Baffler: “Bill of Health”

I have an article in the new issue of the Baffler about what the COVID-19 pandemic reveals about the unjust and dysfunctional way we finance our nation’s hospitals — and why we need to change it. I provide a glimpse of what the COVID-19 pandemic looked like inside our hospital’s wall, a brief history of hospital financing from the Middle Ages to the invention of the DRGs in the 1970s, and why the “inverse care law” is so active in America.

New Article: “US law enforcement crowd control tactics at anti-racism protests: a public health threat”

We had a correspondence piece in The Lancet citing tactics used by US law enforcement agencies as a public health threat on Friday. In brief:

-Rubber bullets and related projectiles (bean bag rounds, foam batons, sponge rounds) can maim and kill. We highlight 12 severe injuries, as reported in the media, from these projectiles in the last few days of May. We call for a ban on these projectiles.

-We note dangers of chemical irritant use (tear gas, pepper spray), which cause coughing and sneezing and mask removal and may exacerbate viral spread. We join the American Thoracic Society in calling for a moratorium on tear gas.

-Jails are coronavirus incubators. Mass arrests will worsen the COVID-19 pandemic and must be avoided.

-We call for a reallocation of some of the >$100 billion spent annually on policing on educational, social, and health programs.

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New study: “18.2 Million Individuals at Increased Risk of Severe COVID-19 Illness Are Un- or Underinsured”

We had a study published last week in the Journal of General Internal Medicine, which found that some 18 million people who are at increased risk of severe COVID-19, whether because of age or chronic illness, are uninsured or underinsured. Not surprisingly, these individuals are disproportionately people of color and those with low incomes. It was covered in Newsweek, Modern Healthcare, Marketwatch, and some other outlets.

New Paper: “COVID-19 and US Health Financing: Perils and Possibilities”

Along with David Himmelstein and Steffie Woolhandler, I have a new paper out today in the International Journal of Health Services exploring issues of health coverage, access, and financing related to the COVID-19 pandemic. It outlines the legislation and proposals meant to address these issues — what each would accomplish, and how they might fall short.

It’s available here at the PNHP website.

Health Affairs Blog: “Medicare for All: If Not Now, When?”

Medicare for All has significant advantages, many agree — but given the enormous political obstacles, shouldn’t we be focused on more moderate reforms? I respond to this critique in today’s Health Affairs blog.

One data point worth noting — although Senator Bernie Sanders often notes that there are 87 million people who are uninsured or underinsured, that figure excludes children and seniors. The actual overall number is greater than 100 million — or nearly 1/3 Americans — with deficient helath coverage.

https://www.healthaffairs.org/do/10.1377/hblog20200309.156440/full/

Doctors “Prescribe” Medicare for All

Our open-letter—signed by more than 2,000 physicians—was published today as a full-page ad in the New York Times.

Among the signatories of the letter, which was organized by PNHP, includes leading figures in American medicine, including founder of Partners in Health Dr. Paul Farmer, developer of the defibrillator Dr. Bernard Lown, former editor-in-chief of the New England Journal of Medicine Dr. Marcia Angell, former NYC Health Commissioner Dr. Mary Bassett, and many more …

In conjunction with yesterday’s announcement that the American College of Physicians, the largest medical specialty society in the country, had endorsed Medicare-for-All, it is becoming increasingly clear that there has been a turn of the tides in the American medical profession on the single-payer question.

Jonathan Cohn describes these developments in an article in the Huffington Post.

Link to all the signatories: http://www.pnhp.org/2020

New Study in Health Affairs: “The Effect Of Veterans Health Administration Coverage On Cost-Related Medication Nonadherence”

Our new research was published in Health Affairs this week. Using national data, we found that patients with VA coverage – which provides medications with no or low copays to veterans – were less likely than those with other forms of insurance to go without needed medications, especially among those with serious chronic diseases. VA coverage also reduced or attenuated racial and income-based disparities in prescription drug access.

We contend that the VA pharmacy benefit should be considered as a model to address the crisis in prescription drug affordability.

The study was covered in STAT: https://www.statnews.com/…/veterans-drugs-cost-patient-ad…/…

Here’s the press release: https://www.eurekalert.org/pub_releases/…/pfan-pwv010320.php

And here’s a link to the study itself: http://www.healthaffairs.org/…/a…/10.1377/hlthaff.2019.00481

New Study: The Effect of Large-scale Health Coverage Expansions in Wealthy Nations on Society-Wide Healthcare Utilization

Our third paper examining how universal coverage affects the society-wide use of healthcare — a question with big implications for predicting the cost of Medicare-for-All — was just published in the Journal of General Internal Medicine. Co-authored with Steffie Woolhandler and David Himmelstein, this is a review of 13 universal coverage expansions taking place in 11 nations over 8 decades, beginning with the 1938 New Zealand Social Security Act and extending to the 2014 implementation of the ACA. We find that these expansions led to modest, and in some cases no, society-wide increase in utilization, even as they redirected care to those who needed it. Medicare for All is likely more affordable than previously predicted.

New Study: Effects of the 1966 Medicare/Medicaid and the 2014 Affordable Care Act Coverage Expansions on Physician Use

Our new study was published yesterday online in the American Journal of Public Health.  We analyzed the effects of the 1966 Medicare/Medicaid and the 2014 Affordable Care Act coverage expansions on the utilization of physician services — both visits and procedures.  We found that although these coverage expansions redirected care to the newly covered, they did not increase overall society-wide use.   Considered together with our study of how these expansions affected hospital utilization (together with other work on the utilization effects of Canadian single-payer, the NHS, and pre-ACA Medicaid expansions), this research suggests that estimates of the cost of coverage expansions may often be in error.

New Study: Utilization Effects of the 1966 and 2014 Coverage Expansions

Last week, colleagues and I published a study in the Annals of Internal Medicine based on analyses of large health surveys conducted around the time of the implementation of Medicare/Medicaid in 1966 and the Affordable Care Act in 2014.  Overall, we demonstrated that these expansions led to shifts in hospital utilization towards newly covered populations, but no net overall increase from either coverage expansion—a finding with important ramifications for today’s debate about the cost of universal coverage.

We published an op-ed about our work in the Boston Globe, and the study was additionally covered by Reuters,  Morning Consult, and other outlets.

Also this kind shout-out from Rep. Pramila Jayapal!

 

We’re Failing Young People with Diabetes

Our study, comparing hospitalization rates for diabetic ketoacidosis in the US to Manitoba, Canada, was just published in the Journal of General Internal Medicine.  I have an op-ed up today on the study in the Washington Post.

Diabetic ketoacidosis is a dangerous complication of diabetes that is typically preventable with regular use of insulin.

Among teenagers, we found that the ketoacidosis hospitalization rate was slightly higher in the US compared to Canada. However, as teenagers became young adults, the hospitalization rate soared by 90% in the US, but only rose 23% in Canada. Differences in our health systems – particularly the disruptions in coverage that are common when adolescents become young adults, could help explain this difference.

Andrea Christopher was the co-first author; other co-authors include Alan Katz, Dan Chateau, Chelsey McDougall, David Bor, David Himmelstein, Steffie Woolhandler, and Danny McCormick.

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The Nation: “We Don’t Need Private Health Insurance”

Earlier this month, Sarah Kliff published an informative article at Vox on the ways that private health insurance has persevered in nations with universal coverage.  On Monday, I had an article in The Nation that made something of a counter-argument: leaving a significant role for private insurance requires that we poke holes in the single-payer public plan, which helps nobody but the corporate insurers.

Blog: Physician Pay Under Single-Payer

A question that comes up in discussions of healthcare reform—and the transition to single-payer—is the potential savings via reductions in compensation for physicians’ labor.  Some assert that the transition to single-payer would, or should, involve historic reductions in pay.  To have an informed discussion, however, we have to first know how much we currently spend on physician salaries.

There are a few different ways to estimate this.  According to CMS’s National Health Expenditures (NHE) accounts, spending on “physician and clinical services” was $664.9 billion in 2016, or about 20% of our health spending.  20% is also the figure that health economist Uwe Reinhardt used a while back, presumably using CMS’ figure.   According to CMS, that figure includes spending on physician offices and outpatient care centers, but also on independent medical and diagnostic laboratories, which muddies the waters.  At the same time, it excludes salaried doctors at hospitals or nursing homes.  But importantly, according to Reinhardt, it reflects expenditures on offices and clinics (including practice overhead), not take-home income.  Reinhardt states that physician income is about half of this spending, which would be 10% of NHE.  For 2016, that would be roughly $330 billion.

Clearly there are several assumptions in that estimate that might make it either too high or too low.  An alternative approach is to multiply the number of practicing doctors by their pay.  According to the Bureau of Labor Statistics, there were 713,800 physician jobs in 2016, while median pay was “equal to or greater than $208,000 per year.”  Hence, this pay figure is presumably an underestimate.  Additionally, mean pay could be higher than median pay depending on the distribution of salaries.  Putting that aside for a moment, multiplying 713,800 by $208,000 gives us $148 billion in physician salaries, or roughly around 5% of 2016 NHE, half that of Reinhardt’s figure.  For the reasons stated, however, we should consider this an underestimate.

Dean Baker, in a piece in Politico, takes this same approach, using somewhat higher numbers.  He notes that there are more than 900,000 doctors, linking to a figure that puts the number of doctors at 1,045,910 in 2013.  However, that sources also notes that there were 148,000 inactive physicians, which would put the number of active physicians slightly shy of 900,000.  Although higher than the BLS figure, that’s similar to a figure from the Kaiser Family Foundation, which reports that there were 968,743 “professionally active” physicians in 2018.  Baker assumes that doctors are paid around $250,000 a year, on average, based on a figure from Medscape’s 2016 Physician Compensation Report.  So, if there are 900,000 doctors paid at $250,000 a year, we have a figure of $225 billion, or a bit less than 7% of 2016 NHE.  That figure is about halfway between the NHE/Reinhardt estimate and the estimate using BLS figures.  (Note: This is based on Baker’s figures, which for income is from 2016.  However, if we use the 2018 KFF figure, 2018 Medscape salary figure, and 2018 NHE, the story doesn’t change much – salaries come to a bit less than 8% of NHE).  

In sum, then, it would appear that physician salaries account for somewhere between 5 – 10 % of healthcare spending.  Let’s assume it is Reinhardt’s 10%, so as to err on the side of greater potential savings via reduced pay.  As he notes, that would mean that if we were to dramatically slash physician pay in a historically unprecedented fashion — say by 20% — US healthcare spending would fall by a grand total of 2%.  Reinhardt argued that in return for that 2% reduction in healthcare spending we would have a “wholly demoralized medical profession,” and so considered this approach a “poor strategy.”

Others may disagree.  Yet regardless of one’s opinion on what physician pay should be, these numbers demonstrate that it is by no means necessary to reduce physician reimbursement, much less slash it, to make single-payer affordable.  After all, even a historic reduction in physician salaries would produce only a 2% reduction in health spending.  Such a pay cut would presumably coincide with a modest increase in utilization under single-payer, which would mean more work for less pay.  It’s hard to see how this wouldn’t alienate the medical profession and turn them against single-payer, possibly dooming its prospects.

It is probably for this reason that major transitions to public universal healthcare systems in history—i.e. US Medicare, the Canadian universal healthcare system, and the United Kingdom’s National Health Service—did not reduce compensation for healthcare workers’ labor.1  We should consider the wisdom of that approach today as we get into the nitty gritty of designing the American single-payer system.2,3,4

 


 

1. As an article in the Independent notes, Nye Bevan “was pragmatic enough to know that he could not run the NHS without consultants, doctors and nurses.”  He made concessions to the doctors and increased the nurses’ pay.

2. As a side-note, reducing economic inequality absolutely must be a priority. To accomplish that, however, I would argue that we should pursue progressive taxes—including on unearned income from wealth—as opposed to specifically targeting the wages of well-paid healthcare workers, particularly given that pursuing the latter could potentially scuttle the passage of single-payer healthcare, a reform that itself would do a great deal to reduce inequality.

3. Keep in mind I am referring to take home reimbursement, not overall reimbursement. By reducing provider-side administrative costs, which a single-payer system will accomplish, physician fees can fall somewhat without reducing payment for labor.  After all, some fee reduction will be the way that provider-side administrative savings are realized.  Matt Bruenig argues that the provider rate cuts assumed in the Mercatus Center single-payer report could probably be wholly accounted for by administrative savings.  I’m also not referring to for-profit physician-owned hospitals or other for-profit healthcare delivery businesses, which should not be allowed in the system—I’m speaking about compensation for labor.  Finally, there should certainly be attenuation in pay disparities, but basically everybody already agrees on that.  After all, simply moving to a single rates system will mean equalizing pay for providers who care for richer and poorer patient populations.

4. Obviously, reimbursement will not (and practically cannot) stay exactly the same—I’m speaking about avoiding large changes. Making healthcare professionals education tuition-free can help ease the transition for doctors who do less well.