PHYSICIANS FOR A NATIONAL HEALTH PROGRAM 29 EAST MADISON SUITE 602 CHICAGO, IL TEL: (312)

The Uninsured

Financial Suffering Among the INSURED

Rising Economic Inequality

Persistent Racial Inequalities

Rationing Amidst a Surplus of Care

Unnecessary Procedures

Variation in Medicare Spending: Some Regions Already Spend at Canadian Level

Half of Americans Live Where Population Is Too Low for Competition Source: NEJM 1993;328:148 A town’s only hospital will not compete with itself

ACOs: A Rerun of the HMO Experience?

Why the ACO/HMO Concept Resonates Proliferation of redundant high tech facilities and useless, even harmful interventions Neglect of primary care, public health, prevention, mental health Lack of teamwork Widespread quality problems need system solutions Inadequate public accountability

HMO-ACO Logic FFS is the problem; capitation (shifting insurance risk) the solution. But... small clinics and hospitals can’t bear risk, so consolidation is necessary. Shifting risk creates incentive to deny care, so report cards are necessary.

Medicare’s PGP/ACO Demo. Project : Gaming, But No Savings “T he model for the ACO program... has been tested in the PGP Demonstration Project... diagnosis coding changes the PGP sites initiated... produced apparent savings that resulted in shared savings payments to some of the demonstration sites, but not actually fewer dollars spent” Berenson RA. Am J. Managed Care, 2010; 16:

ACO Cost Cutting Armamentarium Prevention Disease management “Care Coordination” (consolidation, gate- keeping, utilization review) Electronic medical records Report cards and P-4-P

Prevention Saves Lives, But Not Money “Although some preventive services do save money, the vast majority reviewed in the health economics literature do not.” Cohen JT et al., New England Journal of Medicine 2008;358: “It’s a nice thing to think, and it seems like it should be true, but I don’t know of any evidence that preventive care actually saves money.” Gruber J,quoted in “Free lunch on health? Think again,” NY Times, August 8, 2007: C 2.

Medical Homes and Enhanced Primary Care Don’t Require ACOs “Medical Homes” that integrate more nurses, social workers etc. into primary care and cut physicians’ panel size may improve care and reduce ED and inpatient utilization, possibly enough to offset the additional personnel costs But this intervention does not require recycling the HMO experiment.

P4P – Scores on Whatever You Pay for Improve, But... “The [British P4P] scheme accelerated improvements in quality for 2 of 3 chronic conditions in the short term. However, once targets were reached, the improvement... slowed, and the quality of care declined for 2 conditions that had not been linked to incentives.” Source: NEJM 7/23/2009:368

ACOs and HMOs: Faith-Based Solutions Capitation as magic bullet Consolidation among providers cuts costs Prevention, care management & EMR/ computers save money P-4-P encourages global quality Risk adjustment can overcome gaming (upcoding of diagnoses)

Truly Accountable Care Non-profit All capitation payments used for patient care, not for capital investments, profits, bonuses or exorbitant salaries. Separate capital funding based on regional health planning Eliminate insurance middle-men Rich and poor in same plan Quality data used for improvement, not financial reward

Investor-Owned Care: Inflated Costs, Inferior Quality

For-Profit Hospitals’ Death Rates are 2% Higher Source: CMAJ 2002;166:1399

For-Profit Hospitals Cost 19% More Source: CMAJ 2004;170:1817

For-Profit Dialysis Clinics’ Death Rates are 9% Higher Source: JAMA 2002;288:2449

Mandate Model Reform: Keeping Private Insurers In Charge

“Mandate” Model for Reform Proposed by Richard Nixon in 1971 to block Edward Kennedy’s NHI proposal

“Mandate” Model for Reform 1.Expanded Medicaid-like program  Free for poor  Subsidies for low income  Buy-in without subsidy for others 2.Employer Mandate +/- Individuals 3.Managed Care / Care Management

“Mandate” Model - Problems Absent cost controls, expanded coverage unaffordable Computers, care management, prevention not shown to cut costs Adds administrative complexity and cost; retains wasteful private insurers Impeccable political logic, economic nonsense

Massachusetts: Required Coverage (Income > 300% of Poverty) Premium: $5,600 Annually (56 year old) Premium: $5,600 Annually (56 year old) $2000 deductible $2000 deductible 20% co-insurance AFTER deductible is reached 20% co-insurance AFTER deductible is reached

Despite Medicare’s Lower Overhead, Enrollment of Medicare Patients in Private Plans Has Grown

Private Medicare Plans Have Prospered by Cherry Picking

Public Money, Private Control

The U.S. Trails Other Nations

Canada’s National Health Insurance Program

Quality of Care Slightly Better in Canada Than U.S. A Meta-Analysis of Patients Treated for Same Illnesses (U.S. Studies Included Mostly Insured Patients) Source: Guyatt et al, Open Medicine, April 19, 2007

A National Health Program for the U.S.

Phony vs. Real Reform Phony Choice of HMO/insurer Coverage = Copays, exclusions etc. Security = Lose it if you can’t work or can’t pay Savings = Less care Real Choice of doctor and hospital Coverage = First $, Comprehensive Security = For everyone, forever Savings >$400 bil on bureaucracy

Public Opinion Favors Single Payer National Health Insurance