmingly prefer to receive health insurance directly from an employer rather than through other means. The poll found that as high as 96% of Americans believe it is important that a job offer health insurance.

Ninety-three percent of respondents said they were satisfied with their insurance.

Employer-sponsored health insurance remains far more popular than insurance plans available on the individual market: 

89% of Americans expressed a preference for obtaining their health coverage through an employer than through other means. 

81% of respondents reported that they would rather receive their insurance from an employer than a government-provided health plan.

“I expected there to be a high level of satisfaction with employer health benefits, but I was stunned by the level of intensity,” said  Matt George of Seven Letter Insight, who ran the survey. “It is not an exaggeration to say Americans love, trust, and rely on their workplace health care coverage.”

The survey was commissioned by the Protecting American’s Coverage Together (PACT) campaign, a coalition including the U.S Chamber of Commerce, Business Roundtable, Vermeer Corporation, The National Association of Manufacturers and Council for Affordable Health Coverage. PACT represents leading employer voices focused on strengthening the ESI system and protecting the coverage and benefits that American families depend on for their health.

The State of U.S.Health Insurance in 2022
The Commonwealth Fund
September 29, 2022

By Sara R. Collins, Lauren A. Haynes, Relebohile Masitha

Forty-three percent of working-age adults were inadequately insured in 2022. These individuals were uninsured (9%), had a gap in coverage over the past year (11%), or were insured all year but were underinsured, meaning that their coverage didn’t provide them with affordable access to health care (23%).

Twenty-nine percent of people with employer coverage and 44 percent of those with coverage purchased through the individual market and marketplaces were underinsured.

Among the world’s high-income countries, the U.S. stands alone for the complexity of its health insurance system. Americans are eligible for different types of coverage depending on whether their employer offers it, what their income level is and what their age and health care needs are. There is no national enrollment mechanism for people who don’t have employer coverage; they must know which program they are eligible for and then sign up for coverage. Consequently, people can experience insurance gaps at different points in their lives, like when they lose a job.

The average insurance deductible for employer health plans with single coverage is more then $1,000 ($1,434 for all covered workers in 2021), and out-of-pocket maximums average $4,272 for single coverage in employer plans. Half of survey respondents said they would not have the money to cover an unexpected $1,000 medical bill within 30 days.

Comment by: Don McCanne & Jim Kahn

With our inordinately high costs of health care and persistent gaps and inequities in access, many hope that 2023 is going to be the year that we finally start to enact and implement health care justice for all. Remarkably, however, there is still resistance to the tested and proven concept that will get us there: single payer Medicare for All. Some argue that Medicare has too many defects, but we know what they are and can revise the program to meet widely accepted standards of care. Other nations have shown that to achieve the goals of equity, accessibility, and affordability for all, the government must have a central role.

To those who advocate for reliance on a private sector strategy, we point to its clear failings. Our health system failings reflect the shift of health care funds from patient care to wealthy investors, such as through public fund privatization (eg Medicare Advantage and Medicaid managed care) and the massive acquisition of providers by private equity. That’s why we must pay for health care through public insurance on the model of traditional Medicare.

Employers and insurer organizations tout the benefits of employer-sponsored health insurance. Admittedly, these plans provide a welcome financial backstop for expensive medical problems, such as a heart attack or a fracture requiring surgery. Unsurprisingly, workers value getting health benefits with a significant employer contribution. Yet most job-based plans have large deductibles (thousands of dollars) and provider networks are limited. This mixed picture is evident in the Commonwealth poll and reports by the Kaiser Family Foundation and others.

The Chamber of Commerce poll and report grossly exaggerate the level of support for job-based coverage. It’s biased, in four ways (please excuse geek detour):

1) Biased sample of respondents: it’s an online survey, with no sampling frame or response rate specified. This is a red flag for self-selection: the individuals who see and participate in the poll have a special perspective. The report doesn’t indicate the recruitment message, but if it was something like “What do you like about your health insurance?” or “Do you appreciate your health benefits?”, who do you think would click over to the survey?

2) Biased presentation: Statistics are presented in a way that favors the pro-benefits view. E.g., 52% do NOT strongly agree that insurance is affordable, and a similar % do NOT say that it’s high quality. More than 70% do NOT say it’s comprehensive or convenient.

3) Unfair comparison with public insurance like single payer. Respondents are asked if they prefer private work-based coverage or “government insurance”. No hint at what that means – is it Medicaid? The responses would be quite different if phrased fairly, e.g., “an improved Medicare for All, with coverage for all medical needs; no premiums, deductibles, or copays; and increased taxes only if you earn >$250,000”.

4) Omission. They don’t ask if workers are pleased that employer contributions to health benefits come out of wage or salary levels. (They do, to a very large degree.)

Polling as advocacy isn’t real information. Ok geek mode off.

Single payer would enable access to the entire health care system whenever needed. In contrast, employer insurance depends, first of all, on employment status and employer benefit plans. Second, details of the insurance contract matter: there may not be freedom to choose health care providers,  hospitals, pharmacies, or even what care is covered. Workers may fall prey to job lock, required to stay in a job because insurance may not be available if they quit. Voluntary and highly varied job-based insurance guarantees that coverage is inequitable and unreliable, in contrast to the equity and universality of single payer.

It is understandable how, through the years, individuals have liked employer sponsored plans, since they have been among the better options to provider, under the right circumstances, heath care for workers and for their families. (Less true these days due to the skyrocketing deductibles, and obscuring the lower wage effect.)

Also, taking solace in decent job-based insurance undermines a principle that most of us care about: solidarity. Most of us really would like to see health care for everyone.

Not long ago, we experimented on a large scale with trying to fix the private insurance approach. The Affordable Care Act aimed to preserve, improve, and expand employer sponsored insurance as a pillar of our health care coverage, filling in the voids with a regulated market for private insurance and more Medicaid. The ACA seemed to enhance solidarity while preserving employment sponsored plans.

The problem, as reviewed well recently, is that this experiment in health policy was a dismal failure in providing decent coverage for everyone, and thus a failure in the solidarity we seek. Tens of millions remain uninsured, and under-insurance exploded with the rapid growth of high deductible plans. If solidarity is building, it’s of the wrong variety: shared pain.

Other nations provide us with ample highly successful examples of single payer. They are effective in providing affordable care for everyone and thus also fulfill the goal of solidarity. We really can have high performance universal health care, and save money in the process. A single payer system would guarantee better health care choices than in employer sponsored plans, for workers and for everyone.

We have the opportunity to reject the current, fragmented, dysfunctional employer-sponsored system and adopt policies of social solidarity that would bring affordable, comprehensive high quality health care to everyone.

Look around you. This really seems to be the year to fix the health care financing system in the United States. We can use our ingenuity to create a uniquely American system of social and economic justice.

Let’s do it. In solidarity, single payer for all!

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Health Justice Monitor Annual Review 2022

Summary: The news from 2022: profits, insurance gaps, and medical debt are high; access to care and longevity are low; and efforts for real reform remained determined, and align with democratic values.

Here’s a comprehensive topical compendium of health justice issues we covered last year. The review for 2021, using similar categories, is here.

Revelations – What did we learn (or learn again)?

Our system is failing, more clearly than ever: Our insurance patchwork is an abysmal failure. The Commonwealth annual survey found that 43% of adults 19-64 are inadequately insured; 46% skip care for financial reasons; and 42% have medical bill problems or debt. Underinsurance among children grew from 31% in 2016 to 34% in 2019, a rise of 2.4 million. Women of reproductive age are more likely to skip or delay needed care due to costs, and have the highest rates of avoidable death among high-income countries. More fetuses and babies are dying from syphilis, due to inadequate prenatal care. 26 year-olds struggle to find coverage. A reporter battled with prior authorization to obtain his insulin, barely.

Only 21% of US adults think our healthcare system is good or excellent; just 7% for costs, 22% for equity, and 31% for access. 

Most sadly, overall mortality strikingly worsened: longevity dropped from 79 in 2019 to 76 in 2021, placing the US 4-8 years of life expectancy behind other wealthy nations.

Medical debt is surging – currently affecting 41% of adults, median $2500 with significant effects on other needs. Other surveys found that 18% of households have it, worsening social determinants of health, and 1 in 4 Gen Z and Millennials skip rent or mortgage due to medical debt. Privately-insured individuals with chronic illness are far more likely to have medical debt that is delinquent or in collections, and credit problems. At its worst, medical debt combines with loss of access to care. Not-for-profit hospitals aggressively pursue payment from poor patients eligible for free care. The prevalence of debt in collections varies geographically, higher in the South and with elevated levels of multiple chronic diseases, low birth weight, uninsured, Black race, low income, and high medical spending. The centrist proposed solutions are grossly inadequate.

Health workers feel the pain. The electronic health record, laden with billing requirements, consumes >4 hours per day of physician time, far higher than in countries with simple insurance. There was an exodus of health care workers due to COVID-related work stresses and inadequate employer support

Our priorities are profoundly skewed. A nurse who mistakenly kills one patient gets 8 years in prison; our insurance gaps kill 100,000 a year and nobody is indicted. Primary care, which saves lives, is struggling to survive.

COVID revealed & exacerbated the problems.  During the pandemic, COVID-revealed insurance flaws went unaddressed. Sadly, lack of insurance caused 340,000 added COVID deaths (at time of analysis, more since), radio interview here.

Racial and income disparities remain pervasive. Racism is widespread in US health risks & care, including lower payments for hospitals serving black patients. We propose that single payer will meaningfully (but incompletely) mitigate it. Racism even appears in the crafting of the Inflation Reduction Act. A tiny but vocal group of doctors argued to end all COVID precautions (including masking) which would most harm under-vaccinated and -resourced populations.

State-manipulated and privately managed Medicaid is floundering. In California, a new private pharmacy carve-out adds costs and impedes prescription filling. Medicaid does not guarantee access to cancer care. The profound complexity fills the news. When Connecticut Medicaid dumped private insurers, they saved money and raised quality of care.

System tweaks fall short. Value based care (VBC) – e.g., accountable care – is a pretext for privatization and shareholder yield, with no evidence of public financial or health benefit. Paying for quality targets has not improved quality, with countless dollars and hours on metrics of dubious validity. We critique the CMS manifesto for VBC. Unfortunately, moderate Dems and the GOP support privatization with regulation, a proven non-cure for our insurance woes.

Responses to COVID insurance loss staunched the bleeding briefly. The end of pandemic-instigated Medicaid expansion means eligibility “redetermination” will remove up to one-third from the program. Expanded ACA premium subsidies were insufficient and temporary. As the COVID crisis subsides in intensity, special funding to support its care is disappearing, with patients uncovered.

Medicaid expansion in California leaves behind hundreds of thousands of immigrants.

Health savings accounts – an ever-so-clever invention – turn out to be regressive and ineffective (as many of us predicted). High cost sharing benefits insurers and harms patients. Price transparency for hospitals is rarely adhered to and futile. Piecemeal actions to lower administrative costs are a false fix – untested and small in magnitude. We imagine an apology from a health economist realizing his misguided faith in system tweaks.

A growing profit focus is largely to blame: We determined that an apparent 4.5% insurer profit margin really represents massive 30% returns. We see corporate myths and profit models adding complexity with no gains for patients. The Elizabeth Holmes Theranos case reminded us vividly of the corrosive role of greed in creating false health benefit narratives, as seen broadly in health care. Twelve-year financial trends for the largest six insurers reveals skyrocketing revenue and profits, based mainly on a growing role in public insurance. Half of Americans are in their plans. Private insurers boosted profits during COVID by keeping premiums for care not delivered, even as the government bailed out providers. Income-seeking tactics following business norms rather than medical ethics hurts patients.

For-profit companies are buying up primary care (and here), gastroenterology, and providers more generally, raising serious concerns about the effects of a profit model and lack of community control. Amazon joined the fray. Investor ownership of hospitals is linked with more low-value care, while higher primary care physician presence predicts less low-value care. Sadly the big money culture spreads: both for- and not-for-profit hospitals use aggressive business models (mergers, high prices, & marketing of lucrative services) to maximize revenues and enrich executives and specialists.

The accelerating intrusion of private equity is profoundly damaging (and here), like termites weakening the structure of US health care, rewarding investors at the expense of patients. Private equity ownership of nursing homes depletes services and raises mortality. In the UK private for-profit care raises mortality.

Rising public support for unions is a counterpoint to salary cuts for pharmacists.

The profit quest of course afflicts drug companies, with stunning profit margins. Pharma is battling insurers. And they’re manipulating prices to maximize profits and patient burden.

We bemoan the pervasive untrammeled focus on profit over basic social values, with guns, corporations, foreign policy, and health care.

Medicare is under attack. Medicare continued to suffer the ravages of privatization, from Medicare Advantage (MA) to Direct Contracting in Traditional Medicare (TM). Whistleblowers and the government fight fraudulent upcoding by MA plans, but CMS egregiously fails to correct aggressive (largely legal) upcoding, overpaying by $600 billion over 10 years. MA plans inappropriately denied millions of prior authorization requests. A second installment by Drs. Gilfillan and Berwick buttresses their Sept 2021 critique of MA. Another litany of MA failings.  The NY Times exposed the MA “cash monster” absconding with public funds. MA engages in aggressive and misleading marketing. Compared with TM, clinical outcomes are worse for advanced cancer and similar (at best) for myocardial infarction. Despite cogent critiques, CMS only tinkers at the edges with hundreds of pages of regulations that ignore the fundamental problems.

In February, CMS rebranded TM direct contracting (DCEs) as ACO REACH, leaving intact its profiteering core structure. We critique its defense here and here. And ponder and worry about its risk rating framework. TM physician payments are dropped, leading to program exit. TM ACO REACH will further undermine doctor-patient trust, and won’t provide meaningful equity gains.

Resolve – How did we demonstrate ongoing broad commitment to single payer?

Broad public insurance works. Veterans Affairs (basically a small national health service) lowers mortality by half and costs by 1/5 after an emergency visit, compared with private care. Our analysis of proposed financing for California’s AB1400 suggests savings for the vast majority of families, and a new online household cost calculator lets individuals see for themselves (preview: 9 in 10 save an average of nearly $6000).

Public discussion about reform retains a robust single payer component. Single payer has a clear definition, regardless of what critics may say. A commentary in the Nation noted $117 billion in annual savings from single payer in California amidst our health care cost explosion and the unsavory trade-off forced on us daily: corporate profits up, family health down. Voters across the country approved local single payer initiatives and midterm ballot measures for universal publicly administered health insurance, as well as to regulate medical debt collection and expand Medicaid. A third of adults would vote for a candidate from a different political party if reducing healthcare costs was their top priority. We featured two inspiring women, a lawyer pursuing drug patent changes that favor access for patients over stockholder gains and an heiress urging high taxation of inherited wealth. Don Berwick, a pre-eminent leader in quality improvement, endorsed single payer over greed and profit.

The Healthy California for All Commission endorsed “unified financing,” standard coverage indistinguishable across individuals, lowering costs while assuring access; aka single payer. The Congressional Budget Office highlighted multiple ways in which single payer would strengthen the general economy. Indeed, the thriving economy of Taiwan adopted single payer in the 1990s. We saw single payer support from a conservative acquaintance, a well-known libertarian, Ross Douthat, and a lifelong conservative in Utah. California’s AB1400 advanced from committee, but alas with inadequate support to pass In the full Assembly, was pulled; we explored potential lessons.

Mainstream Democrats passed some good if minor reforms. The Inflation Reduction Act, a scaled-down Build Back Better, takes baby steps toward single payer: first-ever controls on drug prices for CMS and out-of-pocket costs for Medicare beneficiaries.

Health reform is linked to other health issues. We note the rising tide of gun deaths in children and advocate for truthful discussion on guns to honor those who served in the military. We oppose the loss of abortion rights, linked to health reform and democracy. We highlight the profound health implications of climate change.

Robust democracy & single payer have important links. Challenges facing democracy parallel those in health care – a controlling minority aggressively, undemocratically, and fraudulently persuades legislators and bureaucracy to do its bidding. Tactics used by the GOP to subvert voting and for-profit insurers to subvert health care are remarkably similar. The successful midterms (for Democrats and democracy) prompted exploration of conceptual and strategic links with single payer. Indeed the battle for the soul of health care echoes – or should – the battle for the democratic soul of the nation. We can fight conservative despair politics with single payer. Voting rights bills and single payer use simple & equitable rules to guarantee the rights to vote and health care. Freedom is a central feature of single payer – to choose providers, prevent medical debt, and avoid billing hassles. Many wealthy countries thrive with social democracy, crucially enabled by universal health coverage (just reaffirmed in British Columbia). 2022 saw democracy protected from tyrants in the US and abroad through visionary leadership and resolve; the struggle for US health justice demands nothing less. The Jan 6 hearings offer a model for effective public hearings for single payer.

Alternative framing is useful, and fun. We listed 20 single payer advantages & 20 obstacles. We highlighted a call for skilled advocacy. We demonstrate that single payer is “free love”. Two video minutes with Dr. Glaucomflecken says it all, with a smile. We report on disintermediation – insurers pulling out, alas an April Fools post. The profit-mortality nexus is clear on Halloween.

We mourned the passing of Paul Farmer, a visionary and unyielding advocate for global health, who’s antipathy to limiting care is so relevant to the US single payer discussion. We explore the idea of “health communism”.

We praised Thomas Piketty’s vision for modern socialism, which embraces public-spirited investment in health and education for all, while adopting modern equity and ecological values.

Resistance – Where did we fight back against anti-reform actions?

We pushed back on the myth that fee-for-service is the high medical cost culprit and capitation is the only solution. We critique the distorted single payer variant Medicare Advantage for All. Advocacy organizations argued to completely overhaul or dump Medicare Advantage, and battled ACO REACH. Connecticut advocates fought anti-competitive hospital price gauging.

In sum, a 2022 triptych mnemonic:

1) Private insurers (and pharma and large providers) grow profits via manipulation;

3) Even insured patients face huge costs that compromise access & health, and confer crippling debt;

3) There’s strong popular support for fundamental reform – single payer.

The struggle for health justice continues.

– Jim Kahn, HJM editor