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Is Medicare4All really about expanding Medicare?

Raymond T Kyle

April 15, 2019

Although the Democrats’ 2018 mid term election strategy was advertised as a defense of the Affordable Care Act from Republican threats to repeal it, once the results were in, Democrat Senator Bernie Sanders of Vermont, and other 2020 Democrat hopefuls began a concerted campaign to replace President Obama’s signature domestic policy triumph with a single-payer model niftily titled “Medicare for All.” And, although backers, and the proposal’s website, claim that Medicare for All is merely an expansion of traditional Medicare, the details hint at something very different. In fact, Senator Sanders has praised the Canadian health care system as a model for Medicare for All.

Medicare for All, The Proposal

First, Medicare for All, unlike traditional Medicare, has no cost-sharing, meaning patients would have no deductibles, no co-pays, and no premiums. The reasoning behind such a provision is the claim that even minimal out-of-pocket costs reduce utilization. Since most people are not trained medical professionals, costs often keep individuals from seeking care when it is both needed, and most likely to have a positive outcome.

Medicare for All would have a single benefit package, and a single payer, which means no private insurance, and no options like Medicare Advantage or Medigap policies. There would be no red tape requirements, like prior authorization, for approved treatments, and hospitals, nursing homes, and other health centers would receive a “global budget,” where all expenses are reimbursed as a lump sum rather than payments made separately to doctors, labs, and other healthcare professionals involved in a patient’s care.

Under Medicare for All. a hospital or medical group that wants to purchase new capital equipment, like an MRI machine or CT scanner, would have to seek formal approval from a centralized authority before making the purchase. There would be a priority placed on approval for expenditures that address the needs of specific demographic and socioeconomic groups, in an effort to ensure underserved areas and populations receive equal consideration.

There. would be increased emphasis on Primary Care physicians, and less emphasis on specialists. This would be accomplished by subsidizing medical education for those pursuing Primary Care, and funding additional residency programs in Primary Care. Emphasis would be placed on prevention over treatment, and Primary Care doctors would assume greater responsibility for early diagnosis and intervention.

A central authority would negotiate drug prices for the entire United States, the goal being to pay no more for medications here in the US than anywhere else in the world.

Doctors participating in Medicare for All would be required to accept the program’s reimbursement rate as payment in full, and would be prohibited from accepting payments from private parties, even if the payer is the patient themselves. Again, emphasis for reimbursement would be Primary Care physicians rather than specialists.

Medicare for All states that it will ensure all Americans have access to health care, whether they live in a large, metropolitan area, or a poor, sparsely populated rural area. It promises to eliminate inequities in care, and improve the nation’s health, all while cutting medical red tape and other administrative costs. The proposal concludes by claiming that it would, “facilitate the distribution of healthcare resources.” That concluding statement provides insight into what Medicare for All really is, and what it is not.

Before we look into the Canadian system that is the model for Medicare for All, we need to better understand traditional Medicare, what the Trustees of the program say about its future, and how the pressures affecting traditional Medicare will affect any alternatives.

Traditional Medicare

Traditional Medicare consists of two parts, the Hospital Insurance Trust Fund (HI), more commonly called Part A, and the Medical Insurance Trust Fund (SMI), known as Parts B & D. Part A covers in-patient hospital care, skilled nursing facilities, home health care, and hospice services. Part B covers durable medical equipment without bid, ambulatory surgical centers, ambulance services, and medical supplies.

Funding for the two parts also differs, with Part A (HI) funded by a payroll tax on covered earnings. Employers and their employees each pay 1.45% of a worker’s pay, while self-employed individuals pay 2.9% of net earnings. High income workers must contribute another 0.9% tax on earnings above an indexed threshold, which is about $200,000/yr for individuals, and $250,000 for married couples. For Parts B & D (SMI), transfers from the Treasury’s general fund. These transfers represent the largest source of income for Parts B & D, and in 2017 accounted for 70% of funds. Beneficiaries also pay monthly premiums.

So, an obvious difference between traditional Medicare and Medicare for All is in funding. Medicare for All has no premiums, no co-pays, and no deductibles, not even prior authorizations for covered services.That means that Senator Sanders et al would need an increase in taxes just to run in place with no other changes to traditional Medicare. Unfortunately, cost projections for even traditional Medicare have not been static. Total traditional Medicare expenditures in 2017 were $710 BN, a 65% increase over the past decade. Annual per capita increases over the next decade are estimated to be 4.6%, fueled by the continuing retirement of Baby Boomers. To add insult to injury, the latest report by the Medicare Trustees predicts the Medicare Part A trust fund will be out of money in 2026, three years earlier than expected. The Trustees plead with Congress to face the need for reform sooner rather than later, so there is sufficient time for individuals, organizations, and taxpayers to adjust their expectations and behavior. So far, those pleas have fallen on deaf ears.

Medicare for All, The Cost

According to Senator Sanders own estimates, the plan he advocated during the 2016 presidential primary campaign would cost $1.4 trillion/yr. The Urban Institute estimated the 10-year-cost of the Sanders plan as $32 trillion. Candidate Sanders admitted, “there will be pain,” if there is a transition to his plan. As columnist and healthcare analyst Sally Pipes wrote in “Forbes” in July of 2018, “America is struggling to pay for ‘Medicare for Some’-much less ‘Medicare for All.”

The Canadian System

Since cost weighs heavily on Medicare for All, Senator Sanders has praised the Canadian health system for delivering care at half the cost of care in the United States. So, could the Canadian model be an effective road map for the United States?

The Canadian health care system, like Medicare for All, also has no out-of-pocket costs for doctor and hospital visits. Unlike Medicare for All, however, Canadian Medicare does not cover prescription drugs, dentistry, vision care, rehabilitative services, and home health care, so two-thirds of Canadians have supplemental coverage or employer coverage for those needs. The national government provides tender payments to Canada’s provinces and territories, which each have their own insurance plans, and manage actual delivery of care to their constituents. The private sector delivers much of actual care.

Since the Canadian system doesn’t cover all needs, it’s not truly a universal system. In fact, Canada is the only nation in the developed world which claims to have universal coverage, but does not include coverage for prescription medications.Senator Sanders has apparently taken note of those oversights, and provides for them in Medicare for All. But that’s not the only criticism of Sanders’ favored template for the replacement of traditional Medicare. There are also claims of inequity of care for certain indigenous peoples, and anger regarding cost-saving measures that translate into low pay for doctors, and long wait times for patients requiring diagnostic tests and/or treatment. And, of course, taxes are high in order to fund the system, or, at least part of the system.

There are abysmal health statistics for native peoples like the Inuit, and the lack of coverage for prescription medications means that just as in the US, some patients will forego filling prescriptions for lack of money to pay for them. Estimates for the number of Canadian households where someone is not taking their medications due to an inability to pay run as high as 25%. This has led to charges of inequity of care based on demographics and financial status.

Inequity is also charged as regards wait times for non-emergency, specialty procedures like hip and joint replacement. In 2017, the median wait time from referral by a General Practitioner to treatment by an Orthopedist was 41 weeks, and for neurosurgery, 33 weeks. Waits for diagnostic tests are also common, and as the Medicare for All proposal states, long wait times for care can have an adverse effect on treatment outcomes. A common joke among Canadians is that “universal health care” can be translated to mean, “universal access to a wait list.”

Then there’s the hidden costs, both in taxes, and lost productivity, while awaiting treatment. There are steep taxes paid to both the national and provincial governments to support Canadian Medicare. A family of four pays 12,000/yr in taxes to cover its share of the cost. Still, even those high taxes don’t provide the level of universal care Canadians want, and with no cost-sharing at the point of service, there’s no incentive for Canadians to self-moderate their demand for services. All that waiting means less productivity by Canadian workers, resulting in an estimated loss of $1.7 Bn/yr in wages.

Canadian provinces don’t explicitly ration care, but do intervene in the salary potential of doctors, another area where the Sanders Medicare for All is somewhat better, at leadt on paper. In Canadian provinces, doctors don’t work for the government, but the province is the paymaster. Canadian Medicare’s reimbursement rate is so low, entering the medical field or investing in a new office/clinic is a losing proposition financially. A Canadian orthopedist makes only about half what his/her US counterpart does. In the 1990s, cuts in payments to doctors as provinces tried to save money forced many Canadian doctors to relocate to the US. Rather than take the hint, Canada simply imported more foreign doctors who were willing to work for whatever the provinces were willing to pay.

As Sally Pipes wrote in Forbes in January, 2008, re the Canadian model Senator Sanders has praised, “A system that forces patients to wait months, sometimes years, for treatment, should be nobody’s idea of quality health care.”


Senator Sanders and other Democrats tout Medicare for All as the panacea for what ails American health care. His plan draws heavily from the Canadian health care system, but also attempts to address its lack of coverage for prescription drugs, and bolster the position of physicians, at least in Primary Care. Still, profound shortcomings remain. Without any cost-sharing for patients, history reminds that utilization rates will skyrocket, as everyone can go to the doctor for anything, and incur no added cost. With no incentive to moderate behavior, an aging population, and a probable continuing doctor shortage in spite of efforts to correct it, it’s inevitable that the only recourse will be for rationing care by time, as occurs in the Canadian system. Combined with high tax rates, and a long history of obtaining care quickly, Americans are likely to rebel against Medicare for All, and its authors. Several states have considered implementing a similar system for their residents, but the staggering cost involved has driven even California from moving forward with adoption.

So, why the continued push for Medicare for All by Senator Sanders and others? Why the determination to push forward in the face of so many obstacles? The answer appears at the end of the Medicare for All proposal, as mentioned earlier in this article, that it would, “facilitate the distribution of healthcare resources.” In other words, it’s not about healthcare per se, it’s about empowering the government to decide what is equitable, and who gets what. And, as with most socialist plans like this, it’s more likely that everyone gets less than that everyone gets more.

Copyright 2019 Kyle Policy Partners

Getting Beyond Sound Bytes on Drug Costs

St Louis, Missouri

As the 2018 mid-term elections approach, health care is front and center in the political attack ads that dominate the airwaves. Candidates here in Missouri are attacking pharmaceutical manufacturers with “using the law to advance their greed”.  Everyone seems to agree that drug prices are too high, and must be brought down. “Pharma Bro” and convicted felon Martin Shkreli has been made the poster boy for bad behavior by drug makers.

In the rush to judgement and political haymaking, however, some points are omitted, such as the fact that nearly 90% of prescriptions written in the US today are for generics. Or, that America leads the world in the percent of RXs written for generics. That should be great news. As Avik Roy, Forbes opinion editor, healthcare expert, and leader of the magazine’s The Apothecary, has pointed out, “for the tens of millions of Americans suffering from chronic conditions like high cholesterol, high blood pressure, and diabetes, the availability of inexpensive generic drugs has been a boon to public health, and a potential substantial savings in costs related to hospitalization.” Keep that point in mind. For all the complaints of medication costs, few consider the number of hospitalizations, lost days of work, and serious medical events prevented by the availabilty of prescription medications. The following analysis appeared in Health Affairs in 2011,  and chronicles the impact of medication in compliant patients in improving health outcomes and reducing overall spending:

First, Which Drugs Are We Talking About?

So, the first thing we need to do is define terms, which is easier said than done. Is the debate about ALL prescription drugs, just brand-name drugs still under patent protection, or novel medications that either treat relatively rare conditions or represent an entirely new class of treatments? Does it include pharmaceutical products that also incorporate a device to actually deliver the medication?

Overall, Generics Aren’t Overpriced

Generic drug manufacturers estimate that overall, generic drug prices have declined about 11% per year. While that’s great news for consumers, it could lead to future shortages of some popular medications if drugmakers cease production rather than lose money on every pill. It could also lead to quality control issues if smaller, independent manufacturers jump into those markets on a shoestring budget and try to profit by cutting corners. Do we really want to include all generics in the debate, or just the few that present exceptions to the rule?

Orphan Drugs

Very few people understand the challenges in developing so-called, “orphan drugs” that treat serious, often devastating conditions affecting relatively small numbers of people. Development costs can’t be recovered easily because the limited number of patients is insufficient to realize economies of scale. Manufacturers charge higher prices in an attempt to allay the often staggering sums needed to develop and properly test drugs for a relatively small pool of patients. Even recruiting enough participants into clinical trials can be a significant challenge to gaining the participant-based evidence required to gain FDA approval. Still, the alternative is to allow individuals with less common afflictions to suffer a reduced quality and even quantity of life.

Branded Medications

Branded medications, meaning those that still enjoy patent protection, face their own challenges. Besides the need to recoup the cost of research and development, branded drug prices are also influenced by the supply chain that moves them from manufacturer to pharmacy. Middlemen, who receive discounts and rebates from manufacturers, do not always pass those savings onto consumers, Instead, they base the amount the patient  is responsible for on the drug’s list price, not the discount price after incentives. Some in the pipeline even encourage manufacturers to set a high list price so that middlemen can claim they’ve negotiated huge savings for consumers. According to the Pharmaceutical Manufacturers Association (Phrma), spending on new medications in 2017 grew by just 0.6%, but cost-shifting, and higher deductibles, certainly raise out-of-pocket costs for consumers. When we talk about drug costs, let’s make sure we differentiate between price increases that come directly from drug manufacturers, and the mere shifting of a greater share of a medication’s cost from insuers and employers to patients.

Medications Incorporating a Delivery Device

When it comes to medications accompanied by a delivery device, nothing has been as vilified as the EpiPen, a proven life-saver to individuals suffering severe allergic reaction. Critics note the dirt-cheap cost of the incorporated medicine, epinephrine, as reason enough to sanction the manufacturer, but even so, it’s not all cut and dried. There was competition in the class of drugs, but one manufacturer suspended production due to problems with consistent delivery of medication. Another potential competitor saw its application for a generic equivalent rejected by the FDA. FDA approval for devices requires units work as intended each and every time, protecting patients, but raising deveopment costs enough to discourage other potential manufacturers. Over the years, EpiPen has been improved to make its use during an emergency a true one-hand operation, making it the product of choice for families, individuals, and schools. While it’s undoubtedly true that a vial of epinephrine, a needle, and syringe could be kept on hand for very low cost, the ease of use and ability to carry the device anywhere weighs heavily in EpiPen’s favor. For an in-depth look at the issue, the link below is provided.

Epipen, the Story Behind the Story

Other Factors

Where you get your medication can also determine the cost. If you need your medication infused at a hospital, for say, cancer treatment,  the hospital may charge you or your insurer up to two and one-half times what the hospital paid for your medication. That steep mark-up may help pay for other departments at the hospital, but it also contributes to excess costs for patients and insurers.

The Center for Medicare & Medicaid Services (CMS) established a hospital-based charity program, 340B, to provide susceptible patient populations with low cost medication. Unfortunately, CMS investigators have found that many hospitals participating in the program are pocketing the savings from manufacturers  and charging patients and insurers much higher prices in violation of the spirit and intent of the program.

It’s quite possible that even demographics and medical advances contribute to the issue. A recent study by United Health Group reports that 86% of health care costs in the United States are for the treatment of chronic and complex conditions.  The US, like many other advanced countries, has a rapidly growing population of elderly citizens, who are not about to be confined to rocking chairs when there are treatments and procedures available to give them a better quality of life. That dramatic change in the number of illnesses and conditions that can today be treated effectively affects the entire population, not just seniors. Medical breakthroughs are providing treatment options that would have been unavailable just a decade or two ago, and people are taking advantage of them. That includes highly effective, highly successful treatments for serious conditions like Hepatitis C, with cure rates approaching 90-95%. The accompanying $70,000 estimate for a course of treatment seems outrageous, at least until you consider the long-term cost and disability connected with the disease over a patient’s lifetime.


Consider that in 1945, the president and Commander-in-Chief of the United States, embroiled in the most massive conflict the world had ever seen, suddenly died of a massive cerebral hemorrhage.  Doctors had been aware of Franklin D Roosevelt’s sky-high blood pressure for some years, but had no truly effective treatment, not even a simple diuretic. Today, modern medicine allows patients suffering with everything from heart failure to COPD to live better, longer, more productive lives. In some ways, we are victims of our own success.

Ironically, Medicare Part D, which covers prescription drugs for seniors and is administered by private companies, stands out as a program that actually comes in under budget each year. That suggests that costs can be held down with the right combination of market competition and effective government oversight. Competition and market discipline can be enhanced by reforming both the pipeline from manufacturers to patients, and by putting consumers back in charge of the health care checkbook.

People need to know the true cost of their medicines in order to judge their value, so the system needs to be more transparent. That means disclosure of discounts and rebates provided by manufacturers to middlemen and insurers.  For competitive forces to work, the supply chain must be more open to public scrutiny, perhaps even allowing manufacturers to deliver medications directly to patients, not funnel them through a third party.  Reforming health insurance to allow consumers themselves to control more of  their health care dollars would force manufacturers, insurers, and other middlemen to compete for each individual’s business, and put the ultimate consumer at the center of every discussion, and every decision.

Reimbursements to doctors and hospitals should be uniform regardless where the medication is delivered, and manufacturer discounts intended to help disadvantaged patients should not be pocketed by hospital administrators. Accountability should be a major goal of regulators. CMS can certainly swing a big stick here, as can private insurers.

Pharmaceutical companies have indicated their willingness to agree to results-based contracting, where breakthrough medications would be reimbursed based on the results delivered to the patient. This type of reimbursement would also help ensure patients get the right treatment the first time, rather than being forced to attempt treatment with a cheaper, less effective regimen, first.

The share of spending on health care attributable to medications in the US is in line with Canada, France, Germany, and Italy, but those countries control costs by restricting access via price controls. We can avoid that scenario in America if we let the market work as it should, employ government as a watchdog against subterfuge and financial sleight-of-hand by members of the drug pipeline, and put consumers back in control of their health care dollars.

Copyright 2018                Kyle Policy Partners

A Drug Rep’s Purpose

Pharmaceutical companies take lots of hits these days. Hot-button stories, like those about costly Epipens, or the outlandish moves of a pharma-executive-wannabe-turned-felon like Martin Shkreli, have put the approval rating of drug makers somewhere around that of members of Congress. The most visible member of the pharmaceutical industry for most people is the pharmaceutical salesperson, aka drug rep, the person often seen dragging a satchel around medical office buildings. Ask someone what drug reps actually do, and most responses revolve around providing lunches for doctors’ offices, and dropping off drug samples. Outside the circle of doctors, nurses, and office staff, few get to see reps doing what they are actually paid to do.

Doctors, Physician Assistants (PAs) and Advanced Practice Nurses (APNs) deal with a wide variety of illnesses and conditions every day. Many of these conditions are treated with medication, and in most instances, there are two or more choices available. Some treatment regimens contain the option to choose from different classes of drugs, each employing a different mechanism of action. For a condition as common as high blood pressure, there are literally dozens and dozens of agents available, from several different classes, and two or more drugs from different classes may be combined to achieve a patient’s targeted BP goal. Each class of drugs, and even drugs from different manufacturers within the same class, typically have different clinical trial data supporting their use, different dosing schedules, unique side effect profiles, and varying degrees of insurance coverage.

Sound confusing? It definitely is, and expecting prescribers to remember all those variables is nigh unto impossible. There are programs available for electronic devices that can help, but it’s hard to ask a software program a question when one arises. That’s where drug reps come in.

The majority of reps are responsible for at most three or four products, so they have a far easier time keeping up with the latest information, including new clinical trial data, new indications, or FDA-recommended revisions to existing precribing information. They’ll be knowledgeable re which type of patient clinical trials have shown to be best served by their product, including precautions re any interactions their products have with other commonly prescribed medications. They will also be aware of the extent of  insurance coverage for their products, including Medicare Part D and Medicaid, an important factor in this age of complicated, and often changeable formularies, with their exclusions, prior authorizations, and quantity limits.

Drug reps supply offices with Direct-to-Consumer rebates and discount cards, patient education materials, and application forms that allow patients in financial need to receive their meds at low or zero cost. In cases where a patient experiences a severe or unusual side effect, it is often the drug rep who alerts their company’s medical response team, and reports the incident to the FDA as required.

In past years,  drug maker’s sales representatives have sometimes abused their privileges. They deviated from their original purpose of education, and flooded doctors’ offices with cheesy giveaways, free meals, and canned promotional messages. In those instances, reps took time away from patient care, brought little usable information to their customers, and generally made themselves unwelcome. A wave of offices closed themselves off to visitors, ultimately resulting in a substantial reduction in the number of reps employed by manufacturers. Accountability measures recently put into place require pharma companies to report how just much money is spent per attendee at meals delivered to medical offices. Most companies no longer provide promotional supplies like pens, clipboards, and notepads to their reps for distribution to customers. Educational seminars and local speaker programs are now administered by impartial third parties, and speakers must complete training to ensure lectures remain focused on data approved by the FDA and consistent with the product’s prescribing information.

To be totally fair, some limits placed on drug reps’ interactions with their customers resulted not from bad behavior, but from the consolidation of private physician practices into large, hospital-based medical groups. These large groups can be openly hostile to the idea of drug reps regularly interacting with their physicians, especially if they believe reps might violate medical group policies re what type of information can be distributed. Moves by large groups to restrict drug reps intensified as hospitals began to exert ever-greater control over their member prescribers. Some groups go so far as to only allow dropping of samples, with virtually no interaction allowed beyond witnessing a signature for those samples delivered.

More recent times have seen companies emphasize the concept of delivering value to customers, where reps rededicate themselves to helping practices better serve their patients.  Representatives work to tailor their approach to one that recognizes each practice’s unique patient population, addresses cutrent issues, like the affordability of, and access to, medications, and bases interactions with prescribers on the needs of the practice, not the needs of the rep or their company. In the long run, if the response to the excesses of the past leads to a more valuable  relationship between prescribers and reps, it will be worth the upheaval. The real question is how best to get new or updated information to doctors and other prescribers who face an increased patient load, additional administrative duties via the requirements of maintaining Electronic Health Records (EHR), and meeting accounting requirements established by their medical group employer.

Perhaps the best example of how drug reps can provide a service to their customers came from a cardiologist in the St Louis area. While spending the day observing the doctor’s evaluation of patients suffering from heart disease, I asked him what drug reps could do to be of of utmost service to his practice. He pointed to a stack of literature piled high on his desk. The stack consisted of medical journals, pharmacy newsletters, and package insert pages from new medications. He told me that keeping current on new data was a huge challenge in his busy practice, and that he relied on pharma reps to bring him any info that reflected updates or revisions to the dosing, safety profile, or accessibility of the medications he most commonly prescribed, or were newly approved. He also asked that “his reps” keep themselves current and accessible, in case a question arose or a problem developed with any of the products. In short, the doctor wanted his reps to be a timely resource he could count on for support. As the doctor related, “In order to convince a patient to take a prescribed medication, I have to sell them on the risk-to-benefit ratio of the treatment. I need accurate, no-nonsense information in order to do that. Don’t give me a sales pitch, give me the facts.” Accepting that responsibility is what differentiates good drug reps from mere sample droppers. It’s also a way to ensure that when a doctor makes the decision to put pen to prescription pad, or clicks the send button, they’re doing so with the best data available.

Raymond T Kyle

Kyle Policy Partners

Copyright 2018


Need Something as Common as Cataract Surgery? Better Talk to a Lawyer, First.

Anybody who watches late-night TV has probably seen more than their share of ads from personal injury lawyers looking for new clients. They usually specify people harmed by defective medical devices, medication side effects, or been on the receiving end of a botched procedure. You may also have read or heard complaints from doctors that outrageous monetary damages paid out for dubious medical claims is pushing malpractice insurance rates into the stratosphere. Calls for tort reform to address these issues have mostly floundered in Congress and state legislatures, which, not surprisingly, are heavily populated by lawyers. Still, don’t write off the legal profession just yet. After all, you may need to seek legal counsel before your next medical procedure or treatment.

Let’s say you have a common medical condition like cataracts, and your vision is deteriorating. After a thorough exam,  your ophthalmologist recommends surgery to replace the clouded lenses. The doctor’s staff prepares a stack of papers for your review and signature. Most of it is pretty mundane, mostly boilerplate language re permission to treat, financial responsibility, and pre- and post-operative care. One page, though, catches your eye. It’s a form stipulating your agreement to submit to arbitration rather than turn to the courts if something goes wrong and you’re significantly harmed. The form clearly states that patients may refuse to sign the arbitration agreement, but the staff member says the doctor will not perform the procedure without a signed copy on file. A check of the local statutes re medical arbitration confirms that the law, known in the Show Me state as the ‘Missouri Health Care Arbitration Act’, permits doctors and hospitals to refuse to provide non-emergency care if no arbitration agreement has been signed by the patient.  You begin to wonder if a doctor who compels you to preemptively provide him/her with immunity from the courts is someone you want to entrust with your eyesight.

The Missouri statute was part of tort reform legislation originally approved in 2005. It was aimed at preventing outlandish financial payouts to claimants who had shopped around for a friendly jury in a county known to be wildly generous with someone else’s money. Other states have enacted similar laws, which typically assign a small panel of arbitrators to review and settle claims. Court cases from around the country have mostly upheld the binding decisions of the panels unless the injured party can demonstrate they were never fully informed of the arbitration process.

While protecting doctors from outlandish claims may be an admirable goal, demanding that patients agree to limit their rights even before any treatment takes place is misguided and counter-productive. Perhaps most concerning is the impression on patients, who see such demands as a worrying sign that the doctor in whom they are placing their very life is not confident in their own abilities. Reading the required language contained in the arbitration agreement form can add to the patient’s unease.

The patient is compelled to accept arbitration even in the event of malpractice or negligence. How can an individual agree to a specified outcome that may, or may not, ever happen? How does a patient agree to such restrictions on their rights before knowing the severity of injury or mistake?  And what happens to the doctor-patient relationship when the patient sees the agreement as  surrendering their rights in order to safeguard the doctor’s bank account, practice, or reputation?

Why not an offer of arbitration only after actual harm has occured? Or, stipulate that prior agreement to arbitration applies only in cases where the injury is not permanently disabling, and the cause is not related to incompetence or negligence. If both parties wish to avoid the cost and complexity of court proceedings in those instances, voluntary arbitration can offer a viable alternative. For those who have suffered grievous harm, especially at the hands of an incompetent or negligent practitioner, however, the courts may well be the best vehicle to both compensate victims, and prevent new victims being harmed in the future.

As regards medical malpractice lawsuits, reform has been a hot-button issue for both doctors and lawyers for some time. Certain counties across the country are known for producing juries who hand out huge settlements. This phenomenon has driven up the cost of malpractice insurance to the point that some specialties face fewer practitioners in the future. Some doctors have relocated their practices to states with a more sane legal environment. Unfortunately, the patient is now trapped in the middle of the argument, and is quickly becoming a casualty of the medical and legal fields’ inability to find a proper solution.

Raymond T Kyle

Kyle Policy Partners                      Copyright 2018




How Congressional Budget Office Projections Mislead

Republican efforts to repeal & replace Obamacare following their 2016 election triumph, and the inauguration of Donald Trump, faltered, as skittish GOP members of Congress faced Democrat claims that repeal of the individual mandate would throw millions into the ranks of the uninisured. Health policy expert Avik Roy explains how estimates by the Congressional Budget Office (CBO) can be manipulated by partisan politicians, or partisan bureaucracy, to influence public debate. As always, the devil is in the details:

A Health Care Debate Fueled by Deceit, And Conceit

Following Donald J Trump’s 2016 election victory, Republicans seemed poised to finally repeal and replace the Affordable Care Act (ACA). When the time arrived for votes to be cast, however, the repeal effort fell short, as Republicans just couldn’t withstand the media campaign waged against them. Democrats and activists portrayed Republican proposals as mean-spirited and cruel. Social welfare agencies called for retaining parts of the law that benefitted their clients.                                                                                   The tactics worked on the public as well. Opinion polls suddenly reported considerable support for keeping the ACA intact, and proponents urged addressing deficiencies in the original legislation rather than outright repeal. The seven-year “long game” of the GOP effort to overturn President Obama’s signature domestic legislation was effectively stalled, and doubt set in. Did Republicans ever really intend to undo the ACA, or was it just an act? As regards the entire health care/health insurance debate since 2008, it appears there’s plenty of deceit to go around.

Deceit was used to sell the Affordable Care Act.                                                        Most of us are aware of former president Obama’s claim that the ACA would allow patients to keep their plan, and  their doctor, if they were happy with them. He also boasted that the average family of four would save about $2400/yr in insurance premiums. When the law actually went into effect, however, it became clear those bold predictions didn’t even come close to being true. Beyond those claims, the authors of the bill made promises to insurers, drug makers, and even skeptical Democrats in order to gain support for the law’s passage. The reform that promised so much carried a high price in bribes and enticements.

Deceit was used to save the ACA at the Supreme Court.                                          Fast forward to the Supreme Court case, King v Burwell, questioning the constitutionality of the ACA. The case revolved around whether the government could mandate that citizens buy health insurance, and penalize them if they did not. Chief Justice John Roberts wrote for the majority that the mandate to purchase health insurance was constitutional after he unilaterally rewrote the penalty provision as a tax. The Chief Justice had stepped out of  his role as judge to become a legislator. Political expediency had triumphed over the Constitution’s Separation of Powers.

Republicans rode deceit to election victories in 2010, 2014, & 2016.                With the election of Barack Obama as president in 2008, the future of the GOP looked bleak.  The partisan vote that won passage of the ACA breathed new life into the Republican patient. Opposition to greater government control over one-sixth of the US economy energized the Republican bade. GOP leaders vowed to repeal the new law, and rode that promise to win back both houses of Congress, and the presidency, in subsequent elections. But, while certainly willing to pass repeal bills when President Obama was sure to veto them, being in a position to actually accomplish their oft-stated goal produced panic. Battered by criticism from supporters of the ACA within the Democrat Party and the media, seven years of Republican boasts to remove the ACA “root and branch” were revealed as little more than empty political rhetoric.

Democrats employed deceit to save the ACA.                                                                   As reported earlier in this blog, Democrats predicted dire consequences  if the ACA were repealed. Social welfare agencies, and the media, emphasized improvements in the number of uninsured gaining coverage under the ACA, while virtually ignoring the law’s disconnect between having coverage, and actually receiving care. No sooner had the smoke cleared from the failure of the repeal effort, however, and Democrats were themselves turning on the law they had just saved. Facing yet another round of significant premium increases in the upcoming 2017 Open Enrollment period, calls for major changes to the law flowed like water from the Democrat side of the aisle. There were proposals to move the nation to a Medicare-for-all, or even a Medicaid-for-all, system, despite the shaky financial underpinnings of both programs. The same Affordable Care Act that just weeks earlier had been stoutly defended by Democrats was now the target of those very same defenders. Today, the impasse continues.

From all appearances, the Affordable Care Act looks like the law nobody wants, while at the same time being the law no one knows how to fix. Perhaps that’s because government can’t suspend the laws of economics. Competition and consumer choice, two bedrocks of the Free Market, can’t be superseded by government fiat. We are constantly told by politicians and activists posing as economists, that the Free Market won’t work in health care. Those same, self-professed experts can never explain why the market that works for every other product, service, and sector of the economy, won’t work for health care. In fact, it already does. In areas not commonly reimbursed by insurance, such as lasik eyesight correction and cosmetic surgery, competition has driven constant improvements in quality while lowering costs.

A more troubling scenario is the possibility that our elected officials, and unelected members of the federal bureaucracy, believe average Americans just aren’t capable of taking care of themselves. Whether Republicans or Democrats, far too many believe a compassionate government needs to protect people from the risks inherent in living. The best of intentions doesn’t make outside control any less abhorrent. And when the controlling party has the power to make decisions impacting your very life and health, it’s downright scary.

Instead, a free people need to be in charge of their own health care dollars. Refundable tax credits would allow citizens to choose their own health insurance policy, and make insurers compete for every single customer. Individuals would even be able to contract directly with doctors, and bypass conventional health insurance altogether.                                                                                                                        For those now covered by plans through an employer, let the dollars follow the individual, so that changing jobs, or even a layoff, doesn’t mean an abrupt loss of coverage, or mandatory switch to a new plan and new providers. Companies could concentrate on running their business rather than managing their employees’ lives.                                                            Medicaid patients should be allowed to add to the amount the government now spends annually on their behalf in order to purchase a commercially available policy that gives them greater choice of doctors. Rather than being stuck in a program that produces no better health outcomes for recipients than those without insurance, enrollees could choose a better plan that truly serves their needs.                                                                     Likewise, Medicare Advantage plans have become very popular with seniors as private companies aggressively compete for the business of beneficiaries. Why? Because the Advantage plans offer better coverage for the same cost as traditional Medicare.                                                                                                          The nation’s veterans should be free to seek out the best care available instead of being limited to the scandal-plagued Veterans Administration health system. If ever there were evidence that government-run health care is designed to fail, the VA is it. Our veterans should not be the recipients of second-class care.

While doctors and hospitals would also have to compete for customers, they’d benefit from added flexibility. Doctors and medical practices could negotiate agreements for care directly with patients, free from the red tape and interference often common with third-party payers.                                       If a doctor, medical group, or hospital can deliver better care through innovation, expertise, or just plain hard work, let them share in a portion of the savings they provide to programs like Medicare or Medicaid. Government regulations shouldn’t favor the staus quo over a better mousetrap. There also needs to be a sharp reduction in the administrative burden placed on physicians. If a doctor wishes to be an administrator, that’s fine, but those involved in patient care should not be wasting time navigating a clumsy, user-unfriendly, data-mining software program. Big Data may have its place, but not as a distraction in the exam room. In putting the doctor-patient relationship first, doctors would find a powerful ally in those newly empowered patients.

This piece has covered a lot of ground. It’s reviewed the dishonesty and subterfuge that has underlined the health care debate in recent years. It has also proposed a solution that puts individuals in charge of their own health care, and makes insurers, doctors, and hospitals compete for customers on the basis of quality and cost. It’s even discussed the benefits such a proposal’s adoption could provide to the medical profession. Perhaps most importantly, it ensures each person retains the ability to run their own life, without the intrusion of a controlling government. Isn’t that the very essence of being a citizen?

Raymond T Kyle

Kyle Policy Partners                                               Copyright 2017







Beyond the Numbers: What kind of health care do you want?


Since the early 1990s, Americans have been witness to much debate re the cost of health care in the United States. There have been unfavorable comparisons between the American system, and those of other Western, industrialized nations. We’ve been subjected to a dizzying array of statistics, including cost projections, coverage rates, and the impact of health care outlays on the budgets of state and federal governments. The debate seemed to culminate with passage of the Affordable Care Act (ACA) in 2010. Unfortunately, flaws in the ACA dashed its sponsors’ hopes that the issue was finally settled. Now, in 2017, a new president, and Republican Congress, are scrambling to replace former president Barack Obama’s singular domestic achievement. Debate is back, and with a vengeance. While politicians, pundits, and policy wonks battle it out, however, important questions about what type of care actually reaches patients doesn’t seem to be high on the agenda. Somehow, the debate has revolved around health insurance, as if the actual delivery of care is of only secondary importance.

Expanding eligibility for Medicaid, and the associated Childen’s Health Insurance Program (CHIPs), provided most of the newly insured under the ACA. Still, with limited choice in doctors who accept the program, and low reimbursement rates to providers, what ensures the poor get access to quality care, especially if a patient requires the expertise of a specialist? Will a young asthma sufferer be able to find a pediatric pulmonologist who accepts the program? If a Medicaid patient is released from the hospital after suffering a heart attack, will they be able to access a participating cardiologist, or even a family practice physician, when facing significant travel time, or an extensive wait for an appointment? In spite of coverage, will these patients see the best option for obtaining  timely care as a trip to the ER? Will these patients see the expanded program as truly meeting their needs?

For those purchasing insurance on the website, getting it through their employer, or even buying a plan on the open market, how much actual say do they have in the care they receive? Can they choose any doctor, or is the available pool restricted to a certain medical group or hospital? If they become seriously ill, will they be covered for first-rate care, or will they be settling for something less than the best? Will they have access to the best treatments, or simply be dismissed with the assurance that a cheaper, older medication is good enough? Will anyone even be able to tell them the true cost of their care relative to the premiums they pay? In effect, does the level of care they receive represent good value for the money they’ve invested in an insurance policy?

In the nation’s only true single-payer entity, the Veteran’s Administration health system, scandals involving everything from long waits for care to improperly sterilized equpment, have been reported with sickening regularity. Many VA system hospitals lack stable leadership, and politicians’ promises to correct deficiencies have proven hollow. Many veterans suffering from PTSD, or other mental health issues, face long waits for help in dealing with their service-related disabilities. The Congressional Budget Office estimates that in 2013, the Veteran’s Administration spent $54 billion on care for 9 million veterans. Does anyone have confidence that veterans received good, timely care?

For seniors, will the proposal to move Medicare from fee-for-service, where doctors/hospitals charge for each individual service delivered, to bundled payments, where a single group payment is made to cover all services, really improve care while holding down costs? If you require surgery, will hospitals and outpatient clinics be tempted to choose a relatively inexperienced, less-highly compensated surgeon in order to increase their share of the bundled payment? Will rehab centers employ less skilled therapists? And if reimbursements drop too low, will out-of-pocket costs push some procedures/treatments out of the average patient’s ability to pay? Since Medicare recipients currently only pay about 13 cents in premiums for every dollar of care delivered, does the average enrollee fully appreciate the true cost of their care?

Considering the number of years the health care argument has raged, the issue of the value of care has rarely been addressed. Mostly, the discussion concerns cost. We hear that insurance costs are too high, that drugs cost too much, or that a hospital stay can be the gateway to bankruptcy. Those are, of course, legitimate concerns, but any price is too high if the patient feels shortchanged, or worse, ignored. Massive bureaucracies have been created, ostensibly to ensure appropriate care is provided, and that doctors and hospitals are reimbursed fairly.  Unfortunately, the accompanying regulatory environment imposes huge administrative burdens on health care providers, often turning doctors into little more than data entry clerks. Treatment decisions are often contingent upon insurance company guidelines that tie physicians’ hands. Patients become bystanders as decisions are made without their input. They sit in exam rooms, talking to the back of their doctor’s head as he/she fills in screen after screen of the individual’s electronic health record. Eye-to-eye contact becomes a rarity, as do real discussions. There have been some half-hearted reforms, aimed mostly at shifting responsibility for making the bloated system work onto doctors and hospitals. Can anything be done to get the patient back into the game as a participant?

If we can put the power of the health care purse back in the hands of patients, at least whenever possible, the issue of who the system actually serves would be weighted in favor of the patient. Whether the path to empowerment comes in the form of direct care, a willingness of employers to allow their employees greater voice in choosing coverage, allowing participants in government programs to direct at least some of their benefits, or a mix of all options, the patient wins. When patients are in control, the system will finally have to respond to the needs of the person whose life and health is being directly impacted. The real value of care will be determined by the quality of the doctor-patient interaction, not insurance companies’ balance sheets, employers’ HR departments, or politicians. Every attempt at reforming the muddled mess that is today’s American health care system should be geared toward that goal. It’s the only real solution.

Raymond T Kyle

Copyright 2017            Kyle Policy Partners

Risk, Pre-Existing Conditions, & the Cost of Health Insurance

Even before  passage of the Affordable Care Act (ACA) in 2010, the debate re coverage of pre-existing conditions was a hot topic. News accounts of people with serious, perhaps life-threatening medical conditions being denied coverage were heart-wrenching and frightening. So was the thought of being dropped by an insurance company after developing an illness requiring expensive, long-term treatment. No one wants to see someone’s life destroyed by an illness, or driven to bankruptcy by the cost of care. Add in the volatile nature of an ever-changing job market, and you have the stuff of nightmare scenarios. So, when the ACA banned such practices by insurance companies, a collective sigh of relief was heard from many quarters.

Unfortunately, the Law of Unintended Consequences accompanied the ban. People with complex health histories tend to utilize health care to a far greater degree than the young and/or healthy. Without being able to adjust premiums by risk, insurers raised premiums for everyone. No one likes higher insurance payments, but sicker people get a bigger return on their investment. That good deal encourages them to utilize their insurance to the maximum. Healthy individuals, especially young, healthy individuals, get little more than a bigger monthly premium. As a result, many young people simply didn’t sign up, and with a relatively modest penalty for refusing to comply with the law’s mandate to carry health insurance, it made sense for those young and healthy individuals to skip buying coverage until/unless they got sick or suffered serious injury.

Not surprisingly, plans sold on the Exchanges ended up with large numbers of older, sicker patients, and not enough young, healthy patients to balance out the pool. Insurers started hemorrhaging money due to excessive payouts, and when an Obama Administration bailout for insurers failed to materialize, many insurers abandoned the ACA Marketplace. Those that remain offer fairly narrow choices re doctors and hospitals in an effort to control costs. In a way, we are moving back to the Health Maintenance Organization (HMO) model championed by Senator Edward Kennedy in the early-to-mid 1970s. HMOs were heralded as the way to provide affordable care (sound familiar?), and they did offer significantly lower monthly premiums. Unfortunately, the choice of doctors and hospitals were so severely limited, and the quality of care so erratic, they came to be universally hated. Consumers soon abandoned them en masse.

With the election of Donald Trump, the very real possibility of  repeal of the ACA roused supporters of the law. They insisted that the ban on adjusting premiums or denying coverage based on health history be carried over to whatever system replaced it. Many Republicans seem only too happy to comply, citing the popularity of the provision. But, is it really necessary to distort the market for everyone in order to insure coverage for those with a pre-existing condition?

Estimates of the number of people served by the ban run as high as 27% of the US population, so at first glance, it seems a significant challenge to effect change. However, it must be remembered that those individuals enrolled in government-sponsored plans, like Medicare, don’t have to worry about such exclusions, and for the most part, neither do those covered by commercial health insurance provided by their employer. Those two groups dwarf the number of people served by the Exchanges, so we’re talking about a much smaller number.

A replacement for the ACA could fix the perverse nature of the current law. While insurers wouldn’t be able to deny coverage, they could charge higher premiums based on the risk those individuals present. Reform proposals call for publicly-funded premium support for those with higher risk, allowing the remaining people in the insurance pools to benefit from lower premiums. This would avoid the present distortion, where a relatively small segment of the risk pool drives premiums higher for everyone else, especially the younger, healthier folks insurance pools so desperately need in order to remain solvent.

OK, you say, sounds reasonable, but what about the problem of insurers dropping clients after they’ve developed an expensive, chronic condition or been seriously injured?  It’s really not an issue of a pre-existing condition for the original insurer, so what keeps an unscrupulous company from dumping anyone who develops a serious, chronic health issue on another insurer?

Good question, because a person dropped by one insurer as too expensive, isn’t going to be an especially attractive customer to another insurer. The answer lies in allowing the original insurer to drop an individual, but requiring that original insurer to pay the difference between what the client’s original plan cost, and the cost of a comparable plan from the new insurer. That provision will cause companies to think long and hard before dumping someone who had the misfortune to get sick or be injured.

For those subsidized, higher premiums, combined with other incentives to keep clients with serious medical conditions healthy, could actually produce better outcomes than hoped for under the ACA’s outright ban. Insurers would have financial motivation to pursue clients whose complex health histories demand greater maintenance, but also bring in higher revenues, especially if that complex patient can be kept healthy. Equally important, it doesn’t penalize someone for being healthy.

Raymond T Kyle

Copyright  2017    Kyle Policy Partners

Health Care as a Measure of Liberty

The Affordable Care Act, aka Obamacare, has traversed a rocky road in its short tenure.  Since the law’s passage in 2010, everything from website crashes, huge yearly increases in plan premiums, and insurers fleeing the program, have bedeviled President Obama’s signature domestic legislation.

The law’s supporters, led by Hillary Clinton, have proposed some reforms, and have even pushed for a “public option” which translates into a government-run health insurance plan that would compete with private insurers. They claim that as long as for-profit, private companies are involved in health insurance, and health care delivery, costs will remain high, and millions of Americans will be unable to afford coverage. But, instead of calculating dollars and cents, or arguing co-pays, deductibles, and premiums, let’s consider another cost, one that’s a little more abstract.

When government assumes the role of provider, what happens to liberty? Once government determines basic decisions for each individual, are we still a free people? How does the proposition of the nation’s founding, “that the state can only govern with the consent of the governed,” survive, when unelected bureaucrats,  like the head of the Department of Health & Human Services, hold reign over your very existence? What happens when your needs as an individual clash with the rules and regulations deemed the standard for all? Is an accomodation to your unique situation made, or are you told to “just take a pain pill”?

We’re told that these bureacrats and administrators are experts in their field, far more knowledgeable than the average citizen on matters related to the complexity of health care. But who speaks for the individual, the square peg about to be pounded into the round hole? If the approved treatment for your illness or injury doesn’t work in your case, will there be an exception made for your individual needs? Or do you just become the exception that proves the rule?

Don’t we have enough control exerted over our lives, already? Don’t our elected representatives exempt themselves from the same restrictions they place on us? We are told when, how, and where we can obtain coverage and care. There are restrictions on the doctors we can see, the hospitals that we can visit, and the medicines we have access to.  We rarely know the true cost of our care, or the value of the health care dollars we spend.

When we file our taxes each year, we have to prove to the Internal Revenue Service that we have insurance coverage. We’re promised free, preventive care, but one question asked of the doctor can turn our freebie into just another out-of-pocket expense. And through the wonder of some 2400 pages of legislative mumbo-jumbo, most of the millions of  newly insured Americans owe their Obamacare coverage to the simple expansion of Medicaid, an already existing welfare program.

Do we really need to go further down this road of limited choices and unlimited regulation? Why not limited regulation and unlimited choices? Why can’t the same free market forces that provide us a dizzying choice of everything from cars to telephones to breakfast cereals, provide us with options in health insurance and health care? How about less government control, and more freedom? Whose life is it, anyway?

Raymond T Kyle

Copyright 2016       Kyle Policy Partners