Products - Data Briefs - Number 382 - September 2020
Comment by Don McCanne
This report is important because it shows how well (or not) our health care financing system was working under full implementation of the Affordable Care Act but before the onset of the COVID-19 pandemic. It demonstrates that 14.5% of adults under age 65 were uninsured, and the primary reason was the fact that health insurance coverage was not affordable.
This confirms that the current health care financing system is not functioning satisfactorily, so intervention is an imperative.
What choices do we have?
* Maintain the status quo. No politician supports this, and they shouldn't because it would perpetuate personal financial hardship, physical suffering and premature death.
* Continue to implement President Trump's largely random policies designed to reduce government spending and regulation. The numbers of uninsured will continue to increase and actual health care will continue to be less and less affordable. Financial hardship, suffering and death would increase. Not acceptable.
* Enact and implement Joe Biden's proposals for reform that would tweak the current system, leaving in place the Affordable Care Act and possibly adding a public option. Health care spending would increase, the burden of our profound administrative waste would increase, and many would still be left without adequate coverage. It would fail to achieve the goals of universality, affordability and administrative efficiency. We can do better, much better.
* Enact and implement a well designed, single payer, improved Medicare for All. Coverage for all essential health care services would include absolutely everyone. Since it is funded through equitable progressive taxes, it would be affordable for each of us. The current administrative waste would be largely recovered, returning to society enough funds to pay, through equitable taxes, for the additional care required by those currently uninsured or underinsured. Universal, affordable, equitable, efficient - meeting all of our goals in a system we can afford.
We do need gifted leadership to move forward. Unfortunately that leadership was difficult to identify in last night's presidential debate. It's clear the current team has failed us. So do we take our chances on a new team that has already rejected the single payer Medicare for All model? Or might their political position be malleable?
The Great Northern States Health Care Initiative is a group of people from Minnesota and Wisconsin who have come together for the purpose of advocacy for a better health care system in our respective states and the nation. Our main objective is education of ourselves and others in our communities on the imperatives of a single payer health care system.
641-715-3900, Ext. 25790#
Wednesday, September 30, 2020
Monday, September 28, 2020
Average International Market Pricing For US Pharmaceuticals—Lessons From Europe | Health Affairs
Average International Market Pricing For US Pharmaceuticals—Lessons From Europe | Health Affairs Comment by Don McCanne Drug prices in the United States range from $4 for some generics offered through membership programs to $2,125,000 for Zolgensma - a treatment for spinal muscular dystrophy. The average drug spending is about $1,200 per person per year - $346 billion in 2019 - per capita spending that is twice the average of other high-income nations. Why? Prices are too high. Why? Essentially, we have refused to demand that the government regulate drug prices. We won't even demand that the government negotiate better drug prices for the Medicare program. We are back to proposals to allow drug purchases through Canada to take advantage of their lower prices. But there are tremendous logistical problems with that, not to mention that Canada, with one-tenth of the population of the United States, can hardly be expected to meet our needs without threatening the drug supply for their own citizens. Besides, it is somewhat silly for U.S. firms to ship to Canada drugs at a lower price and then send them back here with various private and government administrative costs added on to the prices. I have long said that we don't need to import drugs from Canada; we need to import Canadian drug prices instead. The anti-regulatory posturing on drug pricing may be coming to an end. As Marc Rodwin states, "The Trump administration and House Democrats agree that the US should use an international price index that averages prices paid by other countries (mostly European) to cap the US prices," though the Democrats' proposal is far more comprehensive. More importantly, Rodwin provides us with key lessons derived from the experiences of European nations. We may struggle with trying to reprice a two million dollar drug, but we cannot allow that to set a new standard in price gouging by the pharmaceutical industry. We really do need single payer, improved Medicare for All that includes comprehensive prescription coverage, but we need to be sure that our tax system is paying fair prices for our drugs. I just paid a $567 copay for a drug covered under Medicare Part D. Though I can afford that, too many can't. We need a health care financing system that makes health care affordable for everyone. Instead of paying prices that too many cannot afford, we can make funding through progressive taxes the great equalizer. Everyone can afford that, even President Trump (his taxes for a year not being much more than my copay for one drug?)
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Friday, September 25, 2020
Ginsburg's Passing Creates ACA Guessing Game | MedPage Today
Ginsburg's Passing Creates ACA Guessing Game | MedPage Today: High-profile case has several possible outcomes
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Thursday, September 10, 2020
MIPS penalizes physicians who take care of vulnerable populations - Don McCanne
JAMA September 8, 2020 Association Between Patient Social Risk and Physician Performance Scores in the First Year of the Merit-based Incentive Payment System By Dhruv Khullar, MD, MPP; William L. Schpero, PhD; Amelia M. Bond, PhD; Yuting Qian, MS; Lawrence P. Casalino, MD, PhD Key Points Question: Was there an association between patient social risk and physician performance in the first year of the Merit-based Incentive Payment System (MIPS), a major Medicare value-based payment program? Findings: In this cross-sectional observational study of 284 544 physicians, physicians with the highest proportion of patients dually eligible for Medicare and Medicaid had significantly lower MIPS scores compared with physicians with the lowest proportion (mean, 64.7 vs 75.9; range, 0-100; higher scores reflect better performance). Meaning: Physicians with the highest proportion of socially disadvantaged patients had significantly lower MIPS scores, although further research is needed to understand the reasons underlying the differences in MIPS scores by levels of patient social risk. From the Discussion These results are consistent with prior research in other value-based programs, suggesting that clinicians and health care organizations serving poorer patients tend to have lower performance scores. Many value-based payment programs may thus penalize clinicians for social factors outside their control and inadvertently transfer resources from those caring for less affluent patients to those caring for more affluent patients—the so-called reverse Robin Hood effect. While the Medicare Payment Advisory Commission has recommended eliminating MIPS in its current form, Congress has not provided any indication it intends to do so. https://jamanetwork.com/journals/jama/fullarticle/2770410 == JAMA September 8, 2020 Association of Clinician Health System Affiliation With Outpatient Performance Ratings in the Medicare Merit-based Incentive Payment System Kenton J. Johnston, PhD; Timothy L. Wiemken, PhD; Jason M. Hockenberry, PhD; et al Jose F. Figueroa, MD, MPH; Karen E. Joynt Maddox, MD, MPH Key Points Question: Did clinicians affiliated with health systems composed of hospitals and multispecialty group practices have better performance ratings than their peers under the Centers for Medicare & Medicaid Services Merit-based Incentive Payment System (MIPS)? Findings: In this cross-sectional study of 636 552 clinicians with MIPS data for 2019 (based on clinician performance in 2017), those with health system affiliations compared with clinicians without such affiliations had a mean MIPS performance score of 79 vs 60 on a scale of 0 to 100, with higher scores intended to represent better performance. This difference was statistically significant. Meaning: Clinician affiliation with a health system was associated with significantly better 2019 MIPS performance ratings, but whether this reflects a difference in quality of care is unknown. From the Discussion Whether the MIPS will meaningfully improve quality or reduce costs over time is unknown. Research on prior Medicare value-based payment programs in the outpatient setting, notably the Shared Savings Program and the Value-Based Payment Modifier Program, have produced mixed results, finding modest to no cost savings or improvements in the quality of care. Longer-term studies are needed to examine this program as future years of data become available. https://jamanetwork.com/journals/jama/fullarticle/2770411 == JAMA September 8, 2020 Editorial Potential Adverse Financial Implications of the Merit-based Incentive Payment System for Independent and Safety Net Practices By Carrie H. Colla, PhD; Toyin Ajayi, MD, MPhil; Asaf Bitton, MD, MPH In 2019, US clinicians began to be rewarded or penalized up to 4% of revenue under the Centers for Medicare & Medicaid Services Merit-based Incentive Payment System (MIPS). Clinicians can choose measures for evaluation from 3 categories: quality, meaningful use, and improvement activities. The reports in this issue of JAMA by Johnston et al and by Khullar et al evaluated the MIPS performance scores of clinicians and the potential financial implications associated with the MIPS program. The authors found meaningful advantages for clinicians associated with health care systems and among those who treated fewer patients with low socioeconomic status and complex medical needs. The findings of these studies have important implications for MIPS specifically, and broadly for payment reform. This compelling evidence supports the notion that system-affiliated practices are more likely to be rewarded by pay-for-performance programs than independent practices. However, a large amount of skepticism remains about whether this pay-for-performance approach correlates with better patient outcomes. The proportion of physicians employed by hospitals or health systems has been rapidly increasing from about 28% of primary care physicians in 2010 to almost 50% in 2018.3,4 There are consequences from this consolidation, such as increasing prices in commercial markets without meaningful improvements in care quality and patient outcomes.5 In addition, choice in referrals to inpatient settings, specialty physicians and centers, or ancillary services may be limited. Because the quality measures were chosen by practices and were process based, the investigators could not disentangle whether their results represent better quality of patient care or reflect resources available to support selection and reporting of quality measures. The second major finding raised by these reports is the uncomfortable recognition that the MIPS and other alternative payment models consistently appear to penalize physicians who care for low-income and vulnerable populations. Khullar et al used dual eligibility status as a proxy for social, medical, and behavioral health complexity in the Medicare population. This population requires complex medical care, behavioral health services, and long-term supports, all of which must be coordinated to achieve outcome improvements. Dually eligible beneficiaries are approximately 3 times as likely to have significant limitations in activities of daily living than non–dually eligible beneficiaries (30% vs 9%, respectively) and to experience serious mental illness (30% vs 11%). Dually eligible beneficiaries are also twice as likely (48% vs 21%) to belong to racial or ethnic minority groups than non–dually eligible beneficiaries, reflecting the complex interplay between race, geographic location, racism, poverty, and poor health outcomes. Physicians and other health care professionals who provide care for large proportions of dually eligible beneficiaries must engage in a number of complex, costly activities to improve patient health. Consequently, primary care clinicians who serve medically and socially complex populations have greater process and operational challenges (and clinical difficulties) in providing quality and accessible care to dually eligible populations. Yet instead of adjusting reimbursement to reflect the differential cost of caring for these populations, it appears that the MIPS may further disadvantage safety net clinicians who provide care for dually eligible beneficiaries. The results reported by Khullar et al are consistent with prior research that demonstrated value-based payment programs disproportionately penalize clinicians and practices that serve low-income patients and reflect design flaws of the payment system. The Medicare Payment Advisory Commission has recommended replacing the MIPS because it is unlikely to help beneficiaries choose clinicians, help clinicians improve value, or help the Centers for Medicare & Medicaid Services reward clinicians for value. Rewarding improved performance is a laudable policy goal. Programs like the MIPS, however, appear to be disproportionately rewarding well-off health systems while penalizing smaller practices and those serving disadvantaged populations. https://jamanetwork.com/journals/jama/fullarticle/2770389 === Comment by Don McCanne One of the papers says, "Longer-term studies are needed to examine this program as future years of data become available." Don't they always say that? Once more, MIPS does not work, and it has to go. No more studies, please! We already have a proven model that will work for all of us: single payer improved Medicare for All. When the next Congress convenes and the new administration is installed, our roar has to be deafening and unrelenting.
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How many more studies do we need? The private insurance industry has to go. And, yes, we have a replacement: single payer improved Medicare for All. - Don McCanne
National Bureau of Economic Research August 2020 NBER Working Paper No. 27762 Are All Managed Care Plans Created Equal? Evidence from Random Plan Assignment in Medicaid By Michael Geruso, Timothy J. Layton, Jacob Wallace Abstract Exploiting random assignment of Medicaid beneficiaries to managed care plans, we identify plan-specific effects on healthcare utilization. Auto-assignment to the lowest-spending plan generates 30% lower spending than if the same enrollee were assigned to the highest-spending plan, despite identical cost-sharing. Effects via quantities, rather than differences in negotiated prices, explain these patterns. Rather than reducing “wasteful” spending, low-spending plans cause broad reductions in the use of medical services—including low-cost, high-value care—and worsen beneficiary satisfaction and health. Supply side tools circumvent the classic trade-off between financial risk protection and moral hazard, but give rise instead to a cost/quality trade-off. From the Introduction Regulated competition between private health plans is becoming the dominant form of social health insurance in the United States. In 2017, 54 million Medicaid beneficiaries (69%) and 19 million Medicare beneficiaries (33%) were enrolled in a private managed care plan. In the same year, almost $500 billion of the $1.3 trillion spent on public health insurance programs went to private managed care plans. In this paper, we identify the causal effects of the health plan in which a beneficiary enrolls on her healthcare utilization, the quality of care received, and proxies for satisfaction and health. The context of our analysis is Medicaid Managed Care (MMC), the privatized system through which most Medicaid beneficiaries receive benefits today. In our setting, all plans are required to provide care at zero marginal cost to beneficiaries. It is therefore an ideal context for studying whether various non-cost-sharing plan features (e.g., networks, negotiated provider rates, patient follow-up and medication adherence programs, etc.) can constrain healthcare spending. In contrast, nearly all of the prior econometric literature studying how health plans affect utilization and health outcomes has focused on consumer cost-sharing provisions like copays, coinsurance, and deductibles. But a modern health plan is more than a set of consumer-facing prices, and our analysis sheds new light on the range of impacts generated by supply-side (non-cost-sharing) plan features. To facilitate a transparent comparison between our results and results from cost-sharing studies including the RAND Health Insurance Experiment (Manning et al., 1987) and more recent quasi-experimental work (Brot-Goldberg et al., 2017), we focus our analysis on the types of outcomes that have been the focus of this prior literature. These include overall service utilization and spending, utilization of high- and low-value care, conventional measures of healthcare quality, and surrogate health outcomes like avoidable hospitalizations. As our first main result, we document statistically and economically significant causal variation in spending across plans. If an individual enrolls in the lowest-spending plan in the market she will generate about 30% less in healthcare spending than if the same individual enrolled in the highest-spending plan in the market. We show that risk-adjusted observational measures and causal estimates of plan spending effects are correlated, but find that the risk-adjusted measures tend to overstate causal differences in spending across plans. Plans that attract healthier patients thus do more to constrain spending—i.e., provide less care—consistent with a classic adverse selection model, where sicker individuals select plans providing more care. This fact has important implications for the use of observational measures of spending and quality as a basis for regulatory rewards or penalties. After establishing important differences between risk-adjusted (OLS) plan spending effects and causal (IV) estimates, we investigate which factors drive the bottom-line causal differences. First, we find that almost all services are marginal. That is, lower spending plans tend to provide less of nearly everything. This includes inpatient and outpatient visits, primary care physician office visits, and high-value/cost effective drugs. Second, unlike in other markets, differences in provider prices do not explain the differences in healthcare spending across plans in our setting. In a decomposition, prices account for very little of the cross-plan spending differences. Instead, spending differs because enrollees in low-spending plans use less care, with much of the utilization gap driven by the extensive margin. Importantly (and similar to the effects of deductibles in Brot-Goldberg et al., 2017), utilization reductions do not seem to focus on “low-value” care or “waste”: We estimate that low-spending plans reduce utilization of high-value drugs used to treat diabetes, asthma, and severe mental illnesses, as well as high-value screenings for diabetes, cancer, and sexually transmitted infections. Finally, we show that the low-spending plans also increase avoidable hospitalizations and decrease consumer satisfaction, as measured by the propensity of auto-assigned enrollees to switch out of their plan post-assignment. These results suggest a clear trade-off between spending and beneficiary satisfaction and health. We show that there is substantial causal heterogeneity across plans in spending and utilization that arises without any differences in consumer cost-sharing exposure. Our findings complement a large literature extending back to the RAND health insurance experiment (Manning et al., 1987) that documents how consumer prices impact healthcare utilization. In RAND, and the studies that have followed, patient cost-sharing has proven to be a blunt instrument, affecting the use of low- and high-value services alike (Brot-Goldberg et al., 2017). These findings sparked interest in whether managed care tools offer a scalpel that can target inefficient spending and better manage the high-cost patients responsible for the majority of spending. But our results, along with prior work studying managed care in Medicare (Curto et al., 2017), indicate that supply-side tools exhibit many of the same features and limitations as demand-side tools. Their impacts on healthcare spending are blunt. They indiscriminately reduce utilization, limiting both high- and low-value care rather than targeting “waste.” In another similarity to the effects of consumer cost sharing (as found in Brot-Goldberg et al., 2017), lower-spending managed care plans in our setting do not appear to generate savings by steering patients to lower-cost providers or lowering negotiated prices. Lastly, our work highlights how supply side tools can achieve spending reductions while circumventing the classic trade-off between financial risk protection and moral hazard noted by Zeckhauser (1970) and Pauly (1974). The spread of plan effects we estimate are similar to the utilization difference between the 0% and 95% coinsurance rate treatment arms in the RAND HIE. Thus, significantly constraining healthcare spending need not require exposing consumers to out of pocket spending. But there is no “free lunch” here, as we also document that these spending reductions come at the cost of beneficiary satisfaction and, ultimately, health. Conclusion Our results are important for understanding the potential for managed care to constrain healthcare spending growth. We show that the baskets of rationing devices implicit in managed care can have spending and utilization impacts significantly larger than what could be accomplished by exposing consumers to high deductibles and reasonable coinsurance and copays. Importantly, rationing via managed care reduces spending without exposing consumers to financial risk, circumventing the classic trade-off between financial risk protection and moral hazard noted by Zeckhauser (1970) and Pauly (1974). These findings are particularly relevant for public insurance programs—including the low-income segments of HIX Marketplaces and Medicare—where policymakers have been reluctant to expose low-income consumers to financial risk. However, these spending reductions appear to come with a utility cost. Willingness to remain enrolled in a plan is negatively related to that plan’s cost savings. And cost reductions are blunt—reducing utilization of all types of care, lowering traditional measures of healthcare quality, and increasing the likelihood of adverse health events. https://www.nber.org/papers/w27762.pdf === Comment by Don McCanne Medicaid managed care plans have become very popular in states for the obvious reason that they reduce spending. This paper is important because it reveals how the cost savings are achieved. Most Medicaid programs do not use cost sharing and thus they do not reduce spending that way, but, even if they did, these authors state that "managed care can have spending and utilization impacts significantly larger than what could be accomplished by exposing consumers to high deductibles and reasonable coinsurance and copays." They also find that differences in provider prices do not explain the differences in health care spending across plans in this setting. So how does managed care control spending? The plans consider all services to be marginal and thus they reduce utilization of all services regardless of the value of those services. "Lower spending plans tend to provide less of nearly everything. This includes inpatient and outpatient visits, primary care physician office visits, and high-value/cost effective drugs." This gives rise to cost/quality trade-offs. Reduction in beneficial health care services obviously reduces the quality of care. Low-spending plans increase avoidable hospitalizations. This cavalier attitude does not go without notice; beneficiary satisfaction is diminished. How many more studies do we need? The private insurance industry has to go. And, yes, we have a replacement: single payer improved Medicare for All.
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Wednesday, September 9, 2020
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