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Why Are Political Barriers to Health Reform So Great?

Summary: Many voters are willing to cast their ballot for the candidate who supports reform to reduce health care costs. Yet the GOP seems to hate health insurance. Can’t we agree on reliable insurance for all, and a simple uniform way to pay for it?

West Health – Gallup 2022 Healthcare in America Report
October 20, 2022

In the next election, how likely are you to vote for a candidate from a political party you don’t typically support if reducing healthcare costs was their top priority?

Very or somewhat likely
Democrats    40% 
Republicans  22% 

Republicans look to Obamacare’s ‘family glitch’ for post-midterm fight
POLITCOPRO
October 20, 2022
By Daniel Payne

House Republicans on Thursday asked the Treasury Department to preserve documents related to the administration’s fix of Obamacare’s “family glitch,” preparing for an investigation of what they claim was an “illegal expansion” of health coverage should the GOP regain control of the chamber in the midterms.

In a letter to Treasury Secretary Janet Yellen obtained by POLITICO, Republicans on the Ways and Means Committee told the administration to save and share with the committee information related to the new rule, which extended health insurance subsidies to 1 million Americans.

The letter signals a larger investigation Republicans are planning if they win the House in November, according to a congressional staffer familiar with the matter. 

Comment by: Don McCanne

No surprises here. Many Democrats would be willing to break party ranks to support efforts to reduce health care costs. But how likely is that – a Democratic opponent more reform-minded than the Dem? Far fewer Republican voters prioritize reform, but 20% isn’t nothing – and that situation arises all the time. Yet GOP leaders are so opposed to health insurance that they will fight to reduce it if they regain control. These are the strange political positions staked out around a broken health care system desperately in need of reform.

Suppose we all agreed that we need to provide comprehensive high-quality care to absolutely everyone. I bet even Republicans would endorse that. The only political decision is whether to pay for it through a progressive tax system that is affordable for everyone – a sharp contrast to today’s haphazard financial burdens, barriers to care, and medical debt. Isn’t that a political decision we could all live with? Why not?

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Two Women Prioritize Helping the Public over Protecting the Rich

Summary: Two news stories highlight visionary women pursuing community benefit. One, a lawyer and new MacArthur fellow, seeks drug patent law changes that favor access for patients over benefit to Big Pharma stockholders. Another, an heiress, advocates for high taxation of inherited wealth. Both missions align well with single payer.

Priti Krishtel, Health Justice Lawyer
MacArthur Fellows Program
Class of 2022

Priti Krishtel is a health justice lawyer exposing the inequities in the patent system to increase access to affordable, life-saving medications on a global scale. By distilling the technical aspects of the patent system to show its sometimes devastating impact on people’s lives, Krishtel is galvanizing a movement to center people instead of only commercial interests in our medicines patent policy.

… In 2006, Krishtel co-founded the Initiative for Medicines, Access, and Knowledge (I-MAK) to ensure the public had a voice in the pharmaceutical patent system. Krishtel and the organization are drawing attention to weaknesses within the patent system while identifying needed reforms to make it more responsive to the public good. Patents are intended to incentivize innovation by ensuring that only the patent holder can sell and profit from the product for a fixed time. However, many pharmaceutical companies seek to extend their monopolies by filing multiple patents on small changes (such as changes in dosage) to existing drugs over several years. This stifles competition, delays generic production, and keeps medicines out of the hands of people who need them the most. I-MAK has successfully contested patents worldwide, saving governments billions of dollars in public health spending and giving millions of people access to life-saving treatments. … I-MAK brings together a range of stakeholders—including patient groups, policymakers, and patent lawyers and judges—to deepen collective understanding of the impact of the patent system across different communities. … Their proposed reforms include ensuring only meaningful inventions are rewarded with a patent, increasing oversight from other government branches, and increasing public participation in the patent process.

She’s Inheriting Millions. She Wants Her Wealth Taxed Away
New York Times
October 21, 2022
By 
Emma Bubola

Marlene Engelhorn, 30, heir to a fortune, isn’t interested in philanthropy, believing it only perpetuates existing power dynamics. She’s calling for structural change to how the ultrarich are taxed.

By the time her extraordinarily wealthy grandmother died last month, Marlene Engelhorn already knew who she wanted to be the ultimate beneficiary of the enormous inheritance coming her way: the tax man.

“The dream scenario is I get taxed,” said Ms. Engelhorn, the co-founder of a group called Tax Me Now.

Ms. Engelhorn, a 30-year-old who grew up in Vienna, is part of a growing movement of young, leftist millionaires who say they want governments to take a much larger share of their inherited wealth, arguing that these unearned fortunes should be democratically allocated by the state.

For more than a year, Ms. Engelhorn has been campaigning for tax policies that would redistribute her eight-figure windfall — and anyone else’s.

Comment by: Jim Kahn

We all need inspiration in the pursuit of community values. That’s especially true in today’s world where the profit-takers have such firm control of the rules of the game – influencing laws and regulations that favor them and exploiting those to the max.

Ms. Krishtel and Ms. Engelhorn exhibit admirable community values, talent, and determination. Ms. Krishtel works on pivotal details of patent law, and Ms. Engelhorn targets inheritance taxes for the wealthy. I was exhilarated reading about them.

Single payer, of course, also embodies community health and prosperity over private gain. The profiteers are wealthy health system stakeholders — insurers, pharma, provider conglomerates, and the private equity firms that participate in all those roles. Community includes all the patients and providers who deserve a better system.

There are so many of us engaged in social justice crusades. Let’s draw renewed energy and vision from these amazing women.

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The Rise of Despair and Conservative Politics

Summary: Anne Case & Angus Deaton are leaders in defining the links between rising hopelessness, declining health, and political division. A linchpin is the growing economic penalty from lacking a college degree; another is increasingly unaffordable healthcare. Single payer is harder to achieve in this polarized context, but more needed to overcome our political disarray.

There Are Two Americas Now: One With a B.A. and One Without
NY Times
October 5, 2022
By Thomas Edsall

The Republican Party has become crucially dependent on a segment of white voters suffering what analysts call a “mortality penalty.”

This penalty encompasses not only disproportionately high levels of so-called deaths of despair — suicide, drug overdoses and alcohol abuse — but also across-the-board increases in several categories of disease, injury and emotional disorder.

“Red states are now less healthy than blue states, a reversal of what was once the case,” Anne Case and Angus Deaton, economists at Princeton, argue in a paper they published in April, “The Great Divide: Education, Despair, and Death.”

… the correlation between Republican voting and life expectancy “goes from plus 0.42 when Gerald Ford was the Republican candidate — healthier states voted for Ford and against Carter — to minus 0.69 in 2016 and minus 0.64 in 2020. States classified as the least healthy voted for Trump and against Biden.”

… the ballots cast for Donald Trump by members of the white working class “are surely not for a president who will dismantle safety nets but against a Democratic Party that represents an alliance between minorities — whom working-class whites see as displacing them and challenging their once solid if unperceived privilege — and an educated elite that has benefited from globalization and from a soaring stock market, which was fueled by the rising profitability of those same firms that were increasingly denying jobs to the working class.”

The Great Divide: Education, Despair, and Death
Annual Review of Economics
April 2022
By Anne Case and Angus Deaton

Abstract 

Deaths of despair, morbidity, and emotional distress continue to rise in the United States, largely borne by those without a college degree—the majority of American adults—for many of whom the economy and society are no longer delivering. Concurrently, all-cause mortality in the United States is diverging by education in a way not seen in other rich countries. We review the rising prevalence of pain, despair, and suicide among those without a bachelor’s degree. Pain and despair created a baseline demand for opioids, but the escalation of addiction came from pharma and its political enablers. We examine the politics of despair, or how less-educated people have abandoned and been abandoned by the Democratic Party. Whereas healthier states once voted Republican in presidential elections, now the less-healthy states do. We review deaths during COVID-19, finding that mortality in 2020 maintained or exacerbated existing relative mortality differences between those with and without college degrees.

Excerpts

[T]he economy has increasingly come to serve some, but not all, Americans, and where a central division is between those who do and those who do not have a 4-year college degree. While the college wage premium has soared to unprecedented levels, the inequality between these two groups involves much more than money. The college degree has now become “a condition of dignified work and of social esteem” as well as a matter of life and death, with adult life expectancy rising for the college educated and falling for the rest.

In our book [2020], we developed an account of the rising tide of despair, focusing on declining employment opportunities for those without a BA, especially the fall in good jobs, those that offer a sense of belonging, meaning, and purpose and prospects for advancement. This was aggravated by an ever more expensive health care system—more than twice as expensive as in other rich countries—a fifth of which is financed by an approximately flat tax on workers in amounts that often make low-skilled workers unemployable. An employer-sponsored individual (family) health plan cost $7,470 ($21,342) in 2020, $3.73 ($10.67) per hour for a 2,000-hour year, money that comes out of wages and take-home pay (KFF 2020). We also noted the lack of a comprehensive safety net in the United States for those who are neither elderly nor children … Both the safety net and the financing of health care are radically different in other rich countries where—with a few exceptions—there are few deaths of despair. …[W]e emphasized the corrosive effects of American meritocracy on the unsuccessful, on Young’s “populists” who have to live with the meritocratic hubris of the well-credentialed … and who, as they strive not to blame themselves, believe—with much justification— that society is rigged against them. …

Deaths of despair among Blacks and among Hispanics began to rise after 2010; like those for Whites, the increases are largely confined to those without a 4-year college degree. About three-quarters of the increase for Blacks and Hispanics without a BA is accounted for by drug overdoses.

A Politics of Despair

If the majority of Americans are failing to thrive while a minority prospers, why does the democratic process not work to improve their material and health outcomes? … [L]iving in a functioning democracy is good in and of itself, and the lack of effective political voice is one reason to despair. Woolhandler et al. (2021) in a Lancet Commission report on public policy and health in the Trump era … describe a negative feedback loop in which “the neoliberal policies that inflicted economic hardship and worsened health” did not, as might have been expected in a well-functioning democratic state, generate a political demand for better safety nets and health provision, because less-educated whites see such policies as favoring minorities at their expense. … Blacks and more educated whites react in the opposite direction, widening political polarization, which on net favors the right and provides an opening for populist politicians such as Donald Trump. …

[A]fter the US presidential election of 2016, several studies noted correlations between deaths of despair, changes in life expectancy, and the Republican share of the vote (Monnat 2016, Bor 2017). Bor (2017) finds a correlation of −0.67 across counties between changes in life expectancy from 1980 and 2014 and the share of each county’s vote going to Trump. There is a similar cross-county correlation of Trump’s vote share with the fraction of each county’s White population without a college degree …

The economy began to turn against the white working class around 1970. Real wages began to decline for workers without a BA, and there was a long, slow decline—interrupted but never fully restored during economic booms—in job opportunities for less-educated men, much of which was driven by the decline in employment in American manufacturing. Globalization was important, though less important than automation, as was the relentless increase in the cost of health care, much of which is paid for through what is essentially a head tax on wages. …

Since the 1970s, there has been a slow-rolling and still ongoing divorce between Democrats and the white working class, a divorce that is central to the politics of despair. Especially after the catastrophic 1968 Democratic National Convention, the party slowly oriented itself away from its traditional working-class and union base toward what it is today, a coalition of minorities and educated professionals. …

Comment by: Don McCanne & Jim Kahn

The political realignment that has taken place has racial minorities joining the better educated professionals, improving their own educational levels and their own health status, whereas less educated largely white populations have aligned with the Republicans as their despair and sense of being abandoned has risen. Hence worse health and rising drugs, depression, and suicide in GOP-dominated states. With the conservatives more volubly exploiting these issues, our hopes for reaching social solidarity on a universal health care system diminish.

Is there pride in being uneducated? In being at high risk of those factors that lead to deaths of despair? Of having a shorter life expectancy? Of being used by the conservative political forces to impede social progress in our nation? If these concepts were better understood, we could raise social solidarity and accomplish goals such as health care justice for all.

Providing universal, stable, affordable, high-quality care would sharply decrease political alienation and hopelessness, and tangibly convey the virtues of a community orientation over private profit. No wonder single payer is so frightening to the conservative purveyors of political schism. Halloween is coming, time to embrace our worse fears!

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Poll Gives US Healthcare Cs and Ds

Summary: A national poll of US adults yields terrible scores for our healthcare system: more “poor” and “fail” marks than “excellent” and “good”. The Gallup organization calls these Cs and Ds, but that’s a generous interpretation – we’re failing. We need a total do-over, adopting methods proven in other wealthy nations.

Majorities Rate Cost, Equity of U.S. Healthcare Negatively
Gallup News – Politics
October 6, 2022
By Nicole Willcoxon

Comment by: Jim Kahn

Yowzah. That’s massive under-performance. Only 21% of US adults think our healthcare system grade is good or excellent. Only 7% for costs, 22% for equity, and 31% for access. Quality of care scores highest – 47% say it’s good or excellent. But what is quality without access?

Sad, but not surprising. Indeed, we’ve performed at the bottom of wealthy countries for a long time. See HJM on the latest Commonwealth comparison here, and cross-national satisfaction surveys here and here.

If only we had better examples of how to pay for healthcare. If we could find, somewhere in the world, places that spend less while faring much better on access and outcomes. Oh, wait, all those countries that do better, they also cost a lot less.

Sorry I’m dripping with sarcasm today. It’s SO frustrating that we don’t learn our lesson. To paraphrase Winston Churchill, “Americans always do the right thing, after first trying everything else.” Well, we’ve tried everything else. Time to do the right thing – single payer!

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False Fixes for Administrative Bloat in US Health Care

Summary: Health Affairs did a very credible review of administrative excess in US health care, and a review of “targeted” reforms within the current system. Most optimistically, they would save a few billion dollars of the hundreds of billions in waste that single payer would eliminate.

The Role of Administrative Waste in Excess US Health Spending
Health Affairs Research Brief
October 6, 2022
By Health Affairs Staff

The US Spends More on Health Care Administration than Comparable Countries

One estimate from the Peterson Foundation, based on 2021 data from the OECD, finds that the US spends $1,055 per capita on administrative costs—by far the highest amount on a list of twelve OECD nations plus the US. The country with the next highest level of per capita administrative spending is Germany, at $306 per capita.

At least Half of Administrative Spending Is Wasteful

If administrative spending is about 15–30 percent of national health spending, then wasteful administrative spending comprises half of that, or 7.5–15 percent of national health spending (or $285–$570 billion in 2019).

Systemic Health Care Reforms Can Reduce Administrative Waste

Three main systemic reforms have the potential to not only reduce administrative waste but also offer other benefits to the health care system: all-payer rate setting, single-payer systems, and capitation.

Although these systemic reforms have the potential to reduce wasteful administrative spending, the targeted reforms discussed below are likely to be more realistic and actionable in the US in the near future.

* Centralized Claims Clearinghouse

  Cutler estimates that $300 million (NB not billion!) could be saved annually.

* Standardized Or Limited Prior Authorization

  CAHQ estimates that $417 million could be saved annually by switching to a fully electronic prior authorization system.

* Harmonized Quality Reporting

  Cutler suggests that an improved quality measurement system could save up to $7 billion annually.

* Standardization Of Benefits

  There is a lack of clear evidence that such standardization leads to administrative savings.

* Standardization Of Provider Directories and Credentialing

 Nationally, using a standardized platform for maintaining provider directories could save more than $1.1 billion per year, according to CAQH research.

Comment by: Don McCanne

The failure of our fragmented and dysfunctional health care financing system to provide health care for everyone along with financial security has been a driving force behind the call to enact and implement a humane, rational financing system such as single payer.

Although the political barriers are great, various incremental measures have been implemented with less than sterling results. Numerous studies have shown the profound administrative waste in our system which would be dramatically reduced by single payer. But the political resistance has been too great.

Now a leader in health policy – Health Affairs – is suggesting that, instead of systemic reform, we consider targeted reforms that are listed above. Two problems: If all of them were implemented, highly unlikely, the evidence for their effectiveness is missing. Never tested, conjectural. And, even if achieving the targets, the savings would constitute only a small fraction of the hundreds of billions we are spending on administration that we currently consider wasteful.

Worse, we would leave in place all of the injustices in health care access and in financial hardship due to lack of affordability of care. Also, nothing would have been done to reverse the massive private sector fraud and other waste exemplified by the recent New York Times expose on Medicare Advantage.

I don’t want to squander more space on trying to understand why Health Affairs isn’t supporting effective reform. Instead, I just want to climb up to the mountaintop and shout out: SINGLE PAYER!

Please feel free to join me.

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Medicare Advantage is a “Cash Monster” Absconding with Billions

Summary: The New York Times published a well-researched, clearly-presented, and hard-hitting article about the Medicare Advantage diagnostic upcoding money machine. This superb reporting translates for the public what analysts and reform advocates have warned about for years.

‘The Cash Monster Was Insatiable’: How Insurers Exploited Medicare for Billions
New York Times
Oct. 8, 2022
By Reed Abelson and Margot Sanger-Katz

(bolding by HJM)

The health system Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found enough new diagnoses could earn bottles of Champagne, or a bonus in their paycheck.

Anthem, a large insurer now called Elevance Health, paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.

Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program….

[A] New York Times review of dozens of fraud lawsuits, inspector general audits and investigations by watchdogs shows how major health insurers exploited the program to inflate their profits by billions of dollars….

Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits. And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud. … The fifth company, CVS Health, which owns Aetna, told investors its practices were being investigated by the Department of Justice. …

The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies — enough to cover hearing and vision care for every American over 65.

Another estimate, from a former top government health official, suggested the overpayments in 2020 were double that, more than $25 billion.

The increased privatization has come as Medicare’s finances have been strained by the aging of baby boomers. But for insurers that already dominate health care for workers, the program is strikingly lucrative: A study from the Kaiser Family Foundation, a research group unaffiliated with the insurer Kaiser, found the companies typically earn twice as much gross profit from their Medicare Advantage plans as from other types of insurance.

[R]egulators overseeing the plans at the Centers for Medicare and Medicaid Services, or C.M.S., have been less aggressive, even as the overpayments have been described in inspector general investigations, academic research, Government Accountability Office studies, MedPAC reports and numerous news articles, over the course of four presidential administrations.

Congress gave the agency the power to reduce the insurers’ rates in response to evidence of systematic overbilling, but C.M.S. has never chosen to do so. A regulation proposed in the Trump administration to force the plans to refund the government for more of the incorrect payments has not been finalized four years later. Several top officials have swapped jobs between the industry and the agency.

Comment by: Jim Kahn

This is remarkable reporting. The NYT nailed it: Medicare Advantage is a cash monster focused on maximizing revenue and profits regardless of the impact on beneficiary access to care. See our bolding for key points. A few elaborations:

1. The problem is partly fraud. There’s plenty of that.

2. The full extent of the cash extraction from Medicare is due to both legal and fraudulent diagnostic upcoding, and critically the failure of CMS to exercise its regulatory authority to correct for this upcoding.

3. The projected excess payments to Medicare Advantage is $600 billion over ten years.

4. This doesn’t even include cherry picking and lemon dropping, which contribute substantially to the differences in risk and money extraction.

5. As noted in the article, private insurer profits are much higher with Medicare than in the private sector. And, as shown in HJM, the actual (de-facto) profit returns are obscenely high, 30% or more.

What’s most remarkable about this reporting isn’t the content. That’s terrific, accurate and powerful. What’s most remarkable is the placement: on the front page of the New York Times (for NYT old-timers, “above the fold”). Premier attention to this critical issue. As I can tell from my email and twitter traffic, rapid widespread sharing.

Let’s hope this represents a sea change in how the public understands and reacts to the private insurance takeover of Medicare Advantage, of Medicaid, and – with ACO REACH – traditional Medicare.

We need a health care financing system that elevates patients over profits. Single payer.

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The American Way of Health Insurance: Incur Medical Debt & Lose Access to Care

Summary: The experience of a woman with breast cancer who loses her insurance perfectly illustrates the gaps and harms of our fragmented health insurance system. It’s a heart-rending plea for the US to adopt generous and efficient universal insurance as in wealthy countries around the world.

Medical debt ruined her credit. ‘It’s like you’re being punished for being sick’
NPR Shots
October 6, 2022
By Aneri Pattani

After a year of chemotherapy and radiation, doctors told Penelope Wingard in 2014 that her breast cancer was in remission. She’d been praying for this good news. But it also meant she no longer qualified for a program in North Carolina that offers temporary Medicaid coverage to patients undergoing active breast cancer treatment.

Wingard became uninsured. She’d survived the medical toll, but the financial toll was ongoing.

Bills for follow-up appointments, blood tests and scans quickly piled up. Soon, her oncologist said he wouldn’t see her until she paid down the debt.

“My hair hadn’t even grown back from chemo,” Wingard says, “and I couldn’t see my oncologist.”

Medical debt has sunk her credit score so low that she has struggled to qualify for loans, and applying for jobs and apartments has become a harrowing experience.

“It’s like you’re being punished for being sick,” Wingard says. …

Under the new [medical debt] policies, Equifax, Experian and TransUnion will remove from credit reports any paid debts or individual bills that were less than $500 and had gone to collections, even if unpaid. This doesn’t wipe out what people owe, but the idea is to remove the black mark of collections from their credit so they can more easily reach milestones like qualifying for a car or home loan ….

“Although the credit reporting companies have trumpeted this as a big change, the fact is they’re just removing the small stuff,” says Ryan Sandler, a senior economist with the Consumer Financial Protection Bureau. “They’re not maybe doing as good of a thing as their press releases would like you to believe.”

Wingard has worked as an after-school teacher and tutor, a COVID-19 contact tracer and a driver for a ride-hailing service, but none of those jobs has come with health insurance benefits. Wingard says she tried to buy private insurance on the marketplace several years ago, but her monthly premium would have been more than $200, which she can’t afford.

That left her on the hook for bill after bill after bill. Her credit report shows five pages of notifications from collection agencies representing doctor’s offices, hospitals and labs.

Nearly 20% with medical debt fear they’ll never pay it off.

Comment by: Jim Kahn

“It’s like you’re being punished for being sick.” I can’t get that thought out of my head.

When, when, when will our policymakers embrace the experience of dozens of countries around the world with universal insurance that doesn’t penalize people for getting sick? And that saves money in the process?

How much evidence do we need to collectively say, “American values” is no excuse for a fragmented, inequitable, punitive, harmful, and wasteful financing system?

When will we become sane and kind about how we pay for health care?

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Hospitals Serving Black Patients Are Paid Less

Summary: A commentary by researchers highlights inequalities in the financing of hospitals: those serving mainly Black patients have substantially lower capital investment and payment levels. This is structural racism, reflecting a long history of discriminatory programs and policies.

Hospital financing in black and white
Statnews
September 20, 2022
By Gracie Himmelstein, Joniqua Ceasar, & Kathryn E.W. Himmelstein

During our training as doctors, we have rotated through safety-net hospitals, elite academic medical centers, and private clinics. The resources for patient care and comfort were sumptuous in some facilities, spartan in others. The differences were often night and day or, as we quantified in a later analysis, black and white: we cared for far more white patients at highly resourced facilities and many more Black patients and other patients of color at those with fewer resources.

While the 1964 Civil Rights Act forbade hospitals from discriminating based on race, segregation persists. According to Medicare data we analyzed, a relative handful of hospitals — just 10% of all hospitals — provide three-quarters of all care for Black people covered by Medicare.

We found that in hospital care, as in public education, separate usually means unequal. The hospitals in which Black people account for a large share of inpatients have relatively meager facilities — as measured by the dollar value of the buildings and equipment — and are much less likely than other hospitals to offer expensive, high-tech, and often life-saving services like cardiac catheterization labs, or even routine ones like cardiac rehab programs. The term “structural racism” seems particularly apt for these systematic inequalities in hospitals’ bricks, mortar, and equipment.

Race-based inequities in hospital resources are the legacy of slavery, discrimination, and health care financing policies that directed resources to white communities and away from communities of color. The current-day hospital payment system continues to cement these inequities by assigning different dollar values to the care of different patients: lower values for care delivered to people who are uninsured or covered by Medicaid, and higher values to care for the privately insured and patients with Medicare — especially those able to pay deductibles, copayments, and coinsurance.

Black people are more likely to be consigned to the lower-value group. Far more Black people are uninsured or rely on Medicaid than white people, and Black workers are less likely than white workers to have job-based private insurance. Fewer privately insured Black families have the financial assets needed to cover the often substantial out-of-pocket costs of an insured hospital stay. This payment structure incentivizes hospital leaders to favor services and outreach efforts that attract lucrative — and predominantly white — patients.

… Hospitals caring for large shares of Black patients were paid $283 less for each day of a patient’s hospital stay compared to other hospitals. As a result, while many hospitals realized profits from their inpatient care, Black-serving facilities ran in the red…

Equalizing funding would have required $14 billion in additional payments to Black-serving hospitals in 2018 (the most recent year for which data were available), or about $25 million per Black-serving hospital. …

That the U.S. hospital payment system values different patients differently — and hence penalizes Black-serving hospitals — is a policy choice, and an unusual one among wealthy nations. In most other wealthy nations, even those like Germany with hundreds of different insurance plans, a single fee schedule applies to all patients. In the U.S., the second-class status of those covered by Medicaid was baked in at the outset when, in the midst of the Civil Rights era, Congress chose to separate coverage for the poor (many of whom were Black) from that of the elderly (most of whom were white). Medicare offered seniors a federal plan modeled on Blue Cross coverage, while Medicaid, passed simultaneously, relegated the poor to a welfare-based program largely controlled, even today, by state governments, some of them explicitly racist.

That the current hospital financing system assigns a lower dollar value to the care and lives of Black patients is a largely hidden but pernicious form of structural racism. Health reforms should equalize payments among patients and hospitals, and repair the damage of past policies by directing investments to resource-starved facilities that have long served Black communities.

Comment by: Jim Kahn

This important commentary by health services researchers highlights how hospitals that serve predominantly Black populations are financially compromised. They have 40% lower investment in facilities and receive 22% lower payments for services than hospitals which serve mainly White populations. This is the inequitable effect of a health care financing mix that systematically underpays for Black patient populations, who are more likely to be covered by Medicaid or uninsured.

For those interested in more technical detail, see the two academic articles: capital assets of $5,197/patient-day at black-serving hospitals, $5,763 at Hispanic-serving hospitals, and $8,325 at other hospitals and mean revenues were $283 lower/patient day and mean profits were $111/patient day lower at Black-serving hospitals.

The authors point out that in Germany, with its many private insurers, a single fee schedule applies to all patients, preventing these kinds of inequities. Other strengths of the German system: the insurers sell a standardized broad benefit plan, with no profit (they can profit from a small market in voluntary supplemental insurance).

In the US, this kind of parity and simplicity would be most easily achieved with a single payer system. Health insurers here would never accept the not-for-profit and one-product constraints applied in Germany.

A final note: It’s wonderful to see this important work from two offspring of legendary single payer advocates and researchers (and HJM bloggers) David Himmelstein and Steffie Woolhandler.

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25-year-olds (and all of us) struggle with complex & flawed health insurance options

Summary: The vexing experience of finding health insurance hits the nearly 26-year-olds as they must exit parents’ health plans. Their focused dilemma echoes our collective dilemma: so many insurance options, all of them flawed. What we need is one high quality option: single payer.

For 20-Somethings, a Confusing Rite of Passage: Finding Health Insurance
The New York Times
Sept. 30, 2022
By Isabella Simonetti

Whether they are 25 and about to age out of a parent’s plan or entering the work force for the first time, young Americans are tasked with making crucial decisions about their health care at a time when they may have little understanding of how insurance works.

Depending on the situation, a young adult might weigh these choices: staying on a parent’s plan till 26, joining an employer-sponsored health insurance plan or buying coverage on their state’s marketplace. Someone with an income up to 138 percent of the federal poverty level may even qualify for Medicaid, which offers free or inexpensive health care for low-income Americans, including pregnant women and seniors. The next open enrollment period (the period when you can sign up for coverage) for marketplace plans that comply with the A.C.A. runs from Nov. 1 to Jan. 15, 2023 for most states. Many employers offer open enrollment periods, too, that are typically in the fall, but the timing varies from company to company.

The marketplace plans offer different tiered private insurance options with government subsidies for people whose income falls below a certain threshold. While the service is mainly available through Healthcare.gov, some states, including California and Pennsylvania, operate their own websites. Although the open enrollment period is fixed, those who have experienced a so-called qualifying event, like losing insurance through an employer or being forced off a parent’s insurance after a 26th birthday, have 60 days from that event to enroll in a marketplace plan. If you miss the cutoff, you will have to wait until the next enrollment period, unless there has been a major event like a natural disaster.

For those deciding whether or not to join an employer plan, it is wise to compare its cost and coverage with that of a parent’s plan. If a parent’s plan is cheaper and offers better coverage, asking your parents if they will share the cost with you might be the best solution.

Be careful about taking on the cheapest plan an employer offers, because often that will mean having to pay a higher annual deductible before coverage kicks in.

Among employer plans, there may be the option to choose between a Preferred Provider Organization plan and a Health Maintenance Organization plan. A P.P.O. plan generally is more expensive on a monthly basis but may offer more out-of-network coverage, which could be necessary if you have specific medical needs. An H.M.O., though, is typically less expensive and includes a smaller group of providers.

Comment by: Don McCanne

The 26-year-old seems to have the epitome of American style health care coverage: a conglomeration of market plans, government plans, and government subsidies, with qualifications varying based on personal circumstances. Thus, medical benefits can vary, financial protection can vary, and eligibility for health care professionals and institutions can vary, resulting in unstable care access security and unstable financial security in the face of health care needs. On top of that, the 26-year-old also has an obligation through the tax system to help pay for the health care of others through government programs such as Medicare, Medicaid, the VA, county hospitals and clinics, and so forth.

It seems that the 26-year-old would be much better served by an efficient system that would automatically provide health care whenever needed and that was funded equitably based on ability to pay through progressive taxes. Of course, that would be of benefit not only at 26, but also throughout life as a well-designed single payer program such as Medicare for All.

Instead, we offer the American 26-year-old this highly dysfunctional, expensive hodgepodge of a health care financing that has far worse outcomes than in other wealthy nations. Wouldn’t they prefer care nirvana through single payer?

At 85, with some recent medical setbacks, I’ve been granted a gift of a little extra time, and I’m going to use it to shout to the heavens for a sane, humanitarian health care system for all of us. I am not alone. Remember, the Commonwealth Fund recently noted that a majority of Americans want President Biden and Congress to make health care spending a top priority this year, and many polls show 2/3 support for single payer.

When I was president of PNHP, John Conyers brought us single payer Medicare for All legislation. It would be only a matter of time to move it through the legislative process. What happened? Special interests. And they have continued to prevail ever since. It’s time for Congress respond to the needs of the people instead. It’s time to give citizen action life. Our voices need to finally drown out those of the special interests. To the streets!

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The Dismal State of US Health Insurance

Summary: The 2022 Commonwealth survey of US health insurance tells a dismal story. 43% of adults 19-64 are inadequately insured; 46% report skipping care for financial reasons; and 42% have medical bill problems or debt. Our cobbled-together, profit-driven insurance approach is failing spectacularly and horrendously in its primary mission: providing access to care.

The State of U.S. Health Insurance in 2022 (Findings from the Commonwealth Fund Biennial Health Insurance Survey)
The Commonwealth Fund
September 19, 2022
By Sara R. Collins et al

Highlights

* Forty-three percent of working-age adults were inadequately insured in 2022.

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

* Forty-six percent of respondents said they had skipped or delayed care because of the cost, and 42 percent said they had problems paying medical bills or were paying off medical debt.

* Half (49%) said they would be unable to pay for an unexpected $1,000 medical bill within 30 days, including 68 percent of adults with low income, 69 percent of Black adults, and 63 percent of Latinx/Hispanic adults.

* Sixty-eight percent of Democrats, 55 percent of Independents, and 46 percent of Republicans said President Biden and Congress should make health care costs a top priority in the coming year.

Comment by: Don McCanne & Jim Kahn

We are all too familiar with these statistics demonstrating the inadequacy of our health care coverage in the United States – in spite of having the policy expertise and ample wealth to cover everyone. Indeed, doing so would save us money, by slashing the insane and insanely costly complexity.

Comprehensive health care reform is commonly dismissed because we lack the political support for it. But the survey finds that two-thirds of Democrats, and almost one-half of Republicans, want President Biden and Congress to make health care costs a top priority in the coming year!

With all of our other problems, that kind of support constitutes a mandate! Let’s get on with it!