Thursday, November 07, 2019

Elizabeth Warren crosses a rhetorical Rubicon

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For almost two years, I have complained at intervals that Elizabeth Warren is faking it on healthcare --- that is, blaming U.S. healthcare dysfunction entirely on the rapine of health insurers and pharma, while giving healthcare providers a pass.

In presenting her plan to finance Bernie-brand Medicare for All, Warren leads with this rhetorical reflex but then, finally, departs from it. She has to, as the plan's viability depends on cutting off providers' most lucrative revenue sources.

Warren's first rhetorical strike in this manifesto is against the usual suspects:

Every candidate who opposes my long-term goal of Medicare for All should put forward their own plan to cover everyone, without costing the country anything more in health care spending, and while putting $11 trillion back in the pockets of the American people by eliminating premiums and virtually eliminating out-of-pocket costs. Or, if they are unwilling to do that, they should concede that they think it’s more important to protect the eye-popping profits of private insurers and drug companies and the immense fortunes of the top 1% and giant corporations, rather than provide transformative financial relief for hundreds of millions of American families.
Her diagnosis of high U.S. healthcare costs begins with the administrative burden imposed by insurers:
The business model of private insurers is straightforward: pay out less for medical care than they take in as premiums. This model is located right in the center of our health care system, wasting huge amounts of time and money documenting and arguing over who is owed what. Incredibly, insurance companies spend a whopping $350 billion on administration costs annually — and then, in turn, push huge additional administrative costs onto hospitals, doctors, and millions of other health care professionals in the form of complex billing — and then, in turn, drive up costs incurred by employers as they attempt to navigate the complexity of providing their employees with insurance. 
Soon after, however, Warren retails what's probably the dominant refrain of U.S. healthcare scholarship: It's the Prices, Stupid. She then launches what I believe is her first-ever attack on provider price-gouging:
A heart bypass surgery that costs nearly $16,000 in the Netherlands costs an average of $75,000 in the United States. A CT scan that costs $97 in Canada costs an average of $896 here. And in the United States hospitals can charge new parents for holding their newborn after delivery.

Meanwhile, private equity firms fight bipartisan legislation in Washington that might undermine the profitability of their investments or prevent their hospitals from sending patients surprise bills. And health care CEO salaries continue to soar. Between 2005 and 2015, non-profit hospital CEO salaries increased by 93% to an average of over $3 million, and last year, 62 health care CEOs raked in a combined $1.1 billion — more than the CDC spent on chronic disease prevention.

If we expect the American people to be able to afford health care, we need to rein in these costs. Comprehensive payment reform, as part of Medicare for All, will reduce this component of health care spending. Under my approach, Medicare for All will sharply reduce administrative spending and reimburse physicians and other non-hospital providers at current Medicare rates. My plan will also rebalance rates in a budget neutral way that increases reimbursements for primary care providers and lowers reimbursements for overpaid specialties. 
Note that the attack leads with private equity -- which has made itself a fat target with a dark-money summer advertising campaign aimed at torpedoing legislation to end balance billing. This ad campaign has triggered a spate of articles spotlighting the extent to which private equity-owned physician groups dominate the specialties that engage most relentlessly in balance billing. But then come hits on nonprofit hospital CEO salaries and "overpaid specialties." Mirabilis.

The attack is softened somewhat by a claim that reducing administrative costs and bringing Medicaid rates (for physicians) to Medicare levels (Medicaid actually pays hospitals slightly more than Medicare) will enable providers to thrive at a blended rate of 110% Medicare, with "adjustments for geography and other factors."  But a rhetorical Rubicon has been crossed -- as it was a few weeks ago by Pete Buttigieg.

Elizabeth Warren's healthcare toggle switch
Buttigieg goes first! Decries predatory hospital pricing
Elizabeth Warren is faking it on healthcare

1 comment:

  1. Warren has a good cause and a decent plan; however, I struggle to see how a Congress that has refused to impose modest cuts of 2-4% on doctors in Medicare Part B for decades (as called for by prior law) will suddenly impose much larger cuts on all providers.

    For that matter, I struggle to see how a Congress that cannot control 5 or 6 private equity firms in the surprise billing issue, can suddenly impose lower prices on hundreds of large hospital systems which are the largest high-wage employer in their city.