Health Care Reform Articles - October 18, 2019

Liberal Groups Outline 8 Ways Forward for
Healthcare Reform
— Most would cut overall national health costs, but more aggressive plans hit providers in the wallet
by Shannon Firth, Washington Correspondent, MedPage Today - October 15, 2019

In a report issued Wednesday, two liberal think tanks -- the Commonwealth Fund and the Urban Institute -- outlined eight different healthcare reform options that range from building on the Affordable Care Act's (ACA) reliance on private insurers to full-on single- payer systems.
"This study is important because it shows that there are several health reform approaches that have the potential to increase the number of people with health insurance, make healthcare more affordable and slow cost growth, but they achieve these results in different ways and to varying degrees -- and the details matter," said David Blumenthal, MD, president of the Commonwealth Fund, during a press call on Tuesday.
"Those details will be central" to the national debate on healthcare and health insurance coverage as the 2020 campaign season progresses, he added.

"Universal coverage will require some people to pay premiums or taxes that they might ... not have chosen to do. In other words, they can’t be voluntary, and the greater the savings to national health spending the greater the need for regulation of provider payment rates," said John Holahan, PhD, of the Urban Institute.
By the same token, the more aggressive reforms would relieve individuals and especially employers from having to spend as much as they currently do for healthcare separately from their taxes.
Sara Collins, PhD, of the Commonwealth Fund, explained that the groups sought to explain what various reform models would do and what "financing tradeoffs" might be necessary.
She stressed that the report does not attempt to model any of the current presidential candidates' proposals, but instead examines "a range of policy options" that are similar to the approaches currently being debated, and in doing so illustrate their potential impacts.
To simplify the comparisons, researchers presented the reforms as "fully phased in" by 2020.
In their estimates, the authors used payment rates similar to current Medicare payment rates. The report also assumes, for the purpose of this analysis that "provider supply will, over time, expand to meet the increased demand for services."
Among the report's key takeaways, the authors asserted that their estimates demonstrate that it is possible to achieve universal coverage for legal U.S. residents without increasing overall national health spending.
A Spectrum of Reform Ideas
Reform 1, the simplest and most incremental, builds on the ACA by providing more generous premium and cost-sharing subsidies, and caps premiums at a lower percentage of income than under current law. It also creates a new, permanent reinsurance system. The next three reform plans are quite similar, each incorporating mechanisms for increasing coverage or curbing costs while maintaining the changes in previous plans.

Reform 4 for instance would include all of the changes proposed in Reform 1 while also
reinstating the individual mandate; banning short-term plans (which are usually less comprehensive and provide fewer benefits than the ACA-compliant plans); expanding Medicaid to all states that haven't already done so; enacting a limited auto-enrollment feature for "food stamp" programs; and implementing a public plan option and/or capping provider payment rates in the individual insurance market.

From the current base of 32.2 million uninsured Americans, Reform 1 would reduce that number by 4 million at a cost of $25.7 billion to the federal government in 2020 and $321 billion over a 10-year period. The reform would also increase overall national health spending by $7.8 billion in 2020 (it stood at about $3.7 trillion in 2018).
Reform 4, the broadest of the four "ACA Enhanced" pathways, would lower the number of uninsured Americans by 10.9 million, while increasing federal spending by $46.7 billion in 2020 and $590 billion over 10 years. Notably, the report indicated that it would not increase total national health spending, which includes payments for health-related goods and services by households, employers, and state and federal governments.
"The public option lowers the marketplace premiums. Lower marketplace premiums lower the federal marketplace subsidy costs, and lower subsidy costs mean lower federal spending increases,” said Linda Blumberg, PhD, of the Urban Institute. “The federal cost is significantly lower than what it would be without the public option to hold down marketplace subsidy costs."
Almost Universal Coverage
Reform 5 aims for "universal coverage" but with a caveat. The 25.6 million who are legally present in the U.S. would receive insurance, but 6.6 million undocumented immigrants would not.
Reform 5 involves all of the changes proposed in the preceding plans along with a "nongroup public option" which could be coupled with a cap on provider payment rates. The plan eliminates the employer insurance "firewall" allowing employed individuals to choose a subsidized nongroup plan in lieu of their employer's plan and would include continuous enrollment with retroactive enforcement.
The report estimates that Reform 5 would increase federal spending by $122.1 billion in

2020 and by $1.5 trillion over a 10-year period, while reducing overall national health spending by $22.6 billion. The researchers also note that eliminating the employer insurance firewall, in conjunction with other changes in this reform plan, would see enrollment in employer plans drop by 15 million people.

However, the report projects an increase of 30.8 million people in the nongroup insurance market (with 80% getting federal subsidies) and 12.2 million more people would be enrolled in Medicaid, due to auto-enrollment.
In a phone call with reporters, the study authors noted that former Vice President Joe Biden's plan is most similar to a mix of Reforms 4 and 5.
Reform 6 is similar but includes more generous premium and cost-sharing subsidies for individuals in marketplace plans and caps premiums at an even lower percentage of income than plans 1-5. Because of the larger subsidies, federal health care spending rises by $161.8 billion in 2020 and $2.0 trillion over 10 years.
Of note for healthcare providers, Reforms 4-6 would all entail caps on payment rates.
Single-Payer Plans
Reform 7 -- dubbed "Single Payer 'Lite'" -- would eliminate private insurance and extend coverage to all legally present U.S. residents and offer all ACA essential health benefits. Under this proposal idea, enrollees would not pay any premiums but they would make cost-sharing payments, based on their income.
Of note, this plan would cut off insurance for 4.2 million undocumented immigrants who now have insurance. But 25.6 million legal residents would gain coverage under Single Payer Lite.
Under this plan, federal spending would increase by $1.5 trillion in 2020 and by $17.6 trillion over 10 years; overall national health spending, however, would drop by $209.5 billion in 2020. (No estimate was given for 10-year impacts on total national spending in any of the proposals.)
Reform 8, which the report authors called "Single Payer Enhanced," would extend coverage to all U.S. residents including undocumented immigrants -- a total of 331.5 million people.

Both it and Reform 7 would pay providers "at approximately Medicare rates."
The plan provides the most benefits of any proposal idea, including adult dental, vision, hearing, and home and community-based long-term services and supports. Private insurance would again be prohibited and enrollees would pay neither premiums nor cost- sharing.
Under this enhanced version of a single-payer plan, federal spending would increase by $2.8 trillion in 2020 and by $34 trillion over 10 years. National health spending would rise by $719.7 billion in 2020.
"Employer, household and state spending would decline considerably but by less than the increase in federal spending," the report noted.
Notably, the groups’ modelling did not examine what effects these hypothetical changes to the nation’s largest industry could have on the broader economy. For example, it did not address the possibility that, under systems that reduce or abolish employer-paid insurance, the resulting elimination of that expense from businesses’ balance sheets would allow them to cut prices on their products. That would benefit consumers by reducing their non-health expenses, and the economy as a whole, in part by making U.S. goods more competitive in international markets.
On the other hand, reductions in overall national health spending are bound to result in income and job losses in the healthcare industry. Obviously, abolishing private insurance would throw everyone in that industry out of work. While jobs would also be created elsewhere (in the government’s healthcare administration, for starters), how this might shake out was also not addressed in the groups’ report. 

https://www.medpagetoday.com/publichealthpolicy/healthpolicy/82757

The ‘Public Option’ on Health Care Is a Poison Pill 

by David U. Himmelstein and Steffie Woolhandler - The Nation - October 7, 2019

Health care reform has been the most hotly contested issue in the Democratic presidential debates. Bernie Sanders and Elizabeth Warren have been pushing a single-payer Medicare for All plan, under which a public insurer would cover everyone. They would ban private insurance, except for items not covered by the public plan, such as cosmetic surgery or private rooms in hospitals. The other Democratic contenders favor a “public option” reform that would introduce a Medicare-like public insurer but would allow private insurers to operate as well. They tout this approach as a less traumatic route to universal coverage that would preserve a free choice of insurers for people happy with their plans. And some public option backers go further, claiming that the system would painlessly transition to single payer as the public plan outperforms the private insurers.
That’s comforting rhetoric. But the case for a public option rests on faulty economic logic and naive assumptions about how private insurance actually works. Private insurers have proved endlessly creative at gaming the system to avoid fair competition, and they have used their immense lobbying clout to undermine regulators’ efforts to rein in their abuses. That’s enabled them to siphon hundreds of billions of dollars out of the health care system each year for their own profits and overhead costs while forcing doctors and hospitals to waste billions more on billing-related paperwork.
Those dollars have to come from somewhere. If private insurers required their customers to pay the full costs of private plans, they wouldn’t be able to compete with a public plan like the traditional Medicare program, whose overhead costs are far lower. But this is not the case: In fact, taxpayers—including those not enrolled in a private plan—pick up the tab for much of private insurers’ profligacy. And the high cost of keeping private insurance alive would make it prohibitively expensive to cover the 30 million uninsured in the United States and to upgrade coverage for the tens of millions with inadequate plans.
Public option proposals come in three main varieties:

Medicare for All!

§ A simple buy-in. Some proposals, including those by Joe Biden and Pete Buttigieg, would offer a Medicare-like public plan for sale alongside private plans on the insurance exchanges now available under the Affordable Care Act. These buy-in reforms would minimize the need for new taxes, since most enrollees would be charged premiums. But tens of millions would remain uninsured or with coverage so skimpy, they still couldn’t afford care.
§ Pay or play. This variant (similar to the plan advanced by the Center for American Progress and endorsed by Beto O’Rourke) would offer employers a choice between purchasing private insurance or paying a steep payroll tax (about 8 percent). Anyone lacking employer-paid private coverage would be automatically enrolled in the public plan. The public option would be a good deal for employers who would otherwise have to pay more than 8 percent of their payroll for private coverage—for example, employers with older or mostly female workers (who tend to use more care and incur high premiums) or with lots of low-wage workers (for whom 8 percent of payroll is a relatively small sum). But many firms employing mostly young, male, or highly paid workers (e.g., finance and tech) would likely stay with a private insurer.
§ Medicare Advantage for All. The public option approach favored by Kamala Harris would mimic the current Medicare Advantage program. Medicare Advantage plans are commercial managed care products currently offered by private insurers to seniors. The Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicare, collects the taxes that pay for the program and passes the funds ($233 billion in 2018) along to the insurance companies. Under this approach, the public option would operate alongside the private Medicare Advantage plans and compete with them, as the traditional fully public Medicare program currently does.
No working models of the buy-in or pay-or-play public option variants currently exist in the United States or elsewhere. But decades of experience with Medicare Advantage offer lessons about that program and how private insurers capture profits for themselves and push losses onto their public rival—strategies that allow them to win the competition while driving up everyone’s costs.

A public option plan that facilitates enrollees’ genuine access to health care can’t compete with private insurers that avoid the expensively ill and obstruct access to care. Despite having overhead costs almost seven times that of traditional Medicare (13.7 versus 2 percent), Medicare Advantage plans have grown rapidly. They now cover more than one-third of Medicare beneficiaries, up from 13 percent in 2005. Greed has trumped efficiency, and the efforts of regulators to level the playing field have been overwhelmed by insurers’ profit-driven schemes to tilt it.
Private insurers employ a dizzying array of profit-​enhancing schemes that would be out of bounds for a public plan. These schemes, which continually evolve in response to regulators’ efforts to counter them, boil down to four strategies that are legal, in addition to occasional outright fraud.
§ Obstructing expensive care. Plans try to attract profitable, low-needs enrollees by assuring convenient and affordable access to routine care for minor problems. Simultaneously, they erect barriers to expensive services that threaten profits—for example, prior authorization requirements, high co-payments, narrow networks, and drug formulary restrictions that penalize the unprofitably ill. While the fully public Medicare program contracts with any willing provider, many private insurers exclude (for example) cystic fibrosis specialists, and few Medicare Advantage plans cover care at cancer centers like Memorial Sloan Kettering. Moreover, private insurers’ drug formularies often put all of the drugs—even cheap generics—needed by those with diabetes, schizophrenia, or HIV in a high co-payment tier.
Insurers whose first reaction to a big bill is “claim denied” discourage many patients from pursuing their claims. And as discussed below, if hassling over claims drives some enrollees away, even better: The sickest will be the most hassled and therefore the most likely to switch to a competitor.
§ Cherry-picking and lemon-dropping, or selectively enrolling people who need little care and disenrolling the unprofitably ill. A relatively small number of very sick patients account for the vast majority of medical costs each year. A plan that dodges even a few of these high-needs patients wins, while a competing plan that welcomes all comers loses.

In the employer market, cherry-picking is easy: Private insurers offer attractive premiums to businesses with young, healthy workers and exorbitant rates to those with older, sicker employees. As a letter this summer to The New York Times put it, like casinos, health insurers are profitable because they know the odds of every bet they place—and the house always wins.
The CMS, in theory, requires Medicare Advantage plans to take all comers and prohibits them from forcing people out when they get sick. But regulators’ efforts to enforce these requirements have been overwhelmed by insurers’ chicanery. To avoid the sick, private insurers manipulate provider networks and drug formulary designs. Despite the ban on forcing enrollees out, patients needing high-cost services like dialysis or nursing home care have switched in droves from private plans to traditional, fully public Medicare. And as a last resort, Medicare Advantage plans will stop offering coverage in a county where they’ve accumulated too many unprofitable enrollees, akin to a casino ejecting players who are beating the house.
Finally, Medicare Advantage plans cherry-pick through targeted marketing schemes. In the past, this has meant sign-up dinners in restaurants difficult to access for people who use wheelchairs or offering free fitness center memberships, a perk that appeals mainly to the healthiest seniors. But higher-tech approaches are just around the corner. Will Oscar, the health insurer founded by Jared Kushner’s brother—with Google’s parent company as a significant investor—resist the temptation to use Google’s trove of personal data to target enrollment ads toward profitable enrollees like tennis enthusiasts and avoid purchasers of plus-size clothing or people who have searched online for fertility treatments?
§ Upcoding, or making enrollees look sicker on paper than they really are to inflate risk-adjusted premiums. To counter cherry-picking, the CMS pays Medicare Advantage plans higher premiums for enrollees with more (and more serious) diagnoses. For instance, a Medicare Advantage plan can collect hundreds of dollars more each month from the government by labeling an enrollee’s temporary sadness as “major depression” or calling trivial knee pain “degenerative arthritis.” By applying serious-​sounding diagnoses to minor illnesses, Medicare Advantage plans artificially inflate the premiums they collect from taxpayers by billions of dollars while adding little or nothing to their expenditures for care.
Though most upcoding stays within the letter of the law and merely stretches medical terminology, the CMS’s (rare) audits of enrollees’ charts indicate that Medicare Advantage plans are collecting $10 billion annually from taxpayers for entirely fabricated diagnoses. And that’s only a small fraction of their overall take from upcoding. Private insurers keep most of this pilfered money for their profits and overhead, but they use a portion to fund added benefits (for example, eyeglasses or slightly lower co-payments for routine care) that attract new enrollees and help private plans to seemingly outcompete traditional Medicare.
§ Lobbying to get excessive payments and thwart regulators. Congress has mandated that the CMS overpay Medicare Advantage plans by 2 percent (and even more where medical costs are lower than average). On top of that, Seema Verma, Trump’s CMS administrator, has taken steps that will increase premiums significantly and award unjustified “quality bonuses,” ignoring advice from the Medicare Payment Advisory Commission that payments be trimmed because the government is already overpaying the private plans. And she has ordered changes to the CMS’s Medicare website to trumpet the benefits of Medicare Advantage enrollment.
In sum, a public option insurer that, like traditional Medicare, doesn’t try to dodge unprofitable enrollees would be saddled with more than its share of sick, expensive patients and would become a de facto high-cost, high-risk pool. The CMS’s decades-long efforts to level the playing field have been thwarted by insurers’ upcoding, belying their promises of fair competition. And insurance companies have used their political muscle to sustain and increase their competitive advantage over traditional Medicare. The result: The public plan (and the taxpayers) absorbs the losses while private insurers skim off profits, an imbalance so big that private plans can outcompete a public plan despite squandering vast sums on overhead costs, CEO salaries, and shareholder profits.

Single Payer Would Save, Public Option Won’t

This year alone, private insurers will take in $252 billion more than they pay out, equivalent to 12 percent of their premiums. A single-payer system with overhead costs comparable to Medicare’s (2 percent) could save about $220 billion of that money. A public option would save far less—possibly zero, if much of the new public coverage is channeled through Medicare Advantage plans, whose overhead, at 13.7 percent, is even higher than the average commercial insurer.
Moreover, a public option would save little or nothing on hospitals’ and doctors’ sky-high billing and administrative costs. In a single-payer system, hospitals and other health facilities could be funded via global, lump-sum budgets—similar to the way cities pay fire departments—eliminating the need to attribute costs to individual patients and collect payments from them and their insurers. That global budget payment strategy has cut administrative costs at hospitals in Canada and Scotland to half the US level. The persistence of multiple payers would preclude such administrative streamlining, even if all of the payers are charged the same rates. (Under Maryland’s mislabeled global budget system, the state’s hospitals charge uniform rates but continue to bill per patient; our research indicates that their administrative costs haven’t fallen at all, according to their official cost reports.)

Similarly, for physicians and other practitioners, the complexity involved in billing multiple payers, dealing with multiple drug formularies and referral networks, collecting co-payments and deductibles, and obtaining referrals and prior authorizations drives up office overhead costs and documentation burdens.

The excess overhead inherent to multipayer systems imposes a hidden surcharge on the fees that doctors and hospitals must charge all patients—not just those covered by private insurance. All told, a public option reform would sacrifice about $350 billion annually of single payer’s potential savings on providers’ overhead costs, over and above the $220 billion in savings it could sacrifice annually on insurers’ overhead.
Finally, a public option would undermine the rational health planning that is key to the long-term savings under single payer. Each dollar that a hospital invests in new buildings or equipment increases its operating costs by 20 to 25 cents in every subsequent year. At present, hospitals that garner profits (or “surpluses” for nonprofits) have the capital to expand money-making services and buy high-tech gadgets, whether they’re needed or not, while neglecting vital but unprofitable services. For instance, hospitals around the country have invested in proton-beam-radiation therapy centers that cost hundreds of millions of dollars apiece. (Oklahoma City alone now has two.) Yet there’s little evidence that those machines are any better for most uses than their far cheaper alternatives. Similarly, hospitals have rushed to open invasive cardiology and orthopedic surgery programs, often close to existing ones. These duplicative investments raise costs and probably compromise quality.
Meanwhile, primary care and mental health services have languished, and rural hospitals and other cash-strapped facilities that provide much-needed care spiral toward closure. As in Canada and several European nations, a single-payer system could fund new hospital investments through government grants based on an explicit assessment of needs, instead of counting on private hospitals to use their profits wisely. That strategy has helped other nations direct investments to areas and services with the greatest need and to avoid funding wasteful or redundant facilities. Public option proposals would perpetuate current payment strategies that distort investment and raise long-term costs.
Because a public option would leave the current dysfunctional payment approach in place, it would sacrifice most of the savings available via single-payer reform. The bottom line is that a public option would either cost much more or deliver much less than single payer.

Why Not Import German, Swiss, or Dutch Health Care?

Public option proponents often cite Germany, Switzerland, and the Netherlands as exemplars of how private insurers can coexist with thriving public health care systems. But they ignore the vast differences between those nations’ private insurers and ours.
The nonprofit German “sickness funds,” which cover 89 percent of the population (only wealthy Germans are allowed to purchase coverage from for-profit insurers), are jointly managed by employers and unions—a far cry from our employer-based coverage. The government mandates identical premium rates for all the sickness funds, takes money from those with low-risk enrollees and subsidizes others with older and sicker ones, and directly pays for most hospital construction. All sickness funds offer identical benefit packages, pay the same fees, and cover care from any doctor or hospital.
Although the details differ, a similarly stringent regulatory regime applies in Switzerland, whose system descended from Otto von Bismarck’s original German model, and as in Germany, the government funds most hospital construction. While for-profit insurers can sell supplemental coverage, only nonprofits are allowed to offer the mandated benefit package.
Since 2006, the Netherlands has been transitioning from the German-style universal coverage system to a more market-​oriented approach championed by corporate leaders. However, the government pays directly for all long-term care, and a strong ethos of justice and equality has pressured both public and private actors to avoid any erosion of social solidarity. The Netherlands has long enjoyed ready access to care, and its system hasn’t descended (yet) into an American-style abyss. But under the new regime, hospital administrative costs have risen nearly to US levels, overall health costs have increased rapidly, doctors complain of unsustainable administrative burdens, and even in such a small nation, tens of thousands of people are uninsured. Insurers spend massively on marketing and advertising, and private insurers’ overhead costs average 13 percent of their premiums. Moreover, the United States and the Netherlands aren’t the only places where for-profit insurers’ overhead costs are high: They average 12.4 percent in Switzerland, 20.9 percent in Germany, and 26.2 percent in the United Kingdom.
Transforming the immensely powerful, profit-driven insurance companies of the United States into benign nonprofit insurers in the Swiss or German mold would be as heavy a lift as adopting Medicare for All. Nor can we count on the cultural restraints that have thus far softened the Dutch insurers’ rapacious tendencies and prevented a reversal of that country’s long-standing health care successes.
A final point:
While allowing private insurers to compete with a public plan amounts to a poison pill, the same isn’t true for supplemental private plans that are allowed to cover only those items excluded from the public benefit package. While Canada bans the sale of private coverage that duplicates the public plan’s benefits, it has always allowed supplemental coverage, and that hasn’t sabotaged its system.
The efficiencies of a single-payer system would make universal coverage affordable and give everyone in the United States their free choice of doctors and hospitals. But that goal will remain out of reach if private insurers are allowed to continue gaming the system. Preserving the choice of insurer for some would perpetuate the affordability crisis that has bedeviled the US health care system for generations. Proponents of the public option portray it as a nondisruptive, free-choice version of single payer. That may be good campaign rhetoric, but it’s terrible policy.
https://www.thenation.com/article/insurance-health-care-medicare/

This Is the Most Realistic Path to Medicare for All

It’s similar to how we got to Medicare in the first place: the failure of private insurance. 

by J.C. Silvers - NYT - October 15, 2019

Much to the dismay of single-payer advocates, our current health insurance system is likely to end with a whimper, not a bang. The average person simply prefers what we know versus the bureaucracy we fear.
But for entirely practical reasons, we might yet end up with a form of Medicare for All. Private health insurance is failing in slow motion, and all signs are that it will continue. It was for similar reasons that we got Medicare in 1965. Private insurance, under the crushing weight of chronic conditions and technologic breakthroughs (especially genetics), will increasingly be a losing proposition.
As a former health insurance company C.E.O., I know how insurance is supposed to work: It has to be reasonably priced, spread risks across a pool of policyholders and pay claims when needed. When companies can’t do those fundamental tasks and make a decent profit is when we will get single payer.
It’s already a tough business to be in. Right now the payment system for health care is just a mess. For every dollar of premium, administrative costs absorb up to 20 percent. That’s just too high, and it’s not the only reason for dissatisfaction.

Patients hate paying for cost-sharing in the form of deductibles and copays. Furthermore, narrow networks with a limited number of doctors and hospitals are good for insurers, because it gives them bargaining power, but patients are often left frustrated and hit with surprise bills.
As bad as these problems are, most people are afraid of losing coverage through their employers in favor of a government-run plan. Thus inertia wins — for now.
But there’s a reason Medicare for All is even a possibility: Most people like Medicare. It works reasonably well. And what could drive changes to our current arrangement is a disruption — like the collapse of private insurance.
There are two things insurers hate to do — take risks and pay claims. Before Affordable Care Act regulations, insurance companies cherry-picked for lower-risk customers and charged excessive rates for some enrollees.
Those were actually the first indications of market failure. Since the enactment of the Affordable Care Act, insurers have actually had to take these risks as they were supposed to all along and provide rebates of excessive profits.

With insurers under such pressure, we’re now facing another sort of market dysfunction. Insurance companies are doing what they can to avoid paying claims. A recent report says that Obamacare plans average an 18 percent denial rate for in-network claims submitted by providers. Some reject more than a third. This suggests that even in a regulated marketplace like the Obamacare exchanges, insurers somehow manage to dispute nearly one out of every five claims.
These are systemic failures that can and should be fixed by regulation of the exchanges, better information on plan performance and robust competition. Unfortunately, consumers often still can’t make informed choices, and the options they have are limited.
But even if we fix these problems, there are two bigger factors looming that threaten the integrity of the entire system. Insurance at its root assumes that the payout required cannot be determined for each individual but can be estimated for the whole group. We can’t predict who will be affected by trauma or a broken bone, but in the aggregate, it is possible to estimate what will happen to the insured group as a whole. Some will suffer losses while the majority will be fine, and all will pay a fair average premium to cover the expenses that result.
Yet with the increases in chronic conditions and the promise of genetic information, these insurance requirements are not met. Someone with diabetes or rheumatoid arthritis will have the same condition and similar costs in each future year. And the woman with a positive BRCA gene is much more likely to develop breast cancer. In these cases, known costs simply must be paid. Instead of spreading these across all enrolled populations, they must be financed across time for the increasing numbers with such conditions. Loading private insurance companies with these expenses results in uncompetitive rates and market failure.
There is only one solution: pooling and financing some or all of these at the broadest levels. In a nutshell, that is how we get a single-payer government system.
It is how we got Medicare. The cost of care to the elderly was known at the individual level for virtually everyone, so private insurance just wouldn’t work. So we had to finance this largely predictable cost through the government and its enormous pool of taxpayers.
It has been a tremendous, albeit expensive success. For the most part, people on Medicare like it a lot. This is the reason such a disruptive change is even a political possibility.

We will face the same need sometime in the future for the rest of us. Then a form of Medicare for All will look better than the alternative — a failing private insurance system.

J. B. Silvers is a professor of health care finance at the Weatherhead School of Management at Case Western Reserve University.
https://www.nytimes.com/2019/10/15/opinion/medicare-for-all-insurance.html?action=click&module=Opinion&pgtype=Homepage

This Is the Strongest Argument Against Medicare for All

A deep-blue state’s failure to enact a single-payer system shows why a national version is unlikely to succeed.

by Peter Suderman - NYT - October 9, 2019

It was in Vermont that Senator Bernie Sanders learned to love single-payer health care — what he now calls Medicare for All — and it was in Vermont that American single-payer faced its greatest test so far.
Under Gov. Pete Shumlin, a Democrat and avowed supporter of single-payer health care, the state worked to create a groundbreaking plan, called Green Mountain Care, to cover all its citizens. Following the Affordable Care Act’s 2010 passage, state lawmakers enacted legislation intended to put Vermont “on a path to a single-payer system.” No state-based single-payer effort ever made it as far, and Mr. Shumlin positioned the plan as a test case for the nation.
Yet despite strong support from the legislature and the governor’s office, not to mention Mr. Sanders himself, the effort failed.
That failure demonstrates why any similar project undertaken at a national scale is unlikely to succeed as well. In fact, it is the strongest argument against Mr. Sanders’s single-payer plan.

The first problem for any single-payer push would be political support: Mr. Shumlin campaigned on a promise to build a single-payer system in Vermont, but the public never quite bought in. An April 2014 survey showed 40 percent support, 39 percent opposition and 21 percent undecided — a lukewarm result for such a major undertaking. That year, Mr. Shumlin barely won the popular vote against an anti-single-payer Republican. As John E. McDonough of Harvard wrote in a perceptive New England Journal of Medicine analysis of the plan’s collapse, “a clear public mandate” for Mr. Shumlin’s health care agenda “was nowhere in evidence.”
One reason the plan lacked strong support was lawmakers were cagey about how to pay for it. The 2011 proposal included no specific financing mechanism, because Mr. Shumlin’s team worried that might kill its chances.
Initial cost estimates were far too optimistic. A 2011 study led by William Hsiao of Harvard found that single-payer could reduce state health care spending by 8 percent to 12 percent immediately and more in later years, resulting in about $2 billion in savings over a decade. But by the time Mr. Shumlin ditched the plan, internal government estimates showed a five-year savings of just 1.6 percent.
The reduced savings were partially a result of several decisions, made under political pressure, to expand the offered benefits by paying for a larger share of an individual’s average costs and covering out-of-state workers.
Lower savings, in turn, meant higher tax rates. Initial estimates foresaw that businesses would have to pay additional taxes equal to 9.4 percent of payroll, and families would pay a little more than 3 percent of income, supposedly costing a typical household $370 less per year overall.

Yet by 2014, Mr. Shumlin’s own estimates found that employers would have to pay taxes equal to about 11.5 percent of payroll, while families would have to pay as much as 9.5 percent of their annual income to make the financing work. The plan would have nearly doubled the size of the state’s budget. For both political and economic reasons, the cost was deemed too high.
There were other complications: Public outreach was weak. And in 2013, the state started an online insurance exchange under the Affordable Care Act that was plagued by technical failures, which the state struggled to fix. As the Cornell Policy Review noted in a 2017 post-mortem, the mix of higher-than-expected costs and administrative problems “fostered an atmosphere of uncertainty and distrust in the state government, turning a politically steep climb into a politically insurmountable one.”
And so, at the end of 2014, Mr. Shumlin admitted defeat. “I have learned that the limitations of state-based financing, the limitations of federal law, the limitations of our tax capacity and the sensitivity of our economy” make single-payer “unwise and untenable at this time,” he said. “The risk of economic shock is too high.”
The Vermont plan was done in by high taxes, distrust of government and lack of political support. Any effort by a Sanders administration to enact a single-payer system at a national level would probably be doomed by similar problems.
Like Mr. Shumlin, Mr. Sanders is a devout single-payer supporter who has campaigned aggressively on the idea. And like Mr. Shumlin, Mr. Sanders has so far declined to lay out a plan for fully financing his Medicare for All system.
But while some polls show majority public support for single-payer, that support declines substantially when faced with trade-offs like the elimination of most private coverage or higher taxes — two components of Mr. Sanders’s plan.
Similarly, Medicare for All supporters argue that single-payer would reduce the nation’s overall health spending. But savings are heavily predicated on the assumption that the new government-run system could pay Medicare rates, which are typically lower than those of private insurance, to providers across the board.

Legislators in Washington State started with the same assumption when they attempted to design a state-managed insurance plan, and it proved wrong. The plan passed only once rates were increased. Yet even a plan with lower rates would still represent an enormous increase in total government spending.
A Sanders presidency would have to overcome a deep trust deficit born of both lingering frustrations with Obamacare and the generalized cynicism and ineptitude of the Trump administration and the current Congress. And unlike Mr. Shumlin, Mr. Sanders would be faced with both a public and a legislature that is not nearly as friendly as in left-leaning Vermont. Even if Democrats somehow took both chambers of Congress, influential Democrats in the Senate, where legislative details would be hashed out, are still wary of pursuing a full-fledged single-payer system.
It’s true, of course, that there are differences between state and federal budgeting, and true that the president has political clout no state governor could ever hope to match.
But if it couldn’t work in Vermont, with a determined governor, an accommodating legislature and progressive voters, Mr. Sanders will have a tough time explaining why it will somehow succeed on a vastly larger scale. Vermont represents a practical failure on friendly turf, and that is what makes it such a powerful counter to Mr. Sanders’s proposal.
“If Vermont can pass a strong single-payer system and show it works well, it will not only be enormously important to this state, it will be a model,” Mr. Sanders said in 2013.
As it turns out, it was a model. But instead of showing us how it would work, it showed us why it would fail.
https://www.nytimes.com/2019/10/09/opinion/bernie-sanders-single-payer.html?action=click&module=Opinion&pgtype=Homepage

The Huge Waste in the U.S. Health System

A study finds evidence for how to reduce some of it, but also a large blind spot on how to remove the rest.

by Austin Frakt - NYT - October 7, 2019

A new study, published Monday in JAMA, finds that roughly 20 percent to 25 percent of American health care spending is wasteful. It’s a startling number but not a new finding. What is surprising is how little we know about how to prevent it.
William Shrank, a physician who is chief medical officer of the health insurer Humana and the lead author of the study, said, “One contribution of our study is that we show that we have good evidence on how to eliminate some kinds of waste, but not all of it.”
Following the best available evidence, as reviewed in the study, would eliminate only one-quarter of the waste — reducing health spending by about 5 percent.

Teresa Rogstad of Humana and Natasha Parekh, a physician with the University of Pittsburgh, were co-authors of the study, which combed through 54 studies and reports published since 2012 that estimated the waste or savings from changes in practice and policy.
Because American health spending is so high — almost 18 percent of the economy and over $10,000 per person per year — even small percentages in savings translate into huge dollars.
The estimated waste is at least $760 billion per year. That’s comparable to government spending on Medicare and exceeds national military spending, as well as total primary and secondary education spending.
If we followed the evidence available, we would save about $200 billion per year, about what is spent on the medical care for veterans, the Department of Education and the Department of Energy, combined. That amount could provide health insurance for at least 20 million Americans, or three-quarters of the currently uninsured population.
The largest source of waste, according to the study, is administrative costs, totaling $266 billion a year. This includes time and resources devoted to billing and reporting to insurers and public programs. Despite this high cost, the authors found no studies that evaluate approaches to reducing it.

“That doesn’t mean we have no ideas about how to reduce administrative costs,” said Don Berwick, a physician and senior fellow at the Institute for Healthcare Improvement and author of an editorial on the JAMA study.
Moving to a single-payer system, he suggested, would largely eliminate the vast administrative complexity required by attending to the payment and reporting requirements of various private payers and public programs. But doing so would run up against powerful stakeholders whose incomes derive from the status quo. “What stands in the way of reducing waste — especially administrative waste and out-of-control prices — is much more a lack of political will than a lack of ideas about how to do it.”
While the lead author works for Humana, he also has experience in government and academia, and this is being seen as a major attempt to refine previous studies of health care waste. Reflecting the study’s importance, JAMA published several accompanying editorials. A co-author of one editorial, Ashish Jha of the Harvard Global Health Institute and the Harvard T.H. Chan School of Public Health, said: “It’s perfectly possible to reduce administrative waste in a system with private insurance. In fact, Switzerland, the Netherlands and other countries with private payers have much lower administrative costs than we do. We should focus our energies on administrative simplification, not whether it’s in a single-payer system or not.”
After administrative costs, prices are the next largest area that the JAMA study identified as waste. The authors’ estimate for this is $231 billion to $241 billion per year, on prices that are higher than what would be expected in more competitive health care markets or if we imposed price controls common in many other countries. The study points to high brand drug prices as the major contributor. Although not explicitly raised in the study, consolidated hospital markets also contribute to higher prices.
A variety of approaches could push prices downward, but something might be lost in doing so. “High drug prices do motivate investment and innovation,” said Rachel Sachs, an associate professor of law at Washington University in St. Louis.
That doesn’t mean all innovation is good or worth the price. “It means we should be aware of how we reduce prices, taking into consideration which kinds of products and which populations it might affect,” she said.
Likewise, studies show that when hospitals are paid less, quality can degrade, even leading to higher mortality rates.

Other categories of waste examined by the JAMA study encompass inefficient, low-value and uncoordinated care. Together, these total at least $205 billion.
With more than half of medical treatments lacking solid evidence of effectiveness, it’s not surprising that these areas add up to a large total. They include things like hospital-acquired infections; use of high-cost services when lower-cost ones would suffice; low rates of preventive care; avoidable complications and avoidable hospital admissions and readmissions; and services that provide little to no benefit.
In addition to wasting money, these problems can have direct adverse health effects; lead to unwarranted patient anxiety and stress; and lower patient satisfaction and trust in the health system.
Here the study’s findings are relatively more optimistic. It found evidence on approaches that could eliminate up to half of waste in these categories. The current movement toward value-based payment, promoted by the Affordable Care Act, is intended to address these issues while removing their associated waste. The idea is to pay hospitals and doctors in ways that incentivize efficiency and good outcomes, rather than paying for every service regardless of need or results.
Putting this theory into practice has proved difficult. “Value-based payment hasn’t been as effective as people had hoped,” said Karen Joynt Maddox, a physician and co-director of the Center for Health Economics and Policy at Washington University in St. Louis and a co-author of another editorial of the JAMA study.
So far, only a few value-based payment approaches seem to produce savings, and not a lot. Some of the more promising approaches are those that give hospitals and doctors a single payment “as opposed to paying for individual services,” said Zirui Song, a physician and a health economist with Harvard Medical School.
“Savings tend to come from physicians referring patients to lower-priced facilities or cutting back on potentially lower-value care in areas such as procedures, tests or post-acute service,” he said.

There is evidence of savings from some bundled payment programs. These provide a fixed overall budget for care related to a procedure over a specific period, like 90 days of hip replacement care. Accountable care organizations also seem to drive out a little waste. These give health groups the chance to earn bonuses for accepting financial risk and if they reach some targets on quality of care.
The final area of waste illuminated by the JAMA study is fraud and abuse, accounting for $59 billion to $84 billion a year. As much as politicians love to say they’ll tackle this, it’s a relatively small fraction of overall health care waste, around 10 percent. More could be spent on reducing it, but there’s an obvious drawback if it costs more than a dollar to save a dollar in fraud.
Because health care waste comes from many sources, no single policy will address it. Most important, we have evidence on how to reduce only a small fraction of the waste — we need to do a better job of amassing evidence about what works.

https://www.nytimes.com/2019/10/07/upshot/health-care-waste-study.html?action=click&module=Well&pgtype=Homepage&section=The%20Upshot

It’s a good deal for most older Americans, but Medicare is neither free nor easy

by Thomas Heath - Washington Post - October 11, 2019

Medicare is not free.
That’s the bad news.
The premiums alone can run thousands of dollars a year, and you can go broke if you get stuck in a hospital long enough.
Medicare, the federal health insurance program for people 65 and older, won’t pay anything for a skilled nursing facility past 100 days, and the co-payment for days 21 through 100 will cost you $13,640.

And finally, Medicare pays zero toward long-term care.
“There are several myths about Medicare, and the first is that it is free,” said consultant Diane Omdahl, adding that the coverage does not take care of all medical needs. “People just think Medicare is going to be a cure-all. That’s really, really wrong.”
The good news is that there’s plenty of free help available. And even with its cost and coverage limits, Medicare is a good deal for most older people.
“If I am paying health insurance based on my age in my early 60s, it’s astronomically expensive,” said Robert Spicknall, an employee benefits broker and adviser for the Virginia State Bar Members’ Insurance Center. “If I am one of those people, I can’t wait to get to 65 because Medicare is heavily subsidized by the federal government and much cheaper than private insurance.”
Count me among those who are not eager to turn 65.
I turned 64 last month and started researching Medicare in anticipation of joining the program’s 60 million users. I knew next to nothing about it. I still know next to nothing about it. But I am learning.
I naively thought that I could present a Medicare card to whatever doctor, hospital or pharmacy I chose and get the service or drugs I required. That is not the case.
Please consider this column the first of many bites at the Medicare apple. The subject is so massive and complicated that it is best approached piecemeal.
There are a number of personal considerations to factor in when formulating your approach to Medicare, starting with your health, wealth and lifestyle.
There are also things to know upfront. This is not easy stuff, and the stakes are high. You can make big mistakes, potentially putting your life on the line.
For example, Original Medicare (Part A and Part B only) has no out-of-pocket maximum. Translation: There is no limit to what you might have to pay for certain services such as an extended hospital stay or chemotherapy.
There are enrollment timing rules. You have a seven-month window to enroll in Medicare, beginning three months before your 65th birthday. If you do not enroll within that window, you may be looking at higher costs and fewer options forever.
As with everything about Medicare, there is an asterisk attached to enrollment: If you have group insurance through a company with 20 or more employees, you do not have to enroll during the initial eligibility window.
The entry points for Medicare are Medicare.gov and the Social Security Administration (SocialSecurity.gov).
You can make contact in one of three ways: phone, online or in person.
“You enroll . . . and they send you a card,” Spicknall said. “The key is to be on top of it.”
My head is spinning from the various options, risks, combinations, fees, deductibles and premiums that are part of Medicare. There’s Medicare, Medicare Advantage, prescription drug coverage and Medigap. Some you get through the federal government. Some you buy from private insurers. Some are a combination of both.
You will need help navigating the system. “Nobody knows this stuff themselves,” Spicknall said. “People rattle off terms like Part A and Part B, and Medicare and Medicaid, but there are few who really know.”
In addition to Medicare.gov and the Social Security Administration, there are other sources of free help. A national network of State Health Insurance Assistance Programs (SHIPs) has trained counselors to offer local, personalized assistance to Medicare enrollees and their families.
SHIPs can help answer questions about coverage, premiums, deductibles, coinsurance, or complaints and appeals. They can also advise you on joining or leaving a Medicare Advantage plan (similar to a health maintenance organization), any other Medicare plan or prescription drug plan.
A friend who spoke on the condition of anonymity to be candid said he and his wife had good luck with the SHIPs. “We found our session very informative and productive,” he said.
His one tip: Once you have a counselor on the telephone, don’t let them go. “Never rely on anyone to call you back who assures you they will,” he said.
“Having whacked our way through the brush with machete and pith helmet to enroll my wife,” he said, “I am in a much better position to deal with ‘the process’ that has so many moving parts and different entities when I am eligible in June. I honestly don’t know how others deal with this.”
If you enroll but don’t get it right the first time around, you can tweak your Medicare coverage once a year during open enrollment. The annual sign-up period runs from Oct. 15 to Dec. 7.
I asked Omdahl to provide some Medicare CliffsNotes to ease the process. Here are the highlights:
●Timing is everything.
Three months before your 65th birthday, start thinking about whether you want to enroll in Medicare. You will want to enroll in Medicare if you are retiring and will no longer be covered by your employer’s insurance plan.
●Medicare is not free.
Everyone must pay Part B (medical services and supplies) insurance premiums, $135.50 a month in 2019.
There are also premiums for additional coverage: the Part D prescription drug plan, Medigap policies to supplement Medicare insurance, and some Medicare Advantage plans. (Part A, hospital insurance, is generally premium-free, according to the Medicare website.)
●Some people pay more.
Higher-income beneficiaries pay more for Parts B and D. This is known as the “income-related monthly adjustment amount,” or IRMAA. IRMAA can add as much as $400 a month to your Medicare premium costs.
●Lower premiums do not mean lower out-of-pocket costs.
The average Medicare Advantage premium is $29 a month. Zero-premium plans, which charge no more than regular Medicare Part B, also are available to most beneficiaries. However, these plans come with additional co-payments for health-care services.
Medicare Advantage plans put a limit on out-of-pocket costs. Medicare sets a maximum of $6,700 a year for in-network services, those performed by participating doctors and other providers. Some Medicare Advantage plans offer lower limits.
●Medicare pays nothing for long-term (custodial) care, whether provided in a facility or in the home.
Long-term care comprises a range of services to meet health- or personal-care needs over an extended period. Most of this care involves assistance with personal tasks, such as bathing, dressing, eating, getting in and out of bed or a chair, moving around, and using the bathroom. Medicare does not pay for these services. There is a 70 percent chance that someone turning 65 today will need long-term care services in their remaining years.
Like I said, I am not eager to turn 65.
https://www.washingtonpost.com/business/economy/its-a-good-deal-for-most-older-americans-but-medicare-is-neither-free-nor-easy/2019/10/11/d52e7d00-eb70-11e9-9306-47cb0324fd44_story.html

 Editor's Note:

The preceding clipping explains why advocates for Medicare expansion always specify Improved Medicare for All.

- SPC

Elizabeth Warren’s Medicare for All Dilemma

by John Cassidy - The New Yorker - October 17, 2019

 

In September, 2017, as Republicans in Congress were pursuing an effort to abolish the Affordable Care Act—which ultimately failed in the Senate by one vote—Senator Bernie Sanders introduced the Medicare for All Act of 2017, which would have enrolled all Americans in a new national health-insurance scheme called the Universal Medicare Program. “At a time when millions of Americans do not have access to affordable health care, the Republicans, funded by the Koch brothers, are trying to take away health care from up to thirty-two million more,” Sanders said. “We have a better idea: guarantee health care to all people as a right, not a privilege.”
Although the Medicare for All Act was primarily identified with Sanders, who had proposed the same idea during his 2016 Presidential bid, it was co-sponsored by sixteen other Democratic senators. At least six of them were also considered to be possible 2020 Presidential candidates: Cory Booker, Al Franken, Kirsten Gillibrand, Kamala Harris, Jeff Merkley, and Elizabeth Warren. The bill had the endorsement of a large number of progressive groups, including Our Revolution, MoveOn, the Working Families Party, Friends of the Earth, CREDO, and the Progressive Campaign Change Committee. With the G.O.P. in control of both houses of Congress, the bill went nowhere, but the support it achieved confirmed that many progressive Democrats were eager to move beyond Obamacare and embrace a single-payer system.
In April of this year, Sanders reintroduced his Medicare for All Act and issued a white paper laying out some options for financing such a system, which, according to an Urban Institute study of Sanders’s 2016 campaign proposal, would ultimately raise federal expenditures by about three trillion dollars a year. The options included higher taxes on the rich; a 7.5 per cent payroll tax paid by employers; and a “4 percent income-based premium paid by employees, exempting the first $29,000 in income for a family of four.” Because private-insurance plans would be eliminated under the Sanders bill, insurance premiums would also vanish, and the white paper asserted that “the average American family will save thousands of dollars a year because it will no longer be writing large checks to private health insurance companies.” Still, the fact remained that implementing Medicare for All would likely require raising income taxes on a majority of American households.
By April, Franken had resigned, and Merkley had decided not to enter the 2020 race. The four confirmed contenders from the Senate, aside from Sanders—Booker, Gillibrand, Harris, and Warren—all co-sponsored the Medicare for All Act again, which was hardly surprising. If they had backed away from the Sanders bill, they would have attracted criticism from the left. None of them were doing particularly well in the polls at the time, and so sticking to their prior position must have seemed like the safest political move.
Even so, at least a couple of them tried to preserve some wiggle room. Warren started out the year by portraying her support for Medicare for All as a statement about aspirations rather than a commitment to the particulars of the Sanders plan. In an interview with Bloomberg Television, in January, she identified “affordable health care for every American” as her goal and said that there were “different ways we can get there.” At a CNN town-hall meeting in March, she said that there were “a lot of different pathways” to universal coverage, and added, “What we’re all looking for is the lowest cost way to make sure that everybody gets covered.”
But, unlike in many other policy areas, Warren didn’t propose an over-all health-care-reform plan of her own, as Harris did, or back away from the commitment to eliminate private insurance, as Booker did, sort of. Warren was rolling out so many proposals that her campaign started selling T-shirts emblazoned with the slogan “WARREN HAS A PLAN FOR THAT.” But in the area of health care she confined herself to relatively narrow proposals, including measures to reduce the cost of prescription drugs, expand rural health-care programs, and tackle the opioid crisis. (That’s not to say that these proposals weren’t important individually, merely that they didn’t add up to a comprehensive reform plan.)
At the first Democratic debate, in June, Warren said, “I’m with Bernie on Medicare,” and she also raised her hand when the candidates were asked to indicate whether they favored getting rid of private health insurance. But she didn’t emphasize this in her over-all pitch, and she didn’t get pressed on it. Things changed after she began vying for the lead with Joe Biden in the polls. Front-runners get treated differently than mere contenders: the media scrutinizes everything they say and do, and their fellow-candidates try to take them down. During Tuesday’s debate, Biden, Pete Buttigieg, and Amy Klobuchar zeroed in on Warren’s apparent reluctance to acknowledge explicitly that taxes would go up as part of a Medicare for All plan. “We owe it to the American people to tell them where we will send the invoice,” Klobuchar said. In response to these criticisms, Warren restated her support for Medicare for All, but also tweaked it slightly, saying, “I will not sign a bill into law that does not lower costs for middle-class families.”
The debate left Warren with a dilemma. Should she stick to her current position, which is at least partly designed to avoid giving Trump and the Republicans a talking point—“Warren wants to raise your taxes”—or should she refine it in some way? Some progressives believe she is in the right place. “Democratic voters want to beat Trump and appreciate Democratic politicians who are savvy,” Adam Green, a co-founder of the Progressive Change Campaign Committee, told The Hill on Wednesday. “I don’t see why we would give the insurance companies rope to hang Democrats with a deceptive talking point. The bottom line is that Medicare for All will function like a tax cut for families.” Felicia Wong, the president of the Roosevelt Institute, a liberal think tank, also defended Warren’s approach. In an e-mail to me, Wong wrote, “Senator Warren has started with the basics: Everyone needs health care. And everyone agrees that the system isn’t working. So we need a big national conversation about structuring government as a public provider. That’s an upstream fight. And that is the campaign Sen. Warren is running.”
Sticking to the current strategy won’t stop the onslaught from other candidates. On Wednesday, Biden questioned Warren’s “credibility” and said, “She’s going to have to tell the truth or the question will be raised about whether or not she’s going to be candid and honest with the American people.” In an interview with CNN, Buttigieg claimed that, during the debate, Warren was “more specific and forthcoming about the number of selfies she’s taken than about how this plan is going to be funded.”
A second option is for Warren to provide more details about the sort of Medicare for All proposal she would support, and maybe even unveil one of her own. On Wednesday, her campaign took a small step in this direction. In a statement provided to CNN, it said that the candidate was “reviewing the revenue options suggested by the 2016 Bernie campaign along with other revenue options. But she will only support pay-fors that meet the principles she has laid out in multiple debates.” The CNN report said that the Warren campaign “declined to comment on whether Warren may eventually put out her own details on paying for Medicare for All.” The potential danger of proceeding down this path is that it might further enmesh Warren in the fiendish complexities of health-care reform, which could divert attention away from her many other plans, including her wealth tax and proposal for universal child care.
Warren’s third option, and the one I think she is most likely to choose, involves qualifying her commitment to Medicare for All by again emphasizing its aspirational nature, and stressing that, if she does get elected, other priorities would come first. Adopting this strategy would be less of a reversal than a return to where she started. In an interview with Vox’s Ezra Klein, shortly before the debate in June, Warren said that her first two priorities would be pursuing her anti-corruption package, which would severely restrict the activities of lobbyists and create a new U.S. Office of Public Integrity, and passing her wealth tax. She said that Medicare for All was a “fight that matters to me” but didn’t give any timetable for engaging in it.
Just like the other two strategies, this one would have potential costs. Supporters of Sanders, who is reportedly about to receive the endorsement of Representative Alexandria Ocasio-Cortez, could well accuse Warren of backsliding. Other Democratic primary voters, many of whom identify health care as their biggest policy concern, may get a bit confused. But moving in this direction would have the great merit of accurately reflecting Warren’s over-all policy platform. Sanders, to his credit, has doggedly supported socialized medicine for decades, even when it was far less popular than it is today. He has other policies, but Medicare for All is his signature plan. If he were to win the Democratic nomination and the general election, he would certainly try to enact some version of his Medicare for All Act, and the effort would likely consume much his Presidency, just as passing the Affordable Care Act consumed much of Obama’s first term. Warren is in a different position. Rather than having her name attached to a single issue, she wants to lead a wide-ranging effort to correct some of the excesses and failures of twenty-first-century capitalism and create a new social contract. Given the range and depth of the policy proposals she has put forward, she can credibly claim to have laid out a framework for beginning such a transformation, which could ultimately include the introduction of a single-payer health-care plan that guarantees universal coverage. At the moment, though, her ill-defined association with Sanders’s Medicare for All proposal risks obscuring the rest of her program. I would expect her to clarify it, and soon.

 

https://www.newyorker.com/news/our-columnists/elizabeth-warrens-medicare-for-all-dilemma 

 

When Medical Debt Collectors Decide Who Gets Arrested

by Lizzie Presser - Propublica - October 16, 2019

On the last Tuesday of July, Tres Biggs stepped into the courthouse in Coffeyville, Kansas, for medical debt collection day, a monthly ritual in this quiet city of 9,000, just over the Oklahoma border. He was one of 90 people who had been summoned, sued by the local hospital, or doctors, or an ambulance service over unpaid bills. Some wore eye patches and bandages; others limped to their seats by the wood-paneled walls. Biggs, who is 41, had to take a day off from work to be there. He knew from experience that if he didn’t show up, he could be put in jail.
Before the morning’s hearing, he listened as defendants traded stories. One woman recalled how, at four months pregnant, she had reported a money order scam to her local sheriff’s office only to discover that she had a warrant; she was arrested on the spot. A radiologist had sued her over a $230 bill, and she’d missed one hearing too many. Another woman said she watched, a decade ago, as a deputy came to the door for her diabetic aunt and took her to jail in her final years of life. Now here she was, dealing with her own debt, trying to head off the same fate.
Biggs, who is tall and broad-shouldered, with sun-scorched skin and bright hazel eyes, looked up as defendants talked, but he was embarrassed to say much. His court dates had begun after his son developed leukemia, and they’d picked up when his wife started having seizures. He, too, had been arrested because of medical debt. It had happened more than once.
Judge David Casement entered the courtroom, a black robe swaying over his cowboy boots and silversmithed belt buckle. He is a cattle rancher who was appointed a magistrate judge, though he’d never taken a course in law. Judges don’t need a law degree in Kansas, or many other states, to preside over cases like these. Casement asked the defendants to take an oath and confirmed that the newcomers confessed to their debt. A key purpose of the hearing, though, was for patients to face debt collectors. “They want to talk to you about trying to set up a payment plan, and after you talk with them, you are free to go,” he told the debtors. Then, he left the room.
The first collector of the day was also the most notorious: Michael Hassenplug, a private attorney representing doctors and ambulance services. Every three months, Hassenplug called the same nonpaying defendants to court to list what they earned and what they owned — to testify, quite often, to their poverty. It gave him a sense of his options: to set up a payment plan, to garnish wages or bank accounts, to put a lien on a property. It was called a “debtor’s exam.”
If a debtor missed an exam, the judge typically issued a citation of contempt, a charge for disobeying an order of the court, which in this case was to appear. If the debtor missed a hearing on contempt, Hassenplug would ask the judge for a bench warrant. As long as the defendant had been properly served, the judge’s answer was always yes. In practice, this system has made Hassenplug and other collectors the real arbiters of who gets arrested and who is shown mercy. If debtors can post bail, the judge almost always applies the money to the debt. Hassenplug, like any collector working on commission, gets a cut of the cash he brings in.

Across the country, thousands of people are jailed each year for failing to appear in court for unpaid bills, in arrangements set up much like this one. The practice spread in the wake of the recession as collectors found judges willing to use their broad powers of contempt to wield the threat of arrest. Judges have issued warrants for people who owe money to landlords and payday lenders, who never paid off furniture, or day care fees, or federal student loans. Some debtors who have been arrested owed as little as $28.
More than half of the debt in collections stems from medical care, which, unlike most other debt, is often taken on without a choice or an understanding of the costs. Since the Affordable Care Act of 2010, prices for medical services have ballooned; insurers have nearly tripled deductibles — the amount a person pays before their coverage kicks in — and raised premiums and copays, as well. As a result, tens of millions of people without adequate coverage are expected to pay larger portions of their rising bills.
The sickest patients are often the most indebted, and they’re not exempt from arrest. In Indiana, a cancer patient was hauled away from home in her pajamas in front of her three children; too weak to climb the stairs to the women’s area of the jail, she spent the night in a men’s mental health unit where an inmate smeared feces on the wall. In Utah, a man who had ignored orders to appear over an unpaid ambulance bill told friends he would rather die than go to jail; the day he was arrested, he snuck poison into the cell and ended his life.
In jurisdictions with lax laws and willing judges, jail is the logical endpoint of a system that has automated the steps from high bills to debt to court, and that has given collectors power that is often unchecked. I spent several weeks this summer in Coffeyville, reviewing court files, talking to dozens of patients and interviewing those who had sued them. Though the district does not track how many of these cases end in arrest, I found more than 30 warrants issued against medical debt defendants. At least 11 people were jailed in the past year alone.
With hardly any oversight, even by the presiding judge, collection attorneys have turned this courtroom into a government-sanctioned shakedown of the uninsured and underinsured, where the leverage is the debtors’ liberty.

---

Seated at the front of the courtroom, Hassenplug zipped open his leather binder and uncapped his fountain pen. He is stout, with a pinkish nose and a helmet of salt and pepper hair. His opening case this Tuesday involved 28-year-old Kenneth Maggard, who owed more than $2,000, including interest and court fees, for a 40-mile ambulance ride last year. Maggard had downed most of a bottle of Purple Power Industrial Strength Cleaner, along with some 3M Super Duty Rubbing Compound, “to end it all.” His sister had called 911.
Maggard took his seat. He had cropped red hair, pouchy cheeks and mud-caked sneakers. “The welfare patients are the most demanding, difficult patients on God’s earth,” Hassenplug told me, with Maggard listening, before launching into his interrogation: Are you working? No. Are you on disability? He was diagnosed with schizoaffective disorder, bipolar type, and anxiety. Do you have a car? No. Anyone owe you money you can collect? I wish.
They had been here before, and they both knew Maggard’s disability checks were protected from collections. Hassenplug set down his pen. “Between you and me,” he asked, “you’re never going to pay this bill, are you?”
“No, never,” Maggard said. “If I had the money, I’d pay it.”
Hassenplug replied, “Well, this will end when one of us dies.”
Though debt collection filings are soaring in parts of America, Hassenplug speaks with pride about how he discovered their full potential in Coffeyville long before. A transplant from Kansas City, he was a self-dubbed “four-star fuck-up” who worked his way through law school. He moved to Coffeyville to practice in 1980 and soon earned a reputation as a hard ass. He saw that his firm, Becker, Hildreth, Eastman & Gossard, hadn’t capitalized on its collections cases. The lawyers didn’t demand sufficient payments, and they rarely followed up on litigation, he said. Where other attorneys saw petty work, Hassenplug saw opportunity.

Hassenplug started collecting for doctors, dentists and veterinarians, but also banks and lumber yards and cities. He recognized that medical providers weren’t being compensated for their services, and he was maddened by a “welfare mentality,” as he called it, that allowed patients to dodge bills. “Their attitude a lot of times is, ‘I’m a single mom and … I’m disabled and,’ and the ‘and’ means ‘the rules don’t apply to me.’ I think the rules apply to everybody,” he told me.
He logged his cases in a computer to track them. First with the firm and later in his own practice, he took debtors to court, and he won nearly every time; in about 90% of cases nationally, collectors automatically win when defendants don’t appear or contest the case. Hassenplug didn’t need to accept $10 monthly payments; he could ask for more, or, in some cases, even garnish a quarter of a debtor’s wages. His fee was, and often still is, one-third of what he collects. He asked the court to summon defendants, over and over again. It was the judge’s contempt authority that backed him, he said. “It’s the only way you can get them into court.”
The power of contempt was originally the power of kings. Under early English rule, monarchs were considered vicars of God, and disobeying them was equivalent to committing a sin. Over time, that contempt authority spread to English courts, and ultimately to American courts, which use it to encourage compliance with the judicial system. There is no law requiring that a court use civil contempt when an order isn’t followed, but judges in the U.S. can choose to, whether it’s to force a defendant to pay child support, for example, or show up at a hearing. A person jailed for defying a court order is generally released when they comply.
When Casement took the bench in 1987, after passing a self-study exam, he didn’t know much legalese — he had never been in a courtroom. But attorneys taught him early on that the power of contempt was available to him to punish people who ignored his orders. At first, Casement could see himself in the defendants. “I was a much more pro-debtor aligned judge, much more sympathetic, much less inclined to do anything that I thought would burden them,” he told me. “And over the years, I’ve gradually moved to the other side of the fulcrum. I still consider myself very much in the middle, and I don’t know if I am or not.”
Once a bustling industrial hub, Coffeyville has a poverty rate that is double the national average, and its county ranks among the least healthy in Kansas. Its red-bricked downtown is lined with empty storefronts — former department stores, restaurants and shops. Its signature hotel is now used for low-income housing. “The two growth industries in Coffeyville,” Hassenplug likes to say, “are health care and funerals.”

Coffeyville Regional Medical Center is the only hospital within a 40-mile radius, and it reported $1.5 million in uncollectible patient debt in 2017. A nonprofit run in a city-owned building, the hospital accounts for the vast majority of medical debt lawsuits in the county — about 2,000 in the past five years. It also accounts for the majority of related warrants. Account Recovery Specialists Inc. handles its collections, and it does so for hospitals in most Kansas counties. Though the hospitals can direct ARSI and its contracted attorneys to tell judges not to issue warrants, hardly any have. The Coffeyville hospital’s attorney, Doug Bell, said that its only motivation is to continue to serve the area, and that Kansas’ decision to not expand Medicaid under the Affordable Care Act has had a “dramatic effect on the economic liability of small rural hospitals.”
Three nearby hospitals in this rural region have closed in the past several years, meaning ambulances make more trips. A half-hour from Coffeyville, Independence runs its ambulance service at about a $300,000 annual loss. Its bills were at the root of four arrests this year alone. Derek Dustman, who is 36 and works odd jobs, had been driving a four-wheeler when he was hit by a car and rushed to the hospital. Though he was sued for not paying his $818 ambulance bill, he didn’t have a license to drive to the courthouse. This spring, he spent two nights in jail. “I never in a million years thought that this would end with jail time,” he told me.
For years, Hassenplug has requested that the judge issue warrants on the ambulance service’s behalf. When I asked Lacey Lies, the city’s director of finance, if she ever considered telling him not to resort to bench warrants, she was puzzled. “You’re saying an attorney with no teeth?”

---

The first time Tres Biggs was arrested, in 2008, he was dove hunting in a grove outside Coffeyville. It had been just a year since his 6-year-old son Lane was diagnosed with leukemia, and Biggs watched him breathe in the fresh air, seated on a haybale under an orange sky. When a game warden came through to check hunting permits, Biggs’ friends scattered and hid. He wasn’t the running type, and he took Lane by the hand. The warden ran Biggs’ license. There was a warrant out for his arrest. Biggs asked a friend to take Lane home and crouched into the warden’s truck, scouring his memory for some misstep.
The last few years had been a blur. His wife, Heather, had quit her job as a babysitter to care for their son. Then, she got sick. Some days, she passed out or felt so dizzy she couldn’t leave her bed. Her doctors didn’t know if the attacks were linked to her heart condition, in which blood flowed backward through a valve. To provide for his wife, son and two other kids, Biggs worked two jobs, at a lumber yard and on construction sites. He didn’t know when he would have had time to commit a crime. He’d never been to jail. As he stared out the window at the rolling hills, his face began to sweat. He felt his skin tighten around him and wondered if he would be sick.
The warrant, he learned at the jailhouse, was for failure to appear in court for an unpaid hospital bill. Coffeyville Regional Medical Center had sued him in 2006 for $2,146, after one of Heather’s emergency visits; neither of his jobs offered health insurance. In the shuffle of 70-hour workweeks and Lane’s chemotherapy, he had missed two consecutive court dates. He was fingerprinted, photographed, made to strip and told to brace himself for a tub of delousing liquid. His bail was set at $500 cash; he had about $50 to his name.

His friend bailed him out the next morning, but at the bond hearing, the judge granted the $500, minus court fees, to the hospital. Biggs compensated his friend with a motorboat that a client had given him in exchange for a hunting dog. But it wasn’t long before the family received a new summons. In 2009, a radiologist represented by Hassenplug sued them for $380.
Some court hearings fell on days when Lane had treatment, at a hospital in Tulsa, an hour south. Heather refused to postpone his care. Lane’s condition was improving — in a year, he would be cancer-free — and his dirty blond hair was sprouting again. Her health, though, had taken a turn. She began having weekly seizures, waking up on the floor, confused about where their Christmas tree had gone or why a red Catahoula puppy was skidding around their ranch house. Her doctors concluded she had Lyme disease, which was affecting her nervous system and wiping her short-term memory. Each time she woke up, she repeated: “Don’t take me to the hospital.”
Biggs was still on the hook for the bill that had landed him in jail; bail had covered only part of it, and the rest was growing with 12% annual interest. The hospital had garnished his wages, and the radiologist had garnished his bank account, seizing contributions that his family had raised for Lane’s care. Living on $25,000 a year, Biggs couldn’t afford to buy insurance. His family was on food stamps but didn’t qualify for Medicaid, a federal insurance program for people in poverty. Other states were about to expand it to cover the working poor, but not Kansas, which limited it, for families of his size, to those who earned under $12,000. Like millions of others across America, he and Heather fell into a coverage gap.
By 2012, the Biggs family had accrued more than $70,000 in medical debt, which it owed to Coffeyville Regional Medical Center and other hospitals, pediatricians and neurologists. Some forgave it; others set up lenient payment plans. Coffeyville’s was the only hospital that sued. The doctors who took them to court were represented by Hassenplug.

Biggs began to panic around police, haunted by the fear that at any moment, he might be locked up. That spring, outside the Woodshed gas station, he spotted a sheriff’s deputy who was also an old friend. To shake off his dread, he asked the friend to run his license. The deputy found another warrant, signed by Casement, involving the $380 radiologist’s bill. “You’re not really going to take me in, right?” Biggs remembers asking. The deputy said he had no choice. Bail, as usual, was set at $500.
The family filed for bankruptcy, a short-term fix that erased their debt but burdened them with legal fees. They lost their home and started renting. Biggs ultimately got a job that offered insurance, as a rancher, covered by Blue Cross Blue Shield. But it required Biggs to pay the first $5,000 before it covered medical expenses. When chest pain hit him as he worked cattle in the heat, and he began vomiting, the only nearby hospital was Coffeyville’s. In 2017, the hospital sued again. It was the family’s sixth lawsuit for medical debt.
Sitting in Casement’s courtroom this July, Biggs calculated that he was losing about $120 by taking time off from work to attend this hearing. “I haven’t received a bill,” he told me, slouched over his turquoise shorts. “The only thing I received was this summons.” Around noon, he finally sat down with an ARSI representative, who explained that the underlying bill had been garnished from his wages, but he still owed $328 in interest and court fees. He had another couple thousand dollars in collections for separate bills he hadn’t paid, for which he hadn’t yet been sued. He said the most he could afford to pay, every two weeks, was $12.50.

---

Before the end of the Tuesday docket, Casement returned to the courtroom to read off the names of the hospital’s defendants. Five had failed to show up for contempt citations, to give their reasons for missing their debtor’s exams. Casement saw that two of the no-shows hadn’t been properly notified of the hearing, so attorneys would need to try to reach them again. The judge read the names of the other three defendants and told the hospital’s collections lawyer, “That would be a bench warrant if you want it.”
The following morning, I was reading court files in the clerks’ office when Christa Strickland arrived at 10:20 in flip-flops and black leggings, her caramel hair wrapped in a bun atop her head. She ran her finger down a docket on the bulletin board and asked why her case wasn’t listed. When the clerk pulled up her file, she told Strickland that her contempt hearing had been on Tuesday and she was one day late. “You need to call the law office of Amber Brehm,” the clerk insisted, referring to ARSI’s contracted lawyer, who represents the hospital. She handed over the phone number.
Strickland sat on a hard bench and took out her cellphone. She had saved the hearing in the wrong day on her calendar, but she had taken the day off from work and wanted to clear up the misunderstanding. “I had a court date,” she said when a man answered at the law office. “I thought it was today but apparently it was yesterday. I’m just needing to see if I can set something up?”
“By not appearing at that, the court would be in the process of issuing a bench warrant,” he said.
“What does that mean?” Strickland asked, shaking her head.
“You don’t know what a bench warrant means?” he asked. “That means you will be arrested and taken to jail and ordered to post bond.”
“Oh my God.” Strickland squeezed her eyes shut, wetness smudging her mascara. She poked at her cheek with her index finger. Her father was a preacher. She’d never been in trouble with the law. She had made a mistake, she tried to explain. She wanted to make an arrangement to pay.

The man on the phone told her that it might take a couple weeks before the court processed her warrant paperwork, which the law office had not yet submitted. Once the judge issued the warrant, she could turn herself in. Strickland wanted to scream, I’ll pay the bill, don’t make me go to jail! but she didn’t have the money. Instead, she looked at the ceiling and asked: “Turn myself into the court? The police station?”
“The Sheriff’s Department,” he responded.
“They’re here in the same building,” she said. “I won’t leave here until I get this figured out. Thank you!”
She hung up. Prick, she muttered to herself. You’re going to talk to me like I’m a freaking idiot? That’s not okay. Educate me. The court has to process it? Her mind kept moving in circles. She herself worked in debt collection, for an auto title lending company. She understood that everyone was doing their job. Still, she couldn’t grasp how this bill had gotten this far.
Before she had taken this position, during her second pregnancy, her right breast had developed a chronic infection. In 2008, she was uninsured, needed surgery to remove the swollen abscess and ran up a $2,514 bill. More than a decade later, she was still chipping away at a balance that, because of interest and court fees, had more than doubled to $5,736. She had fallen behind on her monthly payment plan and now worried that her booking photo would be on Mugshot Monday, a Facebook album run by the Police Department. She imagined what she would tell her boss: I went to jail … because I missed a court date … for medical bills. It sounded absurd.
She spotted a sheriff’s deputy in a bulletproof vest with a name tag that said Bishop and a pistol on his hip. “Hey!” she called out, explaining her phone call and how the man said something about a warrant and turning herself in. Bishop radioed into dispatch and smiled with an update: “There’s no warrant in the system yet,” he told her.
“Yet!” Strickland replied, deflating his look of reassurance. “That’s what I’m worrying about.”
“You better give Amber a call back,” Bishop said.
When I asked ARSI about how attorneys decide to request warrants, Joshua Shea, who is general counsel, told me that they don’t. The judge can choose to issue one if court orders are not followed, he said. But Casement said the opposite, telling me that he gave the choice to the attorneys. “I’m not ordering a bench warrant. My decision is to give them that option,” Casement told me. “Whether they exercise it is up to them, but they have my blessing if that’s what they want to do.”
Shea sent me an eight-page email to make clear, in large part, that ARSI, as a collection agency, has no involvement in the courts, and that Brehm is a lawyer whom the agency contractually employs and who represents the hospital directly. Her email address, though, has an ARSI domain, and her resume lists her as ARSI’s director of legal. Brehm said that court hearings aren’t the only option for debtors, who can call her instead and answer questions under oath. Shea said nobody — not the hospital, ARSI, Brehm or the court — uses the threat of jail to “extract payment.”
Strickland reached Brehm after several days, and the attorney agreed to a new hearing. On Aug. 13, when they met in court, Brehm sat at the front of the room.
“We’re giving you a second chance on that citation; just to try to take care of this without there having to be any sort of bench warrant,” the lawyer said. “I want to make sure that we’re all on the same page about the consequences of not coming into court when the order has been issued.”
Strickland nodded.
“Again, if you set a payment plan and keep it,” Brehm said, “we won’t have to worry about that.”

---

In some courthouses, like Coffeyville’s, collection attorneys are not only invited to decide when warrants are issued, but they can also shape how law is applied. Recently, Hassenplug came to believe that debtors were only attending every other hearing in a scheme to avoid jail, and he raised his concern with the judge. He suggested that the judge could fix this by charging extra legal fees; Casement wrote a new policy explaining that anyone who missed two debtor’s exam hearings without a good reason would be ordered to pay an extra $50 to cover the plaintiff’s attorney fees. If they didn’t pay, they would be given a two-day jail sentence; for each additional hearing that they missed, they would be charged a higher attorney fee and get a longer sentence.
Most states don’t allow contempt charges to be used for nonpayment, and some, like Indiana and Florida, have concluded that it is unconstitutional. Michael Crowell, a retired law professor at the University of North Carolina and an expert in judicial authority, reviewed Casement’s policy. “You can’t lock people up for contempt for failing to pay unless you have gone to the trouble to determine that they really have the ability to pay,” he said. Casement told me he hadn’t made findings on ability to pay before ordering defendants to foot attorney’s fees, “but I know that’s something the court should consider,” he said. He also made plain why he wrote the policy: “Mr. Hassenplug and Brehm’s outfit have asked me to.” (Brehm denied she requested this.)

Casement has not done everything the debt collection lawyers have suggested. At first, he agreed to their requests to set bail at the amount of the debt, but he eventually settled on $500. “Most people can come up with $500,” he said. “It may not be their money, but they know someone who will pay.” He made sure no one was arrested unless they’d been reached by personal service or certified mail.
Kansas law allows courts to order debtors in “from time to time,” leaving discretion to judges. Casement limited the frequency of Hassenplug’s debtor’s exams to once every three months. He came to the decision by his own logic around what seemed like a reasonable burden for defendants, and it remains his personal policy today. The law also states that anyone found to be disabled and unable to pay can only be ordered to appear once a year. Without an attorney, debtors like Kenneth Maggard don’t know to assert this right.
Allowing bail money to count toward collections raises some of the most critical legal questions. Hassenplug told me that he thinks it’s great that cash bail is applied to the debt. “A lot of times, that’s the only time we get paid, is if they go to jail,” he said. Peter Holland, the former director of the Consumer Protection Clinic at the University of Maryland Law School, explained that this practice reveals that the jailing is not about contempt, but about collection. “Most judges will tell you, ‘I’m working for the rule of law, and if you don’t show up and you were summoned, there have to be consequences,’” he explained. “But the proof is in the pudding: If the judge is upholding the rule of law, he would give the bail money back to you when you appear in court. Instead, he is using his power to take money from you and hand it to the debt collector. It raises constitutional questions.”
Congress has not acted on advocates’ calls to amend the Fair Debt Collection Practices Act to prohibit collectors from requesting warrants. There are also no current efforts to bar nonprofit hospitals or medical providers that receive funds through Medicare or Medicaid from seeking warrants. Some states have reformed their laws, to make sure defendants are properly served or to prohibit wage garnishments for debt. But legal experts on collections say that more remains to be done, like taking jail out of the equation and instead requiring debtors to sign a financial affidavit or a promise to appear.

Shea, from ARSI, said that using the legal process is time-consuming and costly — a last resort; arrests are “the least desirable stage for any case to reach for all involved.” Even after lawsuits are filed, they try to connect eligible debtors with the Coffeyville hospital to apply for financial assistance, he said. Last year, the hospital wrote off $1.7 million in charity care, said Bell, the hospital lawyer. “That is evidence of a hospital that cares.”
Casement said he did not consider the legality of his policies a problem. He placed some blame on the health care system. “What we have isn’t working,” he said. “As a lifelong Republican, I would probably be hung, but I think we need health care for everybody with some limits on what it’s going to cost us.”
The way he saw it, he had wide latitude to enforce compliance with a court order, though he acknowledged that creditors used bail money to their advantage. “I don’t know whether the Legislature intended it to be used that way or not,” he told me. “I have not had enough pushback from the defendants’ side to give me the impression that I’m really abusing this badly.”

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Before I left Coffeyville, I sat down with Hassenplug in the low-ceilinged courtroom. I asked him whether he thought that the system in Coffeyville was effectively imprisonment for debt, in a country that has outlawed debtors’ prisons. “The only thing they’re in jail for is not appearing,” he replied. “I do my job, I follow the law. You just have to show up in court.”
Debt collection is an $11 billion industry, involving nearly 8,000 firms across the country. Medical debt makes up almost half of what’s collected each year. Today, millions of debt collection suits are overwhelming state courts. The practice is considered a “race of the diligent,” where every creditor is rushing to the courthouse, hustling to get the first judgment, in order to be the first to collect on a debtor’s assets. In Hassenplug’s view, though, this work is not the rich taking from the poor. He laughed at how locals spread rumors, saying that he seized wheelchairs or Christmas trees. Once, he confessed, he took a man’s Rolex, only to find out it was a fake. Some months, he said, even his law office could not make ends meet.
After a couple of hours, a clerk poked her head into the courtroom and told us it was time to leave. Hassenplug and I began to walk out, and on the terrazzo steps, he asked if I wanted to see his buildings. He owned five of them on a shuttered stretch of town. He wondered out loud if he was making a mistake by inviting me, but he was pleased when I accepted. “There ain’t any place on earth quieter than downtown Coffeyville,” he said, leading me into the silent streets.
He walked me through the alleys under a cloudless sky, and when he arrived at one of his buildings, he tapped a code to his garage. The door lifted, and inside, five perfectly maintained motorcycles, Yamahas and Suzukis, were propped in a line. To their left, nine pristine, candy-colored cars were arranged – a Camaro SS with orange stripes, a Pontiac Trans Am, a vintage Silverado pickup with velvet seats. He toured me around the show cars, peering into their windows, and mused about what his hard work had gotten him.

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Correction, Oct. 16, 2019: This story originally misstated the type of cancer Tres Biggs’ son, Lane, had. It was leukemia, not lymphoma.
https://features.propublica.org/medical-debt/when-medical-debt-collectors-decide-who-gets-arrested-coffeyville-kansas/

United Healthcare terminates contract with Houston Methodist; 100,000 plan members affected

by Jenny Deam - Houston Chronicle - October 10, 2019

As many as 100,000 UnitedHealthcare plan members could lose in-network access to all eight Houston Methodist hospitals and dozens of its out-patient facilities on Dec. 31 after the insurer announced it was dropping the major hospital system from its network.

The move would affect anyone with a UnitedHealthcare employer-sponsored plan as well as those covered under the insurer’s Medicare Advantage program for seniors, both the hospital and the insurance company confirmed on Thursday. Medicare Advantage enrollment for 2020 begins next week.

UnitedHealthcare, the nation’s largest insurer, has also said it would drop roughly 800 Methodist-employed physicians from its network on April 1, 2020.

While the thousands of physicians affiliated with Houston Methodist would not be affected by the insurer’s decision at this time, the move could still have sweeping impact if those doctors send patients to a Methodist hospital or facility, which would be out-of-network and cost patients substantially more money.

Negotiations are continuing, but the war of words has escalated in recent days as both sides accuse the other of bad faith and greed. The increasingly nasty fight also offers a rare glimpse at just how contentious negotiations between insurers and providers have become.

On Oct. 2, Dr. Marc Boom, CEO of Houston Methodist, sent a terse email to doctors and department heads saying that after a two-decade relationship with UnitedHealthcare, the insurer “abruptly gave us notice of termination after we refused to accept rate cuts so deep they would have a negative impact on the way we deliver care to thousands of patients who rely on us every day.”

Then, Optum, a United Healthcare sister company, announced that as part of the ongoing dispute, after Oct. 14 any plan member entering the organ transplant program at Houston Methodist — considered one of the nation’s best — will be redirected to an in-network facility to avoid a future out-of-network charge. Existing Methodist transplant patients will be covered after Jan. 1 to assure continuity of care, insurance officials said.

“With these moves” Boom fired back in a second email on Wednesday, “United is not putting the patient first but looking to use its members as pawns in its negotiations,”

UnitedHealthcare took its own shot, accusing Houston Methodist of overcharging patients and being “significantly more expensive than some of the most prestigious hospitals in the country.” The insurer, in a statement, also contended Houston Methodist system is the most expensive in Texas, “driving up the cost of health care for all Texans and the health care system overall.”

“Their costs are not in line with similar institutions,” said Dave Milich, CEO of UnitedHealthCare commercial plans for Texas, said in an interview Thursday. “If you’re going to hold yourself up as one of the top hospitals than we’re going to compare you to them as far as relevant cost.”

Pick a stat

UnitedHealthcare’s internal data indicates the cost at Houston Methodist is 49 percent higher than the average cost at the four other top hospitals in Texas ranked by U.S. News & World Report, and more than one-third higher than the top five ranked best in the nation, the company said. Those U.S. top hospitals are Mayo Clinic, Massachusetts General Hospital in Boston, Johns Hopkins Hospital, Cleveland Clinic, and New York-Presbyterian Hospital-Columbia and Cornell.

Milich added that employers who offer his company’s plans have demanded that it do more to bring down costs for workers.

Stefanie Asin, a spokeswoman for Houston Methodist, disputed that its health care system was more costly than other top institutions. She said statistics from the RAND Corp., a think tank in Santa Monica, Calif., place Houston Methodist’s costs in the mid-range of health care systems in Texas.

“They’re all about the numbers,” she said of UnitedHealthcare. “We’re all about the patients.”

Chris Skisak, executive director of the Houston Business Coalition on Health, a nonprofit that represents employers purchasing health plans, said Thursday both sets of data could be correct, depending on which figures are used and how they are analyzed. Using the RAND study, Methodist’s costs are, indeed, in the mid-range among health care systems in Texas, he said.

But that study also showed Texas hospital costs are higher than those in Chicago, Los Angeles and New York, which suggests that the UnitedHealthcare data is also correct. “The losers here are the patients,” he said.

On Wednesday, Methodist sent letters to about 20,000 UnitedHealthcare Medicare Advantage members urging them to sign up for other insurers’ plans and included a list of companies and contact information. Enrollment for the program for those over 65 runs from Oct. 15 to Dec. 7.

Working hard

“Be assured that we have negotiated in good faith with United, but they continue to demand reductions to our overall contract,” the letter to patients said, “We simply cannot accept cuts that would negatively impact the way you experience care.”

Milich said his company is avoiding putting patients in the middle of the fight. While in contract negotiations with other area health systems in the area, it has only reached an impasse with Houston Methodist. “We are talking regularly” he said,“and working hard to come to an agreement.”

https://www.houstonchronicle.com/business/article/United-Healthcare-terminates-contract-with-14507534.php 

Faced With a Drug Shortfall, Doctors Scramble to Treat Children With Cancer

A critical chemotherapy medication is in short supply, and physicians say there is no appropriate substitute.

by Roni Caryn Rabin - NYT - October 14, 2019

 

A critical drug that serves as the backbone of treatment for most childhood cancers, including leukemias, lymphomas and brain tumors, has become increasingly scarce, and doctors are warning that they may soon be forced to consider rationing doses.
Persistent shortages of certain drugs and medical supplies have plagued the United States for years, but physicians say the loss of this medication, vincristine, is uniquely problematic, as there is no appropriate substitute.
“This is truly a nightmare situation,” said Dr. Yoram Unguru, a pediatric oncologist at the Herman and Walter Samuelson Children’s Hospital at Sinai in Baltimore. “Vincristine is our water. It’s our bread and butter. I can’t think of a disease in childhood cancer that doesn’t use vincristine.”
Shortages of the chemotherapy drug, which is on back order, will likely affect children throughout the country, he said, obligating physicians to make difficult decisions.

“There is no substitution for vincristine that can be recommended,” Dr. Unguru said. “You either have to skip a dose or give a lower dose — or beg, borrow or plead.”
Vincristine is one of the drugs used to manage acute lymphoblastic leukemia, the most common childhood cancer. Vincristine is also an important agent in the treatment of Wilms tumor, a rare kidney cancer that mostly affects children.
The Children’s Oncology Group, a collaboration of researchers at hospitals and cancer centers, has made recommendations for altering clinical trial treatment protocols involving vincristine, including checking the hospital pharmacy’s supply before trial enrollment; considering using half the dose if the full amount is not available; skipping doses during the maintenance phase of treatment; or in some cases omitting the drug altogether.
“We are all devastated,” said Dr. Michael Link, a pediatric oncologist at the Stanford University School of Medicine and a former president of the American Society of Clinical Oncology.
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Without vincristine, many children with acute lymphoblastic leukemia will still be cured, “but this is a difficult disease to treat in general, and with one hand tied behind your back, it makes it much more difficult,” Dr. Link said.

Until earlier this year, there were two suppliers of vincristine: Pfizer and Teva Pharmaceutical Industries. In July, Teva made a “business decision to discontinue the drug,” according to the Food and Drug Administration.
Since then, Pfizer has been the sole supplier, and the company lately has experienced manufacturing troubles.
“Pfizer has experienced a delay, and we are working closely with them and exploring all options to make sure this critical cancer drug is available for the patients who need it,” the F.D.A. said in a brief statement.
Jessica Smith, a spokeswoman for Pfizer, said the company would expedite additional shipments of the drug over the next few weeks to “support three to four times our typical production output,” in an effort to make up for Teva’s withdrawal from the market.
Teva did not return numerous calls for comment.
The American Society of Health-System Pharmacists tracks more than 200 medications in short supply, among them everyday necessities like antibiotics, dextrose and several vaccines, including the rabies vaccine.
The shortages tend disproportionately to involve older, generic injectable drugs, which are difficult to manufacture but command low prices, a combination that often leads manufacturers to get out of the business of making them.
Those withdrawals may leave just one or two companies continuing to supply the drugs in the United States. Their factories must run at peak production to turn a profit and provide a sufficient supply, but the moment there is a quality problem and production shuts down, shortages follow.

Generic drugs play a vital role in the treatment of cancer. Of the 19,000 American children and adolescents younger than 19 who develop cancer every year, 85 percent are cured. But treatment hinges largely on inexpensive, older drugs like vincristine, which have been off patent for decades.
Shortages cause disruption in treatment. According to a survey published in the New England Journal of Medicine in 2013, 83 percent of oncologists said that they were unable to prescribe the chemotherapy agent they waby Mnted to use because of a shortage, and that they had to substitute a different drug or delay treatment.
Dr. Unguru said the survival rate for acute lymphoblastic leukemia, which accounts for nearly one-quarter of all cancers in children, is nearly 90 percent. But eight of the 10 drugs most commonly used to treat it have been unavailable at times over the past decade.
A drug shortages task force established in 2018 by the former F.D.A. Commissioner Scott Gottlieb is supposed to submit a report with findings and recommendations to Congress by the end of the year.
“This shouldn’t be happening in the United States,” said Dr. Peter Adamson, chair of the Children’s Oncology Group.
“It’s hard enough for any family having a kid with cancer, and having a child with cancer likely to be cured except we can’t give them the drug is beyond the imagination. How can we do that to families?”
https://www.nytimes.com/2019/10/14/health/cancer-drug-shortage.html?action=click&module=News&pgtype=Homepage

- Editor's Note:

Maybe it's time to nationalize the pharmaceutical industry.

-SPC

Fed Up With Deaths, Native Americans Want to Run Their Own Health Care

 by Mark Walker - NYT - October 15, 2019

RAPID CITY, S.D. — When 6-month-old James Ladeaux got his second upper respiratory infection in a month, the doctor at the Sioux San Indian Health Service Hospital reassured his mother, Robyn Black Lance, that it was only a cold.
But 12 hours later James was struggling to breathe. Ms. Black Lance rushed her son back to the hospital in western South Dakota, where the doctors said they did not have the capacity to treat him and transferred him to a private hospital in Rapid City. There he was given a diagnosis of a life-threatening case of respiratory syncytial virus.
“They told me if I hadn’t brought him back in, he would have died,” Ms. Black Lance said, choking back tears.
James was lucky to have survived that day in April 2016. The problems at Sioux San, one of 24 hospitals nationwide run by the Indian Health Service, an arm of the Department of Health and Human Services, are pervasive: Five government investigations have found that patients have died at Sioux San from inadequate care, are often given wrong diagnoses and are treated by staff members who have not been screened for hepatitis and tuberculosis.

The troubles were so severe that Sioux San’s emergency room and inpatient unit were shut down by the Indian Health Service and Congress in 2017. Only an urgent care clinic, often understaffed, remained open.
Sioux San is emblematic of the scale of the problems facing the Indian Health Service, which provides government medical care to 2.2 million of the nation’s 3.7 million American Indians and Alaska Natives and is widely judged to provide substandard care.
But Sioux San is also part of a growing trend in which tribes have declared themselves fed up with the federal government’s management of the health care system and are seizing control of troubled hospitals in the belief that they can do a better job of running them.
In mid-July the Great Plains Tribal Chairmen’s Health Board, a nonprofit organization that represents 18 tribal communities in South Dakota, North Dakota, Nebraska and Iowa, began running the Sioux San hospital’s operations.
The change in management has allowed the tribal authority to develop a plan to reopen the inpatient hospital and the emergency room, recruit more qualified doctors and health care workers, and upgrade equipment.

But it is an expensive and daunting proposition.
To make its plan reality, the tribal authority would need to find millions of more dollars over the next several years. Unlike some tribal nations, the tribes in the area do not have enough money from casinos to help finance the health care plan. So they are seeking additional federal grants from outside the Indian Health Service and trying to increase the amount of money they receive from Medicaid and Medicare.

Even if they succeed, it could be years before they achieve their goals of hiring more personnel and reopening the rest of the hospital.
But after years of suffering from poor health care, tribal nations say seizing control of their health care systems may be their best option.
A New York Times analysis of government data found that a quarter of medical positions within the Indian Health Service — including doctors, dentists and nurses — are vacant. In some areas, the vacancy rate is as high as 50 percent.
In states with Indian Health Service hospitals, the death rates for preventable diseases — like alcohol-related illnesses, diabetes and liver disease — are three to five times higher for Native Americans, who largely rely on those hospitals, than for other races combined.
Federal government spending on health care for Native Americans lags that for almost any other population. In 2016, the federal government spent $8,602 per capita on health care for federal inmates compared with $2,843 per patient within the Indian Health Service.

In 2017, the Indian Health Service spent $3,332 per patient, according to a report by the National Congress of American Indians. By comparison, Medicare spent $12,829 per patient that year and Medicaid spent $7,789 per patient, the report said.
In South Dakota, whose residents are among the highest users of Indian Health Service hospitals, the life expectancy for Native Americans is 57, 24 years less than for white residents.
In 2017 a federal watchdog agency, the Government Accountability Office, put the Indian Health Service on its high-risk list of programs and operations that need transformation. Although the watchdog agency says the health service has made some improvements since then, it remains on the high-risk list.

A Grim History

Sioux San Hospital, a large yellow brick building on top of a hill in western Rapid City, has a grim history. Built in 1898 as a Native American boarding school, where children from local tribes were sent and forced to assimilate to American culture, it later became Sioux Sanitarium, a Native American tuberculosis hospital. Many students died of disease, as did most of the TB patients. Bodies of both have been found on the grounds.
In 1955 the newly created Indian Health Service took over Sioux San, and by the 1960s it had become one of the first government hospitals for Native Americans who did not live on a reservation. Patients at Sioux San were chiefly members of the Oglala Sioux, Cheyenne River Sioux and Rosebud tribes who had moved from reservations in the region to Rapid City seeking employment and a better quality of life.
Longtime patients say there were problems at Sioux San from the beginning, but it was not until 2010 that the Centers for Medicare and Medicaid Services, which has the largest capacity in the government for investigating medical fraud and abuse, began the first of the five investigations of the hospital.

In 2011, one investigation found, a 57-year-old woman showed up at the emergency room complaining that she had trouble breathing and felt faint. The hospital did not immediately check her. Minutes later, the woman collapsed outside the emergency room, hit her head on the floor, went into a seizure and died soon after.
Another patient died the day after he was discharged from the hospital, but Sioux San had no records indicating what was wrong, according to a 2014 inspection by the Centers for Medicare and Medicaid.

James Ladeaux, the infant who struggled to breathe after the doctor at Sioux San told his mother he had a cold, ultimately spent a week and a half in intensive care at Rapid City Regional Hospital, where doctors successfully treated him. But the missteps by the medical staff at Sioux San soon became the subject of another federal review.
The nurse who helped assess James told inspectors that she did not notice any problem with him, according to a federal investigation report, while the doctor said he failed to take James’s medical history — his premature birth and previous respiratory condition — into account. Had he known, the doctor said, he would have altered his treatment plan.
Today Rapid City Regional Hospital, five miles away, sees a large number of patients who would otherwise have been treated at Sioux San.
But health care expenses outside the Indian health system are not necessarily covered by the government, meaning that trips to private hospitals can generate large bills. Tribal members who get treatment outside the system have to petition for reimbursement from the Indian Health Service, which does not have the funding to pay for the private care of all those who need it.

Since 2016, Indian Health Service records show that it has declined to pay medical bills for more than 500,000 patients, saddling them with more than $2 billion in medical debt.
“It is sad to see the impact on patients,” said Dr. Brook Eide, an emergency room doctor at Rapid City Regional Hospital. “The impact emotionally and financially. It’s devastating.”

Despite the problems, Congress has consistently declined to provide the Indian Health Service with substantially more money or to overhaul the way Native Americans get health care.
“These were the first Americans and they have been getting second-class health care, if any at all,” said Byron Dorgan, a former senator from North Dakota. Mr. Dorgan, a Democrat, ran an investigation in 2010 when he was the chairman of the Senate Committee on Indian Affairs that found chronic mismanagement, inadequate health care and unqualified staff members within the health service.
Rear Adm. Michael Weahkee, a member of the native Zuni Tribe and a top official in the Indian Health Service, said the federal government had not kept its promise to provide “the highest” level of health care for Native Americans.
“I don’t think the federal government has fulfilled its treaty obligations for providing health care because it has not provided I.H.S. with the resources to do so,” Admiral Weahkee said.

Admiral Weahkee said he was seeing more tribes move in the direction of self-determination. The shift allows tribal nations greater financial flexibility and opens them up to receive other additional funding sources.
Sioux San is one of six Indian Health Service hospitals in South Dakota, Nebraska and Arizona to have converted to tribal management since 2009.

Tribes Take Over

Despite the challenges they face, tribes who choose to take control of their own health care systems have tended to see improvement in their hospitals, said Lynn Malerba, chief of the Mohegan Tribe and chairwoman of the Tribal Self Governance Advisory Committee, an advisory body to the Indian Health Service.
“I know tribes that do have been very successful at creating a really wonderful health system to the point where they are experiencing better health outcomes,” she said. “Tribal citizens who receive their health care through a tribal program are much happier.”
Representative Tom Cole, Republican of Oklahoma and a member of the Chickasaw Nation, said tribes should take care of their own medical needs. “My personal feeling is that if you are a tribe it is better to run your own health care system,” Mr. Cole said.
The most successful model of self-determination has long been the Alaska Native Tribal Health Consortium, which broke off from the Indian Health Service in 1998 and is often studied by tribal nations looking to take over managing their hospitals. In 2012, the Department of Veterans Affairs even teamed up with the consortium to allow veterans living in the state to get care from the Native American facilities.

Alaskan officials say their funding streams come from aggressively seeking grants, their partnership with the veterans department, and billing Medicaid and Medicare.
Other tribes have used casino revenues, something not available in substantial amounts to Sioux San. And it is not entirely clear yet how much funding Sioux San will be able to win from other sources, including grants and Medicaid and Medicare.
Jerilyn Church, the chief executive of the Great Plains Tribal Chairmen’s Health Board, which oversees Sioux San, said the group was aiming to reopen Sioux San’s inpatient unit and emergency room, but that doing so would take years.
For now, the health board is addressing the hospital’s vacancies, reviewing its bill practices and researching grant opportunities to bring new money for equipment and hiring. Ms. Church said the board was also working to develop a pilot program to buy private insurance for the sickest of patients.
Charmaine White Face, 72, a member of the Oglala Sioux Tribe, is among a group of Native Americans in Rapid City who are not convinced that the management change will be successful.
Ms. White Face thinks there should have been more planning and communication with the residents who primarily use the hospital before the change. But most concerning, she said, is the lack of money to achieve the health board’s goals.
“In order to be successful like in Alaska, the tribes, or the native organization, has to have a lot of other resources, and the tribes here in the Great Plains do not,” Ms. White Face said. “We are too poor here.”
https://www.nytimes.com/2019/10/15/us/politics/native-americans-health-care.html?action=click&module=News&pgtype=Homepage

 

Canada needs universal pharmacare

Editorial - The Lancet - October 19, 2019

Canada's often-lauded health-care system has an unusual and unfortunate distinction. Physician care and hospital stays are universally publicly funded, but medicines are not. Canada is the only country in the world with public health care and no universal public system for providing prescription drugs (pharmacare). In the run-up to the country's federal election on Oct 21, the harms to Canadians, and the costs to the health-care system, of the absence of national pharmacare are again in the spotlight.

How Canadians pay for their prescriptions is variable: federal or provincial plans provide public coverage of medicines used outside of hospitals for some groups, such as people receiving social assistance, those older than 65 years, and Indigenous peoples on reserve. About half of the country's 35 million residents have employer-based private insurance, often requiring a copayment. One in five Canadians has to pay out of pocket for medicines that amounted to CAN$30 billion for 600 million prescriptions in 2016, four times what it was 20 years ago. This medley—over 100 different public drug plans and thousands of private ones—has left millions of Canadians struggling to afford their medications.

Worse, the fragmentation means that Canadians pay the highest drug costs in the world, behind only Switzerland and the USA, according to an advisory council report. With a national system, the federal government would be in a powerful bargaining position to bulk-purchase drugs and drive down costs. And removing out-of-pocket expenses would improve patient adherence and health outcomes, reduce avoidable hospital admissions, and provide a net saving to the public purse.

Implementing national pharmacare won't be easy. Funding, administration, and jurisdictional negotiations will be difficult, and creating the requisite national drug agency, formulary, and strategy will take time. But after multiple reports, advisory councils, and political pledges, together with high public expectations, the delivery of the pharmacare promise is long overdue. After Oct 21, a first order of business needs to be a universal system to ensure that Canadians can equitably access medicines.

https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)32324-4/fulltext?dgcid=raven_jbs_etoc_email