Incurable American Excess
by Roger Cohen
New York Times
A few years ago, Americans and Europeans were asked in a Pew Global Attitudes survey what was more important: “freedom to pursue life’s goals without state interference,” or “state guarantees that nobody is in need.” In the United States, 58 percent chose freedom and only 35 percent a state pledge to eradicate neediness. In Britain, the response was the opposite: 55 percent opted for state guarantees and just 38 percent for freedom. On the European Continent — in Germany, France and Spain — those considering state protection as more important than freedom from state interference rose to 62 percent.
This finding gets to the heart of trans-Atlantic differences. Americans, who dwell in a vast country, sparsely populated by European standards, are hardwired to the notion of individual self-reliance. Europeans, with two 20th-century experiences of cataclysmic societal fracture, are bound to the idea of social solidarity as prudent safeguard and guarantor of human decency. The French see the state as a noble idea and embodiment of citizens’ rights. Americans tend to see the state as a predator on those rights. The French ennoble the dutiful public servant. Americans ennoble the disruptive entrepreneur.
To return from Europe to the United States, as I did recently, is to be struck by the crumbling infrastructure, the paucity of public spaces, the conspicuous waste (of food and energy above all), the dirtiness of cities and the acuteness of their poverty. It is also to be overwhelmed by the volume and vital clamor of American life, the challenging interaction, the bracing intermingling of Americans of all stripes, the strident individualism. Europe is more organized, America more alive. Europe purrs; even its hardship seems somehow muted. America revs. The differences can feel violent.
Medicare just turned 50, and we should all look so good
By the Editorial Board
The Star-Ledger (Newark, N.J.), Aug. 2, 2015
Happy anniversary, Medicare. Like that Italian actress starring in the new James Bond movie, you're looking good at 50.
It's hard to believe that before this program went into effect, Ronald Reagan said that if it weren't stopped, "one of these days, you and I are going to spend our sunset years telling our children and our children's children what it once was like in America when men were free."
Yet America did not end, and we did not all become slaves. Instead, what we have is a triumph for the notion of active government. Before Medicare, about half of Americans over age 65 had no health insurance. Now, fifty years later, almost all of them do.
The program has simultaneously reduced deaths, hospital stays and costs, according to a new study from the Journal of the American Medical Association — a health care hat trick that a top researcher at Yale called "jaw-dropping."
Is this a perfect program? No. It could be improved. But Medicare has undeniably made us a more civilized nation, where old people don't die in pain without needed care. It's even become a model for private insurers, helping the whole health care system find better ways of providing treatment.
So there's a much larger lesson in this 50th anniversary, in how to solve major problems in our country: That even with higher taxes, a government program can be an advance of the collective welfare. Of course Medicare will need adjustments to stay in good financial health. But its spending per beneficiary has consistently grown more slowly than private insurance premiums, and its administrative costs are substantially lower.
The Affordable Care Act's cost controls have also improved Medicare's financial outlook. What would really torpedo the program's finances is a repeal of Obamacare, as Republicans have called for, time and time again.
Instead, we should be expanding this success story far beyond the elderly. "Medicare for all," the same concept as Canada's single payer system, would be a more sensible answer than Obamacare, and is probably where we are headed in the end.
After all, under the Affordable Care Act, tens of millions of people will remain under-insured, and the U.S. still spends far more per capita on health care than any other nation. That's why Medicare should be expanded to cover all Americans, as Sen. Bernie Sanders has called for.
Having a single payer system would dramatically reduce costs by eliminating overhead and insurance company profits. And why should access to quality healthcare depend on who your boss is?
A single payer system was scrapped from the Obamacare policy debates because it was viewed as a political impossibility. Yet just over 50 percent of Americans say they still support the idea, including one-quarter of Republicans, according to a new poll.
Some Republican leaders, like Colin Powell, were early supporters of the concept. Others, like Sen. Marco Rubio, argue a single payer system "would completely eviscerate the quality of our health care."
But if Medicare at 50 is any evidence, it's likely to do the exact opposite.
http://www.nj.com/opinion/index.ssf/2015/08/medicare_just_turned_50_and_we_should_all_look_so.html
The Star-Ledger (Newark, N.J.), Aug. 2, 2015
Happy anniversary, Medicare. Like that Italian actress starring in the new James Bond movie, you're looking good at 50.
It's hard to believe that before this program went into effect, Ronald Reagan said that if it weren't stopped, "one of these days, you and I are going to spend our sunset years telling our children and our children's children what it once was like in America when men were free."
Yet America did not end, and we did not all become slaves. Instead, what we have is a triumph for the notion of active government. Before Medicare, about half of Americans over age 65 had no health insurance. Now, fifty years later, almost all of them do.
The program has simultaneously reduced deaths, hospital stays and costs, according to a new study from the Journal of the American Medical Association — a health care hat trick that a top researcher at Yale called "jaw-dropping."
Is this a perfect program? No. It could be improved. But Medicare has undeniably made us a more civilized nation, where old people don't die in pain without needed care. It's even become a model for private insurers, helping the whole health care system find better ways of providing treatment.
So there's a much larger lesson in this 50th anniversary, in how to solve major problems in our country: That even with higher taxes, a government program can be an advance of the collective welfare. Of course Medicare will need adjustments to stay in good financial health. But its spending per beneficiary has consistently grown more slowly than private insurance premiums, and its administrative costs are substantially lower.
The Affordable Care Act's cost controls have also improved Medicare's financial outlook. What would really torpedo the program's finances is a repeal of Obamacare, as Republicans have called for, time and time again.
Instead, we should be expanding this success story far beyond the elderly. "Medicare for all," the same concept as Canada's single payer system, would be a more sensible answer than Obamacare, and is probably where we are headed in the end.
After all, under the Affordable Care Act, tens of millions of people will remain under-insured, and the U.S. still spends far more per capita on health care than any other nation. That's why Medicare should be expanded to cover all Americans, as Sen. Bernie Sanders has called for.
Having a single payer system would dramatically reduce costs by eliminating overhead and insurance company profits. And why should access to quality healthcare depend on who your boss is?
A single payer system was scrapped from the Obamacare policy debates because it was viewed as a political impossibility. Yet just over 50 percent of Americans say they still support the idea, including one-quarter of Republicans, according to a new poll.
Some Republican leaders, like Colin Powell, were early supporters of the concept. Others, like Sen. Marco Rubio, argue a single payer system "would completely eviscerate the quality of our health care."
But if Medicare at 50 is any evidence, it's likely to do the exact opposite.
http://www.nj.com/opinion/index.ssf/2015/08/medicare_just_turned_50_and_we_should_all_look_so.html
Thoughts on Medicare’s 50th Birthday
By Emily Kirchner
The Billfold, July 30, 2015
“What the patient really needs is better insurance.”
The physician said it abruptly, matter-of-factly. Her comment was not meant to evoke empathy in the rest of the medical team. She stated it like a diagnosis.
The recommended care was out of the question because of the patient’s insurance. Two seconds later, the discussion had moved on—how to address our patient’s other medical problems, or maybe when the patient could be discharged from the hospital.
I, the lowly third-year medical student, was still stuck on the doctor’s words: “What the patient really needs is better insurance.”
Today, Medicare turns 50.
Medicare, the federal health insurance program that insures adults age 65 and older as well as younger people with permanent disabilities, currently covers 55 million Americans—that’s 17 percent of the population.
Before Medicare, senior citizens delayed or forewent medical attention. In 1959, a retired Detroit autoworker named John Barclay described why for the Senate Subcommittee on Problems of the Aging or Aged :
The 1963 Survey of the Aged concluded that “Many aged persons never recover from the economic effects of a single hospital episode. Unfortunately, the heaviest burden is likely to fall on those with the least resources. Those with insurance are better able to absorb the blow than those without such protection, but even for the insured there is no present guarantee against dependency in old age caused by catastrophic medical expenses.”
Prior to Medicare, segregation policies in many hospitals legally and routinely denied African Americans and other marginalized racial minorities access to medical care. To receive Medicare reimbursements, institutions were required to see patients of all races. Government officials oversaw desegregation programs to ensure that hospitals could collect Medicare payments.
After it was signed into law by President Johnson in 1965, Medicare enrolled 19 million seniors and covered their 1966 medical expenses for a cool $867 million in today’s dollars. (To put that in perspective, it took over $6 billion for enrollment costs alone in the first year of the Affordable Care Act.) Congress extended Medicare coverage to younger individuals with permanent disabilities in the early 1970s.
And yet a half-century after this landmark legislation became law—the first step, in the eyes of its proponents, toward universal coverage under a national health insurance program—I am treating many patients whose biggest problem is not their medical diagnosis, but their insurance status.
The statistics about health care costs in the U.S. are frightening. Sixty-two percent of all personal bankruptcies in the U.S. are linked to medical bills or illness, and three-quarters of those people had health insurance when they got sick.
Even after the expansion of coverage promised by the Affordable Care Act, about 31 million people will remain uninsured in 2023. High out-of-pocket expenses, including copays, deductibles, and coinsurance, still plague tens of millions of Americans who are technically “insured” but in reality underinsured.
The U.S. spends more on health care than any other country in the world, $3 trillion annually—about 17 percent of our GDP. For all of the money that we are spending on health insurance premiums, out-of-pocket expenses, and taxes to sustain our health care system, we aren’t getting very good care. The U.S. was ranked 37th out of 191 countries in the 2000 World Health Report. We haven’t done much better in any ranking that has emerged since then.
As Medicare turns the big 5-0, it is as good a time as any to consider what our country could look like with improved, expanded Medicare for everyone—i.e. a single-payer national health program.
The Billfold, July 30, 2015
“What the patient really needs is better insurance.”
The physician said it abruptly, matter-of-factly. Her comment was not meant to evoke empathy in the rest of the medical team. She stated it like a diagnosis.
The recommended care was out of the question because of the patient’s insurance. Two seconds later, the discussion had moved on—how to address our patient’s other medical problems, or maybe when the patient could be discharged from the hospital.
I, the lowly third-year medical student, was still stuck on the doctor’s words: “What the patient really needs is better insurance.”
Today, Medicare turns 50.
Medicare, the federal health insurance program that insures adults age 65 and older as well as younger people with permanent disabilities, currently covers 55 million Americans—that’s 17 percent of the population.
Before Medicare, senior citizens delayed or forewent medical attention. In 1959, a retired Detroit autoworker named John Barclay described why for the Senate Subcommittee on Problems of the Aging or Aged :
“…the retired person must pretty much exhaust any savings he has before he can get free hospitalization. This is a constant source of worry. Many of my acquaintances will not visit a doctor for minor illness because they have no money to pay for drugs. After they exhaust their savings they go on welfare to get medical aid, but then, in many cases, it is too late.”About half of our seniors did not have hospital insurance and one in four seniors went without medical care because of cost concerns. The cost burdens of health care and hospitalization meant that the elderly were the group most likely to be living in poverty. In 1965, 1 in 3 seniors was considered poor.
The 1963 Survey of the Aged concluded that “Many aged persons never recover from the economic effects of a single hospital episode. Unfortunately, the heaviest burden is likely to fall on those with the least resources. Those with insurance are better able to absorb the blow than those without such protection, but even for the insured there is no present guarantee against dependency in old age caused by catastrophic medical expenses.”
Prior to Medicare, segregation policies in many hospitals legally and routinely denied African Americans and other marginalized racial minorities access to medical care. To receive Medicare reimbursements, institutions were required to see patients of all races. Government officials oversaw desegregation programs to ensure that hospitals could collect Medicare payments.
After it was signed into law by President Johnson in 1965, Medicare enrolled 19 million seniors and covered their 1966 medical expenses for a cool $867 million in today’s dollars. (To put that in perspective, it took over $6 billion for enrollment costs alone in the first year of the Affordable Care Act.) Congress extended Medicare coverage to younger individuals with permanent disabilities in the early 1970s.
And yet a half-century after this landmark legislation became law—the first step, in the eyes of its proponents, toward universal coverage under a national health insurance program—I am treating many patients whose biggest problem is not their medical diagnosis, but their insurance status.
The statistics about health care costs in the U.S. are frightening. Sixty-two percent of all personal bankruptcies in the U.S. are linked to medical bills or illness, and three-quarters of those people had health insurance when they got sick.
Even after the expansion of coverage promised by the Affordable Care Act, about 31 million people will remain uninsured in 2023. High out-of-pocket expenses, including copays, deductibles, and coinsurance, still plague tens of millions of Americans who are technically “insured” but in reality underinsured.
The U.S. spends more on health care than any other country in the world, $3 trillion annually—about 17 percent of our GDP. For all of the money that we are spending on health insurance premiums, out-of-pocket expenses, and taxes to sustain our health care system, we aren’t getting very good care. The U.S. was ranked 37th out of 191 countries in the 2000 World Health Report. We haven’t done much better in any ranking that has emerged since then.
As Medicare turns the big 5-0, it is as good a time as any to consider what our country could look like with improved, expanded Medicare for everyone—i.e. a single-payer national health program.
11 Maine Hospitals Penalized Under ACA Program
By PATTY WIGHT
Eleven Maine hospitals will be penalized by the federal government this year for having too many Medicare patients readmitted within a month.
It's the fourth year of the Hospital Readmissions Reduction Program, which began under the Affordable Care Act as a way to improve quality care. The penalties assessed to some Maine hospitals are going down, while others are going up.
Medicare tracks hospital readmissions for six conditions: heart attacks, heart failure, pneumonia, chronic obstructive pulmonary disease and elective hip and knee replacements. If a Medicare patient gets treated at a hospital for any of these conditions and returns through the hospital's doors within a month, there's a penalty.
"Overall I think hospitals in Maine believe that this is a good program," says Jeff Austin with the Maine Hospital Association. "It's something that Medicare and other payers should be doing. They should look at the outcomes of care, not just what the service was."
Austin says Maine's hospitals perform well compared to the rest of the nation.
The maximum penalty a hospital can receive is a 3 percent reduction in reimbursement for every Medicare patient admitted for care. The national average penalty is .6 percent. In Maine, it's .4 percent.
Maine Coast Memorial Hospital in Ellsworth saw its penalty increase for the second year in a row to just above 2 percent. Spokeswoman Patricia Patterson King says there's more to that number than meets the eye.
"Because our readmission rate has continued to go down," she says. "But it is the third year of the program, so the penalty rate increased."
The program gradually ups the ante on hospital readmissions and assesses penalties based on a three year rolling set of data. King says it will likely take another year before the numbers reflect quality improvements the hospital has implemented, which range from weekend primary care clinic hours to a new team that's revamping the discharge process.
No, Giving More People Health Insurance Doesn’t Save Money
by Margot Sanger-Katz
In 2014, an estimated nine million people became newly insured thanks to Obamacare.
There’s an oft-expressed view that getting all those people covered could actually save the health system money. The argument goes something like this: Once people have insurance, they’ll go to the doctor instead of an expensive emergency room. Or: Prevention costs far less than a serious illness down the road.
In selling the Affordable Care Act, President Obama was fond of making these sorts of arguments. “There’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse,” he said, in his big 2009 address to Congress, urging passage of the bill. “That makes sense, it saves money, and it saves lives.” The White House was careful to describe the overall financial forecast for the law — the administration said the law would slow spending growth and not reverse it. But it has also argued forcefully and repeatedly about the financial value of preventive care.
This argument for the cost savings from universal health coverage makes some intuitive sense, but it’s wrong. There’s strong evidence from a variety of sources that people who have health insurance spend more on medical care than people who don’t. It also turns out that almost all preventive health care costs more than it saves. Those facts don’t mean that giving people health insurance is a waste of money, since those dollars spent may improve their health and financial security. But there are only a few situations in which giving someone more health care will actually end up saving money.
In defense of single-payer: How it would reduce administrative waste
By Adam Gaffney, M.D.
KevinMD blog, Aug. 4, 2015
Would a single-payer national health program, at the end of the day, truly be sleeker and slimmer than our bloated and fragmented semi-private system? Not according to Dr. Michel Accad, who takes on this important single-payer talking point in his post: “Will single-payer really reduce administrative waste?”
Given that savings from reduced expenditures on billing and overhead are a core argument that single-payer advocates (myself among them) employ to advance our cause, the piece caught my eye. To quote the proposal of the Physicians’ Working Group for Single-Payer Insurance (of note, I’m active in the organization Physicians for a National Health Program [PNHP], which was behind the proposal), published in JAMA in 2003:
"Our multiplicity of insurers forces US hospitals to spend more than twice as much as Canadian hospitals on billing and administration; forces US physicians to spend vast amounts on billing; and nourishes a panoply of business consultants, coding software vendors, and other satellite business."
Had a new study been published demonstrating, contrary to all existing data, that private insurers somehow had lower administrative costs than Medicare? Had Canadian expenditures on health care administration somehow suddenly vaulted ahead of that of the United States? No, neither had come to pass (not surprisingly). In fact, Dr. Accad doesn’t really deal with any of the literature about the administrative efficiency of different types of health care systems. Instead, he employs a “Hayekian perspective” to make the argument that central economic planning is inherently inferior to an atomized free market where individual economic actors buy and sell, rationally relying on their intimate knowledge of local market circumstances. “Only in a decentralized system,” he argues, “of decision making, where price fluctuations can adjust to the reality of needs and provisions, are major gluts and shortages avoided.” (For instance, no one knows the business of bread making better than the bread maker.)
Now on the one hand, it’s a bit quixotic to invoke the political philosophy of a neoliberal economist to argue against what is essentially empirical point: that the United States spends more on health care administration than nations that have a single-payer system.
For it clearly does. One study found that the U.S. spent about three-times as much as Canada on health administration ($1,059 vs. $307 per capita, in 1999). More recently, anotherstudy found that the U.S. had the highest hospital administrative costs among eight high-income nations (an astronomical 1.43 percent of GDP spent annually on hospital administration in the U.S., as compared to 0.41 percent in Canada).
Closer to home, Medicare — a single-payer-like system for older Americans — has an administrative overhead around 2 percent, as compared to the 13.6 percent in overhead and profits of privatized Medicare Advantage, which is run by private insurers.
I could quote my favored political philosophers here to counter Accad’s quotes from Hayek, but it’s really all beside the point. As the Princeton health care economist Uwe E. Reinhardt wrote in the New York Times: “The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.”
To be fair, Dr. Accad makes a good point ridiculing the extraordinarily complex and “byzantine scheme of codification” used by Medicare (and followed by private insurers) for billing purposes. “[A] CPT code 99204-21 (new patient visit, E/M coding level 4, prolonged service) associated with ICD-9 code 786.50 (chest pain, unspecified),” he notes, “hardly conveys any real knowledge and cannot possibly be a basis on which relevant decisions can be made or value established.”
No, it can’t, but that’s not what such codes are used for: They’re used to determine reimbursement. But they don’t have to be — and that’s where the administrative savings come in.
Under a single-payer system (as PNHP’s proposals describe), hospitals would receive a global lump sum budget to pay for all operating costs; there would be no need to monitor services used by individual patients, tabulate costs, or hire debt collectors. Indeed, hospital billing could largely be eliminated from the ledgers of hospital operating expenses.
Simplified fee schedules, capitation, or salaries — without bonuses or penalties for more or less health care use — would be used to reimburse providers in the outpatient sector. The name of the game would be “[s]implicity, simplicity, simplicity!” as one prominent New Englander put it in his important defense of a national single-payer system, Walden.
http://www.pnhp.org/print/news/2015/august/in-defense-of-single-payer-how-it-would-reduce-administrative-waste
KevinMD blog, Aug. 4, 2015
Would a single-payer national health program, at the end of the day, truly be sleeker and slimmer than our bloated and fragmented semi-private system? Not according to Dr. Michel Accad, who takes on this important single-payer talking point in his post: “Will single-payer really reduce administrative waste?”
Given that savings from reduced expenditures on billing and overhead are a core argument that single-payer advocates (myself among them) employ to advance our cause, the piece caught my eye. To quote the proposal of the Physicians’ Working Group for Single-Payer Insurance (of note, I’m active in the organization Physicians for a National Health Program [PNHP], which was behind the proposal), published in JAMA in 2003:
"Our multiplicity of insurers forces US hospitals to spend more than twice as much as Canadian hospitals on billing and administration; forces US physicians to spend vast amounts on billing; and nourishes a panoply of business consultants, coding software vendors, and other satellite business."
Had a new study been published demonstrating, contrary to all existing data, that private insurers somehow had lower administrative costs than Medicare? Had Canadian expenditures on health care administration somehow suddenly vaulted ahead of that of the United States? No, neither had come to pass (not surprisingly). In fact, Dr. Accad doesn’t really deal with any of the literature about the administrative efficiency of different types of health care systems. Instead, he employs a “Hayekian perspective” to make the argument that central economic planning is inherently inferior to an atomized free market where individual economic actors buy and sell, rationally relying on their intimate knowledge of local market circumstances. “Only in a decentralized system,” he argues, “of decision making, where price fluctuations can adjust to the reality of needs and provisions, are major gluts and shortages avoided.” (For instance, no one knows the business of bread making better than the bread maker.)
Now on the one hand, it’s a bit quixotic to invoke the political philosophy of a neoliberal economist to argue against what is essentially empirical point: that the United States spends more on health care administration than nations that have a single-payer system.
For it clearly does. One study found that the U.S. spent about three-times as much as Canada on health administration ($1,059 vs. $307 per capita, in 1999). More recently, anotherstudy found that the U.S. had the highest hospital administrative costs among eight high-income nations (an astronomical 1.43 percent of GDP spent annually on hospital administration in the U.S., as compared to 0.41 percent in Canada).
Closer to home, Medicare — a single-payer-like system for older Americans — has an administrative overhead around 2 percent, as compared to the 13.6 percent in overhead and profits of privatized Medicare Advantage, which is run by private insurers.
I could quote my favored political philosophers here to counter Accad’s quotes from Hayek, but it’s really all beside the point. As the Princeton health care economist Uwe E. Reinhardt wrote in the New York Times: “The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.”
To be fair, Dr. Accad makes a good point ridiculing the extraordinarily complex and “byzantine scheme of codification” used by Medicare (and followed by private insurers) for billing purposes. “[A] CPT code 99204-21 (new patient visit, E/M coding level 4, prolonged service) associated with ICD-9 code 786.50 (chest pain, unspecified),” he notes, “hardly conveys any real knowledge and cannot possibly be a basis on which relevant decisions can be made or value established.”
No, it can’t, but that’s not what such codes are used for: They’re used to determine reimbursement. But they don’t have to be — and that’s where the administrative savings come in.
Under a single-payer system (as PNHP’s proposals describe), hospitals would receive a global lump sum budget to pay for all operating costs; there would be no need to monitor services used by individual patients, tabulate costs, or hire debt collectors. Indeed, hospital billing could largely be eliminated from the ledgers of hospital operating expenses.
Simplified fee schedules, capitation, or salaries — without bonuses or penalties for more or less health care use — would be used to reimburse providers in the outpatient sector. The name of the game would be “[s]implicity, simplicity, simplicity!” as one prominent New Englander put it in his important defense of a national single-payer system, Walden.
http://www.pnhp.org/print/news/2015/august/in-defense-of-single-payer-how-it-would-reduce-administrative-waste
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