Health Care Reform? ACA vs. Single Payer

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Health Care Reform?ACA vs. Single Payer

• Oliver Fein, M.D.
• Professor of Clinical Medicine and Healthcare
  Policy
• Associate Dean
• Office of Affiliations
• Office of Global Health Education
• Weill Cornell Medical College
• ofein_at_med.cornell.edu
• Retiree chapter
• Professional Staff Congress
• November 3, 2014

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DISCLOSURES

• Dr. Oliver Fein has no relevant financial
  relationships with commercial interests
• Dr. Oliver Fein is Chair of the NY-Metro Chapter
  and past President of Physicians for a National
  Health Program (PNHP), a non-profit educational
  and advocacy organization. He receives no
  financial compensation from PNHP.

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• PRESENTATION OUTLINE
•   
• The Politics behind the ACA
• Challenges facing the U.S. Health Care System
•  
• 3. Policy Options ACA vs. Single Payer

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HEALTH REFORMOBAMAS FATEFUL CHOICE

• He did not want to start from scratch
• He had two fundamental choices
• 1) to build on the private sector
• or
• 2) to build on the public sector (Medicare)
• Which did he choose?

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Progress(?) of US Health Reform
Employer mandate
Medicare
Individual mandate
??
each eligible individual must enroll in an
applicable health plan for the individual and
must pay any premium required with respect to
such enrollment. (S.1775)
Public option
you can choose to enroll in the new public
plan
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WHAT HAPPENED TO THEPUBLIC OPTION?

• The original robust Plan March 2009
• Open enrollment Medicare for everyone who wants
  it
• Medicare rates, backed by the government
• 119 million members (Lewin)
• But maintained multiple payers

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1.2 Billion Spent on Health Care Lobbying!
Center for Public Integrity, March 26, 2010
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WHAT HAPPENED TO THEPUBLIC OPTION?

• The House Plan November 2009
• Restricted enrollment (only the uninsured)
• 6 million members (lt2 of the population)
• Negotiated rates, self sustaining
• The Senate Plan December 2009
• No public option

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THE PATIENT PROTECTION AND AFFORDABLE CARE
ACT(ACA)

• March 23, 2010

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The Structure of the Affordable Care Act
(Partial)
Delivery Reform
Insurance Reform
More People
Better Coverage
Integrated Care
Innovation
Quality Focus
Medicaid Expansion
Cost MLR, Rate Review, MCare Adv.
CMMI
ACOs, Bundles,
Value- Based Payment
Prevention Funds
Exchanges
Dual Eligibles
Transparency Data Sharing
Prevention Benefits
Guaranteed Issue
Pricing Reforms
Care Transitions
Fraud and Abuse
Prescription Drugs
Kids lt 26
FQHCs
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ACA(a MANDATE MODEL)

• Everyone is required to have health
• insurance or pay a penalty.
• Individual mandate penalty 695 for
• singles 2,085 for families
• Employer mandate (50 or more
• employees) penalty 2,000/employee
• Necessary for the survival of private HI.
• Private HI lost 3.2 (6.3 million) enrollees in
  2009 and more than 15 million in the last decade.

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Improved MEDICARE FOR ALL (a Single Payer
Model)

• Build on the original Medicare
• 1. Expand Medicare to the entire population
• Improve Coverage preventive services,
• dental care, long term care
• Eliminate deductibles and co-payments
• Expand drug coverage public administration
• 5. Re-design physician reimbursement

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CHALLENGES FACING HEALTH CARE REFORM

• Declining access
• Escalating costs
• Lack of comprehensive benefits
• Restricted choice
• Uneven Quality
• Insufficient primary care
• How to pay for reform

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CHALLENGE 1

• DECLINING ACCESS

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(No Transcript)
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Number of people spending more than 10 of income
on health care (Millions)    
MILLIONS
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RISE IN PERSONAL BANKRUPTCIES

• 62 of personal bankruptcies are due to medical
  expenses and over 75 had health insurance at the
  outset of their
• bankrupting illness.
• Himmelstein, et.al. Am J Med, August, 2009

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ImprovedMEDICARE FOR ALL

• Automatic enrollment
• Federal guarantee
• All residents of the United States
• Everybody in, nobody out

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HEALTH INSURANCE REFORM (ACA)

• Mandates purchase of private HI (2014)
• Expands Medicaid eligibility to 138 FPL (2014) -
  single 15,856 family 26,951, but not in 24
  states
• Subsidizes premiums up to 400 FPL
• (2014) - single 45,960 family 78,120
• Insurance market reforms Coverage up to age 26
  no pre-existing condition exclusions no
  annual/lifetime limits

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Millions Will Remain Uninsured
Millions
Note The uninsured include about 5 million
undocumented immigrants. Source Congressional
Budget Office
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CHALLENGE 2

• ESCALATING COSTS

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Cumulative Increases in Health Insurance
Premiums, Workers Contributions to Premiums,
Inflation, and Workers Earnings, 1999-2011
Source Kaiser/HRET Survey of
Employer-Sponsored Health Benefits, 1999-2011.
Bureau of Labor Statistics, Consumer Price Index,
U.S. City Average of Annual Inflation (April to
April), 1999-2011 Bureau of Labor Statistics,
Seasonally Adjusted Data from the Current
Employment Statistics Survey, 1999-2011 (April to
April).
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High Cost of Health Insurance Premiums Its Even
Too Expensive for the Middle Class Today

• National Average for Employer-provided
  Insurance
• Single Coverage 6,025 per year
• Family Coverage 16,834 per year
• Note employee contribution Single (19)
  1,081
• Family
  (28) 4,823
• Source Kaiser Family Foundation/HRET Survey
  of Employee Benefits, 2014

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ImprovedMEDICARE FOR ALL

• Low Administrative Costs Single Payer
• Administrative cost and profit
• - Medicare 2-3
• - Private insurance 16-30
• 400 billion saved by converting from for-profit
  private HI to Medicare-for-all (single payer)
• NEJM 2003349768-775 updated to 2010

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Covering Everyone and Saving Money through
Medicare for All
B

• Additional costs
• Covering the uninsured and poorly-insured
  6.4
• Elimination of cost-sharing and co-pays
  5.1
• Savings
• Reduced insurance administrative costs
  -5.3
• Reduced hospital administrative costs
  -1.9
• Reduced physician office costs
  -3.6
• Bulk purchasing of drugs equipment
  -2.8
• Primary care emphasis reduce fraud
  -2.2

134 107 241
Total Costs 11.5
-111 -21 -76 -59 -46 -313
Total Savings -15.8
Net Savings - 4.3 - 72
Source Health Care for All Californians Plan,
Lewin Group, January 2005
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(No Transcript)
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Private insurers High Overhead
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SINGLE PAYER OFFERS TOOLS TO BEND THE COST-CURVE

• Global budgeting of hospitals
• Capital investment planning
• Emphasis on primary care coordination of care
  alternative ways of paying for care
• Bulk purchasing of pharmaceuticals

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HEALTH INSURANCE REFORM(ACA)

• Market Theory
• Mandate the young, healthy uninsured buy private
  health insurance
• (they usually dont get sick and dont get
• health insurance low risks)
• Then, the premiums for everyone will
• go down.

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WILL MARKET THEORY WORK?

• Premiums
• Single Coverage 6,025 per year
• Family Coverage 16,834 per year
• national average for employer-provided
  insurance
• Penalties under P-PACA
• Individuals 695 per year
• Families 2,085 per year
• Employers 2,000 per employee

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HEALTH INSURANCE REFORM (ACA)

• Offers unproven tools to contain costs
• Health Information Technology (HIT)
• Chronic Disease Management
• Payment reforms (e.g., ACOs, bundled payments,
  value-based purchasing)

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and Costs Will Keep On Rising
National Health Expenditures (trillions)
6.6 annual growth
4.7
4.67
4.5
6.4 annual growth
6.0 annual growth
National Health Expenditures as Percent
of GDP 17.8 17.9 18.0 18.2 18.8
19.3 19.8 20.2 20.5 21.0
Notes Modified current projection estimates
national health spending when corrected to
reflect underutilization of services by
previously uninsured. Source D. M. Cutler, K.
Davis, and K. Stremikis, Why Health Reform Will
Bend the Cost Curve, Center for American Progress
and The Commonwealth Fund, December 2009.
Estimated Financial Effects of PPACA as Amended,
Richard Foster, CMS Actuary, April 2010
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CHALLENGE 3LACK OF COMPREHENSIVE BENEFITS

• Service Coverage Doctors, NPs, Hospitals, Drugs
  Dental, Mental Health, Home care/nursing home
• Financial Coverage Copays and deductibles

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ImprovedMEDICARE FOR ALL

• Comprehensive coverage
• - Preventive services
• - Hospital care
• Physician services
• Nurse practitioner and Physician Assistants
• - Dental services
• - Mental health and substance abuse services
• - Medication expenses
• - Reproductive health services
• -Home Care/nursing home care
• All medically necessary services
• Any exclusions? How decided?

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ImprovedMEDICARE FOR ALL

• Eliminates Co-Pays or Deductibles
• Reduce use of needed and unneeded
• services equally
• Result in under use of primary care services
• Not as effective in reducing over use of
  technology intensive services, as
• - Eliminating self-referral to MD owned
  facilities
• - Reducing defensive medicine

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HEALTH INSURANCE REFORM (ACA)

• No Standard Benefit Package mandated
• Eliminates co-pays and deductibles, but only on
  preventive services
• Stipulation that health insurers have medical
  lost ratios (MLR) of 80-85
• No regulation of the magnitude of premiums,
  deductibles and co-pays just the stipulation
  that benefits have an actuarial value of 60 or
  higher

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Average employer plan 87 actuarial value
http//www.whatmattersbywellmark.com/premiums.php
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NY State of Health Standard Bronze Plan (Family)

• 6,000 deductible
• Out-of-pocket maximum 12,700 for a family with
  income-based adjustments
• 50 coinsurance after deductible for
• Ambulance services
• Emergency department (unless admitted)
• Urgent Care Center
• Advanced imaging
• Diagnostic tests
• Dialysis
• Hospice care
• Inpatient care for end of life care
  (preauthorization required)

Source NY State of Health Standard Products
courtesy of Len Rodberg
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CHALLENGE 4RESTRICTED CHOICE

• 42 of employees have no choice
• Private health insurance limits choice to
• the network of doctors and hospitals with
• whom they have negotiated contracts
• You pay more to go out of network

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ImprovedMEDICARE FOR ALL

• Expands Choice for Everyone
• No limit to a network of providers
• Free choice of doctor and hospital
• Delinks health insurance from employment

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HEALTH INSURANCE REFORM (ACA)

• Creation of HI Exchanges Expands Choice
• for Some in 2014
• Enrollment is limited to those in the individual
  and small group market
• Market-place of private HI plans
• No public option
• State-based, but no standard national plan
• No state single payer plan allowed until 2017

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Vermont is using its Exchange to facilitate
transition to Single Payer
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Health Care Reform in New York
StateGottfrieds New York Health Bill
A7860/S5425

• Universal coverage
• Comprehensive benefits
• Coordination of care, but no gatekeeping
• No cost sharing
• No private insurance that duplicates
• New York Health
• Funding by graduated payroll tax

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CHALLENGE 5UNEVEN QUALITY

• In 2014, U.S. was last among 11 industrialized
  nations in health system performance (quality,
  access, efficiency, equity and healthy lives).
• In 2004, we were 5th.
• Mirror, Mirror on the Wall
• Commonwealth Fund (2014)

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ImprovedMEDICARE FOR ALL

• National data on health care quality vs.
• proprietary data held by private HI
• National standards and public reporting
• HIT for the nation with patient protections
  every patient their own medical record on a
  credit card

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HEALTH INSURANCE REFORM (ACA)

• Comparative Effectiveness Research
• Innovation Center in CMS to test new payment and
  service delivery models PCMH ACOs (2011)
• Value based purchasing hospital payments based
  on quality reporting measures (2013)
• Readmission penalties (2014)
• Reduce hospital payments for hospital-acquired
  conditions (2015)

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CHALLENGE 6INSUFFICIENT PRIMARY CARE

• Average medical school debt 170,000
• Primary care is under-reimbursed
• Medical school graduates going
• into specialties

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ImprovedMEDICARE FOR ALL

• Free tuition/GME payback
• Debt forgiveness for primary care
• Malpractice payment for primary care
• providers (MDs, NPs and PAs)
• Patient-Centered Medical Homes (team
• based care, open access, coordination of
• care phone/internet medicine)

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HEALTH INSURANCE REFORM (ACA)

• 10 Primary Care Bonus Payments (2011-2017)
  estimate 4-10,000/provider/year
• Increase Medicaid payment to Medicare rates for
  primary care (2013)
• Independent Payment Advisory Board
• I-PAB (2014)

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CHALLENGE 7

• HOW TO PAY FOR REFORM

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ImprovedMEDICARE FOR ALL

• Public funding
• - Graduated payroll tax
• - Corporate taxes
• - Income taxes
• - Tax on unearned income (stocks, bonds,
  etc.)
• No premiums regressive
• No increase in overall health care spending,
  because of administrative savings

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ImprovedMEDICARE FOR ALL

• Non-profit/private delivery system under local
  control
• - This is not socialized medicine
• - Doctors not salaried by government
• - Hospitals not owned by government
• A publicly funded-privately delivered partnership

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HEALTH INSURANCE REFORM (ACA)

• Increased taxes
• - Excise tax on Cadillac health
  insurance plans (2018)
• - Medicare payroll tax increase from 1.45 to
• 2.35 if income greater than 200-250K
• - 3.8 tax on investment income
• 2. Savings from Medicare
• - Advantage (132 bill over 10 yrs)
• - Cut DSH payments (36 million)
• - Cut Medicare payments to hospitals
• (136 bill over 10 yrs)
• - Cut payments for home care/nursing homes (60
  bill)
• 3. Revenue from cracking down on fraud and
  abuse

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AFFORDABLE CARE ACT

• Expanded coverage, but not universal
• Cost control by market means
• No definition of benefits
• Risk of increasing under-insurance
• Choice thru State-based exchanges,
• but no public option
• 6. Primary care/ACO pilots
• 7. Funding Excise tax on high cost
  (comprehensive coverage) private HI and Medicare
  cutbacks

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Single Payer MEDICARE FOR ALLTHE PHYSICIANS
PROPOSAL(JAMA, August 13, 2003 p. 798-805)

• Universal coverage/automatic enrollment
• Low administrative costssingle payer
• Comprehensive coverage without co-pays
• and deductibles
• 4. Maximum choice of Doctor, NP, Hospital
• 5. Improved quality through nationwide HIT
• 6. Expanded primary care
• 7. Publicly-funded/privately delivered
• MEDICARE 2.0

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Conyers Expanded and Improved
Medicare for All/Single Payer
HR 676

• Universal - Extend Medicare to everyone
• Comprehensive benefits
• Choice of doctor and hospital
• No co-pays or deductibles
• Funded through progressive taxes
• Cost-effective Costs less than we now spend and
  contains future costs

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Sanders ( McDermott) American Health
Security Act S 1782 (HR 1200)

• Automatic enrollment
• Comprehensive benefits
• Operated by States using Federal standards
• Free choice of doctor and hospital
• Doctors and hospitals remain independent
• Public agency processes and pays bills
• Financed through payroll taxes

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April 14, 2010

Overall, do you think the benefits from
government programs such as Social Security and
Medicare are worth the costs of those programs
for taxpayers, or are they not worth the costs?
(results in ) Worth It Not Worth
It DK/NA National Sample 76 19 5 Tea Party
Sample 62 33 6
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Summary

• A system based on private insurance plans
• -- will not lead to universal coverage
• -- will not create affordable insurance
• A Medicare for All System
• -- can lead to universal, comprehensive coverage
  without costing more
• -- has the greatest potential to increase
  choice, improve quality and expand primary care
• -- can be financed fairly

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By 2037, under the ACA, Total Healthcare Costs
Will Equal Median Income
120,000
90,000
60,000
30,000





2000 2005 2010 2015 2020 2025 2030 2035 2040
Household Income
Optimistic ACA Assumptions
Young, R. Ann of Fam Med March/April 2012 vol 10
no. 2 156-162
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IS THE ACA - A STEP FORWARD OR BACKWARD?

• Forward Expands coverage Medicaid subsidies
• to buy private health
  insurance.
•  
• Backward Gives taxpayers to private insurers.
• My conclusion ACA is a great leap sideways!
•  
• We must go beyond the ACA to a single-payer
  system.
•  
• The arc of history (the moral universe) is long
  , but it
• bends towards access to heath care for all.

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WHAT CAN YOU DO?

• Sign up to testify at the NYS Assembly Health
  Committee Hearings - Website NYHCampaign.org
•  
• New York City, Tuesday, December 16th 10 AM
• NYU, 238 Thompson St
• MINEOLA, Wednesday, December 17th 10 AM
• Nassau County Leg Building, 1550
  Franklin Av
• 2. Write letters to your legislators
•  
• Join
• PNHP-NY Metro Chapter website
  www.pnhpnymetro.org
• Healthcare-NOW website
• www.healthcare-now.org

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CONTACTS AND REFERENCES

• PNHP National www.pnhp.org
• PNHP-NY Metro www.pnhpnymetro.org
• Bodenheimer TS, Grumbach K. Understanding Health
  Policy A Clinical Approach. McGraw-Hill (2012)
• Fein O, Birn AE. (editors). Comparative Health
  Systems. Am Jour Public Health (2003) 93 1-176
• OBrien ME, Livingston M (editors). 10 Excellent
  Reasons for National Health Care. New Press
  (2008)
• Potter W. Deadly Spin An Insurance Company
  Insider Speaks Out on How Corporate PR Is Killing
  Health Care and Deceiving Americans. Bloomsbury
  (2010)
• Geyman, J. Health Care Wars How Market Ideology
  and Corporate Power are Killing Americans.
  Copernicus Healthcare, Friday Harbor, Washington
  (2012)
• Himmelstein, DU, et. al. A Comparison of Hospital
  Administrative Costs in Eight Nations US Costs
  Exceed All Others by Far. Health Aff (2014)
  331586-1594.