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!


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.


NYT: The multifaceted failings of US health insurance

Summary: The New York Times, the most respected US daily newspaper, over the last week prominently published three stories about startling failings in our health insurance system. Are the reporters and editors sending us a message – time to change health insurance system?

Their Baby Died in the Hospital. Then Came the $257,000 Bill
New York Times
September 21, 2021
By Sarah Kliff

Last summer, Ms. Lane started receiving debt collection notices. The letters, sent by the health plan Cigna, said she owed the insurer over $257,000 for the bills it accidentally covered for Alexandra’s care after Ms. Lane switched health insurers.

Ms. Lane was flummoxed: It was Cigna that had received the initial bill for care and had paid Mount Sinai West. Now, Cigna was seeking the money it had overpaid the hospital by turning to the patient.

“For them, it’s just business, but for us it means constantly going through the trauma of reliving our daughter’s death,” said Clayton Lane, Alexandra’s father and Ms. Lane’s husband. “It means facing threats of financial ruin. It’s so unjust and infuriating.”

Medicare Expansion Clashes with Health Care for the Poor as Budget Bill Shrinks
New York Times
September 20, 2021
By Jonathan Weisman & Sheryl Gay Stolberg

Democrats are facing tough moral and political decisions over how to pursue their century-old dream of universal health care now that their ambitious $3.5 trillion social safety net bill will almost certainly have to be trimmed back.

As they try to reduce the bill’s cost, members of the party disagree over whether to prioritize expanding coverage to more poor adults in states whose leaders have refused to do so or to give new Medicare benefits to older people across income levels.

This Lab Charges $380 for a Covid Test. Is That What Congress Had in Mind?
New York Times
September 26, 2021
By Sarah Kliff

At the drugstore, a rapid Covid test usually costs less than $20.

Across the country, over a dozen testing sites owned by the start-up company GS Labs regularly bill $380.

There’s a reason they can. When Congress tried to ensure that Americans wouldn’t have to pay for coronavirus testing, it required insurers to pay certain laboratories whatever “cash price” they listed online for the tests, with no limit on what that might be.

Comment by: Isabel Ostrer

Three stories in one week on the front page of the preeminent US newspaper. Three stark examples of just how diversely broken the American health insurance system is.

1) A family being harassed by an insurer who accidentally paid for a hospital bill after the family had already switched insurance providers. Now the family relives the tragedy of their infant daughter dying each time they contend with these outrageous and illegitimate bills.

2) Congress debating whether to expand coverage to low-income adults who were left out during the piecemeal expansion offered by the Affordable Care Act or to give seniors more comprehensive health coverage. A terrible choice.

3) A lab gaming the system to change exorbitantly high prices for Covid tests, which is only possible because the US government refuses to take an active role in controlling such prices.

Together, these very different stories offer a glimpse of the myriad ways that American health care fails the American people. Single payer could fix all these problems. A unified insurer would mean the Lane family would not have to contend with multiple for-profit insurers debating which bills they covered. A unified insurer would cover all Americans instead of leaving poor individuals in ACA-non-expansion states by the wayside, and provide comprehensive coverage. A unified insurer would regulate prices and eliminate price-gouging, and control the unhinged growth of American health spending.  


High Uninsurance post-ACA for Low-Income, Black, Hispanic

Summary: This study used a national survey to document high levels of uninsurance among vulnerable populations after ACA implementation, especially in states not choosing to expand Medicaid – up to 40-60% for some groups in some states. Sadly, but unsurprisingly, the ACA falls far short.

States’ Performance in Reducing Uninsurance Among Black, Hispanic, and Low-Income Americans Following Implementation of the Affordable Care Act
Health Equity
July 21, 2021
By G. Lines et al.

From the abstract:

Purpose: To assess state-level variation in changes in uninsurance among Black, Hispanic, and low-income Americans after implementation of the Affordable Care Act (ACA) [in 2014].

Methods: We analyzed data from the Behavioral Risk Factor Surveillance System from 2012 to 2016 …

Results: The range in the percentage point reduction in uninsurance varied substantially across states: 19-fold for Black (0.9–17.4), 18-fold for Hispanic (1.2–21.5), and 23-fold for low-income (1.0–27.8) adults. … In some states, more than one quarter of Black, one half of Hispanic, and approaching one half of low-income adults remained uninsured after full implementation of the ACA. Compared with states in the lowest quintile of change in coverage, states in the highest quintile experienced greater improvements in ability to see a physician.

From Fig 3, for Low Income individuals. Dark bars are states that expanded Medicaid.

Comment by: Jim Kahn

National averages for uninsurance don’t do justice to the dismal post-ACA shortfalls for vulnerable groups – Blacks, Hispanics, and low-income. Especially in states that failed to expand Medicaid, but also in states that did expand. As this study demonstrates, these shortfalls impair ability to see a physician, and that, we know, worsens health outcomes.

How long will our country continue its commitment to highly inefficient convoluted health insurance schemes when there is a simple, efficient, equitable solution waiting for us to pluck it off the shelf and put it in place?

Single payer would not need studies or graphics like this. We’d just cover everyone.



Californians Crave Single Payer!

Summary: Three diverse California groups – doctors in training, low income populations, and leaders of community-based organizations — recently showed high support for single payer. Very encouraging trend, invigorating! Let’s harness that energy.

Health reform debate
USC Keck School of Medicine
September 21, 2021
Single Payer presenter Paul Song MD

See Paul’s ppt deck here.

Community Voices Priorities and Preferences of Californians with Low Incomes for Health Care Reform
September 2021
By The Healthy California for All Commission

From the Executive Summary:

Both the public opinion poll and the CBO leader interviews and surveys conducted show strong support for a single, statewide, government-run health care program that covers all people who live in California. The poll suggests that 65% of Californians with low incomes support the concept, with people of color showing greater support: 76% of African Americans, 71% of Latinos, 73% of Asian/Pacific Islanders, 65% of Native Americans and 54% of whites. Similarly, a majority of CBO leaders indicated support for the concept of a single statewide government-run health care program.

Comment by: Jim Kahn

Look what’s happening in California: So much support for single payer, from different corners … two diverse examples arrived in the last couple of days.

All of us who educate and advocate for single payer have been in debates, arguing the merits of single payer versus strategies that are pure market (“skin in the game”) and blended (like the ACA). Usually we’re quite pleased to swing opinion 10-20%. Look what happened when Paul Song spoke at USC Keck School of Medicine – a 41-point swing! To 89% support! Paul is a brilliant presenter. But, also, the times are changing … more and more people in health care and out recognize the gaping flaws in the current health care non-system, and the excellent performance of single payer.

Who recognizes it especially well? The population that is most vulnerable and in need. In statewide polling of low income populations and of community-based organization leaders, the Health California for All Commission found a clear consensus: “strong support for a single, statewide, government-run health care program that covers all people who live in California”. That sounds like … single payer.

There’s lots of work left to do. Lots more people to convince, including importantly our legislators. Bills to write, battles to wage. But I think we’ve turned a corner … to widespread recognition of what is known so well outside our country’s borders: single payer is a stunningly efficient and effective solution.


If USC is ready for single payer, it’s time!

Summary: The University of Southern California medical school is often regarded as high class. But at least two of its current top leaders share health justice goals, and endorse single payer. The tide of support is turning!

Steve Shapiro brings a big-picture approach to medicine at USC
USC News
September 14, 2021
By Leigh Hopper

Steve Shapiro takes the macro view of medicine. This spring, he became the first senior vice president for health affairs at USC, where he will oversee — and build bridges between — clinical operations at Keck Medicine of USC and research and medical training at the Keck School of Medicine of USC.

Question: You’ve said that L.A. traffic will give you more time for audiobooks. Any recommendations, audio or otherwise?

S. Shapiro: I’ve just finished a couple of books. One was called Broken, Bankrupt and Dying by our chief medical officer at LAC+USC, Brad Spellberg. It’s the best argument I’ve heard for a single-payer system, as well as explaining the nuances of what single-payer means. It’s really impressive.

Broken, Bankrupt, and Dying
By Brad Spellberg (chief medical officer at LAC+USC)

I believe we should move forward with a universal, single-payer, national insurance plan, with no deductible or coinsurance, but with copays for speciality care and prescription drugs, funded by central collected taxes that everyone pays, but while still giving the individual a choice about whether they want to use the public insurance or buy their own private insurance. The resolution to the seeming paradox between a single-payer plan and offering choices is to give government-sponsored insurance to all residents, but also allow and encourage a thriving private insurance market that people can choose to purchase into if they would like. Let the public plan and private markets compete. Give people options.

I think this collective ideal makes the most sense. I think it will offer the best coverage at the best price, and will help reform healthcare delivery to eliminate waste and improve outcomes. I also think it is the most politically palatable, minimizing triggering opposition by including aspects that should appeal to people on both sides of the aisle.

But you know what? At this point, I’ll accept almost any universal system that can muster the political and social support behind it to get it done. I have no use for a philosophically optimal system that can never be implemented. I want something that can get done. So I’m keeping an open mind while advocating for what I think is best, and I’d encourage you to do that too.

Comment by: Don McCanne

For those of us on the West Coast, USC School of Medicine has the reputation, perhaps unfairly, of being the medical school with Rolls Royces in the doctors’ parking lot. For those who might doubt the social mission of USC medical school, these leaders at USC have provided very reassuring comments that show that they share health justice goals with the rest of us.

This book by Brad Spellberg describes many of the intolerable deficiencies and injustices of the current US healthcare system while proposing many corrections that must take place. Though there will be some debate over the specifics, the general approach of establishing a national health insurance program seems to have reached the point where there should be broad public acceptance. At least we now have reassurance that the institutions of the health professions are moving into alignment on the issues. Let’s all move in together and get it done.


Allowing For-Profit Hospice: The Worst Health Policy Idea Ever?

Summary: For-profit ownership has reached two-thirds of hospice agencies. Yet for-profit status is associated with fewer services, less clinically skilled staff, more formal complaints, more discharges of sicker patients, and more hospital and emergency department use. Removing for-profit ownership is part of health reform.

Hospice Tax Status and Ownership Matters for Patients and Families
(behind a paywall)
JAMA Internal Medicine
August 1, 2021
By Melissa D. Aldridge.

From the article: 

The increase in ownership of hospices by private equity (PE) firms and publicly traded companies . . . follows almost 2 decades of steady growth of for-profit ownership of hospice agencies, from one-third of hospices in 2000 to almost two-thirds by 2017. Why is this noteworthy? It is difficult to identify a health care sector more detrimentally affected by the mismatch between profit maximization incentives and quality of care than hospice. Whereas some have argued that tax status (ie, whether a hospice is for profit or nonprofit) is unrelated to hospice quality, an increasing body of evidence suggests otherwise. The requirement for for-profit organizations to distribute net income to shareholders provides strong incentives to generate consistent profits over short time periods. . . .

For-profit compared with nonprofit hospices provide narrower ranges of services to patients, use less skilled clinical staff, care for patients with lower-skilled needs over longer enrollment periods, have higher rates of complaint allegations and deficiencies, and provide fewer community benefits, including training, research, and charity care. For-profit hospices are more likely than nonprofit hospices to discharge patients prior to death, to discharge patients with dementia, and to have higher rates of hospital and emergency department use. In one analysis of 355 hospices, 90% of those with the lowest spending on direct patient care (eg, patient home visits) and the highest rates of hospital use were for-profit hospices.

Comment by: David Himmelstein and Steffie Woolhandler

Allowing for-profit hospices is crazy. The deranged care documented in the commentary above (each statement is referenced in the original article) is the predictable result of reimagining dying patients as prudent shoppers in a commercial transaction. Medicare pays for the overwhelming majority of hospice care and could proscribe the participation of for-profits – it excluded for-profit home care agencies until 1980.

With more and more health care providers being snapped up by for-profit firms, and evidence of their misbehaviors mounting, proscribing for-profit ownership has become an essential element of health care reform.    


Crowdsource ideas on government role in single payer

Summary: Today is an experiment: crowdsource day at Health Justice Monitor! We know that HJM readers think about healthcare reform and discuss it with family and friends, and we’d like to learn from that – garner the most persuasive arguments. Please share your ideas. If this works well, we’ll incorporate it regularly.

Comment by: Jim Kahn

What do you find to be the most persuasive arguments to counter the concern, “Our government can be counted on to get it wrong! Inefficient and ineffective! Look at the post office, the public schools, and Medicaid.”

My usual response is, “Our government gets it right when people in all social strata need the service (e.g., the fire department and Medicare among the elderly) and is especially good at disbursing funds (e.g., social security). Where government services fall short is when the beneficiaries are those without political power, e.g., Medicaid for the poor.”

A possible rejoinder is, “Yeah, but what if enough rich people buy out of the single payer system to support a parallel private healthcare system. They pay their taxes and also for their own upscale medical care. Like they do for private schools.”

To that I say, the “There aren’t enough people able and willing to pay twice for health care. Sure, a few super rich will buy out, but the vast majority – including large segments of society with powerful political voice – will stay in, as will almost all doctors. Just like Medicare today.”

What would you say in this discussion? What has actually worked well in conversations with skeptics?

Send your thoughts to, subject line including “Crowdsource ideas on government role in single payer”. Brief please – 25-50 words. And, let us know if / how you want to be identified.

We’ll curate (edit, trim, organize) and compile in a Google document which we’ll share. (To assure a focus on content and civility, we’re not currently planning to make this site interactive.)

Many thanks. Looking forward to your ideas.


Am I a Single Payer Zealot?

Summary: Yes, proudly.

Health Care Unions Defending Newsom From Recall Will Want Single-Payer Payback
KHN (Kaiser Health News)
September 13, 2021
By Angela Hart

Bob Ross, president and CEO of the California Endowment, a nonprofit that works to expand health care access, is on Newsom’s single-payer commission. He said it will work through “tension” in the coming months before issuing a recommendation to the governor on the feasibility of single-payer.

“We have a camp of single-payer zealots who want the bold stroke of getting to single-payer tomorrow, and the other approach that I call bold incrementalism,” Ross said. “I’m not ruling out any bold stroke on single-payer; I would just want to know how we get it done.”

Comment by: Jim Kahn

If believing that we should jettison $800 billion in administrative bloat and transfer the savings to health care makes me a zealot, I accept the label.

If favoring full health care equity is zealotry, I’m on board.

If removing financial barriers to care and thereby avoiding 80,000 deaths per year is zealous, that’s me.

If patient choice of doctor is a zealot’s errand, where do I sign up?

If reducing physicians’ billing burden so they can focus on clinical care is zealotry untrammeled, count me in.

If rejecting “incremental approaches” that end with tens of millions uninsured or underinsured, and trillions of healthcare dollars diverted to profits for shareholders brand me a zealot, I’ll wear that insignia with pride.

If saying, “enough already, it’s time for the US to join the global consensus on health care as a human right” leads to whispers of out-of-control zeal, I’ll shout it from the mountain tops.

Am I a single payer zealot? Guilty as charged.

(p.s., the KHN article mistakenly asserts that creating single payer in California will cost $400 billion / year. Instead, it will *reduce* spending from the current level of about $400 billion …)


A public option would perpetuate our highly dysfunctional financing system

Summary: Jacob Hacker proposes Public Option 2.0 as part of Medicare and integrated into ACA marketplaces. He says it would pave the way for Medicare for All. But would it? History teaches us that it might well derail the drive for Medicare for All.

Medicare for More — Why We Still Need a Public Option and How to Get There
The New England Journal of Medicine
September 11, 2021
By Jacob S. Hacker

When I first argued for the public option two decades ago, it was seen as a huge reach. Today, it is a mainstream Democratic idea. Indeed, the version that Biden supported during his campaign is more robust than anything considered during the debate over the ACA — so much so that I believe it should be called the “Public Option 2.0.” The public option that Biden embraced would explicitly be part of Medicare, using Medicare’s provider network and basing its reimbursements on Medicare payment rates. It would also be available through the ACA marketplaces to all legal U.S. residents who are not eligible for other public coverage, including workers with employer-sponsored insurance (who today are essentially barred from obtaining ACA coverage), and tax credits would be provided on the same terms as they are with private plans. In addition, the Public Option 2.0 envisions a system in which employers could eventually pay the federal government to enroll their workers in the Medicare-based plan.

The Public Option 2.0 would not be Medicare for All. But it could evolve into something similar.

Progressive critics of the public option argue that it would end up at a competitive disadvantage relative to private plans. They note that in Medicare Advantage, commercial insurers siphon off an increasing share of healthier-than-average beneficiaries who would otherwise enroll in the traditional public plan. On a level playing field, the public option’s ability to negotiate lower prices would give it an important advantage over private plans, as would Medicare’s popularity and the broad choice of providers it offers.

Voters not only support a generous public option by overwhelming bipartisan margins, but they also support automatically enrolling every uninsured person in it. Nor do they seem too worried about its evolving into Medicare for All. Indeed, the largest plurality of voters think it should be a stepping stone to universal Medicare.

Medicare has substantial gaps — most notably, no cap on out-of-pocket costs and no drug benefit integrated into the traditional public program. Expanding Medicare benefits will help beneficiaries now, and it will help the cause of expanding Medicare later. By the same token, Medicare Advantage plans should be stripped of their current unjustified advantages.

Advocates of the Public Option 2.0… can build power to finally make Medicare an option for all Americans who need it.

Comment by: Don McCanne (adapted from NEJM posting)

Jacob Hacker has long been a leader in designing and advocating for a Medicare-like public option, and his current version 2.0 would benefit many. It would be a great addition to the current insurance options, but it would leave in place the rest of our fragmented, dysfunctional, inefficient, inequitable, and overpriced financing system.

Although it has been suggested that it would serve well as a transition to an improved Medicare for All, it is likely that the breadth of coverage, as dysfunctional as it would be, would reduce further the political drive to complete the transition, as we’ve seen in the past. Possibly forever.

It would be far better to take a single leap to a well-designed, less expensive, more equitable, single payer Medicare for All. Jacob Hacker has a standing invitation to join us in the single payer camp where his system design expertise and advocacy for health justice would be most welcome.