President of Just Care USA Diane Archer did not mince her words as she explains the attempted destruction of Medicare by corporate America.
Diane Archer speaks on Medicare privitization
Diane Archer is president of Just Care USA, an independent digital hub covering health and financial issues facing boomers and their families and promoting policy solutions. She is the past board chair of Consumer Reports and serves on the Brown University School of Public Health Advisory Board. Ms. Archer began her career in health advocacy in 1989 as founder and president of the Medicare Rights Center, a national organization dedicated to ensuring that older and disabled Americans get the health care they need. She served as director, Health Care for All Project, Institute for America’s Future, between 2005 and 2010.
Following are the items we cover in this very important interview.
What’s happening to Medicare?
If not stopped or substantially limited in scope, a new government experiment begun under the Trump administration could privatize all of Medicare. Privatization will drive up costs for older adults and people with disabilities, particularly vulnerable people with complex or costly health conditions. it will likely lead to tens of thousands of needless deaths and disabilities every year.
How would it privatize all of Medicare? Isn’t Medicare a public program?
Two ways you can get your Medicare now. Directly administered through the federal government, which is called traditional Medicare, or indirectly, through corporate health insurers that receive a fixed rate per enrollee from the government to cover people’s care, which is called Medicare Advantage.
Right now about half of people choose traditional Medicare and the other half for Medicare Advantage.
With traditional Medicare, you use the doctors and hospitals you want and need wherever you are in the US. And, so long as you have supplemental insurance, all your costs are covered. Very simple and straight forward.
With MA, you are generally restricted as to the doctors and hospitals you can use if you want your care covered. And, you pay some amount out of pocket every time you receive care up to a cap of as much as $7,550 a year.
What’s the problem with MA?
Two big problems
The overarching problem with MA is that they are not competing to deliver high value care to people with complex and costly conditions. In fact, the opposite. The corporate health insurers are paid a flat fee regardless of the cost of services they provide. As a result, you’ll never see them marketing to people with cancer and heart disease. They would not profit as much if they attracted a lot of people with costly conditions.
Moreover, they get to decide when you get care, when it’s medically necessary, coming between you and your doctor. And, they have every financial incentive to delay and deny care. So, they create administrative and financial barriers to care.
And, they are allowed to make these decisions in a black box. The agency that oversees them has said every year for the last several years that they do not provide complete or accurate information about their activities to allow proper oversight. The agency cannot assess their quality.
The other big problem is that they cost a lot more than traditional Medicare, driving up Medicare costs for taxpayers and people with Medicare alike.
Here’s what the agency that oversees Medicare says about Medicare Advantage:
“The MA program has been expected to reduce Medicare spending since its inception—under the original incorporation of private plans in Medicare in 1985, payments to private plans were set at 95 percent of FFS payments—but private plans in the aggregate have never produced savingsfor Medicare, due to policies governing payment rates to MA plans that the Commission has found to be deeply flawed.
In particular, coding intensity inflates payments to MA plans and undermines the goal of plans competing to improve quality and reduce health care costs; the quality bonus program boosts plan payments for nearly all enrollees but does not meaningfully reflect plan quality, from the perspective of enrollees or the Medicare program; and MA benchmarks are set at an abundantly high level such that the government subsidizes MA plans’ substantial and ever-higher levels of extra benefits for MA enrollees. Apart from payments, the Commission finds that the plan-submitted data about beneficiaries’ health care encounters are incomplete, preventing policymakers from understanding plan efficiencies or implementing program oversight. These policy flaws diminish the integrity of the program and generate waste from beneficiary premiums and taxpayer funds. A major overhaul of MA policies is therefore urgently needed.”
https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_Ch12_SEC.pdf
From Direct Contracting to REACH: What stays the same, what differs?
Similarities: If left unchanged, these pilots, which work in fundamental ways like Medicare Advantage (MA) will likely privatize all of Medicare, increase spending, and inevitably lead to drastic cuts to the program, shifting more costs onto vulnerable older adults and people with disabilities, increasing number of preventable deaths and disabilities and exacerbating health inequities.
- Eliminate choice of traditional Medicare, with an opt out in theory only, for most. Most will not understand their rights and would not want to change PCPs. Many people live in areas where DCE/REACH is only option.
- Exacerbate health inequities because they can profit most by caring for the relatively healthy and putting systems in place to encourage the sick to leave.
- Increase government spending without measurable value because they rely on the same “deeply flawed” payment policies in MA that, as MedPAC states, undermine “the goal of plans competing to improve quality and reduce costs:”
- Capitated risk-adjusted payments and upcoding, with ability to delay, deny and possibly withhold care puts patients at risk. Government will always pay far more than it costs to treat the majority of healthy people and far less than it costs to treat the small minority of people who need costly care. Goal will always be to avoid people in poor health.
- Poor data to assess quality. With MA, MedPAC says, “the plan-submitted data about beneficiaries’ health care encounters are incomplete, preventing policymakers from understanding plan efficiencies or implementing program oversight.” In addition to data, good oversight also requires resources CMS doesn’t have.
Differences: Better or same for insurers and investors, no better for enrollees
Increased provider control, in theory only. DCEs requires governing boards to be 25% providers, REACH 75%. But business model is the same with insurers and investors, who are accountable to their investors, who want an ROI. DC middlemen automatically in REACH.
Lip service to health equity, in fact more profiteering off of marginalized communities. REACH pays middlemen to report demographic data and pays them a $360 annual bonus per underserved person, regardless of how much care is delivered. Requires entities to design an equity plan. It is not about demonstrable results.
Less financial risk and therefore, more reliable profits.
REACH lowers DCE penalties for failing to meet quality metrics (Quality withhold falls from 5% to 2%) and for failing to control costs (Maximum discounts from benchmark in Global entities falls from 5% to 3.5%)
REACH changes in the methodology for calculating the limit on risk score growth (financial advisors responded by raising the strategic need to avoid high-risk providers, i.e., dump the docs taking care of the sickest) Still rewards entities that inflate risk scores and restrict care
Changes do not worry Wall Street.Investment analyst Spencer Perlman the day after the announcement: “the reforms are one part a public relations exercise … and one-part modest revisions that should not tangibly impact the for-profit entities currently participating in the Model.
