Editor's Note -
This link to an interiew with Kay Tillow about the DCE threat to traditional Medicare is very informative - and scary.
- SPC
https://davidswanson.org/talk-world-radio-theyre-privatizing-medicare-while-your-eyes-are-on-a-democracy-summit/
Editor's Note -
The following clipping contains a link to an interview with health care journalist Merril Goozner about the new Direct Contract Entity program currently being rolled out by CMS.
It's well worth the hour devoted it.
A New Way To Think About Medicare
Introduced during the Trump administration, “direct contracting” is a Medicare payment model that allows private medical practices and insurance companies to arrange set payments from Medicare for the year, rather than bill the administration for services. But critics warn that the system, which has continued under the Biden administration, is being exploited by venture capitalists. Merrill Goozner is a health care reporter who has spent decades covering the slow-moving crisis of American healthcare, and he joins to Ryan Grim to discuss the present and possible future of Medicare.
The biggest threat to Medicare you've never even heard of
Every year on July 30, advocates across the nation bake cakes and hold rallies to celebrate the anniversary of Medicare, the popular federal program established in 1965 to provide health care to seniors and Americans living with disabilities. The festivities are for good reason: Seniors love Medicare. It is simple, efficient, and empowers them to manage their own health.
But starting this year, millions of seniors are quietly being enrolled into a program run by third-party middlemen called Medicare Direct Contracting (DC). This is occurring without their full knowledge or consent. If left unchecked, the DC program could radically transform Medicare within a few years, without input from seniors or even a vote by Congress.
Developed late in the Trump administration, the Medicare DC program allows commercial insurers and other for-profit companies to “manage” care for seniors enrolled in Traditional (fee-for-service) Medicare. Instead of paying doctors and hospitals directly for seniors’ care, Medicare gives these middlemen (called Direct Contracting Entities, or DCEs) a monthly payment to cover a defined portion of each seniors’ medical expenses. DCEs are then allowed to keep what they don’t pay for in health services, a dangerous financial incentive to restrict and ration seniors’ care.
A majority of seniors choose Traditional Medicare over Medicare Advantage, the version of Medicare run by commercial insurers, because they value having free choice of providers and the power to manage their own care. But under the Medicare Direct Contracting program, older Americans who actively chose the popular Traditional Medicare program are automatically enrolled into a Direct Contracting Entity without their full knowledge or consent.
Seniors in Traditional Medicare may be “auto-aligned” to a DCE if any primary care physician they’ve visited in the past two years is affiliated with that DCE. That means Medicare automatically searches two years of seniors’ claims history without their full consent to find any visits with a participating DCE provider as the basis for enrollment. It’s no wonder that the current DC pilot phase includes potentially 30 million Traditional Medicare beneficiaries enrolled in 53 DCEs across 38 states.
It gets worse. Who are we trusting to “manage” our seniors’ care? Virtually any type of company can apply to be a DCE, including commercial insurers, venture capital investors, and even dialysis centers. In fact, applicants are approved without oversight from Congress. Unlike other care management models, there isn’t even a requirement that DCEs be majority owned by health care providers. This opens the door to ownership by for-profit entities with no health care expertise at all.
Wall Street investors are already tripping over themselves to get into the DC program. This should be a huge red flag for taxpayers and anyone concerned about funding Medicare for future generations. While Traditional Medicare spends an impressive 98 percent of its budget on patient care, Direct Contracting Entities only spends 60 percent of our tax dollars on patient care — keeping up to 40% of revenues for their own profit and overhead. We can’t think of any other industry with numbers like these, let alone one entrusted to care for the health of our nation’s seniors.
If you’ve never heard of Direct Contracting, you’re not alone. The DC program was created by the Center for Medicare and Medicaid Services’ “Innovation Center”, which was established to pilot health payment models without congressional authorization. The Innovation Center can approve and sign contracts with Direct Contracting Entities. They can even scale up the program to cover all of Medicare, without so much as a vote or hearing in Congress.
That’s why doctors from across the nation are gathering at the Department of Health and Human Services (HHS) this week to ring the alarm bells about Direct Contracting. They’re calling on HHS Secretary Xavier Becerra to end the DC program immediately. They’re also urging members of Congress to demand a hearing on this attempt to sell our beloved Medicare to Wall Street investors.
Since Direct Contracting is a pilot program, it can and should be stopped in its tracks by the Biden administration while we have the chance. After our experience with commercial Medicare Advantage plans, we already know that inserting a profit-seeking middleman into Medicare ends up costing taxpayers more, with fewer choices and worse outcomes for seniors.
As a physician and a member of Congress, we’ve never heard a senior ask for their health care to be more complicated, or to have their choice of Traditional Medicare taken away. But that’s exactly what Direct Contracting would do. Traditional Medicare has proven its value for more than half a century. Instead of selling it off to the highest bidder, let’s strengthen and improve its benefits while working to expand it to cover every American.
The Eisenhower Principle
by Kim Bellard - The Health Care Blog - December 9, 2021
I’ve finally come to understand why the U.S. healthcare system continues to be such a mess, and I have President Dwight Eisenhower to thank.
I’ve been paying close attention to our healthcare system for, I hate to admit, over forty years now. It has been a source of constant frustration and amazement that – year after year, crisis after crisis – our healthcare system doesn’t get “fixed.” Yes, we make some improvements, like ACA, but mostly it continues to muddle along.
Then I learned about President Eisenhower’s approach to problems:
That’s it! All these smart people, all these years; they didn’t know how to solve the problem that is our healthcare system, so they all took the Eisenhower approach: enlarge the problem. Let our healthcare system get so bad that not addressing it no longer is possible.
If, indeed, there is such a point.
The actual Eisenhower quote is more nuanced than the above version. It was:
Whenever I run into a problem I can’t solve, I always make it bigger. I can never solve it by trying to make it smaller, but if I make it big enough, I can begin to see the outlines of a solution.
I guess we’re not yet at the point when the outlines of a solution are clear (Bernie Sanders notwithstanding).
Instead, we’ve been chipping away at the problem, trying to make it smaller. For example:
- Employer-sponsored health insurance tax preference (WWII)
- Hill-Burton Act (1946)
- Medicare/Medicaid (1965)
- Federal HMO Act (1973)
- Stark Physician Self-Referral Law (1989)
- DGRs (1983) & RBRVS (1992)
- CHIP (1997)
- Medicare Modernization Act (2003)
- Affordable Care Act (2010)
I could add a plethora of non-legislative efforts, largely private-sector driven, such as second surgical opinion (1970’s), PPOs (1980’s), centers of excellence (1980’s), disease management (1990’s), value-based purchasing (2000’s), or digital health (2010’s). Each was well-intentioned, each was expected to make a dent in a problem, and each was subsumed into the maw of our healthcare system.
But we still pay way more than any developed country for our healthcare system, for health outcomes that put us, at best middle of the pack. Tens of millions of us still lack health insurance, in part because some states refused to expand Medicaid and in part because people still can’t afford/don’t see the value of health insurance, despite subsidies. Health inequities abound, particularly for people of color.
Yes, some of the best care in the world can be found here, but most people shouldn’t expect to receive it – it takes luck, money, and/or the right location. Our malpractice system penalizes physicians without protecting most victims of malpractice. “Public health” has at best been ignored (like most other of our infrastructure) and at worse seen as some sort of Communist plot.
One might have thought that a global pandemic would make the problem big enough. We’ve got over 800,000 people dead already, we’ve overwhelmed many of our hospitals, we’ve burned out large numbers of our healthcare workers, we’ve exposed the fragility of our healthcare (and other) supply chains. Yes, we’ve thrown trillions of dollars at the pandemic, yes, our scientists have developed very effective vaccines in record time, but too many people refuse mitigation measures that might finally bring it to an end.
Yet still the outlines of a solution continue to elude us. It seems there is no health problem so big that we can’t turn into a political issue, not even a pandemic.
Even before the pandemic, we were facing epidemics of chronic diseases, such as diabetes and obesity, as well as gun violence, opioid addiction, and mental health. We know we should address these, we know we could, but mostly we just shake our heads and offer “hopes and prayers.”
How many Americans will have to go bankrupt from the cost of healthcare they received? How many Americans will have to suffer or die from the care they didn’t receive – or from the care they did receive? How embarrassed are we willing to be about our health disparities? How reluctant do people in other countries have to get about living/visiting here due to the risk of getting caught up in our healthcare system?
In Gen Z’s lifetimes, much less those of millennials or Baby Boomers, the problems in our healthcare system have grown from huge to unfathomable. When it comes to healthcare, we’ve let the problem get big enough. It’s been enlarged to the point it is hurting us, our economy, and our futures.
Yet here we are, still fumbling for solutions.
It’s possible that the pandemic will cause our healthcare system to collapse and force us to take action on fundamental reforms. More likely, due to the valiant efforts of our healthcare professionals, it will survive this too, and the pandemic will just be one more insult added to our injury.
It’s possible that when health spending reaches 20% of GDP – as it is projected to do by the end of the decade – we’ll decide we’d had enough, but I remember when we thought 10% was the limit.
It’s possible that we’ll suddenly recognize that, hey, our declining mortality – which is not all due to COVID — is a real problem, but that’s probably too slow and subtle an indicator for us to act.
By now, we shouldn’t just have shadows of solutions. By now, the problem is so big that solutions should be crystal clear to everyone. But they’re not.
We shouldn’t be surprised. We’re very good at kicking the can down the road. We should be very concerned about the national debt, but we add to it blithely. We should be terrified of the impact that climate change is already having and how much worse it will soon be, but addressing it would require us to make too many changes.
Our infrastructure is aging, brittle, and outdated, but even the recent Infrastructure and Investment Jobs Act is much smaller than it really needed to be. The racial wealth gap is a consequence of shameful historical patterns, yet continues to widen; it is not survivable for a democracy.
We’ve learned only half of Eisenhower’s adage: we’ve got the letting the problem get bigger part down, but we’ve forgotten the part about how/when to come up with solutions.
Where’s Eisenhower when we need him?
Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.
https://thehealthcareblog.com/blog/2021/12/14/the-eisenhower-principle/?Mississippi’s miserly healthcare system
The poorest and blackest state in the US declined to expand Medicaid, leaving many citizens without coverage
This story was published in partnership with the Center for Public Integrity, a non-profit news organization that investigates inequality.
Jabriel Muhammad pays up to $40 when he sees a doctor at the community health center in Jefferson county in rural south-western Mississippi. And he goes to the center only when he is really ill. But there’s another price to pay for not having health insurance. In October, he was hit with a $1,394 hospital bill for an MRI scan to diagnose why he wasn’t breathing properly.
“We’re poor folks trying to make it as best we can,” said Muhammad, a 40-year-old self-employed carpenter and plumber. “If I make $10,000 with the work that I do in a year, that’s a nice feeling to me.”
In Mississippi, the poorest and blackest state in the US, single adults without children like Muhammad are not eligible for public health insurance, regardless of how little they earn each year. If he lived 30 miles west in Louisiana, across the Mississippi river, he could afford to see a doctor more often.
Louisiana is the only deep south state that expanded Medicaid under the 2010 Affordable Care Act, which extended healthcare access for people who work but don’t have medical coverage. Most of the 2 million people in the US without expanded coverage live in eight states in the south, where the legacy of slavery continues to shape healthcare policies, efforts to alleviate poverty and the life circumstances of thousands of Black people.
In Mississippi, 78% of the people who would become eligible for health insurance if the state expanded Medicaid are poor adults without children, like Muhammad.
“The denial of Medicaid coverage is scandalous,” said Don Simonton, a retired professor from Alcorn State University, a historically Black college in Mississippi. “It is so typical of the power structure of the south from slave days forward: ‘If you’re poor, you better make some money if you don’t want to die.’”
The Center on Budget and Policy Priorities, a thinktank that supports policies to reduce poverty and inequality, says, “Many of the states that have refused expansion have a long history of policy decisions based on racist views of who deserves to get healthcare services.”
The pandemic and the racial justice uprising last year focused the nation’s attention on healthcare disparities that states have allowed to fester, even as the pandemic punctuated how those disparities can be deadly. That’s especially true in rural Black communities that lack adequate access to basic preventive healthcare services to treat chronic diseases.
Medicaid expansion was designed to reduce racial and geographic inequities in health insurance coverage. The expansion also sought to create a national standard; however, that didn’t happen because, as in the past, some states refused to participate.
Jefferson county sits just downstream and across the Mississippi River from Madison parish, Louisiana. Both places, named for former presidents and slave owners, are among the poorest and blackest in the country. But in Madison access to health insurance has cut the amount of unpaid care costs from insurers and patients, demonstrating how access to healthcare can reduce longstanding racial disparities.
Before the Affordable Care Act, more than 20% of adults younger than 65 in both counties were uninsured. But then their paths diverged. Since 2015, a year before Louisiana expanded Medicaid under the ACA, the percentage of uninsured adults in Madison parish has plunged eight percentage points, while it has remained the same in Jefferson county.
Medicaid expansion has also extended a lifeline to some rural hospitals across the country that were threatened with closure because of charity care and bad debt. Since Louisiana expanded Medicaid in 2016, uncompensated care costs dropped 55% among the state’s rural hospitals, according to a study in the March 2021 issue of Health Affairs. And the hospitals are much better off than those in non-expansion states.
In Madison parish, local and hospital leaders are building a new facility that they hope will mean people won’t have to travel 20 or 30 miles to specialty clinics that treat conditions like diabetes or cancer.
Meanwhile, the Jefferson County Hospital & Behavioral Health unit in Mississippi has been limping along for years, in part because it’s being reimbursed at a rate that is too low to cover its costs.
“Our hospital had been for a long time one of the biggest concerns in the community,” said Anthony “Bruce” Walton, president of the Jefferson county board of supervisors. “Because if we lost our hospital, then it’s like a trickle-down effect. We can’t have our prison, our schools. Everything that we have in our small community pretty much revolves around the hospital.”
Jefferson county, where Muhammad was born and raised, was one of Mississippi’s wealthiest counties, controlled by a few white families until the end of slavery and the civil war set it on a path to becoming among the nation’s poorest today. About 37% of its residents live below the poverty line, or $26,500 for a family of four. Nearly 70% receive some form of government assistance.
In September, Mississippi’s state economist released a report stating that Medicaid expansion would add 11,300 jobs between 2022 and 2027, significantly reduce hospital costs for unpaid care and pay for itself for at least a decade. Yet governor Tate Reeves insists that expanding Medicaid would be bad medicine.
“I firmly believe that it is not good public policy to place 300,000 additional Mississippians on government-funded healthcare,” Reeves, a Republican, wrote last year in his budget recommendation.
Jefferson county could benefit from jobs. Last year, the county had the fourth-highest unemployment rate in the country at 18.4%.
Highway 61, known as the “Blues Highway”, runs through Jefferson but bypasses the county seat of Fayette. Without the highway traffic, Fayette, like much of the county, feels isolated. Main Street is a mix of empty storefronts, low-income housing, single-family homes, a bank and government buildings. There’s a sprinkling of notable businesses, like a Muslim theatre and bakery.
Muhammad, a member of the New Nation of Islam, a Black nationalist group that supports reparations and advocates for self-determination, is like many residents here who create work for themselves because there aren’t enough good-paying jobs outside the school system, healthcare and government. The state has graded the school district an F. And people with four-year college degrees have trouble finding a job.
“I call it the modern-day slavery,” Alford Perryman, a local health insurance salesman said on a recent morning. He sat at a tall table at 61 One Stop, a Black-owned gas station and community gathering space in Fayette owned by Janell Edwards and her husband. “It’s the new way to keep us from progressively moving forward at a faster pace than they are,” he said, referring to white people with power.
Edwards chimed in: “It is a big conundrum of obstacles that really comes from the same source.”
“Four hundred years,” Perryman said. “Four hundred years,” Edwards replied, “of how we came to this country and then the mentalities that were birthed out of that.”
Medicaid was launched in 1965, a critical year for civil rights. The seeds of the safety net program were in legislation aimed to advance the economic, legal and political rights of Black people and President Lyndon B Johnson’s Great Society, a massive social reform initiative that sought to end poverty, among other goals.
Access to healthcare was a critical part of combating poverty. Initially, the government had considered a federally run national healthcare program to serve vulnerable populations. But southern politicians, who opposed civil rights legislation, shaped federal health policy. Administering Medicaid as a state-run program promised to temper their resistance to what they considered federal overreach. Medicaid has been hamstrung ever since.
“Even while recognizing the path-breaking value of Medicaid, we must concede that it has taken constant political struggle to keep the program alive,” Jamila Michener, co-director of the Cornell Center for Health Equity at Cornell University, writes in her book, Fragmented Democracy: Medicaid, Federalism and Unequal Politics. “The political compromises spawned by that struggle have paved the way for geographic inequities.”
The Medicaid program, which matches federal dollars to state money to provide healthcare to the most vulnerable, is of special benefit to Mississippi. For many states, the match is roughly dollar for dollar. But in Mississippi, for every $1 the state spends on Medicaid, the federal government spends $5.46, more than in any other state.
Federal law mandates that states cover certain qualified, low-income groups such as families, people with disabilities, seniors, pregnant women and children. But the state ultimately decides who else is eligible.
A 2012 US supreme court decision gave states the option to decline to expand eligibility. Their decisions fell largely along partisan lines. That left a coverage gap where some people were too poor to qualify for the health insurance subsidies made available under the Affordable Care Act, but not poor enough to meet state guidelines to receive Medicaid.
The American Rescue Plan Act signed by President Joe Biden in March 2021 also temporarily expands the ACA subsidies, extending them through next year to people with incomes above 400% of the poverty level, or $106,000 for a family of four.
Twelve states nationwide, including Mississippi and seven others in the south, have declined to expand healthcare coverage since the supreme court ruling.
Louisiana’s Democratic governor, John Bel Edwards, opted in by executive order, and since then Medicaid coverage of adults in the state has increased by nearly 40%. In Mississippi and the southern states that stayed out of the plan, the proportion of the adult Medicaid population has stayed the same.
“There’s nothing inherently more deserving about the people in Louisiana,” said Michener. “We can say, ‘Well, it’s Mississippi’s choice.’ I think we always have to balance that logic, which is historically grounded in racism, frankly, and white supremacy. I think we always have to challenge that logic and hold it up to the other things we value.”
In Madison parish, 46-year-old Alvin Brown risked crushing medical debt earlier this year when he found himself in the emergency room. The Medicaid program saved him from paying a whopping $9,000 hospital bill.
Brown’s ordeal began in late May. “All of a sudden, I just felt bad,” Brown said. His back hurt and it was painful to urinate. The next day, he visited the emergency room at Madison Parish hospital. A doctor told Brown he was passing a kidney stone and prescribed him medication.
Two days later, Brown was still feeling lousy. Ultimately, he was admitted to a hospital nearly an hour from where he lives.
“That was my first time ever being in the hospital,” he said about the week-long stay. “I never had no [health] issues or nothing.”
It turns out that Brown was dehydrated. As a result, his kidneys began to malfunction. “It was kind of scary,” said Brown, a father of a 15-year-old boy.
He didn’t know he was qualified to receive Medicaid until a hospital employee asked him if he was interested in enrolling in the program. Brown stocks liquor and wine for retail outlets and has an annual household income of $28,000 for a family of three, just under the threshold to qualify for Medicaid coverage.
The coverage kicked in just in time to pay $7,000 toward his $9,000 hospital bill.
There’s a deep bent toward self-reliance in Jefferson county that has helped the community withstand its economic challenges.
In 1969, Charles Evers, the brother of slain civil rights leader Medgar Evers, became mayor of Fayette. Despite white flight during his tenure, locals say, he managed to attract some industry to the area and helped launch the local community health center, a pioneer in the movement to provide free and low-cost healthcare.
“We’re not successful because we don’t have the tenacity or the determination,” Perryman said. “We’re not successful because we don’t have people in place that are vouching for us.”
Blocks away on Main Street in Fayette, the New Nation of Islam operates several small businesses with a vision of building a “beautiful, thriving Black community that will be a model for our people, all over the earth,” said the community’s spiritual leader, whose followers call him Son of Man.
A barber by trade, he does carpentry work to support the community’s efforts.
The members of the group support projects like a K-12 school, tucked away in an unincorporated area known as Red Lick. Muhammad is working on his biggest carpentry project to date – a furniture store in an old cleaners building.
The tight-knit community lives and works cooperatively. Son of Man is helping Muhammad pay off his hospital bill, filling the healthcare gap left by the state of Mississippi.
Muhammad is grateful, but he adds: “It hurts my pocket a little because that’s a good little piece of change for somebody who doesn’t make money every day.”
https://www.theguardian.com/society/2021/dec/16/mississippi-miserly-healthcare-system
The Upshot
Overall health spending in the U.S. reached record levels in 2020.
A new report says the amount spent jumped to 19.7 percent of the economy in 2020 from 9.7 percent in 2019, while direct spending on medical care declined.
By Margot Sanger-Katz - NYT - December 15, 2021
The Covid-19 pandemic brought unprecedented trends in health spending last year — with overall health spending reaching its largest share of the U.S. economy ever at 19.7 percent, or $12,530 per person. But direct spending on medical care was lower than it was in 2019.
A new report from the actuaries at the Centers for Medicare and Medicaid Services, published Wednesday in the journal Health Affairs, found that total health spending in the economy grew to $4.1 trillion in 2020, a leap that represented the highest rate of increase since 2002. But nearly all of that growth came from emergency government spending on the pandemic — the effort to rapidly develop Covid vaccinations, infusions of dollars into public health, and economic stimulus spending to states, hospitals and medical providers, meant to insulate them from the shock of shutdowns in the early days of the pandemic.
“Obviously, 2020 was like no other year we’ve estimated in the history of the accounts,” said Aaron Catlin, a deputy director in the Medicare actuary’s national health statistics group.
Spending in most normal categories of health care actually went down. Health spending by businesses, individuals and state and local governments all fell. Direct spending by individuals and health insurers on medical services at hospitals, doctors and dentists also declined.
But federal programs authorized by Congress pumped unusual amounts of money into the health care system, by offering hospitals and medical practices forgivable loans, increasing the federal share of Medicaid spending, and investing billions in public health and vaccine development prograll. Overall spending on health care that did not include public health spending or special pandemic programs grew by 1.2 percent.
A hospital asked these parents to pay $45,843 a month for their baby's NICU stay
