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Gender: Female
Hometown: Washington state
Home country: USA
Current location: Directly above the center of the earth
Member since: Sat Aug 16, 2003, 02:52 AM
Number of posts: 40,949

About Me

Major policy wonk interests: health care, Social Security/Medicare/Medicaid, election integrity

Journal Archives

US health care prices are NOT higher because we use more services


“First, it gives the lie to the idea that some countries spend more on health as a result of higher utilization. It is all about unit price,” he said. “Second, we have looked here at a number of procedures and products which are identical across the markets surveyed. The price variations bear no relation to health outcomes: they merely demonstrate the relative ability of providers to profiteer at the expense of patients, and in some cases reflect a damaging degree of market failure.”

Prices examined in the study included those from Argentina, Australia, Canada, England, Netherlands, New Zealand, Spain, Switzerland and the United States. The data for the report was gathered from participating IFHP member organizations in each country. Prices in the U.S. were based on prices negotiated between private health plans and health care providers.

2013 Comparative Price Report


Most other countries have some central body that negotiates prices with hospitals and drug manufacturers. Tom Sackville (chief executive of the International Federation of Health Plans) who used to work for Britain's health care system, recalls that it would have a unit of 14 people whose whole job was getting drug manufacturers to give the country a better deal on prescription medications.

That unit of 14 is essentially buying in bulk for a country of 63 million people – and can successfully ask for steep discounts in return.

The United States doesn't have that type of agency. Every insurance plan negotiates individually with hospitals, doctors and pharmaceutical company to set their own prices. Insurers in the United States don't, as these charts show, get a bulk discount. Instead, our fragmented system means that Americans pay more for every type of health care that IFHP measured.

"You could say that American health care providers and pharmaceuticals are essentially taking advantage of the American public because they have such a fragmented system," said Sackville. "The system is so divided, it's easy to conquer."


Still, it is unclear if medical societies are the best ones to make cost assessments. Doctors can have financial conflicts of interest and lack economic expertise.

The cardiology societies, for instance, plan for now to rely on published literature, not commission their own cost-effectiveness studies, said Dr. Paul A. Heidenreich, a professor at Stanford and co-chairman of the committee that wrote the new policy.

They plan to rate the value of treatments based on the cost per quality-adjusted life-year, or QALY — a method used in Britain and by many health economists.

The societies say that treatments costing less than about $50,000 a QALY would be rated as high value, while those costing more than $150,000 a QALY would be low value.

“We couldn’t go on just ignoring costs,” Dr. Heidenreich said.

Comment by Don McCanne of PNHP: The International Federation of Health Plans represents private health insurers in 25 nations. Its members include several U.S. health insurers plus AHIP - the powerful insurance lobby in the United States. Although many would argue that it is this industry that is tasked with the responsibility of negotiating fair prices for health care services and products, in this release they contend that the very high prices in the United States “merely demonstrate the relative ability of providers to profiteer at the expense of patients, and in some cases reflect a damaging degree of market failure.”

What a remarkable statement. We are paying the insurers massive sums for their very expensive administrative services while they inflict tremendous administrative burdens on the health care delivery system, plus they take away from patients their choices in health care, especially choices of their health care professionals. They concede that they cannot control the “ability of providers to profiteer,” nor can they correct this market failure. They have become a profoundly expensive but useless appendage to the health care system - an appendage that should be severed.

Nevertheless, prices are still too high in the United States, so what can be done? Consolidation of hospitals and physicians has been anti-competitive, but prices were already high before the recent wave of consolidations began. Some providers offer services that make them “must have” participants in the insurer networks. They have a greater ability to stand firm on high prices, thus it is unlikely that antitrust enforcement could have more than a negligible impact on reducing prices.

Physicians seem to be more sensitive to cost barriers for their patients than do the hospitals and pharmaceutical firms, though both of the latter do have programs for selected indigent patients. The New York Times article describes how physician organizations are beginning to address the issue of high prices, though much of the effort seems to target the pharmaceutical firms rather than the physicians themselves. What is really remarkable though is that some physicians are now willing to look at assigning a monetary value to a quality-adjusted life-year (QALY).

Do physicians really want to assume the role of telling their patients that they will deny care that may be of some benefit but exceeds an arbitrary cost threshold assigned to a QALY? Physicians traditionally have not been the payers for their own patients’ health care. That is usually an insurer, the government, or the patient paying in cash. Shouldn’t the payer be making the spending decisions instead of the physician?

The insurers have a terrible track record - often paying too much, but also creating access barriers to care. The government has done a better job with Medicare, but with Medicaid they have often underfunded care which also creates financial barriers to care. With today’s very high health care costs, most patients are unable to pay cash if they face major medical expenses, so a third party payer is required.

Some models today would place the physician at least partially in the role of insurer. What is surprising is the relative silence on the ethical violation that such a role entails. The physician should never be placed in a position in which he profits by withholding beneficial health care. The MBAs in health care do not seem to understand the fundamental ethical compromise of such an arrangement.

The IFHP report on international health care prices does show that other nations are much more effective in controlling prices. They all have in common the fact that the government plays a major role in administering or tightly regulating prices. In general, governments seem to get it right. If we had a single payer system, we would get it right as well. In doing so we would also eliminate the profound waste caused by the private insurers, and we would ensure that financial barriers to care are removed for everyone.

What about defining the value of a QALY as ranging from $50,000 to $150,000? That should not be the role of the physician who should always be in a position to advocate for what is right for the patient. That should be the role of the public administrator who negotiates health care prices. A better term than negotiation would be price administration, implying that the government should have an “unfair” or unbalanced clout when it comes to getting prices right. Right prices means legitimate costs plus fair margins. No other country will be paying $84,000 for a twelve week course of Sovaldi to treat hepatitis C. We wouldn’t either if we had a single payer system.

Krugman vs conservative Douthat on ACA


Back when rate shock, website problems and lagging enrollment were threatening to unravel the new health care law before it fully took effect, I concluded a column on Obamacare’s repeated near-death experiences with the following warning to conservatives:

“The welfare state’s ability to defend itself against reform, however, carries a cautionary message for Obamacare’s critics as well. What isn’t killed outright grows stronger the longer it’s embedded in the federal apparatus, gaining constituents and interest-group support just by virtue of its existence even if it doesn’t work out the way it was designed. And as disastrous as its launch has been, if the health care law can survive this crisis in the same limping, staggering way it survived Scott Brown and the Supremes, then it will be a big step closer to being part of the status quo, with all the privileges and political strength that entails.

“So yes — it’s possible that this brush with death will be fatal, possible that the law will fall with the lightest, most politically painless push. But it’s still likely that Obamacare will be undone only if its critics are willing to do something more painful, and take their own turn wrestling with a system that resists any kind of change.”

Obamacare, The Unknown Ideal

But we do know that there won’t be an immediate political unraveling, and that we aren’t headed for the kind of extremely-low-enrollment scenario that seemed conceivable just a few months ago, or the possible world where cancellations had ended up outstripping enrollment, creating a net decline in the number of insured. And knowing that much has significant implications for our politics. It means that the kind of welfare-state embedding described above is taking place on a significant scale, that a large constituency will be served by Obamacare (through Medicaid as well as the exchanges) in 2016 and beyond, and that any kind of conservative alternative will have to confront the reality that the kind of tinkering-around-the-edges alternatives to Obamacare that many Republicans have supported to date would end up stripping coverage from millions of newly-insured Americans. That newly-insured constituency may not be as large as the bill’s architects originally hoped, or be composed of the range of buyers that the program ultimately needs. But it will be a fact on the ground to an extent that was by no means certain last December. And that fact will shape, and constrain, the options of the law’s opponents even in the event that Republicans manage to reclaim the White House two years hence.

But Ross Douthat, in the course of realistically warning his fellow conservatives that Obamacare doesn’t seem to be collapsing, goes on to tell them that they’re going to have to come up with a serious alternative.

And what you’ve just defined are the essentials of ObamaRomneyCare. It’s a three-legged stool that needs all three legs. If you want to cover preexisting conditions, you must have the mandate; if you want the mandate, you must have subsidies. If you think there’s some magic market-based solution that obviates the stuff conservatives don’t like while preserving the stuff they like, you’re deluding yourself.

What this means in practice is that any notion that Republicans will go beyond trying to sabotage the law and come up with an alternative is fantasy. Again, Obamacare is the conservative alternative, and you can’t move further right without doing no reform at all.

Comment by Don McCanne of PNHP: There have been many isolated efforts to define the conservative, or Republican, or libertarian proposal to replace the Affordable Care Act (ACA or Obamacare), but there is no one model that the Republicans wish to advance in Congress at this time. The Republican controlled House of Representatives has voted fifty times to repeal ACA, but they have not voted on any substitute to address the widely acknowledged deficiencies in health care financing.

Conservative Ross Douthat and liberal Paul Krugman now provide us with a perspective on the conservative/Republican alternative for reform.

Douthat acknowledges that a conservative goal is to expand coverage (especially for the more vulnerable), whereas the current “tinkering-around-the-edges alternatives to Obamacare that many Republicans have supported to date would end up stripping coverage from millions of newly-insured Americans.” He suggests that the policy restraints of an ACA already in place would force Republicans “in a more serious direction.”

Krugman, on the other hand, writes, “Obamacare IS the conservative alternative.” Not only does it meet many of the conservative goals of insurance reform, it was even designed by the conservatives. The liberal position would have been to support a single payer model.

Single payer was abandoned in favor of the conservative model that would bring Republicans on board with a new, post-partisan president, while liberals would forfeit the single payer advantages in exchange for a politically feasible, bipartisan accord.

Think of where that puts us now. If the conservatives were to gain complete control, they would tweak ACA to loosen regulation of insurers, to reduce federal funding, and to place greater control within the states. If the liberals were to gain complete control, they would tweak ACA to correct many of the defects that were left in place when the negotiations refining the legislation were halted abruptly because of the Democrats having lost a filibuster-proof majority in the Senate (not to mention the sabotage of a former Democratic vice-presidential nominee).

The fact that further battles will all take place over on the right is a tragedy. The fundamental structure of ACA is irreparably flawed, as would be any modifications that the Republicans would make to move the insurance function further into the private marketplace. Already we have seen a great multitude of very serious flaws that scream out for remedial legislation. But each new patch creates more complexity. The fundamental infrastructure cannot be repaired by patches. We need a new infrastructure (and it would be better and cheaper!).

Krugman says, “in a better world I’d call for single-payer.” Let’s make this a better world.

Jimmy Carter comes out in favor of Medicare for All

The Diane Rehm Show
March 26, 2014
President Jimmy Carter: "A Call To Action"

Diane Rehm: Briefly, how do you feel about the Affordable Care Act?

President Jimmy Carter: I was disappointed the way it was done and the complexity that it assumed. Instead of taking a leadership role from the White House and saying, “This is what we think is best,” they had five different congressional committees do it and it got, I think, the lowest common denominator, which is the most complex system. I would really have favored just the expansion of Medicare to include all ages, rather than just to deal with old people.

Video (38 second clip of quote above; also full 51 minute video):

Comment by Don McCanne of PNHP: Characterizing the Affordable Care Act as “the lowest common denominator - the most complex system,” President Jimmy Carter tells us that he would have favored “the expansion of Medicare to include all ages.”

He’s right, and here’s why. There have been numerous analyses of multiple models of reform. Most of them have included a model that would build on our private insurance system and expand Medicaid, just as is found in the Affordable Care Act. Of these analyses, this is the most expensive model and it falls short on important goals such as universality, equity, administrative efficiency, and affordability.

In contrast, single payer is the least expensive of the effective models and achieves virtually all of the goals of reform. An improved version of Medicare that is expanded to include everyone would be such a model. A health service model - socialized medicine - would also work, but the nation is still too leery of that much government involvement. The popularity of Medicare indicates that this is about the level of government involvement that most would support.

We have to keep reminding Americans that the exchanges are marketing private insurance - not government insurance, so they cannot confuse a government exchange with government insurance. In fact, the exchanges are prohibited from even including a government “public option” (which wouldn’t have worked anyway since the rest of the fragmented, dysfunctional system would have been left in place). Those who defend the private Medicare Advantage plans have to be reminded that they burn up more taxpayer dollars for administration and profits while depriving patients of choice because of their limited networks of providers. Once payment between government Medicare and private Medicare Advantage is equalized, the the private insurers cannot possibly compete with the government program because of their inherent inefficiencies. This was already proven by the failure of the Medicare + Choice plans that preceded Medicare Advantage.

It’s too bad that Jimmy Carter didn’t start talking about Medicare for all when he was president. It might have been helpful if the public had had a few decades to think about it before we got to the point that legislation could be passed. They could have pressured the politicians to do it right.

Spaniards Say No to Privatized Healthcare


The Spanish healthcare system was ranked seventh best in the world by the World Health Organization in 2000. But last year, Spain appeared to be well on its way to adopting a healthcare system more akin to the one used in the United States, which ranked 37th

In October 2012, Ignacio González, the leader of Madrid’s regional government, put forward a plan to privatize six hospitals and 10 percent of the city’s health centers. Critics feared the plan was the first step toward privatization of hospitals in other regions.

But after a wave of strikes by medical providers, as well as lawsuits and a popular referendum, Spanish unions and citizens have won a decisive victory in the battle for public healthcare. On January 27, the Popular Party (PP), Spain’s center-right ruling party, canceled the planned privatization of Madrid’s hospitals.

Shortly after the plan was announced in 2012, a coalition of unions called the first general strike in Madrid’s healthcare sector. The “white wave”—a reference to the medical smocks that strikers wore—quickly spread to the rest of the country as healthcare workers in 15 cities supported Madrid by staging a sympathy strike. This was followed by a popular referendum in May 2013, which resulted in more than a million people going on record to oppose privatization.

Even with Platinum coverage, you still get narrow networks

Guess what? Most Americans don't give a shit about choice of insurance plans, but they really, really care about choice of providers and hospitals.


I had the exact same problem as Mr. Rosenthal only in Florida with Blue Cross Blue Shield. Got screwed, as I also picked the Platinum plan and found out my hospital and doctors were not covered. The best research I did before hand indicated I would be covered and found after the fact I was not. Got furious with BCBS and they agreed to correct a few cost items with my doctors. They are playing dollar games with our health and I am completely frustrated. I am not upset with Obama-Care, only with the sligh and sneaky Insurance companies. Cannot drop my insurance and/or change until November of this year. What a fiasco. A singly payer system would correct all of this smoke and mirror games played by the Insurance industry.


Data to support this claim:

The bottom line is this. When you’re choosing a particular insurance offering, you typically can’t trade up to a better benefit by buying the gold or platinum variety of that plan. It’s usually the exact same benefit regardless of the metal you choose.

So what varies between these different metal plans? Typically, just the co-pay structure and deductibles. As you pay higher premiums for a gold or platinum plan, your deductibles and co-pays will decline. The insurer will typically cover 60 percent of expected medical expenses in a bronze plan, 80 percent in a gold plan and 90 percent in a platinum plan. So, by buying the costlier plans, all you’re doing is fronting a higher premium to buy down your anticipated out of pocket costs. You’re not getting a better network of doctors or a better formulary of drugs.


Across silver tier networks in our 20 analyzed rating areas, 58 percent of the lowest-price products utilize ultra-narrow networks and another 26 percent utilize narrow networks. Network breadth appears to be positively correlated with premium levels in many cases, but the use of narrower networks is common at all price points.


New York’s health insurance exchange (called “NY State of Health”) offers individuals and families numerous insurance plan options at various “metal” levels. What it doesn’t offer in most parts of the state are plans that provide coverage for non-emergency out-of-network care. In a sample Manhattan zip code, for example, there are 62 plans available at all metal levels. Not one of those plans pays for out-of-network care.

Why then did New York State not require out-of-network coverage? “We left it up to the insurers,” said (Department of Health’s Randi) Imbriaco, and the insurers, she continued, arguing that “a closed network helps keeps costs low,” chose not to provide out-of-network coverage in most of New York State, including New York City (some plans in the western part of New York State do offer such coverage).

Comment by Don McCanne of PNHP: According to the Bloomberg Businessweek report, Ben Rosenthal and reader John Alexander purchased the highest tier plans available - platinum plans - to ensure that they would have coverage for their current physicians and hospitals. No way. Insurers have pushed the perversity of narrow network plans all the way to the top.

Before Barack Obama was even nominated, the Democratic strategists had already decided that “Choice” would be a campaign slogan to market health care reform. Some of us protested that Celinda Lake and Herndon Alliance were pushing “choice of private health plans” when what the Democrats should have been advocating was “choice of physicians and hospitals.” It is clear which faction won this debate, as single payer supporters had the door slammed on them.

But look at the consequences. We were promised that we would have our choice of any plan we wanted with benefits as rich as desired, and with a selection of any health care providers we preferred. We could choose our doctors and our hospitals. But what happened?

So they did set up four levels of plans that we could choose from, plus a fifth catastrophic plan as an option for younger individuals. So we could buy a cheap bronze plan that would cover an average of 60 percent of our health care costs, 70 percent for silver, 80 percent for gold, all the way up to an expensive platinum plan that would cover 90 percent of costs. But there would be only negligible differences in the benefits since all plans had to cover the same ten categories of benefits, though some variation within each category is allowed as long as it had the same actuarial value.

But the shocker is the networks that the insurers established. As the AEI report indicates, for plans offered by the same insurer in the same market, the provider networks were just as limited for the high end platinum plans as they were for the cheapest bronze plans. If you want your medical bills paid, you do not have a choice of physicians and hospitals. You have to stay in network. Typically seventy percent of the providers are outside of the narrow network plans offered through the exchanges.

The Remapping Debate report reveals a further complication. Previously plans were available that provided reduced payments for care obtained out of network, with the patient paying a greater share of the costs. Now in areas such as New York City, none of these plans are available through the exchanges. You must stay in network or pay the full bill.

According to the McKinsey report, in some markets plans are available with broader networks, but these are less prevalent and declining in availability, and they are exorbitantly expensive. They will likely be subject to the death spiral since most markets do not have enough super wealthy individuals to maintain a vibrant market of broad network plans. The super wealthy then will simply pay their own bills.

So the Democrats traded off our choice of physicians and hospitals for a choice of deductibles and copayments, as the insurers took away the choices that we actually wanted. The narrow and ultra-narrow networks were a decision of the insurers, not us. We are getting what they want rather than what we want, simply because the Affordable care Act was designed to leave the insurers in charge.

As we’ve said before, all of this would go away if only we would enact a single payer national health program. As PNHP president Andy Coates says, physicians are placed in an “ethical bind” as they practice under “a corporate medical model that threatens to squeeze the humanity out of our interaction with our patients.”

Fox commentator admits America has Third World health care


Aasif Mandvi of The Daily Show used his wit to force the truth out of Fox conservative business commentator Todd Wilemon. It was a smooth takedown that left the professional in a fight for words.

When asked to name five countries with better healthcare systems than the US, Brock ran off a litany of countries in excess of the five. It turns out the US is ranked 37th in the world.

Mandvi then confronted Wilemon with what he had found out without telling him that the place with Third World healthcare conditions is Knoxville, Tennessee. He told him the place he came back from had shockingly poor healthcare conditions and was still reeling from the loss in the Civil War. One quarter of the people are living in poverty. They have high rates of cancer and heart disease. How did Wilemon respond to that?

“This is how bad it could get,” he said. “If we keep going down the path of more government control, less innovation. I don’t know if we can be that place unless a great catastrophe happens in this country.”

Mandvi tells Wilemon he is talking about Knoxville. Wilemon goes into a 13-second silent panic. “People do fall through the cracks,” he responds. But it gets worse. He starts making comments like, everyone will get care but they may have to wait. Some people will get great health care while some will just get good healthcare. If you are poor, stop being poor. That is the healthcare system Wilemon and his ilk want. That is what Obamacare fixes.

Sanders Subcommittee Hearing - Access and Cost: What the US Health Care System Can Learn--

--from Other Countries

Statement by
Tsung-Mei Cheng, LL.B., M.A.
Health Policy Research Analyst
Woodrow Wilson School of Public and International Affairs, Princeton University

Today’s hearing is focused on “international single payer health system models that provide universal coverage of health care.” I will tailor my remarks according to the three sub-themes the Committee wishes to explore, namely:

* Primary care access in single payer systems
* Health care costs in single payer systems, and
* Cross-country comparisons of health outcomes

Before proceeding with the Committee’s agenda in more detail, however, I would like to provide the Committee with a summary of my main points:

1. If equity and social solidarity in access to health care and financing health care were fundamental goals of a health care system, the single payer system provides an ideal platform for achieving these goals.

2. Single-payer systems typically are financed by general- or payroll taxes in a way that tailors the individual’s or family’s contribution to health-care financing to their ability to pay, rather than to their health status, which until this year has long been the practice in the individual health insurance market in the U.S.

3. These systems protect individual households from financial ruin due to medical bills.

4. Single-payer health systems typically afford patients free choice of health-care provider, albeit at the expense of not having a freedom of choice among different health insurers. Remarkably, in the U.S. households have some freedom of choice of health insurers – to the extent their employer offers them choice – but most Americans are confined to networks of providers for their insurance policy. In other words, Americans appear to have traded freedom of choice among providers for the sake of choice among insurers.

5. In single-payer systems “money follows the patient.” Therefore providers of health care must and do compete for patients on the basis of quality and patient satisfaction, but not price.

6. In a single payer health insurance system, health insurance is fully portable from job to job and into unemployment status and retirement. The “job-lock” phenomenon prevalent in the US is unknown in those systems, contributing to labor-market efficiency.

7. Because all funds to providers of health care in a single-payer system flow from one payer, it is relatively easy to control total health spending in such systems. Indeed, total national health spending as a percent of GDP in countries with single-payer systems is lower than it tends to be in non-single-payer health systems. This does not mean providers are left without a voice. Provider inputs are part of the formal negotiations over health-care budgets.

8. For the most part, single-payer systems achieve their cost control by virtue of the monopsonistic market power they enjoy vis a vis providers of health care. It is a countervailing power that the highly fragmented U.S. health-insurance system lacks vis a vis providers.

9. As part of their effort to control total health spending, however, and to avoid the waste of excess capacity that easily develops in health care, some single-payer systems (the UK and Canada) put constraints on the physical capacity of their health system (number of inpatients beds, MRI scanners, etc). That approach can lead to rationing by the queue. The alternative to rationing by such administrative devices, of course, is rationing by price and ability to pay, an approach used by design or by default in the United States. Rationing by price or by non-price mechanism are just alternative forms of rationing.

10. A single-payer system is an ideal platform for a uniform electronic health information system of the sort, for example, used by our Veterans Administration health system (a single-payer system in its own right). There is a common nomenclature which enables 100% electronic billing and claims processing, thus yielding significant savings in administrative costs.

11. Because they conveniently capture information on all health-care transactions, single-payer systems provide a data base that can be used for quality measurement, monitoring and improvement, and also for more basic research on what drives health spending and what clinical treatments works and does not work in health care. It enables evidence based medicine and the tracking of efficacy and safety of new drugs and devices once they are introduced after approval by government based on results of clinical trials.

Statement of Tsung-Mei Cheng (28 pages):

Video of the hearing and links to statements of all participants:

Comment by Don McCanne of PHNP: Sen. Bernie Sanders chaired a Senate committee hearing on what the health care system in the United States can learn from other countries. Tsung-Mei Cheng provided an excellent overview of single payer and of the sharp contrasts between the United States and other nations. Her 28 page statement is well worth downloading to use as an information resource in educating others about single payer.

Other informative presentations included those of Victor Rodwin on France, Ching-Chuan Yeh on Taiwan, Danielle Martin on Canada, and Jakob Kjellberg on Denmark. Even the presentations from the other side by Sally Pipes and David Hogberg were helpful in that they showed how silly (sadly) their views were when contrasted with a group of experts who understand well how systems based on solidarity work. If you can find the time, viewing the entire video (1 hour & 46 minutes) and reading the statements would be well worth the effort (link above).

When Health Costs Harm Your Credit


Mounting evidence shows that chaos in medical billing is not just affecting our health care but dinging the financial reputation of many Americans: While the bills themselves frequently take months to sort out, medical debts can be reported rapidly to credit agencies, and often without notification. And even small unpaid bills can severely damage credit ratings.

A mortgage initiator in Texas, Rodney Anderson of Supreme Lending, recently looked at the credit records of 5,000 applicants and found that 40 percent had medical debt in collection, with the average around $400; even worse, most applicants were unaware of their debt. Richard Cordray, director of the federal Consumer Financial Protection Bureau, has noted that half of all accounts reported by collection agencies now come from medical bills, and the credit record of one in five Americans is affected.

The problem is accelerating for several reasons. Charges are rising. Insurance policies are requiring more patient outlays in the form of higher deductibles and co-payments. More important, perhaps, is that while doctors’ practices traditionally worked out deals for patients who had trouble paying, today many doctors work for large professionally managed groups and hospital systems whose bills are generated far away, by computer.

Comment by Don McCanne of PNHPOur fragmented, dysfunctional system of paying medical bills is having a major impact on personal credit ratings. Half of all accounts reported by collection agencies now come from medical bills. The credit record of one-fifth of Americans is affected, and many of us are unaware of it. Are people so broke that they can’t pay their medical bills, or is something else going on here?

There are two major factors at play here. One is that with flat wages and increasing household costs, many people do have problems paying all of their essential bills, and medical bills are moved to the bottom of the stack. When payment of medical bills is postponed, or perhaps not paid at all, they are commonly sent to collection agencies, eventually appearing on the debtor’s credit report. Now that high deductibles are being used more to shift costs from payers (employers or government) to patients, this phenomenon is much more common.

The other factor is how people with good incomes who are meticulous with management of their personal finances end up with dinged credit reports because of medical bills. It is often due to the administrative complexity of the system we have of paying medical bills through private insurers who make payments based on whether the providers are in or out of network, on whether or not the products or services being billed are even covered by the plans, and on how much the deductible and coinsurance are and what charges can be credited against the deductible.

Typically the individual receives an explanation of benefits which is difficult to decipher often because some of these questions still remain unanswered. Billings may start to come in from various health care providers but without adequate explanation. When the patient inquires as to why the amount was not applied to the deductible, or why the amount seems to be for out-of-network providers when this provider is in-network, or for whatever reason, the patient is often given a temporizing response. When more statements are received that failed to address concerns such as the deductible, further efforts to correct the problem are often met with reassurance. When nothing further is heard, the patient assumes the matter was cleared up. Only later when a collection agency begins to harass them or when they find their credit report includes unpaid medical bills do they discover that the matter never was resolved.

Add in further complexities such as when a person has primary coverage perhaps through Medicare and secondary coverage through a Medigap plan, or a person had a change in coverage coinciding with the medical services provided, straightening out who is responsible for which portions of the charges can be a monumental task.

These highly responsible individuals with previously excellent credit records are understandably angry. They tend to look elsewhere for blame - the physician’s office or billing service, the hospital’s billing department, the insurer’s claim processors, the credit agency’s disregard of registered protests, or perhaps the employer who provided such a screwed up health plan.

Single payer advocates know where most of the blame really lies. It is with our political leaders who insist on perpetuating this highly inefficient, fragmented system of financing health care instead of enacting a single payer national health program. This botched up system of medical billing is only one manifestation of the profound administrative excesses that permeate our system. Ironically, all of this extra administrative detail in handling medical billings doesn’t even work well. You would think that if we are going to be paying much more in administrative costs so that the insurers could do a “better” job than a single government payer in handling our claims, we would be demanding much better performance from them. But no, keep the government out and blame everyone else.

In typical D.C. fashion, our legislators continue to look for solutions that would increase regulatory oversight to prevent unfair damage to the credit ratings of conscientious individuals, though the legislators are receiving expected push back from the credit industry. What we do not need is more administrative oversight piled on top of an administrative boondoggle. Instead we need to replace it with an efficient improved Medicare, with first dollar coverage, that covers everyone. Credit scores dinged by medical bills then would become a quaint historical oddity.

Insurers drastically reduce choice in poorer counties


Hundreds of thousands of Americans in poorer counties have few choices of health insurers and face high premiums through the online exchanges created by the health-care law, according to an analysis by The Wall Street Journal of offerings in 36 states.

Consumers in 515 counties, spread across 15 states, have only one insurer selling coverage through the online marketplaces, the Journal found. In more than 80% of those counties, the sole insurer is a local Blue Cross & Blue Shield plan. Residents of wealthier, more populated counties in the U.S. receive lower-priced choices than those living in counties with a single insurer.

The price differences reflect the strategy of insurers to pick markets where they believe they can turn a profit—and avoid areas of high unemployment and a concentration of unhealthy residents they deem more risky.

Aetna Inc. and UnitedHealth Group Inc., for instance, have limited their participation in the new health-insurance marketplaces, where consumers shop for coverage, to a much smaller map than their traditional business. They offer coverage in more counties outside of the marketplaces, where plans are sold directly to consumers and federal subsidies aren't available.

Aetna targeted areas with stable levels of employment and income to attract desirable customers to its marketplace offerings, Chief Executive Mark Bertolini said last fall. "We were very careful to pick the markets" where the insurer could succeed, he said.

Reversing the trend presents a challenge because low-population areas are unlikely to draw more insurers, said Glenn Melnick, a health-care economist at RAND Corp: "I don't think the health law can overcome those economics."

Comment by Don McCanne of PNHP: We’ve always know that insurers market their plans in areas where there is the greatest potential for business success. As USC Health Finance Professor Glen Melnick explains, the Affordable Care Act cannot overcome those economics.

Clearly we have the wrong model for reform. Private insurers respond to business opportunities. Public insurance, such as a single payer national health program, simply enrolls everyone; there are no market decisions to be made.

So is it going to continue to be about private insurance markets, or will it be about patients - all patients? An improved Medicare for all would be about the latter

Obamacare’s Founding CEO Wants To Bring Single Payer To MA


On his first day as governor of Massachusetts, Donald Berwick promises to set up a commission tasked with finding a way to bring single payer to the Bay State. It'll have report back to him within a year -- ideally sooner.

Having run Medicare and Obamacare in Washington for 17 months, he has concluded that the existing hybrid system is too cumbersome and expensive, and that single payer is the right fix. And he's the only candidate in this year's contest who dares to go there.

"The Affordable Care Act is a majestic step forward for this country -- for the only nation that hasn't made health care a human right yet. But luckily I'm in a state that's able to take even a bigger step," Berwick told TPM in an interview. "And a single payer option -- even if the country is not ready for it, I think Massachusetts is ready and it's worth exploring."

A political novice, Berwick is an underdog candidate for the Democratic nomination in the 2014 elections -- the most outspoken progressive in the race. A pediatrician, Harvard health policy professor and former health care executive, his talent for -- and obsession with -- health management caught the eye of President Barack Obama, who in 2010 appointed him to be the Administrator of the Center for Medicare & Medicaid Services, which was tasked with getting Obamacare off the ground in its infancy. Berwick left in December 2011, after his recess appointment expired and Senate Republicans refused to confirm him.

"I've been looking hard at the Massachusetts budget and I've become more aware than ever of how the rising costs of health care are taking opportunity away from other investments," he said. "I saw it in Washington, and I see it in Massachusetts. We need to find money for transportation, education, the social safety net. ... And so I feel a sense of urgency about getting costs under control without harming patients at all."
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