Taking Medicare For All Seriously
by Jonathan Foley - Health Affairs Blog - June 11, 2019
The Medicare for All Act of 2019 (HR 1384) is more than a
statement of progressive ideals, it is serious legislation. Spearheaded
by second-term progressive Rep. Pramila Jayapal (D-WA) along with 112
co-sponsors, this bill is unlikely to make it to the
Republican-dominated Senate, where it would be dead on arrival. Yet,
this bill, and ones like it, will define the progressive stance on
health reform and will be the benchmark against which the public will
judge the progressive wing and, if President Donald Trump has his way,
the entire Democratic Party.
This bill is more than legislation by aspiration. The first ever Medicare for All congressional hearing took place on April 30, 2019, and gave prominence to Representative Jayapal, HR 1384, and Medicare for All as a feature of the health policy landscape. Although slimmer than the Affordable Care Act’s (ACA’s) 2000+ pages (thank goodness), this bill outlines an entirely different way of organizing and financing health services for all Americans.
HR 1384 funds health services through global budgets. Funding to hospitals and other institutional health care providers is based on amounts that are negotiated annually between providers and regional directors. Individual providers are paid on a fee-for-service basis using a fee schedule that takes into account current Medicare fees if working in private practice or, on a salary basis, if working in an institution such as a hospital that is paid via a global budget.
Congress appropriates a fixed, annual amount for the program and the secretary of the Department of Health and Human Services (HHS) allocates budgets to regions with some ability to top up regional budgets based on the discretion of the secretary. The basis for determining the regional allocation is vague, and the role of states in the funding process appears to be limited to consulting with the regional office on state needs and regional planning. Financial incentives to providers based on pay-for-performance and value-based purchasing arrangements are prohibited.
The bill gives the HHS secretary broad authority to establish program parameters in areas such as eligibility for benefits, enrollment, benefits provided, provider participation standards and qualifications, levels of funding, methods for determining amounts of payments to providers of covered items and services, appeals processes, planning for capital expenditures and service delivery, and planning for health professional education funding. State and federal exchanges created under the ACA are eliminated.
Revenue to support the program, which will be deposited in a universal Medicare trust fund, will be derived from existing sources of federal funding for health care, including Medicare, Medicaid (federal allocation), federal employees health benefits (FEHB), TRICARE, and other federally funded health programs such as maternal and child health; and, taxes to make up the difference between current outlays and the estimated cost of the program. The trust fund is adjusted annually by the medical component of the Consumer Price Index. The bill has yet to be scored by the Congressional Budget Office.
The bill is breathtaking in scope:
A recent analysis of cost increases in the United States indicates that the driving force is the price of hospital and provider care, not increased demand by users of the system. In reviewing US health expenditures between 1996 and 2013, researchers at the University of Washington determined that more than half of the cost increase over that period was due to price and service intensity (more spending per visit), whereas, changes in service use did not result in a statistically significant change in expenditure.
However, judicious use of cost sharing has a role. The RAND Health Insurance Experiment, the landmark study from the 1970s, demonstrated that cost sharing reduced use of health services without a negative health impact (that is, decreased use of the health system due to copayments not leading to increased later use due to health complications. A more recent study based on analyses of Medicare data found that copayments reduce use, but there can be a negative impact on patients with chronic diseases. For these reasons, regulators have required more nuanced use of copayments; for example, the ACA requires no cost sharing for certain preventive services and the Centers for Disease Control and Prevention has recommended limits on cost sharing for medications for chronic illness management.
It is inevitable that shadow markets of some form will develop in response to HR 1384. These markets may be supported by cash payments but possibly by new insurance products that attempt to walk a fine line between health savings accounts and life insurance. Such hybrid products exist in the long-term care insurance market, and it is reasonable to assume they will emerge in this scenario.
If health insurers are the middlemen, they supply or fund some of the “middleware” for the health system. Beyond paying claims, MCOs are involved with key aspects of care delivery such as ensuring that provider networks have sufficient capacity; incentivizing providers to improve the quality of care; building information systems that support communications between providers and their patients (for example, smartphone apps); and supporting disease management, care coordination, and outreach. Some of the more innovative efforts to address social determinants of health have resulted from collaborations among MCOs, community organizations, and providers.
If health insurers are eliminated, an entity or some entities will need to supply or fund this connective tissue of the health system. In Germany, citizens are covered by either one of the statutory, nonprofit health insurance funds or private health insurance. Since 2002, these funders have supported an array of disease management programs for conditions such as diabetes, asthma, heart disease, and chronic obstructive pulmonary disease (COPD). The program emphasizes care coordination amongst specialists and other providers who are following clinical guidelines developed by a national standard-setting body, the German Federal Joint Committee.
In the Netherlands, where most care is financed through health insurance, which citizens are required to purchase, care coordination for chronic disease management is achieved through bundled payments for certain disease conditions (diabetes, COPD, and cardiovascular disease). In the US, currently, this type of coordinated care would be undertaken by MCOs or other health insurers.
HR 1384 rejects the premise of a competitive market approach, full stop.
Competition in health care is unlike competition in any other part of the economy. At the level of primary care providers, if there is sufficient supply, competitive markets and market forces do exist. However, at the hospital level, there is less competition because hospital markets do not always overlap and, increasingly, hospitals are part of multihospital systems. For example, in the state of Maryland, there are 54 hospitals; however, 47 belong to one of three hospital systems. As multihospital health care systems evolve, they also incorporate primary care and specialty physician practices, creating more consolidation and an environment less conducive to competition among providers.
Overall, the health insurance market is among the most concentrated industry markets. In its 2017 update on “Competition in Health Insurance: A Comprehensive Study of U.S. Markets,” the American Medical Association finds that highly concentrated health insurance markets are largely the result of mergers and acquisitions of health insurers. The authors state that, “both consummated and proposed consolidation of health insurers should raise serious antitrust concerns.” They go on to encourage increased vigilance by the Department of Justice in enforcing antitrust laws in the health insurance market.
While other private insurance markets may exhibit anticompetitive behaviors, MA plans and Medicaid MCOs exist within heavily regulated and competitive environments. They must compete with their peers for enrollment, satisfy the oversight of federal and state regulators, and periodically renew their right to offer services through competitive bid processes. If the concern is about the profit-taking of the health insurers, one could raise current requirements on medical loss ratios (the ratio of expenses for medical care versus administration, including profit) and directly regulate the profit as is done with health insurers under contract to TRICARE and the FEHB program.
Although heavily regulated, universal health systems in countries such as Switzerland, Germany, and the Netherlands also use market competition between health insurers to deliver high-quality health care to their citizens.
Even in countries that embrace universal coverage and global budgets, financial incentives are used to influence provider behavior and control costs. Since the early 2000s, primary care practices in the UK’s National Health Service have been at risk for more than a quarter of their incomes based on their performance against quality and access measures. In the UK and New Zealand, primary care providers benefit from budget-holding schemes in which they receive additional payments if the value of pharmaceutical costs attributable to their patients is lower than the predicted amount based on pre-determined benchmarks.
Global budgets for the total cost of care have been introduced in Maryland with the agreement of the Centers for Medicare and Medicaid Services as an innovative attempt to control the growth of Medicare expenditures in the state. Maryland is uniquely positioned to undertake this experiment because the state has been regulating payment rates from all payers to hospitals since the 1970s. However, even in a state with a long tradition of hospital rate regulation, global budgets pose many challenges: Which hospitals are efficient/inefficient? Which hospitals should close? How does local physician supply influence hospital viability? How does the state move care from hospitals to the community safely but expeditiously?
Even within the context of global budgets, Maryland has developed financial incentive arrangements with physicians and hospitals to promote a shift from hospital care to less costly community-based care, while maintaining standards of access and quality.
Maryland is probably equipped for these challenges. However, Maryland is a small state (containing about 1.5 percent of the US population) with a track record of cooperation in the health care industry and government regulators with the experience and authority to manage this change. Replicating this infrastructure across the country will not occur overnight—certainly not within the two years that Rep. Jayapal and her co-sponsors have allocated for the start-up phase of this massive program.
In addition, HR 1384 outlines a more radical form of global budgets than Maryland is implementing. Technically, the savings targets that Maryland hospitals are tasked with achieving relate to the Medicare program only and must occur over a five-year period. HR 1384 caps health care budgets for the entire health care system on an annual basis and allows only two years of phase-in to account for the inevitable restructuring that will need to occur. Finally, HR 1384 does not propose any entities at the state or regional levels akin to Maryland’s hospital rate regulatory body to guide the change in an orderly manner.
In contrast, the system proposed in HR 1384 incorporates elements of other systems but, as a comprehensive reform, is unprecedented. In the review of single-payer proposals in the US in comparison to systems in 12 developed countries, Sherry Glied and colleagues conclude: “A more nuanced understanding of the variations in other countries’ systems could provide U.S. policymakers with more options for moving forward.”
Rep. Jayapal has characterized those who criticize her bill as gradualists, invoking Dr. Martin Luther King, Jr.’s famous admonition not to “take the tranquilizing drug of gradualism” in the pursuit of racial justice (Sine Lecture at American University, April 30, 2019). The implication is that unless one undertakes sweeping reforms of the health system, as a matter of social justice on par with the pursuit of racial equality, one accepts the status quo as good enough. She may be right. However, the sweeping reform she proposes, taken as a whole, has major design flaws. Even among countries that agree with her starting premise, as do I, that health care is a right, there is no precedent.
This bill is more than legislation by aspiration. The first ever Medicare for All congressional hearing took place on April 30, 2019, and gave prominence to Representative Jayapal, HR 1384, and Medicare for All as a feature of the health policy landscape. Although slimmer than the Affordable Care Act’s (ACA’s) 2000+ pages (thank goodness), this bill outlines an entirely different way of organizing and financing health services for all Americans.
The Basics
For a start, HR 1384 does away with private health insurance as we know it and eliminates any patient payments toward health care. That’s right: no coinsurance, copayments, deductibles, or premiums for covered benefits. And, the list of covered benefits is extensive, including benefits not routinely covered by employer-sponsored coverage such as dental, vision, and long-term care. Given the scope of benefits and the restrictions on patient outlays, it might be more accurate to label this bill “Medicaid for All.” Medicaid, the joint federal-state program that provides health insurance for the poor, disabled, and incapacitated elderly, is the most comprehensive health coverage in the United States but, alas, lacks the middle-class appeal of Medicare.HR 1384 funds health services through global budgets. Funding to hospitals and other institutional health care providers is based on amounts that are negotiated annually between providers and regional directors. Individual providers are paid on a fee-for-service basis using a fee schedule that takes into account current Medicare fees if working in private practice or, on a salary basis, if working in an institution such as a hospital that is paid via a global budget.
Congress appropriates a fixed, annual amount for the program and the secretary of the Department of Health and Human Services (HHS) allocates budgets to regions with some ability to top up regional budgets based on the discretion of the secretary. The basis for determining the regional allocation is vague, and the role of states in the funding process appears to be limited to consulting with the regional office on state needs and regional planning. Financial incentives to providers based on pay-for-performance and value-based purchasing arrangements are prohibited.
The bill gives the HHS secretary broad authority to establish program parameters in areas such as eligibility for benefits, enrollment, benefits provided, provider participation standards and qualifications, levels of funding, methods for determining amounts of payments to providers of covered items and services, appeals processes, planning for capital expenditures and service delivery, and planning for health professional education funding. State and federal exchanges created under the ACA are eliminated.
Revenue to support the program, which will be deposited in a universal Medicare trust fund, will be derived from existing sources of federal funding for health care, including Medicare, Medicaid (federal allocation), federal employees health benefits (FEHB), TRICARE, and other federally funded health programs such as maternal and child health; and, taxes to make up the difference between current outlays and the estimated cost of the program. The trust fund is adjusted annually by the medical component of the Consumer Price Index. The bill has yet to be scored by the Congressional Budget Office.
The bill is breathtaking in scope:
- Eliminating private health insurance, except for affinity benefits such as cosmetic surgery;
- Establishing fixed, global budgets nationally and at regional levels;
- Eliminating Medicare and Medicaid as these programs are currently constituted;
- Forgoing funding from states, which currently are required to pay for a significant percentage of the costs of the Medicaid program; and,
- Eliminating payments from individuals for the cost of health care.
No Cost Sharing
No health system in the world is entirely free for all residents. While almost all have lower out-of-pocket costs than the United States, every system has some level of cost sharing in the form of copayments, premiums, deductibles, or capitated membership fees. They impose these fees in part to cover the cost of the services but also to deter unnecessary use of the system. In 2016, the Organization for Economic Cooperation and Development reported that, across the 36 developed countries reporting this statistic, residents paid $700 a year per person out of pocket for health care, while US residents paid on average $1,090 per person (second to the Swiss).A recent analysis of cost increases in the United States indicates that the driving force is the price of hospital and provider care, not increased demand by users of the system. In reviewing US health expenditures between 1996 and 2013, researchers at the University of Washington determined that more than half of the cost increase over that period was due to price and service intensity (more spending per visit), whereas, changes in service use did not result in a statistically significant change in expenditure.
However, judicious use of cost sharing has a role. The RAND Health Insurance Experiment, the landmark study from the 1970s, demonstrated that cost sharing reduced use of health services without a negative health impact (that is, decreased use of the health system due to copayments not leading to increased later use due to health complications. A more recent study based on analyses of Medicare data found that copayments reduce use, but there can be a negative impact on patients with chronic diseases. For these reasons, regulators have required more nuanced use of copayments; for example, the ACA requires no cost sharing for certain preventive services and the Centers for Disease Control and Prevention has recommended limits on cost sharing for medications for chronic illness management.
Essential Elimination Of Private Health Insurance
No developed country has restricted the scope of private health insurance as much as this legislation proposes. In Commonwealth countries such as the United Kingdom, New Zealand, Canada, and Australia, where there are extensive publicly provided and publicly funded health services, private health insurance also exists to supplement the public system.- In Australia, 47 percent of residents have private health insurance for hospital coverage, and 56 percent have private insurance for general treatment coverage.
- In Canada, approximately two-thirds of residents have private coverage that they use to pay for services not paid for by the public system, including vision, dental, certain prescription drugs, rehabilitation services, and home care.
- In the UK, 10.5 percent of residents have private insurance that covers elective, but medically necessary, surgeries in private facilities more quickly (jumping the public queue), mental health care, maternity care, emergency services, and general practice care.
- In New Zealand, about 5 percent of health expenditures are financed by private health insurance for elective, medically necessary surgeries; outpatient specialty care; and cost sharing for general practice care.
It is inevitable that shadow markets of some form will develop in response to HR 1384. These markets may be supported by cash payments but possibly by new insurance products that attempt to walk a fine line between health savings accounts and life insurance. Such hybrid products exist in the long-term care insurance market, and it is reasonable to assume they will emerge in this scenario.
Supplying Health System Middleware
The architects of this legislation clearly view health insurers as middlemen who deny needed care, soak up profits, and add pointless administrative procedures and paperwork to the process. Is this universally true? Are all health plans alike? In the past decade, Medicare Advantage (MA) plans have grown considerably, currently covering more than 35 percent of Medicare enrollees. The Medicare Payment Advisory Commission reports, all things being equal, MA plans in 2019 will be paid on par with Medicare fee-for-service and, when quality bonuses are excluded, will cost the system 2 percent less than fee-for-service, even though they provide expanded benefits compared to fee-for-service. On the Medicaid side, 38 states and the District of Columbia have turned to managed care organizations (MCOs) to care for the Medicaid population; at a national level, almost 60 percent of the Medicaid population is enrolled in a MCO as of 2018.If health insurers are the middlemen, they supply or fund some of the “middleware” for the health system. Beyond paying claims, MCOs are involved with key aspects of care delivery such as ensuring that provider networks have sufficient capacity; incentivizing providers to improve the quality of care; building information systems that support communications between providers and their patients (for example, smartphone apps); and supporting disease management, care coordination, and outreach. Some of the more innovative efforts to address social determinants of health have resulted from collaborations among MCOs, community organizations, and providers.
If health insurers are eliminated, an entity or some entities will need to supply or fund this connective tissue of the health system. In Germany, citizens are covered by either one of the statutory, nonprofit health insurance funds or private health insurance. Since 2002, these funders have supported an array of disease management programs for conditions such as diabetes, asthma, heart disease, and chronic obstructive pulmonary disease (COPD). The program emphasizes care coordination amongst specialists and other providers who are following clinical guidelines developed by a national standard-setting body, the German Federal Joint Committee.
In the Netherlands, where most care is financed through health insurance, which citizens are required to purchase, care coordination for chronic disease management is achieved through bundled payments for certain disease conditions (diabetes, COPD, and cardiovascular disease). In the US, currently, this type of coordinated care would be undertaken by MCOs or other health insurers.
Rejecting Competition
At its core, the success of the ACA is founded on the ability of competitive markets to offer the consumer a choice of health plans and for health plans to compete on price and quality. One can argue whether the markets are stable and whether consumers in rural areas have as much choice as their urban counterparts; however, since 2014, this system has maintained coverage for 11 million people despite early implementation failures, court challenges, and 28 months of ongoing sabotage by the very agency that is required to administer it.HR 1384 rejects the premise of a competitive market approach, full stop.
Competition in health care is unlike competition in any other part of the economy. At the level of primary care providers, if there is sufficient supply, competitive markets and market forces do exist. However, at the hospital level, there is less competition because hospital markets do not always overlap and, increasingly, hospitals are part of multihospital systems. For example, in the state of Maryland, there are 54 hospitals; however, 47 belong to one of three hospital systems. As multihospital health care systems evolve, they also incorporate primary care and specialty physician practices, creating more consolidation and an environment less conducive to competition among providers.
Overall, the health insurance market is among the most concentrated industry markets. In its 2017 update on “Competition in Health Insurance: A Comprehensive Study of U.S. Markets,” the American Medical Association finds that highly concentrated health insurance markets are largely the result of mergers and acquisitions of health insurers. The authors state that, “both consummated and proposed consolidation of health insurers should raise serious antitrust concerns.” They go on to encourage increased vigilance by the Department of Justice in enforcing antitrust laws in the health insurance market.
While other private insurance markets may exhibit anticompetitive behaviors, MA plans and Medicaid MCOs exist within heavily regulated and competitive environments. They must compete with their peers for enrollment, satisfy the oversight of federal and state regulators, and periodically renew their right to offer services through competitive bid processes. If the concern is about the profit-taking of the health insurers, one could raise current requirements on medical loss ratios (the ratio of expenses for medical care versus administration, including profit) and directly regulate the profit as is done with health insurers under contract to TRICARE and the FEHB program.
Although heavily regulated, universal health systems in countries such as Switzerland, Germany, and the Netherlands also use market competition between health insurers to deliver high-quality health care to their citizens.
Global Budgets
One of the most distinctive features of bill HR 1384 is the use of global budgets to control the growth of health care expenditures and, presumably, to promote budget transparency and equity. At the same time, HR 1384 rejects any financial incentives based on use and eliminates all federal pay-for-performance and value-based purchasing programs. The implication is that having fixed budgets will instill the necessary cost control discipline. However, the cost of health care is based on a series of transactions controlled, for the most part, by physicians and hospitals. By eliminating financial incentives, HR 1384 is taking away one of the health system’s primary levers for controlling costs.Even in countries that embrace universal coverage and global budgets, financial incentives are used to influence provider behavior and control costs. Since the early 2000s, primary care practices in the UK’s National Health Service have been at risk for more than a quarter of their incomes based on their performance against quality and access measures. In the UK and New Zealand, primary care providers benefit from budget-holding schemes in which they receive additional payments if the value of pharmaceutical costs attributable to their patients is lower than the predicted amount based on pre-determined benchmarks.
Global budgets for the total cost of care have been introduced in Maryland with the agreement of the Centers for Medicare and Medicaid Services as an innovative attempt to control the growth of Medicare expenditures in the state. Maryland is uniquely positioned to undertake this experiment because the state has been regulating payment rates from all payers to hospitals since the 1970s. However, even in a state with a long tradition of hospital rate regulation, global budgets pose many challenges: Which hospitals are efficient/inefficient? Which hospitals should close? How does local physician supply influence hospital viability? How does the state move care from hospitals to the community safely but expeditiously?
Even within the context of global budgets, Maryland has developed financial incentive arrangements with physicians and hospitals to promote a shift from hospital care to less costly community-based care, while maintaining standards of access and quality.
Maryland is probably equipped for these challenges. However, Maryland is a small state (containing about 1.5 percent of the US population) with a track record of cooperation in the health care industry and government regulators with the experience and authority to manage this change. Replicating this infrastructure across the country will not occur overnight—certainly not within the two years that Rep. Jayapal and her co-sponsors have allocated for the start-up phase of this massive program.
In addition, HR 1384 outlines a more radical form of global budgets than Maryland is implementing. Technically, the savings targets that Maryland hospitals are tasked with achieving relate to the Medicare program only and must occur over a five-year period. HR 1384 caps health care budgets for the entire health care system on an annual basis and allows only two years of phase-in to account for the inevitable restructuring that will need to occur. Finally, HR 1384 does not propose any entities at the state or regional levels akin to Maryland’s hospital rate regulatory body to guide the change in an orderly manner.
Conclusion
Major reforms of the US health system have been preceded by trials at the state level or precedents from other countries. In introducing Medicare and Medicaid in 1965, President Lyndon B. Johnson relied on proposals from organized labor and the American Medical Association that dated back to the 1950s. The eventual result was a hybrid that reflected political compromises from all sides. The market-based model that is core to the ACA was first proposed by Republicans in the 1990s and was passed in 2006 by Mitt Romney when he was governor of Massachusetts.In contrast, the system proposed in HR 1384 incorporates elements of other systems but, as a comprehensive reform, is unprecedented. In the review of single-payer proposals in the US in comparison to systems in 12 developed countries, Sherry Glied and colleagues conclude: “A more nuanced understanding of the variations in other countries’ systems could provide U.S. policymakers with more options for moving forward.”
Rep. Jayapal has characterized those who criticize her bill as gradualists, invoking Dr. Martin Luther King, Jr.’s famous admonition not to “take the tranquilizing drug of gradualism” in the pursuit of racial justice (Sine Lecture at American University, April 30, 2019). The implication is that unless one undertakes sweeping reforms of the health system, as a matter of social justice on par with the pursuit of racial equality, one accepts the status quo as good enough. She may be right. However, the sweeping reform she proposes, taken as a whole, has major design flaws. Even among countries that agree with her starting premise, as do I, that health care is a right, there is no precedent.
https://www.healthaffairs.org/do/10.1377/hblog20190606.959973/full/?utm_source=Newsletter&utm_medium=email&utm_content=Taking+Medicare+For+All+Seriously%3B+Spouses+Are+Caregiving+Alone+In+The+Last+Years+Of+Life%3B+Family+Caregivers+Caring+For+Veterans&utm_campaign=HAT+6-11-19
TESTIMONY
HOUSE WAYS AND MEANS COMMITTEE
June 12, 2019
Email: donberwick@gmail.com Phone: 617-797-5655
Editor's
Note: The following excerpt is from Don Berwick's testimony before the
House Ways and Means Committee on Medicare For All. It is followed by
his much longer written testimony that is worth reading if you have the
time.
-SPC
Two
minute excerpt of Don Berwick's compelling testimony on why Medicare's
benefits should be improved & expanded to cover everyone.
TESTIMONY
HOUSE WAYS AND MEANS COMMITTEE
by Donald M. Berwick, MD, MPP
President Emeritus and Senior Fellow
Institute for Healthcare Improvement
June 12, 2019
Email: donberwick@gmail.com Phone: 617-797-5655
Chairman Neal, Ranking Member Brady, and distinguished members of the
Committee. Thank you very much for the opportunity to share my thoughts this
morning.
My name is Donald Berwick. I am a pediatrician by training, and the founding CEO and now Senior Fellow at the Institute for Healthcare Improvement – a global non-profit whose mission is to help improve the quality of health care worldwide. I am on the health care policy faculty of Harvard Medical School. Most relevant to this testimony, I served as Administrator of the Centers for Medicare and Medicaid Services from July, 2010, to December, 2011. I was a recess appointee of President Obama’s, and had to leave that post due to Constitutional limits on the duration of a recess appointment, since the Senate did not move my nomination to confirmation hearings.
Serving as CMS Administrator was the greatest privilege of my professional career. Every day, I got to show up for work to protect and advance the health and interests of over 100 million Americans, including some of our most vulnerable people, while protecting, as well, the integrity and sustainability of Medicare, Medicaid, and the Children’s Health Insurance Program. My duties additionally included helping to implement the coverage expansions, quality improvement, and program integrity provisions of the Affordable Care Act, which was passed three months before my arrival. CMS was charged by statute to implement about 70% of the provisions of the ACA.
In effect, I had the honor to help lead “Medicare for Some,” and the successes and potential of that program have given me confidence that a wise choice for this nation would be Medicare for All.
The reason for that is not that Medicare for All is somehow a morally righteous or inherently correct idea. It is, after all, not a goal – it is a mechanism to achieve goals. And, like all mechanisms, its value lies completely in whether or not it supports the improvements that we, all together, want to achieve for our nation.
Any proposal for health care reform in this nation should be interrogated with respect to our goals. I propose that four goals, in particular, should be our guides in that interrogation.
My name is Donald Berwick. I am a pediatrician by training, and the founding CEO and now Senior Fellow at the Institute for Healthcare Improvement – a global non-profit whose mission is to help improve the quality of health care worldwide. I am on the health care policy faculty of Harvard Medical School. Most relevant to this testimony, I served as Administrator of the Centers for Medicare and Medicaid Services from July, 2010, to December, 2011. I was a recess appointee of President Obama’s, and had to leave that post due to Constitutional limits on the duration of a recess appointment, since the Senate did not move my nomination to confirmation hearings.
Serving as CMS Administrator was the greatest privilege of my professional career. Every day, I got to show up for work to protect and advance the health and interests of over 100 million Americans, including some of our most vulnerable people, while protecting, as well, the integrity and sustainability of Medicare, Medicaid, and the Children’s Health Insurance Program. My duties additionally included helping to implement the coverage expansions, quality improvement, and program integrity provisions of the Affordable Care Act, which was passed three months before my arrival. CMS was charged by statute to implement about 70% of the provisions of the ACA.
In effect, I had the honor to help lead “Medicare for Some,” and the successes and potential of that program have given me confidence that a wise choice for this nation would be Medicare for All.
The reason for that is not that Medicare for All is somehow a morally righteous or inherently correct idea. It is, after all, not a goal – it is a mechanism to achieve goals. And, like all mechanisms, its value lies completely in whether or not it supports the improvements that we, all together, want to achieve for our nation.
Any proposal for health care reform in this nation should be interrogated with respect to our goals. I propose that four goals, in particular, should be our guides in that interrogation.
1
The first three goals I have long summarized as the so-called “Triple Aim,” which
was first articulated by my colleagues, Dr. John Whittington, of Peoria, Illinois,
and the recently deceased Dr. Tom Nolan, a protégée of the famous quality
scholar, Dr. W. Edwards Deming.1 The “Triple Aim” refers to the three primary
goals of the health and heath care system: first, to improve the health care of
individuals; second, to improve the health of populations; and, third, to continually
reduce costs through the reduction of waste and non-value-added activities –
that is, to make sure that every dollar spent adds value to the lives of the people
we serve. As Administrator of CMS, I centered that Agency’s strategies on the
Triple Aim, as any employee who was there at the time will tell you.
We have a long way to go to achieve the Triple Aim in American health and care. We know from hundreds, if not thousands, of disciplined research studies, including landmark reports from the National Academies of Sciences, Engineering, and Medicine,2 3 that, notwithstanding the miraculous technical progress we have made against many diseases and health burdens, individual health care – Aim Number One – still suffers from pervasive, major problems in patient safety, in failures to use scientifically effective care, in overuse of ineffective or incorrect care, in lack of patient-centeredness, in dropped balls for people with chronic illness, and in unwarranted delays.
With respect to Aim Number Two – better health for populations – we remain seriously underinvested in prevention and in addressing the underlying social determinants of illness, such as poor nutrition, physical inactivity, housing instability, inadequate local transportation, environmental threats, violence, and the continuing effects of structural racism and poverty. The United States ranks 56th in the world in infant mortality and 43rd in life expectancy.4 Other nations spend on average two dollars on addressing social determinants of illness for every dollar they spend on health care; our nation spends less than half as much, just 90 cents on these actual causes, for every dollar we spend on care. In effect, we generously support a massive, three trillion dollar repair shop for injuries and diseases – our health care system – without addressing at all sufficiently upstream the causes of those injuries and diseases. As a result, we are always playing “catch-up” at higher cost and lower effectiveness than prevention would allow.
Our reactive, fragmented system has perpetuated severe racial, socio-economic, and ethnic disparities that many other nations will not tolerate. Hispanics and Blacks have higher rates of obesity and death due to diabetes than Whites; but they are more likely to forgo necessary care because of cost or barriers to access, and they are less likely to have a regular source of care other than the emergency room.5 Inadequate coverage and a segregated delivery system impact outcome measures across the population. The infant mortality rate among Black babies is over double that of Whites.6 In 2014, among individuals with a diagnosis of HIV, the death rate among Black individuals was eight times higher
We have a long way to go to achieve the Triple Aim in American health and care. We know from hundreds, if not thousands, of disciplined research studies, including landmark reports from the National Academies of Sciences, Engineering, and Medicine,2 3 that, notwithstanding the miraculous technical progress we have made against many diseases and health burdens, individual health care – Aim Number One – still suffers from pervasive, major problems in patient safety, in failures to use scientifically effective care, in overuse of ineffective or incorrect care, in lack of patient-centeredness, in dropped balls for people with chronic illness, and in unwarranted delays.
With respect to Aim Number Two – better health for populations – we remain seriously underinvested in prevention and in addressing the underlying social determinants of illness, such as poor nutrition, physical inactivity, housing instability, inadequate local transportation, environmental threats, violence, and the continuing effects of structural racism and poverty. The United States ranks 56th in the world in infant mortality and 43rd in life expectancy.4 Other nations spend on average two dollars on addressing social determinants of illness for every dollar they spend on health care; our nation spends less than half as much, just 90 cents on these actual causes, for every dollar we spend on care. In effect, we generously support a massive, three trillion dollar repair shop for injuries and diseases – our health care system – without addressing at all sufficiently upstream the causes of those injuries and diseases. As a result, we are always playing “catch-up” at higher cost and lower effectiveness than prevention would allow.
Our reactive, fragmented system has perpetuated severe racial, socio-economic, and ethnic disparities that many other nations will not tolerate. Hispanics and Blacks have higher rates of obesity and death due to diabetes than Whites; but they are more likely to forgo necessary care because of cost or barriers to access, and they are less likely to have a regular source of care other than the emergency room.5 Inadequate coverage and a segregated delivery system impact outcome measures across the population. The infant mortality rate among Black babies is over double that of Whites.6 In 2014, among individuals with a diagnosis of HIV, the death rate among Black individuals was eight times higher
2
than that in White individuals.7 Black and American Indian and Alaska Native
women are three times more likely to die from a pregnancy-related cause than
are White women.8
With regard to Aim Number Three – reducing per capita costs by reducing waste – we lag way, way behind other nations. As you all know well by now, we spend just about twice as much per capita on health care as any other high-income nation, and yet in a recent comparison among 10 high-income countries, not one of which spends per capita as much as 70% of what we spend, the US ranks worst in life expectancy, infant mortality, maternal mortality, and obesity rates.9
At least three major scientific reports of the last decade have estimated that 30% to 35% of America’s entire, three trillion dollar health care bill, represents waste, not effective care.10 We waste through arcane and complex administrative processes and paperwork; we waste through poor care coordination and errors in care; we waste through overuse of scientifically incorrect care; we waste through indefensible, opaque, non-competitive pricing of drugs, devices, procedures, and tests; and we waste through fraud and abuse by a small, but very damaging, minority of care providers.
That is our troubling scorecard on the Triple Aim – we are often very far from excellence in better care for individuals, better health for populations, and lower per capita costs through reducing waste and focusing on what truly helps. But there is also a fourth, indeed, overarching aim for our health care policy; it is, in fact, a precondition to the Triple Aim. That aim is Universal Coverage – leaving no one out. It is an embarrassing paradox that our nation – the wealthiest on earth, and spending by far the most on health care – has not yet made health care a human right. Even after the immense gains under the Affordable Care Act, we still leave almost 30 million Americans without health insurance. According to the Kaiser Family Foundation, 22% of Native American, 19% of Hispanic, 11% of Black, and 7% of White individuals still lack health insurance.11
No other western nation does that. None. We are alone. Indeed, Article 25 of the United Nations Universal Declaration of Human Rights, written over seven decades ago, explicitly lists medical care as a fundamental right.12
Yet I have many friends and colleagues who say that declaring health care to be a human right – leaving no one out – is somehow not feasible or somehow unwise for our nation. I simply do not understand that point of view. It seems to me wrong, immoral. It is also economically unwise, because the downstream effects of lack of health insurance coverage are well known, well documented, harmful to people, and costly to communities.
It seems to me that a nation founded on an “inalienable right to life, liberty, and the pursuit of happiness” ought to promise itself the right to those forms of social policy and cohesion, including health care, that make life, liberty, and the pursuit of happiness possible. We promise elementary and secondary education; we
With regard to Aim Number Three – reducing per capita costs by reducing waste – we lag way, way behind other nations. As you all know well by now, we spend just about twice as much per capita on health care as any other high-income nation, and yet in a recent comparison among 10 high-income countries, not one of which spends per capita as much as 70% of what we spend, the US ranks worst in life expectancy, infant mortality, maternal mortality, and obesity rates.9
At least three major scientific reports of the last decade have estimated that 30% to 35% of America’s entire, three trillion dollar health care bill, represents waste, not effective care.10 We waste through arcane and complex administrative processes and paperwork; we waste through poor care coordination and errors in care; we waste through overuse of scientifically incorrect care; we waste through indefensible, opaque, non-competitive pricing of drugs, devices, procedures, and tests; and we waste through fraud and abuse by a small, but very damaging, minority of care providers.
That is our troubling scorecard on the Triple Aim – we are often very far from excellence in better care for individuals, better health for populations, and lower per capita costs through reducing waste and focusing on what truly helps. But there is also a fourth, indeed, overarching aim for our health care policy; it is, in fact, a precondition to the Triple Aim. That aim is Universal Coverage – leaving no one out. It is an embarrassing paradox that our nation – the wealthiest on earth, and spending by far the most on health care – has not yet made health care a human right. Even after the immense gains under the Affordable Care Act, we still leave almost 30 million Americans without health insurance. According to the Kaiser Family Foundation, 22% of Native American, 19% of Hispanic, 11% of Black, and 7% of White individuals still lack health insurance.11
No other western nation does that. None. We are alone. Indeed, Article 25 of the United Nations Universal Declaration of Human Rights, written over seven decades ago, explicitly lists medical care as a fundamental right.12
Yet I have many friends and colleagues who say that declaring health care to be a human right – leaving no one out – is somehow not feasible or somehow unwise for our nation. I simply do not understand that point of view. It seems to me wrong, immoral. It is also economically unwise, because the downstream effects of lack of health insurance coverage are well known, well documented, harmful to people, and costly to communities.
It seems to me that a nation founded on an “inalienable right to life, liberty, and the pursuit of happiness” ought to promise itself the right to those forms of social policy and cohesion, including health care, that make life, liberty, and the pursuit of happiness possible. We promise elementary and secondary education; we
3
promise clean water and clean air; we promise public safety and first responders;
we promise due process in our courts. Why not promise health care?
And so, this is my recommendation for the questions we should ask about any major proposal for American health care reform: Will it advance the causes of better care for individuals, better health for populations, lower per capita costs through reducing waste, and leaving no one out?
And so, through that lens, let me take a moment to describe some of the work of the Administrator of Medicare for Some – examples from my own work as Administrator of CMS. What does the job of leading CMS have to do with progress toward the Triple Aim and Universal Coverage?
One of the four is easy: universality. By its design, Medicare leaves just about no one out who qualifies by age. In this crazy debate about whether or not health care is a human right in our nation, we have already made a choice – way back in 1965 – that it is a right, for some of us. And the result has been an entirely feasible, immensely popular form of governmentally sponsored, guaranteed health insurance for a crucial subpopulation. CMS stands as protector of that right, and my work as Administrator included continual surveillance for violations of access to care to which Medicare beneficiaries are, by law, entitled.
What about better care for individuals? In May, 2011, I received a superb report from the HHS Inspector General, Dan Levinson, documenting widespread overuse of antipsychotic medications in American nursing homes, resulting in over-sedation – essentially chemical restraints – for hundreds of thousands of nursing home patients.13 This report had special meaning for me, since I had watched my own father, for 50 years a physician in a small Connecticut town, get over-sedated in a nursing home, leading to a severe pressure ulcer and weeks of disorientation. Within days of receiving Dan’s report, I invited to my office for a meeting leaders from the nursing home industry, geriatricians, geriatric nurses, and others. They came – after all, Medicaid pays for half of the nursing home care in the nation – and, showing them the IG report, I said, “Please... this is unacceptable. Either you fix it, or we shall take further steps to do so.” I recall that within a month of that meeting, the nursing home associations had produced strategic plans for reducing over-sedation. In cooperation with the industry, CMS organized in March of 2012, the National Partnership to Improve Dementia Care in Nursing Homes, including a focus on reducing over-sedation. By 2016, overuse of sedation had fallen by 33% and progress continues to this day.14 I note that Chairman Neal has recently called attention to the need for further progress, but it is no accident that he directs that call to CMS, because he knows that CMS, and CMS alone among payers, can get that job done. No private insurer could have or would have taken such action.
Here is another example of pursuing better care. Patient safety has been a serious concern among quality scholars for decades, coming to a head with the
And so, this is my recommendation for the questions we should ask about any major proposal for American health care reform: Will it advance the causes of better care for individuals, better health for populations, lower per capita costs through reducing waste, and leaving no one out?
And so, through that lens, let me take a moment to describe some of the work of the Administrator of Medicare for Some – examples from my own work as Administrator of CMS. What does the job of leading CMS have to do with progress toward the Triple Aim and Universal Coverage?
One of the four is easy: universality. By its design, Medicare leaves just about no one out who qualifies by age. In this crazy debate about whether or not health care is a human right in our nation, we have already made a choice – way back in 1965 – that it is a right, for some of us. And the result has been an entirely feasible, immensely popular form of governmentally sponsored, guaranteed health insurance for a crucial subpopulation. CMS stands as protector of that right, and my work as Administrator included continual surveillance for violations of access to care to which Medicare beneficiaries are, by law, entitled.
What about better care for individuals? In May, 2011, I received a superb report from the HHS Inspector General, Dan Levinson, documenting widespread overuse of antipsychotic medications in American nursing homes, resulting in over-sedation – essentially chemical restraints – for hundreds of thousands of nursing home patients.13 This report had special meaning for me, since I had watched my own father, for 50 years a physician in a small Connecticut town, get over-sedated in a nursing home, leading to a severe pressure ulcer and weeks of disorientation. Within days of receiving Dan’s report, I invited to my office for a meeting leaders from the nursing home industry, geriatricians, geriatric nurses, and others. They came – after all, Medicaid pays for half of the nursing home care in the nation – and, showing them the IG report, I said, “Please... this is unacceptable. Either you fix it, or we shall take further steps to do so.” I recall that within a month of that meeting, the nursing home associations had produced strategic plans for reducing over-sedation. In cooperation with the industry, CMS organized in March of 2012, the National Partnership to Improve Dementia Care in Nursing Homes, including a focus on reducing over-sedation. By 2016, overuse of sedation had fallen by 33% and progress continues to this day.14 I note that Chairman Neal has recently called attention to the need for further progress, but it is no accident that he directs that call to CMS, because he knows that CMS, and CMS alone among payers, can get that job done. No private insurer could have or would have taken such action.
Here is another example of pursuing better care. Patient safety has been a serious concern among quality scholars for decades, coming to a head with the
4
publication in 1999 of the Institute of Medicine report, To Err Is Human, which
estimated that 44,000 to 98,000 Americans died each year in hospitals due to
errors in their care. Progress has been steady since, but very slow. In April,
2011, under the aegis of the Center for Medicare and Medicaid Innovation –
CMMI – which was created by the Affordable Care Act, we launched the
Partnership for Patients, the largest patient safety improvement project in history
in any nation to help hospitals reduce a range of avoidable complications and to
improve coordination of care for discharged patients and thereby reduce hospital
readmissions.15 This program invested one billion dollars in improving patient
safety, and linked progress to rewards and penalties for hospital quality also
authorized under the ACA. Over 4000 hospitals participated in the program. As
of 2017, the Partnership for Patients was estimated to have saved over 125,000
lives, prevented over three million infections and injuries in hospitals, and
reduced costs by over $26 billion – an immense return on a $1 billion investment.
That program and that progress continue to this day. No private insurer could
have or would have organized such an effort at that scale. In our nation, CMS,
and CMS alone among payers, could do that.
In its history, CMS has been perhaps the most important single force for organizing, resourcing, and incentivizing improvements in individual patient care in the nation.
What about better health for populations? As you know, Title 18 and 19 did not primarily establish Medicare and Medicaid for prevention; they began as hospital- focused programs. But, over the years, their effects on preventive practice, and even more recently, on addressing the social determinants of illness, have grown. The ACA authorized first-dollar coverage never before offered for clinical preventive services of proven benefit, and I got to oversee the issuing of regulations that now give tens of millions of elders access to such prevention, including an annual wellness visit. CMS started those innovations; private insurers did not. They followed. CMS, and CMS alone among payers, could change those norms for coverage.
When I was Administrator, the Director of the Centers for Disease Control and Prevention (CDC), Dr. Tom Frieden, and I organized a joint project that we called the “Million Hearts Campaign,” to reduce heart attacks and strokes by advancing a few proven preventive measures throughout the nation. That program continues on now.16 No private insurer could have or would have organized such a national program.
Think for a moment of the possibilities this would offer to intercept the vicious opioid epidemic sweeping our nation. No commercial insurer can or would take on stopping that epidemic as a central strategic imperative. Medicare for All could.
In its history, CMS has been perhaps the most important single force for organizing, resourcing, and incentivizing improvements in individual patient care in the nation.
What about better health for populations? As you know, Title 18 and 19 did not primarily establish Medicare and Medicaid for prevention; they began as hospital- focused programs. But, over the years, their effects on preventive practice, and even more recently, on addressing the social determinants of illness, have grown. The ACA authorized first-dollar coverage never before offered for clinical preventive services of proven benefit, and I got to oversee the issuing of regulations that now give tens of millions of elders access to such prevention, including an annual wellness visit. CMS started those innovations; private insurers did not. They followed. CMS, and CMS alone among payers, could change those norms for coverage.
When I was Administrator, the Director of the Centers for Disease Control and Prevention (CDC), Dr. Tom Frieden, and I organized a joint project that we called the “Million Hearts Campaign,” to reduce heart attacks and strokes by advancing a few proven preventive measures throughout the nation. That program continues on now.16 No private insurer could have or would have organized such a national program.
Think for a moment of the possibilities this would offer to intercept the vicious opioid epidemic sweeping our nation. No commercial insurer can or would take on stopping that epidemic as a central strategic imperative. Medicare for All could.
5
Note that one reason that commercial insurers do not generally invest
significantly in addressing prevention and social determinants of health is their
time frame. Churn, as people migrate through their lives from one insurer to
another, or even to uninsured status, means than an insurer who invests in
preventing heart attacks or strokes may never see any financial return; the
beneficiaries will have moved on to other coverage. Medicare does not face that
barrier. From the time of a beneficiary’s enrollment, CMS and the beneficiary
become lifelong partners.
A universal Medicare for All program could help advance health equity, in part by providing targeted support to physicians and hospitals serving vulnerable or impoverished patients. It could offer trainees incentives to enter critical fields of medicine, such as primary care, and to work in underserved areas. Arguably, Medicare for All is the nation’s best option for the protection and improvement of our public’s health.
The third part of the Triple Aim is reducing per capita costs through reducing waste and non-value-added expenditures. As a price-setter, Medicare can and does address cost directly, through trying to set reasonable payment levels, and, when it is allowed to do so, through competitive bidding.
Here is such an example. In the Medicare Modernization Act of 2003 (MMA), Congress mandated that CMS conduct a competitive bidding experiment for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) following an earlier successful pilot.
A universal Medicare for All program could help advance health equity, in part by providing targeted support to physicians and hospitals serving vulnerable or impoverished patients. It could offer trainees incentives to enter critical fields of medicine, such as primary care, and to work in underserved areas. Arguably, Medicare for All is the nation’s best option for the protection and improvement of our public’s health.
The third part of the Triple Aim is reducing per capita costs through reducing waste and non-value-added expenditures. As a price-setter, Medicare can and does address cost directly, through trying to set reasonable payment levels, and, when it is allowed to do so, through competitive bidding.
Here is such an example. In the Medicare Modernization Act of 2003 (MMA), Congress mandated that CMS conduct a competitive bidding experiment for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) following an earlier successful pilot.
In 2011, despite heavy opposition from the
industry and some members of Congress, CMS implemented DMEPOS
competitive bidding in nine metropolitan areas. Based on the bids at the time,
the agency estimated that the program would save nearly $26 billion over 10
years, 2013-2022, once fully phased-in across the US. Beneficiaries would save
an additional $17 billion in lower copayments and premiums. (Unfortunately, this
Administration has permitted this program to sunset. While CMS has announced
that new competitively-bid contracts will become effective January 1, 2021, the
future of the program remains uncertain. In the meantime, taxpayers and
beneficiaries pay more than they should for routine items and supplies.)
That is just one example of how CMS can be a force for reducing costs in ways
that help beneficiaries. The potential levers are many. Broadly, I can see at least
four ways in which Medicare for All would reduce health care costs, just as the
current Medicare program often does.
First, by simplifying the administrative procedures and paperwork that are plaguing our clinicians, hospitals, and patients. I would estimate that CMS administers Medicare with overhead costs of about 2% or 3% of the total. (The actual administrative budget when I served was about 1% of the total, but I am giving allowance for costs in other government agencies, like the IRS and Social Security Administration, plus billing processes in the delivery system.) As you
First, by simplifying the administrative procedures and paperwork that are plaguing our clinicians, hospitals, and patients. I would estimate that CMS administers Medicare with overhead costs of about 2% or 3% of the total. (The actual administrative budget when I served was about 1% of the total, but I am giving allowance for costs in other government agencies, like the IRS and Social Security Administration, plus billing processes in the delivery system.) As you
6
know well, the ACA seeks to limit commercial insurance overhead to 15% - over
five times as much as CMS overhead.
Streamlining payment offers vast cost savings. Under the simplifications of Medicare for All, providers of care would face just one set of billing rules and processes, greatly reducing operating costs. Research demonstrates that in the US, hospitals spend over 25% of total expenditures on administration, compared to 12.5% and 15.5% across hospitals in Canada and England, respectively.17 A survey from 2009 revealed that the average physician in a practice spent almost $70,000 per year in time interacting with health insurers.18 This not only inflates prices, but also affects the quality and supply of care and the morale of clinicians; evidence suggests that providers most burdened by administrative work (such as primary care physicians) are more prone to burnout and less likely to continue clinical practice.19
Second, by using price-setting authority and negotiation as a large-volume purchaser of supplies, drugs, and services. Medicare’s heft today as an administrative price-setter places a burden on its shoulders to exercise that authority prudently, balancing interests always: the sustainability of the Trust Fund, the defense of the public purse, the out-of-pocket costs for beneficiaries, and the financial vitality of the people and organizations that provide care. The same would be true of an expanded Medicare program. In addition, Medicare, more than any other payer, can accelerate progress toward value-based payment and away from volume-driven payment.
I think that it is essential for hospitals to have incomes sufficient for their sustainability, but, in this regard, it must be noted that some
Third, by energetically pursuing and supporting improvements in the quality of care. A concerted national agenda to reduce patient injuries and complications, to increase use of evidence-based clinical care, to reduce overuse of incorrect care (like excessive antibiotic use and unwarranted testing), to give more control to patients over the care decisions that affect them, and to help people with chronic illnesses to stay where they want to be – at home and in their communities – would all reduce total health care expenditures, while improving outcomes for patients and families.
Fourth, by allowing for investments in reducing upstream causes of illness and disability. A Medicare for All system would at long last help our nation to invest in
Streamlining payment offers vast cost savings. Under the simplifications of Medicare for All, providers of care would face just one set of billing rules and processes, greatly reducing operating costs. Research demonstrates that in the US, hospitals spend over 25% of total expenditures on administration, compared to 12.5% and 15.5% across hospitals in Canada and England, respectively.17 A survey from 2009 revealed that the average physician in a practice spent almost $70,000 per year in time interacting with health insurers.18 This not only inflates prices, but also affects the quality and supply of care and the morale of clinicians; evidence suggests that providers most burdened by administrative work (such as primary care physicians) are more prone to burnout and less likely to continue clinical practice.19
Second, by using price-setting authority and negotiation as a large-volume purchaser of supplies, drugs, and services. Medicare’s heft today as an administrative price-setter places a burden on its shoulders to exercise that authority prudently, balancing interests always: the sustainability of the Trust Fund, the defense of the public purse, the out-of-pocket costs for beneficiaries, and the financial vitality of the people and organizations that provide care. The same would be true of an expanded Medicare program. In addition, Medicare, more than any other payer, can accelerate progress toward value-based payment and away from volume-driven payment.
I think that it is essential for hospitals to have incomes sufficient for their sustainability, but, in this regard, it must be noted that some
Third, by energetically pursuing and supporting improvements in the quality of care. A concerted national agenda to reduce patient injuries and complications, to increase use of evidence-based clinical care, to reduce overuse of incorrect care (like excessive antibiotic use and unwarranted testing), to give more control to patients over the care decisions that affect them, and to help people with chronic illnesses to stay where they want to be – at home and in their communities – would all reduce total health care expenditures, while improving outcomes for patients and families.
Fourth, by allowing for investments in reducing upstream causes of illness and disability. A Medicare for All system would at long last help our nation to invest in
hospitals and other
providers are engaging today in unconscionable pricing practices in the non-
Medicare sector, charging as much as 400% of Medicare rates in some
markets.20 There really is no justification for these rates, and one strong
argument for Medicare for All would be its capacity to insist on fairer pricing that
will force attention toward greater efficiencies and reforms at the delivery system
level. This is not an agenda that the current commercial sector insurers are
generally able or willing to undertake.
7
community-based resources and social care services that can reduce
dependency on high-tech, high-cost care by helping people stay well and at
home. It would also allow for a long-overdue national effort to reduce the large
racial and socio-economic disparities in health that continue in our nation.
Absent a Medicare for All system of payment, I simply do not see the
mechanisms or will to rebalance our investments toward health and wellbeing,
and to end the tragic health inequities that our nation continues to tolerate.
Today’s opioid epidemic, rising maternal mortality rates, and what the
economists Angus Deaton and Anne Case term “deaths of despair”21 are all
national burdens that call out for national leadership. A Medicare for All system
would give our country a mechanism for setting such priorities and acting on
them, all together.
If anyone can show me a payment model that beats Medicare for All in achieving the Triple Aim and universal coverage, I am all ears. But I have as yet seen none. And the nation’s experience with Medicare for Some – as it exists now, and as endorsed by the overwhelming popularity of Medicare in our nation – suggests that we may, indeed, already have an answer in our hands.
I do not wish to minimize or disregard the many obstacles and objections to Medicare for All as a pathway for our nation. But, whereas some others find the obstacles to be insurmountable, I do not. I believe that we have the wits, experience, wealth, and agility to overcome every one, as we have for Medicare as we know it today. To be specific, here are some of the objections:
If anyone can show me a payment model that beats Medicare for All in achieving the Triple Aim and universal coverage, I am all ears. But I have as yet seen none. And the nation’s experience with Medicare for Some – as it exists now, and as endorsed by the overwhelming popularity of Medicare in our nation – suggests that we may, indeed, already have an answer in our hands.
I do not wish to minimize or disregard the many obstacles and objections to Medicare for All as a pathway for our nation. But, whereas some others find the obstacles to be insurmountable, I do not. I believe that we have the wits, experience, wealth, and agility to overcome every one, as we have for Medicare as we know it today. To be specific, here are some of the objections:
-
That Medicare for All is unaffordable. I think the opposite may be true; that
is, without Medicare for All, health care in our nation may be bound to
head, as it is now heading, for true unaffordability. Medicare for All is a
positive way out. As I noted above, the level of waste in our health care
system is enormous. A publicly accountable, transparent, and mission-
oriented payer would offer us as a nation leverage against wasteful health
care expenditures that is not achievable in the current, chaotic payment
environment.
-
That Medicare for All is a governmental takeover of health care. It is not.
Not one single bill that I know of proposes under any form of expanded
governmental coverage that government should become the provider of
health care for all Americans. Medicare for All is about paying for care –
consolidating payment in a public program. It is not about providing care.
Care provision, through today’s array of hospitals, clinicians, nursing
homes, and so on, would remain as it is – largely private sector and
entrepreneurial.
-
That Medicare for All would severely underpay hospitals and clinicians.
That would be neither wise nor inevitable. When government becomes
the payer for any good or service, and is subject to oversight from
8
Congress, it is and should be held accountable for responsible practices.
That is how Medicare works today; and it is how Medicare for All should
and would work in the future.
-
That Medicare for All implies a financially unrealistic package of health
care services. Any insurer – government or commercial – has to end up
implementing a defined benefit package, and the content and
comprehensiveness of that coverage will always be subject to debate and
negotiation. What Medicare for All does do is to move that dialogue into
daylight, as we can consider as a nation what we wish to include in
universal coverage and what not. That is exactly what happened, for
example, when the ACA extended coverage for clinical prevention
services, and when Congress took steps toward assuring mental health
care parity. The current commercial insurance system does the same –
deciding what is and is not covered – but it does that largely out of sight
and without any real form of pubic accountability.
-
That Medicare for All would unacceptably disrupt people’s current
relationships with their health care insurers. Indeed, Medicare for All
would give every American not now covered by Medicare a new insurer –
a public insurer. Whether this threat to existing bonds between people
and commercial insurers in fact troubles Americans I find doubtful. I
suspect that what most Americans value is their bond with clinicians, not
with insurers.
-
That the tax increases implied by Medicare for All are massive. This
represents a negative framing of a positive result. Yes, indeed, the fund
flows for health care under Medicare for All would become public, as
opposed to the private payment now channeled through payroll check
deductions and employer contributions to commercial health insurance.
These are existing fees – “taxes” really – through private channels. What
the American worker cares most about financially is how much he or she
takes home at the end of the day. Under Medicare for All, properly
designed, that amount – take home pay – goes up, not down.
I end where I began: Medicare for All is not an end in itself. It is a means to achieve what we care about: better care, better health, lower cost, and leaving no one out. I am open to considering any proposal that moves our nation fast and well toward those goals. Compared with Medicare for All, I see none better.
1 Berwick DM, Nolan TW, Whittington. The Triple Aim: care, health, and cost. Health Affairs 2008; 27: 759-69.
9
2 Kohn LT, Corrigan JM, Donaldson MS, eds. To Err Is Human: Building a Safer
Health Care System. (Washington, DC: National Academies Press; 2000.)
3 Institute of Medicine. Crossing the Quality Chasm: A New Health System for the 21st Century. (Washington, DC: National Academies Press; 2001.)
4 https://www.cia.gov/library/publications/the-world- factbook/rankorder/2102rank.html
5 Artiga S, Foutz J, Cornachione E, et al. Key Facts on Health and Health Care by Race and Ethnicity. Kaiser Family Foundation 2016.
6 Infant Mortality and African Americans. 2017. Office of Minority Health. Department of Health and Human Services. https://minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=23
7 Artiga S, Foutz J, Cornachione E, et al. Key Facts on Health and Health Care by Race and Ethnicity. Kaiser Family Foundation 2016.
8 Pregnancy-Related Deaths. 2019. Centers for Disease Control.
https://www.cdc.gov/vitalsigns/maternal-deaths/index.html
9 Papanicolas I, Woski LR, Jha A. Health care spending in the US and other high-income countries. JAMA 2018; 319:1024-39.
10 Institute of Medicine. Best Care at Lower Cost: The Path to Continuous Learning Health Care in America. (Washington, DC: National Academies Press; 2012.)
11 Uninsured Rates for the Nonelderly by Race/Ethnicity. 2019. Kaiser Family Foundation.
12 United Nations. Universal Declaration of Human Rights. 2015.
13 Levinson DR. Medicare atypical antipsychotic drug claims for elderly nursing home residents. https://oig.hhs.gov/oei/reports/oei-07-08-00150.pdf.
14 Gurwitz JH, Bonner A, Berwick DM. Reducing excessive use of antipsychotic agents in nursing homes. JAMA 2017; 318: 118-9.
15 https://partnershipforpatients.cms.gov/ 16 https://millionhearts.hhs.gov/
3 Institute of Medicine. Crossing the Quality Chasm: A New Health System for the 21st Century. (Washington, DC: National Academies Press; 2001.)
4 https://www.cia.gov/library/publications/the-world- factbook/rankorder/2102rank.html
5 Artiga S, Foutz J, Cornachione E, et al. Key Facts on Health and Health Care by Race and Ethnicity. Kaiser Family Foundation 2016.
6 Infant Mortality and African Americans. 2017. Office of Minority Health. Department of Health and Human Services. https://minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=23
7 Artiga S, Foutz J, Cornachione E, et al. Key Facts on Health and Health Care by Race and Ethnicity. Kaiser Family Foundation 2016.
8 Pregnancy-Related Deaths. 2019. Centers for Disease Control.
https://www.cdc.gov/vitalsigns/maternal-deaths/index.html
9 Papanicolas I, Woski LR, Jha A. Health care spending in the US and other high-income countries. JAMA 2018; 319:1024-39.
10 Institute of Medicine. Best Care at Lower Cost: The Path to Continuous Learning Health Care in America. (Washington, DC: National Academies Press; 2012.)
11 Uninsured Rates for the Nonelderly by Race/Ethnicity. 2019. Kaiser Family Foundation.
12 United Nations. Universal Declaration of Human Rights. 2015.
13 Levinson DR. Medicare atypical antipsychotic drug claims for elderly nursing home residents. https://oig.hhs.gov/oei/reports/oei-07-08-00150.pdf.
14 Gurwitz JH, Bonner A, Berwick DM. Reducing excessive use of antipsychotic agents in nursing homes. JAMA 2017; 318: 118-9.
15 https://partnershipforpatients.cms.gov/ 16 https://millionhearts.hhs.gov/
10
17 Himmelstein DU, Jun M, Busse R et al. A comparison of hospital
administrative costs in eight nations: US costs exceed all others by far. Health
Affairs 2014; 33(9):1586-94.
18 Casalino LP, Nicholson S, Gans DN et al. What does it cost physician practices to interact with health insurance plans? Health Affairs 2009; 28(4):w533-43
19 Rao S, Kimball A, Lehroff S, et al. The Impact of Administrative Burden on Academic Physicians: Results of a Hospital-Wide Physician Survey. Academic Medicine 2017; 92(2):237-243.
20 White C, Whaley C. Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely: Findings from an Employer-Led Transparency Initiative. RAND Corporation, 2019.
21 Case A, Deaton A. Mortality and morbidity in the 21st century. Brookings Papers on Economic Activity. Spring, 2017: 397-476. https://www.brookings.edu/wp-content/uploads/2017/03/6_casedeaton.pdf
18 Casalino LP, Nicholson S, Gans DN et al. What does it cost physician practices to interact with health insurance plans? Health Affairs 2009; 28(4):w533-43
19 Rao S, Kimball A, Lehroff S, et al. The Impact of Administrative Burden on Academic Physicians: Results of a Hospital-Wide Physician Survey. Academic Medicine 2017; 92(2):237-243.
20 White C, Whaley C. Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely: Findings from an Employer-Led Transparency Initiative. RAND Corporation, 2019.
21 Case A, Deaton A. Mortality and morbidity in the 21st century. Brookings Papers on Economic Activity. Spring, 2017: 397-476. https://www.brookings.edu/wp-content/uploads/2017/03/6_casedeaton.pdf
Today’s Doctors: Overburdened and Burning Out
LTE - NYT - June 12, 2019
To the Editor:
Re “Is Exploiting Doctors the Business Plan?,” by Danielle Ofri (Sunday Review, June 9):
The
corporatization of health care, in the interests of efficiency and
lower costs, is bringing down our outstanding system of care that has
long been the envy of the world. Patients are treated like widgets, and
doctors and nurses are treated like assembly-line employees.
Many
doctors are not given the discretion or the time to treat each patient
as an individual, with kindness and respect. They are hardly able to
think through complicated, life-altering decisions.
Medical
care is very expensive and costs have to be reduced. However, there are
so many ways to do that without killing the doctor-patient relationship
and exploiting medical professionals. The doctor burnout rate is high,
and doctors are retiring at younger ages.
Some
ways to reduce costs are requiring hospitals to publish the costs of
their tests so they can be compared, negotiating on drug prices and
creating a universal insurance form.
We can have a
high-quality, efficient, humane system if we use common-sense practices,
but we have to stop treating health care like any other for-profit
industry. It is different and requires a more nuanced approach.
Carol Kraines
Deerfield, Ill.
Deerfield, Ill.
To the Editor:
As
a physician, I agree with Dr. Danielle Ofri’s assertion that most
health care professionals have remained true to the highest ideals of
their fields in the face of increasing corporatization and challenging
working conditions. But I find her assertion of exploitation — at least
of doctors — difficult to reconcile.
By
and large physicians in the United States earn far more money than
their peers in the rest of the world, placing us squarely in the top 2
percent, if not 1 percent, of American income distribution. The
proliferation of health care administrators is attributable to an
unnecessarily complex reimbursement system based on a private,
for-profit insurance industry.
Yet the American Medical Association, the largest professional organization of physicians, actively lobbies against the administrative simplicity of Medicare for All.
Moreover, physician groups have long opposed expansions in scope of
practice for nurses, nurse practitioners and others who could allow
physicians to concentrate on the most complex patients who need our
expertise.
Doctors continue to be seen
as leaders in health care. Rather than just lament the current state of
affairs, we must acknowledge that we have been complicit, and make
amends.
Keith J. Loud
Norwich, Vt.
Norwich, Vt.
To the Editor:
From
my perspective as a retired health care economist, I believe that the
fundamental problem is that our health care system has evolved without
direction from the small practice model to team medicine. If we focus on
the system as a whole we may find some solutions.
First,
insist that all electronic information systems require only essential
information to reduce the time that doctors spend entering data.
Second,
download any responsibilities that can be prudently handled by a nurse,
a technician, a staff person or a less experienced doctor. We have far
fewer doctors per capita than many other advanced countries. We need to
open many more seats in medical schools, make it easier for
foreign-trained doctors to practice in the United States, and empower
nurses and physician assistants.
Third, cut noncritical administrative expenses; a 10:1 ratio of administrators to doctors is ridiculous.
And
fourth, have the various medical boards define safe harbor treatment
standards (which help protect doctors against liability) and guidelines
for excessive treatment.
Larry Fox
Rancho Mirage, Calif.
Rancho Mirage, Calif.
Maine Voices: Anti-‘Medicare for All’ industry group doesn’t serve patients’ interests
Partnership for America's Health Care Future members benefit from the status quo – but nobody else does.
by Dan Bryant - Portland Press Herald - June 12, 2019
Case in point: Partnership for America’s Health Care Future. Formed last year in response to rising interest in public health care proposals (“Medicare for All” and its variants), the group states that its mission is “to improve what’s working in health care and fix what’s not.” Its members “support building on the strength of employer-provided health coverage and preserving Medicare, Medicaid, and other programs that so many Americans depend on.”
However, as one reads through the partnership’s material, promoted through Facebook and Twitter, the efforts of the political consulting firm FP1 Strategies and email blasts, one wonders what they mean by “what’s not (working)” in health care. Is it what the public plans attempt to address – the waste, the uninsured and inadequately insured, the cost shifting, the prohibitive cost-sharing, the job lock, the business burden, the physician burnout, the patient confusion, the medical bankruptcies and the medical classism?
A look at some of the partnership’s 30 members – which collectively spent $143 million lobbying Congress last year, according to the Center for Responsive Politics – offers some perspective.
The Pharmaceutical Research and Manufacturers of America, the drug industry’s main lobbying group, is one such member. Last year, PhRMA lobbied against Medicare Part D drug price negotiation and the importation of cheaper drugs; the year before, it resisted Nevada’s efforts to control the surging price of insulin. Another partnership member, the Association for Accessible Medicines, represents generic-drug manufacturers; in 2018, it argued successfully against a Maryland law restraining massive generic-drug price hikes. Maine and 43 other states recently filed a lawsuit alleging that drugmakers conspired to inflate prices of over 100 generic drugs by up to 1,000 percent. Both PhRMA and the Association for Accessible Medicines have good reason to resist reform that could entail drug price regulation or negotiation.
Another trade group, America’s Health Insurance Plans, spent over $6 million lobbying Congress last year, during which the inflation rate for health insurance was over 10 percent, as opposed to 2.3 percent for medical care services themselves. The prime goal of the Council of Insurance Agents and Brokers, another partnership member, is to “advance our members’ businesses and grow their bottom lines.” Any public health care plan would, of course, greatly reduce for-profit insurers’ bottom line.
Representing hospital interests are the American Hospital Association, which supported the creation of the Affordable Care Act and its government-subsidized insurance; and the Federation of American Hospitals (investor-owned). Other hospital management members include the Fortune 500 companies LifePoint Health (owned by affiliates of equity firm Apollo Global Management), and Universal Health Services (“an inspired choice for value investors,” according to investment adviser Zacks). Hospital Corp. of America, Community Health Systems and Tenet Healthcare, also Fortune 500 companies, have been fined for overcharging and upcoding claims; they, too, might well like to keep government oversight to a minimum.
Hospitals in general, including nonprofit ones, acutely aware of Medicare and Medicaid’s lower reimbursement rates, are understandably concerned about greater government control. What they don’t seem to acknowledge, though, is the considerable savings they should enjoy with many of the public plans (billing simplification, drug and device price negotiation, etc.).
Interestingly, the only partnership members representing physicians are the American Medical Association (originally an opponent of Medicare, and now representing a quarter of U.S. physicians), the North Dakota Medical Association and the American College of Radiology.
What must strike anyone reviewing the partnership’s membership is that the partnership’s goal of sustaining private, for-profit, employment-based insurance while keeping government responsible for the poor and elderly (“what’s working”) would benefit all of them personally.
What is less clear is whether it would benefit the country as a whole, and whether fixing “what’s not (working)” would, either, if that doesn’t include the issues that the public plans try to address.
By all means, consider Partnership for America’s Health Care Future’s arguments, but do so in light of just whose interests they serve.
https://www.pressherald.com/2019/06/12/maine-voices-anti-medicare-for-all-industry-group-doesnt-have-patients-interests-in-mind/
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