A Public Option Is Not Enough: The Pain of Narrow Networks

During the Democratic primary campaign, several candidates have come out in support of a public option as their preferred strategy for improving the American healthcare system. While details are scarce in candidates’ proposals, generally speaking a public option is a federally-administered insurance plan that competes with but does not replace commercial insurance plans.

With a public option, people have the choice to pay a premium to be insured under the federally-administered plan. Others would remain insured on commercial plans through employers, unions, or the individual marketplace. This is the supposed draw of the public option, the “if you like your plan, you can keep it” appeal.

However, what a public option does not address is network limitations which are the source of much of the frustration with our current health care system. Network limitations are the reason that you can only see certain doctors or visit certain hospitals with your insurance plan. If you go out-of-network, you have to pay a higher co-pay or even the full cash price just to see the doctor you prefer.

However, networks are renegotiated every year. Just because a doctor is in your network one year is no guarantee that they will be in your network the next. If you have been seeing your same primary care doctor for twenty years and value that relationship, out of nowhere they can inexplicably be declared “out of network” and you’ll be forced to find a new one or face hefty fees to have continuity with a doctor you trust.

If you get insurance through your employer, they can also choose arbitrarily to switch commercial insurance plans without your input or consent. Right now, this sudden change in coverage happens to one in four people every year. If you like your current PCP, you better hope your boss isn’t feeling fickle.

If you go to a hospital or emergency department that is in your network but one of the doctors who takes care of you there is out-of-network, you will still get stuck with a surprise medical bill which currently happens with 42% of all hospital admissions, sticking patients with an average bill of $2000 over and above what they would have paid otherwise.

Similarly, each insurance plan has their own formulary–a list of medications organized by how large of a co-pay you must contribute to have your prescription filled. Every year, insurance companies will renegotiate their formularies and without your input declare a medicine that you’ve been taking for years to be “non-preferred” leaving you again to stop or switch medications lest you be hit with a heavy fine. If your doctor determines that a non-formulary medication is actually the best treatment for you, there is often nothing they or you can do about it.

Again, if you get your insurance through your employer and they decide to switch plans or you change jobs, you can easily be thrown off of the medications you need for your health.

If it isn’t abundantly clear from the above, much of the frustration of our current health care payment system is caused by the presence of narrow networks and limited formularies in which your choice of doctors or medicines is not based on your medical needs, but on the backroom dealings of business executives. With a public option, none of this changes.

Health care is expensive in America because it profits those with power

In this excellent review of the late Uwe Reinhardt’s book “Priced Out,” Dr. Adam Gaffney lays out in cogent terms why we cannot understand rising health care spending in America in simple terms of either over-utilization or insurer-provider price negotiation.

This writing is especially impactful to me because I became interested in health care due to frustration with how high health care prices were keeping people in poverty from getting the care they needed, and was initially very persuaded by super-utilization arguments. I followed the work of people like Jeffrey Brenner because at the heart of it, I saw compassion for patients harmed by lack of preventive care and social services. However, I also absorbed the subtle patient-blaming aspects of this approach.

In medical school at UPenn, I got involved in excellent research by Heather Klusaritz through which I had the opportunity to interview patients who had been labelled at super-utilizers due to frequent visits to emergency departments. In these conversations, I was forced to confront my internalized bias against these patients who were described as “inappropriately” visiting emergency departments for complaints that were not true emergencies. Through these conversations, I gained a deeper understanding of the inadequacy of our health care, public health, and public welfare infrastructure. If frustration with these systems led me to medical school, it was in medical school that I saw just how bad things really were.

With faculty like Zeke Emanuel providing our health care systems lectures, I initially bought into neo-liberal arguments that these were simply failures of incentives. Part of me believed that if enough Ivy League technocrats crafted just the right policies–Rube Goldberg-esque as they might be–private insurers and for-profit hospitals would provide for the health care Americans needed. However, over time I began to see how market forces would never be sufficient to guide health care allocation and development, and it will only lead to ever-rising health care spending at the expense of everything else in our budgets.

For both the private insurers and profit-driven hospital systems, increasing health care spending is just more cash in their pockets. Your deductible is their kid’s private school tuition payment. Health care isn’t expensive in America because of utilization. Health care is expensive in America because it profits those with power. There is exactly one real policy solution to the fact that we now pay nearly $11,000 per year for health care in America compared to an average of $4,000 per year in OECD countries and that solution is single-payer Medicare For All.

High health care spending in America means lower wages for Americans. It means high deductibles, frequent medical bankruptcies, and families rationing health care because they need some money for groceries. It is inhumane and we’ve tolerated it for far too long. As long as private insurers are the payers in the American health care system, there will always be insurance trolls whose priority is to deny cancer patients their chemotherapy or to put huge paperwork burdens in front of patients and doctors to discourage necessary care. As long as private insurers are the payers, hospital systems will spend enormous amounts of money on flashy branding and sleek buildings to attract wealthy patients as if a person’s income determined the value of their life.

So read Adam Gaffney’s piece and vote only for those politicians who support Medicare For All because it is truly our only way to a better future for health care.

Medicare For All: An Update

A little over a year ago, I made my personal case for Medicare For All. In that post, I argued that the American health care system has intolerable financial toxicity on patients and that a transition to a single payer system, such as Medicare For All, was the only feasible way to achieve true universal health care coverage in which a person’s economic status was not the main determinant of the health care they receive.

Since then, Medicare For All has continued to gain momentum with many of the leading contenders for the Democratic presidential nomination like Bernie Sanders, Elizabeth Warren, Kamala Harris, Cory Booker, and Kirsten Gillibrand explicitly in favor of this approach.

Pramila Jayapal (my very own congressional representative) has released an updated house bill (H.R. 1384, summary here) with 108 cosponsors, to implement Medicare For All. This operates as a companion bill to Bernie Sanders’ Medicare for all bill (S.1804) with 16 cosponsors in the Senate.

As coverage has increased, I’ve seen some important points about Medicare For All go missing from the popular discourse, so I would like to highlight a couple of points here.

What will the quality of coverage be like?

Although I feel that overall “Medicare For All” is a great slogan, it sometimes creates confusion because many assume that this means that the current Medicare plan would simply be extended to all Americans. However, the Jayapal and Sanders bills both outline a heath insurance payment system that is far more generous than current Medicare. For that matter, it’s far more generous that most commercial insurance. We’re talking no copays, no deductibles, unlimited network, vision benefits, dental benefits, and long-term care benefits. For the patient, this means that if the health care is medically indicated there are zero financial barriers to you receiving it.

How are we going to pay for it?

Many commentators have brought up that the budget allocation for a Medicare For All bill, by nature of paying for all Americans’ health care, is quite large. However, when compared to current national health care spending, the increase is marginal. For example, using estimates from The Urban Institute, annual health spending would increase from $2.8 trillion per year to $3.5 trillion per year.

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That additional $500 billion gets 34 million more Americans medical coverage, 75 million more dental coverage, and 167 million more vision coverage. That is in addition to upgrading every American’s health care coverage as described above. There are a variety of ways to pay for this including repealing Trump-era tax cuts ($230 billion per year) and implementing a wealth tax ($275 billion per year). Matt Bruenig has also laid out how to capture current employer health insurance spending through payroll taxes.

Advocacy versus legislative action

It’s worth emphasizing that Medicare For All is still in the advocacy stage, not in the legislative stage. Although a majority of Americans already support Medicare For All, activists and advocates are working to build upon that strong momentum and build enthusiasm amongst legislators who can bring Medicare For All into reality. Not every nitty gritty detail is going to be exactly worked out at this stage and that’s okay. Good quality legislation takes time to build and refine. It often requires ongoing amendment after passage. We as a nation have proven ourselves capable of this in the past and we can continue to be capable of it as long as we remain committed to universal, comprehensive health care coverage that is free at point of service.

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Do No Harm: A Doctor’s Case For Single Payer

In 2013, Drs. Ubel, Abernethy, and Zafar published “Full Disclosure — Out-of-Pocket Costs as Side Effects” in the New England Journal of Medicine. In this essay, the authors grapple with the ethical responsibilities of physicians when it comes to the enormous cost of modern medicine. If a surgery or a course of chemotherapy is likely to bankrupt a patient, what is our duty to warn them, to ensure that they have considered both benefits and harms? A larger question, however, was left unasked: “How do we as physicians ethically operate within a medical system that forces people on a regular basis to choose between health and financial stability”

To grasp the extent of the issue, consider that even after the passage and defense of the Affordable Care Act, 27 million American remain uninsured. An additional 41 million Americans are underinsured which is to say that their out-of-pocket expenses (such as deductibles and copays) are enough to cause financial duress, despite having health insurance. And as health insurance deductibles increases faster than wages, the proportion of Americans who are underinsured continues to grow.

The consequences of this are grave. Three out of ten American adults report forgoing needed medical care due to cost concerns. One in four were unable to pay for basic necessities like food, heat, or rent because of medical bills. One third spent down all of their savings.

When health economists have looked to explain why it is that health care is so enormously expensive in America, time and time again they have found (in the words of the late, great Uwe Reinhardt) that “it’s the prices, stupid.”

That is to say that hospitals, doctors, pharmaceutical companies, and medical device manufacturers charge Americans prices far in excess of what people are charged in other high-income countries. Joseph Dieleman and his colleagues at Harvard reassessed this question for the Journal of the American Medical Association just last year and came to the same conclusion (though with a less blunt title).

One key distinction between America and its peer nations is that other nations have centralized institutions to determine fair pricing for medical goods and services. In Germany, this is the Institute for Quality and Efficiency in Health Care (IQWiG). In the U.K., it is the National Institute for Health and Clinical Excellence (NICE). In France, it is the National Union of Health Insurance Funds (UNCAM). Each of these countries takes advantage of a strong price negotiating position through centralization.

The other crucial distinction between America and its peer nations is that these other nations recognize that some minimum level of health is a necessary precondition to social, civic, and economic participation and as such is worth the investment of public funds. In other words, by treating health care as a human right, they protect their citizens’ capacity to exercise their other rights in good health. This framework justifies  distributing the costs of health care equitably, and in turn preventing financial penalty from compounding the injury of illness.

These two features of an improved health care system – 1) centralized purchasing and 2) equitable funding – are achievable in the United States with a transition to a Single Payer system. In such a system, a single publicly funded entity (e.g. Medicare) would pay for all medical goods and services on behalf of Americans. Medical care will still be delivered by private doctors and hospitals, and medical goods will still be produced by private companies. The only difference for most people is that the money that you had been paying to a private insurance company will instead be going to a public insurance entity (e.g. Medicare).

Many proposals for different Single Payer systems are currently being considered by both national and state legislative bodies in the United States. Perhaps the most famous at this time is Bernie Sanders’ Medicare For All Act (S. 1804 with 16 co-sponsors) and its accompanying house legislation (H.R. 676 with 120 co-sponsors) introduced by Representative John Conyers. Senator Chris Murphy has been working on his own Single Payer strategy which is qualitatively similar to Representative Pete Stark’s AmeriCare Single Payer plan. There are also numerous state-level Single Payer plans including The Washington Health Security Trust (HB 1026SB 5701), The Healthy California Act (SB 562), and the New York Health Act (A. 4738 and S. 4840).

These legislative pushes take place in the context of the rising popularity of Single Payer, which has now achieved majority support in public opinion polling. As the popularity of Single Payer legislation grows, Democrats positioning themselves for 2020 presidential bids like Kamala Harris, Cory Booker, and Kirsten Gillibrand have already declared their support, recognizing that Single Payer is a necessary part of a popular Democratic platform.

This momentum should not inspire complacency, however. There is a great deal of organizing, consensus building, and legislative refinement needed in the months ahead. For my part, I plan on working with Health Care For All Washington on their push for state-level single payer and Democratic Socialists of America on their push for federal-level Medicare For All. Others are doing great work through Physicians for a National Health Program and National Nurses United.

If this has piqued your interest, I encourage you to continue read up on Single Payer and find the right level of involvement for yourself. Whether that’s calling your elected officials, talking with your friends and co-workers, writing an op-ed for your local newspaper, or knocking on doors, it’s all important work.

More articles on Single Payer:

Innovations in Primary Care: Moving Beyond Fee-For-Service

The American medical system has long operated under a fee-for-service model in which only specific, narrowly-defined medical services qualify for reimbursement from insurance companies. This system is reasonably well-suited for procedure-oriented specialties in which services with clear indications, processes, and outcomes such as colonoscopy or knee replacement can be appropriately paid for.

In America’s fee-for-service system, reimbursement for primary care services is limited to short office visits and certain outpatient procedures (such as a joint injection). Many primary care doctors have felt that they could offer better care for their patients if the payment structure allowed for more flexibility in services offered, but opportunities to test this hypothesis have been limited.

Today, three groups in the Seattle area – Landmark, Concerto, and Iora – are independently demonstrating the value of flexibility in primary care to improve patient outcomes at overall lower cost. They’ve accomplished this by arranging for alternative payment models with local Medicare Advantage plans (private insurance plans who contract with Medicare to provide health insurance to seniors). Rather than operating under fee-for-service, these companies get a per-member, per-month payment. This payment structure provides a flexible budget with which they can offer services that don’t necessarily fit into the established fee-for-service structure.   Continue reading “Innovations in Primary Care: Moving Beyond Fee-For-Service”

Bringing Single Payer to Washington State

Yesterday I attended a meeting of Health Care for All Washington regarding single payer legislation in our state. The particular set of bills they are supporting are SB-5701 and HB-1026 which establish a trust fund (the Washington Health Security Trust or WHST) which would eventually act as a single payer for health care services in the state of Washington.

Specifically, this legislation creates the trust fund, establishes a board of trustees and guidance committees to run the Trust, and then lays out in very broad strokes what the Trust is meant to accomplish. As described in the legislation, the Trust is meant to pay for health care for Washington residents not otherwise covered by Medicaid, Medicare, or private insurance including dental and long term care (think nursing homes). Most likely the funds for the Trust would come from a combination of a payroll tax and a sliding-scale premium.   Continue reading “Bringing Single Payer to Washington State”

Innovations In Primary Care #1: Introduction

As part of my family medicine residency training, I’m taking a month-long elective called Innovations in Primary Care. This month is an opportunity for primary care doctors from family medicine and internal medicine residency programs in Seattle to explore some of the different primary care models being trialed in the Seattle area and to use those experiences to fuel discussion about how primary care (and really, all medical care) can be improved in the United States.

Today was our first meeting, during which we gathered to collectively write an H&P for our current medical system. For those reading this who are not in medicine, the History and Physical or H&P is a semi-standardized note-writing structure that doctors use to describe the subjective and objective information about a patient’s health, assess why  the patient is experiencing illness, and describe the next steps we need to take (diagnostic tests and/or treatments) going forward. It’s a structured way of thinking about a patient that helps us be rigorous and methodical.

It was a gratifying process because each of the doctors at the table shared a passion for making our health care system better, but brought a different set of experiences and priorities to the conversation.

Some of the take-aways I had from this conversation are as follows (in no particular order):

  1. The insurance framework for paying for health care, while originally conceived to improve access to surgical services which would otherwise be prohibitively expensive to most people, was quickly recognized by doctors as a way to extract larger fees for patient care. After all, when a third party (the insurance company) pays the bills, people tolerate much higher fees even if the end result is steady rise in out-of-pocket costs for everyone. Doctors, hospitals, and pharmaceutical companies have abused this system so greedily under the previous usual-and-customary payment system that increasingly rigid cost-containment measures have had to be implemented to control costs. We now live in a society where the average doctor makes $294,000 per year–more than 98.9% of Americans–while medical bills bankrupt patients and health insurance cost suppresses wage growth. Recognizing and holding ourselves accountable to how capitalism in medicine has brought out the worst in us is necessary before we can even begin to conceptualize a new system.
  2. The costs of most important and effective interventions to improve health, including primary care, are recurring and predictable costs that are best paid for through public health funding, NOT through health insurance. Access to clean water, nutritious food, safe housing, and preventive medical care is necessary for All People at All Times.
  3. America fails to invest in public welfare programs because of racism. The idea of the racialized-and-thus-undeserving Other benefiting from public welfare programs (e.g. the racist specter of the Welfare Queen that Reagan so infamously promoted) is fundamentally intolerable to White America. We are comfortable with 1 in 7 people in the United States facing food insecurity if it means we can prevent one person from buying steak with food stamps. There is no justice without racial justice.
  4. Many participants are needed to transform our medical care system into a true health care system. While there are only physicians in this particular group, the real work requires public health professionals, community health workers, housing experts, policy wonks, political activists, artists, chefs, personal trainers, behavioralists, and many others to both design an implement a better system.

I’m looking forward to the experiences and conversations this month will bring, and I hope to walk away with greater insight into how I can be a better advocate for effective and equitable health care in this country.