August 24, 2016
Most will remember that one of the most spirited debates during congressional consideration of the Affordable Care Act, back in the early days of the Obama administration, concerned the proposed creation of a government-run health insurance plan that would compete alongside private plans in the new insurance exchanges. Lawmakers rightly rejected the idea, arguing that it would create a degree of federal involvement in health insurance far exceeding the comfort level of moderates and conservatives, create an uneven and potentially destabilizing playing field in the health coverage marketplace, and cause a displacement of employer-based insurance as a result of federally-set, artificially-low premiums and deductibles.
Even HHS Secretary Kathleen Sebelius said, at the time, that the public option was not “an essential element for reform.”
As we’re witnessing the health insurance exchanges facing some well-publicized difficulties today, we’re hearing more calls from candidates and interest groups to bring back the public option.
We need to give those calls a deaf ear.
No doubt, the next Congress and administration will need to address the state of the Obamacare exchanges, making the right policy decisions to enable health plans to compete without absorbing unsustainable losses. Forcing those plans to compete with a taxpayer-subsidized insurance alternative will only bring less stability, not more.
And just as important to the long-term sustainability of our healthcare system and accessibility to care for a growing number of patients, the public option is detrimental to physicians and hospitals. A government-run plan that reimburses for services at Medicare rates will “disrupt the fragile financial system that sustains hospitals today.”
The quotation in the previous paragraph came from a letter jointly written this summer by the American Hospital Association and the Federation of American Hospitals. Their letter points out that Medicare is paying less than the actual cost of care being delivered to patients. They note, “adding millions more enrollees whose health care would be reimbursed at Medicare rates would likely threaten access to needed health care services, particularly for those in vulnerable communities.”
They added, “We continue to believe the framework of health care exchanges providing subsidized coverage, combined with expansion of the Medicaid program, was the best means of achieving universal coverage. The addition of a public option at this time would only introduce greater uncertainty to a health care system that is experiencing rapid transformation.”
We agree. Let’s strengthen the health insurance exchanges and leave the public option as an interesting chapter in the history of healthcare policy debates.
August 17, 2016
It’s like a bad rerun, but one with real consequences. Every two years, some political candidates and the interest groups that support them decide the best way to boost their share of the 65-and-older vote is to scare these seniors into believing that the candidate on the other side is going to place their Medicare program in grave danger. This tactic is obviously successful or candidates wouldn’t keep doing it, but its effectiveness doesn’t make it right.
There is no reasonable disagreement that the Medicare status quo is not sustainable. The Medicare Board of Trustees, in its most recent actuarial projection, said the program will become insolvent in 2028. We need to discuss solutions to strengthen Medicare. Campaigns are traditionally the platform through which new ideas can be submitted for public debate and consideration. That’s not happening, though, when opportunistic groups portray any reform ideas as a weapon that will obliterate grandma’s healthcare.
This is happening already in the 2016 campaign. In New Hampshire, for example, Senator Kelly Ayotte (R-NH) is being falsely accused by a national labor union of advocating reforms that will cost seniors thousands of dollars. This isn’t true, and an op-ed I wrote on the subject was published today in the Manchester Union Leader. I’m sharing it with you below.
Those of us who realize the need for sensible, essential Medicare reform need to speak out against these exercises in political misinformation. The stakes are high and we need to fight their version of Mediscare horror fiction with the facts. Here is the text of the Union Leader op-ed:
One of the most tried and true campaign strategies, utilized for decades now, is to scare senior citizens to the polls by convincing them that their Medicare and Social Security are being threatened. Politicians and their allies keep doing this, regardless of the tactic’s moral and ethical implications, because it works. Medicare is such an important lifeline to seniors, they naturally respond if they think they’re about to lose it, or if they believe their care will start costing them more money.
New Hampshire voters are the current targets for Medicare scare tactics. The American Federation of State, County and Municipal Employees labor union (AFSCME) has been airing television ads showing a woman caring for an elderly relative and saying that Sen. Kelly Ayotte wants to turn Medicare into a “voucher program, costing us thousands.” It’s a well-produced piece of television that would give any Medicare beneficiary or caregiver, not armed with facts, reason for concern.
Here’s the problem. This ad specifically, and most of those in its genre, rely on gross distortions and, in many cases, outright untruths to frighten the bejeebers out of its target audience. And people and organizations dedicated to building a stronger Medicare program deplore campaign propaganda like this because it makes it all the more difficult to take action to save a program that has a very short solvency timeframe.
New Hampshire voters should be clear on one thing. Nobody in Congress has proposed changes to Medicare that will cost them thousands of dollars. In fact, just the opposite is true. The nonpartisan Congressional Budget Office has said that the reforms advocated by Sen. Ayotte, and others from both parties, would actually save most seniors money on their Medicare out-of-pocket costs.
When groups like AFSCME use scary terms like “voucher program,” they are actually referring to giving seniors greater power of consumer choice to have the kind of health coverage that meets their specific needs. This works well, for example, in the Medicare Part D prescription drug program, in which seniors choose from among various plans with different premium costs and coverage levels. A recent national survey showed the Part D program enjoying an 88 percent approval rating among its enrollees. And the Medicare Advantage program, which has seen a significant rise in beneficiary participation, also allows seniors a choice of plans that are competing to offer the best value.
Consumer choice is not as ominous a phrase, however, as voucher program.
The larger problem here lies in the fact that campaigns set the stage for future policy making. To advocate no changes to Medicare is tantamount to supporting its demise. Medicare’s actuaries reported this year that the program will become financially insolvent in 2030. AFSCME and others that want to punish proponents of Medicare reforms are essentially saying they’re fine with future generations, and even today’s middle-aged workers, being out of luck when they reach 65 and expect Medicare coverage.
New Hampshire voters, and all of us in this country, for that matter, deserve more honesty and more responsibility in the way campaign rhetoric is carried out. We need a forthright, candid national discussion on the future of Medicare without falsely accusing Kelly Ayotte and others of wanting to bankrupt someone’s grandmother. Even if it has historically worked to scare seniors to the polls, it has never been the right thing to do.
July 27, 2016
As it was enacted into law in 2003, the Medicare prescription drug benefit, which would come to be known as Medicare Part D, had no shortage of critics. A New York Times story cited fears that the program’s private sector-based structure would leave “the elderly exposed to a future of soaring drug costs.”
Others said that insurers would never agree to create drug-only plans and that the marketplace would be bereft of options for seniors. And then there were the persistent critics who argued that offering seniors a broad range of competitive plan choices, instead of a one-size-fits-all government-run approach, would only confuse and frustrate them.
Now, ten years after Medicare Part D was fully implemented, those arguments have long been put to rest. Our Medicare Today coalition conducts an annual nationwide survey of seniors to ascertain how well the prescription drug program is working for them. The results, as has been the case every year, show that this remains an enormously popular program that is changing lives for the better by making prescription medications affordable and accessible.
Here’s what we learned from this year’s Morning Consult survey of approximately 2,000 seniors:
- 88 percent are satisfied with the Medicare Part D coverage
- 80 percent say their plan is a good value
- 92 percent report their plan is convenient to use
- 84 percent say it is important for them to have a variety of plans from which to choose (the ‘competition will cause confusion’ argument never did hold water and was, quite frankly, demeaning to seniors)
And, as to the concerns expressed over a decade ago regarding ‘soaring’ costs, Medicare Part D’s structure in which plans compete on the basis of value has resulted in average monthly premiums staying relatively stable at just over $30 for several years now.
Unfortunately, years after the original criticisms of Part D have long been vanquished by the program’s indisputable successes, there are still efforts to scramble its existing structure and give the federal government a significantly greater role in pricing and drug accessibility. We can only hope that policymakers take note of these polling numbers and realize it would make little sense to fundamentally change a program that is not only popular but fulfilling its intended mission.
July 07, 2016
“Policy should not lose sight of the fact that new treatments represent miracles to many patients, and should encourage more, not less innovation.”
With those words in her op-ed in the Wall Street Journal, Susan DeVore, president and CEO of Premier, Inc. and chair of the Healthcare Leadership Council, gets right to the heart – or what should be the heart – of the national debate over pharmaceutical pricing. With so many new lifesaving therapies in various stages of development and clinical testing, how do we make these medicines accessible to patients and consumers while encouraging even more beneficial innovation?
Ms. DeVore answers that question with one word – competition. As she accurately points out, new breakthrough drugs like the cure for Hepatitis C often enter the marketplace with extremely high prices, but those costs drop considerably when competing products are made available. Thus, one important answer to the drug pricing issue is to speed the process by which new drugs and medical technologies are approved for the market. The Healthcare Leadership Council has made several recommendations in this area.
The answer is most certainly not to be found in the form of government price controls. As Ms. DeVore writes, “The reality is that government negotiation will translate into price controls. I have limited faith in the government’s ability to set pricing better than the market, or keep pace with innovation. Their solution will invariably set prices too low, creating a chill on research and discovery as talent and capital leaves the sector to seek a better return elsewhere.”
The Premier CEO is absolutely right. We can do better than a pharmaceutical pricing debate that, up to now, has been largely binary – either price controls or not. We need to discuss mechanisms and policies that will bring more innovative products to the market and, in so doing, strengthen accessibility and affordability.
June 22, 2016
On a day in which the House Republicans are announcing their alternative health reform plan, House Democrats are staging a sit-in over gun laws, and the presumptive presidential nominees are firing insults at each other, it’s understandable if the annual issuance of the Medicare Board of Trustees report gets a little lost in the mix.
It’s a report quite worthy of attention, though, because its pages contain more than one call to action.
First, the trustees are now projecting that the Medicare program will reach insolvency in 2028, two years earlier than last year’s estimate. This is not an insignificant change. Think of the time required to enact comprehensive health reform, from the Nixon Administration’s efforts in the early 70s to the Affordable Care Act signing in 2010, or the decades spent trying to bring a prescription drug benefit to Medicare. Twelve years may seem like a considerable amount of time to make Medicare financially sustainable and reliable for future generations but, in legislative terms, it’s not long at all.
We need serious discussions on how to modernize and strengthen Medicare. The successes of the Medicare Advantage and Medicare Part D prescription drug programs provide sound examples lawmakers can use in shaping the future. Those programs have utilized consumer choice and competition as drivers to provide high-quality care at reasonable costs. And, in fact, the Congressional Budget Office has concluded that bringing those choice-and-competition qualities to Medicare as a whole would reduce program spending and beneficiary out-of-pocket costs.
The Medicare Trustees report sends a clear signal that this discussion shouldn’t wait.
Another important aspect of the trustees report concerns the Independent Payment Advisory Board (IPAB). Many expected projected spending levels in this year’s report to trigger IPAB into action. That wasn’t the case, although that threshold is expected to be reached next year. Congress shouldn’t wait until then to make this bad idea go away for good.
Over 500 organizations representing patients, healthcare providers and employers have written to Congress already, pointing out that a mechanism which shifts power from elected representatives to unelected appointees would do significant damage to Medicare beneficiaries and the healthcare system as a whole. By making harsh, arbitrary cuts to Medicare payments to healthcare goods and services instead of focusing on bringing greater value to the program, quality and access would be adversely affected.
No, the Medicare trustees didn’t flip the switch to activate IPAB this year, but it’s an imminent problem and it needs to be addressed sooner rather than later.