Financial Costs – The Moral Healthcare Blog

Why are conservative attacks on universal healthcare always so lame?

An Astoundingly Tone-Deaf Piece by Sally Pipes in Forbes Magazine.

“The pandemic has revealed the rotten core of single-payer.”

I can scarcely fathom a more obtuse sentence. Here we are, in America, currently competing to be a shit-hole nation, and Ms. Pipes is so clueless that she thinks the pandemic has exposed other nations’ healthcare problems. Wow. Just wow.

Data from the Kaiser Family Foundation showed the uninsured rate in America, thanks to the Affordable Care Act, had declined from around 17% to about 10%. So, as of 2018, about 27.9 million people in the US were uninsured. (For those of you who have not had the misfortune of reading Ms. Pipes work, these 27. 9 million people can’t even qualify for the horrific queues Ms. Pipes laments about.) Since the pandemic, these numbers have skyrocketed, as Mr. Trump might say. With the massive waves of unemployment due to the pandemic, Families USA estimated more than 5 million laid-off workers joined the ranks of the uninsured. They, too are not even eligible to get in the queues for care that Ms. Pipes laments.

Ms. Pipes points to the sad case of a man who died from kidney failure due to delayed elective surgeries in Canada. Sad, of course, but Ms. Pipes is no doubt aware of the saying attributed to Stalin, “A single death is a tragedy; a million deaths is a statistic” While Ms. Pipes is lamenting the Canadian system for this tragedy, the US healthcare system is guilty of the statistical heap of deaths due to kidney failure in the US. According to the CDC via the National Kidney Foundation:

Early referral to nephrology is associated with improved CKD outcomes, however Black or African American patients are more likely to have delayed referral or no nephrology referral at all. Communities of color are also overrepresented among patients with end-stage kidney disease. For every three non-Hispanics who develop kidney failure, four Hispanics develop kidney failure. Black or African Americans are three times more likely to suffer from kidney failure than Whites.

Pipes notes that three dozen people have died in Ontario due to cancelled heart surgeries. I hate to make light of this, because, you know, most Canadians care about each other and this bothers them. But in America, this is chump change, in terms of the cost in human lives. Again, More than 30 million Americans can’t even get into the queue for the cancelled heart surgeries. As Ms. Pipes probably knows, showing up in the Emergency Department actually having a heart attack does not turn out as well as having a primary care doctor you can afford to see and maybe try to avoid the heart attack in the first place. According to the American Heart Association (references omitted),

Americans with CVD risk factors who are underinsured or do not have access health insurance, have higher mortality rates and poorer blood pressure control than their adequately insured counterparts. Uninsured stroke patients also suffer from greater neurological impairments, longer hospital stays, and higher risk of death than similar patients with adequate coverage. Not having coverage or having inadequate coverage also impacts patients’ financial stability. More than 60% of all bankruptcies in 2007 were a result of illness and medical bills – more than a quarter of these bankruptcies were the result of CVD. Nearly 80% of those who filed for medical bankruptcy were insured. Additionally, uninsured and underinsured patients are more likely to report access issues related to cost, including not filling a prescription, forgoing needed specialist care, or even not seeking medical care during an acute heart attack. Delaying care can have huge negative consequences for both patients and for the healthcare system. To that extent, it is clear that not having access to quality, comprehensive health coverage and care is bad for patients.

Her next example is a woman from Nova Scotia who had to resort to a GoFundMe campaign to pay expenses for lung transplant surgery! Can you imagine? Oh, wait, about half of all money raised on GoFundMe is for medical expenses. The Guardian recently reported that “25% of Americans say they or a family member have delayed medical treatment for a serious illness due to the costs of care, and an additional 8% report delaying medical treatment for less serious illnesses.” BTW, the Guardian sites an anecdote about a woman who called in sick due to pneumonia and lost her job and her health insurance for exceeding her employer’s attendance requirements by one day.

And speaking of financial hardship, or the “financial toxicity” of disease, researchers reported in 2018, pre-pandemic, that, for Americans newly diagnosed with cancer between 2000-2012, at just year two, 42.4% had depleted their entire life’s assets, with average losses of $92,098. Only 7.9% of these were uninsured.

The overarching theme of this piece is that somehow citizens with universal and affordable access to care are paying a steeper price than those of us with an unreliable and expensive healthcare infrastructure. She gives examples of people with access to universal, affordable healthcare are now caught in a backlog due to the pandemic. That is awful. But, the idea that America is somehow immune to the disruptions necessitated by COVID-19 is so ludicrous that I don’t think it needs dignified with a reference. If the planet you are living on has not allowed in enough oxygen to allow you to not see what utter nonsense this is, then you stopped reading this a long time ago!

This wouldn’t be a Sally Pipes piece without a partisan attack, and she does not disappoint, attacking Joe Biden and Democrats for working towards universal healthcare. She closes with this precious line, “The pandemic has revealed the rotten core of single-payer.” I have been saying for some time now that avarice and amorality are the rotten core of American Healthcare, and the pandemic has, as possibly it’s only upside, exposed the truism that American healthcare is a mess.

Cognitive Science Lessons.

People like Ms. Pipes have spent decades making sure that stories like the ones she has in her articles are pushed front and center in people minds. It is very effective in insuring predisposition to opposing healthcare reform for the following reasons:

Recency Effect and Availability Bias. Placing narratives, especially emotionally charged ones, as Pipes’ does expertly, is a powerful tool. It activates our mind in several ways. Because we hear stories like these repeated by conservatives over and over again (mostly the same set of stories), they are both recent and available, and thus come to mind when we are asked to think about universal healthcare. When there is a discussion of the topic, these types of anecdotes come to mind and reinforce opposition, if that is our predisposition, to change. The obvious counter to this is to make the “American Horror Stories” that physicians, nurses and really anyone who has had an interaction with the healthcare system, know so well, and tell those thousands and millions of stories! Even for someone who has run the gauntlet and gotten the crowning jewels of medicine, like a transplant or interventional procedures or survived sepsis in the ICU, it is rare to not have numerous tales of the hassles of prior authorization and “explanation of benefits” forms and bills and checks and everything that makes the business of medicine such a horror show.
Loss or Risk or Dread Aversion. Knowing or hearing stories of dreadful outcomes creates powerful aversion in us. If we hear stories of people not receiving care and dying, that arouses significant emotions and colors our assessment of a problem. Thus, when stories are recent, available to our minds readily and scary, they are impactful. And as with the former effects, those who know the benefits of universal healthcare that we see around the world, and the horror show we see here in America, this should be our wheelhouse. We have the stories of the heartlessness and cruel rationing of care in front of us every day. We need to collect them and use them. Recency, availability and dread aversion need to become the friends of advocates for universal healthcare.
I was going to add a third point here about the pro-business, pro-corporate brainwashing that has occurred in the US over the past half century or so, but rather, I’ll just ask you to read Anand Giridharadas’ Winners Take All, or at least get a taste of it here in this Guardian review. And for those who think private corporations always handle things better than government or other public agencies, I’ll just ask you to recall the last time you called your a) cable company b) health insurance company or c) well, almost any large corporation.

Overruns Forcing Lower Payments to Some Providers in Stopgap Health Program – NYTimes.com

WASHINGTON — The Obama administration said Monday that it was cutting payments to doctors and hospitals after finding that cost overruns are threatening to use up the money available in a health insurance program for people with cancer, heart disease and other serious illnesses.

The administration had predicted that up to 400,000 people would enroll in the program, created by the 2010 health care law. In fact, about 135,000 have enrolled, but the cost of their claims has far exceeded White House estimates, exhausting most of the $5 billion provided by Congress.

Under a new policy issued by Kathleen Sebelius, the secretary of health and human services, “health care facilities and providers will get paid less” for providing the same services to patients in the federal program, known as the Pre-Existing Condition Insurance Plan.

In most cases, payments to health care providers will be capped at Medicare rates, which are substantially less than the commercial insurance rates they have been receiving. The new policy generally prohibits doctors and hospitals from increasing charges to consumers to make up the difference.

Michael T. Keough, the executive director of the North Carolina Health Insurance Risk Pool, said the new policy was one of several steps taken recently by federal officials to control spending.

“They are trying to stanch the hemorrhaging,” Mr. Keough said.

The federal government notified some states last month that it was setting a ceiling on costs that would be reimbursed from June through December of this year. In effect, state officials said, the new limits shift the financial risk of the program from the federal government to those states.

Congress established the program to provide coverage to people with pre-existing conditions who had been uninsured for at least six months, and Ms. Sebelius has said, “It literally saves lives.”

The program provides a transition to 2014, when most consumers will be able to obtain insurance regardless of their pre-existing conditions.

Federal officials froze enrollment in the program in February, but costs continued to grow rapidly.

Overruns Forcing Lower Payments to Some Providers in Stopgap Health Program – NYTimes.com

It is worth remembering, that these patients had run out of options for access to treatment before the program.

Papa John’s: ‘Obamacare’ will raise pizza prices – POLITICO.com

If you thought Obamacare was going to be expensive, Papa John’s is here to show exactly how little an effect on businesses it will be to buy health insurance for employees – less than 15 cents a pizza! As Pete Townshend once said, “I call that a bargain, the best I ever had!”

Pizza chain Papa John’s told shareholders that President Obama’s health care law will cost consumers more on their pizza.

On a conference call last week, CEO and founder John Schnatter (a Mitt Romney supporter and fundraiser) said the health care law’s changes — set to go into effect in 2014 — will result in higher costs for the company — which they vowed to pass onto consumers.

“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis,” Schnatter said.

An Insurance Maze for U.S. Doctors – NYTimes.com

An Insurance Maze for U.S. Doctors – NYTimes.com:

“Researchers asked hundreds of physicians and administrators in private practices across the United States and Canada how much time they spent each day with insurers and other third-party payers, tracking down information for claims that were denied or incorrectly paid, resolving questions about insurance coverage for prescription drugs or diagnostic tests, and filing the different forms required by each and every insurance company.

“Physicians in Canada, where health care is administered mainly by the government, did spend a good deal of time and money communicating with their payers. But American doctors in the study spent far more dealing with multiple health plans: more than $80,000 per year per physician, or roughly four times as much as their northern counterparts. And their offices spent as many as 21 hours per week with payers, nearly 10 times as much as the Canadian offices.

“The amount of time we spend on this is just crazy,” said Dr. Sara L. Star, a partner in a three-physician pediatrics practice in suburban Chicago. “But each insurance company has its own language, its own set of rules and specific contracts with certain laboratories, hospitals, physicians and pharmaceutical companies.”

The Health Affairs article is here.

Health Care Cost Increase Is Projected for New Law – NYTimes.com

But Mr. Foster said, “Overall national health expenditures under the health reform act would increase by a total of $311 billion,” or nine-tenths of 1 percent, compared with the amounts that would otherwise be spent from 2010 to 2019.

In his report, sent to Congress Thursday night, Mr. Foster said that some provisions of the law, including cutbacks in Medicare payments to health care providers and a tax on high-cost employer-sponsored coverage, would slow the growth of health costs. But he said the savings “would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions.”

The report says that 34 million uninsured people will gain coverage under the law, but that 23 million people, including 5 million illegal immigrants, will still be uninsured in 2019.

Sounds like success to me. Uwe Reinhardt used to estimate it would cost an additional $100 billion a year to cover everyone. This doesn’t seem to far off from that estimate.

Escaping To England To Find Treatment She Can Afford

From Kaiser Health News Today:

Sometimes my husband Roger gripes about what he calls the British “nanny state.” So much is done for the English, he maintains, they can’t think for themselves anymore. Showers, for instance, are statutorily equipped with automatic shut-off valves on the thermostats. In case the water gets too hot. I remind him that the opposite of the nanny state is me in the U.S. with breast cancer and no steady job and insurance.

I had some wonderful doctors in New York, caring and helpful. But I also had to fight with my hospital there to get the tests I needed, and several of the specialists were so difficult to deal with I chose medical protocols to avoid them—no matter what the best option for treatment was. What I really notice about the health care providers in England is that they seem to have more than half a second for me – and they actually listen.

A nice piece about the nightmare that medicine is not in England. She left the US to go to England because she couldn’t afford the US health care system, and found out there were other bonuses to a differenet model of financing health care.

Paying for Reform – Updated

I was asked recently, how will we pay for reform. Tom Coburn, on Sermo.com, asked physicains to support him not supporting us physicians in asking for repeal of SGR with its $250 billion dollar price tag. I don’t know when he had this sudden change of heart, feeling physicians should not get paid more for Medicare patients, but hey…

The other question was about the overall price tag of HR 3200, somewhere in the neighborhood of $100 billion a year, or $1 trillion over ten years.

[Cross posted at DailyKos.]
No problem. First and best answer: REPEAL THE BUSH TAX CUTS!
http://www.usnews.com/blogs/john-farrell/2009/04/15/no-tea-party-protests-for-teddy-roosevelt-republican-champion-of-the-income-tax.html

They were bad economics, bad public policy, and bad morally.

UPDATE: Susie Madrak at Crooks and Liars summarizes a Citizens for Tax Justice report on the disaster that the Bush Tax cuts were and are:

I’d advise listening to the two EXCELLENT “This American Life” episodes on HC reform:
http://cmhmd.blogspot.com/2009/10/this-american-life-hc-reform-part-2.html

Follow the links, download the MP3’s and you can make audio CDs for the car.

There are lots of answers in there, but I’ll give you a few easy ones:

1.) McAllen, TX and EOL Care:

http://cmhmd.blogspot.com/2009/05/annals-of-medicine-cost-conundrum.html

That’s actually two, practice variation and EOL care.

2.) Prescription co-pays: $10 for a $20 prescription, $30 for a $600 prescription. (Unless you have a coupon from the manufacturer to make the $30 copay $0.00 – the second TAL episode explains this.)

3.) George Lundberg has a few ideas:
http://cmhmd.blogspot.com/2009/08/health-care-blog-how-to-rein-in-medical.html

4.) Uwe Reinhardt has a modest proposal:
http://healthaffairs.org/blog/2009/07/24/a-modest-proposal-on-payment-reform/

5.) Wendell Potter, too:
http://www.time.com/time/politics/article/0,8599,1920893,00.html

6.) Administrative costs:
http://cmhmd.blogspot.com/2009/07/health-affairs-2-articles-on-cost-of.html

Bottom line is, as has been suggested before, passing the bill is going to be half the battle, implementing reform in a way that is most beneficial to patients at the least cost to us as a society is next up.

But let’s get everyone taken care of first, and avoid the 18K to 45K people dying EVERY YEAR due to lack of access to health care and THEN we’ll deal with reducing costs. Turns out, if you read the Gawande article, they may be by doing the exact same things.

And finally, $1 trillion over ten years is $100 billion a year, and we spend $2.5 trillion a year on HC already, so that is very little money in the grand scheme of national economics. So, as Uwe would say, “Go explain to God why you cannot do this. He will laugh at you.”

Cheers,http://cdn.crooksandliars.com/files/uploads/2009/09/nationaldebt_42d6b.jpg

Facts About Healthcare Costs – National Coalition on Health Care

NCHC Facts About Healthcare – Health Insurance Costs:

In 2008, total national health expenditures were expected to rise 6.9 percent — two times the rate of inflation.1 Total spending was $2.4 TRILLION in 2007, or $7900 per person. Total health care spending represented 17 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP.1

In 2008, employer health insurance premiums increased by 5.0 percent – two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,700. The annual premium for single coverage averaged over $4,700.2

…………….

National Health Care Spending

In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012.1 Health care spending is projected to reach $4.3 trillion by 2016.1
Health care spending is 4.3 times the amount spent on national defense.3

In 2008, the United States will spend 17 percent of its gross domestic product (GDP) on health care. It is projected that the percentage will reach 20 percent by 2017.1

Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens.3

Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.4

Employer and Employee Health Insurance Costs

Premiums for employer-based health insurance rose by 5.0 percent in 2008. In 2007, small employers saw their premiums, on average, increase 5.5 percent. Firms with less than 24 workers, experienced an increase of 6.8 percent.2

The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,700 in 2008. Workers contributed nearly $3,400, or 12 percent more than they did in 2007.2 The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712).

Workers are now paying $1,600 more in premiums annually for family coverage than they did in 1999.2

Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period.2

Health insurance expenses are the fastest growing cost component for employers. Unless something changes dramatically, health insurance costs will overtake profits by the end of 2008.5

According to the Kaiser Family Foundation and the Health Research and Educational Trust, premiums for employer-sponsored health insurance in the United States have been rising four times faster on average than workers’ earnings since 1999.2

The average employee contribution to company-provided health insurance has increased more than 120 percent since 2000. Average out-of-pocket costs for deductibles, co-payments for medications, and co-insurance for physician and hospital visits rose 115 percent during the same period.6

The percentage of Americans under age 65 whose family-level, out-of-pocket spending for health care, including health insurance, that exceeds $2,000 a year, rose from 37.3 percent in 1996 to 43.1 percent in 2003 – a 16 percent increase.7

The Impact of Rising Health Care Costs

National surveys show that the primary reason people are uninsured is the high cost of health insurance coverage.2

Economists have found that rising health care costs correlate to drops in health insurance coverage.8

A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.9 Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

A new survey shows that more than 25 percent said that housing problems resulted from medical debt, including the inability to make rent or mortgage payments and the development of bad credit ratings.10

About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs. 11

A survey of Iowa consumers found that in order to cope with rising health insurance costs, 86 percent said they had cut back on how much they could save, and 44 percent said that they have cut back on food and heating expenses.12

Retiring elderly couples will need $250,000 in savings just to pay for the most basic medical coverage.13 Many experts believe that this figure is conservative and that $300,000 may be a more realistic number.

According to a recent report, the United States has $480 billion in excess spending each year in comparison to Western European nations that have universal health insurance coverage. The costs are mainly associated with excess administrative costs and poorer quality of care.14

The United States spends six times more per capita on the administration of the health care system than its peer Western European nations.14

Acrobat version with references is here.

Study Links Medical Costs and Personal Bankruptcy – BusinessWeek

Study Links Medical Costs and Personal Bankruptcy – BusinessWeek:

“Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.

“Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 study of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings. This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college.”

The abstract is here, I cannot access the full text, unfortunately.

How health care costs contribute to income disparity in US – The McKinsey Quarterly – health care costs income disparity US – Economic Studies – Country Reports

The top-income category (earning on average $210,100 annually1) has enjoyed rising incomes and growing employer-paid health care benefits, which have made their out-of-pocket spending on health care a relatively small and affordable portion of total spending. The higher-middle-income category (earning an average of $84,800 annually) and the lower-middle-income group (earning on average $41,500), have also seen increasing benefits and incomes—but at a much slower rate, making the uncovered portion of their health care costs ever-more expensive. In the bottom-income category (earning an average of $14,800 a year), incomes have been stagnant, and their employers are less likely to pay for their health insurance. This group is finding any health care difficult, if not impossible, to afford.

As part of a study of widening income gaps between US households, we found that rising employer-paid health insurance premiums constitute a growing share of the
combined income of lower-paid employees—a much larger share than for those who
are higher paid. For those workers within the bottom-income group who are insured (22 percent), the ratio of employer-paid premiums to household income is 20 percent. That compares with 3.3 percent for the top-income group, in which nine out of ten workers are insured.

This is in line with New America’s estimate of 17% of household compensation now going to health care, which, really, is a prohibitive amount for lower and middle income families.