Editor's Note:
The following article from the UCLA and University of Pennsylvania law journals is the first article I've seen in the academic literature that explicitly calls out the folly of the notion of market forces and compeition as a way to control healthcare costs and assure quality since I wrote about it in the New England Journal of Medicine almost 40 years ago.
- SPC
Health Care's Market Bureaucracy
Allison K. Hoffman - University of Pennsylvania Law School - May 26, 2019
Abstract
The last several decades of health law and policy have been
built on a foundation of economic theory. This theory supported the
proliferation of market-based policies that promised maximum efficiency
and minimal bureaucracy. Neither of these promises has been realized. A
mounting body of empirical research discussed in this Article makes
clear that leading market-based policies are not efficient — they fail
to capture what people want. Even more, this Article describes how the
struggle to bolster these policies — through constant regulatory,
technocratic tinkering that aims to improve the market and the
decision-making of consumers in it — has produced a massive market
bureaucracy.
To illustrate the growth the of market bureaucracy, this Article traces the origin and development of several market-based theories that have been central to the modern era of health law. The first, called managed competition, looks to consumerism in insurance markets and contends that people will choose wisely among health plan options, and their choices will drive higher value health care. The second relies on consumerism when using medical care. Sometimes called consumer-driven health care, the notion is that when people are subject to a share of the costs, they will more selectively choose when and where to use medical care and will avoid low-value care. The final example considers the application of antitrust to health care mergers, ostensibly to create a competitive field on which consumerism can flourish.
This Article shows that, in application, none of these ideas has, nor will ever, deliver as imagined in a world that deviates from theory. Nonetheless, they continue to spawn a vast web of health law regulation in their support. The cost of this market bureaucracy includes the scaffolding to hold up an ineffective market-based structure and, more importantly, the opportunity cost of driving out better alternatives to solving important health care challenges.
Health care’s market bureaucracy endures in light of this failure in part due to politics and political economy, a point others have illuminated well. Yet, this Article suggests that it persists equally because of its elevation of values of individualism and choice. Choice is especially appealing when it comes to decisions about our health, where we want to believe we are in control, but choice has proven empty as conceived. Understanding that markets do not actually enhance choice—and are as bureaucratic as any other approach — can clear the way to ask how to design health law and policy that better produces what the polity genuinely values.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3394970
To illustrate the growth the of market bureaucracy, this Article traces the origin and development of several market-based theories that have been central to the modern era of health law. The first, called managed competition, looks to consumerism in insurance markets and contends that people will choose wisely among health plan options, and their choices will drive higher value health care. The second relies on consumerism when using medical care. Sometimes called consumer-driven health care, the notion is that when people are subject to a share of the costs, they will more selectively choose when and where to use medical care and will avoid low-value care. The final example considers the application of antitrust to health care mergers, ostensibly to create a competitive field on which consumerism can flourish.
This Article shows that, in application, none of these ideas has, nor will ever, deliver as imagined in a world that deviates from theory. Nonetheless, they continue to spawn a vast web of health law regulation in their support. The cost of this market bureaucracy includes the scaffolding to hold up an ineffective market-based structure and, more importantly, the opportunity cost of driving out better alternatives to solving important health care challenges.
Health care’s market bureaucracy endures in light of this failure in part due to politics and political economy, a point others have illuminated well. Yet, this Article suggests that it persists equally because of its elevation of values of individualism and choice. Choice is especially appealing when it comes to decisions about our health, where we want to believe we are in control, but choice has proven empty as conceived. Understanding that markets do not actually enhance choice—and are as bureaucratic as any other approach — can clear the way to ask how to design health law and policy that better produces what the polity genuinely values.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3394970
That Beloved Hospital? It’s Driving Up Health Care Costs
by Elisabeth Rosenthal - NYT - 9-01-2019
As voters fume about the high cost of health care,
politicians have been targeting two well-deserved villains:
pharmaceutical companies, whose prices have risen more than inflation, and insurers, who pay their executives millions in salaries while raising premiums and deductibles.
But while the Democratic presidential candidates have devoted copious airtime to debating health care, many of the country’s leading health policy experts have wondered why they have given a total pass to arguably a primary culprit behind runaway medical inflation: America’s hospitals.
Data shows that hospitals are by far the biggest cost in our $3.5 trillion health care system, where spending is growing faster than gross domestic product, inflation and wage growth. Spending on hospitals represents 44 percent of personal expenses for the privately insured, according to Rand.
A report this year from researchers at Yale and other universities found that hospital prices increased a whopping 42 percent from 2007 to 2014 for inpatient care and 25 percent for outpatient care, compared with 18 percent and 6 percent for physicians.
But while the Democratic presidential candidates have devoted copious airtime to debating health care, many of the country’s leading health policy experts have wondered why they have given a total pass to arguably a primary culprit behind runaway medical inflation: America’s hospitals.
Data shows that hospitals are by far the biggest cost in our $3.5 trillion health care system, where spending is growing faster than gross domestic product, inflation and wage growth. Spending on hospitals represents 44 percent of personal expenses for the privately insured, according to Rand.
A report this year from researchers at Yale and other universities found that hospital prices increased a whopping 42 percent from 2007 to 2014 for inpatient care and 25 percent for outpatient care, compared with 18 percent and 6 percent for physicians.
So why have
politicians on both the left and right let hospitals off scot-free?
Because a web of ties binds politicians to the health care system.
Every senator, virtually every congressman and every mayor of every large city has a powerful hospital system in his or her district. And those hospitals are as politically untouchable as soybean growers in Iowa or oil producers in Texas.
As hospitals and hospital systems have consolidated, they have become the biggest employers in numerous cities and states. They have replaced manufacturing as the hometown industry in a number of rust-belt cities, including Cleveland and Pittsburgh.
Can Kamala Harris ignore the requests of Sutter Health, Kaiser Permanente, U.C.L.A. or any of the big health care systems in California? Can Elizabeth Warren ignore the needs of Partners HealthCare, Boston’s behemoth? (Bernie Sanders may be somewhat different on this front because Vermont doesn’t have any nationally ranked hospitals.)
Beyond that, hospitals are often beloved by constituents. It’s easy to get voters riled up about a drug maker in Silicon Valley or an insurer in Hartford. It’s much riskier to try to direct their venom at the place where their children were born; that employed their parents as nurses, doctors and orderlies; that sponsored local Little League teams; that was associated with their Catholic Church.
Every senator, virtually every congressman and every mayor of every large city has a powerful hospital system in his or her district. And those hospitals are as politically untouchable as soybean growers in Iowa or oil producers in Texas.
As hospitals and hospital systems have consolidated, they have become the biggest employers in numerous cities and states. They have replaced manufacturing as the hometown industry in a number of rust-belt cities, including Cleveland and Pittsburgh.
Can Kamala Harris ignore the requests of Sutter Health, Kaiser Permanente, U.C.L.A. or any of the big health care systems in California? Can Elizabeth Warren ignore the needs of Partners HealthCare, Boston’s behemoth? (Bernie Sanders may be somewhat different on this front because Vermont doesn’t have any nationally ranked hospitals.)
Beyond that, hospitals are often beloved by constituents. It’s easy to get voters riled up about a drug maker in Silicon Valley or an insurer in Hartford. It’s much riskier to try to direct their venom at the place where their children were born; that employed their parents as nurses, doctors and orderlies; that sponsored local Little League teams; that was associated with their Catholic Church.
And,
of course, there’s election money. Hospital trade groups, medical
centers and their employees are major political donors, contributing to
whichever party holds power — and often to the out-of-power party as
well. In 2018, PACs associated with the Greater New York Hospital Association,
and individuals linked to it, gave $4.5 million to the Democrats’
Senate Majority PAC and $1 million to their House Majority PAC. Its
chief lobbyist personally gave nearly a quarter of a million dollars to dozens of campaigns last year.
Senator Sanders has called on his competitors for the Democratic nomination to follow his lead and reject contributions from pharma and insurance. Can any candidate do the same for hospitals? The campaign committees of all 10 candidates participating in the upcoming Democratic debate have plentiful donations linked to the hospital and health care industry, according to Open Secrets.
But the symbiosis between hospitals and politicians operates most insidiously in the subtle fueling of each other’s interests. Zack Cooper, a health economist at Yale, and his colleagues looked at this life cycle of influence by analyzing how members of Congress voted for a Medicare provision that allowed hospitals to apply to have their government payments increased. Hospitals in districts of members who voted yea got more money than hospitals whose representatives voted nay, to the collective tune of $100 million. They used that money to hire more staff and increase payroll. They also spent millions lobbying to extend the program.
Members who voted yea in turn received a 25 percent increase in total campaign contributions and a 65 percent increase in contributions from individuals working in the health care industry in their home states. It was a win-win for both sides.
To defend their high prices, medical centers assert that they couldn’t afford to operate on Medicare payments, which are generally lower than what private insurers pay. But the argument isn’t convincing.
The cost of a hospital stay in the United States averaged $5,220 a day in 2015 — and could be as high as over $17,000, compared with $765 in Australia. In a Rand study published earlier this year, researchers calculated that hospitals treating patients with private health insurance were paid, overall, 2.4 times the Medicare rates in 2017, and nearly three times the rate for outpatient care. If the plans had paid according to Medicare’s formula, their spending would be reduced by over half.
Most economists think hospitals could do just fine with far less than they get today from private insurance.
Senator Sanders has called on his competitors for the Democratic nomination to follow his lead and reject contributions from pharma and insurance. Can any candidate do the same for hospitals? The campaign committees of all 10 candidates participating in the upcoming Democratic debate have plentiful donations linked to the hospital and health care industry, according to Open Secrets.
But the symbiosis between hospitals and politicians operates most insidiously in the subtle fueling of each other’s interests. Zack Cooper, a health economist at Yale, and his colleagues looked at this life cycle of influence by analyzing how members of Congress voted for a Medicare provision that allowed hospitals to apply to have their government payments increased. Hospitals in districts of members who voted yea got more money than hospitals whose representatives voted nay, to the collective tune of $100 million. They used that money to hire more staff and increase payroll. They also spent millions lobbying to extend the program.
Members who voted yea in turn received a 25 percent increase in total campaign contributions and a 65 percent increase in contributions from individuals working in the health care industry in their home states. It was a win-win for both sides.
To defend their high prices, medical centers assert that they couldn’t afford to operate on Medicare payments, which are generally lower than what private insurers pay. But the argument isn’t convincing.
The cost of a hospital stay in the United States averaged $5,220 a day in 2015 — and could be as high as over $17,000, compared with $765 in Australia. In a Rand study published earlier this year, researchers calculated that hospitals treating patients with private health insurance were paid, overall, 2.4 times the Medicare rates in 2017, and nearly three times the rate for outpatient care. If the plans had paid according to Medicare’s formula, their spending would be reduced by over half.
Most economists think hospitals could do just fine with far less than they get today from private insurance.
It would be unseemly for these nonprofit medical centers to make barrels of money. So when their operations generate huge surpluses — as many big medical centers do — they plow the money back into the system. They build another cancer clinic, increase C.E.O. pay, buy the newest scanner (whether it is needed or not) or install spas and Zen gardens.
Some rural hospitals are genuinely struggling. But many American hospitals have been spending capital “like water,” said Kevin Schulman a physician-economist at Stanford. The high cost of hospitals today, he said, is often a function of the cost of new infrastructure or poor management decisions. “Medicare is supposed to pay the cost of an efficient hospital,” he said. “If they’ve made bad decisions, why should we keep paying for that?”
If hospitals were paid less via regulation or genuine competition, they would look different, and they’d make different purchasing decisions about technology. But would that matter to medical results? Compared with their European counterparts, some American hospitals resemble seven-star hotels. And yet, on average, the United States doesn’t have better outcomes than other wealthy nations. By some measures — such as life expectancy and infant mortality — it scores worse than average.
As attorney general in California, Kamala Harris in 2012 initiated an antitrust investigation into hospitals’ high charges. But as a senator and presidential candidate, she has been largely silent on the issue — as have all the other candidates.
As Uwe Reinhardt, the revered Princeton health economist who died in 2017, told me, “If you want to save money, you have to pay less.” That means taking on hospital pricing.
So fine, go after drug makers and insurers. And for good measure, attack the device makers who profit from huge markups, and the pharmacy benefit managers — the middlemen who negotiate drug prices down for insurers, then keep the difference for themselves.
But with Congress returning to Washington in the coming days and a new Democratic debate less than two weeks away, our elected officials need to address the elephant in the room and tell us how they plan to rein in hospital excesses.
Elisabeth Rosenthal, a former New York Times correspondent, is the editor in chief of Kaiser Health News, the author of “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back” and a contributing opinion writer.
https://www.nytimes.com/2019/09/01/opinion/hospital-spending.html?smid=nytcore-ios-share
As costs mount, states scramble for new ways to pay for late-in-life care - The Boston Globe
by Shirley Leung - Boston Globe - August 28, 2019
“A lot of states have concluded that the cost of doing nothing now exceeds the cost of doing something,” said Marc Cohen, a gerontology professor and researcher at the University of Massachusetts Boston.Massachusetts, long a health policy innovator, has stopped short of a groundbreaking initiative on long-term care. Instead, it’s expanded the rolls for Mass Health, the state Medicaid program that funds nursing home care for low-income residents, making thousands more residents eligible. And it’s broadened access to another program offering in-home help with activities such as bathing and meal preparation, letting middle-income seniors take part through a sliding scale of co-pays.
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“We’re
trying to leverage the policies we have to meet our long-term care
needs,” said Elizabeth Chen, the Massachusetts secretary of elder
affairs.Other states are experimenting with other approaches. A national advocacy group called Caring Across Generations, which backs state campaigns to bankroll long-term care, counts 11 — including New York, Illinois, Iowa, and Minnesota — working on far-reaching plans.
California and Michigan, among others, are weighing variations of a law passed by Washington state this spring. It will create an insurance fund providing all residents up to $36,500 for expenses such as in-home care, wheelchair ramps, and meal deliveries, as well as nursing home fees. Workers in the state will be assessed a monthly 0.58 percent payroll tax to seed the fund.
“This model will work, and it could be used almost off-the-shelf by every state,” said Jason McGill, assistant director of the Washington state Medicaid program, which projects the plan will save it nearly $4 billion in long-term care costs by 2052.
Other states are looking to a 2017 initiative adopted in Hawaii designed to keep working family caregivers in the labor force. If they work at least 30 hours a week outside the home, caregivers are eligible for stipends of as much as $70 a day to defray the cost of services for their loved ones. Several states are also exploring measures to boost pay for health workers who provide long-term care, making it competitive with other low-wage jobs.
“You can find jobs in the fast-food industry that pay more than home care work,” said Laura DePalma, campaign director at Michigan United, a group that’s organized support for legislation combining an insurance fund with higher wages for care providers.
Chen said Massachusetts officials will watch as other states launch programs. “We’re learning from what others are doing,” she said.
Some in the state’s health policy community believe it’s time for a broad-based approach that would help not only low-income seniors but middle-income seniors as well. “This is a huge and expensive coverage gap,” said Nancy Turnbull, associate dean at the Harvard School of Public Health.
She acknowledged, however, that such a plan “wouldn’t be cheap.”
Long-term care was historically considered a family’s responsibility. But in an era when families are smaller and more geographically dispersed, many have outsourced caregiving. That’s hard on states, which have to sacrifice other priorities to cover Medicaid costs for low-income seniors. And it’s especially tough for middle-class families who don’t qualify for public assistance.
An estimated 14.4 million seniors will have accumulated too much savings to be eligible for Medicaid by 2029 and won’t be able to pay for assisted living without spending down their assets, according to a study in the journal Health Affairs in April.
The average total cost for the roughly half of Americans expected to have significant needs in their old age will be $266,000, according to a National Academy of Social Research report. That could be out of reach for the majority of middle-income seniors.
Long-term care isn’t covered by Medicare, the federal health insurance program for seniors. And only about 7 percent of Americans over 50 have bought private long-term care insurance; such insurance is cheaper when purchased at a younger age, but many middle-aged people are tapped out with such expenses as mortgages and college payments.
“People are getting old, and most haven’t planned for the cost,” said Robert Yee, a New York actuarial consultant who worked on an ill-fated federal government plan more than a decade ago to add a long-term care benefit to the Obama-era health reforms.
The state of Washington’s program, which includes elements of that federal plan, has drawn criticism from both sides of the political spectrum. Some see its mandatory payroll tax as government overreach, while others question whether its benefit will be enough to cover the needs of those with diseases such as Alzheimer’s, who might spend years in assisted living.
Yee, however, said even a modest benefit could fuel a cottage industry of supplemental insurance that could pick up remaining costs and be more affordable than traditional long-term plans. Many private insurers pulled out of the long-term care market over the past two decades as life spans increased, leaving potential buyers with fewer and more costly options.
The experience of the Obama years illustrates the difficulty of enacting long-term care legislation. Architects of the Affordable Care Act backed a companion measure — also signed into law in 2010 — creating a federal long-term care insurance program. But because participation was voluntary, and few young and healthy employees would buy in, it was ultimately deemed unworkable and repealed by Congress in 2013.
Six years later, “long-term care isn’t even on the radar screen” of national policy makers, said John McDonough, a Harvard public health professor and former adviser in the Senate during the development of the Affordable Care Act.
Even in the states, the effort is challenging, said Kristina Bas-Hamilton, legislative director for Local 3930 of the United Domestic Workers in Sacramento, which is pushing for a plan to raise health worker pay and establish a long-term care insurance fund in California.
Advocates for expanding access to long-term care are “fighting with every other crisis out there,” she said. “You’ve got to break through the noise.”
Despite state surveys showing public support for long-term care insurance, many balk at paying more in taxes to fund it. Last November, when a plan to finance a program providing free at-home services through a 3.8 percent income tax was put to a referendum in Maine, one of the nation’s fastest-aging states, voters defeated it 62.8 percent to 37.1 percent.
That hasn’t dimmed enthusiasm among labor leaders for a far-reaching approach.
At a national meeting of health care locals from the Service Employees International Union in Chicago earlier this month, union officials from other states peppered Sterling Harders, president of SEIU 775 in Seattle, with questions about Washington’s insurance program.
“Folks are very interested in what we’re doing,” Harders said. “We hope to be the model in the long-term care field that Massachusetts was in universal health care.”
https://www.bostonglobe.com/metro/2019/08/28/costs-mount-states-scramble-for-new-ways-pay-for-late-life-care/M8htXFlwNOwpXXgrJXjB0N/story.html?et_rid=1744895461&s_campaign=todaysheadlines:newsletter
'Medicare Advantage for All'
by Ken Jando and Vivian Ho - The Hill - August 27, 2019
The
recent Democratic debates confirmed that universal access to health
care insurance is a core issue for the 2020 election, although it’s
difficult keeping up with all the proposals. "Medicare for All" gets the most press, but its cost may be prohibitive, and has no chance of surviving the health care industry lobbying in Congress.
Former Vice President Joe BidenJoe BidenFormer Biden economic adviser: 'I really like a lot of' Warren's tax proposals Poll: Trump trails top 2020 Democrats in Michigan Monmouth acknowledges poll showing Biden losing support was 'outlier' MORE and Mayor Pete ButtigiegPeter (Pete) Paul ButtigiegTrump trails top five 2020 Democrats in national poll Two new polls show Biden with big edge on Warren, Sanders We know Mayor Buttigieg's drug decriminalization plan works — ask Portugal MORE want to bolster the Affordable Care Act by creating a new “public option” within it. Sen. Kamala Harris has introduced a proposal to include Medicare Advantage alongside the publicly run Medicare program.
All of these suggestions seem to involve huge risks, making a complex system even more so. And from the Republican side, we have absolutely no proposals. So where is the bold new idea that could actually happen? How do we build on what’s already working well, cover everyone, simplify administration and find a path that limits cost increases to the same rate as GDP growth or lower? Maybe it’s time for “Medicare Advantage for All.”
Currently over 20 million Americans who are eligible for Medicare have chosen the private insurance alternative to traditional Medicare called Medicare Advantage. That’s about 35 percent of all Medicare-eligible seniors, and this percentage rises every year. Most Republicans support Medicare Advantage, including the Trump administration. Let’s build on that popular program’s success.
Medicare Advantage plans are individually selected by people based on cost, personal risk tolerance, network provider options and customer service. Americans like choices, and Medicare Advantage offers multiple choices along with a minimum safety net level of coverage. Medicare Advantage plans avoid the confusion of Medicare Part A, Part B, Part D and Medicare supplements since they cover all those elements and usually more. Most seniors have more than a dozen Medicare Advantage options to choose from. These plans cover all the services and benefits of Medicare, often with lower deductibles and copayments plus enhanced benefits. It’s no wonder these plans are popular. The primary trade-off for the consumer is a requirement to utilize the carrier’s contracted provider network, similar to what virtually all employer-sponsored insurance requires. In fact, Medicare Advantage HMO or PPO plans are offered by the same companies that provide individual and employer-sponsored insurance around the country.
The second rapidly growing segment of American health insurance is the individual marketplace under the ACA. The benefits offered in the marketplace, the companies offering those plans and the way the Center for Medicare and Medicaid Services regulates those plans is similar to Medicare Advantage. These markets could easily be merged.
New federal regulations beginning in January 2020 will allow employers to move away from picking a “one size fits all” group insurance plan for their employees to a “defined contribution” approach. Employees would use employer funds via a health reimbursement account to purchase an individual policy under the ACA’s marketplace that, again, looks a lot like a Medicare Advantage plan.
Over 80 percent of all Medicaid recipients are currently enrolled in Medicaid managed care, where they choose a private insurance company to provide all Medicaid benefits via an HMO network that, you guessed it, looks a lot like a Medicare Advantage plan with limited or no cost-sharing
We are already on our way to Medicare Advantage for All, but we are not doing it systematically or thoughtfully. A move to Medicare Advantage for All is achievable in a relatively short time frame, without the disruption and risk of Medicare for All, or without the confusion of even more options and funding mechanisms. The majority of Americans who have employer-sponsored insurance would still have it. And Medicaid becomes mainstream.
All Americans would have multiple choices of networks, carriers and benefit levels. All Americans would have incentives for consumerism and healthy behaviors. Cost growth would slow, as more people would receive coverage under Medicare, with an average annual growth rate per enrollee of 1.5 percent since 2010 versus 4.5 percent for the privately insured.
No big tax increases would be needed. Employers would continue to fund much of the cost, just as they do in defined contribution retirement plans. We could dramatically reduce the administrative burdens on patients and providers, as the processes would be the same whether you are young, old, rich, poor, subsidized or not.
With Medicare Advantage for All, we would be building on and improving the current system rather than blowing it all up and starting over. We could cover everyone, improve health outcomes, improve patient experience and stop the increase in health costs under Medicare Advantage for All. Republicans should love the free market approach, Democrats should embrace the opportunity to improve the ACA and Americans of all stripes should support a pragmatic and achievable path to universal coverage. We hope something this reasonable will survive our current political process.
Ken Janda is the principal of Houston-based consulting firm Wild Blue Health Solutions, adjunct professor at Rice University’s Jones Graduate School of Business and a former health insurance CEO. Vivian Ho is the James A. Baker III Institute Chair in Health Economics at Rice's Baker Institute for Public Policy, director of the institute’s Center for Health and Biosciences and a professor of economics at Rice.
https://thehill.com/opinion/healthcare/458783-medicare-advantage-for-all
Gompers had some major flaws, but he was 100 percent correct on that point. Workers are the true wealth creators and they have a right to band together to demand their fair share of the fruits of their labor. When workers exercise that collective strength, incomes go up and conditions improve for everyone.
Unfortunately, anti-labor politicians, corporations and billionaires have waged a decades-long assault on workers’ rights, leaving the U.S. with some of the weakest worker protections in the industrialized world. As a result, corporate profits have soared while wages have stagnated, even as productivity has risen nearly 70 percent in the past 40 years.
But working people are banding together and taking action! Last year, nearly a half-million workers went out on strike – the highest number since 1986. After enduring years of poor wages and austerity, a tight labor market has emboldened teachers, nurses, hotel workers, grocery store employees, bus drivers and others to withhold their labor to demand better wages, working conditions and more public funding for crucial public services.
And they’re winning! Here in Maine we’ve witnessed this rise in collective action firsthand as Preble Street workers, Calais Regional Hospital techs, Baxter Academy teachers and Kennebec Valley Community Action Program drivers have all formed new unions this year. All of this activity is occurring as a recent poll shows support for unions at a near-50-year high, with enthusiasm particularly strong among young people.
However, without pro-labor leaders in office, the laws are often stacked against us. President Franklin D. Roosevelt and Michigan Gov. Frank Murphy paved the way for the rapid growth of unions in the 1930s by refusing to send in troops to break the Flint, Michigan, sit-down strike at General Motors in 1937. Then President Ronald Reagan reversed decades of labor policy by declaring an all-out war on unions with his firing and permanent replacement of striking air traffic controllers 44 years later.
While we’ve heard many promises since then, Congress has not passed one significant piece of pro-union legislation in decades. This time, no candidate should take our support for granted. Fortunately, we are seeing some serious plans emerge.
One proposal, the Protecting the Right to Organize Act, would strengthen workers’ rights by prohibiting companies from interfering in union elections and banning so-called “right to work” laws, which are designed to weaken unions, drive down wages and allow workers to get the benefits of unions without paying dues. Another, more-ambitious measure would allow unions to negotiate minimum standards for entire industries rather than bargaining with only one company at a time. Sector-wide bargaining has been phenomenally successful in raising living standards for workers in Europe.
As the health care crisis continues to worsen, we are also urging candidates to support a “Medicare for All” system so we can finally take health care off the bargaining table and focus on raising wages and improving working conditions. And finally, it is urgent that Congress pass comprehensive immigration reform to give the millions of undocumented workers a legal path to citizenship. This is not only the humane thing to do, but it will end a two-tiered labor system that encourages the exploitation of workers and drives down wages for everyone.
Regardless of what politicians do in Washington, we will continue to organize and build power in our movement. If we’ve learned anything from the history of workers’ struggles, it’s that they can pass anti-worker laws, they can rig the justice system against us, they can hire armies of anti-union consultants and they can even send out the National Guard, but they can never destroy the desire of working people to band together to protect their common interests.
https://www.pressherald.com/2019/09/02/maine-afl-cio-director-the-workers-are-getting-restless-and-politicians-better-listen/
Former Vice President Joe BidenJoe BidenFormer Biden economic adviser: 'I really like a lot of' Warren's tax proposals Poll: Trump trails top 2020 Democrats in Michigan Monmouth acknowledges poll showing Biden losing support was 'outlier' MORE and Mayor Pete ButtigiegPeter (Pete) Paul ButtigiegTrump trails top five 2020 Democrats in national poll Two new polls show Biden with big edge on Warren, Sanders We know Mayor Buttigieg's drug decriminalization plan works — ask Portugal MORE want to bolster the Affordable Care Act by creating a new “public option” within it. Sen. Kamala Harris has introduced a proposal to include Medicare Advantage alongside the publicly run Medicare program.
All of these suggestions seem to involve huge risks, making a complex system even more so. And from the Republican side, we have absolutely no proposals. So where is the bold new idea that could actually happen? How do we build on what’s already working well, cover everyone, simplify administration and find a path that limits cost increases to the same rate as GDP growth or lower? Maybe it’s time for “Medicare Advantage for All.”
Currently over 20 million Americans who are eligible for Medicare have chosen the private insurance alternative to traditional Medicare called Medicare Advantage. That’s about 35 percent of all Medicare-eligible seniors, and this percentage rises every year. Most Republicans support Medicare Advantage, including the Trump administration. Let’s build on that popular program’s success.
Medicare Advantage plans are individually selected by people based on cost, personal risk tolerance, network provider options and customer service. Americans like choices, and Medicare Advantage offers multiple choices along with a minimum safety net level of coverage. Medicare Advantage plans avoid the confusion of Medicare Part A, Part B, Part D and Medicare supplements since they cover all those elements and usually more. Most seniors have more than a dozen Medicare Advantage options to choose from. These plans cover all the services and benefits of Medicare, often with lower deductibles and copayments plus enhanced benefits. It’s no wonder these plans are popular. The primary trade-off for the consumer is a requirement to utilize the carrier’s contracted provider network, similar to what virtually all employer-sponsored insurance requires. In fact, Medicare Advantage HMO or PPO plans are offered by the same companies that provide individual and employer-sponsored insurance around the country.
The second rapidly growing segment of American health insurance is the individual marketplace under the ACA. The benefits offered in the marketplace, the companies offering those plans and the way the Center for Medicare and Medicaid Services regulates those plans is similar to Medicare Advantage. These markets could easily be merged.
New federal regulations beginning in January 2020 will allow employers to move away from picking a “one size fits all” group insurance plan for their employees to a “defined contribution” approach. Employees would use employer funds via a health reimbursement account to purchase an individual policy under the ACA’s marketplace that, again, looks a lot like a Medicare Advantage plan.
Over 80 percent of all Medicaid recipients are currently enrolled in Medicaid managed care, where they choose a private insurance company to provide all Medicaid benefits via an HMO network that, you guessed it, looks a lot like a Medicare Advantage plan with limited or no cost-sharing
We are already on our way to Medicare Advantage for All, but we are not doing it systematically or thoughtfully. A move to Medicare Advantage for All is achievable in a relatively short time frame, without the disruption and risk of Medicare for All, or without the confusion of even more options and funding mechanisms. The majority of Americans who have employer-sponsored insurance would still have it. And Medicaid becomes mainstream.
All Americans would have multiple choices of networks, carriers and benefit levels. All Americans would have incentives for consumerism and healthy behaviors. Cost growth would slow, as more people would receive coverage under Medicare, with an average annual growth rate per enrollee of 1.5 percent since 2010 versus 4.5 percent for the privately insured.
No big tax increases would be needed. Employers would continue to fund much of the cost, just as they do in defined contribution retirement plans. We could dramatically reduce the administrative burdens on patients and providers, as the processes would be the same whether you are young, old, rich, poor, subsidized or not.
With Medicare Advantage for All, we would be building on and improving the current system rather than blowing it all up and starting over. We could cover everyone, improve health outcomes, improve patient experience and stop the increase in health costs under Medicare Advantage for All. Republicans should love the free market approach, Democrats should embrace the opportunity to improve the ACA and Americans of all stripes should support a pragmatic and achievable path to universal coverage. We hope something this reasonable will survive our current political process.
Ken Janda is the principal of Houston-based consulting firm Wild Blue Health Solutions, adjunct professor at Rice University’s Jones Graduate School of Business and a former health insurance CEO. Vivian Ho is the James A. Baker III Institute Chair in Health Economics at Rice's Baker Institute for Public Policy, director of the institute’s Center for Health and Biosciences and a professor of economics at Rice.
https://thehill.com/opinion/healthcare/458783-medicare-advantage-for-all
Public option plans won’t fix American healthcare system
by Daniel Bryant - Bangor Daily News - August 22, 2019
Public option health plans
have been much in the news of late. Defined as health care coverage
plans offered to individuals by the government and paid for by premiums
and tax-funded government subsidies and credits, they are designed as alternatives to single-payer plans,
which would replace our present multi-payer system with a publicly
funded comprehensive health care plan for everyone. Public options
appeal to many centrist politicians because they represent choice, and
promise not to disrupt our present system.
Many observers, however, feel that the primary goal of
health care reform is to address problems with our current system and
that public options fail to do that. Here are several examples of why.
Access: Most Americans feel
that everyone should have access to good health care. There is no
guarantee that a public option would do that, or expectation that
existing “thin” plans would be improved. A single-payer plan funds good
health care equally for everyone.
Health expenditures: As just one of many commercial, state,
and federal plans, a public option cannot achieve the large-scale cost
controls of a single-payer plan (provider and drug price negotiation,
global hospital budgets, overhead reduction, bulk purchasing, etc.).
Waste: All the waste of our present system ( over $500 billion a year)
would remain with an added public option. There would be duplication of
competing plans with their own sets of benefits, eligibility
requirements, and individualized premiums requiring sophisticated
provider billing departments and a public option would not address run-away drug prices.
Cost: To make premiums low enough that people with
individual or employment-based plans will switch to a public option,
subsidies and tax credits would need to be generous. Because, savings
will be few with public options, those funding their own health care
individually or through work will have to pay additional taxes to fund
others’ care. In addition, absent savings, benefits such as eye,
hearing, and dental care could not be added to a public option plan
without increasing taxes.
Point of service costs: Unlike the situation in single-payer
plans, public options will still entail cost sharing (out-of-pocket
expenses, deductibles), which have been shown to discourage care.
Complexity: Only the most sophisticated of health care
consumers will be able to compare a new public option to their existing
options and choose wisely.
Business burdens: Businesses that offer a health insurance
benefit will find benefit management yet more complicated, and worker
morale harder to maintain.
Job lock: Workers, in the case where their company chooses
the public option and largely funds it, would still be victims of the
job lock that keeps workers in a job for fear of losing their health
care benefits.
Provider costs: With public options, provider and hospital
billing departments will still have to deal with uncompensated care and
collections, and will have their work further complicated by the
addition of yet another payer. With single-payer plans, all bills would
be paid; and billing costs would be greatly reduced from the current 20 percent of the budget.
Choice of provider: The number of providers participating
in a public option will depend on the generosity of reimbursements,
which requires generous funding. Therefore, the choice of providers may
be limited. In a single-payer plan, thanks to reduced provider overhead
and major savings system-wide, most providers would see little change in
net income and would therefore participate.
In summary, public options not only do not address many of
the problems in our multi-payer health care system, they actually
aggravate them.
Daniel Bryant of Cape Elizabeth is a retired internist.
He is a member of Physicians for a National Health Program and its
Maine chapter, Maine AllCare.
https://bangordailynews.com/2019/08/22/opinion/contributors/public-option-plans-wont-fix-american-healthcare-system/
Maine AFL-CIO director: Workers are getting restless, and politicians better listen
by Cynthia Phinney - Portland Press Herald - September 2, 2019
On a soggy September day in 1891, Samuel Gompers, the longtime president of the American Federation of Labor, gave the keynote address at the first “official” Labor Day in Maine. In a rousing speech to workers and their families at Sebago Lake, Gompers argued that “wealth is a public trust, and the right to have something to say about wages and hours of labor pertains to the workers from whom the wealth comes.”Gompers had some major flaws, but he was 100 percent correct on that point. Workers are the true wealth creators and they have a right to band together to demand their fair share of the fruits of their labor. When workers exercise that collective strength, incomes go up and conditions improve for everyone.
Unfortunately, anti-labor politicians, corporations and billionaires have waged a decades-long assault on workers’ rights, leaving the U.S. with some of the weakest worker protections in the industrialized world. As a result, corporate profits have soared while wages have stagnated, even as productivity has risen nearly 70 percent in the past 40 years.
But working people are banding together and taking action! Last year, nearly a half-million workers went out on strike – the highest number since 1986. After enduring years of poor wages and austerity, a tight labor market has emboldened teachers, nurses, hotel workers, grocery store employees, bus drivers and others to withhold their labor to demand better wages, working conditions and more public funding for crucial public services.
And they’re winning! Here in Maine we’ve witnessed this rise in collective action firsthand as Preble Street workers, Calais Regional Hospital techs, Baxter Academy teachers and Kennebec Valley Community Action Program drivers have all formed new unions this year. All of this activity is occurring as a recent poll shows support for unions at a near-50-year high, with enthusiasm particularly strong among young people.
However, without pro-labor leaders in office, the laws are often stacked against us. President Franklin D. Roosevelt and Michigan Gov. Frank Murphy paved the way for the rapid growth of unions in the 1930s by refusing to send in troops to break the Flint, Michigan, sit-down strike at General Motors in 1937. Then President Ronald Reagan reversed decades of labor policy by declaring an all-out war on unions with his firing and permanent replacement of striking air traffic controllers 44 years later.
While we’ve heard many promises since then, Congress has not passed one significant piece of pro-union legislation in decades. This time, no candidate should take our support for granted. Fortunately, we are seeing some serious plans emerge.
One proposal, the Protecting the Right to Organize Act, would strengthen workers’ rights by prohibiting companies from interfering in union elections and banning so-called “right to work” laws, which are designed to weaken unions, drive down wages and allow workers to get the benefits of unions without paying dues. Another, more-ambitious measure would allow unions to negotiate minimum standards for entire industries rather than bargaining with only one company at a time. Sector-wide bargaining has been phenomenally successful in raising living standards for workers in Europe.
As the health care crisis continues to worsen, we are also urging candidates to support a “Medicare for All” system so we can finally take health care off the bargaining table and focus on raising wages and improving working conditions. And finally, it is urgent that Congress pass comprehensive immigration reform to give the millions of undocumented workers a legal path to citizenship. This is not only the humane thing to do, but it will end a two-tiered labor system that encourages the exploitation of workers and drives down wages for everyone.
Regardless of what politicians do in Washington, we will continue to organize and build power in our movement. If we’ve learned anything from the history of workers’ struggles, it’s that they can pass anti-worker laws, they can rig the justice system against us, they can hire armies of anti-union consultants and they can even send out the National Guard, but they can never destroy the desire of working people to band together to protect their common interests.
https://www.pressherald.com/2019/09/02/maine-afl-cio-director-the-workers-are-getting-restless-and-politicians-better-listen/
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