MODIFIED RAPTURE!

In Gilbert & Sullivan’s MIKADO, the male romantic lead, Nanki-Poo, is appalled to learn that the girl he loves, Yum-Yum, is to marry someone else.  But when she tells Nanki-Poo than she doesn’t love her fiancé,  her lover exclaims, “modified rapture!”

Just so, when I heard yesterday that Nancy Pelosi supports holding hearings on "Medicare for all," I had an all-too-brief surge of elation.  According to THE HILL, “Pelosi had said last year only that Medicare for all would ‘have to be evaluated’ and is ‘on the table,’” but now...was Pelosi actually saying that the status of Single-Payer had risen from the theoretical to the possible, which the political art might somehow make real? This was worth celebrating, EXCEPT:

•      Doug Henwood of JACOBIN magazine says that “we have this coalition now developing in Congress of Democrats opposed to any idea of single-payer,  so not obvious at this point.”
•          We have Democrats in the House who – like Joe Kennedy III – talk a good game about healthcare being a right and not a privilege – but, at the end of the day betray why they may be less than enthusiastic about it.  Kennedy, for example, says he’s concerned that – among other things – it could negatively affect investor - owned hospitals, which include Catholic hospitals in Massachusetts.  He doesn’t mention that he has taken $348,000 in campaign donations from Big Pharma, and that he owns stock in a pharmaceutical company one of whose medications – which fights Hepatitis C – costs $1000 per pill.
•         Among the ones who say they actually are for some form of “universal healthcare,” there is little agreement as to what form it should take. (See my earlier post “Various Flavors of Healthcare Reform.”)

Meanwhile everyone seems to agree that Single-Payer would save this country money. Even Koch’s Mercatus institute, in an attempt to slam the concept, estimated that in ten years it would cost this country $32 trillion -- which happens to be $2 trillion LESS than what it would cost us if we kept spending at the rate we’re spending now!  And the latest confirmation of the Single-Payer idea – from the Political Economy Research Institute (PERI) -- estimates that, when stabilized, a single-payer plan would save this country 15%-16% of GDP. 

PERI’s report -- Economic Analysis of Medicare for All – was subjected to Peer Reviews, all of which were uniformly positive:

                      Peer Review of PERI Economic Analysis of Medicare for All                    

In their review, my heroes, Woolhandler and Himmelstein, together with the redoubtable Adam Gaffney, pointed out that, based on their own researches,  PERI’s estimates of savings were less than they probably would be, while their estimates of expenses were greater than they probably would be.  In contrast to these conservative estimates,  according to Woolhandler et al,  was the optimism of Peri’s estimate of the time it would take to achieve much savings, if for no other reason than the challenge of reducing to a single computer architecture the daunting welter and variety of systems now being used.

But from my point of view, a very cogent observation was also made by Alison Galvani, who pointed out that while Medicare was pretty good at controlling prices, it wasn’t very good at controlling overuse of high-tech procedures (see my post: Why is American Healthcare So Expensive?).  She pointed out that the same McAllen doctors who, with their Medicare Patients, went through the roof in prescribing procedures that were unlikely to help, were much more conservative when it came to the Blue Cross/Blue Shield patients. He cited an article by Luisa Franzini in Health Affairs, which touted Blue Cross/Blue Shield’s supervisory measures  -- prior approval for elective procedures, and case managers for any case likely to cost $50,000 or more, and so on.  She also mentioned what I felt was one of the most important factors: "Private insurers have the advantage of a “threat point” at which they can ultimately refuse to contract for services to specific physicians or hospitals—something that Medicare cannot do."

I wondered what indeed could rein-in the entrepreneurial ambitions of Doctors.  In outfits like the Mayo Clinic or the Cleveland Clinic, Doctors are on salaries, so that nothing distracts them from focusing on the patient, who comes first.  It turns out that this way, outcomes are better while expenses are less.  Does this mean that Single-payer is going to require all Doctors to be on salaries? I wouldn’t hold your breath waiting.

But there is one economy that Galvani doesn’t mention:  As Woolhandler, Himmelstein, and Gaffney point out, that PERI analysis uses the House version’s approach to Hospitals, Clinics, Dialysis Centers:  the gradual take-over of all such privately owned facilities so that ultimately they are publicly owned,  (no stockholders) and directed NOT to make a profit.  The profit incentive being removed, these facilities are no longer incentivized to game the system and are supported globally, the way we support firehouses.  It’s a great idea, though Joe Kennedy III isn’t likely to be pleased with it.

The action in congress is thus likely to be fascinating and extremely consequential.  But that doesn’t mean we should ease up on our own efforts. Don McCanne,  a physician who writes a blog for the Physicians for a National Health Program (PNHP), writes the following:

“The hearings will be part of the process, but it is important that we continue with our other advocacy activities as well. Special targets should include politicians who do not yet seem to understand why single payer is an imperative, and politicians who profess to be advocates but who could be swayed to support detrimental reform policies in a perversion of the process of political compromise. We need to continue to work with politicians who are already fully on board, but we should also continue our efforts to educate those who say they are opposed, if,  for no other reason, they might accept defeat more readily were they to understand the clear social benefit of Medicare for All.  Also we cannot let up in the least in our efforts to educate the public at large. Grassroots efforts will continue to be an essential component of the reform effort.”  (Emphasis added)

This paragraph contains marching orders for all of us.  As the discussions intensify, both in Albany and D.C., our efforts must likewise grow stronger and more passionate.   On the day when Single-Payer passes in New York State, we all will experience not modified, but complete rapture!

WHY IS AMERICAN HEALTHCARE SO EXPENSIVE?

Part Two

In this blog’s early posts, we saw how Big Pharma exploits its near monopolistic powers by raising prices simply because it can, resulting in the shortened lives of many patients who have been priced out of living.

In the current two-part series, the first part showed the results of Physicians and other providers gaming the system by ordering unnecessary procedures – which benefits mainly them, unlike Patient Centered systems like the Mayo Clinic, where their salaried doctors have no incentive to drive up charges, and everything is focused on institution-wide teamwork in healing the patient.  The former is profit-driven, the latter patient-driven, resulting in better outcomes at lower costs.

So far, if we’ve been paying attention, we’d be justified in concluding that where patient care is concerned, considerations of profit are poison.

But what about Hospitals and Clinics, Dialysis Centers and the like? Are considerations of profit poison for them as well? The answer is a resounding YES, according to Steffie Woolhandler and David Himmelstein, the pre-eminent Physicians/Scholars, co-founders of the Physicians for a National Health Program,  the lead authors of the PNHP’s healthcare reform article published in the Journal of the American Medical Association, which in turn is the basis of H.R. 676 , the Single-Payer Bill from the House of Representatives. Woolhandler and Himmelstein are, in my opinion, the God-Parents of our movement. and are worth listening to.

They spell out their position in the article: IMPORTANCE OF ALIGNING HOUSE AND SENATE SINGLE-PAYER BILLS THE RIGHT WAY: Removing Medicare’s Profiteering Incentive is Key. I encourage you to read it:

Aligning House & Senate Versions of Single-Payer The Right Way.

Woolhandler and Himmelstein say that the Senate Bill, unlike the House Bill “...would, like Medicare, pay hospitals and other institutional providers on a per-patient basis, intermixing payments for current operating expenses with funding for future capital investments and profits. At present, hospitals’ success, and even survival, depends on generating profits (“surpluses” in non-profit facilities). Hospitals with a favorable bottom line can invest and add new buildings and programs, while unprofitable ones can’t modernize or expand, risking a downward spiral toward takeover or closure....It’s this profit imperative that drives hospitals’ financial gaming, e.g. upcoding, and concentration on the most lucrative services, such as elective cardiac and orthopedic services, rather than money losers like mental health. This payment mechanism (and S.1804 as a whole) also leaves the door open to investor-owned providers.”

The authors go on to explain why payment for performance schemes – in addition to requiring expensive bureaucratic overhead – provide “no evidence that they’ve improved patients’ outcomes in any setting.” Moreover – it should go without saying – the minute you have an investor-owned enterprise, you must compromise quality to ensure profits. Privately owned dialysis centers, for example, have far worse outcomes than community owned ones.

Contrast all this with the model provided by Scotland and several other European countries who pay these institutions the way we pay firehouses – globally – to take care of operating expenses. Our firehouses aren’t expected to make a “profit” to save for a new firetruck.  If they need one, they appeal to the local municipality to buy them one.

The House’s H.R. 676, similarly, would pay medical institutions globally, covering all operating costs, and would allow no “profits.” If new equipment or expansions are warranted, they would get them from the government, which – if it wanted to stay in office – would provide them promptly. And privately owned facilities would be made publicly owned by the government’s buying them out. This would be less expensive than  it might at first appear, partly because health facilities typically carry a debt load, and partly because it would not be done all at once, but over a period of time.

Everyone agrees that once established, Single-Payer would save money if for no other reason than obscene profits and bloated bureaucratic overhead would be eliminated (contrast Medicare’s 2% overhead with conventional insurance’s 12%).  While that is not small potatoes, it might well not be enough to meaningfully lighten the burden of healthcare on our economy.  As our authors point out:
“In sum, the financial viability of a single-payer reform turns on cutting administrative costs and minimizing incentives for financial gaming. Maintaining Medicare’s current payment strategies, as under S.1804, would be substantially costlier than adopting the non-profit global-budgeting strategy used in several other nations.”

Atul Gawande, physician/author of the article on which the previous post is based, is more blunt:

“When it comes to making care better and cheaper, changing who pays the doctor will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes. You get McAllen.”

To me this means that setting up Single-Payer – by itself – will not be enough, unless it removes the profit motive, regulates  greed, minimizes the incentives to game the system, and unless it requires healthcare providers to meet carefully fashioned public standards . If this happens, the cost savings and improvements in care will be very great.

There will be plenty of arguments, pro and con, for everything that’s been said in all my posts. Our job is to stay on top of them, making sure that when reform is done, it’s done right.

Dio

PS: To leave a comment (and I encourage you to do  so) just click on the number of comments area, and share your thoughts in the “comment box” that appears.

WHY IS HEALTHCARE SO EXPENSIVE IN THE USA?

Part One

A few days ago I came across a video entitled, The Real Reason American Healthcare is So Expensive. Almost 3 million people have watched it, You really should, too.

The Real Reason American Healthcare is So Expensive

In typing this just now, I couldn't help watching it again -- which made it my fourth time viewing it (it's that good).  What it shows is that the high cost of healthcare in this country is NOT because of what we spend on Medicare, Medicaid, and VA healthcare -- our versions of socialized medicine in this country. In those public expenditures, our costs are right in line with other countries. Where we exceed them is what we spend privately. That's where we go through the roof.

I love the enthusiasm of the young man in the video, who says he's "obsessed" with this data. He points out that we hear all the time that the government "can't say no, it's corrupt, it's inefficient, it's slow; if you want something done right you give it to the private sector. That is what we hear in America all the time," he says, "yet here we are, with the biggest private sector, spending the most."  And it's not because we Americans go to the doctor more, he says, showing that if anything, we go less. He goes on to state the obvious, that the capitalist free-market model, while it may be great for selling things, simply cannot work when providing healthcare to people, who, when they need it, are in no position to comparison shop for the best value, even if they knew the best thing to shop for. And when presented with a sky-high cost , they are in no position to say "no." We are left with a graphic of our healthcare system -- symbolized by a huge hospital building with many lines of "influence" running from it to the Capitol Building in Washington, DC,  Although there are no arrows to show in which direction the lines of "influence" are flowing, and the young man doesn't say so explicitly, I gather that they are flowing not from the Capitol, but to the Capitol, and that influence is in the form of dollars. Our healthcare system has grown so powerfully wealthy, he says, that it's going to be very hard to trim the cost of doctors and the services and medicines they prescribe. 

It's almost as if there has descended on us, like a poisonous fog, a culture of money, a phrase I borrowed from Atul Gawande's famous New Yorker article, The Cost Conundrum. You should read it: 

The Cost Conundrum

Here Gawande describes the medical goings-on in the small, not-very-prosperous McAllen Texas, which had -- at the time of Gawande's writing (2009) -- the most expensive healthcare market in the country. Many healthcare markets -- such as El Paso -- were far more prosperous yet spent on medical costs only half the money spent in McAllen. With all this money spent in McAllen, one might suppose that the healthcare delivered there was superior. Not so -- in fact, Gawande reports the reverse: 

"Medicare ranks hospitals on twenty-five metrics of care. On all but two of these, McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care."

Why then? Gawande quotes a general surgeon: "'We all know....there is overutilization here, pure and simple.' Doctors, he said. were racking up charges with extra tests, services and procedures."  It got to the point, he said, where “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?”

Gawande contrasts all this with the practice at Mayo clinic, where doctors are not paid by procedure, but are salaried. The time they spend with patients is not a predetermined slot of 15 minutes,but is determined by the patient's need. And they regularly consult with other doctors in the practice, so that the outcome is a joint effort. Gawande writes that "No one there actually intends to do fewer expensive scans and procedures than is done elsewhere in the country. The aim is to raise quality and to help doctors and other staff members work as a team. But, almost by happenstance, the result has been lower costs." 

It's no accident that in my recent posting [Good News ... Sort Of], Mayo is one of the hospitals cited for combining with others to establish CIVICA RX, a company which will produce generic medicines that the current cartel has attempted to price out of reach of many people. Intermountain Healthcare, also cited by Gawande for good practice, is another co-founder of Civica. Are they exceptions? As far back as 2009, Gawande pessimistically predicted that the Mayo Model seemed to be losing traction, whereas the McAllen model seemed to be winning.

Despite the remarkable surge in demand for Single-Payer, it may be too soon to tell which model will win. As we saw in the video above, Bernie Sanders proposes a transition plan to ease us into a full scale Single-Payer, but from my point of view, the crucial question will be whether or not Bernie or anyone else can succeed in putting price controls on Big Pharma. That is the epic struggle to come. Meanwhile, NYHA has such controls written into it, and it behooves us to push for it, publicize it, and do everything we can to hasten the day when Single-Payer will be the law -- if not of our country, then of our State.

PS: If you'd like to leave a comment -- and I hope you will -- just click on the number of comments area and share your thoughts in the "comment box" that appears.

PPS: My surgery went well, and I'm doing fine. But an amusing thing happened. I heard one nurse comment to another that the downside for working for an eye surgeon is that while before surgery, some patients mention how nice looking they are,  they hear no such remarks after surgery, when the patients can see. And on a more serious note, both doctors present said Single-Payer was "inevitable."  More on that later, perhaps.

GOOD NEWS! ... SORT OF

Today I read some very positive sounding news: The on-line journal VOX reports that "A group of hospitals is banding together to produce cheap generic drugs to fight off egregious price hikes and drug shortages. The not-for-profit venture is called Civica Rx, and the company announced itself last month. A collection of 22 hospitals in the Salt Lake City area called Intermountain Healthcare, the Mayo Clinic, the for-profit health care facilities company HCA Healthcare, and some philanthropic foundations are pulling together to form the firm."

Wonderful!  They're looking to produce drugs generic drugs that are in short supply, or whose prices have skyrocketed  -- or both. For example, IV bags, injections for sundry anemic problems, tissue numbing agents, have been reported in very short supply, not to mention drugs that treat Parkinson's disease, chemotherapy drugs, and a tablet to treat C.O.P.D.  -- chronic obstructive pulmonary disease.

All this, Vox reminds us, is happening against the backdrop of the Justice Department and 45 states being  "currently in court accusing generic drug makers of price fixing and costing Americans more than $1 billion for their medicines."  Vox goes on to say that  "We spend a lot of time on new brand-name drugs, but some of the most egregious examples of price hikes have been for generic drugs."

Amazing! No less than Jeff Bezos, chief of Amazon, had tried to go up against the behemoth of Big Pharma but had to back down, lacking the infrastructure and the complex network of customer relationships that Big Pharma has built up over the years. Yet now, these folks think they can do what Bezos couldn't? 

They have a very good chance. Part of Big Pharma's network of customer relationships was with hospitals, but a good part of the new group are themselves hospitals! They're not trying to develop any new drugs, but simply to make old ones that the drug industry, doubtless for monopolistic reasons, had allowed to get very scarce. Yes, the FDA will have to give its approval, but with the collective bona fides of  the new venture, that may not be at all impossible. The new firm will start off with 14 drugs yet to be named. "Experts," says Vox, "are cautiously optimistic." 

And you thought that Big Pharma was unassailable!  But don't start dancing quite yet. Yesterday I read of a study which proved that doctors who were given free meals were much more likely to prescribe the new, branded, proprietary drug pitched by the rep who was paying for the meal!  Researchers had already established that doctors who had been set up with speaking engagements would be far friendlier to the folks who set them up -- and the drugs they were selling -- than they otherwise would have been.

Let me tell you something: For years and years, the Health Industry has been wallowing in their own private Capitalistic heaven, enjoying obscene profits untrammeled by the regulations they would face in any other country. And do you think they are going to give all that up with out a fight? Do you think they won't pull out every trick in the book, to threaten,  lie, distort, suborn, seduce -- whatever it takes for them to hold on to their cushy situation? Ladies and Gentlemen, what we're up against here is class war.  Actually, we've been it it for a long time, but not many knew it.

But now, as the Bible says, it's time for us to "gird our loins with strength," and fight for our lives -- literally. I'm not talking pitchforks; it hasn't come to that yet, thank God. What I am talking about is linking arms, for unity is our strength. Our job is to form a unified front and show our state lawmakers that if they don't pass the New York Health Act (Single Payer for New York) we'll vote them out. Period. Many of them were very happy to vote for it when they were sure that the Republicans in the Senate would shoot it down.  But since that's now far less likely to happen, these so-called progressives may remember the money that got them elected,  and where it came from. They'll have a change of heart and reconsider, UNLESS WE HOLD THEIR FEET TO THE FIRE. What fire?  Why do you think I've been sharing these tales of  rapacious capitalists whose stupendous salaries we've been paying for with our blood -- to fuel the the fire of our outrage, our determination.  There'll be more of the same, God willing, together with some sense of what Single Payer is, and why I can think of no  other cure for the sick morass that is healthcare in our country.

Dio

PS: If you'd like to comment, (and I hope you will) simply click on the number of comments  area, and share your thoughts in the comment box that appears. Don't be afraid to teach me something -- your comments have already taught me a lot, and I love it!