For Profit Healthcare: Is It Healthy? What is the alternative? Ed Weisbart, MD, CPE, FAAFP Physicians for a National Health Program Chair, MO Chapter Medicare for All? Whats So Great About Medicare? Whats So Great About Medicare? 52 years of success and American pride 1. Youre in control 2. Much less waste 3. Longer lives Medicare Means
Youre in control Physicians in practice in USA Physicians opting out of Medicare Go to any doctor or hospital Anywhere in the United States 685,000 9,539 Youre back in control. 2013 data from Fiscal Times http://www.thefiscaltimes.com/Columns/2013/09/04/Are-Doctors-Really-Ditching-Medicare Accessed July 16, 2017 Medicares directory
98% of practicing physicians Medicare Means Stop Wasting Our Money on Bureaucracy 20% Insurance Overhead Q1 2016 19.9% 18.8% 18.7% 15% 15.9%
10% 5% 0% Aetna Wellpoint/ Anthem United Healthcare Source: Day, Himmelstein, Broder, Woolhandler Int. J Health Serv 2014 Updated data from firms SEC filings (Q12016) Overhead = (Premium revenue Medical Expenses) / Premium Revenues 2016 Medicare Trust Fund Report at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2017.pdf Humana 2.2% Medicare A+B
Medicare Means Healthier Americans 1 We have the worlds best doctors, hospitals, nurses, etc. 3 USA Rank Medicare is a crown jewel of America. 5 7 Age 65 9 11
Women 13 Men Institute of Medicine. Shorter Lives, Poorer Health. Fig 1-9: Ranking of US mortality rates by age group among 17 peer countries, 2006-2008. 2013 Peer nations are Australia, Austria, Canada, Denmark, Finland, France, Germany, Italy, Japan, Norway, Portugal, Spain, Sweden, Switzerland, Netherlands, United Kingdom Age 95-99 90-94 85-89 80-84 75-79
15-19 10-14 5-9 1-4 17 0-1 15 Medicare for All Is Elegantly Simple Improved Medicare for all Americans Single Payer HR 676:
Medicare for All Improve Medicare Expand Medicare Fix the benefit gaps Include every American, Add coverage for dental, including Congress hearing, glasses, etc. Eliminates wasteful overhead Eliminate financial barriers Creates the largest risk pool No more deductibles, copays, Resists legislative damage etc. Entirely eliminates any role or market for Medicare Advantage (Part C) Medicare for All Makes Economic Sense
25 independent studies, at the state and federal level, confirm that the savings would fund full coverage. http://www.pnhp.org/facts/single-payer-system-cost Accessed 2/25/2017 Medicare for All Makes Economic Sense $ Billions Increased utilization (home health, dental, etc.) $142 Covering the uninsured $110 Medicaid Rate Adjustment $74
Analysis of HR676 Friedman, G. Dollars & Sense. March/April 2012 New Costs $178 Negotiated prices for drugs and devices $215 Admin costs to providers (hospitals and physicians) $153 Health insurance admin New Savings; $23 Gov. admin ($23B)
New Savings Proven strategy to control hospital costs: Global Budgeting from One Payer Maximizes Administrative Savings Eliminates per-patient billing Eliminates incentives for upcoding Reduces internal cost accounting Reduces Disparities Eliminates profitability of particular patients based on insurance Eliminates profitability of specific services (e.g. psych vs.
ortho) Independent Hospitals Are Disappearing 100% Proportion of Hospitals That Are System-Owned vs. Independent 80% System-Owned 60% 40% 20% 0% Source: Sanofi Hospital/Systems Digest, 2016 Independent
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Hospitals Are Gobbling Up Other Hospitals 107 100 93 Number of Acquired Hospitals 75 76 50 60 50 102 83
102 90 16% of US hospitals have been acquired since 2008. 25 0 99 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 https://www.managedcaremag.com/archives/2017/12/hospital-consolidation In healthcare business models Consolidation Has Become a Defining Factor Economies of Scale Tighten operations
Streamline services Increased Market Share Boost Clinical Standardization Stronger negotiating Reduced cost of capital Evidence-based care Drive towards best practice 2.5% reduction in annual operating expenses per admission at acquired hospitals - Report from the American Hospital Association http://www.healthleadersmedia.com/leadership/benefits-hospital-consolidation-detailed-aha-funded-report Self-Reported Improvements in
25% % of survey respondents noting improvements Patient satisfaction as measured by HCAHPS Deloitte, Hospital M&A: When Done Well, M&A Can Achieve Valuable Outcomes, 2017 Market Consolidation Increases Prices $250 Price to Treat An Adult with Common Cold $200 $150 $100 20% 30%
40% 50% 60% % of Communitys PCP Practices Owned by Hospitals http://petris.org/wp-content/uploads/2018/03/CA-Consolidation-Full-Report_03.26.18.pdf https://www.brookings.edu/testimonies/health-care-market-consolidations-impacts-on-costs-quality-and-access/ Market Consolidation Increases Prices Low-Consolidated Community Highly Consolidated Community Treat a Common Cold $131 $215
Monthly Premium http://petris.org/wp-content/uploads/2018/03/CA-Consolidation-Full-Report_03.26.18.pdf https://www.brookings.edu/testimonies/health-care-market-consolidations-impacts-on-costs-quality-and-access/ Market Consolidation Increases Prices The same patterns are found wherever you look. Breast, Cervical, and Colon Cancer Screening Hematology/Oncology procedures Sore Throat treatment Kidney Stone treatment Wrist, hand, or ankle fracture/dislocation/sprain Outpatient Orthopedics procedures Coronary Artery Bypass surgery
Outpatient Cardiology procedures Partial Hip Replacements Knee Ligament injuries Premature babies Fibroid surgery http://petris.org/wp-content/uploads/2018/03/CA-Consolidation-Full-Report_03.26.18.pdf https://www.brookings.edu/testimonies/health-care-market-consolidations-impacts-on-costs-quality-and-access/ Market Consolidation Increases Prices Larger hospitals can negotiate higher rates than small independent groups. How does this happen? Must have hospitals in a multi-market system =
higher rates for system hospitals elsewhere. Anti-trust enforcement agencies look at markets separately. https://www.brookings.edu/wp-content/uploads/2016/07/Ginsburg-California-Senate-Health-Mar-16-1.pdf Investors making a profit from health care is contrary to the Gospel call to heal the sick Catholic hospitals cannot be sold to for-profit companies. Pope John Paul II Vatican statement on sale of St. Louis University Hospital to Tenet Dec. 1997 For-Profit Hospitals Cost 19% More Meta-analysis of 8 studies across 1,978 hospitals CMAJ 2002;166:1399; updated study in progress
For-Profit Hospitals Death Rates Are 2% Higher Meta-analysis of 14 studies of 36 million patients CMAJ 2002;166:1399; updated study in progress For-Profit Hospitals Lack Translation Services 87% 84% 74% Percent with Translation Services Non-Profit
For-Profit 58% 50% Low Need Moderate Need Health Affairs 2016;35:1399 Need defined by % of population in service area not English proficient: Low = <5%; moderate = 5-10%; high = >10% 56% High Need Lower Quality Hospitals More Likely to be For Profit Highest Quality Hospitals
Non-Profit / Gov Lowest Quality Hospitals 21.00% 11.88% For-Profit 88.12% Health Affairs 2011;30:1904. Quality rating based on Medicares Hospital Compare data 79.00% Tenets Track Record 1985-1993: Recurrent criminal activity (bribery, kickbacks, kidnapping) 1994-1995: Insurance fraud, kickbacks ($579M fines and settlements) 2002-2003: FBI raids Tenet hospitals re: unnecessary heart surgery ($449M settlement) 2006: Medicare outlier fraud, improper tax deductions ($1.2 B fines) 2015: DOJ investigating 56 Tenet hospitals for kickbacks and inappropriate defibrillator implants
2016: Kickbacks for Obstetric referrals ($516M fine) Tenet was formerly known as National Medical Enterprise or NME Mod Hlthcr 3/29&4/26/85, 9/6/93, 7/4/94, 11/4/02, 1/16/06, 11/26/06, 5/18/15 USA Today 8/26/02; NYT 10/22/91, 7/31/94; 11/1/02; 6/30/06; Atlanta Bus Chronicle 8/1/16 HCAs 20th Century History Closed the only hospital in Destin FL Closed the only rehab unit in Austin TX Pressured physicians to admit insured pts Pressured physicians to exclude uninsured pts Widespread charges of inadequate nurse staffing Convicted of unfair labor practices Convicted of conspiracy to defraud business partners NYT 3/29, 5/11, &4/6/97; Jenks 9/24/97; Mod Hlthcr 6/29/93, 10/17/94, 10/30/95, 4/15/96; Columbus Dispatch 3/19/97; WSJ 7/29/97 HCAs 21st Century Practices 2004: Record settlement for Medicare fraud: $1.7 billion 2015: Routinely performed unnecessary cardiac
procedures. $215 million judgment. Too many others to list https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386.htm https://www.rgrdlaw.com/cases-schuh-v-hca-holdings-inc.html Multiple settlements or judgments of fraud against government, insurers, patients, and investors. Are Hospital Acquisitions Good or Bad? Economies of Scale Synergies Higher rates Reduced staffing and services
Rates drive premiums For Profits Pay Local Taxes Property tax Sales tax Ultimately derived from patient care May Fund Independent Foundations Transitions may fund a foundation Local investments Their functionality should not be a work-around but core to the national strategy. We Love Our Hospitals.
Canadians Love Theirs Too. Toronto General Hospital McGill University Health Centre University of Alberta Hospital Alberta Childrens Hospital Physicians for National Health Program Membership open to everybody not only to physicians! www.pnhp.org Facebook: DoctorsForSinglePayer Twitter: @pnhp
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