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This is apropos of nothing in particular. I was over at the World Bank site fiddling around with some stuff and happened to look at their chart for health care spending. There’s a good case to be made that as GDP rises, the share devoted to health care also rises. This is because richer countries have more “spare” income and health care is what they spend it on.
But Sweden and Switzerland have per-capita GDPs as high as ours, and they still spend a whole lot less. The sooner we start reining in the growth of health care spending the better.
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Chart of the Day: Health Care Spending as a Percentage of GDP
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It’s been James Comey week, and rightly so: President Donald Trump’s firing of the FBI director threatens the investigation into Russia’s interference in the 2016 election. Some Democrats are calling it a constitutional crisis and even some Republicans say an independent investigation is necessary. But while everyone was watching the Comey saga unfold, the Trump administration continued to advance its agenda. Here’s what happened while you weren’t paying attention:
The administration launched a commission that could suppress voting.
Trump signed an executive order establishing a vote fraud commission on Thursday to study “vulnerabilities in voting systems and practices used for Federal elections that could lead to improper voter registrations and improper voting, including fraudulent voter registrations and fraudulent voting.” Since voting fraud is nearly nonexistent problem, civil rights advocates are rightly concerned that it’ll be used to justify voting suppression efforts. As Mother Jones‘ Pema Levy reported, the leadership of the commission gives further credence to these concerns.
The Justice Department reupped the war on drugs.
Attorney General Jeff Sessions announced Friday that he’s reversing a key part of the Obama administration’s criminal justice reform. Sessions has instructed federal prosecutors to “charge and pursue the most serious, readily provable offense.” Former Attorney General Eric Holder’s guidance had directed prosecutors to pursue drug charges in a way that did not trigger mandatory minimum sentences if defendants met certain criteria such as not belonging to a gang or major drug trafficking organization. “Jeff Sessions is pushing federal prosecutors to reverse progress and repeat a failed experiment—the War on Drugs—that has devastated the lives and rights of millions of Americans, ripping apart families and communities and setting millions, particularly Black people and other people of color, on a vicious cycle of incarceration,” said Udi Ofer, director of the American Civil Liberties Union’s Campaign for Smart Justice, in a statement.
The EPA signaled that it’s choosing industry over science.
Environmental Protection Agency Administrator Scott Pruitt dismissed half the scientists from the agency’s 18-member Board of Scientific Counselors and is considering replacing them with industry representatives. “The administrator believes we should have people on this board who understand the impact of regulations on the regulated community,” an EPA spokesperson told the New York Times. The board gives advice and recommendations to ensure the integrity of the EPA’s scientific research and has been the target of political attacks from industry groups and Republicans. “If they are proposing that the decisions not be based on science, what is it they are proposing they be based on?” Andrew Rosenberg, director of the Center for Science and Democracy at the Union of Concerned Scientists, told ThinkProgress. “The alternative is pure politics. Who has the most influence?”
The health secretary rejected effective treatment for opioid addiction.
Trump has promised to fight the opioid epidemic and appointed a commission to address the issue, but comments from the government’s top health executive raise concerns about the administration’s approach. When asked about drug treatment this week during an event about the crisis, Health and Human Services Secretary Tom Price said, “If we’re just substituting one opioid for another, we’re not moving the dial much. Folks need to be cured so they can be productive members of society and realize their dreams.” The website for the National Institutes of Health says it’s a myth that medicine-assisted treatment substitutes “one addiction for another,” and studies have shown it to be effective. “This is a dangerous, dangerous statement,” physician Corey Waller, chair of legislative advocacy for the American Society of Addiction Medicine, told Politico. “He is moving out of the world of scientific fact into the world of alternative facts.”
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Here’s What the Trump Administration Did This Week While All Eyes Were on Comey
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Members of Congress are home in their districts until next week, but when they come back to town they’ll be facing an imminent government shutdown—unless they manage to pass last-minute legislation to keep federal programs funded. A shutdown now appears a little more likely thanks to some gamesmanship from President Donald Trump over Obamacare that prompted Democrats to issue threats of their own last week.
The showdown involves an Obamacare program know as “cost sharing reduction,” which requires insurance companies to offer discounted copayments and deductibles to low-income people who buy health plans on the individual market. In return, the federal government makes payments to compensate insurers for this expense. Last week, Trump threatened to stop making these payments to insurers—a move that could lead to massive price spikes for millions of people and cause insurers to flee from the individual marketplaces.
By issuing the threat, Trump was attempting to scare Democrats into agreeing to repeal Obamacare. “Obamacare is dead next month if it doesn’t get that money,” Trump told the Wall Street Journal. “I haven’t made my viewpoint clear yet. I don’t want people to get hurt…What I think should happen and will happen is the Democrats will start calling me and negotiating.”
But Trump’s gambit may have backfired. Democratic leaders are now saying they might not vote to keep the government funded next week unless that funding bill includes a provision appropriating money specifically for the cost sharing reductions. “We will not negotiate with hostage takers,” Sen. Ron Wyden (D-Ore.) warned last week.
Democrats may actually have a surprisingly strong negotiating position. Despite controlling both chambers of Congress, the GOP needs their help to keep the government open. Republicans will need support from at least eight Democratic senators in order to avoid a filibuster. And given House Republicans’ penchant for defying party leadership, Speaker of the House Paul Ryan (R-Wisc.) might also need some Democratic votes to overcome conservative objections to the funding bill.
When it comes to the controversies surrounding Obamacare, the cost sharing reduction payments have received relatively little attention. But they are an essential component of how the law makes insurance affordable for lower-income families. For anyone who makes less than 250 percent of the federal poverty line ($30,150 for an individual, $61,500 for a family of four), the government pays insurance companies to lower out-of-pocket costs.
About 58 percent of people who purchase insurance through Obamacare’s marketplaces qualify for the reduced copays and deductibles, totaling more than 7 million people. For consumers, the savings can be substantial. The Kaiser Family Foundation found that for people below 150 percent of the poverty line, average deductibles dropped from $3,609 to $255 thanks to the program. It all adds up to $7 billion in federal spending for 2017, and it’s projected to rise to $10 billion next year and $11 billion in 2019.
The current debate revolves around a quirk in the way the law was written. The Affordable Care Act requires the government to reimburse insurance companies, but lawmakers apparently failed to include a provision to explicitly “appropriate” money for these payments. (It’s not enough for Congress to authorize a program; under the Constitution, Congress must also appropriate funds for a program before the government can spend money on it.) The Obama administration started to dole out the funds anyway, citing a different appropriation authority, but House Republicans objected and sued. A federal judge sided with Republicans last year, though that decision was stayed pending appeal. (The details are too convoluted to explain in full here, but Vox has a great description.)
After Trump won the presidency, House Republicans asked the courts to hold off on the case, since they’re hoping they can end the program by repealing Obamacare. Now, the Trump administration has until May 22 to let the court know if it still plans to appeal the ruling. If Trump chooses, the administration could unilaterally drop the case and let stand the lower court decision barring the payments.
But while the administration can choose to stop making the payments to insurance companies, insurers would still be required to offer discounted policies. On that point, the law is explicit: Insurance companies must reduce out-of-pocket costs for low-income consumers. In other words, they would still have to offer cheaper copays and deductibles—just without the government assistance they were promised.
An analysis by the Kaiser Family Foundation found that, in order to offset those lost funds, insurers would have to increase premiums by 19 percent on average. That increase would not be evenly distributed across the country, though. The rate increase would likely be far less drastic in states that expanded Medicaid under Obamacare, since Medicaid provides government-sponsored insurance to low-income people who would otherwise use the individual marketplaces. North Dakota would see the smallest premium spike if the payments to insurers stopped—a 10-percent increase. By contrast, insurance premiums would rise 27 percent in Mississippi and 25 percent in Florida and Alabama.
It isn’t just Democratic politicians who are crying foul over Trump’s threats. The health care industry industry last week implored Trump to maintain funding for the subsidies. In a letter to the president—signed by the American Medical Association, America’s Health Insurance Plans, BlueCross BlueShield, and the US Chamber of Commerce—industry groups warned that unless Trump makes clear that he’s going to continue the payments, insurers will flee the markets in 2018, and premiums for the remaining options will skyrocket.
“The most critical action to help stabilize the individual market for 2017 and 2018,” the letter says, “is to remove uncertainty about continued funding for cost sharing reductions.”
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Trump Is Playing Chicken With Millions of Health Plans. The Result Might Be a Government Shutdown.
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According to a new series of studies in The Lancet, the United States risks a “21st century health-poverty trap” if it does not address low-income Americans’ growing inability to access or afford quality health care. The five papers published today in the British medical journal describe how the high cost of health care is intensifying the widening gap between the rich and poor and issue a call for a single-payer health care system.
The studies highlight several alarming trends: America’s richest 1 percent live more than a decade longer on average than the poorest Americans; 40 percent of poor Americans skip going to the doctor because they can’t afford to; the neediest 20 percent of Americans spend almost twice what the richest 20 percent Americans spend on private health insurance; and 1 out of every 10 households facing high medical costs declares bankruptcy, even after the implementation of Obamacare.
“We are witnessing a slow-moving disaster unfolding for the health of lower-income Americans who have spent their working lives in a period of rising income inequalities,” says Dr. Jacob Bor, an assistant professor at the Boston University School of Public Health.
Some of the health effects of poverty documented in the studies are staggering. The average life expectancy rates of the poorest 5 percent Americans have not budged since 2001, despite gains by middle and high-income Americans, who can now expect to live an extra two years on average. Instead, entrenched poverty is elevating mortality rates: The wealthiest 1 percent now can expect to live 10 to 15 years longer than the poorest 1 percent of Americans.
The Lancet series kicks off with an introduction by Vermont Sen. Bernie Sanders calling for a single-payer health care system. “Health care is not a commodity. It is a human right,” he writes. “The goal of a health-care system should be to keep people well, not to make stockholders rich. The USA has the most expensive, bureaucratic, wasteful, and ineffective health-care system in the world.”
The studies also conclude that America would benefit from a single-payer health care system. Authors Dr. Adam Gaffney of the Cambridge Health Alliance and Dr. Danny McCormick of Harvard Medical School argue that offering comprehensive health coverage to all Americans would close the current gaps in access to health care: “A single-payer, Medicare-for-all reform—championed by Senator Bernie Sanders during his upstart presidential campaign, as well as by many physicians and the nation’s largest nurses union—would, in our view, best address health-care inequalities.”
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The High Cost of Health Care Is Stealing Years of Life From Poor Americans
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In a major blow to President Donald Trump and House Speaker Paul Ryan, the House vote to repeal and replace the Affordable Care Act, which was slated for Thursday, has been postponed.
The delay comes just hours after a failed emergency meeting between Trump and members of the House Freedom Caucus, hard-line conservatives who demanded the American Health Care Act eliminate Obamacare’s so-called essential health benefits. The potential concession to the Freedom Caucus’ demands reportedly alarmed more moderate-leaning Republicans.
It’s unclear when a rescheduled vote will take place.
As of Thursday afternoon, 47 House Republicans remained undecided about their vote on Ryan’s health care legislation; 31 Republican lawmakers said they would reject the proposal. With all Democrats voting no, the bill can only afford to lose 22 Republicans to secure passage.
This is a breaking news post. We will update as more information becomes available.
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This week I’m spending time in two counties in Northeast Ohio. Like so many places in the Rust Belt, Ashtabula and Trumbull counties have been ravaged by the opioid epidemic. I’m talking to people here about what the drugs have done to their communities. I’ll be tweeting about what I’m seeing.
Two weeks ago, Brian Reed read on Facebook that there had been another overdose in his hometown of Warren, Ohio—this one in a supermarket parking lot. Police warned residents of the Rust Belt town to avoid the area. “Prayers to the family,” Reed wrote in the comments section of the article.
Later that afternoon, two detectives knocked on the door to tell him that the victim was his son, David. The 29 year old had been the father of two, with another on the way.
There have been 16 fatal ODs this month in Warren county, OH. Here’s the story of one father: pic.twitter.com/5Wjz2rRV43
— Julia Lurie (@julia_lurie) March 21,
David’s death was one of 16 fatal overdoses so far this March in Trumbull County, a monthly record in a northeast Ohio region that has been devastated by the spread of fentanyl, a synthetic opioid far more potent than morphine or heroin. The county is decidedly rural—farmland studded with small towns of chain stores and vacant mom-and-pop shops, country music, and sermons on the radio. On Monday night, 275 residents made the drive to a town hall about the epidemic. When asked who had lost a loved one to overdose, many people raised their hands.
The exact cocktail of drugs that killed David won’t be known for several more weeks; with so many deaths, there’s a backlog in toxicology testing. But all signs point to fentanyl: Increasingly, drug users checking into treatment are testing negative for heroin but positive for the synthetic opioid, said Dr. Daniel Brown, the chief medical officer of local drug treatment center Meridian Healthcare. “There’s no naturally occurring opiate in their system—it’s all fentanyl,” he said. “I don’t foresee us going back to having naturally occurring opiates such as heroin. It’s probably here to stay.”
After each overdose death in Trumbull County, Humphrey Garmaniuk, the county coroner, receives a phone call and his team examines the scene. “I did one this morning, he was found by his son,” he said. “I have a 31-year-old lady waiting for me tomorrow.”
Humphrey Germaniuk, coroner of Trumbull county OH pic.twitter.com/jSNoS1w6uQ
— Julia Lurie (@julia_lurie)
Despite the barrage of bad news, there were some reasons to be hopeful. Due to an aggressive county-wide effort to distribute the overdose reversal drug naloxone to drug users and their families, 132 overdose victims were successfully revived by community members last year. Medication addiction treatments are increasingly available, said county mental health board executive director April Caraway. Brian Reed encouraged attendants to spread the word about Ohio’s Good Samaritan law, which protects those who call 911 in overdose cases from being arrested.
Participants asked questions on note cards: What kind of addiction treatment is best to start with? Are there support services for the children of users? Does using naloxone over and over just enable drug users? And, finally: “Story of hope: Beauty and beast. Daddy was the beast when he was doing drugs. Now he’s my prince. My father’s been clean for three years.”
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I Went to a Town Hall Meeting in a County Ravaged by Opioids. What I Saw Broke My Heart.
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I got into a conversation today about my contention from last night that national health care systems are better at controlling costs than the private sector. We all know that US health care costs are the highest in the world, but are they growing faster than the rest of the world? And how about different health care sectors in the US?
I haven’t looked at this in years, so I decided to dig up the data and see. First off, here is growth in health care spending among a representative group of rich countries during recent decades:
This data is a little tricky because some countries changed the way they calculated health care spending during this period. I didn’t use any of them, and it’s possible that one or two might have grown faster than us. But the US is certainly in the top two or three, if not at the very top.
One problem with international comparisons of health care spending is that some countries are aging faster than others, and it stands to reason that countries with older populations will spend more than those with younger populations. Here’s a look at spending growth during the period 1970-2002 that controls for aging:
During these earlier decades there are several countries with higher growth rates than the US. I’m a little surprised there weren’t more, given that postwar European countries were still catching up to the US during the first half of this period.
Finally, here’s a comparison of growth rates just within the US:
The data here tells a pretty consistent story. Despite starting at a higher base, the US is in the top two or three in the world—maybe at the very top—for health care spending growth over the past half century or so. Within the US, private health care spending growth has outpaced both Medicare and Medicaid. Both internationally and in the US, government-run health care programs appear to be better at controlling costs than the private sector.
Of course, there are other sources of data and other ways of doing comparisons, so don’t take this as the last word. If I come across any other studies that seem to have interesting ways of slicing the data, I’ll follow up.
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On Monday evening, the House Ways and Means Committee and the Energy and Commerce Committee unveiled Republicans’ bill proposing to repeal and replace Obamacare. Until today, top Republicans opted to keep the bill “under lock and key” somewhere in the basement of Congress. You can read the full draft here and here (it is split). It includes proposals to eliminate mandatory health insurance for all Americans, defund Planned Parenthood, and more.
Mere moments after it was released, Rep. Justin Amash (R-Mich.) attacked the bill from the right by calling it “Obamacare 2.0.”
Obamacare 2.0 https://t.co/p0zKkMD3UT
— Justin Amash (@justinamash)
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The House GOP Just Finally Revealed Their Secret Bill to Repeal Obamacare
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During Tom Price’s confirmation hearing last week, Sen. Orrin Hatch quizzed him on his commitment to eradicating Medicare fraud, which the Utah Republican noted had cost the government billions of dollars. If confirmed to head the US Department of Health and Human Services, Price, a Republican congressman from Georgia, will oversee the agency’s efforts to protect government-run health care programs from scammers. “I think they’re a minority,” Price replied, “but there’s some bad actors out there…If we were to focus on those individuals that were the bad actors specifically, then I think we could do a much better job of not just identifying the fraud that exists out there, but ending that fraud.”
Those bad actors aren’t as rare as Price suggested. In fact, a company closely linked to his medical practice was ensnared in a multimillion-dollar Medicare fraud case. In 1999, Price became a partner in Resurgens PC, what is now Georgia’s largest orthopedic practice, where he also served as a board member until 2004, when he ran for Congress. Resurgens doctors performed surgeries at an outpatient facility that had been incorporated as a separate corporate entity, Resurgens Surgery Center LLC. In 2005, the surgery center agreed to repay $2.5 million to the federal government to settle allegations that it had fraudulently billed Medicare and Medicaid and violated a federal anti-kickback law.
Price was not implicated in the case—the wrongdoing allegedly occurred between 1993 and 1997, before he joined the practice—and he didn’t hold a direct financial stake in Resurgens Surgery Center. But the payout by Resurgens Surgery Center highlights one of the conflicts he may face if his nomination is approved. As HHS secretary, he will be charged with helping enforce the very laws the Justice Department accused Resurgens Surgery Center of violating. A spokeswoman for Price did not respond to questions from Mother Jones.
There are other reasons to question how aggressively Price will go after Medicare scammers. He was a longtime member of a conservative medical organization, the Association of American Physicians and Surgeons, that has strongly opposed fraud investigations by HHS, claiming that “misguided enforcement actions” target honest physicians.
“It’s worth wondering how tough Price is going to be on these issues,” says Marc Smolonsky, a former associate deputy secretary at HHS during the Obama administration and an expert on health care fraud. “I’m not saying he’s not going to be tough, but it’s certainly something to ask.” He notes that Congress earmarks almost $1.5 billion a year for HHS to probe fraud. “Most of that is under his purview.”
The case against Resurgens Surgery Center began in 2001, when a whistleblower named Robert Allen filed a federal False Claims Act lawsuit against the company in a Georgia federal court. Between 1995 and 1997, Allen had been a consultant and then an administrator for a group of anesthesiologists who worked closely with Resurgens Surgery Center. Allen alleged that the anesthesiologists had colluded with Resurgens Surgery Center to illegally collect “facility fees” from Medicare and Medicaid for services they performed in a Resurgens facility. The government health care programs allows certain health care providers, such as hospitals or outpatient surgery centers, to bill extra fees to help cover the overhead of running the facility on top of those charged for medical care.
But to claim such facility fees legally, federal regulations require a health care facility to have a certificate of need and a government-issued billing number. Resurgens Surgery Center had the right paperwork, but the suit alleged it covered only orthopedic services, not pain management or anesthesia. The anesthesiologists named in the whistleblower suit allegedly had neither a billing number nor a certificate of need. In fact, federal rules specifically bar anesthesiologists from collecting facility fees from Medicare. So, Allen’s suit alleged, the anesthesiologists and Resurgens Surgery Center set up a lucrative but illegal arrangement. The anesthesiologists would provide pain treatments to their patients at the Resurgens facility and use its billing number to charge the federal government for use of the premises. In return, the anesthesiologists allegedly kicked back a portion of the facility fees to Resurgens Surgery Center.
Allen claimed this arrangement began in 1993 and continued after he left the anesthesiologists’ practice in 1997. And he alleged that he told the doctors their setup was illegal but they declined to put an end to it.
The Department of Justice can intervene in private whistleblower suits if it believes serious misconduct has occurred. In 2002, it did so in Allen’s case. In 2004, the anesthesiologists settled for $1.3 million. The following year, shortly after Price was elected to Congress, Resurgens Surgery Center also settled, agreeing to repay $2.5 million in fees it had billed the government. Neither Resurgens Surgery Center nor the anesthesiologists admitted to wrongdoing in the settlement.
Doug Lundy, co-president of Resurgens PC, did not respond to requests for comment. But after the 2005 settlement was announced, Charles C. Murphy, an attorney for Resurgens Surgery Center, told a local Georgia newspaper that the company made a “business decision” to settle the case. “The Resurgens doctors believed they had done nothing improper,” he said. “Nonetheless, the case was becoming a significant distraction, and Resurgens Surgery Center believes the more prudent course was to put the matter behind it.”
Since Price entered Congress, his former Resurgens colleagues and other company employees have been major backers of his campaigns, donating nearly $225,000 since 2004. In July 2015, Lundy hosted a fundraiser for Price. After Price was nominated to HHS, Resurgens issued a statement congratulating Price. (The statement was subsequently removed from the company’s website.) A full vote by the Senate on his nomination is expected next week.
The Obama administration made a big push to crack down on Medicare billing fraud, which is believed to sap nearly $100 billion a year from Medicare and Medicaid. It aggressively rooted out crooked doctors and hospitals that were bilking the system, and it included tougher anti-fraud rules in the Affordable Care Act. In June, HHS and the Department of Justice spearheaded the largest Medicare fraud takedown in history. The investigation resulted in charges against more than 300 people and involved nearly $1 billion in fraudulent billing. Sixty-one of the people charged were doctors.
Will a Secretary Price continue to pursue this kind of aggressive enforcement? Dr. Robert Berenson, a fellow at the Urban Institute and a former member of the government’s Medicare Payment Advisory Commission, is skeptical. “He clearly thinks doctors should be left alone,” Berenson says. “Billing fraud is the kind of thing that happens when they are left alone.”
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A Company Closely Linked to Tom Price’s Medical Practice Paid a Big Medicare Fraud Settlement
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