Relevant and even prescient commentary on news, politics and the economy.

McConnell’s AHCA Bill Text and WP Interpretation

I have not had a chance to read through this; but, I thought I would put this out here for all of us to read, Senate Version AHCA McConnell

Updated this post with the changes proposed in the McConnell Senate Bill as taken from today’s Washington Post.

Washington Post Version

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How Senate Republicans Plan to Dismantle Obamacare; Washington Post; Haeyoun Park and Margot Sanger – Katz; June 22, 2017

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Many places in America are essentially devoid of doctors

Via Kevin MD Dr. Kenneth Lin writes another article on disappearing rural medical care.  this is part of the article…

I recently attended a conference in Savannah, Georgia sponsored by the Association for Prevention Teaching and Research.

Since I haven’t spent much time in Georgia outside of Savannah and Atlanta, the welcoming plenary on improving health outcomes for the state’s rural and underserved populations was eye-opening. According to Dr. Keisha Callins, Chair of the Department of Community Medicine at Mercer University, Georgia ranked 39th out of 50 states in primary care physician supply in 2013 and is projected to be last by 2020. 90 percent of Georgia’s counties are medically underserved. Mercer supports several pipeline programs that actively recruit students from rural areas, expose all students early to rural practice and community health, and provide financial incentives for graduates who choose to work in underserved areas of the state. But it’s an uphill battle. Even replicated in many medical schools across the country, these kinds of programs likely won’t attract enough doctors to rural areas where they are most needed.

When people talk about places where doctors won’t go, they tend to focus on international destinations, such as war zones in Syria or sparsely populated areas of sub-Saharan Africa. It’s hard to believe that many places in America are essentially devoid of doctors, and access to medical care is as limited as in countries where average income is a tiny fraction of that in the U.S. Providing health care coverage for everyone, while important, won’t automatically ensure the availability of health professionals and resources in rural communities. In a recent JAMA Forum piece, Diana Mason discussed the financial struggles of rural hospitals that support community health alongside primary care clinicians, which may become more acute if budget cuts to rural health programs and grants occur as proposed in President Trump’s budget.

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Rethinking rural hospitals

Via Journel of American Medical Association (JAMA) is an invitation us to keep looking at the plight of rural hospitals in light of decreasing rural population. Dr. Diana Mason writes:

But other rural communities, home to nearly 20% of the US population, are not so fortunate. Since 2010, 78 of the more than 2150 rural nonspecialty US hospitals have closed. While the closure rate has recently declined, the proportion of financially struggling rural hospitals has increased. When a rural hospital closes, the economic losses can devastate an already stressed community through loss of health care workers, emergency services, and primary care capacity, as well as higher unemployment and lower per-capita income, a drop in housing values, poorer health, and increasing health disparities.

Why are rural hospitals at higher risk of closure than urban hospitals? George Pink, PhD, Deputy Director of the North Carolina Rural Health Research Program, sees 3 main contributors:

  • Market factors. Rural areas tend to have poorer population health, higher unemployment rates, and stiffer competition from other hospitals
  • Hospital factors. These include low occupancy rates, lack of physician coverage, deteriorating facilities, and patient safety concerns
  • Financial factors. From 2012 to 2014, for example, rural hospitals averaged a 2% operating margin, compared with 5.9% for urban hospitals

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Mitch McConnell, Healthcare, and the ACA

I am always curious about why certain people make it a mission to get rid of things. I think it truly is about Addison Mitchell McConnell trying to erase the accomplishments of what the first black President Barack Obama did as the president. I did some rather easy digging and pulled up Wikipedia. here is what they said about Mitch.

As a youth, Addison (Mitch) McConnell overcame polio. He received “government-provided healthcare” in Warm Springs saving him from being disabled for the rest of his life.” Addison Mitchell McConnell

Given that you Senator McConnell received government-provided healthcare during your youth which saved you from being disabled, why do you feel the need to strip 24 million people of their healthcare? This healthcare may save their lives also.

Paul Ryan benefited from government survivor benefits which allowed him to go to college.

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Dean Baker’s Articles on Healthcare

Barkley has mentioned this particular article several times now. I would be negligent if I did not post a link to it so we could read it. New Health Care Plan: Open Source Drugs, Immigrant Doctors, and a Public Option, 25 March 2017, CEPR, Beat The Press, Dean Baker.

There are two obvious directions to go to get costs down for low- and middle-income families. One is to increase taxes on the wealthy. The other is to reduce the cost of health care. The latter is likely the more promising option, especially since we have such a vast amount of waste in our system. The three obvious routes are lower prices for prescription drugs and medical equipment, reducing the pay of doctors, and savings on administrative costs from having Medicare offer an insurance plan in the exchanges.

This short article is worthy of a read also. Why Do Proponents of More Immigration Never Mention Doctors? 08 February 2017, CEPR, Beat The Press, Dean Baker.

If we got the pay of our doctors down to the levels in other wealthy countries it could save us close to $100 billion a year.

More on Healthcare to follow.

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Medicare does “NOT PAY FOR ITSELF”

In the comments section of an earlier post (1/3 of Medicare is Wasted), Maggie Mahar had stated to everyone; “Medicare Does Not Pay for Itself.” This is what I meant by that comment:

“For more than a decade the the federal government has borrowed to pay for the rising cost of Medicare. Debt-financing of Medicare will increase sharply as the population over 65 doubles from 2010 to 2030 and the number of beneficiaries over 85—with the greatest medical needs—triple.”

Note, using borrowed money to finance Medicare is not something happening in the future as it began more than a decade ago. Yet, as the article notes: “Members of Congress are reluctant to argue with constituents who sincerely believe that they have ‘paid for’ Medicare with payroll taxes and premiums. Most find it more convenient to tiptoe around the minefield of Medicare financings.” So the charade continues even today.

People who believe that they have paid for their Medicare with payroll taxes and premiums are terribly naïve and do not realize how much Medicare actually costs or how much “Medicare for all” would cost.

The article goes on to explain the history of how we arrived where we are today and why I make the comment on Medicare:

“In the mid-1990s, Democrats proposed to balance the Medicare budget by limiting fees paid to physicians for services, while Republicans sought to contain the costs by transferring the program to managed care insurers and capping the annual per capita rise in premium subsidies.

In 1997 the leadership in both parties agreed to a plan that would eliminate borrowing for Medicare, principally by limiting the growth in the level of fees paid to physicians. That Medicare reform, along with increasing general revenues paid by taxpayers in the highest bracket, led to a federal budget that balanced in fiscal year 2000.

The balance turned out to be short-lived. In 2001 and 2003 Congress passed debt-financed reductions in income tax rates. And in 2003 it also suspended the application of ceilings on fees set in 1997. Later that year Congress used debt to finance a new Medicare prescription drug benefit and higher payments to Medicare managed care plans.

As a result, the portion of Medicare paid for with dedicated taxes dropped from 73 percent in 2000 to 53 percent in 2010, the year that the first of the Baby Boom generation became eligible for Medicare.”

“After the 2008 election of President Obama, Democrats sought Medicare ‘savings’ for the purpose of expanding other medical services rather than balancing the budget for Medicare. In order to offset the cost of expanded PPACA medical services for families with low incomes; they placed restrictions on reimbursement rates, provided incentives for more efficient delivery of medical care, raised the Medicare tax paid by taxpayers with high-earned incomes, and applied Medicare taxation to gains from investment.”

On the other side of the political spectrum, “Republican House Budget Chairman Paul Ryan exemplifies his party’s ambivalence toward Medicare reform. He ran as the vice presidential candidate on a ticket in 2012 that attacked the Affordable Care Act’s limits on Medicare reimbursements. Yet before and after that election, he incorporated those very cost-saving measures into his own budget plans.”

Incumbents from “both parties find it awkward to even talk about the practice of borrowing to pay for Medicare. Obviously, an extra layer of interest on debt simply increases the program’s long-term cost. Any attempt to highlight that issue naturally invites the question of whether to cut Medicare costs or raise tax revenue dedicated to the program. No mainstream politician seeks to cut benefits by almost half and down to the level payable by revenues from premiums and payroll taxes. Democrats condemn any increase in payroll taxation as ‘regressive,’ while most congressional Republicans have signed a pledge to oppose any tax increase.”

Both sides of the aisle feint a reluctance to either cut Medicare benefits or increase Medicare withholding taxes and an honest discussion with their constituents regarding Medicare financing knowing full well something must be done. Indeed, it is politically expedient to kick the can or the bucket into the next decade avoiding the third rail of Medicare.

What can we do? I will answer that question in my next post.

Notes and References:
1. “Pay As You Go Medicare” Washington Monthly, Bill White, June 23, 2014

2. Maggie Mahar writes the Health Beat Blog Maggie is also the author of Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006). Mahar also served as the co-writer of the documentary, Money-Driven Medicine (2009), directed by Andrew Fredericks and produced by Alex Gibney. Before she began writing about health care, Mahar was a financial journalist and wrote for Barron’s, Time Inc., The New York Times, and other publications. Her first book, Bull: A History of the Boom and Bust 1982-2003 (Harper Collins, 2003) was recommended by Warren Buffet in Berkshire Hathaway’s annual report.

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1/3 of Medicare Spending is Wasted

This was initially posted at Angry Bear September 14, 2014 by Maggie Mahar of Health Beat A little history: Dan and I invited Maggie Mahar to write at Angry Bear Blog as I was covering much of the Healthcare debate and Maggie could add much more in-depth knowledge and analysis of healthcare than I could. This is an important post as it gets down to the nitty-gritty of Medicare-For-All, things we need to know, and why it may not work.

Maggie Mahar in answer to a commenter:

You write: “That claim that one-third of Medicare spending is wasted sounds pretty questionable to me.”

This is your opinion. If you had spent the last 20 years working as a medical researcher investigating unnecessary treatment, your opinion would be of great interest to all of us; but, I’m assuming you have not done so.

Thus, you might be interested in some facts . . .

Dr. Donald Berwick, who headed up Medicare and Medicaid during the 1st half of the Obama administration has said, repeatedly, that at least 1/3 of Medicare dollars were wasted on unnecessary tests, procedures and drugs that provide no benefit for the patient. He is only one of dozens of health policy experts who have made the same statement. (Google “Health Affairs” the leading medical journal that focuses on health policy and “unnecessary treatments” Over the past 30 years, researchers at Dartmouth have provided stacks of evidence documenting unnecessary care in the U.S.

You also write: “I doubt that treatment protocols in the U.S. are all that different from other countries.”

Again, this is your opinion. Unfortunately, you are wrong.

In other countries, doctors and hospitals tend to follow evidence-based guidelines. In the U.S. a great many doctors object to the idea of someone telling them how to practice medicine even though that “someone is “science”. They value their autonomy and prefer to do things the way they have always done them. Of course this is not true of all doctors; but even when you look at protocols at our academic medical centers, you find that the way they treat similar patients varies widely.

Here, I’m not talking about how much they charge for a procedure (which also varies widely) but how many tests they order, how often they prescribe spine surgery for someone suffering from low-back pain, how often they tell a woman she needs a C-Section . . .

One big problem is that our doctors and hospitals are paid on a “fee – for service basis;” in other words, the more they do, the more they are paid.

As Dartmouth’s Dr. Eliot Fisher points out: “U.S. patients are not hospitalized more often than patients in other countries; but in the U.S., a lot more happens to you while you’re there.”

In addition, traditionally our medical schools have trained doctors to practice very aggressive medicine. The resident who orders a battery of tests is praised. Students are told “Don’t just sit there (and think). Do Something!” Traditionally, our medical culture has been a very macho culture and it is just beginning to change.

Finally, Americans tend to think that “more is always better.” Larger servings in a restaurant, bigger cars, bigger homes, etc. And when it comes to healthcare, patients in the U.S. tend to think that “more care is better care.” They are wrong. Every medical product and service carries some risk. If it provides no or little benefit, the patient is exposed to risk without benefit.

When medical protocols in the U.S. are compared to how medicine is practiced in other countries, researchers have found: —- Much unnecessary spine surgery. The rate of back surgery in the U.S. is five times higher than in the UK. Studies have shown little difference in long-term outcomes for patients who undergo back surgery compared to those who select non-surgical treatment.

The U.S. does more testing than other countries. For instance, the number of MRI and CT tests for every 1,000 people in 2010 was double the average in other OECD countries. Comparatively, there were also more tonsillectomies, caesarean sections and knee replacements. Regardless of how much more, nearly every procedure, scan and drug costs; it’s nothing compared to how out-of-whack the medical heroics thrown at Americans in the last stages of life The Cost of Health Care: A Country-by-Country Comparison

Colonoscopies are prescribed and performed more frequently than medical guidelines recommend and are given preference over less invasive tests that screen for colon cancer. Those less invasive tests are not only routinely performed in other countries, they’ve also been proven to be just as effective by the U.S. Preventative Services Task Force.

“We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

In the U.S. many more patients die in ICU’s getting futile care. This is a painful, lonely way to die. In other countries, more patients are treated in hospices or allowed to go home where nurses and even doctors visit them.

Half of all heart surgeries (using stents) do no good. We know which half! But stent-makers and other providers have turned this into a big business.

– Our drug companies enjoy 20% profit margins.

– Our device-makers boast 16% profit margins.

We are over-medicated (particularly older people), and undergo too many surgeries that involve very expensive devices. Medicare covers virtually everything (even drugs that have been shown to be dangerous–until they are taken off the market). If it does not cover all of the newest treatments and products lobbyists would howl– and Congress makes sure that heads roll.

This is one reason why we don’t want to give everyone 40 to 65 a chance to enroll in Medicare. No one could afford it. (This idea was considered in the late 1990s. Do you have any idea how much 40-65 year olds would have to pay for our extraordinarily inefficient and wasteful Medicare system? On top of that and like people over 65, they would have to pay hefty sums for MediGap to Medicare advantage — private insurance plans that cover all of the things that Medicare doesn’t.

Medicare is now beginning to cut back, and over time it will refuse to pays for unnecessary surgeries (heart surgeries, unproven prostate cancer surgeries, and some hip and knee replacements, unless the patient has tried physical therapy first–and losing weight, if possible. (Some people just can’t lose weight, even under a doctor’s supervision.)

Medicare will also stop covering every new drug that comes on market, setting up a formulary and only paying for drugs that are effective — and cost-effective. The same will be true of devices.

Then — and only then — we might talk about letting people 40-65 sign up for Medicare, though in many cases, research on quality of care suggests that they would be better off with the best of our non-profit insurers: Kaiser, Geisinger, etc.

Medicare is a highly politicized bureaucracy and inevitably, Congress dictates what it can and can’t do. Medical guidelines should be set by medical researchers and doctors who have no financial interest in the outcome.

Maggie Mahar is the originator and author of the Health Beat Blog. Maggie wrote “Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006),” and was the co-writer of the documentary, Money-Driven Medicine (2009), directed by Andrew Fredericks and produced by Alex Gibney.

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Where the ACA Should Go Next?

run75441: This is the first in a series of 3 posts written by Maggie Mahar discussing Medicare, what it covers, and what it lacks in coverage. Maggie touches on the Public Option and Medicare. I start to get edgy when people talk about the Public Option, Universal Coverage, Single Payor, Medicare-For-All, etc. as they do not really define it and who will control its funding. We have a Congress which is intent on cutting the PPACA/ACA/Obamacare, which many take offense to today, and leave us with far less. I am not so sure we can trust Congress and politics to insure our healthcare.

On Tue, Sep 9, 2014 at 1:47 PM, Dan <cdansplace2@aol.com> emailed:

Rortybomb, New Piece on Where the ACA Should Go Next Rorty touts the 2009 House Bill which calls for a Public Option and described here To improve ‘Obamacare,’ reconsider the original House bill

Maggie Mahar replies:

Originally I favored a public option, but in fact, at the time, no one really spelled out who would run the public option–or how it would be run.

One of the best things about the ACA is that lets both HHS and CMS make end-runs around Congress. I would never want a public option that was run by Congress.

Here is the comment I just posted in reply to the post “Where the ACA Should Go Next”

I would need to know far more about the public option—and how it would be different from Medicare– before voting for it.

Medicare is extraordinarily wasteful– 1/3 of Medicare dollars are squandered on unnecessary treatments that provide no benefit to the patient. Why? Because Congress is Medicare’s board of directors, and lobbyists representing various specialist’ groups, hospitals, device-makers and drug-makers control Congress.

Meanwhile, Medicare does not cover much needed care, ie. vision checks are just one example. This is why the vast majority of Medicare beneficiaries must buy separate private insurance (MediGap or Medicare Advantage) to supplement what medicare doesn’t cover.

Finally, I favor narrow networks. They keep costs down. The doctors and hospitals that are not included in the networks are those that refuse to negotiate  prices.  By excluding them we remind doctors and hospitals that we can no longer afford letting providers charge whatever they wish. No other developed nation allows doctors and hospitals to simply set prices.

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Consumer Reports: Obamacare reduced bankruptcy rate

A new article at consumerreports.org suggests that the Patient Protection and Affordable Care Act* (PPACA) played a substantial role in the decline of annual personal bankruptcies that we have seen since the high of 1.5 million in 2010.

As I showed several years ago, international bankruptcy data support the oft-heard claim that medical bills make up one of the biggest, if not the biggest, causes of personal bankruptcy. That is, if the United States has a bunch of medical bankruptcies and other countries don’t, all other things equal you would expect the U.S. to have a higher overall bankruptcy rate than other countries. And the only article I was able to find on this showed that it was true: In 2006, the U.S. had a rate (6000 per million population) that was twice Canada’s (3000 per million), which in turn far outstripped #3 Germany (1200 per million). The U.S. and Canadian rates have long been the highest because they had the most debtor-friendly bankruptcy systems, so debtors took advantage of it when they could.

Canada and the U.S. had similar rates in 1982, but thereafter the U.S. rate increased substantially more rapidly than Canada’s did. As this period was also marked by U.S. health care costs outstripping those of other OECD countries, this is definitely evidence that medical bills were contributing to the higher U.S. bankruptcy rate.

Now, as suggested by Consumer Reports, the increase in insurance coverage rates and the many consumer protections due to the Affordable Care Act are contributing to a falling bankruptcy rate. Certainly, part of the fall is due to the passing of the worst part of the Great Recession, but the numbers are still striking.

A chart showing how the number of personal bankruptcy cases dropped after the ACA was introduced.
As the article points out and the chart above emphasizes, protections that surely reduced bankruptcy rates were contained in even the initial phase of the ACA. In 2011, the Obama administration rolled out the ban on yearly and lifetime limits, guaranteed coverage for pre-existing conditions, and implemented the rules allowing adult children to remain on their parents’ policies until they were 26. By the time all ACA provisions were in effect in 2014, there was already a decline of over 600,000 bankruptcies per year. In the next two years, bankruptcies declined by a further 160,000 per year.

With the possibility that the American Health Care Act (AHCA) could reverse many of those protections, the conclusion is inescapable that medical bankruptcies will once again increase. Just how much, of course, depends on the particulars after (and if) the bill goes through the Senate, but this new study shows us just how much we have gained, and how much we have at risk.

* I use the full name of the law because both the patient protection and affordability aspects of the legislation contributed to this outcome.

Consumer Reports has not responded to my request to use the chart. It will be removed if so requested.

Cross-posted from middleclasspoliticaleconomist.com.

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