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Canadians root for an ACA innovation center

By SHEFALI LUTHRA

For Kaiser Health News

TORONTO

Ask people in Canada what they make of American healthcare, and the answer typically falls between bewilderment and outrage.

Canada, after all, prides itself on a health system that guarantees government insurance for everyone. And many Canadians find it baffling that there’s anybody in the United States who can’t afford a visit to the doctor.

So even as Canadians throw shade at the American hodgepodge of public plans, private insurance, deductibles and copays, they hold in high esteem a little-known Affordable Care Act initiative: the federal Center for Medicare & Medicaid Innovation (CMMI).

It was a hot topic on a reporter’s recent visit to Toronto to study the single-payer  system.

Wonky as it seems, the center’s mission — testing innovations to hold down healthcare costs while increasing quality — has gotten noticed. Researchers and clinicians talk about its potential to foster experimentation and how it has led the United States to think out of the box regarding payment and reimbursement models.

“It is gaining traction in many circles here,” said Robert Reid, who researches health care quality at the University of Toronto.

“There have been some good efforts … they have tried more things than we have,” agreed Dr. Kaveh Shojania, a Toronto-based internist who studies health care quality and safety.

Despite the praise emanating from north of the border, the program doesn’t get the same love on the homefront.

Through the ACA, CMMI is armed with $10 billion each decade and sponsors on-the-ground experiments with doctors, health systems and payers. The idea is to devise and implement payment approaches that reward healthcare quality and efficiency, rather than the number of procedures performed.

Since taking office, though, President Trump has rolled back its reach.

Canada has its own reasons for seeing potential in this sort of systemic test kitchen.

Healthcare’s growing price tag — and a payment system that doesn’t necessarily reward keeping people healthy — is hardly just an American problem. The vast majority of Canadian doctors are paid through what Americans call the “fee-for-service” model. And Canadian policymakers are also looking for strategies to curb health care costs — which, while greater in the United States, are a big budget here, too.

“The whole world is confronting the same issue, which is, ‘How do you pay and incentivize doctors to keep people out of the hospital and keep them healthy?’” said Ezekiel Emanuel, a former adviser to former President Obama who pushed for the center’s initial development. “Different places are looking at how to break out of that system, because everyone knows its perversions. This is one place where … we are in the world among the most innovative groups.”

Emanuel added that he wasn’t surprised to hear of the center’s appeal in Canada. He has received similar feedback from health ministers in Belgium and France, he said.

Even so, U.S. critics say CMMI’s work is a waste of money or a federal overreach.

And, so far, the Trump administration has reduced by half the size of one high-profile Obama administration project that would have bundled payments for hip and knee replacements — so that the hospitals performing those were paid a set amount, rather than for individual services. It also canceled other scheduled “bundling” projects targeting payment for cardiac care and other joint replacements.

CMS Administrator Seema Verma wrote in The Wall Street Journal in September that the Innovation Center was going to begin moving “in a new direction.”

A follow-up “request for information” from the federal government suggested that the center would emphasize cutting healthcare costs through such  strategies as market competition, eliminating fraud and helping consumers actually shop for care. It also suggested that the Innovation Center would favor smaller-scale projects.

At least for now, it’s hard to interpret what this means, said Jack Hoadley, a health-policy analyst at Georgetown University who has previously worked at the Department of Health and Human Services.

Limiting CMMI’s footprint would be problematic, Emanuel argued, while discussing CMMI’s status in the U.S.

The footprint in Canada, though, seems to be growing.

“We definitely looked to it as a model as something we can do. Like look, this happened, and why can’t we do the same thing here?” said Dr. Tara Kiran, a Toronto-based primary-care doctor who also researches healthcare care quality.


Julie Rovner: What happened to ‘Medicare for all’?

By JULIE ROVNER

For Kaiser Health News

After a raucous debate lasting nearly a year, the Democrats are united on health care. But that unity does not include a call for a single-payer “Medicare for all” health system.

“This campaign is about moving the United States toward universal health care and reducing the number of people who are uninsured or under-insured,” Sen. Bernie Sanders (I-Vt.) said Tuesday in endorsing his rival Hillary Clinton, the presumptive Democratic presidential nominee.

Sanders did win a few health care concessions in the negotiations leading to the endorsement. Clinton vowed to support more funding for community health centers and access to a “public option” government insurance plan, which she has supported in the past.

But on Sanders’s top health priority — his “Medicare for All” plan — there was not a word. At the Democratic Platform Committee meeting over the weekend, an amendment to add a single-payer plan to the document was defeated.

It wasn’t much of a surprise.

Most health-policy analysts — including those who are sympathetic to the idea — say moving from the current U.S. public-private hybrid health system to one fully funded by the government in one step is basically impossible. And that’s making a huge assumption that it could get through Congress.

“To try to do it in one fell swoop would be massively disruptive,” said Paul Starr, a professor at Princeton who was a health policy adviser to President Bill Clinton.

The U.S. healthcare system, said Jeff Goldsmith, a healthcare consultant and health futurist, is “the size of a country — it’s bigger than France — and it employs 16 million people.”

In moving to a single-payer system, he said, “you’re talking about reallocating $3 trillion, reducing people’s incomes and creating” in effect a single entity that would set prices for all medical services. Single-payer supporters dispute the idea that getting from here to there could not be done.

“We’re so used to such a complicated system in the U.S. that we envisage any change would be incredibly complicated as well,” said Steffie Woolhandler, a physician and one of the founders of the single-payer advocacy organization Physicians for a National Health Program. “But what you’re doing with single-payer is actually simplifying the system.”

For example, said Woolhandler, “the latest data are that U.S. hospitals are spending 25 percent of their total budget on billing and administration, and hospitals in single-payer nations like Canada and Scotland are spending 12 percent.”

But while a single-payer system would undoubtedly produce efficiencies, it would also bring huge disruptions. Said Starr, single-payer supporters “haven’t worked through the consequences.”

One of the biggest is exactly how to redistribute literally trillions of dollars. The problem, said Harold Pollack, a professor at the University of Chicago, is that the change will create losers as well as winners.

“Precisely the thing that is a feature for single-payer proponents is a bug for everyone who provides goods and services for the medical economy,” he said, since their profits — and possibly their incomes — could be cut.

And it’s not just the private insurance industry (which would effectively be put out of business) that could feel the impact to the bottom line. Parts of the health care industry that lawmakers want to help, like rural hospitals, could inadvertently get hurt, too. Many rural hospitals get paid so little by Medicare that they only survive on higher private insurance payments. Yet under single-payer, those payments would go away and some could not make it financially. “You would not want to wipe out a third of the hospitals in Minnesota by accident,” Pollack said. “And you could,” if payments to hospitals end up too low.

There are also questions about how feasible it would be to have the federal government run the entire health care system. “It’s hard to be nimble” when a system gets that big, said Ezekiel Emanuel, a former health-sector adviser in the Obama administration now at the University of Pennsylvania. “No organization in the world does anything for 300 million people and does it efficiently.”

The politics of Medicare — which serves roughly 50 million Americans — already make some things difficult or impossible, he said, pointing to a current fight in which doctors and patient advocacy groups blasted a proposal to move to a more cost-effective way to pay for cancer drugs. “You already can’t do certain things in Medicare because of the politicization,” he said. ”When you cover the whole country, it would be a lot of gridlock.”

Pollack agreed, and pointed out it’s not just the health care industry that could revolt. When the full Affordable Care Act was rolled out in 2013, he said, “the people who couldn’t keep their old plans — a very tiny number as a percent of Americans” were furious. “We saw how difficult that was and how angry the public was when that promise wasn’t kept. Now imagine the major shift we’d have to do to move to a single payer system.”

There’s also the question of whether it’s simply too late to go back to the health care drawing board.

Single-payer supporter Woolhandler insists it is not. “Other nations have gone to single-payer systems,” she said. “It usually can be done in about a year.”

The last industrialized country that did the switch was Taiwan, in the mid-1990s. Taiwan, however, with its 23 million residents, has a population larger than New York and smaller than Texas, and had no existing private health insurance system at the time.

“What I’ve often said is we could have done this in the 1940s when Harry Truman proposed it,” said Starr, who has written at length on the history of American health politics. “Health care at that point was probably about 4 percent of [gross domestic product] and there existed at that time a relatively small private insurance industry.” Today health care spending in the U.S. is approaching 18 percent of the nation’s GDP and the private health insurance industry accounts for half a trillion dollars per year.

Both Starr and Pollack, however, said it would be possible to make a switch, although it would have to be carried out over a very long period of time.

“You could imagine some kind of long transition, where you gradually expanded Medicare,” said Starr, “for example moving it down to age 55” and then in later years continue to lower the age threshold.

But even if the U.S. did manage to execute a single-payer system, said Pollack, it would likely prove problematic, particularly in how it would be financed.

“The major value of a single-payer system would be to help the bottom third of the income distribution, and that means the top 20 percent of the population will have to pay more,” he said. “I’m actually in favor of that, but let’s not kid ourselves. That’s a knife fight that’s going to be had.”


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