“There is an underappreciated contributor to the United States’ comparatively poor health: We underinvest in social services that help people live healthier lives and therefore overspend on medical care relative to other developed countries.
The long-term trends in US health care, as I wrote about earlier this week, tell a clear story: Medical outcomes have gotten better, with measures of life expectancy and disease burden improving over the last 25 years, but they haven’t improved as much as they have in other wealthy nations that spend less money on health care than the US.”
“If you combine social services spending with health spending, the US and its peers spend about the same amount of money (a little more than 30 percent of their respective GDPs). But spending in those other countries is weighted more toward social support — food and housing subsidies, income assistance, etc. — whereas America spends more on medical care.”
“Eighteen percent of people in the US live in poverty, compared with 10 percent in other wealthy countries. And we know that people with lower incomes face many structural challenges — lack of access to healthy food, clean water, and fresh air, for starters — that lead to worse health outcomes. When they get sick, they have a harder time both finding a doctor and affording their medical care. In general, they also live with more stress and anxiety than people who make more money, which also has deleterious effects on their health.”
“Washington state first approved its public option in 2019 and made it available to consumers for enrollment in 2020. The state now has a year of experience getting the Cascade Care program up and running, and it’s already starting to tinker with the policy design. It’s also offering lessons for Colorado and Nevada (the other state to pass a public option this year, one week before Colorado).
As these states have drawn up their plans, one thing has become clear: The potential value of a public option is in keeping health care costs in check by keeping rates lower than those of private insurance plans. But it still remains to be seen whether a public option can expand health coverage to more people.”
“None of the states offer a “public” option like the one Congress contemplated in 2009, where the government sets up and administers its own health insurance plan.
“None of them are true public options in that sense,” says Katie Keith, who writes about insurance reform for Health Affairs and consulted with states as they developed public option legislation.
Instead, she compares them with public-private partnerships. States are contracting with private companies to create new insurance options to be overseen, if not run, by the government. States would face practical challenges to doing a “true” public option — namely, building up the financial reserves they’d need to pay out claims — so they’re taking another approach wherein private insurance companies will run the public option under rules set by the government.”
“The plans will be sold on the ACA marketplaces, alongside ACA-compliant private insurance. Only people who are eligible for ACA coverage through the individual and small-group market can sign up”
“How much to pay health care providers is the most important issue for any health insurance plan — those prices dictate the premiums charged to customers — and these states are taking divergent approaches in their calculations.”
“One challenge in trying to set lower provider rates is that doctors and hospitals might simply choose not to accept the public option plan. That was Washington’s experience in its first year: Some hospitals refused to contract with the public plan, and since an adequate provider network isn’t possible without a hospital, the plan has only been available in 19 of the state’s 39 counties.
Washington is trying to correct that issue through recently signed legislation that will, among other things, require hospitals in large systems to participate in at least one public option plan. Nevada and Colorado, having seen Washington’s network-adequacy issues, are setting up their own provider participation requirements from the start.”
“The Affordable Care Act’s achievements are clear. People who buy insurance in the individual and small-group markets no longer face discrimination for preexisting conditions. Preventive services for Americans with all types of insurance are free. Combine the marketplaces that provide tax subsidies for private coverage and the Medicaid expansions adopted by 38 states (along with a handful of smaller provisions), and the ACA has provided coverage to about 31 million Americans, according to a new estimate from the Biden administration.
After the rocky rollout of HealthCare.gov in 2014 and a few years of soaring premiums, the law’s private marketplaces have stabilized”
“one of the biggest gaps in the ACA itself: Medicaid. The program’s expansion to cover more low-income adults was supposed to be mandatory for all 50 states, a statutory overreach that was scaled back by the Supreme Court, where two liberal justices joined the conservatives to rule that the expansion must be optional.
As a result, 12 states still refuse to expand Medicaid. An estimated 4 million people who would have been covered by the expansion remain uninsured.”
“Some people who purchase private insurance through the law can still face high out-of-pocket costs. Some of the health plans sold on the marketplaces have deductibles as high as $6,000 for an individual or $13,000 for a family — and those are usually the cheapest plans available. Until this year, people who made too much money to qualify for the law’s subsidies had to pay the full cost for their insurance, making it unaffordable for some.”
“one core problem remains: While every other developed country in the world enjoys universal (or near-universal) health coverage, 1 in 10 people living in the United States still don’t have insurance.
That number is lower than it was before 2010, when it was about 17 percent. But it is an embarrassing outlier among our economic peers. Americans also spend more of their own money on their health care than people in almost every other country.”
“America spends more money on health care for worse outcomes than its peer countries, as researchers have noted time and again. On a global index of health care quality and access, the US trails many more socialized systems. Life expectancy has dipped in recent years, ending decades of progress and dropping the US further behind comparable countries.
There is no denying that the high quality of health care available in the United States — for those who can afford it. The US health care industry can undoubtedly be among the most innovative in the world: It was American science that cured hepatitis-C in the last decade. The success of the country’s Covid-19 vaccine development, production and distribution is undeniable.
But prioritizing innovation above all else creates its own problems, leaving US health policy captive to private interests.”
“For many low-income people in the US, getting insured isn’t enough to get health care: Patients with Medicaid can struggle to find a doctor willing to take their health insurance.
And this happens in large part because, for doctors and providers, billing Medicaid is a pain.
A recent study by researchers from the US Bureau of Economic Analysis, the University of Chicago, and the Federal Reserve Bank in San Francisco found providers run into more obstacles when trying to bill Medicaid than they do with other insurers, and that these administrative hurdles explain the access problems experienced by Medicaid patients as much as the program’s payment rates.”
“About 19 percent of the initial claims submitted to Medicaid are not paid in full. For Medicare and for the private insurers, that share is much lower: 8 percent and 5 percent, respectively.
The health care providers then must invest time and money to sort out any rejected or disputed claims.”
“the study makes a strong case that solving access problems for Medicaid patients does not require jacking up the program’s payment rates, a difficult sell in a time of strained state budgets, in the country already with the world’s highest health care costs.
The researchers instead present this solution to the problem they identified: “To increase access to care, regulators could implement or require a simpler, cheaper administration of payment processes, without raising prices.”
So if we simply made it easier for doctors to receive payment for the services they provide, it could make a big difference for Medicaid patients.”
“America still has the highest uninsured rate in the developed world and the highest health care costs. So long as the health care industry wields a veto pen over any plan that would cut into its profits to address those problems, little is going to change.”
“Researchers at Harvard University and the University of California Berkeley examined what happened when Medicare beneficiaries faced an increase in their out-of-pocket costs for prescription drugs. They found that a 34 percent increase (a $10.40 increase per drug) led to a significant decrease in patients filling their prescriptions — and, eventually, a 33 percent increase in mortality.
The rise in deaths resulted from people indiscriminately cutting back on medications when they had to pay more for them, including drugs for heart disease, hypertension, asthma, and diabetes.
“We find that small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death,” the authors — Amitabh Chandra, Evan Flack, and Ziad Obermeyer — wrote. “Cutbacks are widespread, but most striking are those seen in patients with the greatest treatable health risks, in whom they are likely to be particularly destructive.””
“This finding challenges an important assumption embedded in American health care policy. In the 1970s and ’80s, the RAND Health Insurance Experiment concluded that small copays encouraged patients to use fewer health care services without leading to worse health outcomes. That helped establish a new economic argument for insurers to ask their customers to put more “skin in the game”: it would encourage more efficient use of health care services with no downside.
But that premise presumed people would be rational. For example, if they are being asked to pay more money for prescription drugs, they would cut back on less-valuable medications first. The Harvard/Cal study didn’t detect any such rationality. When costs went up, people just stopped filling their prescriptions for statins — high-value drugs that are effective in preventing heart attacks.
The researchers explained it like this: The way patients behaved when faced with higher out-of-pocket costs would suggest that they placed very little value on their lives. They literally stopped taking high-value drugs because of the price.”
“If patients can’t make good value judgments, the economic argument for cost-sharing starts to crumble, and it starts to seem like eliminating cost-sharing — increasing the likelihood patients will continue to take the medications they need to stay alive — would be a cheap way to “buy” people more health. As the researchers wrote, “improving the design of prescription drug insurance offers policy makers the opportunity to purchase large gains in health at extremely low cost per life-year.””
“Eliminating out-of-pocket costs would come with a price: Insurers would likely charge higher premiums to offset the loss of the copays and coinsurance that currently reduce their direct costs. But if the goal is better health outcomes, that is arguably a price worth paying.”