U.S. Health Care Is Less Private, More ‘Socialist’ Than You Might Think

The extent of the government's role in health care has become a key issue in the Democratic presidential primary. Here, candidates Hillary Clinton and Bernie Sanders are seen in a debate on Jan. 17 in Charleston, S.C. (Mic Smith/AP)

The extent of the government’s role in health care has become a key issue in the Democratic presidential primary. Here, candidates Hillary Clinton and Bernie Sanders are seen in a debate on Jan. 17. (Mic Smith/AP)

By Richard Knox

Readers, a pop quiz:

The proportion of U.S. health care paid by tax funds is (a) less than 30 percent, (b) about half or (c) more than 60 percent.

If you picked “more than 60 percent,” you’re right — but you’re also pretty unusual.

“Many perceive that the U.S. health care financing system is predominantly private, in contrast to the universal tax-funded health care systems in nations such as Canada, France or the United Kingdom,” David Himmelstein and Steffie Woolhandler write in a new analysis of U.S. health spending in the American Journal of Public Health.

They find that 64.3 percent of U.S. health expenditures are government-financed. And they project the tax-supported proportion will rise to 67.1 percent over the coming decade as the baby boom generation ages and retires — nearly as high as Canada’s 70 percent.

“We are actually paying for a national health program, we’re just not getting it,” Woolhandler says.

tax dollars for U.S. health spending

Now, Himmelstein and Woolhandler have an agenda. For decades, they’ve been perhaps the leading researchers promoting the kind of single-payer health system that Socialist and Democratic presidential candidate Bernie Sanders has put on the debate agenda. One recent poll suggests more than half of Americans (and 30 percent of Republicans) support the idea.

But even if you disagree with the Himmelstein-Woolhandler ideology, their research is generally regarded as sound, and their method is straightforward.

They added up what federal and state governments spend on health through Medicare, Medicaid, the Veterans Health Administration, government employees’ health care premiums, tax subsidies and other programs. They argue that accounting by government agencies (the Center for Medicare and Medicaid) undercounts the real tax burden because it leaves out major pieces of the pie — such as government employees’ care ($156 billion a year) and tax subsidies for private, employer-sponsored coverage (nearly $300 billion).

And whatever you think about Medicare-for-all, it’s a good idea to see the present U.S. health care system for what it is — an increasingly government-funded financing scheme. Continue reading

Yes, Medicare Will Cover Lung Cancer Scans For Longtime Smokers, But…

(Source: Wikimedia Commons)

(Source: Wikimedia Commons)

…to finish the sentence in the headline: But it was not the simple no-brainer that you might think.

Lung cancer is the biggest cancer killer of all, causing 160,000 American deaths a year. But should we use lung scans to screen longtime smokers en masse for it? That question has been vigorously debated of late in medical circles, as Medicare has weighed whether to pay for the scans.

This week, Medicare announced that it did indeed propose to cover annual low-dose CT scans for smokers and former smokers, ages 55 to 74, with a smoking history equivalent to a 30-year pack-a-day habit. (More details here.)

People say ‘You deserve this because you brought it on yourself, and thus, suffer the consequences.’

– Laurie Fenton Ambrose

The draft decision now gathers public comment for a month and will still need to be finalized, but cancer activists and some doctors are already hailing it as a victory. Laurie Fenton Ambrose, president of the Lung Cancer Alliance, which had helped lead the push for the coverage, predicted that the scans would save tens of thousands of lives.

So why has screening for lung cancer sparked such hot debate? Why did it even recently trigger a rare pointcounterpoint duel in the pages of a major medical journal, JAMA Internal Medicine?

Well, first, the pendulum has been swinging lately towards greater skepticism about routine cancer screening, from mammograms to prostate tests.

(Source: FDA)

(Source: FDA)

At issue is the pivotal question of whether some forms of cancer screening do more harm than good, given that some of the tumors they pick up would never have caused any trouble. Routine blood tests for prostate cancer have fallen out of favor, for example, and the New England Journal of Medicine just published a cautionary tale from Korea about how mass ultrasound scans for thyroid cancer saved no lives.

So that’s the broader medical context. Then there’s the money. I recently heard a Medicare official say with pained realism at a public forum, “We can’t cover everything good.” Close to 5 million people on Medicare would be eligible for the screening, NPR reports, and the scans cost an estimated $241 each.

So at a time of greater emphasis on health costs and greater doubts about cancer screening, “We just found ourselves caught in that crossfire,” said Fenton Ambrose of the Lung Cancer Alliance.

With lung cancer, there’s also the question of special stigma. People say “You deserve this because you brought it on yourself, and thus, suffer the consequences,” Fenton Ambrose said. “It has always had that type of stigma, that even carried through in some of the public comments that came forth during the Medicare consideration.”

Dr. Chrisopher Lathan, a medical oncologist at the Dana-Farber Cancer Institute, similarly cited stigma as a source of “hesitation” on the coverage. “This is a cancer that’s heavily linked to a behavior,” he said. “The amount of data needed to convince everyone that this was a good screening tool — that hurdle was much higher. And also, we are in a more skeptical time, academically, when we look at screening. We know that screening is good, but it’s good in certain circumstances.”

Which circumstances, when it comes to lung scans? This is the moment for the Public Service Announcement that says, “Talk with your doctor.”

“At the end of the day, this is about the relationship between doctors and patients,” Fenton Ambrose said. And in particular, there are some gray areas that require discussion, she noted. What if, for example, you’re a bit younger, or smoked a bit less than the cut-off? Research is now under way on that “second tier” of potential scan subjects, she said. Continue reading

Deluge Of Medicare Data On Docs: Is It Useful? Well, It’s A Step…


Yay, transparency. It’s surely a good thing that Medicare has been releasing gushes of data lately on its health-care payments, most recently on payments to individual physicians. And it’s surely laudable that media outfits like ProPublica are trying to mine the data — on about 880,000 health care providers across the country — to look for overcharging.

But as a patient and health-care shopper, I have yet to see anything that would make me say, “Aha, now that’s useful!” In fact, as WBUR’s Martha Bebinger recently reported, even the new state law requiring health-price transparency is not, in fact, useful yet: “The 26 Steps I took To (Try To) Comparison Shop For A Bone Density Test.”

You can argue in the abstract about the flaws in Medicare’s data release — its failure to distinguish between the easy cases and the complex ones, for example. To follow that tennis back-and-forth, you can read our recent post by the president of the Massachusetts Medical Society and, just out in the New England Journal of Medicine, a defense of the release from Medicare: “The Medicare Physician-Data Release — Context and Rationale.”

But to get a bit more concrete, check out Dr. Patrick T. O’Gara of Brigham and Women’s Hospital, also just out in the New England Journal: “Caution Advised: Medicare’s Physician-Payment Data Release.” He calls the data release a “small but flawed” step toward making medical cost considerations more transparent. I’d hope that it might also be a small but flawed step toward what many of us want most, a way to gauge the quality of care a doctor provides (and avoid the bad apples.)

So is the new data release helpful to Dr. O’Gara or his patients? Well, as I read him, um, no.

As a result of gaining access to these data, will my own patients, for instance, achieve a better understanding of how care is delivered through the Medicare program or be able to compare my 2012 performance, quality of care, and costs with a peer group of general cardiologists at academic medical centers?

They will be able to see the total Medicare payments I received ($64,986.06) and determine with little difficulty that, in terms of Medicare income, I ranked 468th out of 738 cardiologists in Massachusetts and 109th of 291 cardiologists in Boston while seeing approximately 600 more unique beneficiaries and billing for about half as many different procedure codes as the average Massachusetts cardiologist. They will not learn anything about the many other aspects of my practice, the complexity of my patients’ health care needs, or the vagaries of the Medicare claims processes, all of which contribute to the total picture. Some patients will worry that I underachieved; no patients are likely to question how this payment total affected my 2013 salary negotiations. I will not he able to provide insights as to why the Medicare payments I received might differ (either positively or negatively) from that allocated to another general cardiologist who provided comparable services in equal numbers at another academic medical center — nor would I choose to refer my patients for a second or third opinion on the basis of such information.

In short, well, meh, but it’s a start. Readers, has anyone tried to look at the Medicare data? Was it helpful?

Report: In Mass. Health Care, System Skewed So Rich Get Richer

A report released today by the Healthcare Equality and Affordability League (H.E.A.L.) — a partnership between the for-profit Steward Health Care System and the union, 1199 SEIU United Healthcare Workers East — finds that disparities in hospital costs and financing across the state are driving “a vicious cycle” of inequality in health care.

The result, according to this analysis, is that medical care is becoming less affordable for lower-and middle-income families in Massachusetts, and the disparities in hospital financing are “compromising the viability of community hospitals.”

The group is calling for new, and what they call more “fair” reimbursement rates so that poorer, community hospitals (with a greater proportion of Medicare and Medicaid patients compared to the higher-cost Boston teaching hospitals) can continue to serve the lower-income patients, among other financial recommendations.

David Williams, president of the Boston consulting firm Health Business Group, who was paid by H.E.A.L to research and co-author the report, says: “What hasn’t been demonstrated before is what impact these financing disparities have on communities and community hospitals.”

He notes: “The hospitals that have the highest percentage of publicly funded patients, they get paid less, but in addition to that, those hospitals also get the lowest commercial rates — because they’re not in as strong a position to negotiate — so that means that they’re doubly disadvantaged…it means that the hospitals serving middle-class and lower income communities don’t have the resources to compete effectively with those hospitals that get higher reimbursements.”

Clearly, the group’s recommendations would benefit the Steward-owned hospitals, Williams acknowledges, but, he adds: “it would also help with the state’s overall approach to cost containment.

I asked Nancy Turnbull, an associate dean at the Harvard School of Public Health, to take a look at the report and here’s what she had to say:

…This report looks to be raising critical issues regarding payment disparities. We’ve known for years, from the work of the [Attorney General], [Center for Health Information and Analysis] and others that these disparities exist and are, in many cases, getting worse. So far, we’ve done little to address them, and the effect these disparities have on lower paid providers and the patients for whom they care. However, I don’t think the solution is, in most cases, to just increase the rates of payment for poorly paid providers, although that is a needed action for some. We also need to talk about reallocation of existing payments, and about costs. I am supportive, to some extent, of giving consumers reasonable financial incentives, based on their income, to use lower cost providers—although lower paid is not the same as lower cost–but we also need approaches that are systemic. Consumers in tiered and high deductible health plans aren’t going to solve this problem without tough action by state government and other payers, including, in my opinion some regulation of rates of payment. And most tiered networks available so far are regressive — they impose higher costs on lower-and moderate-income people. They address one form of inequality by creating another.

Among the findings, according to the H.E.A.L press release:

“The rich get richer as highest cost hospitals attract a greater proportion of patients with commercial insurance, which have higher reimbursement rates than Medicare and Medicaid.”

(H.E.A.L report)

(H.E.A.L report)

–“Patient migration for routine care from community hospitals to high cost Boston teaching hospitals increases total medical costs and contributes to higher premiums for all individuals and families with commercial insurance (non-Medicare nor Medicaid). Additionally, low-income patients, forced to travel greater distances to receive routine care are more likely to forgo treatment until conditions become acute and require more expensive interventions.”  Continue reading

Boston’s Mostly Good Results In Health Savings Experiment

Boston is a major player in a critical national health care test: Can focusing on prevention, and paying doctors based on the quality of their care, actually save money?

After the first year of this experiment, the answer is: Maybe.

Nationally, 32 large hospitals and physician groups signed on as Pioneer ACOs (Accountable Care Organizations). 

They agreed to try to save money on Medicare patients while still making sure patients received regular check-ups, cancer screenings and kept problems such as high blood pressure under control. Results out today show that 18 of the 32 groups spent less on Medicare patients than doctors and hospitals outside this pilot project. Most of those who saved money got to keep half the savings.

All 32 groups met the program’s quality goals.  There was a disagreement about how tough the federal Center for Medicare and Medicaid Services should be in setting those 30-plus goals.  The issue may come to a head again this year when quality scores won’t just be reported, they will count towards or against what providers are paid.



In Boston, four of the five Pioneer ACOs spent less money on Medicare patients in the first year of the contract than the federal government projected they would spend if not operating as an ACO:

–Beth Israel Deaconess Care Organization (BIDCO) says it saved 4.2%.

–Mount Auburn Cambridge Independent Physicians Association (MACIPA) says it saved 3.4%.

–Partners HealthCare says it saved 2.4%.

–Steward Health Care says it saved money, but declined to say how much.

–Atrius Health, the state’s largest physicians group lost money.
Update: Atrius Health says a final tally, that includes the first quarter of this year, reduced its loss from 2.1% to .98%. Since this falls within the margin of error, Atrius will not have to return any money to CMS for the first year of the Pioneer ACO program.

Specifically $220 on each of its Medicare patients.  Atrius offered more specific numbers than any of the other Boston Pioneers (as a sort of challenge that the other organizations did not take up). Transparency anyone?

Atrius spent $10,665 on its Medicare patients before becoming a Pioneer ACO, and $10,885 after the first year.

“We thought we’d be at an initial disadvantage,” says Atrius CEO Gene Lindsey, “because we had already harvested much of the low hanging fruit, that some of the organizations might be able to harvest in the first year to show good results.  But the difficult work that would be necessary for sustained results…would really be a long-haul effort.”

At Partners, Vice President for Population Health Management at Partners HealthCare, Dr. Tim Ferris, says he “didn’t expect to be this successful in the first year of the program.”  Ferris echoes Lindsey’s long view. The changes needed to make an ACO work are “a long term effort that will pay off much more in five years than in the first year.” Continue reading

What Mass. Hospitals Charge Vs. What They Get Paid

View map in a larger map

Some people play fantasy football, some knit. We here at CommonHealth sometimes like to play with health care data — most recently, a trove of Medicare numbers released last week on how much hospitals officially charge for common procedures and how much Medicare actually pays for them.

WBUR’s Alex Kingsbury first took a look at the wide range in Massachusetts hospitals’ charges for a single category, treatment of chronic lung disease, here. His map illustrated a strikingly broad range from $8,918 to $52,729. Now, in the map above, he rejiggers his Google Fusion Table to explore a broader question I put to him: How do the hospitals shake out in terms of the percentage of their official charges that they get from Medicare?

And here’s a fun little factoid that emerges from the map: That range goes from procedures for which the Medicare payment amounts to less than 18 percent of the charges billed to well over 100 percent of the charges billed. I’d thought this recalculation of the data might yield some interesting insights — Who most overcharges? Or who might feel most shafted by government payments? — but it runs such a crazy gamut that perhaps it serves mainly as yet another indicator of just how distorted and Byzantine and broken the American health care market is. (Didn’t need any further proof of that? Fine. Just enjoy playing with the map.)

Last week’s release of the Medicare data brought a media splash — particularly among data-visualization fans like the Washington Post — but also a backlash.

Health care economist Uwe Reinhardt pointed out that the official hospital charges are famously irrelevant to the reimbursement that health insurers actually pay, to the point that he called last week’s fuss about the Medicare data laughable. He wrote in The New York Times:

Even funnier are the protestations by hospital executives that hardly anyone ever pays these fictional prices, which prompted me to offer the following technical definition: “ ‘Charges’ are the prices that a totally inebriated foreign billionaire would pay a U.S. hospital if his wife were not around to control the bloke.”

Former Beth Israel Deaconess Medical Center chief Paul Levy also blasted the Medicare data as “useless noise”: Continue reading

Debunking ‘The Myth Of The Greedy Geezer’

You know the greedy geezer, don’t you? That resource-sucking, Social Security-inflating senior who’s being blamed by some these days for the federal budget deficit now and in years to come, depriving today’s children of their rightful legacy?

Well, in a sweeping piece in the Columbia Journalism Review, health care reporter Trudy Lieberman explodes the idea that the Social Security debate should be framed as a conflict between old and young.  She begins:

A meme that has been bubbling up in the media for months goes something like this: The elderly have it too good. They claim too much of the country’s financial resources and will eat their children’s—and grandchildren’s—breakfast, lunch, and dinner unless Social Security and Medicare are cut. The country can no longer afford to give seniors so much.

Trudy Lieberman

Trudy Lieberman

The press, she writes, “has been presenting a one-sided picture of the Social Security situation, quite possibly to the detriment of young and the old alike. From other perspectives, the two generations are not in opposition at all, but natural allies, both with common interests in a strong Social Security system.”

In fact, Trudy argues, this false generational conflict draws attention away from what may be the true conflict around Social Security: Between the richest 1 percent and the rest of us. Listen to her discuss the issue by clicking the play arrow on the sound file above, and read her full article here.

Medicare, You Can Do Better (Or Why You Need A Translator For This Post)

By Martha Bebinger

I wrote to Medicare a while back, asking for a price.  I know nothing is simple in the world of health care costs, but I just needed one number, that’s all. One number that Medicare uses, I assume, to calculate payments to doctors and hospitals all the time.

Here’s what I wanted to know: how much does Medicare pay a particular hospital in Boston for a colonoscopy (it was for a story I wrote about searching for the best colonoscopy in our medical Mecca).

The first response I got, at a time when we’re supposed to have more price transparency, was ridiculous.  If I can figure this out, I should be awarded an honorary masters in something, don’t you think?

For the inpatient hospital side:

If you want to calculate a hospital specific DRG payment for a specific fiscal year, look at that year’s IPPS Impact file to get the hospital’s wage index.

Then you can look at Table 5 for the FY 2009 Final Rule to get the relative weights for the MS-DRGs you are interested in. Finally, you can determine the FY 2009 labor related share and non-labor related share rates from Table 1A in the FY 2009 Final Rule.

These files and tables can be found here:

Then the hospital specific DRG payment can be calculated as follows: (wage index x labor related share + non-labor related share) x DRG relative weight.

For the outpatient side:

Medicare Part B data by procedure code for specific years are posted: Data are presented by 5-digit code so you would need to know the code for CT scan and MRI. Code range categories are identified in the readme file which is included in the zipped file.

A colonoscopy for the inpatient side does not affect the MS-DRG assignment. You will only be able to narrow it down by looking at the procedure codes. Below are the two most common reported. Continue reading

Health Care And The Fiscal Cliff Deal

Harvard professor and author John E. McDonough

Harvard professor and author John E. McDonough

I don’t know about you but I never want to hear about the “fiscal cliff” ever again.

But for true wonks who wish to close the loop on what actually emerged from that final, chaotic and infuriating flurry of legislative wrangling earlier this week, here’s John McDonough, this town’s go-to guy for level-headed health care analysis, offering details in The Boston Globe.

Aside from the major fix to doctors’ Medicare payments (the deal prevents a 30% drop in physician fees) McDonough notes some other items that you probably heard nothing about:

There are 29 Medicare and other health related sections in all. Here are some of the big ones:

–The big “pay-for” cuts $10.5B from Medicare hospital payments to recoup over-payments to hospitals.
–Payment adjustments for End Stage Renal Disease (ESRD) will save $4.9B.
–Rebasing payments for Disproportionate Share Hospitals (DSH) will save $4.2B.
–Rejiggering the coding intensity between Medicare Advantage and Medicare fee-for-service will save $2.5B.
–$1.8B will be saved from reduced payments for certain therapies provided on the same day.
–Eliminating the Medicare Improvement Fund will save $1.7B.
–Throw in a bunch of smaller items less than $1B in savings, and we end up with only a net $1.7B increase in spending over 10 years.

Study: Canada Points Way To Saving Medicare

CIA map of Canada

CIA map of Canada (Wikimedia Commons)

Plenty of rhetoric this election season has warned that Medicare, the government health coverage for seniors, will go bankrupt in a few years. (CNN does an excellent fact-check of those claims here.)

What is to be done? The candidates propose differing remedies, but a research letter just out in The Archives of Internal Medicine analyzed decades of Medicare data and offers a persuasive case for an alternative solution: Do as the Canadians do.

It estimates that if the United States Medicare system were more like Canada’s, we could have saved more than $2 trillion since 1980. Instead, our Medicare spending on seniors has grown at almost triple the rate of Canada’s.

Drs. Steffie Woolhandler and David Himmelstein

Drs. Steffie Woolhandler and David Himmelstein

The authors, Dr. David U. Himmelstein and Dr. Steffie Woolhandler, are professors at the City University of New York’s School of Public Health and visiting professors at Harvard Medical School. They are also co-founders of Physicians for a National Health Program and prominent advocates for a single-payer system in the United States. From the press release:

After adjusting for inflation, the authors found U.S. Medicare spending per elderly enrollee rose 198.7 percent from 1980 through 2009. In Canada, the comparable figure was 73 percent.

According to the authors, the findings have important implications for the debate on how to save Medicare. “Had U.S. Medicare spending per elderly enrollee increased as slowly as in Canada, the savings from 1980 through 2009 would have totaled $2.156 trillion,” said Himmelstein. “That’s equivalent to more than one-sixth of the U.S. national debt.”

The new findings appear today in the Archives of Internal Medicine, a leading medical journal published by the American Medical Association. The article, which takes the form of a research letter, includes supplementary analyses based on less detailed data showing that the U.S. could have reaped even larger savings – nearly $3 trillion – from 1971 to 2009.

The article cites several reasons for Canada’s better record on cost containment: Less paperwork and administrative bloat throughout their health system (administrative costs account for 16.7 percent of total health spending vs. 31 percent in the U.S.); the use of lump-sum budgets for hospitals; stringent controls on spending for new buildings and expensive new equipment; the use of single-buyer purchasing power to rein in drug and device prices; relatively low litigation and malpractice costs; and an emphasis on primary care. Continue reading