Single-Payer Health Care Reform:
Cost Considerations in Maine
by Dan Bryant- Maine Health Policy Review - Issue 1 2024
Abstract
One of the suggested reforms of our troubled health care system is the publicly funded universal health care, or single-payer, model; one of the arguments against it is its presumed cost. Using 2020 data for Maine (the most complete recent data available), I distinguish and examine three types of health care cost, which are easily confused: the cost of providers’ health care services, the cost the multiple payers pay for those services, and the cost to Maine residents of funding those multiple payers through taxes, premiums, etc. I then estimate what the cost of a single-payer plan to Maine residents would have been in 2020, suggest how a health care income tax could have paid for it, and conclude with the suggestion that single-payer advocates will have to educate the public and the Legislature about cost considerations like these if they expect to win either over to their side.
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DOI
https://doi.org/10.53558/BLNK3962
Recommended Citation
Bryant, Daniel. "Single-Payer Health Care Reform: Cost Considerations in Maine." Maine Policy Review 33.1 (2024) , https://digitalcommons.library.umaine.edu/mpr/vol33/iss1/9.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
https://digitalcommons.library.umaine.edu/mpr/vol33/iss1/9.
US health system ranks last compared with peer nations, report finds
Despite Americans paying nearly double that of other nations, the US fares poorly in list of 10 countries
by Jessica Glenza - The Guardian - September 19, 2024
The United States health system ranked dead last in an international comparison of 10 peer nations, according to a new report by the Commonwealth Fund.
In spite of Americans paying nearly double that of other countries, the system performed poorly on health equity, access to care and outcomes.
“I see the human toll of these shortcomings on a daily basis,” said Dr Joseph Betancourt, the president of the Commonwealth Fund, a foundation with a focus on healthcare research and policy.
“I see patients who cannot afford their medications … I see older patients arrive sicker than they should because they spent the majority of their lives uninsured,” said Betancourt. “It’s time we finally build a health system that delivers quality affordable healthcare for all Americans.”
However, even as high healthcare prices bite into workers’ paychecks, the economy and inflation dominate voters’ concerns. Neither Kamala Harris nor Donald Trump has proposed major healthcare reforms.
The Democratic presidential nominee has largely reframed healthcare as an economic issue, promising medical debt relief while highlighting the Biden administration’s successes, such as Medicare drug price negotiations.
The Republican presidential nominee said he has “concepts of a plan” to improve healthcare, but has made no proposals. The conservative policy agenda Project 2025 has largely proposed gutting scientific and public health infrastructure.
However, when asked about healthcare issues, voters overwhelmingly ranked cost at the top. The cost of drugs, doctors and insurance are the top issue for Democrats (42%) and Republicans (45%), according to Kaiser Family Foundation health system polling. Americans spend $4.5tn per year on healthcare, or more than $13,000 per person per year on healthcare, according to federal government data.
The Commonwealth Fund’s report is the 20th in their “Mirror, Mirror” series, an international comparison of the US health system to nine wealthy democracies including Australia, Canada, France, Germany, the Netherlands, New Zealand, the UK, Sweden and Switzerland. The foundation calls this year’s report a “portrait of a failing US health system”.
The report uses 70 indicators from across five main sectors, including access to care, health equity, care process, administrative efficiency and outcomes. The measures are derived from a survey conducted by Commonwealth as well as publicly available measures from the World Health Organization, OECD and Our World in Data.
In all but “care process” – the domain that covers issues such as reconciling medications – the US ranked as the last or penultimate nation. Presenters for Commonwealth noted the US is often “in a class of its own” far below the nearest peer nation.
“Poverty, homelessness, hunger, discrimination, substance abuse – other countries don’t make their health systems work so hard,” said Reginald D Williams II, vice-president of the fund. He said most peer nations cover more of their citizens’ basic needs. “Too many individuals in the US face a lifetime of inequity, it doesn’t have to be this way.”
But recommendations to improve the US health system’s standing among peer nations will not be easy to implement.
The fund said the US would need to expand insurance coverage and make “meaningful” improvements on the amount of healthcare expenses patients pay themselves; minimize the complexity and variation in insurance plans to improve administrative efficiency; build a viable primary care and public health system; and invest in social wellbeing, rather than thrust problems of social inequity onto the health system.
“I don’t expect we will in one fell swoop rewrite the social contract,” said Dr David Blumenthal, the fund’s past president and an author of the report. “The American electorate makes choices about which direction to move in, and that is very much an issue in this election.”
https://www.theguardian.com/us-news/2024/sep/18/american-health-system-ranks-last
The GOP's Obamacare Agenda Just Reemerged From Hiding
Health care has been invisible for most of the presidential campaign. That changed at last week’s presidential debate, when Donald Trump answered a question about his intentions on the Affordable Care Act (aka Obamacare).
First Trump claimed to have “saved” the 2010 health care law despite having spent the first year of his presidency trying to repeal it. Then he promised that he had “concepts of a plan” for replacing it.
Trump didn’t specify what these concepts were, which was nothing new. The Republican presidential nominee has been promising a mythical, never-defined plan that will provide “great health care for much less money” since he first started talking about repealing Obamacare in his 2016 presidential campaign.
But over the weekend, his running mate, Sen. JD Vance of Ohio, said Trump actually did have an alternative. During an appearance on NBC’s “Meet the Press,” Vance said Trump had in mind a “deregulatory agenda so that people can choose a health care plan that fits them.”
Americans have different health care needs, Vance explained, so it makes sense to “promote some more choice in our health care system and not have a one-size-fits-all approach that puts a lot of people into the same insurance pools, into the same risk pools, that actually makes it harder for people to make the right choices for their families.”
Those of us who follow health care policy closely understood immediately what he meant.
At any one time, most people aren’t spending a lot on medical care because most people are in relatively good health. The vast majority of costs come from the minority who are getting intensive or ongoing treatment for serious medical problems ― basically anything from a car accident to diabetes to cancer.
The challenge in health policy is how to cover those big expenses. The approach in most economically advanced countries ― and the one embedded here in programs like the Affordable Care Act ― is to have everybody contribute into insurance funds so that the healthy subsidize the sick. These are the “insurance pools” and “risk pools” that Vance is criticizing.
The alternative is to allow more segregation based on health status by, for example, letting insurers charge higher prices, withhold certain benefits or deny coverage altogether to people with pre-existing conditions.
This can work out well for people in good health, at least in the short term, because they will be comfortable buying barebones plans that insurers will charge less for. But they’re likely to face trouble if they need serious medical care ― as most people do eventually ― because their insurance won’t cover their needs.
And that’s to say nothing of the people who’d already had major health problems and couldn’t even find insurance in the first place.
This is the way things worked for many Americans before Obamacare, and it’s the way things would work once again under Affordable Care Act replacements that conservatives have touted in the past.
Vance was careful to say he and Trump would “make sure everybody is covered,” just as Trump has promised before. But the actual plans Republicans put forward during the 2017 repeal fight would have caused the number of Americans without insurance to rise by millions or even tens of millions, partly because they did not protect people with pre-existing conditions, partly because they simultaneously proposed to slash funding for Medicaid, the program the insures low-income Americans.
And that’s not surprising. Conservatives don’t merely want to reduce the cross-subsidy between healthy and sick. They also want to free up money for tax cuts that would disproportionately benefit the wealthy, something, it so happens, that Trump and the Republicans still want to do.
Of course, cutting health care programs to finance tax cuts isn’t especially popular. Neither is undermining protections for people with pre-existing conditions. Republicans know this too well. The 2017 repeal effort was a political catastrophe for them and it’s why nowadays they don’t go out of their way to talk up the cause.
But that doesn’t mean they’ve given up or that they couldn’t scrounge up the votes if they were back in control of Washington. Just consider some comments a Republican House candidate in a key swing district made over the summer.
A Pair Of Comments ― And What They Could Mean
The candidate, Alison Esposito, is running in New York’s 18th Congressional District. Like most Republicans on the ballot this year, she hasn’t had a lot to say about health care. But questions about it came up at campaign events twice over the summer, according to recordings a source provided to HuffPost.
The first came at a local conservative meeting in July. An audience member mentioned that Trump last fall had posted on social media that Republicans should “never give up” trying to “terminate” the Affordable Care Act and that, if elected to a new term, he would replace it with a still-unspecified “better” alternative.
“I’m wondering if that’s something that you support or something that you could speak to,” the audience member said.
Esposito responded, “Well, yes, there has to be a better system of health care in place.” Later she said that “Obamacare doesn’t work.”
The Affordable Care Act isn’t the only Democratic health care initiative that has attracted the ire of Republicans. Another is the Inflation Reduction Act, the sweeping 2022 climate and health care law. Among its provisions is a series of initiatives to bring down drug prices in Medicare by, for example, capping insulin costs at $35 a month and allowing the federal government to bargain down the prices of certain high-cost medications.
That program’s future was the subject of the second question Esposito got, this time during an electronic town hall in August. “Would you vote to repeal the Inflation Reduction Act?” a questioner asked Esposito.
“Yeah,” she responded. “That act was reckless, and [Vice President] Kamala Harris was the deciding vote for the printing of money and irresponsibly and recklessly putting it into our system, our budgets.”
The questions, to be clear, weren’t that specific. And Esposito’s answers were certainly open to interpretation. Did she actually mean to endorse repeal of the Affordable Care Act? Does she really want to roll back the Inflation Reduction Act’s prescription drug reforms?
But when HuffPost put those questions directly to her campaign, the response, given by a spokesperson, was to bemoan the high cost of health care, attack Biden for supposedly undermining part of Medicare and promise that Esposito would “find ways for everyone to find the healthcare coverage that works best for them and their family.”
Conspicuously lacking from the statement was any denial that Esposito wants to repeal the drug pricing reforms or Obamacare. The district’s Democratic incumbent, Pat Ryan, has a history of supporting both programs. And though Esposito may not be looking to lead a crusade against either program, other Republicans might be.
Project 2025, the Heritage Foundation’s governing agenda for a second Trump term, calls for rolling back both the drug pricing reforms and key pieces of the Affordable Care Act. So does the latest budget from the Republican Study Committee, which represents conservatives in the U.S. House.
And just this week, an article in Axios quoted two high-profile Republican lawmakers saying they were looking to repeal the new drug pricing reforms ― an effort that, it probably goes without saying, would get a strong outside boost from the pharmaceutical industry.
The logic here is no mystery. Conservatives believe the drug price reductions will ultimately discourage innovation, just as they believe the Affordable Care Act’s rules make the insurance markets less efficient. It’s all part of their broader conviction that the federal government ends up doing more harm than good when it gets involved in health care.
And Trump? He hasn’t said specifically what he thinks about the drug pricing changes. When Axios asked the campaign for his position, the response was a boilerplate statement from a spokesperson that Trump “will release more details but his overall position on health care remains the same: bring down costs and increase the quality of care by improving competition in the marketplace.”
https://www.huffpost.com/entry/trump-vance-obamacare-drug-prices_n_66eb3573e4b051614c50d01d
The Campaign Issue That Isn’t: Health Care Reform
by Margot Sanger-Katz - NYT - SEPTEMBER 14, 2024
Donald J. Trump tried to repeal Obamacare in 2017. Kamala Harris proposed a fundamental restructuring of U.S. health care in 2019, a move to a single-payer system.
These bold ideas were no aberration. In nearly every major presidential race for decades, health care has been a central issue. Remember Bill Clinton’s (doomed) health reform plan? George W. Bush’s Medicare drug plan? Mitt Romney’s Medicare privatization proposal? Bernie Sanders’s Medicare for all?
As you may have noticed, with less than two months until Election Day, big, prominent plans for health reform are nowhere to be seen. Even in an election that has been fairly light on policy proposals, health care’s absence is notable.
There were no days of either party’s convention devoted to the plight of the uninsured or the middle-class families saddled with high premiums. Health care is only briefly mentioned in either candidate’s stump speeches or television ads. There aren’t even full pages on the candidates’ websites with their plans for an industry that represents a sixth of the U.S. economy — though the Harris campaign recently published several paragraphs. When the Affordable Care Act came up at the debate, near the end, the candidates offered few specific policy proposals.
“This is the first election in maybe decades where health reform has not been a central issue,” said Larry Levitt, the executive vice president for health reform at KFF, a health research group.
The topic is not completely absent from the political conversation, as Mr. Levitt noted. Both candidates do discuss the high cost of prescription drugs, and several Democratic convention speakers applauded drug price reforms passed in the Biden administration. Abortion has been a major campaign theme for Ms. Harris, who has also talked about medical debt and defending Obamacare. But no one is focusing on major reforms of the health insurance system.
Health care’s new status as a second-tier issue was clear in the debate Tuesday, when the moderators asked Mr. Trump about his previous efforts to repeal Obamacare. They did so as the penultimate question of the debate, highlighting how marginal the issue has become relative to other voter concerns. Mr. Trump was particularly vague in his response, saying he had “concepts of a plan” to improve the insurance system. Ms. Harris mainly said she wanted to “maintain and grow the Affordable Care Act.”
“Republicans think they can ignore health care,” said Michael Cannon, the director of health policy studies at the libertarian Cato Institute. “They can’t. Democrats think they have solved health care. They haven’t.”
The absence of a prominent debate is puzzling to policymakers on both the right and the left. Many conservatives are concerned about the growing costs of the government’s large health programs: Medicare, Medicaid and Obamacare. And many Democrats worry about the looming expiration of health insurance subsidies that could raise premiums for millions of Americans after next year.
“The fact that both parties have decided we’re not going to tackle the health entitlement crisis is really odd,” said Brian Blase, president at the Paragon Health Institute, a right-leaning think tank, and a former member of the White House National Economic Council in the Trump administration. Mr. Blase noted that limiting Medicare’s future budget trajectory was a longtime priority for most Republicans and many Democrats. (Both Mr. Clinton and Barack Obama proposed major Medicare reforms as president.)
Mr. Blase said this lack of attention to the fiscal concerns reflect “this populist moment right now, where neither party wants to deal in reality.”
Both candidates have learned the hard way that proposing major changes can alienate some voters even as it thrills others. Mr. Trump’s unsuccessful effort to repeal Obamacare in 2017 was followed by major Democratic gains in the 2018 midterms. Ms. Harris faced intense criticism after a 2019 Democratic primary debate in which she appeared to endorse abolishing private health insurance.
The overall state of the health system is also different now. After years of crises and emergencies, no part of the system is currently ablaze. Obamacare markets have settled and grown after a rocky launch. The uninsured rate is near a record low. Obamacare has become popular. Overall health care spending, while high and growing, has not been following its historically steep trajectory.
As a result, voters today are more focused on other issues like the cost of living or the Southern border. And on the health care topic that both candidates have spent time talking about — prescription drugs — Mr. Trump and Ms. Harris largely agree that the federal government should rein in high pharmaceutical prices.
“When people feel less vulnerable, it makes the demand for a whole new system go down,” said Linda Blumberg, a professor of public policy at Georgetown and fellow at the Urban Institute. “I think there’s some recognition of that.”
The fact that the candidates are relatively quiet about health care does not mean they would manage the health system in the same way if elected.
Although Ms. Harris has not spoken about it in detail, a sentence on her campaign website indicates she, like Mr. Biden, supports an extension of health insurance subsidies that are scheduled to expire next year. Her campaign has said she no longer supports the single-payer plan she endorsed in her last presidential run. And in the debate, she emphasized that she supports private insurance for many Americans. She also wants to limit how much customers need to pay out of pocket for prescription drugs.
And while Mr. Trump has explicitly vowed not to cut Medicare, his first-term record suggests he may seek to make major changes to Medicaid, including the addition of work requirements, changes to the way the program is financed, and deep cuts to long-term funding.
His first term also suggests he would manage Obamacare markets differently, encouraging health plans that have to follow fewer rules, cutting funding for advertising, and allowing the extra subsidies to expire. The health care chapter of Project 2025, a detailed document of policy prescriptions for Mr. Trump to consider if elected, encourages such policies and was written by a former top Trump health official.
And while he declined to articulate a proposal on Tuesday, he also did not rule out the possibility of another effort to repeal Obamacare and replace it with a different system.
That means the health care stakes could still be large, even if the conversation is smaller.
Claire,
To continue our series shining the spotlight on bad actors in our broken health care system, let’s take a look at the multi-billion dollar pharmaceutical industry, AKA Big Pharma.
Pharmaceutical companies reap massive profits from drug manufacturing that far surpass their research and development costs. In 2021, the world’s largest pharma company based on sales was Pfizer, raking in $72 billion in prescription drug sales (including their Covid-19 vaccine).1
In the United States, Big Pharma sets its own prices for the prescription medications and life-saving drugs we rely on, which often results in massive price-gouging driven by corporate greed. You might remember when Turing Pharmaceuticals, led by CEO Martin Shkreli, hiked the price for a long-existing parasitic infection treatment from $13.50 to $750 per pill.2
But it’s not an issue of lone bad actors – it is the business model of the entire pharmaceutical industry to hike the prices of existing drugs in order to produce large profits.
Because our country, unlike many developed countries, does not have a single-payer, universal health care system, patients pay the price: in some cases, we pay upwards of 79% more for the same prescription drugs than patients in other parts of the world do.3
After decades of policy proposals, Democrats finally made progress on this critical issue when they gave Medicare the power to begin drug price negotiations through the 2022 Inflation Reduction Act. For the first time ever, the federal government can now negotiate directly with drug companies to lower the prices of some of the most commonly used medications under Medicare.
The first ten drugs were announced last August, with the Biden Administration revealing that prices for 9 out of 10 of the most expensive and popular medications under Medicare are being slashed by half or more. As a direct result of this, the Medicare program will save $6 billion on prescription drugs, and Medicare beneficiaries will save an additional $1.5 BILLION in out-of-pocket costs in just 2026 alone!4
But Big Pharma did everything in its power — from lobbying to lawsuits — to try and stop this. These companies have suggested that price cuts will hurt their ability to research and develop new, groundbreaking medications for diseases such as cancer and Alzheimer's — but as we saw in the first chart in this email, their profit margins are so obscenely large that this excuse simply isn’t true.
For now, Big Pharma’s legal challenges against the price negotiations have been unsuccessful, and another round of 15 drug price cuts will be announced by February 2025. While this is good news, we know the industry is going to keep up its fight against drug price negotiations and continue to spend millions of dollars on political contributions to convince our elected officials to oppose Medicare for All, which would create a single-payer system and allow the government to negotiate ALL drug prices.
That’s why we must continue to organize around getting Big Pharma out of our politics through our Patients Over Profits campaign, and make all prescription drugs free at the point of service, for every patient, by passing Medicare for All.
In solidarity,
Nurses’ Campaign to Win Medicare for All
Sources:
1 - The World's Biggest Players in Pharma
2 - A Decade Marked By Outrage Over Drug Prices
3 - Big Pharma claims lower prices will mean giving up miracle medications. Ignore them.
4 - Medicare drug talks yielded $6 billion in savings
Opinion | Trump and Republicans Only Need the Courts to Destroy Obamacare
by Danielle Ofri - NYT - September 23, 2024
After maintaining an oddly low profile early in the election season, health care is a wallflower no more. Last week, the Republican vice-presidential nominee, JD Vance, suggested a second Trump administration might roll back the protections under the Affordable Care Act ensuring that patients with pre-existing conditions are covered. Perhaps he was trying to formulate some “concepts of a plan” that days earlier former President Donald Trump offered during the presidential debate when asked what he had in mind for supplanting the health care law.
Shambolic “repeal and replace” attempts, however, are hardly needed to render a grave prognosis for the Affordable Care Act, the 14-year-old law that provides medical coverage for 45 million Americans. The most virulent threats are proliferating in the judicial system.
This summer, a pair of Supreme Court decisions radically reshaped the health care landscape by overturning the so-called Chevron doctrine. For the past 40 years, this doctrine acknowledged the technical knowledge of scientists and policy experts within federal agencies, giving deference to “reasonable” regulations these agencies issued to interpret ambiguities always present in the complex laws.
In overturning Chevron, the Supreme Court ruled that the courts — not government agencies — should take the lead in clarifying the ambiguities, with Chief Justice John Roberts writing that “agencies have no special competence” in this regard. This significantly weakens the federal agencies’ ability to define the rules that cover health, safety, the environment and other sectors.
No matter who is elected president in November, experts expect a raft of legal challenges from deep-pocketed industry players — drug and device manufacturers, health care conglomerates, insurance companies, pharmacy benefit managers, the nursing home industry. A separate Supreme Court case that loosens the statute of limitations for filing suits means that even long-established regulations are at risk.
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Lawsuits could chip away at regulations intended to protect patients medically (such as requiring a minimum number of staff members on the floor at nursing homes) and financially (such as the No Surprises Act, which prevents excessive bills from out-of-network providers incurred during emergency care). Medicare’s ability to negotiate down drug prices would be another likely target.
Legislative brawls like the 70-odd attempts to overturn or undermine the Affordable Care Act will no longer be necessary; the law could be deboned in the courts, with hundreds of individual rules litigated by various interest groups. This would continue the weakening of the A.C.A. that we saw during the Trump administration, which included elimination of universal coverage of birth control, proliferation of lower-quality insurance plans and cuts in subsidies for low-income patients.
The worry about the post-Chevron landscape goes even beyond the rollback of medical safeguards. Inconsistencies in how lawsuits play out in different parts of the country could lead to a hodgepodge of unequal rulings that might make certain vaccines and birth control, for example, routine medical care for some Americans, and hard to come by for others.
This would almost certainly exacerbate health disparities. Having health insurance is one of the most powerful tools for narrowing inequities, because research shows that people with insurance have better medical outcomes and live longer. The progress in increasing coverage rates since the advent of the Affordable Care Act could easily be erased as more provisions of the law are pruned away. (Witness the millions of people who lost Medicaid upon expiration of pandemic rules that had forbidden states from disenrolling people during the public health emergency.)
The judicial unraveling of health and safety regulations will lumber forth no matter who is elected president in November. But bear in mind that the defendants in these lawsuits will be the agencies of the U.S. government and that the defense will be mounted by a presidentially appointed attorney general. A Kamala Harris administration would be expected to defend its agencies vigorously and work with Congress to head off future challenges by fine-tuning regulations through legislation. A Trump administration that views government agencies as “the deep state” would most likely offer tepid defense, at best. At worst, it might openly solicit legal challenges, while appointing conservative judges with scant regard for federal agencies or their experts.
Not long ago, one of my patients with severe diabetes withdrew from medical care for months after job termination led to insurance loss. The resulting medical chaos was a dispiriting reflection of the fragility — and cruelty — of our system. As I sit with my patients and contemplate the further dismantling of our health care system, it’s hard not to feel discouraged.
Despair, however, is not an option in medicine. One ray of optimism arises from the fact that many of the policies on the chopping block are, in fact, quite popular. Mr. Vance should consider that protections for people with pre-existing conditions are supported by a majority of Americans, including Republicans. Pushback may come from the public, in the form of ballot initiatives.
While most Republican states turned down the Affordable Care Act’s offer of Medicaid expansion, voters in Idaho, Nebraska, Oklahoma, Utah, South Dakota and Maine expanded Medicaid via ballot initiative. Missouri voters did so too, even though they had to fight their own government all the way up to the State Supreme Court to get it enacted.
Such grass-roots initiatives are already at work for reproductive health. Voters in the red states Kentucky and Kansas voted down abortion restrictions in ballot initiatives. Voters in Ohio, Michigan, Vermont and California amended their state Constitutions to protect abortion rights, and more ballot initiatives on abortion are expected this November.
The post-Chevron world threatens health and safety regulations, and a G.O.P. victory at the national level is expected to exacerbate this trend. Ballot initiatives and local elections have the potential to mitigate some of this, but the human cost will play out in exam rooms, emergency rooms and living rooms around the country. Medical professionals and patients — along with caregivers and families — carry firsthand knowledge of how political policies and judicial decisions play out in blood, bruise and breath. Our job will be to keep these human experiences front and center during this tumultuous election season.
https://www.nytimes.com/2024/09/23/opinion/trump-obamacare-health-courts.html
I Know a Farmer Who…
by Richard Rhames - Counterpunch - September 25, 2025
The most recent USDA agricultural census (2022) showed the number of American farms decreasing 6% since 2017, with the number of producers aged 35 to 64 declining 9%. Generally, people with (something like) “options” and their lives ahead of them—— when confronted with the bleak economics of farming—— try to do something else. Creating “challenges” to broad-based rural prosperity has been official policy here since the mid-20th century. (I’ve written about that a number of times over the years.)
Perhaps unsurprisingly, the census found that “the number of producers 65 and older increased 12%, continuing the trend of an aging producer population.” Media outlets have typically whistled- past-the-farmer-graveyard and tended to focus on feel-good “stories”/ snippets dealing with perky entrepreneurial theme-park ventures lumped together as “agri-tourism.” Keeping the place going with hay rides, corn mazes and event-barn rentals can temporarily paper over starker economic ag-realities. A few decades ago I was able to arrange an editorial board meeting at the Portland Press Herald. The Washington D.C.-based economic policy director of the National Farmers Union and another NFU staffer were in Maine for events, and I’d hoped that their insights might improve local media coverage.
One of the editors began the meeting by observing that since there was plenty of food in the stores, everything seemed OK policy-wise. It was down-hill from there. Oh well. Nothing ventured…..
I know a farmer who inhabits the “65 and over” category referenced by the 2022 ag census. Having lived most of his life without health insurance as a condition-of-employment, he and his wife successfully aged-into Medicare. In most “developed” countries the population enjoys a right to healthcare from birth (or before). Here one needs to be closer to death to enjoy the benefit.
Last week a visit to the dermatologist revealed a suspicious growth and a biopsy was performed——possible melanoma. “Farmer tans” come with consequences. We’ll see.
Also, as it happens, last week the UK Guardian (9/19/24) provided some interesting context, reporting that, “The United States health system ranked dead last in an international comparison of 10 peer nations, according to a new report by the Commonwealth Fund.”
“In spite of Americans paying nearly double that of other countries, the system performed poorly on health equity, access to care and outcomes.”
Commonwealth Fund president, Dr. Joseph Betancourt relates, “I see patients who cannot afford their medications…. I see older patients arrive sicker than they should because they spent the majority of their lives uninsured…It’s time we finally build a health system that delivers quality affordable healthcare for all Americans.”
Dr. B’s urgings fall with a thud here in our dying empire of course. Though Americans’ per person spending on healthcare totals more than $13,000, and polls as a top issue, the system is unmoved. With the Trump/Harris horserace in its final furlong nothing of substance is on-offer from either of the presidential wannabes. Neither party will acknowledge the institutional running sore that is the US healthcare regime. Pundits and Pooh-Bahs enthuse about America as “the indispensable nation” and assert “American Exceptionalism.”
The Commonwealth Fund’s 20th report of its “Mirror, Mirror” series, compares the US to 9 other wealthy countries—Australia, Canada, France, Germany, the Netherlands, New Zealand, the UK, Sweden and Switzerland. It reveals structurally “exceptional” failures and examples “indispensable” to policy crafters elsewhere in how NOT to structure systems of societal maintenance and uplift. “The foundation calls this year’s report a ‘portrait of a failing US health system.’” (See Guardian)
It’s not that people and organizations haven’t been trying to get something less barbaric installed here. Back in 2009 when Mr. Obama’s so-called Affordable Care Act (a policy proposal crafted by the private insurance industry) was being “heard” by the Senate Finance Committee, doctors, nurses and citizens stood up and urged the committee to “Put Single-Payer on the table.” As each advocate was led away by security forces and arrested, another would rise. Chairman Max Baucus finally admitted, “We need more police.”
He got them.
We “got” the ACA, 26 million people still without insurance, increased hedge/vulture-fund ownership of hospitals and healthcare generally, and all the “excess deaths” / reduced life expectancy that goes with it.
Among the “Baucus 15” arrested for their policy advocacy that day were Russell Mokhiber, editor of “Corporate Crime Reporter,” and a founder of Single Payer Action, Dr. Margaret Flowers of Physicians for a National Health Program (PNHP), Deann McEwen R.N., Maine resident/ public citizen Jerry Call, and others who supported a civilized, humane and efficient system (i.e. un-American).
The Guardian piece concludes, incongruously quoting one Dr. David Blumenthal alleging that “The American electorate makes choices about which direction to move in….” and that this profit-questing is perhaps redeemable though a “donor”-based and utterly captive political system.
Is he joking?
I know a farmer who is not amused.
That Message From Your Doctor? It May Have Been Drafted by A.I.
Overwhelmed by queries, physicians are turning to artificial intelligence to correspond with patients. Many have no clue that the replies are software-generated.
by Teddy Rosenbluth - NYT - September 24, 2024
Every day, patients send hundreds of thousands of messages to their doctors through MyChart, a communications platform that is nearly ubiquitous in U.S. hospitals.
They describe their pain and divulge their symptoms — the texture of their rashes, the color of their stool — trusting the doctor on the other end to advise them.
But increasingly, the responses to those messages are not written by the doctor — at least, not entirely. About 15,000 doctors and assistants at more than 150 health systems are using a new artificial intelligence feature in MyChart to draft replies to such messages.
Many patients receiving those replies have no idea that they were written with the help of artificial intelligence. In interviews, officials at several health systems using MyChart’s tool acknowledged that they do not disclose that the messages contain A.I.-generated content.
The trend troubles some experts who worry that doctors may not be vigilant enough to catch potentially dangerous errors in medically significant messages drafted by A.I.
In an industry that has largely used A.I. to tackle administrative tasks like summarizing appointment notes or appealing insurance denials, critics fear that the wide adoption of MyChart’s tool has allowed A.I. to edge into clinical decision-making and doctor-patient relationships.
Already the tool can be instructed to write in an individual doctor’s voice. But it does not always draft correct responses.
“The sales pitch has been that it’s supposed to save them time so that they can spend more time talking to patients,” said Athmeya Jayaram, a researcher at the Hastings Center, a bioethics research institute in Garrison, N.Y.
“In this case, they’re trying to save time talking to patients with generative A.I.”
During the peak of the pandemic, when in-person appointments were often reserved for the sickest patients, many turned to MyChart messages as a rare, direct line of communication with their doctors.
It wasn’t until years later that providers realized they had a problem: Even after most aspects of health care returned to normal, they were still swamped with patient messages.
Already overburdened doctors were suddenly spending lunch breaks and evenings replying to patient messages. Hospital leaders feared that if they didn’t find a way to reduce this extra — largely nonbillable — work, the patient messages would become a major driver of physician burnout.
So in early 2023, when Epic, the software giant that developed MyChart, began offering a new tool that used A.I. to compose replies, some of the country’s largest academic medical centers were eager to adopt it.
Instead of starting each message with a blank screen, a doctor sees an automatically generated response above the patient’s question. The response is created with a version of GPT-4 (the technology underlying ChatGPT) that complies with medical privacy laws.
The MyChart tool, called In Basket Art, pulls in context from the patient’s prior messages and information from his or her electronic medical records, like a medication list, to create a draft that providers can approve or change.
By letting doctors act more like editors, health systems hoped they could get through their patient messages faster and spend less mental energy doing it.
This has been partially borne out in early studies, which have found that Art did lessen feelings of burnout and cognitive burden, but did not necessarily save time.
Several hundred clinicians at U.C. San Diego Health, more than a hundred providers at U.W. Health in Wisconsin and every licensed clinician at Stanford Health Care’s primary care practices — including doctors, nurses and pharmacists — have access to the A.I. tool.
Dozens of doctors at Northwestern Health, N.Y.U. Langone Health and U.N.C. Health are piloting Art while leaders consider a broader expansion.
In the absence of strong federal regulations or widely accepted ethical frameworks, each health system decides how to test the tool’s safety and whether to inform patients about its use.
Some hospital systems, like U.C. San Diego Health, put a disclosure at the bottom of each message explaining that it has been “generated automatically,” and reviewed and edited by a physician.
“I see, personally, no downside to being transparent,” said Dr. Christopher Longhurst, the health system’s chief clinical and innovation officer.
Patients have generally accepted the new technology, he said. (One doctor received an email saying, “I want to be the first to congratulate you on your A.I. co-pilot and be the first to send you an A.I.-generated patient message.”)
Other systems — including Stanford Health Care, U.W. Health, U.N.C. Health and N.Y.U. Langone Health — decided that notifying patients would do more harm than good.
Some administrators worried that doctors might see the disclaimer as an excuse to send messages to patients without properly vetting them, said Dr. Brian Patterson, the physician administrative director for clinical A.I. at U.W. Health.
And telling patients the message had A.I. content might cheapen the clinical advice, even though it was endorsed by their physicians, said Dr. Paul Testa, chief medical information officer at NYU Langone Health.
To Dr. Jayaram, whether to disclose use of the tool comes down to a simple question: What do patients expect?
When patients send a message about their health, he said, they assume that their doctors will consider their history, treatment preferences and family dynamics — intangibles gleaned from longstanding relationships.
“When you read a doctor’s note, you read it in the voice of your doctor,” he said. “If a patient were to know that, in fact, the message that they’re exchanging with their doctor is generated by A.I., I think they would feel rightly betrayed.”
To many health systems, creating an algorithm that convincingly mimics a particular physician’s “voice” helps make the tool useful. Indeed, Epic recently started giving its tool greater access to past messages, so that its drafts could imitate each doctor’s individual writing style.
Brent Lamm, chief information officer for U.N.C. Health, said this addressed common complaints he heard from doctors: “My personal voice is not coming through” or “I’ve known this patient for seven years. They’re going to know it’s not me.”
Health care administrators often refer to Art as a low-risk use of A.I., since ideally a provider is always reading through the drafts and correcting mistakes.
The characterization annoys researchers who study how humans work in relation to artificial intelligence. Ken Holstein, a professor at the human-computer interaction institute at Carnegie Mellon, said the portrayal “goes against about 50 years of research.”
Humans have a well-documented tendency, called automation bias, to accept an algorithm’s recommendations even if it contradicts their own expertise, he said. This bias could cause doctors to be less critical while reviewing A.I.-generated drafts, potentially allowing dangerous errors to reach patients.
And Art is not immune to mistakes. A recent study found that seven of 116 A.I.-generated drafts contained so-called hallucinations — fabrications that the technology is notorious for conjuring.
Dr. Vinay Reddy, a family medicine doctor at U.N.C. Health, recalled an instance in which a patient messaged a colleague to check whether she needed a hepatitis B vaccine.
The A.I.-generated draft confidently assured the patient she had gotten her shots and provided dates for them. This was completely false, and occurred because the model didn’t have access to her vaccination records, he said.
A small study published in The Lancet Digital Health found that GPT-4, the same A.I. model that underlies Epic’s tool, made more insidious errors when answering hypothetical patient questions.
Physicians reviewing its answers found that the drafts, if left unedited, would pose a risk of severe harm about 7 percent of the time.
What reassures Dr. Eric Poon, chief health information officer at Duke Health, is that the model produces drafts that are still “moderate in quality,” which he thinks keeps doctors skeptical and vigilant about catching errors.
On average, fewer than a third of A.I.-generated drafts are sent to patients unedited, according to Epic, an indication to hospital administrators that doctors are not rubber-stamping messages.
“One question in the back of my mind is, what if the technology got better?” he said. “What if clinicians start letting their guard down? Will errors slip through?”
Epic has built guardrails into the programming to steer Art away from giving clinical advice, said Garrett Adams, a vice president of research and development at the company.
Mr. Adams said the tool was best suited to answer common administrative questions like “When is my appointment?” or “Can I reschedule my checkup?”
But researchers have not developed ways to reliably force the models to follow instructions, Dr. Holstein said.
Dr. Anand Chowdhury, who helped oversee deployment of Art at Duke Health, said he and his colleagues repeatedly adjusted instructions to stop the tool from giving clinical advice, with little success.
“No matter how hard we tried, we couldn’t take out its instinct to try to be helpful,” he said.
Three health systems told The New York Times that they removed some guardrails from the instructions.
Dr. Longhurst at U.C. San Diego Health said the model “performed better” when language that instructed Art not to “respond with clinical information” was removed. Administrators felt comfortable giving the A.I. more freedom since doctors review its messages.
Stanford Health Care took a “managed risk” to allow Art to “think more like a clinician,” after some of the strictest guardrails seemed to make its drafts generic and unhelpful, said Dr. Christopher Sharp, the health system’s chief medical information officer.
Beyond questions of safety and transparency, some bioethicists have a more fundamental concern: Is this how we want to use A.I. in medicine?
Unlike many other A.I. health care tools, Art isn’t designed to improve clinical outcomes (though one study suggested responses may be more empathetic and positive), and it isn’t targeting strictly administrative tasks.
Instead, A.I. seems to be intruding on rare moments when patient and doctors could actually be communicating with one another directly — the kind of moments that technology should be enabling, said Daniel Schiff, co-director of the Governance and Responsible A.I. Lab at Purdue University.
“Even if it was flawless, do you want to automate one of the few ways that we’re still interacting with each other?”
https://www.nytimes.com/2024/09/24/health/ai-patient-messages-mychart.html
What happens when profit-driven private equity firms become the primary owners of healthcare entities, including hospitals, mental health facilities, and nursing homes?
Private equity’s modus operandi is to load facilities up with debt, reduce competition, shutter facilities, and cut staff time, all to make more money -- leaving fewer choices among healthcare providers, especially in rural areas. Without regulation, such reckless profiteering is nearly guaranteed to lead to disruption in access to facilities, higher patient costs, and reduced quality of care.
Senator Ed Markey says private equity firms view the healthcare system as little more than a “piggy bank.” When they put “profit over patients,” patients’ standard of care suffers along with the quality of health workers’ workplaces. Needed facilities are closed without adequate transition plans for patients, leaving “communities... to clean up the mess.”
He is 100% right. It’s time for Congress to rein in private equity’s takeover of healthcare.
Now, Senator Markey and Rep. Pramila Jayapal introduced the Health Over Wealth Act. This legislation is necessary to establish permanent guardrails to protect patients, providers, and communities, and to guarantee that corporate wealth will not come before public health.
This comprehensive bill addresses issues of transparency; patient, community, and health provider protections; the role of private equity in the healthcare marketplace; and the accessibility, safety, and quality of healthcare services.
Transparency: Required reporting will ensure the public is able to know the status of healthcare entities owned by private equity firms with regard to their debt, executive pay, political spending, patient costs, and any reductions in patient services or staff wages and benefits.
Continuity of Care Protections: The bill would require private equity firms to establish escrow accounts sufficient to cover five years of operation beyond any financial disruptions or facility closures and fund neighboring providers in case of closure.
Public Accountability: The bill would require private equity firms to obtain a license in order to purchase healthcare entities in whole or part. This license could be revoked in the event of understaffing, price-gouging, or reducing patients’ access to care.
Community Protections: The bill would require the Department of Health and Human Services (HHS) to review, and possibly block, any sales of hospitals or facilities by private equity Real Estate Investment Trusts (REITs) if the sale would threaten the facility’s financial status or the public health.
The Role of Private Equity: The bill would establish an HHS Task Force to monitor and examine changes in the marketplace and any patterns of private equity ownership that result in excessive consolidation or inequities in access or quality or services.
Accessibility, Safety, and Quality: The bill would prevent the stripping of assets from healthcare facilities by private equity firms necessary for assuring the safety and quality of healthcare services and retain staff in any bankruptcy.
Thank you for all you do,
- Aliya
Aliya Sabharwal (she/her)
Private Equity Campaign Manager
Americans for Financial Reform
Commentary: Just who will take on the insatiable drug companies?
The news that Medicare will begin negotiating pricing with drug companies is good news for those on Medicare, and for the financial stability of the program overall.
Unfortunately, for those not covered by Medicare it will likely lead to additional exorbitant price increases for drugs. In health care, this is known as “cost shifting.” In simple terms, it is the process in which one group pays more for their care because another group is paying less.
I have written several times on these pages about the runaway cost of prescription drugs, and it continues to amaze me how collectively helpless we are to do anything about it.
In 2015, shortly before I mentioned the drugs Humira and Enbrel in a Press Herald column, they were priced (according to the pricing site goodrx.com) at $2,800 a month. These are competing drugs (used to treat a variety of inflammatory diseases), made by different drug companies, and yet their pricing was within a few dollars. Since then, these drugs have figuratively walked hand in hand, in raising their prices: $3,500, $4,200, $5,500, to where they are today: Humira at $6,653 and Enbrel at $6,775, a price difference of $122 between them.
The simple question on those increases is: Why? Is it cost of ingredients? Manufacturing? Labor? No, I am sure the reason is “because they can,” and the drug companies will continue to do so until they are stopped.
A few years ago, the government tried to force drug companies to show pricing in their ads. The manufacturers took it to court, claiming it was a violation of their First Amendment right to free speech (or, more specifically, their right to not speak). And they won; there is seldom pricing in their ads.
I can tell you, though, as a general rule of thumb, if you see people singing and dancing in an advertisement, then it is an expensive drug. Skyrizi – a treatment for plaque psoriasis, psoriatic arthritis and Crohn’s disease – at a cost of $19,700 per dose, is a prime example of that. At six doses in year one, that’s $118,200. Fortunately, “only” four doses per year are needed thereafter. Since the drug companies won’t put their pricing out there I wish this fact could somehow go viral, which is something I’m too old to initiate.
One of the main problems is that those who could be most influential in bringing about change aren’t doing anything to achieve that change, and I suspect they are conflicted.
Politicians vaguely say, “We need to lower the cost of prescription drugs,” but I have never heard one of them use or say names like Humira, Enbrel, Skyrizi or any other expensive drug. Not once. Drug manufacturers give “generously” to politicians in both parties, and I’m sure that is one reason that the subject of prescription drugs is one of the few topics in which there is no political divide.
Similarly, I have yet to hear the national news media speak out on the topic. Watch the nightly news shows, any of them. Their major advertisements are for drugs (see names above). Similar to politicians, I have never heard a network news anchor speak any of their names. Not once. Sadly, in both instances, it seems to be a case of “don’t bite the hand that feeds you.”
While watching the Skyrizi ads on television, I can’t help but notice the beautiful blue sky highlighting all the fun going on below. Given the name, it’s understandable. But when I watch the ads, it brings to mind the expression: “The sky’s the limit,” which means there is no limit. Based on the way things are going, I can’t disagree.
Are high deductible health insurance plans a good deal for you?
They’re becoming more popular but also carry risks that you should consider as open enrollment time looms.
For millions of Americans, the end of year means it’s time to review health insurance coverage as open enrollment for 2025 gets underway. That usually takes place in October and November for the 154 million who get their plan through work; for the additional 21 million who access insurance through the government-run marketplaces created under the Affordable Care Act (ACA), it starts Nov. 1 and ends Dec. 15.
One of the biggest shake-ups in recent years is the growth of high deductible plans, which offer lower monthly premiums but require consumers to pay most initial medical costs out of pocket before the plan’s coverage kicks in. While their cheaper premiums may look like a bargain, consumers risk paying much more if they have unexpected illnesses or failed to budget well for more routine care.
Here’s what you need to know when it’s time to choose a health insurance plan.
How are high deductible plans different from other options?
Most Americans are familiar with the more traditional “preferred provider organization” (PPOs), which offers a broader network of participating medical professionals and a lower deductible in exchange for a higher monthly premium. These may be a good choice for people who’ll need more than routine medical care. They also tend to have lower co-payments and don’t always require patients to seek their primary doctor’s approval to see specialists.
Some employers also offer the option of a health maintenance organization (HMO), which typically charges lower premiums but imposes more restrictions on access to specialists, with primary care doctors sometimes acting as “gatekeepers.”
Both types of plans have lost ground to high deductible plans. In 2006, only 4 percent of workers were covered by them; by 2024, the share was 27 percent, according to the nonprofit health policy research organization KFF. In that same time, the share of people in PPOs slipped from 60 percent to 48 percent, while those in HMOs dropped from 20 percent to 13 percent.
Why can high deductible plans be risky?
Many Americans have had sticker shock in recent years because deductibles have risen across most types of plans. For HMO or PPO plans, they average around $3,000 a year for family coverage (when out-of-pocket expenses of all members count against a deductible) compared to almost $5,000 for high deductible plans.
The ACA established federal requirements for most health plans, including high deductible ones, to ensure the most basic routine preventive services (such as mammograms and colorectal cancer screening) don’t require co-pays. But given the threshold for coverage under high deductible plans, enrollees are more tempted to curtail or delay other types of preventive care and elective treatments to save money, research has shown.
In other cases, consumers might hold off on elective treatments and screenings until later in the year, after they rack up other health expenses to reach their deductible. This can be especially risky for those who have chronic conditions such as heart disease and diabetes, potentially leading to missed opportunities for earlier intervention.
Given that these plans can result in hefty out-of-pocket bills, high earners are in a better position to fund their medical care, while those on lower incomes have more at risk, said Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms. She encourages “caution” before signing up — despite the allure of lower premiums.
That’s especially the case for the millions of Americans who are cash-strapped even for basic necessities. A 2022 Federal Reserve survey suggested that about 37 percent of adults in the United States couldn’t fully cover an unexpected $400 expense with either cash or its equivalent, such as a credit card.
Why have health insurance deductibles become so expensive?
Deductibles have been pushed up in part by the broader increase in drug prices. Another driver is the consolidation of the health care system. Larger systems can demand higher prices, and because employers want to offer plans that include major hospitals in their region, hospitals have more clout in those price negotiations, Corlette said.
“Employers and insurance companies turn around and pass those costs on to consumers,” she said. “That is done both in the form of higher premiums, but also through higher deductibles and other forms of cost sharing.”
The consolidation trend has caught the attention of the Justice Department’s antitrust division, the Federal Trade Commission and the Department of Health and Human Services, which have launched a joint inquiry into how mergers and acquisitions, especially by private equity, are driving up medical costs.
Can health savings accounts help consumers cover some of those costs?
Created in 2003, HSAs allow people to set aside a tax-free share of their paycheck for health costs. These accounts have become increasingly popular for those on high deductible plans because they can be used to cover bills before the deductible kicks in. Employers offer them in tandem with high deductible plans and sometimes kick in matching money. HSAs are also appealing because they’re portable and can be invested, so employees can take them to a new job or roll them over.
That very feature, however, has opened HSAs to criticism as tax shelters for the wealthy, who have more cash to funnel to these accounts. A Congressional Research Service report, based on 2017 IRS data, pointed to such an income divide: Up to 17 percent of returns reporting adjusted gross income between $200,000 and $499,999 indicated use of an HSA, while less than 4 percent of those between $10,000 to $24,999 did so.
If I get a choice of health insurance plans, what’s the best option for me?
The answer depends on your personal and financial circumstances. But experts agree you need to consider more than the monthly premium. If you need only routine preventive care, the high deductible option may be attractive if you accept the limits of its coverage as a trade-off.
But people need to be realistic about their potential financial liabilities and consider what will happen if they have an unforeseen illness or accident, said A. Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design.
“Even if you think you’re a superhero, you have to make sure that you can cover the deductible in your plan,” he said.
Experts also advise closely looking at which services are covered in the various plans.
Deniece Maston, an HR knowledge adviser for SHRM who used to work for government contractors, recalled talking with employees who at first were attracted to the plans’ low premiums. After encouraging them to consider their families’ likely medical needs, they often made different choices, she said: “By doing the math, they found out that the cheaper plan actually had them pay more.”
Regardless of what you choose, you should also make sure your plan’s information on in-network medical professionals is up to date by checking with their doctor’s office. Sometimes insurers’ directories are inaccurate, leaving people scrambling to find new doctors and hospitals or risk facing higher costs for out-of-network care.
https://www.washingtonpost.com/business/2024/10/14/high-deductible-health-insurance-risk/
CVS and Walgreens are ailing. Here’s why
Not too long after Tim Wentworth became CEO of Walgreens, he revealed a stunning figure: Roughly a quarter of the pharmacy chain’s stores do not make money.
On Tuesday, he said 1,200 of those stores will close over three years. That’s two weeks after rival CVS announced layoffs of 2,900 corporate staff. Both chains are on a multi-billion-dollar cost-saving spree – closing hundreds of locations, cutting thousands of jobs and, really, reconsidering their role in Americans’ lives.
The slow simmer of mistakes and misfortunes have come to a boil for the biggest U.S. drugstore chains. They’ve accumulated too many stores at a time of changing shopper habits. They’re saddled with numerous government fines and a particularly ailing relationship with insurers.
The problem of stores
CVS and Walgreens have some notable differences. Walgreens, which also owns the British drugstore Boots, is more singularly focused on its pharmacy business. CVS has expanded further into health care through mergers with insurer Aetna and Caremark, a pharmacy benefit manager that helps insurers negotiate prescription drug coverage and costs. Yet the two companies have made similar missteps.
The simplest part of the problem is scale. CVS and Walgreens grew massive nationwide footprints of more than 9,000 and 8,000 stores, respectively. They gobbled up mom-and-pop shops and signed long-term leases for prime locations on street corners.
Now, shoppers regularly complain about stores being chronically understaffed, and products locked up to prevent theft. The shelves of snacks, makeup, greeting cards and cleaning products were meant to boost profits. But sales have sagged for years — a result of a losing battle with Amazon, Walmart, Costco, grocery and dollar stores.
CVS and Walgreens “probably do have too many stores because they over-expanded, but the bigger problem is that the stores that they have are not very good,” said Neil Saunders, retail analyst at the firm GlobalData.
The chains have failed to add new incentives for shoppers, beyond printing photos or dropping off shopping returns, says Anshuman Jaiswal, a longtime consultant to retailers and pharmacies. And neither chain has built a meaningful online presence designed to give customers what they need.
“If you go to CVS.com or Walgreens.com, if you are placing an order for cough syrup, why don't I sell chicken broth as a product recommendation immediately?” Jaiswal says. “It's about reimagining the business model.”
The problem of prescriptions
Given the retail struggles, pharmacies could perhaps simply ditch the convenience store and focus on selling medicine — except CVS and Walgreens say it’s harder and harder to make a profit from this part of their business.
Years ago, a big shift in the power balance between pharmacies and health insurers revealed the limits of drugstores’ leverage.
“Historically, there was a view that there was a lot of customer loyalty to their specific retail pharmacy … and that patients, or consumers, would be all up in arms if they were forced to move their prescriptions,” says Brian Tanquilut, health care services analyst at the investment bank Jefferies.
Walgreens tested this theory about a decade ago when it got into a public fight with Express Scripts, a pharmacy benefit manager that worked with major health insurers.
Walgreens and Express Scripts played a game of chicken over how much Walgreens should earn from prescriptions – and Walgreens lost. For a time, it got kicked out of insurance networks used by millions of people, who simply went elsewhere to get their medicine at the lower in-network prices.
“What that did was to prove that patient loyalty is not to the retail pharmacy, but it actually is whatever my insurance is willing to pay,” Tanquilut says. “And that opened the door for the payers to keep pushing pricing down on retail pharmacy chains.”
Hoping reinvention is the cure
These days, CVS and Walgreens are facing tough competition from pharmacies that don’t depend as much on profits from prescriptions because they’re part of retail giants, including Walmart and Costco. The drugstore chains also have spent millions of dollars on government fines over allegations of unsafe staffing levels, overbilling government insurance programs and contributing to the opioid epidemic.
Over the years, CVS and Walgreens attempted to reframe themselves as health care hubs, expanding primary-care clinics. But these operations cost time and money.
On Tuesday, Walgreens CEO Wentworth said his chain is “reorienting to its legacy strength as a retail pharmacy-led company.” CVS is reportedly weighing a breakup to undo its mergers with Aetna and Caremark.
Both companies are also proposing new structures for how they want to be paid for filling prescriptions, hoping this is the big shot in the arm they need.
"I'm very confident that over a two- to three-year period we will have reset the framework for reimbursement discussions," Wentworth told investors on Tuesday. “We are in the early stages of a turnaround that will take time.”
34 Million Seniors in Medicare Advantage Plans Face Rude Awakening
by Emma Churchin - CEPR - October 15, 2024
October 15 marks the first day of open enrollment in Medicare Advantage (MA) plans – a time that will deliver chaos and confusion for many of the 34 million seniors who depend on these plans to pay their healthcare bills. It’s yet another reminder that Medicare wastes billions of dollars funneling public money to private companies that are primarily driven by profit-seeking.
Last year, more MA members than expected used their benefits to get necessary medical care. One might assume that companies would expect beneficiaries to use health care services. But after years of making outsized profits, the insurance companies that own these plans are reacting to this by downsizing plans, cutting benefits, increasing copays, and raising prescription drug deductibles. In other words, Medicare Advantage beneficiaries are being penalized for using the health care that they pay for.
Insurers are Dropping Plans and Slashing Benefits
Having spent decades luring enrollees and collecting premiums, two of the biggest health insurers in the MA marketplace, CVS and Humana, are scaling back, slashing benefits, and canceling plans with too many members who used their health benefits. They are closing less profitable health plans that serve half a million or more seniors, forcing them to sign up for other more expensive or less generous coverage. Humana is set to leave 13 markets around the country, affecting 560,000 beneficiaries or 10 percent of its plan members. The reason for exiting? The CFO herself, Susan Diamond, said the specific markets just aren’t profitable. CVS Chief Financial Officer Tom Cowhey sent a similar message at a conference last month: “Could we lose up to 10 percent of our existing Medicare members next year? That’s entirely possible. And that’s okay because we need to get this business back on track.”
Medicare Advantage plans are being impacted all over the country. In Vermont, MVP and WellCare are dropping two MA plans in January 2025. This will affect 6,000 older Vermonters who will need to quickly choose new plans in the upcoming enrollment period. The MA plans cited spiking health care costs and lower Medicare reimbursements. WellCare, which is run by Centene Corp, pulled out of Alabama, Massachusetts, New Hampshire, New Mexico, and Rhode Island in addition to Vermont, leaving 40,000 people and 4 percent of MA beneficiaries without continued coverage past the enrollment period. In New Hampshire, multiple MA plans are shutting down, leaving tens of thousands beneficiaries scrambling. In Minnesota, nearly 60,000 people will face disruptions to their MA plans.
Health systems and hospitals are also making the decision to cancel contracts due to excessive prior authorization denial rates and slow payments from insurers. Already 27 health systems have canceled their Medicare Advantage contracts this year. MA plans can be especially harmful to rural providers who already face financial hurdles, and may further struggle to continue providing care to their communities due to unreliable and low reimbursements from insurers.
The MA companies are following a similar strategy when it comes to prescriptions. To weed out people who require expensive medications, insurance companies are raising copays on drugs, hoping members will seek more affordable coverage elsewhere. Roughly two-thirds of all 34 million Medicare Advantage enrollees are in plans where the drug deductibles will increase by 167 percent – or at least $200 next year.
And all of this is in addition to the serious, well-documented problems with denials of care and coverage in Medicare Advantage that beneficiaries have experienced since the program started.
Medicare vs Privatized Medicare Advantage
The purpose of insurance companies running Medicare Advantage plans is to make money, pure and simple. Seniors across the country rely on these plans – yet the record shows that insurers don’t value the quality and affordability of care, and don’t want beneficiaries to use the medical services they need. Beneficiaries are tossed aside because they live in an unprofitable market for their insurer or because they are actually using the insurance they signed up for to access services.
The purpose of Medicare is different: Protecting American seniors by guaranteeing health coverage. Medicare Advantage funnels taxpayer money to predominantly large insurance companies like CVS-Aetna and UnitedHealthcare to manage what healthcare beneficiaries can access. This has cost significantly more than Traditional Medicare, transferring hundreds of billions of dollars in overpayments to large corporations who profit by getting more taxpayer money and spending less on coverage. Now that beneficiaries want to utilize the care they have been promised, these insurance giants are choosing to raise healthcare costs for American seniors.
As we reach the open enrollment period from October 15 to December 7, beneficiaries should consider signing up for Traditional Medicare to ensure they get covered for the care they need from the doctors and hospitals they want to use, without administrative hurdles. In Traditional Medicare, seniors need not worry about insurance companies dropping or altering their plans or pushing higher costs on them and reducing access. Since the government does not require an out-of-pocket cap in Traditional Medicare – something that is necessary in MA plans – beneficiaries should consider getting a supplemental Medigap plan if they can afford it to get true comprehensive coverage.
In most regions, the companies assure that there will still be Medicare Advantage plans available from other companies, or the same company. But what is to say MA plans do not use profit as their north star once again next year?
When healthcare is a business, regular people lose.
https://cepr.net/34-million-seniors-in-medicare-advantage-plans-face-rude-awakening/
