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Public Health Capacity Needs a Major Boost

Summary: To achieve a healthy nation, we need not only single payer healthcare, but also robust public health practice. During COVID, an already underfunded and understaffed public health system suffered a buffeting while – and because – it was trying to do its job of mitigating the pandemic. It’s time to rebuild public health capacity.

Threats, Resignations and 100 New Laws: Why Public Health Is in Crisis
The New York Times
October 18, 2021
By Mike Baker and Danielle Ivory

State and local public health departments across the country have endured not only the public’s fury, but widespread staff defections, burnout, firings, unpredictable funding and a significant erosion in their authority to impose the health orders that were critical to America’s early response to the pandemic.

While the coronavirus has killed more than 700,000 in the United States in nearly two years, a more invisible casualty has been the nation’s public health system. Already underfunded and neglected even before the pandemic, public health has been further undermined in ways that could resound for decades to come. A New York Times review of hundreds of health departments in all 50 states indicates that local public health across the country is less equipped to confront a pandemic now than it was at the beginning of 2020.

“We have learned all the wrong lessons from the pandemic,” said Adriane Casalotti, chief of public and government affairs for the National Association of County and City Health Officials, an organization representing the nearly 3,000 local health departments across the nation. “We are attacking and removing authority from the people who are trying to protect us.”

Comment by: Don McCanne

A side bar indicated that Colin Powell died of Covid-19, in spite of having been vaccinated. Did those whose actions are promoting the dissemination of the Covid virus really want this to happen?

I am literally shedding tears for our nation.

We just want excellent health care and public health practice for everyone. Is that really too much to ask?

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Don’t Undermine Medicare via Means Testing in Build Back Better

Summary: Means test Medicare? What? Yes, suggested by a conservative Democrat for the proposed Medicare improvements in the huge social infrastructure bill in Congress. This would undermine the solidarity of support for a great program, and leave many elders without insurance or care. It must be stopped.

Means Testing is the Wrong Approach to Medicare Expansion
The Hill
October 11, 2021
By Max Richtman

The debate over Medicare expansion has hurled a bad idea back into the public square:  means-testing seniors’ health care benefits. This is something seniors’ advocates have long opposed, because it would hurt beneficiaries and undermine support for the Medicare program itself. Means-testing benefits should have no role in the expansion of Medicare to include dental, vision, and hearing coverage — which are part of President Biden’s Build Back Better Plan working its way through Congress. 

These expanded coverages would plug a gaping hole in Medicare that has prevented millions of seniors from obtaining proper care for their eyes, ears, and teeth — the gateways to good health. But now some centrist members of Congress want to limit those crucial, new coverages to an income-restricted segment of beneficiaries. That amounts to means testing of benefits — something that has been anathema to Medicare since its inception.

Manchin’s Means-Testing and Work Requirements Are a Recipe for Building Back Worse
Common Dreams
October 13, 2021
By Nancy J. Altman

If Manchin forces work requirements and intrusive, demeaning means tests, it will be substantially easier for Republicans to drown Biden’s legacy in the bathtub once they are back in control.

Manchin’s demands for work requirements and means-testing would save money largely by making federal programs inaccessible to many who need them, including those who need them the most. Those most in need often have the most trouble navigating complicated and burdensome eligibility requirements, because they generally lack the necessary time, resources, and family support. Experience teaches that much of the money saved on benefits would be spent on wasteful and intrusive administration.

Comment by: Eagan Kemp

The universal nature of Medicare coverage for seniors is one of the key reasons that it has often been referred to as the third rail of U.S. politics. Politicians have been loath to try to cut Medicare, even as they have sought to privatize it. Adding means testing would threaten the very foundation of Medicare and open it to future cuts and debasements. It would also impose administrative barriers, meaning many seniors would lose coverage (something we see regularly for Medicaid beneficiaries).

If Manchin and others worry that the wealthy will get benefits they could otherwise afford, then the better solution is for the wealthy to finally pay their fair share in taxes. A strong Medicare system is truly universal, one of the key reasons we fight for Medicare for All.

Under Medicare for All, funded by progressive taxation, we would finally guarantee that everyone gets the care they need, regardless of cost. And ensure that wealthier Americans contribute to financing while benefitting from high-quality care.

Although sufficient social solidarity is necessary to set up a universal healthcare system, it is also true that countries with universal healthcare systems develop a level of pride in their system far beyond what anyone would claim for our fragmented and profit-focused system. Means testing in Medicare would disrupt one of the few bright spots in our health coverage. We must do everything in our power to stop it from happening.

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We can cut drug prices *and* foster innovation

Summary: As Congress considers enabling Medicare to negotiate down out-of-control drug prices, pharmaceutical companies warn that innovation will suffer. Not so, says the president of the Commonwealth Fund. And not so, experts agreed back in 2004. It’s time to empower the public purchaser!

The U.S. Can Lower Drug Prices Without Sacrificing Innovation
Harvard Business Review
October 1, 2021
By David Blumenthal (President, Commonwealth Fund), et al

With Congress considering legislation to allow Medicare to use its bargaining power to negotiate lower drug prices, large pharmaceutical companies are once again waging a campaign that contends that doing so would seriously harm the development of breakthrough drugs. This is not true. Smaller companies now account for the lion’s share of such breakthroughs. The key to supporting drug innovation is to increase NIH funding of the efforts that gives rise to these new companies, cut the costs and accelerate the speed of clinical trials, and reform patent law.

The United States needs an effective strategy for maximizing drug innovation and the huge benefits to humanity that it promises. Protecting the revenues of Big Pharma is not that strategy.

Border Wars: The Prescription Drug Battle with Canada
January 27, 2004 (yes, 2004!)

Debate excerpts:

James K. Glassman: Dr. McCanne, as a physician do you have concerns that if drug importation and re-importation forces down prices, that drug companies will cut back research, and that ultimately Americans will not be able to get the life-saving medicines that they have been getting over the last many decades?

Don McCanne, MD: We don’t think that we really need to re-import drugs from Canada. We think we need to import Canadian drug prices. Every other nation has some mechanism of controlling excessive prices. And we need to do the same thing. In Medicare we do that for physicians, hospitals, laboratories. And now that we’ve accepted prescription drugs as a part of Medicare, we need to do that with the prescription drug industry as well.

JKG: Top-down, command and control stifles innovation, writes someone sitting in front of me. I think that’s a pretty good proposition. How does Dr. McCanne expect innovation to occur?

DM: Well, just not top-down control, but funding. You know, price controls and budgeting and so forth. And that really is an important issue in innovation. But if we look at the history in technological innovation, probably two of the very greatest advances in the last half century have been MRI scans and CT scans. Each of those appropriately received the Nobel Prize for those developments. Where were they developed? Well, the Nobel Prize was shared with a British scientist. England has amongst the lowest rate of funding of their health care system, but that did not stop the technological innovation that occurred in the CT scanning and MRIs, and some of the other research that has taken place.

JKG: Disrupting that system in the way that you propose, many people think would stifle that kind of innovation. Where is this innovation going to come from if it’s not from drug companies wanting to make decent profits on developing new drugs?

DM: There’s no way the drug industry is going to walk away from $1.6 trillion, period.

JKG: Dr. Friedman, Congressman Gutknecht just said the best way to get drug prices down is to have the government negotiate on peoples’ behalf. Do you think that’s the best way to get drug prices down?

Nobel laureate Milton Friedman: No, I don’t think that would get drug prices down. You would still have the situation that a pharmaceutical company produces a drug, that drug involved a lot of cost in developing it. It has to get that money back. It’s going to charge a high price.

Congressman Gil Gutknecht: The idea that no research goes on in Europe is really a myth. And so the idea that somehow if we open up markets and allow more competition that research will somehow stop I think is really a myth and we need to discard it. The idea that you [need] billions of dollars in return, and especially when much of the research is essentially funded by the taxpayers. We’re going to spend this year, and I’m proud of this number, we’re going to spend $27 billion of your dollars on basic research from the federal government this year. And much of that will be given away to the pharmaceutical industry. And so this whole notion that unless we protect these exorbitant prices that Americans are forced to pay, that research won’t be done, I think that’s a myth. And I think there’s plenty of history to prove that.

JKG: Dr. Friedman?

MF: Of course research will be done. I think it is an exaggeration to say that the only source of research is the existence of patents. It isn’t. There’s been enormous progress in medical science over the last 100 years, most of it in ways that have very little or nothing to do with the patent system. They’re through universities, they’re through non-profit organizations, through government [things], so that the issue is not will there be any innovation or not? The issue goes back to the question of do you want to grant patents? And if you want to grant patents, what contracts which the patent owner makes are enforceable in the courts? That it seems to me is a straight-forward issue.

I’m not arguing that this is the be all or end all of innovation, it isn’t. But it is true that it costs a great deal of money, thanks to FDA provisions to bring a new drug to market, and that you have to face the question of how is that going to be financed? And is it going to be financed through patents or is it going to be financed through government subsidy? That’s I think the issue at bottom, it’s not an easy issue. Don’t misunderstand me. As I say, I personally had very mixed feelings to begin with about this issue.

JKG: Dr. Friedman, did you want to comment on the issue of the government doing more negotiating on prices for drugs?

MF: If the government is buying, it ought to be free to negotiate, I have no quarrel with that. I’m not trying to protect the pharmaceutical companies, they’re plenty good at protecting themselves.

Comment by: Don McCanne

Big Pharma (PhRMA) is currently heavily promoting the concept that if Medicare is allowed to negotiate drug prices with the pharmaceutical industry, there will be inadequate funding left to develop new pharmaceutical innovations that would enable the production of new breakthrough drugs. This is not a new concept as the debate excerpts above from a generation ago demonstrate. But also not new is the counter to that, stating that much of the cost of research is borne by other entities and not the pharmaceutical firms. The outrageous pricing of new drugs is not because of the costs of research, but rather it simply reflects the greed of the pharmaceutical industry.

Why does Pharma fear negotiation of drug prices? The full answer appears in the Harvard Business Review article cited above, but their primary concern is that it could bring an end to their lucrative, egregious price gouging.

Even Milton Friedman said that bringing a new drug to market could be financed through patents or through government subsidies, and he conceded that he had mixed feelings about this. History has confirmed that reliance on government subsidies has still led to price gouging, so there should be no more mixed feelings. Price negotiation has become an imperative. As Milton Friedman said, “If the government is buying, it ought to be free to negotiate.”

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Access to Mental Health Care — US worst among wealthy countries

Summary: World Mental Health Day was October 10th. How is the US doing on access to care? Terribly. Therapists often don’t take insurance, and we lead wealthy nations in financial barriers to care: fully 50% of those in need. Single payer would provide a strong behavioral health benefit.

Why It’s So Hard to Find a Therapist Who Takes Insurance
The Wall Street Journal
October 5, 2021
By Andrea Petersen

Especially in big cities such as Los Angeles, New York and Washington, D.C., demand for mental-health care is so strong that many experienced therapists don’t accept any insurance plans, they say. They can easily fill their practices with patients who would pay out of pocket, they add. Therapists who do take insurance are often booked up. And in many smaller towns and rural areas, there are few mental-health professionals at all.

Mental Health Care Needs in US and 10 Other High-Income Countries The Commonwealth Fund
October 8, 2021
By Reginald D. Williams II, Arnav Shah

The following charts show that, across the countries, large shares of people with mental health needs: … have high rates of cost-related problems accessing care, especially among US Black and Latinx/Hispanic adults.

Comment by: Isabel Ostrer

World Mental Health Day was on October 10, so we ought to look at mental health care access in the United States. The findings are, unfortunately, discouraging.

As the WSJ article points out, finding a therapist who will take your insurance is difficult. There’s no requirement for mental health providers to accept insurance. And, in fact, they often make more by not taking it, thus incentivized to accept only patients who have the means to pay out of pocket.

It’s no wonder that the US fares poorly among peer high-income nations when it comes to mental health. The Commonwealth Fund survey finds that white and Black US adults have the highest rates of mental health needs in these countries. And US adults with mental health needs were the most likely to report a cost-related problem accessing health care. Black US adults with mental health needs use the emergency room – a suboptimal setting – at disproportionately high rates.

As we reflect on World Mental Health Day, the US has plenty to learn from peer countries. Perhaps most fundamentally is that we must broaden access to mental health treatment and providers. A single payer system would achieve this by ensuring all Americans have access to a standardized package of behavioral health care services. 

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Racism in health – medical debt

Summary: “Columbus Day” is a holiday that invites us to reflect on another source of pervasive racism in our health system – the debt that arises when health insurance is absent or inadequate. This problem would be resolved with, yes, single payer.

The racial implications of medical debt: How moving toward universal health care and other reforms can address them
Brookings Institute
October 5, 2021
By Andre M. Perry et al.

17.4% of households with insurance have medical debt compared to 27.9% of households without insurance. Conditional on having medical debt, households with health insurance have an average of $18,827.25, while households without health insurance have an average of $31,947.87.

[R]oughly half of all collections tradelines are due to medical bills, affecting nearly one in five consumers in the credit reporting system. … In 2007, at least 62% of bankruptcies were, at least partially, attributable to medical debt. Even after the advent of the Affordable Care Act in 2010, that number has not decreased significantly.

Twenty-seven percent of Black households hold medical debt compared to 16.8% of non-Black households.

Comment by: Jim Kahn

Today is still officially designated “Columbus Day” despite the racist implications of naming the “discovery” of this continent for a European who arrived to find inhabitants already quite aware of its existence. Thus started racism in our land.

Racism permeates our systems. Recently I wrote in HJM about two reports on racism in health. In this post I add a third: medical debt.

The Brookings Institute examined census data and found that medical debt rates are far higher among Blacks than Whites. This is related to a greater chance of being uninsured, but even insured Blacks are as likely as uninsured whites to hold medical debt.

Who’s got this medical debt? Almost entirely people with zero or negative net worth. Not people who can afford it.

How much do they have? A mean of $20,500, a median of $2000.

The racism links work, in part, like this:

  1. Blacks were historically shunted to occupations and jobs that paid less.
  2. Blacks were deprived of government subsidies, such as federally insured mortgages.
  3. Black families thus have a net worth about one-tenth that of whites.
  4. The jobs Blacks hold are less likely to provide health insurance.
  5. Safety net insurance like Medicaid is very restricted and stingy in many states.
  6. Blacks are left with poor access to health care and more medical debt, which they can’t afford.
  7. Financial barriers to healthcare cause serious health consequences.

The Brookings authors mention single payer as one potential solution to these problems. We think single payer is the only reasonable option that meets their own prescription that “American health insurance systems need a radical restructuring”.

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Medicare Privatization is Failing Seniors

Summary: Seniors face much greater financial barriers to medical care in the US than in other wealthy countries. Why? Because we’re handing Medicare over to business interests, which prioritizes profits over medical care and health.

When Costs Are a Barrier to Getting Health Care: Reports from Older Adults in the United States and Other High-Income Countries
The Commonwealth Fund
October 1, 2021

Toplines

Older Americans pay more for health care and are more likely to postpone or skip care because of the cost than people in other high-income countries.

Despite the financial protection Medicare offers, the program’s significant cost-sharing requirements leave many older adults exposed to high health care costs.

Policy Implications

Overall, our analysis shows that the affordability of health care remains a concern for older adults and is leading American seniors to forgo care. Survey data show that older Americans pay more for health care and are more likely to postpone or skip care because of the cost than people in other high-income countries. Countries where more comprehensive coverage is available have fewer people skipping or missing care. Dental care illustrates the key role coverage plays in access to care: in those countries that carve out dental care from medical coverage, or fail to cover it at all, many people avoid getting their oral health needs addressed.

Care that is postponed or never received could have cost implications for Medicare. Evidence shows that forgoing health care is associated with poor health outcomes and increased risk of hospitalization.

Congress is currently considering legislation that would add dental, vision, and hearing coverage to traditional Medicare. This change could lead to an increase in U.S. older adults visiting the dentist.

Comment by: Don McCanne

In spite of the popularity of the concept of Medicare for All, what gains have we actually made in expanding Medicare to provide more financial protection for seniors, much less expanding Medicare to cover more individuals than those over 65 (except for people with disabilities)? This Commonwealth Fund study indicates that, compared to other countries, Medicare is falling short of providing adequate financial protection to seniors with health care needs.

Although there has been considerable discussion about using proposed reconciliation legislation to expand Medicare coverage by adding dental, vision, and hearing services, insider information from Congress reveals that it has already been decided that these services will not be included as efforts are being made to compromise on the cost of the legislation.

Actually, it is worse than that. As we continue to advocate for Medicare for All, a greater percentage of Medicare beneficiaries have moved into the privatized Medicare Advantage plans, and, even worse, there is considerable momentum to involuntarily shift even more of the traditional Medicare beneficiaries into privatized plans through the deceptive direct contracting entities (DCE). Those who are trying to escape into the Medigap policies are finding that they may not be available to them if they did not sign up when they first became eligible for Medicare.

So not only is Medicare coverage not nearly as generous as many of us need, the private insurance industry is operating behind the scenes to even further reduce the coverage provided while using celebrities to promote sales through false images of expanded coverage when actually they are taking away coverage and diverting profits though restricted provider lists, prior authorization barriers, illegitimate risk-adjustment upcoding, and other private insurer deceptions.

For decades now, we’ve been sitting in the aisles, supporting “Medicare for All,” while the various administrations have been moving in the direction of turning health care over to the business interests. Those physicians who were in practice, like me, before Medicare and Medicaid were enacted – just think back about how the programs were when they began and how they have been transformed over the decades, right under our supposed supervision, giving ever more power to the MBAs. Now look at where we are with the pending involuntary privatization of the traditional Medicare program, with structural changes being made to take good care of the business interests while neglecting the needs of patients. Think of the various policies that have been and will be put in place, and you will see that they are based on what is taught in business schools and not on what is taught in medical, nursing, and other health professional schools. There we are taught how to take care of patients.

Do we really want to continue to promote Medicare for All when Medicare itself is transforming into an industry that primarily serves the financial interests of insurers to the detriment of the health care interests of patients? Are we going to end up with Medicare Advantage for All? That’s a label that might assist the private insurers with their marketing, but it can only compound the deficiencies hinted at in this Commonwealth Fund report on current health cost barriers for our seniors on Medicare.

Maybe we’d better reset our public education campaign and go back to promoting SINGLE PAYER – Health Care for All.

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Dental care for Medicare!

Summary: Medicare has always lacked dental services. Some dentists are now offering dental practice “memberships”. But dental health is too important to be handled piecemeal and unregulated. It’s time for dental coverage in Medicare!

Dentists Chip Away at Uninsured Problem by Offering Patients Membership Plans
Kaiser Health News
September 17, 2021
By Phil Galewitz

A quarter of dentists nationwide [offer] memberships, according to a 2021 survey of 70,000 dentists by the American Dental Association.

These in-office plans are largely targeted to the 65 million Americans who lack dental insurance and have to pay out-of-pocket for all their care. Dentists also like the plans better than handling insurance plans because they don’t have to deal with insurers’ heavily discounted reimbursement rates, waits to get preapprovals to provide services and delays in getting their claims paid.

Comment by: Allison K. Hoffman & Hannah Leibson

Congressional Democrats continue to battle over the size and scope of the 2022 budget reconciliation bill. The $3.5 trillion version of the bill proposed in September adds dental, vision, and hearing benefits to the traditional Medicare program. But if the total spending decreases to levels that moderate Democrats like Joe Manchin (WV) and Kyrsten Sinema (AZ) currently demand, these benefits are at risk.

Since Medicare’s passage in 1965, dental coverage has not been part of traditional Medicare benefits, despite strong evidence that poor oral health can exacerbate other health conditions. As noted in an earlier HJM post, without this benefit, approximately 24 million Medicare enrollees lack access to dental coverage. In turn, many do not seek out needed dental care, a problem disproportionately affecting communities of color and low-income beneficiaries. For Medicare beneficiaries who did seek dental care in 2018, average out-of-pocket spending neared almost $1000 a year.

Today’s options for beneficiaries are not great. Some people enroll in Medicare Advantage, which generally includes some dental benefits. Moving into a managed care plan with a private insurer can be unappealing in various other ways, however.

This recent Kaiser Health News article highlights another alternative, one that also falls short. It describes how up to 25 percent of dental practices nationwide have begun to offer independent membership plans to their patients. These prepaid care plans provide, for a fixed monthly fee, access to basic services like an annual exam, coverage for an emergency visit, and discounts on procedures. The yearly cost to enroll in one of these plans is about $300-400. 

These plans may chip away at the number of people who forgo needed preventive care, but they are far from a replacement for dental benefits. Someone enrolled in a prepaid plan who needs more than routine care could still face substantial bills for procedures, even with discounted rates. The plans, unlike dental insurance plans, are unregulated, so no one is ensuring they deliver as promised. And, Galewitz reports, the discounts offered on services are typically less than in dental insurance plans. In addition, dental insurance plans negotiate lower rates with dentists, which also reduces patients’ share of the bills.

Dentists who offer these prepaid plans gain confidence that their bills will be paid, and at the rates they want—rather than the ones that dental insurance plans negotiate. But these plans are not a good long-term policy solution for seniors, even if they encourage them to seek out routine dental care. As Galewitz notes, however, many seniors are enrolling in them.

What is tragic is that the American Dental Association (ADA), the largest industry association for dentists and, as the Wall Street Journal describes, “one of Washington’s most powerful health professional organizations,” has urged its members to oppose a broad dental benefit. At its core, the ADA fears Medicare would reimburse dentists less than what many patients currently pay for services. Their opposition is reminiscent of the American Medical Association’s opposition to Medicare’s initial passage, and the ADA’s opposition to including dental benefits in the program from the start. It is not a position that puts patients’ interests first.  

On the other hand, the Center for Medicare Advocacy and various others, including the National Dental Association, an organization of minority dentists who promote oral health equity in communities of color, are putting patients’ needs first and have signaled strong support.

This lineup of interests casts a clear message to Senators who care about the health and financial wellbeing of seniors: it is past time for traditional Medicare to include dental benefits.  

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Racism in US health, two reminders

Summary: Racism in US health manifests in multiple guises and scales. Today we report on two diverse country-wide phenomena most severely harming Blacks: thousands of deaths due to police violence, and millions burdened by social stresses and substandard insurance for the poor.

Fatal police violence by race and state in the USA, 1980–2019: a network meta-regression
Lancet
October 2, 2021
By GBD 2019 Police Violence US Subnational Collaborators

From the abstract:
We compared data from the USA National Vital Statistics System (NVSS) to three non-governmental, open-source databases on police violence: Fatal Encounters, Mapping Police Violence, and The Counted.

Across all races and states in the USA, we estimate 30 800 deaths from police violence between 1980 and 2018; this represents 17 100 more deaths than reported by the NVSS. Over this time period, the age-standardised mortality rate due to police violence was highest in non-Hispanic Black people (0·69 per 100 000), followed by Hispanic people of any race (0·35), non-Hispanic White people (0·20), and non-Hispanic people of other races (0·15). This variation is further affected by the decedent’s sex and shows large discrepancies between states. Between 1980 and 2018, the NVSS did not report 55·5% of all deaths attributable to police violence. When aggregating all races, the age-standardised mortality rate due to police violence was 0·25 per 100 000 in the 1980s and 0·34 per 100 000 in the 2010s, an increase of 38·4% …

Racism, Chronic Disease and Mental Health: Time to Change Our Racialized System of Second‐Class Care
Healthcare
September 27, 2021
By Judith Albert et al.

The “weathering hypothesis” was first proposed by Arline Geronimus in 1992: “Namely, that the health of African American women may begin to deteriorate in early adulthood as a physical consequence of cumulative socioeconomic disadvantage.” Now, nearly 30 years later, a large body of literature has expanded upon this hypothesis. There is accumulating evidence that structural as well as interpersonal racism contribute to the significant increases in Black maternal and infant morbidity and mortality compared to that of whites.

Blacks use about half the outpatient care and fewer psychiatric medications as white adults, yet are hospitalized at twice the rate as their white counterparts for mental illness

From the abstract:
Medicaid … while passed alongside Medicare during the Civil Rights era, was Congress’s concession to Southern states unwilling to [permit] federal oversight and funds to the provision of equal healthcare for poor and Black people. Medicaid, which covers 33% of all Blacks in the US and suffers from chronic underfunding and state efforts to weaken it through demonstration waivers, is a second‐class system of healthcare with eligibility criteria that vary by state and year.

Comment by: Jim Kahn

Racism in US health is structural, pervasive, and multi-faceted. Two articles published this week together convey this devastating point.

The article in Lancet is an impressive national comparison of databases of more than 30,000 deaths from police violence with government vital statistics. The official statistics 50% under-report violent deaths by police. These deaths are 3.5 times more common for Blacks than for Non-Hispanic Whites. It’s not healthcare, but it certainly is health-related. And these vast racial differences constitute highly suggestive evidence of systemic racism in attitude and approach.

The article in Healthcare reviews social and health burdens disproportionally faced by millions in Black populations. These include social stressors, poor access to mental health care, and the Medicaid insurance for impoverished populations – under-funded and manipulated to impede access to care. Our health insurance system is profoundly structurally inequitable.

And what for? We know that the simplest, most equitable insurance systems – covering everyone with the same insurance — are also the most efficient and effective.

Single payer would not only eliminate insurance and care inequities, it would foster social cohesion, and thus help reduce policing bias.

Who’s gaining with our current bloated, lopsided system? Mainly the rich, so they can stash more money overseas (that’s another story this week!).

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No relief from private insurance market concentration

Summary: The American Medical Association finds rising health insurer concentration. That’s bad, because powerful private insurers undermine the healthcare experience. What we need is fully concentrated insurance: a single payer, committed to the public good.

AMA publishes new study monitoring competition in U.S. health insurance markets
AMA press release
September 28, 2021

The American Medical Association (AMA) today published the newest annual edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets with findings demonstrating the rise of highly concentrated markets for health insurance.

The study’s findings show most health insurance markets in the U.S. are highly concentrated leaving millions of Americans with more limited health insurer options.

Between 2014 and 2020, the share of highly concentrated markets rose from 71% to 73%.

[This report] is a vital element of AMA’s continued antitrust advocacy to protect patients and physicians from competitive harm.

Comment by: Don McCanne

For two decades, the AMA has been publishing these annual reports on highly concentrated markets for health insurance, indicating that “consolidation involving health insurers may cause competitive harm to consumers and providers of care.”

With all of the problems in health care today, you would think that these reports would have led to interventions reducing the concentration. Instead, concentration actually rose from 71% to 73%. This demonstrates the ineffectiveness of current legislative, administrative, and private market sector control over private insurance abuses.

It is true that a single payer Medicare for All would maximally concentrate insurer function, but it would do that with a program that would operate on behalf of the public good for all of us rather than what we have now – a system that operates on behalf of a private sector that is draining funds for its own benefit rather than for the health of us all.

For those waiting for the AMA to do something, two decades of inertia is enough. We claim we have a democracy. It’s high time that we invoke its power to change policy for the public good. We can begin by electing legislators who understand and support policies that will lead to health care justice for all. No more delay!

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Medicare Advantage & DCEs: How Corporate Investors Deplete Medicare

Summary: Private investors have devised and exploit clever mechanisms to obtain massive payments and outlandish profits from Medicare. These manipulations started with Medicare Advantage, and now threaten traditional Medicare via Direct Contracting Entities. DCEs must be stopped.

Medicare Advantage, Direct Contracting, and The Medicare ‘Money Machine’
Part 1 & Part 2

Health Affairs Blog
September 27 & 28, 2021
By Richard Gilfillan Donald M. Berwick

In this two-part post, we … explain the perverse MA business model that underlies this elevated level of investment, and we will explore its connection to the Direct Contracting model now being tested by CMS. The story is complex, but we think it is worth telling because the stakes for beneficiaries, the public treasury, and our health care system are very high. This business model is distorting health care delivery, creating excessive costs for taxpayers and Medicare beneficiaries, draining the Medicare Trust Fund, obstructing the badly needed value transformation of American health care, and diverting the money needed to fund other social services and goods.

The Medicare Payment Advisory Committee (MedPAC) has documented approximately $140 billion in MA overpayments over the past 12 years. MedPAC further concludes that risk adjustment overpayments are currently increasing [and may rise to $355 billion over the next eight years].

Given an Orwellian title, Direct Contracting, launched by Center for Medicare and Medicaid Innovation (CMMI), was anything but direct. “Indirect Contracting” would have been a far more accurate name, since the cornerstone of the program was CMS’s opening the door to non-provider-controlled “Direct Contracting Entities (DCEs)” to become the fiscal intermediaries between patients and providers.

Comment by: Jim Kahn

Why are investors paying $87,000 per “covered life” for Medicare-focused health companies? That’s more than seven years of care costs for one beneficiary. Where’s the profit to justify those prices?

That’s the question that this very important Health Affairs blog addresses. It lays out in gory detail just how cleverly corporate investors have refined techniques to influence and manipulate Medicare rules to massively profit, thereby threatening the principles and finances of this valued program. My comment today is long, to provide a proper tour of the blog’s major points.

Part 1 focuses on Medicare Advantage. That’s the part of Medicare in which private insurance companies set up care networks and serve as financial intermediaries.

“Upcoding” is the name of the game. The secret to high profits is to exploit the diagnostic coding system set up to adjust for differences in clinical severity (and costs) between traditional fee-for-service Medicare and Medicare Advantage. The diagnosis codes used to design this system years ago relied on sparse coding practices, mainly of more severe disease instances. Now codes have multiplied. Medicare Advantage companies actively seek and add diagnoses – even minor or equivocal ones – to gain the high payments. And thus they earn much higher premium payments from Medicare, even several times higher.

This strategy has three versions: (1) Pay Providers for Submitting More Codes, (2) Share the Risk Premium with Providers, and (3) Own the Providers. Option 3 is the most profitable, but requires buying up providers. That’s exactly what’s happening. And that’s why the valuations are so high.

Part 2 focuses on “Direct Contracting Entities” or DCEs.

DCEs are the mechanism devised by the Center for Medicare and Medicaid Services (CMS) to bring private insurers and investor-controlled provider firms – those driving Medicare Advantage profiteering – into traditional Medicare. CMS structured DCEs very similarly to Medicare Advantage, to ease the transition.

And, indeed, DCEs provide several routes for participating companies to manipulate clinical severity coding to raise payments and profits. These include changing the codes prior to DCE entry and allowing re-coding for several years for a large category of DCE entrants.

The scope is huge. Initial DCE contracts with investor (not provider) owners will reach 60% of traditional Medicare beneficiaries.

The effects for beneficiaries will be hassles. Payment arrangements will be more complicated, with a role for the DCE, CMS, and Medigap.

Thus, magically, seniors who chose traditional Medicare will find themselves in a Medicare Advantage-like situation.

And maybe headed to Medicare Advantage. DCE enrollees may be recruited into Medicare Advantage owned by the same company. The company has a huge incentive to make life in the DCE less attractive.

All of these contractual details are complicated and confusing. I’m confused, and I think about this for a living. The complexity is not a bug, it’s a feature – provide lots of room to maneuver, and obscure what’s really going on.

Who wins? Investors. “From early April, 2010 through the end of August, 2021, the average stock price for five MA-focused insurers—United Health, Humana, Cigna, Anthem, and CVS/Aetna—increased 825 percent (compared to 280 percent for the entire S&P 500).”

The authors offer a long list of policy solutions. As readers of HJM know, I’m not a big fan of ACOs. But their other suggestions resonate. For example:

— Replace the defective risk adjustment system, so that it can’t be manipulated through upcoding to shift tens of billions of dollars in profits to investors and deplete the Medicare Trust Fund. There are alternatives, such as the Medicare Beneficiary Survey.

— End DCEs. Or, if they must continue, drastically lower the scale to just enough for testing, and then use the results to decide what to do. And limit DCEs to provider-owned, not insurer-owned, companies.

The huge Medicare health insurance ship is headed in the wrong direction. Let’s turn the rudder toward traditional Medicare, traditionally implemented, and then on to an improved Medicare for All.