What do the American people want in a healthcare plan? Not what Trump, Price and the GOP will give them

Readers of this blog are probably aware that I am a member of Physicians for a National Health Program (PNHP) and, like that organization, support the creation of a single-payer health system in the US. Sometimes referred to as a Canadian-type health system, or as in Sen. Bernie Sanders’ presidential campaign, “Medicare for All”, it is pretty easy to understand, and is a system that has worked not only in Canada but, in modified forms, in most developed countries in the world. The key feature of such a system is that it is one program that covers everyone in the country, “Everybody In, Nobody Out”in the title of the book by the late Quentin Young, MD, a former President and executive director of PNHP and a “tiger for social justice” in the words of his Chicago Sun-Times obituary.

Such a system would replace the bewildering, dazzling, complex, confusing mess of the current US health care system, with its hundreds of different private insurance policies with widely varying benefits, premiums, and coverage, as well as the federal programs of Medicare, federal-state partnerships like Medicaid and the ACA’s health insurance exchanges, and of course that persistent, pesky mass of 30 million or so uninsured. And the underinsured, who are effectively uninsured, because they buy the only policy that they feel that they can afford only to find out when they need it that it, surprise, doesn’t cover what they need!

Much of the defense of the ACA has been based on the fact that an insurance pool must have healthy as well as sick people. This is a core tenet of insurance, which would otherwise be unaffordable. Life insurance cannot work if it only covers people on their deathbeds; car insurance cannot work if it only is purchased at the time of an accident, homeowner’s insurance cannot work if it is only bought by people in the midst of a fire. If this were how insurance worked, there would be no need for it, for the premiums would be basically the same as paying for the cost of the services. To have it otherwise, as insurance, requires a pool of money contributed by folks, whether directly or through their taxes, who are not immediately benefiting to cover those who need it. In fact, though, understandably but impossibly, people want coverage for when they are sick, but don’t want to pay when they are not. People may not want to pay a lot when they are healthy (or think that they are) but they want coverage for their sick parents, or newborn with health problems, or when they are diagnosed with cancer, or when their adolescents are in a car wreck. These are things that don’t happen to most of us most of the time but happen to enough of us over our lives that we know enough to fear or expect it. A national single-payer system gets rid of this problem, by having the largest possible risk pool.

But the people of the US did not elect Bernie Sanders, and he did not even get the Democratic nomination. We elected (OK, the Constitutional unfairness of the Electoral College elected) Donald Trump, whose positions may be erratic and change frequently, but whose appointments to Cabinet-level posts are remarkably consistent. Most are from the most right wing of the Republican Party, not unlike we would have expected from Ted Cruz. Despite a campaign that attacked Wall Street and the support Hillary Clinton received from the financial sector, he has appointed many Wall Streeters, including several former (and current) folks from Goldman Sachs -- most recently, their lawyer whose wife still works for them, to head the SEC. Foxes guarding the henhouse abound; climate change deniers will head the EPA and Department of Energy. And in the same vein, we have, for Health and Human Services nominee, Rep. Tom Price, the orthopedic surgeon from Georgia about whom I wrote recently (“Trump, Price, and Verma: Bad news for the health of Americans, including Trump voters”, December 3, 2016).

Rep. Price certainly does not stand for a single-payer national health system. Nor does he stand for ensuring health care for the vulnerable, whether poor, elderly, rural, or sick, as demonstrated in an excellent piece in the New England Journal of Medicine by Sherry A. Glied and Richard Frank, “Care for the vulnerable vs. cash for the powerful – Trump’s pick for HHS”. It notes that he “…favors converting Medicare to a premium-support system and changing the structure of Medicaid to a block grant,” which would mean that not only Medicaid, and the coverage people have received under ACA, but even Medicare which has protected seniors for 50 years, would be under threat. The article contains information about his positions on other issues, including favoring greater access to armor-piercing bullets, opposing regulations on cigars and on tobacco as a drug, opposing the reauthorization of the Violence Against Women Act and laws prohibiting discrimination against LGBT people. In terms of ensuring health coverage he is as mean as they come:

His voting record shows long-standing opposition to policies aimed at improving access to care for the most vulnerable Americans. In 2007–2008, during the presidency of George W. Bush, he was one of only 47 representatives to vote against the Domenici–Wellstone Mental Health Parity and Addiction Equity Act, which improved coverage for mental health care in private insurance plans. He also voted against funding for combating AIDS, malaria, and tuberculosis; against expansion of the State Children’s Health Insurance Program; and in favor of allowing hospitals to turn away Medicaid and Medicare patients seeking nonemergency care if they could not afford copayments.

But he is the President-elect’s health guy, and we might think that the folks who voted for Mr. Trump will get what they wanted. Except they probably won’t, other than that small slice of voters representing the wealthiest providers, insurers, drug manufacturers, corporate executives, and pundits (like the Wall St. Journal’s Kim Strassel). The health situation in the US is bad, particularly for lower income whites, whose mortality rate has, remarkably, as reported by the Commonwealth Fund, been static rather than decreasing or in some cases (low income women) increasing. These are many of the same folks who voted for Donald Trump, and are presumably looking for a solution. The Kaiser Foundation recently conducted focus groups among Trump voters in states have been hard hit by job losses and were key swing states in the election – Ohio, Michigan, and Pennsylvania. The participants either had Medicaid or were covered by ACA. The results are summarized by an op-ed in the New York Times by Kaiser’s CEO, Drew Altman, “The health care plan Trump voters really want”, January 5, 2017.

If these Trump voters could write a health plan, it would, many said, focus on keeping their out-of-pocket costs low, control drug prices and improve access to cheaper drugs. It would also address consumer issues many had complained about loudly, including eliminating surprise medical bills for out-of-network care, assuring the adequacy of provider networks and making their insurance much more understandable.

That’s what they want. That’s what I want. It is what I believe a single-payer system would deliver. But it sure isn’t what they are going to get from Tom Price, or from whatever “replacement” the Republicans come up with for ACA.

And that’s more than a shame.  It’s a scandal.

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Health system woes, or whose benefit should we be focusing on anyway?

It’s not easy to be a big healthcare system these days, what with all the new rules and incentives for spending less money and providing less unnecessary care. Medicare is leading this charge, with a variety of efforts, mostly recently contained in the 2015 Medicare Access and CHIP Reauthorization Act, fondly known as MACRA. This law extends previous efforts by Medicare to encourage consolidation and “shared savings” (spend less and you get to keep some) through the creation of “alternative payment models” (APMs), most of which emphasize increasing prospective payment (paying in advance for a basket of services to be delivered to a population) rather than fee-for-service (paying for each service provided).

In some ways, and particularly in some places, such large health systems are well-positioned for these changes; because they are big and provide the whole range of healthcare services (or most of it), and because many of them employ physicians, they should be able to take advantage of the efficiencies of scale, as well as understand their comprehensive costs. Many of them are; Kaiser, especially on the West Coast, and other early-adopters of this comprehensive model. Other payers are following Medicare’s lead, such as Blue Cross/Blue Shield of Massachusetts.

Still, it’s hard to change your business model. When your health system has been designed for decades to maximize income from fee-for-service by hiring lots of specialists who provide services (often procedures) that bring in a lot of money and supplying them with the expensive facilities and equipment to do them, it is scary to think that this entire investment could move from being a profit center to a cost center, where each of these procedures just chips off money already received in capitation rather than generating new revenue. Plus APMs create incentives to spend less overall, and you have spent decades gearing up to spend more – with the expectation and assumption that reimbursement would more than cover this investment.

And if you are not on a coast, but in the part of the country where such changes are happening more slowly, and in fact are mostly still in the future and you’re still making money the old way, it is a very scary and risky proposition to change your business model completely. The analogy of when it is time to put your second foot in a canoe is an apt one. The dock is a stable place to be, comfortable and familiar, but the canoe can take you off to new, and maybe wonderful, places. But there is only a limited amount of time that you can keep one foot on the dock and one in the canoe before the canoe moves off and you end up falling in the lake.

One of the big concerns confronting such health systems is the degree to which they should invest in expanding primary care capacity. The argument for doing so, put forward by most consultants and experts, is that it ensures a patient base loyal to their system and referring in to their hospital(s) and specialists and providing a more comprehensive ability to manage the spectrum of care. The other option is to “double down” and be providers of only high-end, high-cost (and hopefully high-profit) care, with the assumption that the community’s primary and secondary care providers will see you as a beacon for their complex problems and refer their patients to you. This latter position is especially popular among academic medical centers, hospitals tied to a medical school and a faculty practice group, and is much closer to the advice given by the University Health Consortium, the organization of such hospitals.

Along with this is the question of how income might be distributed. Most of the incentives in MACRA and prospective payment are for primary care; in addition to direct reimbursements for primary care providers, the shared savings come from a higher percent of conditions being managed by primary care and not subspecialists, fewer hospitalizations resulting from greater continuity of care, and fewer referrals for imaging (x-rays and the like) of questionable necessity but easy availability (because the capacity for doing them has been overbuilt). Kocher and Chigurupati discuss these issues in their July 14 piece in the New England Journal of Medicine, “The Coming Battle over Shared Savings — Primary Care: Physicians versus Specialists”.[1]The main point of the piece is how specialty physicians will respond to their incomes decreasing – they suggest the options are defensive (fight it and keep doing what they are doing) or offensive (sell themselves as more able to contain costs especially for certain disease conditions). Of course, what works for some specialists may harm others; if, say, a pulmonologist caring for chronic obstructive lung disease is very efficient and their patients need less imaging and fewer admissions, it can hurt others.

The average American is not going to have great sympathy for loss of income for such specialists. The authors cite the mean income for primary care doctors as $195,000, about 4 times the average US household income, and average for specialists $284,000, significantly more but deceptive in that many specialist make 2, 3, or more times that. Thus a $35,000 reduction in income, which is what the authors use in their example, is likely to mostly concern these doctors. The authors also note that primary care physicians “…account directly for a small percentage of health care costs. Yet they substantially influence the total cost of care through referrals and directing of their patients’ subsequent care.” They are, or could be, cost effective, provided that there is not pressure from the system to increase referrals – something that has usually been the norm, and even touted by primary care physician groups who talk about “downstream revenue” generated.

Of course, nowhere in these discussions is the question of what is best for the health of the American people. Implicitly, MACRA and the ACA before it (with its creation of accountable care organizations or ACOs), are intended to increase both access to care and its quality (two legs of the “triple aim”), but arguably have been put forward by both the federal government (Medicare) and adopted by other insurers to achieve the third leg – lower cost. And for insurers, including Medicare, the concern is lower cost to them. The issues addressed heretofore in this piece and by Kocher and Chigurupati and by consultants such as the Advisory Board and organizations like UHS, are how healthcare providers (healthcare systems, academic and otherwise, physicians and other individual providers) can most effectively respond to keep from losing money, from having the cost savings for insurers come at a big cost to them.

The health of the people should be the measure. And it needs to be the health of all the people, the poorest and sickest and most vulnerable and most easily left off, not just the high-yield, high-profit generally healthy, well-insured person who needs a single procedure and has no complicating conditions. Indirect incentives that seek to modify behavior by not demanding that all necessary health needs be provided to all people and no unnecessary care be provided to anyone are all bound to fail. Societies are, or should be judged, not by how they care for their most privileged but by how they care for their most needy (see the FDR epigram at the top right of this page).

And nowhere is this more true than when it comes to the people’s health.

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[1] Kocher R, Chigurupati A, The Coming Battle over Shared Savings — Primary Care Physicians versus Specialists, NEJM 375(2):104-106, July 14, 2016

Medicare Advantage plans, CMS, and providing high-quality care to -- and care for -- all people

Medicare Advantage plans, also known as Medicare HMOs, or officially as Medicare Part C, are an alternative to traditional Medicare. By enrolling in such a plan, at additional out-of-pocket cost, the Medicare recipient gets additional benefits that are characteristic of HMOs. This may include smaller (or no) copayments or deductibles, coverage for things not covered by traditional Medicare like dental care, eyeglasses, and hearing aids, and other “advantages”. There are disadvantages, also, of course, just as in other HMOs. Beyond cost, the main one is that there is a limited panel of providers – doctors and hospitals – that the person can use. This is particularly an issue for retired people who travel a lot, or may spend the winter in a warmer climate, since these HMOs’ panels are usually in a limited geographic area.

Older “closed panel” HMOs usually had only doctors and other providers employed by the HMO itself. There are fewer of these than there once were; some of them, like Kaiser, are well-known. Other HMOs are “open panel”, where any doctor can be “approved” to be part of their provider group, but many doctors may choose not to be for reasons such as lower reimbursement or onerous regulation. Thus, it is at least theoretically possible that a Medicare Advantage enrollee could receive lower quality care from the doctors and hospitals that were part of the HMO’s network than from another doctor or hospital that might not be, but would be available to traditional Medicare patients. In addition, some Medicare Advantage plans are open to “dual-eligibles”, people with both Medicare and Medicaid, with Medicaid paying the additional premium. That such programs might provide worse care than others isnot an unreasonable concern based upon other services targeted Medicaid patients (e.g., nursing homes) and other programs targeted specifically to low income people.

Thus, Medicare has developed a rating system for Medicare Advantage plans, which assigns from 1 to 5 stars based, presumably, on carefully considered and assessed quality measures. If you want a good plan, it would behoove you to choose one with a “5 star” rating. Provided, of course, one is available in your area, and provided you can afford the out-of-pocket costs, or, if you have Medicaid, it is one that Medicaid will pay for. Unsurprisingly, many plans that have enrolled Medicaid or other lower-income patients have had lower ratings, based on the outcomes of those patients. The plans argue that this is because these low-income patients are higher-risk, have more co-existing medical, mental health, and social conditions outside of the plan’s control. Others, including the Center for Medicare and Medicaid Services (CMS), which administers Medicare, have argued that considering these characteristics might “give a pass” to plans that provide lower-quality care to poor people. A similar rating system exists for hospitals, and similar arguments have been made. As I discussed in a blog from November 10, 2013, “Does quality of care vary by insurance status? Even Medicare? Is that OK?”, there are legitimate arguments to be made on both sides.

Now, however, according to a report in “Modern Healthcare” on October 21, 2015, CMS interim administrator Andy Slavitt and his deputy administrator who runs the Center for Medicare, Sean Cavanaugh, are considering adjusting its quality ratings for Medicare Advantage plans based upon the pre-existing risk of the patients enrolled. This is important to the plans, since Medicare can drop them if they have several years of lower-than-3-star ratings. And they don’t want to be dropped, because these plans are moneymakers, in no small part because CMS treats them, financially, better than traditional Medicare plans (a result of purposeful federal policy to try experiments to “privatize” Medicare). While new criteria have not been officially announced, and would not take effect until 2017, “The comments from Slavitt and Cavanaugh were somewhat surprising because the CMS has previously downplayed the effects of socio-economic status on the ratings. The agency described the effect as ‘small in most cases and not consistently negative’ in a summary of findings from an analysis the CMS commissioned by the RAND Corp.”

It is not only surprising, but when one considers why the (possible) change of heart is happening, it is difficult to not consider the financial and political clout of the insurance industry that sponsors these programs, and the political support that such “private” Medicare-replacement programs have.  It is worth noting that CMS has not indicated that it will consider revising the ratings for hospitals, despite the fact that hospitals that care a higher proportion of poor and socially disadvantaged people face the same issues. The financial penalty for hospitals is very direct, as Medicare is not paying for readmissions which occur within 30 days. If this seems, on its face, reasonable, consider that sometimes even when the care provided in the hospital is of high quality, people go back to their homes (or long-term care facilities) where it may not be. This is sometimes a result of lack of money, lack of social support, and other stressors, but the result is that they are more likely to be readmitted. Again, CMS has argued that it would not want to encourage hospitals providing lower-quality care for poor people (which certainly would be a bad thing). But if CMS penalizes hospitals for readmissions that are outside their control, it simply encourages hospitals to not care for low-income people, or, if they are sole providers in their community, possibly even close their doors, and that would be a very bad thing. Studies that have been done indeed show that readmissions are higher when hospitals care for lower income and Medicaid patients, and that this is not the result of poorer quality care provided when those people are inpatients. (See “Aiming for Fewer Hospital U-turns: The Medicare Hospital Readmission Reduction Program” from the Kaiser Family Foundation and “Socioeconomic status and readmissions: evidence from an urban teaching hospital” in Health Affairs.)

It is important for CMS to ensure that the care provided to all Medicare recipients (indeed all people) by a hospital is not discriminatory or inequitable and that all patients have access to the care they need at the highest possible quality level. But unadjusted readmission rates are a very crude measure of quality, and it is unreasonable for CMS to expect that hospitals will be able to compensate for the impacts of poverty and lack of access to preventive care and early diagnosis and treatment. It is not unreasonable, however, for us, the American people, to expect that our government develop and help pay for programs that ensure that people’s basic needs for shelter, food, clothing, warmth and other social determinants of health, as well as post-hospital care (access to primary care, home health, and high-quality long-term care).

A single-payer health system is insufficient to address all of these needs. But it is a good start for some of them.