The logic underpinning Medicare for all who want it

Blog as sketchpad: as employer-sponsored insurance continues to slowly, steadily bleed Americans white, I think the case for a strong public option that anyone can buy into on an affordable, income-adjusted basis boils down to a few simple propositions:

1. Employer insurance is deteriorating because employers (through insurance intermediaries) lack pricing power. Every year, premium and OOP increases exceed inflation and wage growth.

2. The competition needed to endow them with that power is a strong public option paying providers Medicare rates or some variant.

3. Once such a public option establishes all-payer rates, either de facto or by fiat**, we will have space to determine whether private insurance adds any value

4. Under those revamped market conditions, we can afford to be agnostic as to whether private insurance survives or dies.

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FN - This little credo started life as a postscript to a slightly longer version of the argument.

* The Medicare for America bill, which establishes a strong public option paying modified Medicare rates (110% Medicare, with adjustments for primary care, mental health and underserved areas), stipulates that providers who accept the public plan must accept the same payment rates from commercial insurers. Competition from a strong public option could more slowly have the same effect.

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ACA 2.0 in California: an individual mandate without shame and a move toward all-payer in pharma

Yesterday California's new Governor, Gavin Newsom "announced a series of major, first-in-the-nation executive actions and budget proposals to lower prescription drug and health care costs for all California families and move California closer to the goal of health care for all."

A couple of quick thoughts about the package:

1. The ACA-related proposals are to raise the subsidy cap to 600% FPL while enriching current subsidies -- and to implement a state individual mandate. That pairing addresses the fatal flaw in the ACA individual mandate, which New Jersey's disappointing enrollment performance following passage of a state individual mandate illustrates: subsidies are too skimpy (if available at all) to make the coverage on offer seem like a good deal to many who are required to obtain it.

Try telling someone with an income of $30k that a silver plan with a deductible of $2,500 will cost them $200 a month, or that a bronze plan with a $3k deductible will cost, $137 a month.That was the deal on offer for a 40 year-old in most of Jersey in 2019; in most other states, the deductibles would have been higher, though the bronze premium would in many cases be lower. My duty as an ACA Certified Application Counselor has been light, but I've seen enough to know that that kind of result does not make many prospective enrollee happy* (the case is different at lower incomes -- say, $17-20k for an individual, where strong Cost Sharing Reduction is available).  The case is often much worse for those with incomes above the subsidy threshold. In many states, premiums had risen high enough by 2018 that many people in the 400-600% FPL  income range and above were exempt from the mandate.

Synthetic single payer

Here's a healthcare reform bill that fits on a postcard:

The Medicare-for-all Biosimilar Act of 2017

Title 1: Uniform Payment Rate
     Sect. 101. All payers for healthcare services shall pay providers at a rate equal to 120% of current Medicare payment rates. Price schedule will be maintained and updated by CMS, with existing alternative payment programs maintained at the 120% payment ratio. Medicare Advantage benchmarks will be adjusted accordingly.

Title II: Healthcare Budget
     Sect. 201. The Medicare tax will be increased to a level sufficient to fund the government's increased payments in Medicare and Medicaid.

My healthcare credo to date

As an amateur healthcare student, every now and then I like to pause and take stock of the convictions I've picked up by osmosis -- by deciding, consciously and unconsciously, what (and whom) to credit in what I read and hear. Here's a short set of hypotheses (and suspicions).

1. The single most important means of healthcare cost control is uniform or at least coordinated pricing: single payer, all-payer, or, maybe in the U.S., private as a fixed percentage of public. The U.S.'s  unique every-payer-for-itself system is the main reason Americans pay far more per procedure than citizens of any other developed country.

2. The evils of market consolidation are likely to outstrip the virtues of coordinated care.

3. Which treatments and drugs are covered by insurance, and to what level (ideally by all payers in concert, and. by Medicare and Medicaid in our current system) should be informed by outcomes research and price/benefit calculations.

4. The wisest words ever spoken by a public health official: "We cover everybody, but not everything."*

Why inner city hospitals move to greener pastures

Kaiser Health News' Phil Galewitz has a story about inner city urban hospitals that are moving, or seeking to move, to greener pastures -- that is, into nearby suburbs:

By moving to wealthier areas, hospitals can reduce the percent of uninsured and lower-paying Medicaid patients, while increasing the proportion of privately insured patients—what hospitals refer to as attracting better “payer mix."

The "payer mix" concept reminds me of the old joke about economists. A research team made fifty people sit on blocks of ice and another fifty on radiators. On average, they were comfortable.

Hospitals serve people whose payers pay too much and others who pay too little. On average, if their administrators jigger things right (and their location allows, or can be changed), they're comfortable -- often very comfortable, nonprofit or no. The mix includes providing as many high margin procedures as possible -- "such as transplants, cardiac surgery, cancer treatments, and CT, MRI, and other imaging," as Ezekiel Emanuel summarizes in Reinventing American Healthcare (2014). But it also includes minimizing charity care and Medicaid and, to a lesser extent, Medicare in favor of privately insured -- or, best case, wealthy foreign uninsured -- patients.

Obama soft-focuses our domestic ills

I usually find Obama interviews, especially long ones, reassuring. His understanding of issues is nuanced and multi-tiered. But his responses to Ezra Klein's questions about domestic issues and trends struck me as disappointingly unfocused, or off-focus, on several fronts. For example:

1. Asked about the causes of growing inequality, he back-loaded labor law:

Now, there are a whole bunch of reasons for that [stagnant middle class wages]. Some of it has to do with technology and entire job sectors being eliminated — travel agents, bank tellers, a lot of middle management — because of efficiencies with the internet and a paperless office. A lot of it has to do with globalization and the rest of the world catching up. Post-World War II, we just had some enormous structural advantages because our competitors had been devastated by war, and we had also made investments that put us ahead of the curve, whether in education or infrastructure or research and development.