Editor's Note:
The following study has just been released. Click on the hot-link at the end of the Abstract to see the full study.
-SPC
ECONOMIC ANALYSIS OF THE HEALTHY CALIFORNIA SINGLE- PAYER HEALTH CARE PROPOSAL
(SB-562)
May 2017
By
Dr. Robert Pollin
Distinguished Professor of Economics and Co-Director, Political Economy Research Institute (PERI) University of Massachusetts-Amherst
Dr. James Heintz
Andrew Glyn Professor of Economics and Associate Director PERI University of Massachusetts-Amherst
Dr. Peter Arno
Senior Fellow and Director of Health Policy Research, PERI University of Massachusetts-Amherst
Dr. Jeannette Wicks-Lim Assistant Research Professor, PERI University of Massachusetts-Amherst
We are grateful for the contributions to this project and comments on a preliminary draft by Amal Ahmad, Michael Ash, Megan Baier, Brian Callaci, Shouvik Chakraborty, Don DeMoro, Jerry Epstein, Jerry Friedman, David Himmelstein, Dan Johnston, Jim Kahn, Ian Lewis, Michael Lighty, and Stephanie Woolhandler. We also appreciate the financial support for this project from the California Nurses Association. All errors remain our own.
(SB-562)
May 2017
By
Dr. Robert Pollin
Distinguished Professor of Economics and Co-Director, Political Economy Research Institute (PERI) University of Massachusetts-Amherst
Dr. James Heintz
Andrew Glyn Professor of Economics and Associate Director PERI University of Massachusetts-Amherst
Dr. Peter Arno
Senior Fellow and Director of Health Policy Research, PERI University of Massachusetts-Amherst
Dr. Jeannette Wicks-Lim Assistant Research Professor, PERI University of Massachusetts-Amherst
We are grateful for the contributions to this project and comments on a preliminary draft by Amal Ahmad, Michael Ash, Megan Baier, Brian Callaci, Shouvik Chakraborty, Don DeMoro, Jerry Epstein, Jerry Friedman, David Himmelstein, Dan Johnston, Jim Kahn, Ian Lewis, Michael Lighty, and Stephanie Woolhandler. We also appreciate the financial support for this project from the California Nurses Association. All errors remain our own.
Pollin, Heintz, Arno and Wicks-Lim, “Economic Analysis of Healthy California” May 2017
Page 1
ECONOMIC ANALYSIS OF THE HEALTHY CALIFORNIA SINGLE- PAYER HEALTH CARE PROPOSAL
(SB-562)
By
Robert Pollin, James Heintz, Peter Arno, and Jeannette Wicks-Lim Department of Economics and Political Economy Research Institute (PERI) University of Massachusetts-Amherst
May 2017
JEL CODES: I11, I13, I14, H71ABSTRACT: The State of California is considering a bill to create a statewide single-payer health care system. This study provides an economic analysis of the proposed measure, The Healthy California Act (SB-562). The study includes four major sections: 1) Cost Estimate of Universal Health Care Coverage in California; 2) Cost Saving Potential under Healthy California; 3) Financing Healthy California; and 4) Impact on Individual California Families and Businesses. The primary goal of Healthy California is to provide high-quality health care to all California residents, including those who are presently either uninsured or underinsured. The study finds that the providing full universal coverage would increase overall system costs by about 10 percent, but that the single payer system could produce savings of about 18 percent. The study thus finds that the proposed single-payer system could provide decent health care for all California residents while still reducing net overall costs by about 8 percent relative to the existing system. We propose two new taxes to generate the revenue required to offset the loss of private insurance spending: a gross receipts tax of 2.3 percent and a sales tax of 2.3 percent, along with exemptions and tax credits for small business owners and low-income families to promote tax-burden equity. Within this proposed tax framework, Healthy California can achieve both lower costs and greater equity in the provision of health care in California for both families and businesses of all sizes. Thus, net health care spending for middle-income families will fall by between 2.6 – 9.1 percent of income. Small firms that have been providing private health care coverage for their workers will experience a 22 percent decline in their health-care costs as a share of payroll. The small firms that have not provided coverage will still make zero payments for health care under Healthy California through their gross receipts tax exemption. Medium-sized firms will see their health care costs fall by between 6.8 and 13.4 percent as a share of payroll relative to the existing system. Firms with up to 500 employees will experience a 5.7 percent fall, and the largest firms, with over 500 employees, will experience a 0.6 percent fall as a share of payroll relative to the existing system.
http://www.healthycaliforniaact.org/wp-content/uploads/Pollin-Economic-Analysis-SB-562.pdf
Page 1
ECONOMIC ANALYSIS OF THE HEALTHY CALIFORNIA SINGLE- PAYER HEALTH CARE PROPOSAL
(SB-562)
By
Robert Pollin, James Heintz, Peter Arno, and Jeannette Wicks-Lim Department of Economics and Political Economy Research Institute (PERI) University of Massachusetts-Amherst
May 2017
JEL CODES: I11, I13, I14, H71ABSTRACT: The State of California is considering a bill to create a statewide single-payer health care system. This study provides an economic analysis of the proposed measure, The Healthy California Act (SB-562). The study includes four major sections: 1) Cost Estimate of Universal Health Care Coverage in California; 2) Cost Saving Potential under Healthy California; 3) Financing Healthy California; and 4) Impact on Individual California Families and Businesses. The primary goal of Healthy California is to provide high-quality health care to all California residents, including those who are presently either uninsured or underinsured. The study finds that the providing full universal coverage would increase overall system costs by about 10 percent, but that the single payer system could produce savings of about 18 percent. The study thus finds that the proposed single-payer system could provide decent health care for all California residents while still reducing net overall costs by about 8 percent relative to the existing system. We propose two new taxes to generate the revenue required to offset the loss of private insurance spending: a gross receipts tax of 2.3 percent and a sales tax of 2.3 percent, along with exemptions and tax credits for small business owners and low-income families to promote tax-burden equity. Within this proposed tax framework, Healthy California can achieve both lower costs and greater equity in the provision of health care in California for both families and businesses of all sizes. Thus, net health care spending for middle-income families will fall by between 2.6 – 9.1 percent of income. Small firms that have been providing private health care coverage for their workers will experience a 22 percent decline in their health-care costs as a share of payroll. The small firms that have not provided coverage will still make zero payments for health care under Healthy California through their gross receipts tax exemption. Medium-sized firms will see their health care costs fall by between 6.8 and 13.4 percent as a share of payroll relative to the existing system. Firms with up to 500 employees will experience a 5.7 percent fall, and the largest firms, with over 500 employees, will experience a 0.6 percent fall as a share of payroll relative to the existing system.
http://www.healthycaliforniaact.org/wp-content/uploads/Pollin-Economic-Analysis-SB-562.pdf
by Andy Slavic - Washington Post - May 26, 2017
This week the Trump administration managed to impose a massive tax increase on middle-income families beginning in 2018. You could be excused for missing this story if you were focusing instead on President Trump’s draconian budget or Republican efforts to take away health care from tens of millions of people. But, indeed, on Monday, the Trump Health Care Tax was born.
The new tax, 19 percent or more of premiums, will be added on top of the cost of policies purchased through the individual-market health insurance exchanges. It is a result of Trump’s decision to create as much chaos as possible in the health-care market — in this case by not committing to continue to reimburse billions of dollars of cost-sharing payments owed to insurers just as they set prices for next year. And the president couldn’t have been more clear about why he’s imposing this tax: He thinks disrupting the Affordable Care Act exchanges, which serve more than 12 million Americans, will force Democrats to agree to proposals in his budget and in the House health-care bill that would take coverage away from tens of millions.
There is something even more troubling about this tax. In an unusual twist, it will not be paid to the government but to insurance companies. That’s because, under the ACA, 83 percent of people who are insured on the exchanges are protected from premium increases by tax credits provided by the government. If premiums go up, government payments to insurers go up with them. Trump is even willing to sacrifice federal dollars to sink the ACA.
But let’s take a step back. This all started as a cynical ploy by Congress that got further out of hand when Trump won the presidency. In between more than 50 votesto adjust or outright repeal the ACA, Congress used a number of budget tricks and lawsuits to undermine the law. The effect was to eliminate billions of dollars in funding designed to keep rates lower, prevent millions of Americans eligible for Medicaid from accessing coverage and force a dozen co-ops designed to increase competition out of business.
Even with these headwinds, the exchanges are far from failing. Four million new people were added during last year’s open enrollment. Insurers have consistently reported profitability, putting the market on track for lower premium increases and more competition in 2018. Independent analysts at Standard & Poor’s affirmed, “If it remains business as usual, we expect 2018 premiums to increase at a far lower clip than in 2017.” But as bipartisan insurance commissioners and the nonpartisan Congressional Budget Office just confirmed, Trump’s tampering is badly destabilizing things.
When Trump became president, many of us wondered publicly whether the administration would at least carry out the law in ways that served the interests of the American public. We didn’t have to wonder for long.
Trump made clear right away what his strategy was. “The best thing we can do, politically speaking, is let Obamacare explode,” he said from the Oval Office. And Trump and his team proceeded to pour the oil and light the match.
Step one was to stop outreach during the week of open enrollment when the biggest number of young and healthy people get covered. Trump quickly took steps to stop enforcing the ACA’s individual mandate and adopted regulations increasing paperwork for consumers, reducing tax credits that help people pay premiums and shortening the period for consumers to sign up. And Trump’s budget indicates he is planning more cuts to outreach and consumer assistance. All of these steps reduce coverage and increase costs.
Worst of all for consumers, Trump’s move this week may be the last straw for insurers. Faced with an administration that has made clear it will do what it can to cause the exchanges to fail, insurers are questioning whether they can continue to participate. The administration is proving that the one thing it can succeed at is failure.
Remarkably, all of this is in service of something even worse: a plan to take health-care from 23 million Americans, raise costs for tens of millions more and eliminate access to care in large parts of the country.
With the CBO score of the House health-care bill out, it’s now time for senators to cry foul. Foul on a secretive process; foul on a bill that hurts millions of people; foul on ripping apart Medicaid coverage for kids, seniors and people with disabilities; and foul on taking away substance-abuse treatment and mental-health care from millions of people who need it. For a bill that could impact the course of Americans for generations to come, this is no time to “voice concerns” or “discuss challenges.” And it’s no time to act as a ratifying body for a president who doesn’t have the best interests of its constituents in mind.
The only way to alter the self-fulfilling, destructive course that Trump has set us on is for senators to publicly say that they will never vote for a bill that robs people of coverage and to tell the administration to undo the Trump tax, stop the antics that are driving instability in the exchanges, and do the real work of improving Americans’ access to high-quality health care.
The GOP masterminds behind the Obamacare sabotage
by Dana Milbank - Washington Post - May 14, 2017
President Trump says, “ObamaCare is imploding and will only get worse,” and he should know: He’s the one who placed the explosives under Obamacare’s foundation.
House Energy and Commerce Committee Chairman Greg Walden (R-Ore.), co-author of the GOP health-care bill, says of Obamacare: “We’ve arrived at the scene of a pretty big wreck.” And he, too, should know: He’s the one who dumped oil and tire spikes on the road.
This is some prodigious cynicism, even by Washington standards. In the past couple of months, the Trump administration and the new GOP Congress have done all they could to undermine Obamacare, and now that their efforts are beginning to succeed they’re claiming Obamacare is collapsing under its own weight.
The Affordable Care Act may or may not be in the death spiral Republicans have long craved, but it has definitely deteriorated since the Trump administration and the new GOP Congress assumed power. And no wonder: They sabotaged it.
While defending the GOP health-care plan on March 9, House Speaker Paul Ryan said that Obamacare is in a "death spiral" because healthy people are forced to pay for the people who are sick. (The Washington Post)
They withdrew TV and online advertising encouraging people to sign up for coverage during the crucial period before the deadline. The White House issued an executive order and took other actions that strongly implied it would no longer enforce the “individual mandate” requiring people to sign up for coverage. And the constant promises of imminent repeal have spooked both insurers and individuals from participating.
Trump and congressional allies have, in short, created a self-fulfilling expectation of collapse. “What’s happened since the Trump administration took power is tremendous uncertainty about the future of the ACA,” said Larry Levitt of the Kaiser Family Foundation, which conducts health-care research but takes no position on the law. “For people who were on the fence about participating, the future uncertainty pushes them over. Many insurers, meanwhile, were willing to suffer short-term losses with the promise of future profits, but if the ACA’s future is uncertain there’s little reason to stick around.”
Now opponents of the law are using the wreckage they created to justify their own plan, which the nonpartisan Congressional Budget Office projects would cause 24 million more people to go without coverage than would have under Obamacare. It would dramatically cut coverage for poor and middle-class Americans, increase costs sharply for older Americans and give hundreds of billions in tax breaks to the wealthy and corporate interests. There would actually be more people without health insurance under the GOP plan than there were before Obamacare.
Confronted with the task of selling this cruel plan to the public, the administration and its allies are doing what they’ve done before: attempting to deny reality. They’re seeking to discredit the CBO, perhaps hoping people won’t recall that Republicans picked the man who runs it: Keith Hall, a conservative former George W. Bush administration economist .
Worse, they’re perpetuating the canard that Obamacare was collapsing on its own, leaving them no choice but to repeal it. Walden argued that “if we don’t intercede now, fewer will have access to insurance — period.” Ryan said the “law is collapsing” and asked: “Are we going to stay with Obamacare and ride out the status quo?” And Trump floated a fallback plan: pass nothing, let Obamacare fail and blame Democrats for it.
But they aren’t “letting” Obamacare fail; they’re causing it. As I wrote six months ago, Obamacare extended coverage to more than 20 million, and it works well for most. Slightly more than 2 million people, mostly in rural areas, don’t have competitive plans to choose from and are seeing huge premium increases. Congress could have fixed that by giving insurers incentives to participate in those markets. Instead, Republican lawmakers refused to help insurers and then crowed when insurers complained.
Last month, Aetna chief executive Mark Bertolini said Obamacare was in a “death spiral” — and Trump gleefully tweeted about it. But the CBO, in its report Monday, said the exchanges would remain “stable in most areas” if the current law were left intact, because subsidies and the individual mandate would sustain demand.
At a listening sessions at the White House, March 13, President Trump said the best thing Republicans in Congress "could do politically is wait a year," to alter the Affordable Care Act, but that that would be "the wrong thing to do for the country."(The Washington Post)
The problem is that the administration has been working aggressively to suppress demand, by suggesting the mandate to buy insurance won’t be enforced and by ending government attempts to enroll people. A Brookings Institution analysis said a decline in enrollment for 2017 likely wasn’t caused by premium increases. Joshua Peck, former chief marketing officer for HealthCare.gov, estimated in a post on Medium that Trump deterred 480,000 people from signing up.
Obamacare isn’t failing; it’s being destroyed. And those committing the sabotage ought to own whatever happens next, whether they pass a replacement or not.
The US healthcare system is at a dramatic fork in the road
by Adam Gaffney - The Guardian - May 25, 2017
The US healthcare system – and with it the health and welfare of millions – is poised on the edge of a knife. Though the fetid dysfunction and entanglements of the Trump presidency dominate the airwaves, this is an issue that will have life and death consequences for countless Americans.
The Congressional Budget Office’s (CBO) dismal “scoring” of the revised American Health Care Act (AHCA) on Wednesday made clear just how dire America’s healthcare prospects are under Trump’s administration. But while the healthcare debate is often framed as a choice between Obamacare and the new Republican plan, there are actually three healthcare visions in competition today. These can be labelled healthcare past, healthcare present, and healthcare future.
Let us begin with healthcare past, for the dark past is precisely where Republicans are striving to take us with the AHCA. The bill – narrowly passed by the House on 4 May – is less a piece of healthcare “reform” than a dump truck sent barreling at high speed into the foundation of the healthcare safety net.
Wednesday’s CBO score reflects the modifications made to the AHCA to pacify the hard-right Freedom Caucus, changes that allowed states to obtain waivers that would relieve health insurers of the requirement that they cover the full spectrum of “essential healthcare benefits”, or permit them to charge higher premiums to those guilty of the misdemeanor of sickness, all purportedly for the goal of lowering premiums.
In fairness, the CBO report did find that these waivers would bring down premiums for non-group plans. This, however, was not the result of some mysterious market magic, but simply because, as the CBO noted, covered benefits would be skimpier, while sicker and older people would be pushed out of the market.
In some states that obtained waivers, “over time, less healthy individuals … would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all”. Moreover, out-of-pocket costs would rise for many, for instance whenever people needed to use services that were no longer covered – say mental health or maternity care.
Much else, however, stayed the same from the previous reports. Like the last AHCA, this one would cut more than $800bn in Medicaid spending over a decade, dollars it would pass into the bank accounts of the rich in the form of tax cuts, booting about 14 million individuals out of the program in the process. And overall, the new AHCA would eventually strip insurance from 23 million people, as compared to the previous estimate of 24 million.
It’s worth noting here that Trump’s budget – released Tuesday – proposed additional Medicaid cuts in addition of those of the AHCA, which amounted to a gargantuan $1.3tn over a decade, according to the Center on Budget and Policy Priorities.
The tax plan and budget – best characterized as a battle plan for no-holds-barred top-down class warfare drawn up by apparently innumerate xenophobes – would in effect transform the healthcare and food aid of the poor into bricks for a US-Mexico border wall, guns for an already swollen military, and – more than anything – a big fat payout to Trump’s bloated billionaire and millionaire cronies.
What becomes of this violent agenda now depends on Congress – and on the grassroots pressure that can be brought to bear upon its members.
But assuming the AHCA dies a much-deserved death – quite possible given the headwinds it faces in the Senate – we will still have to contend with healthcare present.
Last week, the Centers for Disease Control released 2016 results from the National Health Interview Survey, giving us a fresh glimpse of where things stand today. And on the one hand, the news seemed good: the number of uninsured people fell from 48.6 to 28.6 million between 2010 and 2016.
On the other hand, it revealed utter stagnation: an identical number were uninsured in 2016 as compared with 2015, with about a quarter of those with low incomes uninsured last year (among non-elderly adults). It also suggested that the value of insurance is declining, with “high-deductible health plans” rapidly becoming the rule and not the exception: for the privately insured under age 65, 39.4% had a high-deductible in 2016, up from 25.3% in 2010.
Healthcare present, therefore, is an unstable status quo: an improvement from healthcare past, no doubt, but millions remain uninsured and out-of-pocket health costs continue to squeeze the insured.
Which takes us to the third vision, that of healthcare future. As it happens, another recent development provided a brief glimmer of hope for that vision. As the Hillreported, the Democratic congressman John Conyers held a press conference yesterday (Physicians for a National Health Program, in which I am active, participated) to announce that his universal healthcare bill – the “Expanded & Improved Medicare For All Act” – had achieved 111 co-sponsors, amounting to a majority of the House Democratic Caucus and the most in the bill’s history.
This bill – like other single-payer proposals – is the precise antithesis of Paul Ryan’s AHCA. Rather than extract coverage from millions to provide tax breaks for the rich, it would use progressive taxation to provide first-dollar health coverage to all.
Which of these three visions will win out is uncertain, but the outcome of the contest will have a lasting impact on the country. We can only hope that the thuggish, rapacious vision championed by Trump and his administration does not prevail.
C.B.O. Has Clear Message About Losers in House Health Bill
by Margot Sanger-Katz - NYT - May 25, 2017
The Senate now has a clearer sense of who would win and lose under the health bill the House sent them. It also got a startlingly direct message from government analysts about how destabilizing one of the House ideas could be.
The Congressional Budget Office published its assessment of the House health bill on Wednesday, and warned that a last-minute amendment made to win conservative votes would result in deeply dysfunctional markets for about a sixth of the population. In those places, insurance would fail to cover important medical services, and people with pre-existing illnesses could be shut out of coverage, the budget office said.
It found that about half the country would face thinner coverage for people who buy their own insurance, as it would be unlikely to include mental health and addiction treatment services, maternity care or rehabilitation services. Medical deductibles would also increase.
As in the original version of the bill, winners would include people who are young, healthy and earn higher incomes. They would be better off, assuming they didn’t develop serious health problems. The bill makes big cuts to taxes on payroll and investment income for those earning more than $200,000, and provides more subsidies to buy insurance for people earning between about $50,000 and $150,000. On average, premiums for health plans people buy for themselves would decline over the 10-year period, as coverage becomes less generous.
Losers would include poor Americans who use Medicaid, as 14 million fewer people would be in the program after 10 years. Poorer and older Americans who buy their own insurance, particularly those in both categories, would also lose coverage. The cost of insurance for a 64-year-old earning about $27,000 would increase to more than $13,000, from $1,700 under the Affordable Care Act, even for states that pared back insurance rules.
The report was sharply critical of the idea that sicker patients could be protected in a system that allowed insurers to charge them higher premiums. In the minority of states it predicted would pursue broad waivers of Obamacare’s insurance regulations, the office said that sick customers would face far higher prices and many would be priced out of the market altogether.
“Over time, less healthy individuals (including those with pre-existing or newly acquired medical conditions) would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all,” the report said.
Republicans have argued that the bill’s waivers would not hurt insurance access for people with pre-existing health conditions, thanks to state funding devoted to high-risk pools subsidizing their coverage. The C.B.O. essentially dismissed that idea, saying that the state funds would not be enough to protect sick customers from huge bills.
Premiums for healthier customers would go down in those states, though some people might end up buying plans so flimsy that the budget office said they didn’t count as insurance. A second set of states that pursued more limited waivers of insurance rules could enjoy premiums some 20 percent lower than expected under the Affordable Care Act in exchange for more limited benefits, it said.
Republicans have argued that letting states waive the insurance rules would lead to a more robust and attractive insurance market. The C.B.O. disagreed with that argument, too. It said that markets in the states with waivers would become smaller than under an earlier version of the bill that did not include the waivers. In response, more employers would offer workers coverage, it said, since they would see individual coverage as an unattractive alternative.
Over all, the budget office found that the law would mean 23 million more peoplewould lack insurance than under current law, a slight decrease from its assessment of an earlier draft that did not include the waivers. But it noted that the group without insurance would not be precisely the same as it would under the earlier bill. The uninsured would be more likely to be the kind of patients who rely on health insurance most.
Does the health care bill passed by the House live up to Republicans’ promises? We checked the facts.
By DAVE HORN, NATALIE RENEAU and MARK SCHEFFLER on May 25, 2017. Photo by Stephen Crowley/The New York Times. Watch in Times Video »
The Medicaid changes make up the bulk of the coverage reductions in the estimate. The bill reduces funding for a new group of poor adults who were covered by most states under the Affordable Care Act, but it also reduces funding to states for children, disabled adults, poor elderly Americans and parents of young children, who have long been covered by Medicaid as well.
For those who buy their own insurance, the bill’s changes to government subsidies would mean huge price increases for many older people, particularly those with low incomes living in expensive markets.
The budget office’s hardest task was estimating how many states would waive their insurance rules and in what ways. Such judgments take guesswork about the choices state officials will make, and they almost certainly involve some degree of error. So it’s reasonable to see its one-sixth estimate as fuzzy. But the budget office, which consults with state governments in preparing its estimates, was certain that at least some states would pursue such waivers. And in the states that did, the market would become inhospitable to the sick.
Senate leaders, aware of the criticism already leveled at the House bill, say they are writing their own bill. This analysis is likely to offer guidance in where they will and won’t want to go.
Trumpcare’s Cruelty, Reaffirmed
Editorial Board - NYT - May 27, 017
Any doubts about the senseless cruelty underlying the health care agenda put forward by President Trump and Congress were put to rest last week by two government documents. The fantasy that Mr. Trump intends to fight for the health of long-suffering working people should be similarly interred.
One document was the administration’s budget. The other was the Congressional Budget Office’s detailed analysis of the Trumpcare bill passed by the House earlier this month. The budget proposes billions of dollars in cuts to programs that fund research into new cures, protect the country from infectious diseases and provide care to the poor, the elderly and people with disabilities. The analysis said that Trumpcare — formally the American Health Care Act — would rob 23 million people of health insurance while leaving millions of others with policies that offer little protection from major medical conditions. All of this would be done in service of huge tax cuts for the richest Americans.
Consider the fate of Medicaid, a program that provides health insurance to more than 74 million people, among them 60 percent of nursing home residents and millions of people with disabilities. Trumpcare would slash Medicaid spending by $834 billion over 10 years, according to the C.B.O. The president’s budget would take a further $610 billion from the program under the pretext of reforming it. Taken together, this amounts to an estimated 45 percent reduction by 2026 compared with current law, the Center on Budget and Policy Priorities says.
Trumpcare, the C.B.O. says, would make it impossible for millions of people with pre-existing conditions like heart disease or diabetes to buy health insurance. That’s because the law would let states waive many of the requirements in the Affordable Care Act, the 2010 law known as Obamacare. It would also greatly increase the cost of insurance policies for older and poorer people, no matter where they live. By way of illustration, a 64-year-old earning $26,500 a year and living in a state not seeking waivers would have to pay $16,100 a year for coverage, nearly 10 times as much as she would under Obamacare.
The House speaker, Paul Ryan, would argue that Trumpcare is an improvement over the A.C.A. because it would lower premiums for many people, especially the young and healthy. The C.B.O. says he’s right, noting that plans would include fewer benefits. In effect, Mr. Ryan and his colleagues are patting themselves on the back for lowering health insurance premiums by taking away people’s access to medical services.
Apart from inflicting hardship, what would Trumpcare and the president’s budget achieve? Mainly a windfall for wealthy families. The administration has not provided enough information to make good estimates, so it’s hard to say how much the rich would gain from the budget, although it would be a lot. We know more about Trumpcare. The Tax Policy Center estimates that almost all of the tax cuts in that legislation would flow to the rich: The top 1 percent would take home an average of $37,200 a year, while people with middle-class incomes would get a measly $300.
The White House and Republicans in the House of Representatives agree on Trumpcare and are aligned on many parts of the president’s budget. The Senate, however, is still up for grabs. A handful of more moderate senators like Susan Collins of Maine, Lisa Murkowski of Alaska, Shelley Moore Capito of West Virginia, Lamar Alexander of Tennessee and Rob Portman of Ohio are all that stand in the way of this retrograde assault on American health care.
In ‘Drop Out Club,’ desperate doctors counsel each other on quitting the field
by Sarah Kwon - STAT - May
“Burned out cardiac surgeon seeks opportunities or empathy,” one message reads. “I feel stuck,” another confides. A third says simply, “I don’t want to be a doctor anymore!”
The posts come in from across the globe, each generating its own thread of commiseration and advice. “I just wanted to reach out and let you know I feel your pain,” a doctor-turned-MBA replies to one surgeon. “Your story is so similar to mine,” a respondent marvels to a fellow trainee. “Before you quit, think about what motivated you in the first place, and what changed,” cautions an emergency physician to an early-career doctor.
This networking site, and others like it, is where doctors come to discuss the verboten: leaving the medical profession. There are posts from medical school students questioning their career path, and from trainees unable to find a full-time job. And predominantly there are posts by physicians who, after years in the field, are desperate, at the end of their rope, looking for a way out.
Some of them are suffering from what doctors know simply by the shorthand of burnout — loss of enthusiasm for work, feelings of cynicism, and a low sense of personal accomplishment. Burnout is on the rise among doctors: One study found that over half of all US physicians are experiencing it, for reasons such as long work hours and an increasing burden of bureaucratic tasks. With no nationally available, peer-reviewed data on physician turnover, it’s not clear precisely how many doctors leave because of burnout.
But more than most, doctors may find a career change daunting. There’s the time invested — four years of medical school and as many as nine more years of specialty training — and perhaps a lucrative salary that’s hard to leave behind. Doctors’ specialized skills may seem less obviously transferrable to another field. And the perceived virtuousness of a career in medicine may make some feel guilty to consider leaving.
So they come to Drop Out Club to air their worries, seek solace from those who’ve made the leap — and just feel less alone. The site’s forum is where they ask for and offer advice; there’s also a job board where employers post positions, and members can converse privately in individual messaging. Among its 37,000 members, about half are doctors, said Heather Clisby, a company spokesperson.
Two recently established Facebook groups aim to meet a similar need. Since their founding last year, Physician Nonclinical Career Hunters and PMG Physicians and Non-Clinical Careers have amassed nearly 3,000 members combined. (The latter group is visible only to those who are invited by current members.)
“The frustration with medicine is fueling our growth,” said Dr. Laura Fijolek McKain, the founder of Physician Nonclinical Career Hunters. “Doctors are frustrated with how much time they’re spending on paperwork and other activities that have little to do with patient care.”
And on the web they can find what is often hard to come by in daily life: a ready-made community of people grappling with the same questions.
Finding solidarity online
Dr. Maryam Shapland initially loved her job as an emergency physician. It was busy, exciting, and important. But after a few years, the work felt less exciting and more stressful. She reduced her work hours, but still felt worn out all the time. Then, seven years into her practice, one of her patients sued her.
Devastated, she decided to start searching for a new career.
At first, she felt guilty for wanting to leave. “People thought I made good money, helped people, and had a nice life,” she said. “All the checkboxes were marked off, so what did I have to complain about?”
Then she found Drop Out Club. She quickly became a “lurker” on the member forum, reading messages posted by others. “Reading all these stories of people trying to leave made me realize I wasn’t crazy for being unhappy in this career I had worked so hard for,” she said.
Shapland hired a career coach, started actively using LinkedIn, and in 2015 was hired as a medical director at a life insurance company. “Leaving medicine felt like giving up a big part of my identity,” she said. “But I’m proud of what I do now. Most importantly, I’m happy and thriving.”
And now that’s a message she’s hoping to transmit to others in her shoes. In retrospect, Shapland said, Drop Out Club suffered from too many mentees and not enough mentors. Once she made it to the other side, she decided to regularly provide career advice — and her email address — on the forum. Since her first post in 2015, she said she gets approximately one new person a week emailing her to seek advice on leaving medicine.
Grappling with leaving
One of those was Dr. Ashwini Zenooz, a radiologist who had practiced for over 10 years. Surrounded by colleagues who seemingly loved their jobs, Zenooz felt that she couldn’t discuss wanting to leave medicine with them. Finding Drop Out Club “was a way to extend my network to people closer to my needs,” she said. Browsing the forum, Zenooz saw Shapland’s email address and sent her a note — which became an extended email conversation, and, eventually, an hourlong phone call one afternoon. Zenooz ultimately took a job in health policy.
Many of the inquiries Shapland receives are related to financial concerns. Medical education can leave doctors with up to a half million dollars of debt, making many feel tied to a high-paying job. Others struggle with the “golden handcuffs” of medicine, unable to leave lifestyles supported by comfortable incomes.
Fear of the unknown can also be daunting, especially to those who have spent their entire careers in medicine. “Leaving behind the familiar and going into the unknown was scary at first. I had been doing this job for decades, and there was a certain comfort level with that,” says Dr. Joshua Schechtel, a hospitalist who left clinical practice this year.
Dr. K.K., an oncologist who requested anonymity in case she returns to clinical practice in the future, found Drop Out Club while trying to make sense of the various nonclinical career options. She posted questions and read stories of members’ career paths out of medicine. “I saw proof that a lot of people who left medicine found other jobs and were happy,” she said. “It made me realize that I, too, could find a way out.” She recently left clinical practice and now works as a consultant for health insurance companies. “Leaving my patients and their families was very hard,” she said — but “my new role allows for a much healthier work-life balance.”
Still, not everyone finds meaningful support through online communities.
Some simply want more hands-on support than a peer-to-peer site can provide. Dr. Mary Schultheis, a colorectal surgeon, joined Drop Out Club after 10 years in private practice. “The hardest part of leaving was accepting that it didn’t mean I was a failure,” she said. “Drop Out Club couldn’t help me come to terms with this, but working with a career coach did.” She left clinical practice this year and now balances part-time consulting and health insurance industry roles.
Others find there aren’t enough people to provide advice. “There were a lot of people who piled on to commiserate, but it was hard to find actionable advice on Drop Out Club,” said a dermatologist in California. She reverted to networking the “old-fashioned way, meeting people locally and building a Rolodex,” which ultimately led to her current mix of part-time consulting and part-time medicine.
Shapland agrees that the site — and the medical field more generally — needs doctors who have left clinical practice to speak up and share their unconventional career paths. They need to make themselves available to help as she did, she said. “Just being a living, breathing example of someone who made it to the other side and will answer a couple questions can help someone take that leap of faith.” She’s proof of it.
Drug Lobbyists’ Battle Cry Over Prices: Blame the Others
By Eric Lipton and Katie Thomas - NYT - May 29, 2017
WASHINGTON — Hundreds of independent pharmacists swarmed the House and Senate office buildings one recent afternoon, climbing the marble staircases as they rushed from one appointment to the next, pitching lawmakers on their plan to rein in the soaring drug prices that have enraged American consumers.
As they crowded into lawmakers’ offices, describing themselves as the industry’s “white hats,” they pointed a finger at pharmacy benefit managers like Express Scripts and CVS Health, which handle the drug coverage of millions of Americans.
“Want to reduce prescription drug costs?” the pharmacists argued during their visits. “Pay attention to the middlemen.”
A civil war has broken out among the most powerful players in the pharmaceutical industry — including brand-name and generic drug makers, and even your local pharmacists — with each blaming others for the rising price of medicine.
It is an industry that was already spending nearly double what other business sectors in the United States economy allocate on lobbying, and those sums continue to rise. President Trump has only heightened anxiety by accusing the drug industry of “getting away with murder,” even though he has not weighed in with his own proposal.
For now, lawmakers are facing an almost daily assault.
“Everyone is very eager to maximize their profits and get a piece of the pie, and sorting it all out is complicated,” said Senator Susan Collins, Republican of Maine.
The question is whether a rare confluence of public outrage, political will and presidential leadership can bring about a meaningful change that will slow the drain on consumers’ pocketbooks.
“You remember that old photograph of the Three Stooges, their faces cracked sideways and they are pointing at each other?” asked Chester Davis Jr., the president of the Association for Accessible Medicines, sitting in the basement cafeteria of the Russell Senate Office Building at the start of a day in which he would make his own pitches on behalf of generic drugmakers. “Everyone is doing the finger-pointing, when in fact there is a lot of blame to go around.”
In polls, Democrats and Republicans alike have lowering drug prices near the top of their health care priorities. Public anger has risen along with the skyrocketing prices for many essential medicines — insulin for diabetes, for example, and EpiPens for severe allergic reactions. But will efforts to reduce drug costs surmount the industry’s aggressive lobbying and campaign contributions?
“It’s still a very uphill fight,” said Representative Lloyd Doggett, Democrat of Texas, who like Ms. Collins has been pushing Congress to increase competition and lower prices, “given the millions they have spent on lobbying, advertising and campaign contributions.”
With billions in profit on the line, the pharmaceutical and health products industry has already spent $78 million on lobbying in the first quarter of this year, a 14 percent jump over last year, according to the Center for Responsive Politics. The industry pays some 1,100 lobbyists — more than two for each member of Congress.
In the 2016 election cycle, the industry poured more than $58 million into the election campaigns of members of Congress and presidential candidates, as well as other political causes, the Center for Responsive Politics data shows. That was the biggest investment in the industry’s history and a 20 percent jump from the last presidential election cycle in 2012.
No single proposal has emerged as a clear winner in the bid to lower prices. Mr. Trump has sent conflicting signals: On one hand, he has accused the industry of“price fixing” and has said the government should be allowed to negotiate the price of drugs covered by Medicare. At other times, he has talked about rolling back regulations and named an industry-friendly former congressman, Tom Price, to head the Department of Health and Human Services, and a former pharmaceutical consultant, Scott Gottlieb, to lead the Food and Drug Administration.
Members of Congress have put forward a grab-bag of options, each of which would help or hurt different industry players.
Some address minor aspects, such as a bipartisan bill that would force brand-name drugmakers to hand over samples of their drugs to generic competitors. One would allow for the importing of cheaper drugs. Another would force pharmacy benefit managers to disclose more information about how they did business.
For now, it is a free-for-all.
The brand-name drug industry is the dominant player. It spends the most on campaign contributions, has the largest army of lobbyists and has the biggest pile of chits among lawmakers to try to protect its own interests.
Its trade group, the Pharmaceutical Research and Manufacturers of America, or PhRMA, was so concerned about its vulnerability this year that it increased its annual dues by 50 percent — generating an extra $100 million to flood social media, television stations, as well as newspapers and magazines with advertising that reminds consumers of the industry’s role in helping to save lives. A second set of PhRMA ads point blame for price increases elsewhere, like benefit managers and health insurers.
In doing so, PhRMA is seeking to rehabilitate a reputation that was damaged by the actions of companies like Turing Pharmaceuticals, which sharply hiked the price of a decades-old medicine. Its unapologetic former chief executive, Martin Shkreli, came to be seen as the ultimate illustration of the industry’s bad deeds.
Though Turing was never a member of the group, PhRMA recently purged nearly two dozen companies from its membership after it voted to exclude investor-driven drug companies like Turing.
Nearly every week that Congress is in session, the industry holds fund-raisers at private clubs and restaurants to help bankroll the re-election campaigns of its allies. One former lobbyist for PhRMA recently boasted that he had once organized six fund-raising events in a two-day period. (He asked that he not be named because the fund-raising efforts are supposed to be confidential.)
In late April, for example, a PhRMA Industry Breakfast was hosted for Representative John Shimkus, Republican of Illinois, at the National Republican Club of Capitol Hill, a members-only hot spot across the street from the Capitol.
The industry had reason to thank Mr. Shimkus. Last year, he helped save pharmaceutical companies billions of dollars by persuading the Obama administration to kill a project that was meant to test ways to lower the cost of the so-called Medicare Part B program, which spent $24.6 billion on prescription drugs in 2015.
Mr. Shimkus, who received nearly $300,000 in drug-industry contributions in the last election cycle, led an effort to collect signatures from 242 members of the House challenging the effort. He also co-sponsored legislation that threatened to block it,which became moot after the Obama administration backed down.
A spokesman for Mr. Shimkus said his actions were intended to protect cancerpatients — pointing to a clinic in his district he said might close if the Medicare program had gone into effect — not the pharmaceutical industry.
But other participants said industry influence — as drug companies attempted to preserve their bottom line — had played a decisive role.
“When we first proposed this, people were warning me, ‘Be careful, everybody on K Street is going to be gunning for you now,’ and I did not really know what they meant,” said Andy Slavitt, a top Obama administration official who pushed the prescription drug price experiment. “Now I know. When you take on pharma, you take on this whole town.”
Stephen J. Ubl, the chief executive of PhRMA, acknowledged that his group had been “very engaged” in defending his member companies’ interests, and blamed a few bad actors — not his own members — for the public’s disapproval.
“The researchers wake up every day working for better treatments and cures,” he said, echoing his organization’s multimillion-dollar advertising campaign, “Go Boldly.”
The pharmacy benefit managers are giants themselves. Two of the biggest, Express Scripts and CVS Health, which are among the nation’s 50 largest companies, have initiated their own counteroffensive.
In February, Mark Merritt, the president of the Pharmaceutical Care Management Association, the trade group for benefit managers, outlined a strategy to “engage the new administration” and to build “a political firewall on Capitol Hill,” according to a confidential memo that was first made public by BuzzFeed.
The memo bragged about the group’s courting of senior Trump administration officials. It also said it had met with Capitol Hill staff members and lawmakers, formed a partnership with conservative advocacy groups and created an advertising campaign called “Drug Benefit Solutions.”
Last month, the group hosted several hundred government officials and other industry players at a fancy “policy forum” a few blocks from the Capitol, where it detailed just why its members were “uniquely positioned” to save consumers money.
When the independent pharmacists descended on Capitol Hill in late April, they came with a brochure depicting benefit managers as sharp-toothed dogs, grabbing bags of money.
Yet even as they walked the halls, a group calling itself Ask Your Independent Pharmacist sent a blast email to some of the same lawmakers the pharmacists had just met with. “Whose interests are they on the Hill to champion — the pharmacist’s pocketbook or the patients they claim to serve?” an email asked.
When The New York Times called a public relations firm, Kivvit, which operates out of an address listed on the email, staff members repeatedly hung up when asked who had paid for the message. After a reporter called the firm’s Chicago headquarters, Tracy Schmaler, a Justice Department aide in the Obama administration who now works at Kivvit, responded: Express Scripts had paid for the message.
Jonah Houts, the head of government affairs at Express Scripts, said the company’s role as a middleman drew fire from all sides.
“We were designed to create tension,” he said. “We’re successful at what we do, and that’s why we want to make sure the lawmakers who are considering legislation that affects us understand that.”
The generics industry has also come under attack. Though its drugs are generally cheap, some have also risen sharply in price, and prosecutors have been investigating claims of price-fixing by some of the largest players, including Mylan.
Heather Bresch, the chief executive of Mylan and a former chairwoman of the generics trade group, has been pilloried on social media for her role in hiking the price of EpiPens, even though EpiPens sold as branded drugs, not generics.
As the controversy over EpiPens unfolded, Ms. Bresch shifted criticism toward what she called the “broken system” of brokers, distributors and pharmacists who take a cut of the price, too. In January, the generics trade group shed its old name for one that reflects the changed political climate: the Association for Accessible Medicines.
Mr. Doggett, the Texas Democrat, said the industry war was in some ways a positive sign.
“We have moved from ‘There is no problem’ to ‘It’s not my fault,’ ” he said. “It begins to focus attention on what so many of my constituents already know the problem is, which is price gouging.”
Economic Analysis of the
Healthy California Single-Payer
Health Care Proposal
(SB-562)
MAY 2017
Dr. Robert Pollin
Distinguished Professor of Economics and
Co-Director, Political Economy Research Institute (PERI) University of Massachusetts-Amherst
Dr. James Heintz
Andrew Glyn Professor of Economics and Associate Director, PERI
University of Massachusetts-Amherst
Dr. Peter Arno
Senior Fellow and Director of Health Policy Research, PERI University of Massachusetts-Amherst
Dr. Jeannette Wicks-Lim
Assistant Research Professor, PERI University of Massachusetts-Amherst
(SB-562)
MAY 2017
Dr. Robert Pollin
Distinguished Professor of Economics and
Co-Director, Political Economy Research Institute (PERI) University of Massachusetts-Amherst
Dr. James Heintz
Andrew Glyn Professor of Economics and Associate Director, PERI
University of Massachusetts-Amherst
Dr. Peter Arno
Senior Fellow and Director of Health Policy Research, PERI University of Massachusetts-Amherst
Dr. Jeannette Wicks-Lim
Assistant Research Professor, PERI University of Massachusetts-Amherst
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