Medicare Advantage Places Us at a Disadvantage

Summary: This week we scrutinize Medicare Advantage (MA). Today: A survey from the Center for Medicare Advocacy found that MA plans deny, reduce, delay, and charge beneficiaries more for home health services. And a leading researcher estimated that Medicare overpaid MA plans by $106 billion over ten years for sicker patients. So … overpaying for worse care. Hmm.

Home Health Survey: Medicare Beneficiaries Likely Misinformed and Underserved
Center for Medicare Advocacy
December 2021

From April 28, 2021 – November 19, 2021, the Center for Medicare Advocacy conducted a survey of 217 Medicare-certified home health agencies in 20 states to learn what beneficiaries may experience when seeking home care.

The Medicare Act mandates that Medicare Advantage plans cover, at least, all the medically necessary services that traditional (also known as “original”) Medicare covers. However, when surveyed home health agencies were asked if there were differences in the services they could provide to clients enrolled in Medicare Advantage plans versus clients with traditional Medicare coverage, their comments describe a very different reality.

Major themes among agency comments were that Medicare Advantage plans deny more services, allow fewer visits per care modality, delay onset of care, lead to more changes to provider-approved plans of care, are significantly harder for agencies to work with, and require greater out-of-pocket costs. Many agencies also mentioned discrepancies in care caused by the pre-authorization process.


* “Abso-freakin-lutely! Medicare Advantage plans in our area are rotten.”

* “Very much so, there’s a difference. Medicare Advantage plans don’t approve as much services.”

* “Medicare Advantage patients are reimbursed for less, and do not have therapy covered. Typically they only provide nursing services.”

* “The payment model is different so we can’t take as many Medicare Advantage beneficiaries. Traditional Medicare is better.”

* “Medicare Advantage plans typically offer less coverage.”

* “Medicare Advantage plans can be very limiting. Anthem and Humana are terrible, and very often do not cover services that patients need.”

* “Medicare Advantage plans often fight tooth and nail on the number of visits they will allow. Anthem is the worst. They use MyNexus, a company for prior authorization work, and allow very few visits.”

* “MA authorizations are limited. We [the agency] fight and appeal for more services. United Healthcare and Aetna provide particular coverage challenges.”

* “Managed Medicare seems to be a lot stingier with what they authorize than traditional Medicare.”

Researcher: Medicare Advantage Plans Costing Billions More Than They Should
By Fred Schulte
November 11, 2021

Switching seniors to Medicare Advantage plans has cost taxpayers tens of billions of dollars more than keeping them in original Medicare, a cost that has exploded since 2018 and is likely to rise even higher, new research has found.

Richard Kronick, a former federal health policy researcher and a professor at the University of California-San Diego, said his analysis of newly released Medicare Advantage billing data estimates that Medicare overpaid the private health plans by more than $106 billion from 2010 through 2019 because of the way the private plans charge for sicker patients. “They are paying [Medicare Advantage plans] way more than they should,” said Kronick.

Kronick called the growth in Medicare Advantage costs a “systemic problem across the industry,” which CMS has failed to rein in. He said some plans saw “eye-popping” revenue gains, while others had more modest increases.

Making any cuts to Medicare Advantage payments faces stiff opposition, however.

On Oct. 15, 13 U.S. senators, including Sen. Kyrsten Sinema (D-Ariz.) sent a letter to CMS opposing any payment reductions. (Sen. Manchin also signed – DMc)

Comment by: Don McCanne

We have been witnessing the privatization of the Medicare program through the introduction of the private Medicare Advantage plans, and, more recently, the Direct Contracting Entities as a means of converting much of the remaining traditional Medicare program into private plans.

We have recently been inundated with heavy marketing of these plans during the open enrollment period, promising eligible Medicare beneficiaries much better benefits at considerably lower costs.

Better benefits? Look at the report on services provided by home health agencies, the type of services the marketing suggests are superior when provided by the Medicare Advantage plans. This study showed that services were emphatically inferior to services provided under the traditional Medicare program.

And lower costs? The other report cited above indicates that Medicare Advantage plans were overpaid by tens of billions of dollars.

When there is a popular movement to eliminate private plans and establish a single payer Medicare for All program, it is ironic that our government is establishing policies to suppress our existing Medicare program and replace it with private plans when the evidence is that they are a major source of much of the detrimental dysfunction in health care financing.

What we need is an equitable, publicly administered and publicly financed health care program for everyone: a single payer, improved Medicare for All. But we do need to consider getting rid of the politicians who want to use our public funds to support the private health plans while suppressing our public programs.


Failure of Nursing Home Safety Monitoring

Summary: NY Times research found a huge gap between safety problems found in nursing homes and the public reporting of those problems. Quality star ratings are misleading. Consumers are not being protected.

How Nursing Homes’ Worst Offenses Are Hidden From the Public
New York Times
Dec. 9, 2021
By Robert Gebeloff, Katie Thomas, & Jessica Silver-Greenberg

A New York Times investigation found that at least 2,700 similarly dangerous incidents were also not factored into the rating system [Care Compare] run by the federal Centers for Medicare and Medicaid Services, or C.M.S., which is designed to give people reliable information to evaluate the safety and quality of thousands of nursing homes.

Oklahoma’s inspections agency referred to nursing homes as its ‘clients,’ according to a letter from the agency reviewed by The Times. Inspectors in Pennsylvania complained about being told to be ‘kinder and gentler’ with nursing homes, according to the 2013 survey. Last year, in the depths of the pandemic, the California department of health told inspectors to act as safety “consultants” to nursing homes and to not take on an enforcement role. (The policy was scrapped after inspectors objected.)

Jonathan Blum, the chief operating officer for C.M.S., said that citations are omitted during state-level appeals to be fair to nursing homes that are disputing inspectors’ findings. He acknowledged that even after appeals are exhausted, some citations still don’t appear on Care Compare. He said C.M.S. is ‘working to correct this issue.’

The Times asked public health agencies in all 50 states how often citations were upheld, reduced in severity or deleted entirely since 2016. Eighteen states provided figures. About 37 percent of the time, the nursing homes succeeded in getting citations removed or reduced in severity.

Studies have found that federal inspectors tend to find more serious problems than their state counterparts during these examinations. But the Medicare agency does not publish the reports of its own inspectors — even when they turn up dangerous or deadly conditions — or factor them into homes’ star ratings.

Comment by: Allison K. Hoffman

The COVID-19 pandemic revealed the depths of problems in U.S. nursing homes, but it is also clear that nursing homes have had serious deficiencies leading up to the pandemic. Worse, even when these problems are uncovered, they are sometimes later buried. There are many reasons why nursing homes became an epicenter for the pandemic, but one has been well illuminated by recent New York Times reporting: the failure of regulatory monitoring and reporting systems, including Care Compare and star ratings, which were intended to reflect nursing home quality.

These types of ratings systems are part of a consumerist turn in health care, based on the idea that with all the right information, patients will be able to navigate the system to choose among care providers and balance things like quality and price. There are many flaws in these assumptions. The N.Y. Times reporting over the past year shows that one necessary piece of the consumerist model is completely lacking: the quality of information to inform decisionmaking. This article, in particular, illuminates the fact that even after major problems were uncovered in surveys and inspections, nursing homes had too many tools to keep those problems from coming to light and eventually making it into Care Compare. The problems don’t harm their star ratings – a scale from 1 to 5 that is supposed to—but often fails to— indicate nursing home quality.

The failure of these ratings to capture what is actually happening in settings where residents often cannot advocate for themselves is tragic. When the faults in such a system intersect with a pandemic, people who think they have chosen quality nursing homes for loved ones learning that they are tragically wrong.

Even the best nursing homes went through extremely trying times over the past two years. But some nursing homes began this period in a state of poor oversight, management, staffing, and operations that never should have been tolerated.


COVID Stumble: US Politics, Vaccine Hesitancy, & Mortality

Summary: On Monday we posted on how well Taiwan dealt with COVID; today, one way the US fell sadly short. NPR reports that COVID mortality is 3 times higher in heavily Trump than heavily Biden counties – due to lower vaccination rates, in turn due to misinformation and vaccine hesitancy. Thus political division and distortion of science are deadly.

Pro-Trump counties now have far higher COVID death rates. Misinformation is to blame
NPR Morning Edition
December 5, 2021
Daniel Wood and Geoff Brumfiel

Since May 2021, people living in counties that voted heavily for Donald Trump during the last presidential election have been nearly three times as likely to die from COVID-19 as those who live in areas that went for now-President Biden.

NPR looked at deaths per 100,000 people in roughly 3,000 counties across the U.S. from May 2021, the point at which vaccinations widely became available. People living in counties that went 60% or higher for Trump in November 2020 had 2.73 times the death rates of those that went for Biden.

In October, the reddest tenth of the country saw death rates that were six times higher than the bluest tenth…

The data also reveal a major contributing factor to the death rate difference: The higher the vote share for Trump, the lower the vaccination rate.

Recent polling shows that partisanship is now this single strongest identifying predictor of whether someone is vaccinated. Polling also shows that mistrust in official sources of information and exposure to misinformation, about both COVID-19 and the vaccines, run high among Republicans.

It was not always this way. Earlier in the pandemic, many different groups expressed hesitancy toward getting vaccinated. African Americans, younger Americans and rural Americans all had significant portions of their demographic that resisted vaccination. But over time, the vaccination rates in those demographics have risen, while the rate of Republican vaccination against COVID-19 has flatlined at just 59%, according to the latest numbers from Kaiser. By comparison, 91% of Democrats are vaccinated.

Being unvaccinated increases the risk of death from COVID-19 dramatically, according to the CDC. The vast majority of deaths since May, around 150,000, have occurred among the unvaccinated, says Peter Hotez, dean for the National School of Tropical Medicine at Baylor College of Medicine.

While vaccine hesitancy exists in many different groups, Hotez suspects that the deaths are “overwhelmingly” concentrated in more politically conservative communities. “How does this make sense at any level?” he asks.

Republicans are far more likely to believe false statements about COVID-19 and vaccines. A full 94% of Republicans think one or more false statements about COVID-19 and vaccines might be true, and 46% believe four or more statements might be true. By contrast, only 14% of Democrats believe four or more false statements about the disease.

Comment by: Gregg Gonsalves and Robert Heimer

This is an interesting look by NPR at vaccine hesitancy, COVID-19 conspiracy thinking and its impact on pandemic mortality by political affiliation. Similar trends have been noted in the New York Times, by the Kaiser Family Foundation and researchers.

However, many of these stories have put the onus on individuals, neglecting to mention or downplaying the notion that it is elected officials, at the state and local levels, who have downplayed and even legislated against epidemic control measures that promote or require masking, testing, or getting vaccinated. The focus on individuals completely neglects the structural determinants of health.

What would be more informative to see would be an analysis of the statements of local and state officials who, aligning with the anti-science attitudes of President Trump, instituted policies at these levels of jurisdiction, and how these policies led to increased COVID-19 mortality. We would assume—and let’s put it to the test—that these factors might have a stronger relationship with mortality than simply voting patterns in the last election.

However, such a simple analysis is likely to miss one of the key features of the cumulative mortality of the COVID pandemic. In the first months of the pandemic, as we were accumulating knowledge about SARS-CoV-2 transmissibility and severity, especially in specific populations, the first places where the virus spread were hit hardest. These include very blue regions of the country. What is disappointing is that the lessons learned there were dismissed in more red regions, perhaps in part because the lessons came from blue states.  


Navigating the COVID pandemic: Taiwan’s Example

Summary: As the US approaches 800,000 COVID deaths, this week we review how pandemic control fared in two countries. Today: Taiwan, where broad public cooperation coupled with technical finesse to minimize health and economic harm. On Wednesday: the US, where pandemic response was hobbled by tense interactions between political partisanship and public health.

How has Taiwan navigated the pandemic?
Economics Observatory
December 1, 2021
By Tsung-Mei Cheng

Taiwan has fared better than many other countries during the Covid-19 crisis. Political leadership, early action, a national plan, strong information and communications technology infrastructure and a cooperative public have all contributed.

As of October 2021, Taiwan ranked lowest in total number of Covid-19 cases and second lowest in deaths per 100,000 population among comparable OECD countries.

Of 20 nations, the United States ranked second with 13,825 cases per 100,000 population and Taiwan ranked twentieth with 69 per 100,000. … the United States ranked first with 224 deaths per 100,000 population and Taiwan ranked nineteenth with 4 per 100,000.

At the same time, Taiwan’s economy grew in both 2020 and 2021. This continued, and even outpaced, the growth seen in preceding years. In contrast, the world’s real GDP declined by 3.4% in 2020, with the G20 countries, members of the euro area and comparable OECD countries had negative growth ranging from -1% to -11%.

The situation has remained stable since the government lowered the emergency alert from level 3 to level 2 on 27 July 2021. Since September, new cases of domestic transmission have been at either zero or in the low single digits. Deaths have also remained very low. For nine successive days between 29 September and 8 October, Taiwan reported no deaths. This was at a time when the average daily deaths in the United States stood at 1,867, with most days exceeding 2,000 deaths per day.

Taiwan was prepared and acted at the first signs of the virus in early 2020. Policy makers had learned lessons from the 2003 SARS crisis and made plans to prepare for future pandemics.

To that end, the government strengthened Taiwan’s CDC and healthcare delivery system, and taught the public the importance of face masks, hand hygiene and temperature checks. In addition, a 2011 constitutional ruling granted the government power to do all that is necessary in national public health emergencies, including ‘temporarily removing personal freedom of movement’. This made mandatory quarantine possible during the Covid-19 crisis.

Difficulties frequently encountered in many Western countries with vaccine hesitancy, contact tracing, quarantine and facemask resistance have not generally been problems in Taiwan. The public regards cooperating with the government in national emergencies as a civic responsibility and shares the recognition that everyone is in this together. The importance of these two attributes cannot be overstated in Taiwan’s highly successful Covid-19 outcomes to date.

Comment by: Don McCanne (with all due credit to Tsung-Mei Cheng and Uwe Reinhardt):

There has been considerable disagreement within the United States about the nature of the Covid-19 epidemic, a disagreement not shared in Taiwan where the people worked together to try to bring it under control.

It is interesting that the author, Tsung-Mei Cheng, and her late husband, Uwe Reinhardt, worked with Taiwan to help establish their single payer health care financing system — a system that proved to be very helpful during this epidemic, along with their other public policies. Their ethical principles helped make the Taiwanese government much more effective in combating the scourge of Covid-19 than we were in the United States, in spite of our wealth.

In a Princeton Policy Podcast, Tsung-Mei Cheng said, “Uwe writes in the book (‘Priced Out’), and I’ll paraphrase him, health reform as in Europe, Canada, or say Taiwan, which operates a government-run single payer health care system; they usually begin their debate on health reform making explicit the ethical principles that should govern or constrain their health policy. They explicitly state what these ethical values are. For example, in Germany, the word is solidarity. Everybody respects that, and there is agreement on that. Say… yes, we want solidarity therefore everyone shall have health care, the same health care. Well, Canada, in the Canada Health Act, it says that all shall have health care based on health care needs and not on ability to pay. Now, in this country, Uwe’s experience has been that, you know, by merely bringing up the topic of distributive ethics for health care it can easily raise the ire of an audience because it is viewed as too personal, too political, or too divisive. So, instead, we discuss health reform mainly in technical terms, usually in economic terms and let social ethics fall where they may, and people certainly have different social ethics. Now the second biggest takeaway from the book for me is about what Uwe said about the uninsured in America. He said, and this is a direct quote from him, ‘The issue of universal coverage is not a matter of economics; little more than one percent of GDP assigned to health care could cover all. It is a matter of soul.'”

Well, this is embarrassing. We, as a people, have it within our power to address these problems effectively – not just Covid, but health care for the entire nation, forever. What do we do? Well, for Covid, we’ll soon be approaching a million deaths. And all of our other health problems? For shame, America. For shame!


Health Insurance Headlines of the Single Payer Future

Summary: And now for something completely different: We take cost headlines recently reported in KHN (Kaiser Health News) and imagine how they would look under single payer, or how they just wouldn’t make sense. Enjoy the vision. Let’s make it happen.

KHN Health Costs: Dec. 2, 2021

BILL OF THE MONTH: The ER Charged Him $6,500 for Six Stitches.
No Wonder His Critically Ill Wife Avoided the ER.
Single Payer: You’re all set. No charge.

Stranded by the Pandemic, He Had Only Travel Insurance. It Left Him With a $38,000 Bill.
Although it’s possible to buy travel insurance that provides some health coverage, the devil is in the fine print. Obama-era laws that prevent refusal of payment for preexisting conditions don’t apply to travel insurance.
Single Payer: Stranded by the pandemic, man received the care he needed, free.

Your Out-of-Pocket Health Care Costs Need Not Be a Mystery
A new California law requires health insurance companies to notify consumers how much remains on their deductibles and how close they are to their annual out-of-pocket spending limits.
Single Payer: You don’t have any out-of-pocket costs.

Patients Get Stranded Out of Network as Insurer-Hospital Contract Talks Fall Apart
As hospital systems and insurers adjust to the pandemic, their contract negotiations grow increasingly fraught. Contracts for in-network care are ending without a new deal, leaving patients suddenly with out-of-network bills or scrambling to find new in-network providers.
Single Payer: Networks?

Congressional Doctors Lead Bipartisan Revolt Over Policy on Surprise Medical Bills
Congress last year shielded consumers from unexpected out-of-network charges, but hospitals and doctors have decried the arbitration plan put forward by the Biden administration for negotiating these bills as favoring insurers. More than 150 members of the House agree.
Single Payer: What’s a medical bill? Sure would be surprised to receive one of those.

New Health Plans Offer Twists on Existing Options, With a Dose of ‘Buyer Beware’
Fueled by consumer frustration with high premiums and deductibles, two new insurance offerings promise a means for consumers to take control of health care costs. But experts say they pose risks.
Single Payer: What’s a health plan?

Why You Can’t Find Cheap At-Home Covid Tests
You probably won’t be testing everyone at your Thanksgiving table for covid because the tests are expensive and hard to find. Why? The federal government is partly to blame.
Single Payer: Covid tests – all medical tests – provided free.

As Big Pharma and Hospitals Battle Over Drug Discounts, Patients Miss Out on Millions in Benefits
The number of pharmacies dispensing 340B discounted drugs soared to more than 31,000 this year. Drugmakers struck back by halting some discounts. Hospitals say they are losing millions of dollars — and cutting back services to patients — as a result.
Single Payer: Latest update of drug prices released by government.

Medicare’s Open Enrollment Is Open Season for Scammers
Medicare officials say complaints are rising from seniors lured into private plans with misleading information or enrolled without their consent. In response, officials have threatened to penalize the private companies selling Medicare Advantage and drug plans if they or agents working on their behalf mislead consumers.
Single Payer: Everyone covered, cradle to grave. No transitions between coverage, ever.

Medicare Enrollment Blitz Doesn’t Include Options to Move Into Medigap
TV ads and mailings targeting seniors tout Medicare Advantage plans this time of year, but millions choosing traditional Medicare make a costly and difficult decision about Medigap coverage, which gets much less attention.
Single Payer: See above. Not a thing.

Researcher: Medicare Advantage Plans Costing Billions More Than They Should
Some insurers pocketed ‘eye-popping’ overpayments, billing records show.
Single Payer: Doctors and single payer commissioner agree on payment rates for next year.

Uninsured in South Would Win Big in Democrats’ Plan, but Hospitals Fear Funding Loss
The latest iteration of President Joe Biden’s social-spending package would close the health insurance gap for at least 2.2 million people, making a huge difference especially in the South, where political opposition has blocked Medicaid expansion.
Single Payer: Hospitals get new annual global budget amounts. (What’s “uninsured”?)

Missouri’s Thin Dental Safety Net Stretched Amid Medicaid Expansion
An estimated 275,000 Missouri adults can get dental insurance now as the state has expanded who is eligible for Medicaid. But with so few dentists participating in the program, the state’s already-backlogged dental clinics are facing a glut of new clients.
Single Payer: Dentists settle on payment rates for next year.

How Rural Communities Are Losing Their Pharmacies
More than 1,000 independent rural pharmacies have closed since 2003, leaving 630 communities with no retail drugstore. As 41 million people stuck in pharmacy deserts make do, the remaining drugstores struggle to survive.
Single Payer: Rural pharmacies receive subsidies to stay open.

California Law Aims to Strengthen Access to Mental Health Services
The law doesn’t take effect until July, but its passage should force insurers to expand their rosters of therapists. Here’s how you can challenge your health plan’s mental health services until then.
Single Payer: 90% of mental health providers in single payer system.

KHN’s ‘What the Health?’: Why Health Care Is So Expensive, Chapter $22K
A new survey finds the average cost of an employer-provided family plan has risen to more than $22,000.
Single Payer: Who remembers work-based health insurance?

‘An Arm and a Leg’: Need Surgery to Save Your Life? Tips for Getting Insurance to Pay
Laurie Todd calls herself the “Insurance Warrior” and is sharing her strategies for getting health insurance companies to bend to her will.
Single Payer: Surgery included in coverage!

Comment by: Jim Kahn

This isn’t fantasy in any wealthy country except the US. Embrace this future.


Privatizing Jail Healthcare Increases Death Rates

Summary: A Reuters investigation found 7,571 inmate deaths across >500 US jails from 2008-2019, including nearly 5000 among inmates awaiting trial. Death risks were 18-58% higher in jails with healthcare managed by private companies.

Dying inside: The hidden crisis in America’s jails
Part 1 and Part 2
October 16, 2020
By Jason Szep

A Reuters data analysis finds that jails with healthcare overseen by private companies incur higher death rates on average than those with care handled by government agencies. The story of a Georgia jail that hired Corizon Health Inc reveals the hidden cost of privatized inmate healthcare. . . . Jails with publicly managed medical services, usually run by the sheriff’s office or local health department, had an average of 12.8 deaths per 10,000 inmates in that time. Jails with healthcare provided by one of the five companies had an additional 2.3 to 7.4 annual deaths per 10,000 inmates. The death rates were 18% to 58% higher, depending upon the company.

Comment and Graph by: David Himmelstein and Steffie Woolhandler

The US locks up more people than any other nation, with people of color incarcerated at vastly higher rates than non-Hispanic Whites. Taking 2 million people’s freedom away is bad enough, but abusing them while incarcerated adds injury to injury.

Private healthcare firms have taken advantage of mass incarceration to generate profits from inmates’ suffering; their frequent neglect of even basic standards of care apparently drives up death rates.

For John Oliver’s darkly humorous take on the overall privatization of prisons, see:


Health Care Reform’s History of Utter Failure

Summary: The persistent malfunctioning of our health insurance system is clearer than ever. The futility of periodic piecemeal reforms is undeniable. Yet, we’re on the verge of another set of modest changes that won’t resolve the fundamental problems. Let’s turn to single payer to properly revamp the system.

Pain Machine: Why our health care system is broken.
The Nation
November 28, 2021
By Ryan Cooper

The American health care system is a notorious disaster. On the one hand, even “good” private employer-based insurance is often a nightmare to actually use, while tens of millions of people have much worse coverage or none at all. At the same time, our system is also incredibly expensive — eating up 17 percent of the US gross domestic product, or nearly twice what peer rich nations spend on average.

Why are we stuck with this expensive, broken system? One good answer can be found in Ten Year War: Obamacare and the Unfinished Crusade for Universal Coverage, an excellent new book by veteran health care reporter Jonathan Cohn about the political history of health care reform in this country. Cohn shows how repeated failures by both Democrats and Republicans to get a decent policy through our rickety 18th-century constitutional structure led to the strategy that produced Obamacare, formally known as the Affordable Care Act — a policy that improved our system in many ways but also entrenched some of its worst elements.

Throwing trainloads of money at the extant hideous semi-private health care mess might, someday, get almost everyone in the United States technically insured. But the coverage will probably not be very good, and it will not stop the cost bloat that is devouring the American economy from the inside. If we want true universal health care, where anyone who is sick can go to the doctor without the terror of being slammed with an unpayable bill, and we want the price of that care not to eat up nearly a fifth of the economy, a lot of powerful corporate interests are going to have to take a major hit. Time is short: Democrats may not keep their current razor-thin congressional majorities for long, so it’s up to them to take the initiative — and for the rest of us to keep up the pressure.

The Ten Year War
By Jonathan Cohn

The Affordable Care Act was an attempt to achieve the liberal end of universal coverage through a more conservative scheme that relied heavily on competition among private insurers. But the intellectual foundation for that calculation seems increasingly shaky, especially when it comes to controlling the cost of care. Although the law’s delivery reforms have probably helped slow the rise in health care spending, overall competition among insurers hasn’t pushed the system toward efficiency as much as the experts had hoped. Even many card-carrying economists schooled in the virtues of markets and hazards of government control now wonder whether it’s time for the United States, like other developed nations, to set a global budget for health care, have the government regulate prices, or maybe do both of those things.

If the United States keeps moving in this direction, until everybody has coverage, it could end up with a single, government-run insurance program for everyone.

The reality is that any system that covers everybody with low out-of-pocket costs and some kind of government control over spending is going to look a lot more like Medicare for All than what the U.S. has now.

Democrats’ Bill Would Go Far Toward ‘Patching the Holes’ in Health Coverage
The New York Times
December 1, 2021
By Reed Abelson et al

More than 75 years after Truman first proposed universal coverage, Democrats are still chasing his dream. If President Biden’s social policy bill becomes law, they will make major strides toward fulfilling it.

If the measure passes, the United States will retain its patchwork system, where people obtain different health coverage depending on where they live, what they earn, where they work and how old they are.

As a group, the health care provisions will cost $330 billion over the next decade and come with compensating health savings of $325 billion, according to an analysis of Congressional Budget Office data by the Committee for a Responsible Federal Budget. But that balance is slightly misleading: The parts that save money are designed as permanent, while several new coverage provisions would expire after 2025.

Even with the changes, the Congressional Budget Office estimates that more than 27 million people would remain uninsured.

Comment by: Don McCanne

Although health reform efforts in the United States have produced some modest improvements here and there, the overall result must be considered a failure when considering the high costs and remaining deficiencies. The current efforts are no different. We would spend more money and yet fail to correct most of the deficiencies in the system, still leaving 27 million people without coverage.

It has long been recognized that adopting the policies of single payer financing would correct the deficiencies while filling the voids in coverage. Let’s do it right this time even if it requires a reset in the current legislative effort. It would be less expensive and better for everyone except maybe for those who are diverting our health care assets to their own pecuniary interests.


Quantifying Patient Burden Due to Insurance Complexity

Summary: We know that US health insurance causes huge administrative overhead at providers and private insurers. Now, two studies document the burden for patients. One estimates that administrative hurdles cause delayed or foregone care for 1 in 4 insured individuals. The other reports on worker insurance hassles, quantifying lost time, added stress, and foregone productivity – reaching >$100 billion.

Patient administrative burden in the US health care system
Health Services Research
September 8, 2021
By Michael Anne Kyle and Austin B. Frakt

From Abstract (key passages)
We … administered survey questions to a nationally representative sample of insured, nonelderly adults (n = 4155).

24.4% of respondents … reported delayed or foregone care due to an administrative task. Disability status had the strongest association with administrative tasks (adjusted odds ratio [OR] 2.91) and burden (adjusted OR 1.66). … Higher income was associated with fewer subsequent burdens (adjusted OR 0.55).

The prevalence of delayed/foregone care due to administrative tasks is comparable to similar estimates of cost-related barriers to care. Demographic disparities in burden warrant further attention.

Magnitude and Effects of “Sludge” in Benefits Administration: How Health Insurance Hassles Burden Workers and Cost Employers
October 29, 2020
Academy of Management Discoveries
By Jeffrey Pfeffer et al.

Using a nationally representative sample, we found that the direct cost of the time spent by employees dealing with health insurance administration was approximately $21.57 billion, with 53 percent of that time spent ($11.4 billion) at work. The time spent on administrative burdens can also have spillover effects on employee attitudes. Specifically, we found that, controlling for self-reported health and various demographics, people who spent more time on the phone with their health insurer were less satisfied with their current workplace, less engaged, more likely to report significant stress, more likely to have missed a day or more of work, and more likely to feel burned out at work. The estimated cost of additional absence was $26.4 billion, and the productivity cost of reduced satisfaction was approximately $95.6 billion.

Comment by: Adam Gaffney

The enormous administrative waste of American healthcare is widely recognized. About one third of total healthcare spending in the US goes towards administration, about twice the proportion as in Canada. We spend more than $80,000 per physician in the US to cover the cost of their interactions with insurance companies, four-fold higher than Canada. However, while the system-wide costs, including for providers, are well known, less research has focused on the burden placed on patients.

Two recent studies change that. The first found that about 1 in 4 insured non-elderly adults went without, or delayed, needed healthcare due to administrative burdens, including for such onerous insurance-related tasks like dealing with billing issues and working through prior authorizations. Such administrative hurdles further compound the financial barriers that deter large numbers of Americans from needed care — with deadly results.

A second study quantified the amount of time US workers spend on the phone with insurance companies each year. With some extrapolations based on the authors’ assumptions, we learn from this study that full-time US workers collectively expend around half a billion hours per year on this psychologically draining, time-sapping task.

 “Man Dying from Cancer Spends Last Good Day on Phone with Insurance Company,” reads one dark humored headline from the satirical publication The Onion. Sadly, in the US, it rings true.


High Profit COVID Vaccines

Summary: A new article in the Journal of the Royal Society of Medicine describes how the price charged by US-based COVID-19 manufacturers exceeds production costs by 10-fold or more. That’s a stunning profit margin, for technology developed with huge government support and a guaranteed market. Comprehensive pharmaceutical price regulation is essential in any comprehensive health care financing reform.

The costs of coronavirus vaccines and their pricing
Journal of the Royal Society of Medicine
November 2021
By Donald W Light and Joel Lexchin

COVID-19 vaccines need to be as globally affordable and accessible as possible as a public health good to help counter [the] threat to global public health.

[P]ublic funding to corporations has directly or indirectly financed all phases of vaccine research, development, testing and manufacturing, including the development of the innovations on which the RNA platform (mRNA) and other vaccines are based. Billions in funding from taxpayers, multiple branches of the United States (USA) government, from the European Union (EU) and countries such as Germany, has been so extensive that there is little investment or sunk costs for corporations to recover, except perhaps for those associated with manufacturing the vaccines themselves. In addition, company costs for liability are minimised, as are the large marketing costs typical of pharmaceutical products.

AstraZeneca [British-Swedish] has said it is selling its Oxford-based vaccine without profit during the global pandemic, but its inter-country price per dose varies – $2.15 in Europe, $3–4 in the USA and $5.25 in South Africa … Moderna and Pfizer [American] were charging more affluent nations and the EU for their mRNA vaccines with prices ranging from $14.70 to $23.50 a dose. Do their costs of developing and manufacturing vaccines, net of public subsidies, justify these prices, or are the companies just ‘making a killing’?

Adding these costs together, net manufacturing costs for 100 million doses ready for shipping appear to range from US$ 0.54 to US$ 0.98 a dose.

Comment by: Jim Kahn

This excellent synthesis of available cost information [imprecise, because cost detail is treated as proprietary] demonstrates that COVID-19 vaccine production costs are a very small fraction of charged prices. Especially for US-based manufacturers.

Of course we want companies to profit from drug development success – and the COVID-19 vaccines are a remarkable, indeed historic example of that. But the work was done with huge government financial support, the market is guaranteed by the government, and liability is restricted. So why do prices need to exceed costs by ten-fold or more?

They don’t. AstraZeneca – the only non-US company in this mix – charges about 85% less than Moderna and Pfizer.

Fair returns, based on full disclosure of production costs and reasonable adjustment for government support, is the proper basis for determining price.

The Build Back Better social infrastructure bill currently in Congress includes a few drug price control mechanisms, but far less scope than originally proposed – for limited numbers of drugs, and substantially gameable. More on that another day.

We need drug price controls as the default condition, not voluntary or sporadic.


Achieving Racial and Ethnic Equity in US Health Care

Summary: The Commonwealth Fund just released an important national and state-by-state review of inequities in health care. The findings are unsurprising and distressing – higher rates of access barriers and mortality from treatable conditions among people of color, and marked variation by state. If only there were a way to pay for health care to efficiently eliminate these inequities …

Achieving Racial and Ethnic Equity in U.S. Health Care: A Scorecard of State Performance
The Commonwealth Fund
November 18, 2021
By David C. Radley et al

Black and American Indian/Alaska Native (AIAN) people live fewer years, on average, than white people. They are also more likely to die from treatable conditions; more likely to die during or after pregnancy and to suffer serious pregnancy-related complications; and more likely to lose children in infancy.

People’s health also varies markedly across and within states, as does access to health services and overall quality of care. Large racial and ethnic health inequities, driven by factors both inside and outside the health care delivery system, are common.

Issues around cost, affordability, and access to care also contribute to inequities. Black, Latinx/Hispanic, and AIAN populations are less likely to have health insurance, more likely to face cost-related barriers to getting care, and more likely to incur medical debt.

Decades of policy choices made by federal, state, and local leaders have led to structural economic suppression, unequal educational access, and residential segregation, all of which have contributed in their own ways to worse health outcomes for many people of color. The failure to ensure all Americans have reliable health coverage has paved the way to inequitable access to health care.

From Conclusion

Too often in the U.S., race and ethnicity are correlated with access to health care, quality of care, health outcomes, and overall well-being. This is a legacy of structural, institutional, and individual racism that predated the country’s founding and that has persisted to the present day, in large part through federal and state policy. By pursuing new policies that center racial and ethnic equity, expand access to high-quality, affordable care, and bolster the primary care workforce, we as a nation can ensure that the health care system fulfills its mission to serve all Americans.

Comment by: Don McCanne

Achieving racial and ethnic equity has been a goal for as long as I can remember, and after 80 plus years of my life, one devoted to health care, it still hasn’t been achieved, as this Commonwealth Fund report reveals.

Just think about what one public policy could accomplish: establishing an equitable, single payer, improved Medicare for All program. Yes, there would still be perpetual details to attend to, but just think of the gains we would make by taking that first step, making the rest of the gains semi-automatic once the principle of equity is established. Isn’t now the time to finally make that move?