What Trump gets wrong about Medicare-for-all
by Stephanie Woolhandler and David U. Himmelstein - CNN - October 13, 2018
(CNN) — President Trump's critique of "Medicare-for-all" reform assaults the truth. Contrary to his claims, the single-payer bills in the House and Senate would upgrade coverage and broaden choice for seniors, along with the rest of Americans. And Medicare-for-all would slow the growth of medical costs, assuring Medicare's long-term financial health.
Medicare currently leaves many seniors facing unaffordable medical bills. According to estimates from the Commonwealth Fund, the average enrollee spends $3,024 out of their own pockets on medical bills each year, and medical costs eat up more than 20% of total income for one in four seniors.
To escape some of those costs, many seniors are fleeing to private Medicare Advantage plans that restrict their enrollees to narrow networks of doctors, and often exclude cancer centers and other top-tier hospitals. But the trade-off might not be worth the savings, since the average person enrolled in a Medicare Advantage plan is still saddled with $2,472 in uncovered medical bills.
Medicare-for-all would plug these coverage holes, eliminating virtually all copayments, deductibles and uncovered services. It would also free seniors to choose any hospital and any doctor, and spare doctors from the managed care paperwork and restrictions on referrals imposed by Medicare Advantage plans, freeing up more time to spend with patients.
The President's claim that Medicare-for-all would break the bank rests on a study by the Mercatus Center, which receives funding from the conservative Koch brothers. But Trump leaves out the fact that even the Mercatus study concluded that a single-payer reform would actually reduce medical spending by $2 trillion over 10 years; the federal government's health spending would rise, but spending by employers, state and local government, and families would fall by an even larger amount.
The bottom line of the Mercatus study (which probably underestimates single payers' savings), and many others is that single-payer reform would lower costs for the vast majority -- including seniors -- and avert the funding crisis that looms over Medicare.
Medicare-for-all can upgrade coverage while lowering costs by cutting out the insurance middlemen who currently drain hundreds of billions annually from our health care system but add no value. This year alone, private health insurers' overhead -- the money they collect in premiums that goes for marketing, accounting, executives' bonuses, profits and more, instead of care -- will total $256.3 billion, 12% of their premiums. That's fivefold higher than the traditional Medicare program's 2% overhead, according to 2017 data.
And Medicare-for-all would shrink billing and paperwork costs for doctors and hospitals, which currently contend with the arcane billing, coverage and documentation requirements of hundreds of different insurance plans. In countries with single-payer programs like Canada (Canada's program is called Medicare) and Scotland, hospitals spend half as much as US hospitals, percentagewise, on administration. And according to research published in 2011, the average doctor in the United States was spending $89,975 each year dealing with insurance paperwork, $60,770 more than Canadian doctors spent under that nation's Medicare-for-all system.
Overall, a single-payer reform could save more than $500 billion annually on insurance overhead and providers' billing costs. In addition, our research shows that a Medicare-for-all program could use its market clout to bargain down drug prices to the levels in Canada and Europe, saving another $113 billion. The savings on bureaucracy and drug prices are more than enough to cover the nearly 29 million Americans uninsured in 2017, and improve the coverage for seniors and the tens of millions of others with unaffordable copayments and deductibles.
In his effort to tar Medicare-for-all as a socialist plot, the President invokes the example of Venezuela. But he ignores the successes of single-payer programs in capitalist countries like Canada, Australia, Scotland and much of Europe. The national health insurance programs in those nations cover everyone, cost half as much (per person) as our system, and get better results; US life expectancy, which used to lead the world, has stagnated and now lags years behind that of Canada and most of Europe. For what we're now spending, we could have a Rolls- Royce version of Canada's system.
The President's fear-mongering about waiting lists, bankrupt doctors and hospitals, and socialism mirrors rhetoric in the campaign to block Medicare in the mid-1960s. Back then, The Wall Street Journal warned about "patient pileups," and the American Medical Association mounted a campaign featuring Ronald Reagan that smeared Medicare as creeping socialism that would rob Americans' freedom.
But today, America's doctors are rallying to Medicare-for-all. Polls show that many doctors, and most Americans, favor such reform, and thousands have endorsed Physicians for a National Health Program's single-payer proposals. A 2018 poll from the Kaiser Family Foundation found six in 10 favor a national health care plan.
Ironically, the President claims the mantle of Medicare's protector, even as his chief economic adviser has announced plans for "entitlement reform" -- Washington-speak for cutting Medicare, Medicaid and Social Security. Meanwhile, Republicans continue to press for the repeal of the ACA's coverage expansions, and its pre-existing condition protections. While the sham replacement they offer would guarantee people with a pre-existing condition the right to buy coverage, insurers could refuse to pay bills for the condition.
President Trump's Medicare-for-all attack rests on fake facts and baseless smears. The insurance companies and drug firms whose profits would shrink under single payer will no doubt welcome his words. But the truth is that Medicare-for-all isn't just the best way to fix our broken health care system -- it's the only way.
The following is the introduction to a very useful comparison of the many legislative proposals now before Congress for expanding Medicare to cover more Americans - sometimes called "Medicare for More".
It is followed by a comment by PNHP's Don McCanne, explaining some of the differences among them. Click on the URL following the Intro to see the full 16 page report.
Medicare-for-All and Public Plan Buy-In Proposals: Overview and Key IssuesTricia Neuman, Karen Pollitz, and Jennifer Tolbert
As policymakers debate next steps for expanding health insurance coverage and lowering health costs, some have introduced legislation that would broaden the role of public programs, such as Medicare and Medicaid. During the 115th Congress, eight such proposals were introduced, ranging from bills that would create a new national health insurance program for all U.S. residents, replacing virtually all other sources of public and private insurance (Medicare-for-All), to more incremental approaches that would create a new public plan option, as a supplement to private sources of coverage and public programs.
These eight legislative proposals differ in ways that have important implications for consumers, health care providers and payers, including employers, states, the federal government, and taxpayers. Key policy differences relate to eligibility, the size and scope of the public plan, covered benefits and cost sharing, premiums, subsidies for premium and cost sharing, cost containment strategies, and the likely interactions with current public programs and private sources of coverage. They also vary in their level of detail; some bills, according to their sponsors, are intended to serve as blueprints for reform, and are expected to include greater specificity over time. Given the timing of the legislative calendar, these bills are unlikely to advance in the current Congressional session; however, they illustrate the range of options that will likely serve as prototypes for legislation that may be introduced in the next session of Congress.
Greatly simplified, these public plan proposals fall into four general categories:
- Two proposals would create Medicare-For-All, a single national health insurance program for all
U.S. residents (Senator Sanders, S. 1804; Rep. Ellison, H.R. 676)1;
- Three proposals would create a new public plan option, based on Medicare, that would be offered to individuals and some or all employers through the ACA marketplace (The Choice Act by Rep. Schakowsky, H.R. 635, and Sen. Whitehouse, S. 194); The Medicare-X Choice Act by Sen. Bennett, S. 1970, and Rep. Higgins, H.R.4094; and the Choose Medicare Act by Sen. Merkley, S. 2708 and Rep. Richmond, H.R. 6117)
- Two proposals would create a Medicare buy-in option for older individuals not yet eligible for the current Medicare program (Sen. Stabenow, S. 1742; Rep. Higgins, H.R. 3748); and
- One proposal would create a Medicaid buy-in option that states can elect to offer to individuals through the ACA marketplace. (Sen Schatz, S. 2001 and Rep. Luján, H.R. 4129).This policy brief summarizes key features of these proposals, highlights similarities and differences, and discusses key questions, trade-offs and potential implications. Several of these proposals have both a House and Senate sponsor; throughout the document, we refer to the sponsor who first introduced the legislation.
Full 16 page report:
Side-by-Side Comparison of Medicare-for-All and Public Plan Proposals (12 pages):http://files.kff.org/attachment/Table-Side-by-Side-Comparison-Medicare-for-all-Public-Plan-Proposals
Interactive for comparing proposals:
Comment by Don McCanneThe enthusiasm for Medicare for All continues to increase so much so that it has now become part of our national parlance. Until recently, the meaning of the term has been quite specific, referring to a single payer national health program based on an improved version of our traditional Medicare program that would include everyone and which would be publicly-financed and publicly-administered.Now advocates of various models of incremental reform want to get in on the action, and they are doing so usually by using the Medicare label. So we not only have two Medicare for All bills, but we also have the labels of Medicare public option (Choice, Medicare-X Choice, Choose Medicare), Medicare Buy-in (Medicare at 55, Medicare Buy-in and Health Care Stabilization), and even a Medicaid buy-in option. Needless to say, this has caused confusion which particularly has been a problem with distinguishing true single payer from merely adding a public option to our current inefficient, fragmented financing system.This report, authored by the policy experts at KFF, is timely and welcome since it describes the eight leading legislative proposals and discusses some of the key issues that distinguish them. The authors do set apart Medicare for All as a single, federal, government-administered program that would provide coverage to all U.S. residents, replacing virtually all other sources of private health coverage (employment-sponsored plans and insurance offered inside and outside ACA marketplaces) and most public programs, including Medicare, Medicaid and CHIP. All of these other programs - public option, Medicare buy-in, and state Medicaid buy-in - keep intact our administratively inefficient, expensive, fragmented, dysfunctional health care financing system while merely adding administratively complex options.The difference is night and day. There should be no confusion between an improved Medicare for All that would fix our health care financing problems, and the other proposals that merely add to the complexity and waste while failing to adequately address the inequities and deficiencies inherent in our current system.This is why the Issue Brief and Side-by-Side comparison produced by KFF are so pertinent. They can be used to educate others on the stark differences between the two approaches to reform - single payer versus adding an option - not to mention that they can be used to sharpen your communication skills as you attempt to educate others on these crucial differences.
States Are Not Waiting on Congress to Expand Medicare to Cover Everybodyby Wendell Potter - Tarbell.org - August 10, 2018With all the buzz over the past year about the United States moving to a Medicare-for-all type of health care system, what has not been talked about nearly as much are the different paths we as a country could take to get there.While Medicare-for-all bills in Congress have made headlines, far less attention has been focused on legislation that would create state-based publicly financed health care systems.It’s entirely possible, maybe even likely, that a state could lead the way. That’s exactly what happened in Canada back in the 1960s. It wasn’t federal lawmakers in Ottawa who got the ball rolling up there. It was the premier of Saskatchewan, thousands of miles to the west.If that’s how it takes off here, which state will be our Saskatchewan?It very possibly could be New York.The New York State Assembly passed a bill in June that would provide comprehensive coverage for all New Yorkers. Although the bill, the New York Health Act, has not yet passed the Senate, it got a big boost a few days ago when the RAND Corporation, a global nonprofit policy think tank, released a study showing that the state’s residents, millions of whom are either uninsured or underinsured, would get better coverage—and pay less for it—if the bill became law. Overall, RAND said, the state would save an estimated $15 billion annually after 10 years compared with what it would spend under the current system.Not only would most New Yorkers save money, their coverage would be considerably more comprehensive. Almost all health care services, including dental and vision, would be covered. (Long-term care is not currently in the bill, but the RAND study said it could be included and still cost less than the status quo after ten years.) Out of pocket spending would be cut in half.According to RAND, much of the savings would come from lower administrative costs. Because of our current mix of public and private payers, the United States spends far more on health care administration than any other developed country. RAND found that the New York Health Act would reduce administrative costs by $23 billion. That’s to a large extent what would enable the state to cover everyone and provide them with richer benefits. RAND said the state would actually spend $9 billion more on care than if the current system is still in place.The results of the study came as welcome news to the bill’s sponsors, Assembly Health Committee Chair Richard Gottfried and State Sen. Gustavo Rivera.“This is an important validation of the New York Health Act by one of the most prestigious analytical firms in the country,” Gottfried said in a statement. “RAND shows we can make sure every New Yorker gets the care they need and does not suffer financially to get it, save billions of dollars a year by cutting administrative costs, insurance company profit, and outrageous drug prices, and pay for it all more fairly.”Rivera said he believes the savings and benefits would actually be greater than what RAND estimates. He also noted that RAND found that the bill would also create new jobs in the state.Under the bill’s public financing of coverage, premiums that individuals and corporations now pay would be in the form of taxes. As Vox reporter Dylan Scott noted in a recent analysis of the RAND study, the “new tax payments would almost perfectly replace the premiums that people and their employers pay right now for private health insurance.”While the great majority of New Yorkers would pay less for coverage if the law is enacted, people with incomes in the top 10 percent likely would pay more. As Jodi Liu, the associate policy researcher at RAND who led the study, noted, the progressive nature of the funding mechanism will not be without detractors. “One of the biggest challenges could be the design of the tax schedule, as policymakers seek a balance between affordability for lower- and middle-income households and potential tax avoidance behaviors by higher-income households.”The RAND study was commissioned by the New York State Health Foundation.https://www.tarbell.org/2018/08/states-are-not-waiting-on-congress-to-expand-medicare-to-cover-everybody/?ref=feed
How corporate health care interests, nervous about their profits, are trying to scare youby Wendell Potter - Tarbell.org - August 8, 2018Chances are, you saw a headline or heard a report that went something like this: Expanding Medicare to cover all Americans would cost $32.6 trillion dollars.If I was still a flack for the health insurance industry, I would have worked hard behind the scenes to make sure you saw that story—and the one thing you would remember about it was that scary number.That’s because the one thing my former employers fear more than anything else is Medicare for All, which poll after poll is showing once again that a majority of Americans support.We’ve been here before. In the months before I left my job in 2008, the insurance industry got very nervous when our own internal polls showed what we see today: a growing percentage of voters wants the government, instead of for-profit corporations, to provide them with access to needed health care.One of the reasons I quit my job was because I could not in good conscience be a part of what we in the PR trade referred to as a FUD campaign, one designed to create fear, uncertainty and doubt about something. My former colleagues and I were very effective creators and implementers of FUD campaigns. We carried them out whenever any kind of health care reform was being proposed that might lead to shrinking profit margins.The “strategic imperative” of the insurance industry’s FUD campaigns was, and still is, this: scare the bejesus out of people. Get them to believe that expanding Medicare to cover us all would be a “government takeover of health care.” (It wouldn’t, but truth has little place in a FUD campaign.) And get them to believe that health care would cost Americans a lot more under Medicare for All. (It would actually cost Americans less, but, again, that’s not a fact the industry wants you to know.)In a FUD campaign, you always use numbers very selectively and out of context—like that $32.6 trillion figure. The very intent is to mislead.Never mind that most other developed countries have some kind of single-payer, Medicare for All-type system. Or that those systems cost less both overall and on a per capita basis, provide residents with universal access to care and have better health outcomes on most metrics than our fragmented, profit-driven multi-payer system. The point was to scare you into thinking there was no way this could ever work.In a FUD campaign, it’s always helpful to be able to cite an industry-friendly think tank, like the Mercatus Center that came up with that $32.6 trillion figure, as the source for our so-called “facts.”A bit of context: Charles Koch sits on the Mercatus Center’s board of directors and he and his brother, David, have given the center, based at George Mason University, more $9 million. They’ve also donated an additional $65 million to the university (which came with the condition that hiring in the economics department would be subject to their approval).If you were to read nothing but the headlines about the Mercatus report, all you would really know is that it concluded that Medicare for All would cost $32.6 trillion. You would have had to read deep into the report itself to learn that it would cost that much not in a single year, as many people undoubtedly believed, but over the course of 10 years. But the objective was to get that big number into as many headlines as possible; details be damned.If I were still in my old job, I would have known well in advance that this study was about to be released. As soon as it was published, I would have been on the phone to the many reporters I knew to make sure they were aware of it.I would say something like this: “Hey, Barbara (or Mike or Andrew) I just wanted to be sure you saw the new study about how a single payer system would cost us. Nearly 33 trillion dollars! Even I didn’t know it would be that high!”Sure enough, many of the headlines about the Mercatus Center’s work were exactly what my old-self and former colleagues would have been delighted to see. Like this one from the Associated Press: “’Medicare for All’ Could Cost $32.6 Trillion, George Mason Study Says.” And this one from The Hill, an inside-the-beltway publication: “Bernie Sanders’s ‘Medicare for all’ would cost 32.6 trillion: study.”That number, of course, was misleading to say the least. If you read the whole study carefully, you would have noted that even the Mercatus researcher concluded that Medicare for All would be a better deal for Americans than our current system. The study found that Medicare for All would actually cost $2 trillion less than our current health care system. And that it would save businesses money, raise wages, create savings for families, cut administrative costs in half, and save hundreds of billions of dollars in prescription drug costs.The role I had to play in disseminating biased and misleading studies to scare people away from Medicare for All is one I deeply regret. It got to the point where I hated myself for what I was doing for a living. I became what some have called a whistleblower. I testified before Congress several times, pulling the curtains back on the deceptive business and PR practices of the health insurance industry. (I’ve also written extensively about them, including in my book, Deadly Spin, An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans).The lies and misinformation my colleagues and I spread caused patients to suffer, and even die. Our system was and still is bankrupting families. It was and still is drowning businesses in insurance premiums. It was and still is hurting our economy and economic competitiveness. It was and still is keeping wages flat. It was and still is forcing doctors and nurses to spend more time doing paperwork than caring for patients. I finally reached the point that I could not in good conscience keep spreading lies and misinformation to perpetuate a system that was becoming increasingly unaffordable and inequitable but that was still very profitable for my industry and other health care special interests.I consider it part of my mission now is to expose the FUD campaigns and other deceptive tactics I once used to help maintain the status quo. The Mercatus study is just the most recent example of FUD, but it certainly won’t be the last. You can expect to see many other “studies” as support for Medicare for All continues to grow, and it will. Keep an eye out for reports from outfits like the Pacific Research Institute, the Fraser Institute and the American Enterprise Institute, all of which I used to work with in my old life. (Cigna, the last insurer I worked for, even endowed a chair at AEI in honor of a former CEO.)Let me give you some real numbers, from the Centers for Medicare and Medicaid Services: The U.S. already spends $3.5 trillion a year on health care, according to a CMS report from earlier this year. By 2026—just eight years from now—it is expected to reach $5.7 trillion a year. As a percentage of GDP, it is expected to jump from 17.9% (as of 2016) to 19.7 percent in 2026. Keep in mind, this is from the Trump administration, not some single-payer advocacy group.With that likely to be our reality if we stick with our multi-payer system, how can we afford not to consider Medicare for All?https://www.tarbell.org/2018/08/how-corporate-health-care-interests-nervous-about-their-profits-are-trying-to-scare-you/?ref=feed
How Health Insurers Drive Huge Profits Off Of Older Americansby Joey Rettino and Wendell Potter - Tarbell.org - October 11, 2018
TranscriptHealth insurance rules my life. It decides my jobs, my aspirations, my retirement plans and, potentially, my citizenship.I am one of as many as 133 million Americans under the age of 65 with a pre-existing medical condition — in my case, intractable epilepsy — that for decades blocked me from obtaining individual health insurance. People like me gained visibility in 2010, after the Affordable Care Act required insurers to provide coverage for pre-existing conditions. I cheered that Americans would no longer have their life choices dictated by insurance.Now we confront uncertainty again, as a group of Republican state attorneys general are arguing in a Texas courtroom to kill the A.C.A., including its rule on pre-existing conditions. The Trump administration supports the effort, arguing in a brief that the protection for the chronically ill must go down with the rest of the law. This position unmasks the president’s recent lie that he was fighting to preserve insurance for those with pre-existing conditions.When asked how people like me are supposed to obtain insurance, these politicians virtually shrug, trotting out failed ideas from the past or promising that the free market will provide.I know from experience that their purported solutions are impotent fantasies. I have had chronic seizures since I was 18. I feared the day that I would age out of my parents’ insurance policy, when I turned 25. My parents were well-off, but given my medical expenses, a year without coverage could have bankrupted us. My hospitalizations were frequent and often involuntary. When I convulsed in public, strangers usually called an ambulance. Emergency rooms did little but let me sleep it off — a nap that cost thousands of dollars.I couldn’t buy a private policy, because companies either rejected me or imposed a “pre-existing condition clause,” leaving uncovered anything related to my epilepsy. That meant if I was hit by a car after falling into the street during a convulsion, I’d still be on the hook for the full cost of treating my injuries.The only solution was employer-based group insurance. I wanted to be a newspaper reporter, but I could not be too picky. The basis of my career decisions rested almost solely on a potential employer’s benefits package.When I was 23, I approached the founder of a small magazine I had written for, seeking a staff job. He knew about my epilepsy. Apologizing, he explained that another employee also had expensive health problems, and if I was hired, the magazine wouldn’t be able to afford the premiums. I thanked him for his honesty and scratched that option off the list.Next possibility: After weeks of interviews at an advocacy group, I met with the official who made hiring decisions. If he offered the job, he asked, would I accept? I asked if the post came with group insurance. When assured that it did, I promised to take it.The next day, the offer came, with one change — no group insurance. Instead, I would receive $500 to buy my own policy. When I told him that could not work, he pressed me to explain. Reluctantly, I revealed my epilepsy. The next morning, on my first day of work, he told me that I was off salary and I was no longer allowed in the office. Less than 24 hours after I disclosed my epilepsy, the advocacy group decided I had to work as a freelancer from home. My chance for insurance evaporated.Job after job followed, none with coverage. Months before my dreaded 25th birthday, I took a low-level editor’s post compiling career announcements for a Washington magazine; I hated the work, but I needed the health coverage. Weeks into the job, the insurer rejected a bill for my anticonvulsants; unknown to me until that moment, the magazine’s insurance policy included a pre-existing condition clause.Desperate, I pleaded with colleagues for help. One journalist offered to assist me in gaining work as a copy boy at The New York Times — a job many rungs lower on the career ladder, but one that offered insurance. In my interview, a perplexed editor stared at my résumé. Why, he asked, would I trade an editor’s job for one fetching coffee?I lied. I revealed nothing about my health issues or my fears of financial wreckage. Instead, I rhapsodized about The Times. I got the job.I turned 25 before my Times policy went into effect, leaving me uninsured for a few weeks. During that gap, I found myself post-seizure in an emergency room. Realizing I was responsible for all the costs, I demanded to be released and staggered outside. I woke up hours later on the sidewalk. My parents paid the multi-thousand-dollar hospital bill out of pocket.I worked seven days a week as a copy boy and then news clerk, terrified that easing up would cost me my job and my insurance. Thankfully, in 1988, The Times promoted me to reporter.By 2005, I was married and considered going on my wife’s employer’s insurance plan so that I could become a full-time book writer. But my wife is four years older than me, and she hoped to retire at 65, when she aged into Medicare. If I was solely an author, at the age of 61 I would be both uninsured and uninsurable. I abandoned the idea.Now, as Republicans fight to destroy the A.C.A., the terror of financial wreckage has returned. My wife either has to work until she is 69 or we will have to risk being wiped out if I lose my insurance through my current job. Just my medication — at almost $50,000 a year — would rapidly deplete our savings. That prospect is too much for us to bear.So we are left considering a more dramatic option: leaving the United States for a European country that guarantees coverage. We consulted a lawyer, who is helping me try to gain German citizenship, and my wife, who was born in England, is renewing her British passport. But it angers us that we might be forced to leave our home simply because of this nation’s broken health policies.For almost 40 years, my battle for insurance sent my life in directions I often didn’t desire. Now it tears at me to know that the final choice — obtaining foreign citizenship and moving an ocean away from our friends and loved ones — might be necessary. But I will not allow America and its petty politics to kill me.Calls for a Medicare for All system are growing louder. Many Democrats have embraced it, while President Trump said last week that it would raise health care costs drastically.Democrats say that giving people the option to partake in Medicare — no matter their age — will actually cut costs.American administrative costs for health care are the highest in the world, and they argue that one advantage of Medicare for All is that it would save money because Medicare's administrative costs are below those of private insurers.Does that argument hold up?
Don’t forget about Medicare’s private plansMedicare’s administrative costs were $8.1 billion last year, or 1.1 percent of total spending, close to the proportion it has been in recent years.But some have argued that the actual cost is higher because of services performed for Medicare by other parts of the government that aren’t accounted for: The Social Security Administration collects premiums, the Internal Revenue Service collects taxes for the program, the F.B.I. provides fraud prevention services, and at least seven other federal agencies and departments also do work that benefits Medicare.The claim that these administrative costs are overlooked is false. As annual reporting of Medicare’s finances plainly states, they are accounted for.But there is something missing from the $8.1 billion Medicare administrative cost figure, as Kip Sullivan explains in a 2013 paper published in the Journal of Health Politics, Policy and Law. Although it accurately accounts for the federal government’s administrative costs, it does not include those borne by private plans that also offer Medicare benefits.In addition to the traditional (public) Medicare plan, Medicare is also available from private plans through the Medicare Advantage program. Today, one-third of people using Medicare are in such plans, up from about one-fifth a decade ago. Moreover, all Medicare drug benefits are administered through private plans.National Health Expenditure data shows both the government’s administrative costs for Medicare and those of Medicare’s private plans. Putting them together for the most recent year available (2016), they reach $47 billion, or 7 percent of total Medicare spending — well above the administrative costs borne directly by the Medicare program.Medicare’s private drug benefit plans incur administrative costs that are about 11 percent of their spending. All of this additional, private administrative cost is paid for by taxpayers and, through their premiums, people who use Medicare.Medicare’s direct administrative costs are not only low, but they also have been falling over the years, as a percent of total program spending. Yet the program’s total administrative costs — including those of the private plans — have been rising.“This reflects a shift toward more enrollment in private plans,” Mr. Sullivan said. “The growth of those plans has raised, not lowered, overall Medicare administrative costs.”
The high costs of private insurer plansMaking an accurate estimate of the administrative costs of Medicare for All would depend, in part, on whether it would be more like an expansion of traditional Medicare (with its 1.1 percent administrative cost rate) or of all of Medicare, including its private plans (with a combined 7 percent administrative cost rate).Yet both figures are well below private insurers’ administrative costs, which run about 13 percent of spending (this also includes profit), according to America’s Health Insurance Plans, an advocacy organization for the industry.Some critics have argued that Medicare’s administrative cost rate appears artificially low because Medicare enrollees’ health spending is so high. Average Medicare spending per beneficiary is just over $12,000 per year; for an average worker in a private plan, it’s about $6,000. If you simply divide administrative costs by total spending, you will get a lower number for Medicare for this reason alone.This is true, but the government’s administrative costs for Medicare are still below those of private plans. The government’s administrative costs are about $132 per person compared with over $700 for private plans. One reason Medicare’s are so much lower is that it reaps economies of scale. It also benefits from not needing to do much marketing, and it doesn’t earn profits.A final critique of Medicare’s administrative costs is that they’re inefficiently low because the program doesn’t spend enough on anti-fraud efforts.This is hard to prove or disprove. The government engages in a number of Medicare anti-fraud activities that more than pay for themselves. Perhaps another dollar spent tracking fraud would yield more than a dollar in return.Still, even if Medicare did every bit as much in this area as the private sector, it would not raise its administrative costs by much.“While private health plans have active anti-fraud, waste and abuse efforts, their total spending on this is very low,” said Andrew Naugle, a health care consultant with Milliman who studies health plan administrative costs. “For most plans, it’s not even in the top 10 categories of administrative spending.”
Features that may be worth the costAlthough Medicare for All might shed some administrative costs, it could also shed some other features, including some that many people appreciate.“We should keep in mind that traditional Medicare and private plans are completely different products, and thus their associated administrative cost loads are very different,” Mr. Naugle said.Traditional Medicare is primarily focused on processing payments to providers, while private plans — including those offered by Medicare Advantage, employers and Affordable Care Act marketplace plans — engage in care management, which could help coordinate care for people with chronic conditions. Private plans also establish networks of physicians, which could help steer enrollees to higher-quality providers.These activities cost money and are things traditional Medicare doesn’t do, at least not directly. It has, however, put in new programs to give health care providers incentives to better coordinate care.Another point in favor of private plans is that they’re more responsive to consumer demand. For this reason, private plans have provided some benefits that Medicare hasn’t — or provided them long before Medicare did.For example, drug coverage was commonplace in private plans well before Medicare put in a universal prescription drug benefit in 2006. Another is that traditional Medicare still doesn’t have an out-of-pocket limit, whereas that’s standard for private plans.But let’s get back to the main question we posed at the top: Are Democrats right that Medicare’s administrative costs are below those of private insurers? The answer is yes. But that’s in part because private plans do things that Medicare doesn’t. Whether those things are worth higher administrative costs is a value judgment on which reasonable people can disagree.https://www.nytimes.com/2018/10/15/upshot/is-medicare-for-all-the-answer-to-sky-high-administrative-costs.html?nytapp=true&smid=nytcore-ios-share
The Real Lesson Of ORBITA: The Remarkable Power Of Medical Therapyby Vikas Saini - Health Affairs - October 11, 2018
What ORBITA Shows, And What It Doesn’t
Getting Physicians To Stop Delivering Low-Value Servicesby Shannon Brownlee - Health Affairs - October 11, 2018What can be done to encourage doctors and other clinicians to heed new evidence when it shows the tests or procedures they are delivering are in fact not helping their patients—and may even harm them? This question has become increasingly relevant in the face of a growing number of studies casting doubt on the safety and efficacy of commonly used treatments and tests. Even when new evidence is clearly negative, clinicians often resist abandoning a service they have believed in, and developed expertise in, especially when that service provides a significant portion of their livelihoods.Take the PSA, or Prostate Specific Antigen test, widely promoted for more than three decades to screen for prostate cancer. Most patients and physicians assumed that catching cancer early leads to a lower risk of death. But results from several large randomized controlled clinical trials, which compared men who received regular PSA screening versus usual care, showed little to no difference between the two groups in terms of their risk of dying of prostate cancer. The PSA test, it turns out, leads to the diagnosis of unthreatening tumors in 20 to 40 percent of cases.Other recently discredited procedures and tests include arthroscopic knee surgery, no better than placebo (or sham) surgery for relieving arthritis pain. Likewise veterbroplasty, which involves injecting a kind of superglue into the patient’s vertebrae and is also intended to relieve arthritis pain. And now, the mother of all medical reversals, the ORBITA trial, whose publication last year ignited a firestorm of controversy. ORBITA found that implanting a cardiac stent to relieve angina, or chest pain due to heart disease, is no better than a sham stent procedure.One might think that such strong negative evidence would be enough to get doctors to give up a practice, or at least be more judicious in choosing their patients. After all, negative evidence says the procedure is more likely to harm their patients than help them.Instead, clinicians often persist in delivering services long after the data say they should have scaled back or stopped. Eventually, truly useless interventions go the way of bloodletting, but, in the meantime, patients are exposed to the potential risk of harm with little or no chance of having their symptoms or conditions effectively treated. So the question of how to motivate clinicians to cease and desist should concern anyone who wants to reduce overuse and ensure that patients get the right care.
A Personal Encounter With The Persistence Of OveruseI came up against this problem in a very personal way about eight years ago, after one of my brothers called to tell me our then 80-year-old father, Mick Brownlee, had been hospitalized with a stroke. A vascular surgeon was recommending a carotid endarterectomy, Could I get on the phone to help decide what to do?At the time, carotid endarterectomy had been a topic of intense debate in the neurology and vascular surgery communities for nearly a decade. In use since the 1950s, the procedure is a sort of Roto-Rooter for the arteries in the neck that supply the brain with blood. Built-up plaque inside the carotids can break free and move into smaller arteries in the brain, where it can block the flow of blood and cause a stroke. Endarterectomy removes some of that plaque in the carotids, reducing the risk of a stroke over the next five years.Unfortunately, the procedure itself can actually cause a stroke or even death in about 4 percent of patients. A string of studies had shown that the surgery is worth doing only for some patients; for many others, the potential benefit is marginal. For most of the patients who were getting it, the risk of stroke was greater any potential protective effect the surgery might provide. In 2005, as many as 92 percent of the 135,701 carotid endarterectomies in the United States were still being performed on patients who stood a greater chance of being harmed by the procedure, not helped.By the time my father had his stroke, the total number of endarterectomies had declined, but there was not a lot of information about whether or not surgeons were paying attention to the data and offering the procedure only to the right patients. I was pretty sure Mick was not an appropriate patient. For one thing, he was growing increasingly frail. For another, he’d fallen several times in the last year. He had lost weight, and his short-term memory was shot—all signs that he was unlikely to live five years more and thus was not a good candidate.When I got on the phone with brothers, stepmother, father, and the surgeon, my family shared the impression that the endarterectomy might somehow, magically, bring back the Mick of just a couple of years before, when he was still sculpting, and struggled less with memory and balance. My saying otherwise would have no effect. The doctor had to say it.The vascular surgeon began by pronouncing Mick an “appropriate candidate” for this “highly effective surgery.” Then he asked if we had any questions. Eventually, I asked the question that hit home: “What will this surgery do for his quality of life?”“Nothing,” said the surgeon. “It’s all about preventing another stroke.”There was murmuring on the line. “Are you saying the surgery won’t help him with his memory? Or walking?” asked my stepmother. Eventually my family understood that the surgery would not change Mick’s current situation and decided against it.
Resistance To ORBITA Mirrors Resistance To Vertebroplasty StudiesMaybe this surgeon had not been reading his medical journals, and was recommending an endarterectomy because he was unaware of the evidence. I think the real reason has less to do with knowledge than psychology. Most clinicians believe in their treatments and take pride in what they do. They don’t like to imagine that a service they’ve been delivering might be useless or harmful. Add to that the fact that physicians get paid to do what they do, and new evidence threatens both their sense of being good doctors and their livelihoods.Not surprisingly, when strong evidence is published showing a cherished procedure is ineffective, many physicians who perform that procedure initially express shock and disbelief. Then they come up with numerous, often unsubstantiated reasons to cast doubt on the results and continue business as usual.When the ORBITA trial was published in December of last year, surgeons who perform stent procedures expressed their doubts in the journals and on social media. The study was too small, they claimed. The patients in it weren’t suffering from serious disease; there was a subgroup in the study that benefited. Some said their personal experience showed their patients benefit from stents. Others claimed to already know everything the trial showed.Some surgeons argued that sham-controlled trials are unethical because we just know stenting works. At one point, one of the principal investigators of the trial, Darrell Francis, a British interventional cardiologist, wrote on Twitter, “I would like to thank the patients for participating in #ORBITA without realizing what a low level of intellect would be put into criticizing their efforts.”The arguments clinicians raise against results they don’t like are often similar to those raised against ORBITA, regardless of the procedure. A prime example is the response spine surgeons and radiologists had to two high-quality, randomized trials published in 2009, showing that vertebroplasty is no better than sham surgery.Some faulted the trials for enrolling patients too early in the course of their condition. Others said patients were enrolled too late; patients were not in as much pain as their patients; the studies were too small, too big, and, unbelievably, “too rigorous.” In an editorial, The Spine Journal editor-in-chief, Eugene J. Carragee, called the reactions, “imperious.”Imperious or not, what’s more astonishing is how willingly physicians take up new procedures and tests on the basis of the slimmest of evidence that they work. In the case of vertebroplasty, early reports claiming “immediate” and “complete pain relief” in the vast majority of patients should have raised at least some suspicion that the results were too good to be true. Instead, physicians made perfunctory remarks about the need for better evidence and then proceeded to perform hundreds of thousands of vertebroplasties, even as increasingly rigorous studies showed a decreasing size of the procedure’s effect. In 2008, there were more than 100,000 vertebroplasties performed in the US. Five years after the negative trials were published, that number had dropped only 25 percent.
Additional Ways To Promote Evidence-Based PracticeThis should be depressing news for anybody who thinks simply publishing new evidence is enough to ensure that patients get the right care. If we want physicians to heed evidence, we should probably consider multiple other approaches.
Research First, Then Expand The Use Of New ProceduresFirst, we should be doing the research before the procedure or test is widely used—and paid for, which tends to reinforce physicians’ attachment to it. It took a decade for vertebroplasty to be put to a real test, and that’s fast compared to how long it has taken to mount rigorous studies of other procedures.Stents have been around for 40 years and we’re only now getting around to the definitive studies. If the ORBITA trial is confirmed by other studies, we will have spent hundreds of billions of dollars over the last four decades on a treatment that at best adds only the slimmest of additional benefit to optimal medical therapy for heart disease (drugs, lifestyle changes) and at worst is no better than a placebo. Carotid endarterectomy was performed for nearly 40 years before real studies were launched. The need to do pivotal studies early applies even more to procedures that relieve pain—like vertebroplasty and stenting—and psychiatric illnesses; these conditions are particularly susceptible to placebo effect, which can fool patients and doctors alike.
Don’t Pay For It Unless It WorksSecond, isn’t it time to stop paying for inappropriate care? Physicians don’t like to contemplate this solution, and neither do insurers, because they know that doctors and patients will wave the rationing flag. But this is one incentive that actually reduces useless care. In 2014, both Canada and Australia stopped paying for Vitamin D testing, which was leading to high rates of prescriptions for Vitamin D for patients who did not need it. Australia’s Medicare program was spending $12 million a year on Vitamin D testing. In Canada, more than 25,000 tests a year were being performed. Once the authority stopped paying for it, testing in Canada dropped by 80 percent within six months.
Patients Are Not Consumers And Physicians Are Not Used Car SalesmenThird, let’s stop using marketing language. Calling patients “consumers” who need to be “engaged” reinforces an attitude that says being a person who is sick, frightened, in pain, and in need of care is no different from a customer buying a used car. That means the doctor is merely a “provider” of a medical service and has a diminished duty to serve the patient’s needs first. One day, patients won’t trust doctors any more than they trust used car salesmen.
The Importance Of Fully Informed PatientsFinally, patients and families need unbiased, understandable information in order to make choices about treatments. We can’t leave the transmission of that information to their doctors, because many of them are not very good at making sure patients and families understand the tradeoffs involved in different treatment choices. Several studies have found that patients giving consent are largely uninformed about a wide variety of medical decisions. The reason is not that they can’t understand what’s at stake; it’s that doctors don’t convey information effectively.Making sure patients understand their treatment choices has turned out to be a difficult problem to solve. For 30 years, proponents of shared decision making have been advocating the use of decision aids—booklets, video, and other forms of clear, simple information—to help patients understand treatment options, and then for clinicians to share the decision based in part on what the patient cares about. In my father’s case, he cared about not being harmed by a surgery that offered only the slimmest chance of benefit more than preventing a stroke that he might never have. But maybe shared decision making is a little like Brazil (which has been famously called “the country of the future” for last several decades): It would improve care dramatically, but its time has not yet come. Perhaps the only way to get shared decision making into common practice is for patients to start asking uncomfortable questions.Failing to explain tradeoffs allows doctors to avoid thinking hard about the potential negative effect of their procedure on the patient and family. On paper, my father might have been an appropriate candidate for carotid endarterectomy, if marginally so. Until the surgeon was confronted with the unrealistic expectations of a worried family, he did not have to consider the increasing frailty of the man in front of him. Unfortunately, most families don’t have as a member someone who studies overuse of medical procedures for a living, and who can help ensure that the conversation includes the negatives of a treatment as well as the positives.Mary Mayhew, who opposed Medicaid expansion in Maine, named to head nation’s Medicaid program
Former Maine DHHS Commissioner Mary Mayhew Appointed As Federal Medicaid Directorby Steve Mistler - Maine Public - October 15, 2018Former Maine Health and Human Services Commissisoner Mary Mayhew has been tapped by the Trump administration to become the deputy administrator and director of Medicaid and the Children’s Health Insurance Program, or CHIP.Mayhew’s appointment was confirmed Monday by a spokesman for Centers of Medicare and Medicaid Services. It drew a swift reaction from opponents of the policies she pushed at the Maine Department of Health and Human Services.“Maine’s national health ranking fell during her time, from 10th to 22nd. The number of uninsured children in Maine rose. Maine’s infant mortality rate spiked. So this is not a person who should be running any kind of public health system, much less the national public health system,” says Zach Heiden, the legal director for the ACLU of Maine, which is among several groups that has sued DHHS over policies implemented while Mayhew led the agency.Mayhew was picked to become the DHHS chief by Republican Gov. Paul LePage in 2011. For nearly seven years she oversaw an agency that administers an array of public health programs, including welfare cash assistance and MaineCare, the state’s version of Medicaid.Over that time, Mayhew helped implement changes that limited cash assistance through the Temporary Assistance for Needy Families program to five years, resulting in 23,000 fewer Mainers receiving benefits and in the accumulation of $146 million in unused TANF funds.She also helped spearhead restrictions to MaineCare and led LePage’s staunch opposition to expansion of the program to roughly 70,000 low-income Mainers through the Affordable Care Act. That effort included the administration’s granting of a $1 million no-bid contract to evaluate Maine’s welfare system.The report’s findings were widely rejected and significant portions turned out to be plagiarized.Mayhew weathered the controversy, and her efforts to fight Medicaid expansion were applauded by conservatives. She parlayed her experience as the DHHS chief into a bid for governor, finishing third in a four-way Republican primary in June.She was endorsed by Deb Sanderson, a Republican state representative from Chelsea who also serves on the Legislature’s Health and Human Services Committee. Sanderson said Mayhew helped prioritize essential government services while getting the DHHS budget under control.“And I’m really hopeful that she’ll be able to do that for the entire nation,” she said.But her oversight of DHHS has left a bitter taste for Democrats like state Rep. Drew Gattine, who clashed with Mayhew repeatedly. He says Mayhew’s appointment by the Trump administration follows its trend of picking people to lead the same federal agencies and programs that they’ve long opposed.“[She’s] certainly a person who I would categorize as being antagonistic to Medicaid as opposed to a person who’s going to be supportive of its mission of supporting people’s health care,” he said.In an interview with Maine Public Radio in April, Mayhew said all of the changes she pursued at DHHS were designed to help people get out of poverty.“There has been such a failure to fully appreciate that at the end of the day, the true compassion that has been core to our efforts, is that if you are on any of those welfare programs it means that you are living in poverty. What the governor said, what I said, is that’s no way of life for anyone,” she said.Mayhew did return phone calls seeking comment on her new job. She succeeds Brian Neale, who had been the director of Medicaid and CHIP until his resignation in January. Tim Hill has been serving as acting director since then.The CMS spokesman says Mayhew’s appointment does not have to be confirmed by the U.S. Senate.http://www.mainepublic.org/post/former-maine-dhhs-commissioner-mary-mayhew-appointed-federal-medicaid-director#stream/0