Transcript of the empowering documentary film – Parts I
The post-World War II hostility to public progress is not only catastrophically stupid; it is also radically ahistorical and even un-American: the entire nation was founded on the idea that “We the People” — common people — had the inalienable right to band together to promote the common welfare, against the wishes of the rich and powerful and well-born, who have always preferred that the masses be dependent on the wealthy as benefactors.
Because the tools of mass propaganda were more and better developed in the United States than anywhere else, the wealthy were able to use the US-USSR hostility as a mental frame to persuade Americans that giving themselves assured access to health care was “socialism” rather than the most natural next step for a democracy, as happened throughout Europe and in Britain.
The campaign by the medical-industrial complex is really a remarkable feat in the annals of disinformation and deception. To this day, tens of millions of Americans unthinkingly accept, simultaneously, the notion that we should all be taxed to defend ourselves against vanishingly small threats emanating from foreign nations, but that taxes to defend ourselves against the certainties of disease, aging, and injuries are morally vile and would lead to ruin.
Thankfully, as WWII recedes in memory, more and more Americans, especially in Oregon, are waking up and questioning just how is it that having individuals go bankrupt if they are unlucky is good for America. Just asking the question is progress.
But we’re not just asking the question. Thanks to tireless work by advocates like Health Care for All Oregon, the Oregon Health Authority has commissioned the RAND corporation – one of the first Pentagon-funded “think tanks” formed to help the US contain the Soviets – to study alternative health care models, including the so-called “Single Payer” plan.
And more and more committed, successful capitalists are waking up to the realization that stupidity in the name of anti-communism is still just stupidity, and that burdening entrepreneurs with providing health care coverage is the worst thing we can do in a global economy.
One CEO, Richard Master, got so fed up with our skyrocketing costs and poor results that he has become an evangelist for reform. He made an excellent documentary, “FIX IT,” which details what could be called “The business case for Single Payer.” (Master’s started a company to produce the film, aptly named “Unfinished Business LLC.)
The entire movie is available to view, free, here. But Master also kindly gave OregonPEN permission to publish a transcript of the film. Thus, this week’s OregonPEN is given over to a partial transcript from this outstanding, invaluable project. Interspersed with the transcript are pages from a brochure available at the FIXITHEALTHCARE.com website.
“Why I Made This Movie” – Richard Master
Of all the eye-‐popping numbers I came across while researching why the United States has the most expensive health care system in the world—and why my company, MCS Industries, Inc. has faced double-‐digit health insurance rate increases year after year—that’s the one that shocked me the most. Every physician in this country now has to spend $84,000, on average, just to interact with private health insurance companies. $84,000! By comparison, doctors in Canada spend a little more than one-‐fourth of that interacting with that country’s single-‐payer system.
My company now has to pay $1.5 million a year to provide access to health care for our workers and their dependents. When I investigated where all that money goes, I was shocked. I found that the first three cents of every premium dollar goes to the insurance agent who helps MCS select an insurance plan and negotiate rates with our insurer.
The next 20 cents goes to the insurance company to help pay for its sales and marketing and other administrative functions, which includes the work of a huge staff that does nothing more than approve or deny care.
Another 10 cents (at least) goes to cover what it costs doctors and hospitals to handle the massive amount of paper work and phone time made necessary by my insurance company’s pre-approval demands, denials and other payment issues.
That’s 33 cents of every premium dollar, 33 cents that has nothing to do with the delivery of health care.
As if that weren’t bad enough, I learned that private insurance companies have not been doing nearly as good a job negotiating with health care providers as they’ve led employers like me to believe. The truth is that private insurers end up paying 20 percent more for health care services than Medicare, which, keep in mind, is our government‐run program for people much older than the average privately insured American.
These and other startling findings of my research so outraged me that I felt an obligation to share it with other Americans, especially other American CEOs. That’s why I reached out to award‐winning filmmakers to produce Fix It: Healthcare at the Tipping Point, which makes a compelling case for scrapping our complex and
needlessly expensive multi-payer system for a single-payer.
I learned as we conducted interviews with some of the nation’s leading health policy experts—like Dr. Don Berwick, former administrator of the Center for Medicare and Medicaid Services, and Dr. Theodore Marmor, Professor Emeritus, Public Policy at Yale University—as well as doctors and nurses, other business and government executives and ordinary, hard-working people, that the insurance industry has been selling us a bill of goods for years.
I’ve come to realize that insurers comprise a completely unnecessary middleman that not only adds little if any value to our health care system, it adds enormous costs to it. Costs that are passed on to Americans and their employers.
As a consequence of all this waste and inefficiency, our total spending on health care recently soared above $3 trillion in 2014, the growth in cost continues. We spend more on health care than any other country, and we have far less to show for it. More than 17 percent of our national GDP is now eaten up by health care costs, far more than any other country. Canadians, by contrast, spend less than 11 percent of their GDP on health care and they have better health outcomes and live longer on average than Americans. And Taiwan, which switched to a single-payer system in 1995, spends just 1.6 percent of its total operating health care budget on administration.
I learned that it’s a myth that under a single‐payer system, the government takes over the delivery of health care. Not only are hospitals operated privately and doctors are in private practice in Canada and Taiwan, patients in those countries have complete freedom of choice of providers. By contrast, more and more Americans find themselves in health plans that severely restrict their access to providers. If they see a provider “out of network,” they may have to pay the full cost out of their own pockets.
We spent a lot of time in Canada interviewing doctors and nurses and even conservative business executives who were completely baffled that Americans tolerate such an inefficient, costly and inequitable system. “I’m a member of the Conservative party of Canada, and we stand for removing waste, being more efficient and finding ways to grow our businesses, said Dann Konkin, president of a Canadian industrial screen printing company in British Columbia. “And one of the greatest ways that we can grow our business is to reduce costs, and that’s why we embrace the Canadian healthcare system. What I don’t understand is why my fellow conservatives in the United States tend to fight this.”
Konkin told us that he decided against opening facility in the U.S. after finding out how much he would have to pay to provide health insurance for his American workforce. “The more we looked at it, the amount of costs that we would have incurred by having our company relocate into the United Sates just through the insurance coverage costs alone made it a nonstarter,” Konkin told us. “If I had to increase my costs by over a million dollars in my company because of insurance coverage costs, that along would probably drive me to bankruptcy.”
Several years ago, Michael Grimaldi, then president of General Motors of Canada put it this way: “Canada’s public healthcare system significantly reduces total labor costs for automobile manufacturing firms.”
A fellow Pennsylvania business owner—David Steil, who served as a Republican member of the legislature for 16 years—told us this: “Conservatives should be supportive of single-payer because it costs less. When they look at the single‐payer model they will come quickly to the conclusion that it is the least expensive, the most supportive of a free market, and will have the most direct effect on the costs of their operation.”
I’m confident that after watching Fix It and reviewing the accompanying materials, you will come to the same conclusion. It is time we realize we don’t have to tolerate a system—a $3 trillion system—in which one of three dollars is wasted. A system in which just a few sick employees can take down a company. A system that starves the rest of our economy to the point that we don’t have enough money for our schools and roads.
Please join me and many others in the fight for a simplified, single-payer health care system. A single-‐system in which one entity that pays the bills. A single-system, in fact, like our original Medicare, but for all ages.
We can’t afford to wait any longer.
Richard Master, CEO
MCS Industries, Inc.
FIX IT: Healthcare at the Tipping Point
Richard Master: [00:06] Over this period of 35 years, the company grew from zero to hundred and seventy million in sales and became the leading company in both the picture frame industry and mirrors. From 1980 into the ’90s we were doubling our size every two and a half to three years.
As a result of foreign competition, our gross profit margins deteriorated. We had to watch every penny of overhead.
We had gone to our customers with a price increase. They reject it, so in order for us to maintain profitability and margins, we’ve got to figure out how to do things more efficiently.
Here we are, we’re mobilizing our resources very carefully. We’re controlling costs and the one area that was so confounding was health care costs. We saw the passage of the Affordable Care Act.
President Barack Obama: [01:15] We are done.
Richard Master: [01:16] The cost to our company and our workers continued to rise dramatically. We would be faced with double digit, sometimes high double digit increases.
Debbie Figueroa-Seigel: [01:28] The premiums in total for health care costs has actually doubled over the last 10 years. That’s an exorbitant increase. That’s more than any other expense has increased over that same 10-year period.
Richard Master: [01:43] Pity the company that’s more labor intensive than us. They are going to suffer dramatically. If they are having bad years, if they are on the verge of collapse, this is going to push them over.
Debbie Figueroa-Seigel [01:58] Picture frames aren’t an expensive product. Even a few cents on picture frames makes a big difference in how we sell that product. We’re looking at every penny, every half penny on this product. It makes a big difference in how we can sell this product and how profitable we are.
Richard Master: [02:21] After years and years of incurring these significant cost increases, I started to look into health care. The one great thing about MCS is if there is a problem, we deal with it straight ahead, we investigate, we resolve, we fix.
Mark Dudzic: [02:42] A worker making minimum wage could work full‑time for an entire year, not earn enough to pay for a health care benefit.
Uwe Reinhardt: [02:59] For an average family of four, this year’s number is $23,000. That’s what the typical American family insured that way costs.
Wendell Potter: [03:10] They have this false sense of security, that they’re in a plan that provides them protection, but regrettably, all too often, people find out when it’s too late, after they’ve been sick, after they’ve been hospitalized or injured and requiring expensive treatment, that their coverage was not nearly what they thought it was.
Mark Dudzic: [03:30] The shock only comes when you have to use your insurance. You feel like you have healthcare insurance, and that entitles you to healthcare, but it doesn’t.
Walter Tsou: [03:41] You might as well say, it’s not really an insurance plan. That’s how outrageously priced our healthcare plans are today, and how unaffordable they are.
Wendell Potter: [03:51] Insurance companies are able to charge elder people three times as much as younger people for the exact same policy.
Patrick Noonan: [03:57] Their potential employer sees them as a risk.
Michael Gusmano: [04:02] The age 50 to 64 age bracket includes very high rates of uninsurance within the US market, and it’s because these are very expensive employees.
Walter Tsou: [04:11] It makes it less likely that employers will even consider hiring someone in their 50s, for example, or early 60s.
Jim Stanford: [04:19] There’s all kinds of costs and unintended consequences that come with having your healthcare depend on your job. It may be that you want to move to a different job, or it may be that you got laid off because of a recession or a downturn in the business.
Wendell Potter: [04:35] I’ve talked to people who’ve told me they’ve not gotten a raise in five years because the money they would otherwise have gotten in raises has gone to insurance companies.
Michael Gusmano: [04:46] We’ve created a very fragmented system in which coverage is tied to employment in ways it isn’t in most other countries in the world.
Jim Stanford: [04:55] If you and your family lose their whole health insurance because of a change in your employment status, that’s an incredible insecurity, an incredible burden for families to have to bear.
Wendell Potter: [05:05] The whole idea of having insurance that protects us from financial ruin, it just doesn’t exist anymore for most people.
Man 1: [05:14] This is why, of a million bankruptcies in the United States, over 60 percent are associated with medical conditions, and the great majority of those are people who have health insurance.
Donna Smith: [05:28] We went through years of working hard only to lose everything, lose our home, go bankrupt. What a shameful thing to do to people.
Mark Dudzic: [05:36] You see these numbers of people who don’t have insurance and families who are driven to bankruptcy…
Donna Smith: [05:41] If you talk to most families, they can identify at least one person in their family who has really struggled with healthcare issues and how to finance those issues.
Mark Dudzic: [05:52] 40,000 unnecessary deaths every year because there is no health insurance, and these are real people who are dying.
Faith Wildrick: [06:00] Of course, I had health insurance, but I never actually thought a whole lot about it. I paid the premiums. I wasn’t using anything that much.
My out of pocket expenses were pretty much nil, but then Bill got sick, and he was hospitalized. All of a sudden, these bills started rolling in, and my insurance wasn’t covering everything.
Richard Master: [06:38] In 2014 a family that was paying 4 to 5 thousand as a premium share and MCS was paying 13 to 14 thousand as their share of the coverage, that family could pay another 6 or 12 thousand dollars if one or two people got sick.
Debbie Figueroa-Seigel [07:02] It’s really devastating to a lot of people when they can’t afford healthcare, and when it’s impacting their family life.
You’re already afraid because there is a family member who is sick. Now your expenses have increased while your income has decreased.
Faith Wildrick: [07:19] We’re up around $10,000 in expenses. What would happen if I would get sick? Our expenses would be probably up around $16,000 a year. That’s unbelievable. If anything happens to me, we’re done.
Richard Master: [07:46] Let’s look at an employee who makes between $18 and $19 an hour, makes $1,500 every two weeks, has a take‑home pay of $935. That employee, if someone gets seriously ill in the family, will essentially be wiped out.
Faith Wildrick: [08:12] All those years that I worked and that Bill has worked, it’s going to be for nothing. We’re going to lose everything that we have.
All you feel is hopelessness. You don’t feel like there’s any way that you can get out of this, that you’re stuck. This isn’t fair. This should not be happening in the United States.
Richard Master: [08:43] The thought that my employees, members of my work family, are susceptible to this challenge from medical cost is not acceptable to me. It should not be acceptable to any employer in the United States.
John Callahan: [09:03] My father, late in his life, was an over the road truck driver. He had some modest success and went from one truck that he drove himself, to buying a second and third truck, ultimately having a couple of employees that drove for him.
He had achieved in some very modest and small way, late in his life, the success that I think he always had dreamed of.
Unfortunately, he suffered a really catastrophic truck accident, where his truck actually flipped over a guardrail and landed on the highway beneath him.
I will never forget being there when he woke up in the ICU, and his immediate reaction was to try to rip the lines out of him and get out of there. I said, “Dad, it’s OK, you’re in the hospital, and you’re in the ICU. It’s going to be all right.”
He said to me, “No, you don’t understand.” He said, “I can’t afford this. I got to get out of here.” It bankrupted his company. The two folks he had working for him didn’t have a job anymore. Doing all the right things, playing by the rules.
Working hard was all eliminated like that, with one accident. I’ll never forget what it did to him. It broke his spirit, quite honestly. He was never really the same man after that.
Patrick Noonan: [10:37] Every employer I know, and I’m talking about small to medium guys mostly, they dread the next hike in their insurance rates.
We’ve got people who fear they’re going to be put out of business if they have one employee or one spouse or one child that has some kind of a huge healthcare event.
Frank Mondillo: [10:55] Hemophilia is one of the most expensive diseases to have. Right now my medication is upward to around $50,000 a month. There is no cure for hemophilia, so at least $50,000 a month for the rest of my life. Shouldn’t happen where you’re hired for a job and then to find out that they’re going broke because they’re trying to afford healthcare for me.
Dave Steil: [11:18] The current costs of the system are becoming intolerable, and as they become intolerable, their business naturally is going to look for other solutions.
Chuck Pennacchio: [11:28] It distracts businesses from doing their primary function, precludes them being able to budget for hiring, for investment, for expanding their enterprise.
Gerald Friedman: [11:39] Why are we creating an extra hurdle for business? It’s tough enough out there. Why are we making it harder for people to provide goods and services to the American public, while employing people and providing tax revenues?
Michael Lighty: [11:53] I often ask folks that I work with who own businesses, tell me one thing in your business that you spend, the kind of money that you spend on health insurance, that adds no value to your business.
There’s a middleman, an insurance company, that isn’t improving your employee’s health, that isn’t saving you money, and that is not doing what’s in the best interest of our economy.
Richard Master: [12:18] Healthcare costs are going up two to two and a half percent above the projected growth of gross domestic product. It is running away from us. Healthcare costs have gone up to $3 trillion.
Man 2: [12:31] We’ve gone from 7 percent of the economy back in 1971 being healthcare, to 18 percent today.
Man 3: [12:37] When the rest of the world is spending less than 10 percent of their economies and getting healthcare to all of their citizens.
Man 4: [12:46] There’s been a reduction in consumer purchasing power that can be directly associated to the increase in medical costs in the country.
Chuck Pennacchio: [12:58] If you now have a $1,000, $2,000 deductible, that is money that is not available for you to get a new car.
Sean Flaherty: [13:08] More disposable income to spend translates into more demand for the goods and services that employers are in business to produce and sell.
Chuck Pennacchio: [13:19] In the city of Philadelphia where school teachers are being laid off by the thousands and where classroom sizes are escalating above 40 students per teacher, and you don’t have proper security in schools, children are being taught on the fourth and fifth floors of buildings that don’t have air conditioning or proper heating.
We are undermining our capacity to function, let alone compete, as a society because of the rising costs of healthcare.
Walter Tsou: [13:54] People don’t realize that huge federal deficit that we have in this country is related to the fact that we have this enormous healthcare cost bill.
Chuck Pennacchio: [14:05] Part of the indirect costs of healthcare that most people are not aware of is that their taxes will continue to go up to pay for this broken healthcare system.
John: [14:16] We are here at the Bethlehem Wastewater Treatment Plant here in Bethlehem, Pennsylvania. This piece of equipment behind me is a 40 year old piece of equipment that’s been basically taken out of service.
We’ve got a rental unit that we now pay $17,000 a month to lease that piece of equipment. That $17,000 of additional cost, monthly expense, is going to get passed on to the sewer customers in the form of rate increases.
This plant in general is just one small example of what the true impacts are of the spiraling costs of healthcare and our inability, whether it be here in the city or as a country, to address the infrastructure needs that we have throughout this country.
Essentially, what we had to do is starve other departments and other areas of the city in order to continue to accommodate those increases in healthcare costs.
If an ICU stay costs $30,000 a day, we’re shelling out, as an employer by virtue of being self‑insured, $30,000 a day. That’s half a police officer for a year. Depending on the amount of long‑term or significant illnesses you have in any given year, can mean swings of millions of dollars on an annual basis.
An average tax bill in the city of Bethlehem might be $2,500. If you figure that for every dollar, it’s about 33 cents on the dollar, that’s about a $750 dollar bill every year that the taxpayers of the city of Bethlehem are paying to provide healthcare for our employees.
How are we going to make the ends meet, provide the city services that our residents deserve, and do it without having to raise taxes? Senior citizens are struggling to stay in their home as it is. You can literally tax people out of the home that they’ve had all their lives.
Man 5: [16:03] I remember 35 years ago when healthcare was affordable. MCS had great insurance, full coverage with minimal deductibles. US employers across the country provided well for their employees. No worries. That’s all been eroded by a relentless increase in healthcare costs.
Today, there’s a dark cloud of anxiety in the country, a dark cloud over our employees. They’re one diagnosis, one accident away from financial disaster. A few sick employees can take down a company. The dark cloud hangs over our cities.
No money for infrastructure. No money for schools, high taxes. That dark cloud hangs over our whole economy, causing flat wages and no money to spend to fuel real growth. It’s a problem that we have to solve.
Gerald Friedman: [17:15] In 1969, Blue Cross/Blue Shield had community ratings. Everybody paid the same rates. It was a truly non‑profit and in every state Blue Cross/Blue Shields were regulated to serve the public interest. That’s what we gave up on.
Wendell Potter: [17:32] Some executives at life insurance companies saw an opportunity come into this area, come into this space, and make some money. They came in and started offering cut rate policies, but only to those who were younger and healthier.
Gerald Friedman: [17:48] The group of people subscribing to Blue Cross/Blue Shield became less and less healthy, more and more expensive, forcing the Blues to raise their rates more and more and by the late ’70s, early ’80s, in every state in the union. The old Blue Cross/Blue Shield model was dying. These companies were going bankrupt. Non‑profit companies couldn’t make it.
Wendell Potter: [18:14] For‑profit insurance companies over the years became so dominant that they actually came to control the healthcare system. They bought a lot of the Blue Cross plans. A lot of the Blue Cross plans now are for for‑profit companies.
Michael Lighty: [18:25] The US has one of the shortest lengths of stays in hospitals of any country, and we’re told we have to shorten it. We go to the doctor about 4.2 times a year. The Japanese go 13 times. We’re told that we use too much healthcare, and we have to restrict access to save money when, in fact, we’re below average when it comes to comparable countries.
Gerald Friedman: [18:46] The whole system is set up to discourage people from using healthcare.
Donald Light: [18:52] The insurance companies are specialists at figuring out ways of covering less or paying less, the sicker you are.
Man 6: [19:00] Not only are people having to pay more money out of their own pockets for care in these plans, they’re finding that the choice of providers has been narrowed.
Donald Moore: [19:10] As a primary care physician, I have selected the specialists that I’m most comfortable working with. As it stands right now I’ve got to say to my staff, “Check if Dr. Brown is a member of this patient’s insurance.” Referrals are so much more limited in the current system.
Kevin Outterson: [19:30] People have precious little choice today. Frequently people will look at their plan and realize that their doctor is not on any of their plans.
Donald Moore: [19:38] The choice we need is not choice between insurance companies. As a matter of fact, we don’t choose our insurance companies in general. It’s your employer, if you’re getting your insurance through an employer, that chooses the insurance company and that’s really not based on the quality of the insurance most of the time. Most of the time, it’s based on the cost of the employer.
Wendell Potter: [19:57] One of the reasons I left the industry was because I was expected to be a cheerleader for consumer driven plans, or plans which have high deductibles and to persuade the American public, employers in particular, that everyone needed to have more skin in the game.
What the companies were doing to meet Wall Street’s financial expectations, was to make it less likely that people could get care that they needed, that they could afford insurance.
That’s when I decided I had to find some other way to earn a living. I was being paid, in my view, to mislead people, and I couldn’t in good conscience keep doing that.
Michael Gusmano: [20:36] Medicare, and they talk about how it’s broken, that it’s unaffordable, that the costs are escalating. This is an enormous distortion of the reality of Medicare. In fact, Medicare has been a run‑away success.
Walter Tsou: [20:52] Well, Medicare can take care of the sickest and the oldest in our society, and they can do it actually at far less cost than the private insurance companies could do.
Wendell Potter: [21:04] They don’t have the same kind of cost that the private insurance companies have. They don’t spend enormous amounts of money on themselves and marketing teams, and on advertising.
They don’t need to have an infrastructure in which they’re going back and forth with healthcare providers on a daily basis to try to determine whether or not something is a covered benefit, which is also something that eats up an enormous amount of their premium revenue.
Donald Berwick: [21:30] I was the administrator of the Centers for Medicare and Medicaid services that runs both of those programs, and the Children’s Health Insurance program.
We had 5,500 employees in that system to cover the whole country. Our budget, the amount of money going out to the healthcare system, was about $820 billion a year, nearly a trillion dollars.
Total overhead budget, that is the administrative budget that I had, was about $8 billion, one percent of the total. That probably undercounts, so let’s make it three percent, four percent of the total budget.
Right now, by policy in this country under the Affordable Care Act, we are trying to argue insurance companies down to 15 percent overhead.
Walter Tsou: [22:11] The American taxpayers are saddled with the poorest in our society and the oldest, and those with chronic disabilities, those on dialysis.
We’re putting them in the government programs and saying, “All you healthy people from 18 to 64, we’re going to hand it over to private insurance companies.”
Still, even with doing that, Medicare manages to actually control healthcare costs better than the private insurance companies can.
Victor Rodwin: [22:40] If you suffer from end stage renal disease in the United States, irrespective of your age, you are covered by Medicare. If you are blind, you also are covered by Medicare, even if your child was blind.
[22:56] We’ve established the precedent already in this country, of having one payer pay for all the care needed for two organs. By just adding the heart and the liver, that would have gotten us a long way towards universal coverage.
Michael Gusmano: [23:11] Medicare isn’t the problem. It’s a wonderful example of the kind of solution that actually works and is consistent with the international standards in healthcare.
Sean Flaherty: [23:21] It’s the system as a whole that creates the inefficiency. The fact that there are so many different payers and so many different plans and so many different ways in which bills have to be made and collected.
Hisham Abu-nabba: [23:35] Having multiple insurances, and having multiple ways of even billing for that patient is adding to the inefficiencies of the patients. You look at quality and variability, they’re opposite of one another.
The more variability that you have, the more entities, provider, payer, insurance, manufacturers and so on, the more chances of error, the more inefficiencies, the more cost.
Wendell Potter: [23:59] One of the reasons why hospital bills are so high, why we are charged so much by doctors, is because they have to spend a lot of resources.
They have to hire staff who do nothing more than engage in a nitpicking war with insurance companies on a daily basis to make sure that they are getting paid appropriately.
Martha Kuhl: [24:19] It makes me angry to see so much waste in healthcare, that there are nurses who are pulled away from actually providing hands‑on patient care and they’re pulled into administrative duties.
They’re pulled into those duties because we have an incredibly complex billing system. We have many different payers in our billing system. We have people who can’t pay, people who have this insurance, people who have that insurance.
There are nurses whose full time job is to help get authorization so that a patient can get the care they need, and that’s ridiculous.
I would really love to be a nurse without having to think about whether or not a patient can get the care they need, whether or not a patient is sent home from the hospital without the proper medications because they can’t afford it.
Whether or not a patient is going to be able to get a treatment that a doctor recommends, because their insurance company won’t pay for it and they can’t afford it. I’ll go into a patient room on a day of discharge and I’ll find a patient who tells me they’re not ready yet to go home. They say, “I’m fearful. I still have pain.”
The doctors and the nurses share these frustrations, that an insurance company would make a decision to send a patient home too soon. I have seen parents make decisions that would put them into bankruptcy to get their children care.
They love their children and they want to do everything possible. They didn’t understand their actual health insurance. Health insurance is a really complex system.
Families will sit in rooms and cry over, whether or not they’re going to be able to face this, whether or not they’re going to be able to afford it, whether or not they’re going to be able to keep their job, whether or not they’re going to keep their insurance, what’s going to happen to their house, etc. Nurses see this on a day‑to‑day basis, and it does break your heart.
(Time Counter Restarts)
Dr. Dwight Michael: [00:26] We, as a small practice of five doctors and one provider, deal with about 20 different insurance companies at this point. We have a middle office that has three people in it and an office manager, that deal with, essentially insurance issues and payment issues all the time.
If I write a prescription, and they want more information, my nurse has to call up that company, wait for their telephone system to come up with a live voice, give them the particulars of the patient and the medication. It’s not uncommon that they spend 30 minutes with one appeal.
We’re trying to figure out the game so that we spend the least amount of time doing that kind of baloney. Every physician spends $84,000 a year just to interact with the private health insurance industry.
Dr. Yasin Khan: [01:27] To care for my patient in a proper fashion, on a day‑to‑day basis, I need, at least, two people to take care of all of the denials. I have a patient who specifically, for example, needs an epidural because they have a herniation of disc. They have a proven MRI, they have a physical exam. They have all the documentation. I still get denied.
Jennifer Ambrose: [01:53] Doctor wanted an MRI ordered. Patient was in excruciating pain, unable to walk. We attempted the MRI and we were told, “No. Patient had to have six weeks of physical therapy.”
He endured six weeks of physical therapy. His symptoms got worse. In the meantime, he had five office visits, two ER visits, an admission, a transfer to another hospital, and finally a rehab hospital. It just blew my mind that we could not get the MRI approved without six weeks of therapy when we had a person that could not walk.
We deal with insurance companies all day long. We document every conversation we have, who we spoke with, when we spoke with them, because depending on who you get on the phone, you will get a different answer every time you call in. If we did not have the staff that we did, we would not be questioning half of the claims that we do. It’s very time consuming and it’s extremely frustrating.
Michael Lighty: [02:44] Insurance companies increasingly are the force in the room, unseen but powerful. When you’re in the hospital room, that’s who is really driving a lot of the decisions that are made. How long you’re going to be in the hospital? What drugs you’re going to be given? What access to providers or tests that you have? Those things are increasingly driven by the insurance company reimbursement.
Dr. Donald Moore: [03:07] Multiple insurance companies telling me to bill less and do less for the patient. Based on their reimbursement have given me 10 minutes to see a complex patient. That is not possible.
We concluded the only way we could continue to do what I was trained to do, what I thought was the right thing to do was to get rid of these insurance companies. We made a decision to move to a single‑payer. We started taking Medicare, Medicaid and other government insurances. That’s how we moved to a single‑payer.
We had to give up almost 70 percent of our practice, which were commercial insurance. I certainly have a lot less patients than I had before.
Richard Master: [03:56] MCS pays $1.5 million a year for its health insurance, and where does it go? Three cents of every dollar goes to an insurance agent that represents MCS in selecting an insurance plan and negotiating price.
The next 20 cents of our premium dollar goes to the insurance company for its sales and marketing expense, and for its staff to pre‑approve and deny care, and its administrative expense.
Then you have at the provider level 10 to 15 cents that goes to hospitals and doctors to interface with my insurance company. They face massive amounts of paperwork and phone time, dealing with preapprovals and denials, and payment issues. None of it is related to care.
That’s 33 cents of our dollar before the actual cost of care is paid for. My insurance company is supposed to negotiate better prices from the providers, but on average they end up paying 20 percent more than Medicare does. They pass that extra cost onto my company. I don’t see what private insurance brings to the table.
Wendell Potter: [05:15] What keeps insurance company CEOs up at night is the worry that other CEOs will eventually come to realize that they add more cost than value to our healthcare system, and that more and more employers, corporate executives, are beginning to understand that.
Since I have been known as an outspoken critic of the industry and an advocate for change, I’ve gotten calls from a lot of people I used to work with who’ve said, “Thank you for doing what you’re doing. You’re telling the truth.”
Dr. Donald Berwick: [05:54] I cannot read my insurance policy. I don’t understand it. I can’t figure it out. With all due respect, if I can’t figure it out, most people probably can’t. That is waste added. It’s not transparency. It’s confusion. When you have a publicly accountable system as we could have with single‑payer, you can have less confusion.
Richard Master: [06:12] Over and over again we’re hearing the same plea. The system is too confusing. We need to have simplification to control cost and to improve quality.
What about single‑payer health insurance? What does it mean? One entity that pays the bills! We get rid of the hundreds of complicated insurance plans, and we have one comprehensive plan that covers everybody. It’s simple and efficient. You go to any doctor or any hospital you want, present a card, and you’re covered. There are no deductibles, no out‑of‑pocket expenses, and no contentious preapproval before a treatment.
Everybody is covered. Nobody is left out. Single‑payer is not a government takeover of healthcare. The doctors and hospitals remain totally independent, just like they are with Medicare.
Michael: [07:15] If I told you that every one of your employees could get the healthcare they need, guaranteed, that your costs would go down, everyone would pay less and get more, you might be skeptical. The truth is, most every country in the world does that.
Tsung-Mei Cheng: [07:30] The benefits in Taiwan’s single‑payer system are comprehensive. You have inpatient care, hospitalizations, visits to doctors, drugs, dental care, free child delivery, dialysis. All of that is paid for. Patients have complete freedom of choice of providers.
[08:01] Taiwan spends 1.6 percent of its total operating budget on administration. That is a tiny fraction of what we spend in this country. It’s the peace of mind that it gives people, which Americans don’t have. Yet, I hope every American has that, someday.
Dr. Michael Gusmano: [08:24] One of the myths about universal healthcare systems is that they engage in rationing. That in order to cover everyone and operate within a budget, they have to severely limit access to specialty care and surgical care. Our research has shown that, that’s just not the case.
Chuck Pannacchio: [08:43] Our current broken healthcare system is the most rationed healthcare system in the world. That’s why a third of Americans don’t get the healthcare they need.
Uwe Reinhardt: [08:53] The idea that you can have high deductible policies, and that you’re not rationing healthcare by income class, I would say, “Where were you educated?” That isn’t even requiring a PhD, that’s just common sense. Think of a waitress, making 30,000, and you ask her to cough up 10,000 out‑of‑pocket.
Gerald Friedman: [09:15] One of the biggest differences between the United States and the rest of the world, studies by the Commonwealth Fund and others find Americans are much, much more likely than people in other countries to defer medical care because of cost.
Victor Rodwin: [09:27] We have a large number of people dying from causes that should be preventable. When one takes all these causes of death, which one should not die from, given access to appropriate and effective medical care, the US comes out as number 19, compared to France, which, in fact, is number one, or Australia which is number two.
No question on my mind that our low ranking on avoidable mortality is due to the fact that we still have financial access barriers to the most basic kinds of services in the United States of America.
Richard Master: [10:26] The data shows very compelling information about single‑payer systems. It was imperative that we visit a single‑payer system and experience what life was like on the ground. Fortunately, we’ve got a single‑payer system operating to our north in Canada.
Dr. Bruce Flemming: [10:51] This is our high-resolution CT scanner. It’s a very important part of the equipment that we use to make a prompt diagnosis for our folks with a variety of disorders, medical conditions, and trauma.
This is a Dr. O’Connell. He is currently speaking to a group of residents in a room with, as you can see, the flat-screen technology.
Dr. Timothy O’Connell: Since around October of 2013 we’ve had on‑site 24‑hour‑day staff, radiologist coverage here, our subspecialty staff with emergency trauma radiologist fulltime. We’re the first site in the world to offer 24‑hour‑day cardiac CT scanning.
Dr. Khati Hendry: [11:30] Short time after I moved here and I had a house, looking out over the lake and I just had this strange feeling. I’m trying to put my finger on it. This is a peaceful feeling. In the absence of stress, I found that I was really quite unencumbered when it came to seeing the patients that I can concentrate on doing medicine and not worry about other things. That was quite a change from what my experience had been.
Then I worked in community health centers in Oakland, California for many years. I was the Medical Director there and the Medical Director also of a consortium of community health centers, also in the East Bay Area. I left there in 2004 and moved to Canada. Sometimes when I’m driving around, I think, “Oh my gosh, you know, [indecipherable] or something.”
First family practice department meeting that I attended, here in Canada, was quite an experience. People actually seemed happy. No one was talking about the latest outrage that had occurred from some insurance company. No one was complaining that they couldn’t see their patients anymore.
Dr. Danielle Martin: [12:42] As a Canadian physician I laugh when I hear people talking about governments, telling me what to do, you’re a government run healthcare. That’s certainly not been my experience working in the Canadian Health Care System. I have an enormous degree of clinical autonomy.
Dr. Hendry: [12:58] People seem to think that because there’s a single‑payer that you are working for the government. You’re an employee. They tell you what to do. Nothing could be further from the truth.
I’m in practice. I’m a small business person. They are not running my business for me. They don’t come in and review me and tell me, “You’re not doing this right. You’re not doing that right.” They’re the ones that pay me for the work that I do.
Laura Smith: [13:28] This is what I do to bill for one patient. I bring up the patient. I click on new, type in the codes, billing item and a diagnosis code. The date is already filled in for me. I create billing- it’s done.
Dr. Hendry: [13:46] It is very simple. Basically you come in. I see you. I send off a bill. Two weeks later there’s money in the bank. The patient doesn’t have to pay.
I once had to deal with an American insurance company in trying to collect $600 or $700. It took me probably six months, probably six faxes, six phone calls, and then we received a portion of the payment.
Bonnie Kiddell: [14:20] We are billing on behalf of the University Health Network for four hospitals, for diagnostic tests to the Ministry Of Health. We don’t see any situations where the ministry is second‑guessing the doctor’s clinical decision on the test. We bill weekly, electronically and there are approximately 10,000 claims on those weekly billings and those are handled by approximately 10 people within the department.
Dr. Martin: [14:48] This myth about Canadians dying on waiting list is simply that. It’s a myth. When people have something really urgent that needs to be dealt with, in the Canadian Healthcare System, it gets dealt with. The notion that having a single‑payer somehow causes wait‑times is not actually borne out by the international evidence on healthcare system design.
We see healthcare systems internationally where it’s a single‑payer system and there’s virtually no wait time at all-Taiwan being the good example of that. We see systems that have multi‑payers where wait times have been a big problem.
Dr. Jim Stanford: [15:30] There’s a lot of mythology out there that, somehow there’s a big tax burden or big costs that comes along with the Canadian publicly‑funded model.
Carol Sadler: [15:39] In my 25 years as a cross‑border tax consultant, I’d say I’ve prepared at least 5,000 US returns and about the same amount 5,000 Canadian returns. The surprising thing is that, even though on an income of $50,000, the tax rates in Canada and the US are about the same. In Canada, that tax covers primary health care. In the US there’d be additional cost to that person either it’s they’re own insurance or employer insurance.
Gerald Friedman: [16:06] Canada now spends half as much per person as we do in the United States, yet their life expectancy has increased faster than ours.
Theodore Marmor: [16:16] It’s a story of this Universal Health Insurance that very few Canadians would ever imagine reversing, and it’s a story of Canadians looking south of the border and noticing we have both spectacular centers of excellence and spectacularly expensive, complicated, and hard to adjust by distribution of medical care.
Dann Konkin: [16:48] I am Dann Konkin and I’m the President of Ampco Manufacturers, a family-owned business, and been in business for over 47 years. I’m a member of the Conservative Party of Canada and we stand for removing waste being more efficient and finding ways to grow our own businesses.
One of the greatest ways that we can grow our business is to reduce cost and that’s why we embrace the Canadian Health Care System. What I don’t understand is why my fellow conservatives in the United States tend to fight this.
Terry Alexander: [17:21] My name is Terry Alexander and I work for Ampco Manufacturers and I’ve been an employer here for 17 years. From what I’ve experienced the Canadian Health Care System is amazing. I felt very well taken care off. I didn’t feel there is any treatment that was available that they weren’t providing for me. My appointments were very quick.
While I was going through my treatment of my surgery and the chemotherapy and the radiation therapy it was absolutely exhausting and very stressful and lots of anxiety. If I had, had the added burden of coming up without thousand of dollars for my healthcare coverage to fight this disease, it would have been devastating, it would’ve been horrible.
When I hear that people say our Canadians system isn’t good, it makes a bit angry because I’m quite proud of our Canadian system.
Dr. Stanford: [18:10] There is a huge amount of mythology and propaganda that I know was promoted in the United States- all kinds of lies about the supposedly poor quality of our healthcare, the supposedly huge cost of our healthcare system.
Wendell Potter: [18:23] There was concern within the industry that more and more Americans could believe and buy on to the idea, why do we need insurance companies anyway? Why don’t we just have a Canadian‑style system? Our costs would be lower. We’d have access to good quality care. It’s very, very important to discredit the Canadian system in particular. Try to find someone willing to tell some sad story.
Man 1: [18:46] Under the Canadian single‑payer health plan, he was told it would take another eight months, than would likely become another…
Wendell Potter: [18:53] You look for the one or two that seem to be compelling that you can use and to get people to think that, that is common. That’s the way it is. When there are obviously far, far, far more stories in the US about people who are not being able to get the care that they need than you’ll ever find in Canada.
Theodore Marmor: [19:09] Canadian hospitals and Canadian doctors have more bed‑days per thousand and more visits per capita than in the United States.
Wendell Potter: [19:18] I knew that what I was doing was really at odds with the way the system was really run. Also, with the fact that Canadians are far happier with our healthcare system, than American citizens are with our system, and I regret what I did.
There’s no doubt I mislead people and it’s a shame that I did that because people have an opinion of the Canadian system partly because the work that I did, that was just completely wrong. I feel terrible about that. I often say that what I’m doing now is, in many ways, trying to make amends for misleading people.
Dann Konkin: [19:51] We looked at opening up a US operation. We wanted to be closer to our customer base. We wanted to be closer to our supply base. The more we looked at it, the amount of cost that we would have incurred, by having our company relocate into the United States, just through the insurance coverage costs alone, just made it a non‑starter.
If I had to increase my cost by over a million dollars in my company, because of insurance coverage costs, that alone would probably drive me to bankruptcy.
Dr. Stanford: [20:21] In fact, up here in Canada, the major American auto companies, Ford, General Motors, and Chrysler, actually made a public declaration, a public statement that, “the publicly funded healthcare system in Canada was an important competitive advantage for their operations in Canada.”
Theodore Marmor: [20:40] What we have now, by comparison with Canada, are the consequences of complexity, of not knowing what you’re entitled to, of excessive preoccupation with choice of insurance plan, of facing high deductibles in coinsurance- which the Canadians don’t- and of living with a situation which, even if you’re insured, the fearfulness of things falling outside the insurance package worry Americans.
Dr. Stanford: [21:09] How could you prefer a system where the employer has all the hassle of providing private health insurance- the huge cost of it, and the risk and uncertainty of it?
Man 2: [21:21] The other thing that we have to address is the issue of concession bargaining. Again…
Dave Steil: [21:25] Labor negotiations are always a very contentious thing. We hear about them today particularly in the public sector, in state government, municipal government, school districts, very contentious labor negotiations.
Almost always one of those contentious issues is healthcare. If healthcare is no longer part of the bargaining process because it’s now covered under a single‑payer healthcare system, that issue is off the table.
Richard Master: [21:53] If you look at corporate interests, those usually associated with the right side of politics, the conservative side. Their interests are enormously tied to reform of healthcare.
Dave Steil: [22:06] As a business owner, and also as a former republican legislator, I’ve said that conservatives should be supportive of single‑payer because it costs less.
Dr. Berwick: [22:17] Talking with corporate executives, a lot of them, I think get this. They know what waste is. They wouldn’t be running successful companies if they tolerated waste in their production system. They can see the waste on the healthcare side. This crazy transactional system is costing them money without value.
Dave Steil: [22:34] Business, when they look at the single‑payer model, will come quickly to the conclusion that it is the least expensive, the most supportive of a free market. Then we’ll have the most direct affect on their cost of operation.
Richard Master: [22:48] The cost to my company, and its employees, goes down with single‑payer. Instead of high insurance premiums, with high deductibles, there’s a simple payroll fee, like we pay for social security, my company gets out of the healthcare business.
Dr. Berwick: [23:06] I did a study myself, which estimated 34 percent waste in American healthcare. The National Academy of Sciences did a study that came between 30 and 40 percent. The Rand Corporation has a study about 35 percent, I think it is.
One out of $3 wasted. One out of $3 trillion is $1 trillion of non‑value‑added activity and care. It’s hard to get that out with a multi‑payer system.
Kevin Outterson: [23:35] In every city, every day, there’s people who pay 10,000, 20,000, and 40,000 for the same procedure. The doctor doesn’t change their quality based on how much they are being paid. In Massachusetts, the Attorney General issued subpoenas to get this information.
What we found, even for people who that are health policy experts and thought they understood this area, the variation in what hospitals were getting paid was more dramatic than we thought.
Dr. Berwick: [24:06] How are the prices set? I’ll wager you have no idea, and I don’t think anybody does.
Man 3: [24:12] This is a situation where nobody really knows what it costs, and nobody really knows what’s being billed, because it varies all over the map. What healthcare systems have learned is that they can charge whatever they want. Pretty soon you’ve got the MRI that cost $12,000 when in fact it may cost them $300 to provide.
Dr. Berwick: [24:34] You see, there’s no accountability. The buck doesn’t stop anywhere. The system is not in control. With a single‑payer there is more clout, there’s more chance to push back, and to push back on prices to say, “No” to price increases, and forms of pricing that just make no sense.
Gerald Friedman: [24:53] The reason traditional Medicare has controlled prices better than the rest of the healthcare sector is because they’ve controlled hospital prices and physician rates. They don’t pay just what people want. They pay according to a more reasonable schedule that’s more equitable.
The only place in the United States where you get drugs at Canadian prices, the Veteran’s Administration. The VA, using competitive bidding, and a formulary list, gets lower prices, and they pay 41 percent less on average than does the rest of the United States.
Are the drug companies losing money selling to the VA? No. They wouldn’t do it if they were losing money. It’s just they’re making a lot more money off the rest of us.
Dr. Stephanie Woolhandler: [25:38] There’s actually excellent data showing that when you have excess number of hospital beds, and excess number of specialists, and particularly excess number of facilities like MRI scanners and operating suites, you get much higher healthcare costs, due to much higher rates of intervention, but there’s no improvement in population health. From a population point of view, that money for the excess is wasted.
Dr. Berwick: [26:12] I don’t mean to be critical of the motivation, intent, or goodwill of the providers. They care a lot about what they do. Hospitals believe in what they do. It would be easier if they were bad guys. They’re not. They’re good guys, but they need somebody on the other side of the table with the authority and the resources to speak up for the people, for the public.
(To be continued.)
- “MCS faced with double digit increases every year in health care cost increases” and “The premiums in total for health care cost has actually doubled over the past 10 years”
-From MCS Files – Employee share in 2004 was $75.66 for Aetna in 2014 it is now $413.01 for Highmark Blue Shield. In 2004 the monthly premium for Aetna was $710 and is now $1,529.66 for Highmark Blue Shield as of 2014.
- “A Worker making minimum wage for an entire year is not making enough to pay for a health care benefit”
“10 Dollars an hour for every hour they work”
-Health insurance equals $18K cost for medical insurance is $9 per hour — 2,000/18K = $9 *
- “For an average family of 4 this years number is $23,000 dollars that’s what a typical family insured that way costs” -(http://www.milliman.com/uploadedFiles/insight/Periodicals/mmi/2015-MMI.pdf)
In 2015 the average annual family insurance cost is $24,671
- “Insurance companies are able to older employees up to 3x as much as they would a younger employee”
– The HHS report provides some details for premiums by age group, showing that a typical 60-year-old individual will pay almost 60 percent more than a typical 27-year-old for the second-lowest cost silver plan. But, again, these figures don’t include out of pocket expenses.
http://www.washingtonpost.com/blogs/she-the-people/wp/2014/06/24/older-women-bear-the-brunt-of-higher-insurance-costs-under-obamacare/The costs of claims also increase with the age of the insured, as shown in Figure 2. The average costs of claims rise every 10 years for men from age 45 on and for women from age 35 https://www.bc.edu/content/dam/files/research_sites/agingandwork/pdf/publications/IB08_HealthInsurance.pdf
- “Of 1 million bankruptcies in the U.S over 60 percent are because of medical related issues, and the majority amount of those people have health insurance”-In 2013 1.7 Americans lived in households experiencing bankruptcies due to health care. 64 million Americans struggled to pay medical bills in 2014 – commonwealth fund of those 64 million Americans 59 percent were insured for the entire year – 36 percent or 66 million Americans reported delayed care due to costs http://www.commonwealthfund.org/publications/Issue-Briefs/2015/Jan/Biennial-Health-Insurance-Survey
A study by the American journal of medicine in 2007 62.1 percent of all bankruptcies have medical cause. Most medical debtors are well educated and middle class citizens and ¾ of them had health insurance.
The share of bankruptcies attributable to medical problems rose by 50 percent between 2001 and 2007
- 1,973 American households file for bankruptcy every day – – 62% of bankruptices are medical related. There are 1.2 million total bankruptcies a year. Debt.org
– in 2005 1 out of 55 households filed for bankruptcies – Debt.org
– Businesses are 3 percent of bankruptcies – Debt.org
– in 2011 1,400,000 bankruptcies
– in 2005 medical bills were 46% of bankruptcies – debt.org
– in 2014 937k bankruptcy fillings and less than 3% were from businesses – U.S Bankruptcy Court- “Business and Non Business Cases Commenced Case Load Stats U.S Bankruptcy”
- Richard conversation about Premium Shares, and how an employee could end up paying an additional 6,000+ if one or two family members got sick.
– Additional information from Kasier Employer Health Benefit Survey for data on Premiums
- – In 2014 the average contributions for employees are $1,081 for single and $4,823 for family.
– Family contribution has increased 81% since 2004
– PPO is the most common health plan 54% of insured people had it in 2014
– In 2009 the average deductible was $829 in 2014 it was $1,217
– 73% of workers have co-pays for primary care physicians and 72% for specialty care
– Average co-pay for in-network is $24 for primary and $36 for specialty
– Average Coinsurance = 18% for primary and 19% for specialty
– 62% of covered works are in drug prescription plans with 3 or more tiers
– 15% of plans pay fill cost of prescriptions once the deductible is met
– 17% are in plans with the same cost sharing for all prescription drugs.
– The Typical American family is not prepared for a major financial shock) only has 21 days of income readily accessible – CNN Financial report * (we both have this on file) from the same report *Middle Class income families make between $36-60K the lowest income households earn less than $20,300. 60% of Americans have the same amount of wealth as they did in 1989. From the PEW Research center 46 percent of Americans are considered Middle Class (http://www.pewresearch.org/fact-tank/2014/12/17/wealth-gap-upper-middle-income/#comments)
- “health care costs are going up 2 percent above the inflation rate and 2 to 2 ½ percent the projected growth of the GDP”
Inflation – http://www.forbes.com/sites/castlight/2015/01/08/behind-the-numbers-are-healthcare-costs-really-getting-better/
Healthcare cost growth refers to the rate at which the national spending is increasing. In 2013, this was 3.6 percent. That’s the lowest rate of increase since 1960 when the government started keeping track of these things – but it’s still more than double the 1.5 percent rate of inflation that we saw in the broader US economy in 2013.
GDP – The U.S. Commerce Department’s Bureau of Economic Analysis in its advance estimate (PDF) for second-quarter gross domestic product showed healthcare spending climbed 4.9% compared to the second quarter a year ago. The overall economy grew at a 2.3% rate in the quarter.
Information is from this article: http://www.modernhealthcare.com/article/20150730/NEWS/150739985
Which uses this information http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp2q15_adv.pdf
- Additionally from the CMS
– Health spending is projected to be 19.9 percent of GDP by 2022.
– Health spending is projected to grow at an average rate of 5.8 percent from 2012-2022, 1.0 percentage point faster than expected average annual growth in the Gross DomesticProduct (GDP).
- “Health costs have gone up to 3 trillion dollars”
NHE grew 3.6% to $2.9 trillion in 2013, or $9,255 per person, and accounted for 17.4% of Gross Domestic Product (GDP). https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet.html
- We’ve gone from 7 percent of the economy back in 1971 being health care to 18 percent today” And “When the rest of the world is spending less than 10 percent of their economies and getting health care to all of their citizens” http://www.commonwealthfund.org/publications/in-brief/2014/jun/global-slowdown-in-health-care-spending-growthS is currently 17.6 percent of the GDP, compared to an average of 9.2% of the OECD countries
Spending per person in the U.S is $8,745 compared to an average of $3,355 for OECD countries
- Chuck, Philadelphia school discussion
- change teachers to school staff – June 7, 2013 — The Philadelphia School District announced Friday is it laying off 3,783 people across entire range of district employees, from senior administrators to support staff.Class Size growth – School officials previously said they might have to lay off 1,300 employees, swell class sizes to 40 or more, ax school police officers, and further cut services to students.At least one of those doomsday scenarios would not come to pass, the superintendent said Wednesday.”I’m saying definitively, I’m not going to put 40 children in a class,” he told reporters, “because they’re not going to be safe.”
- “If an ICU stay costs 30K a day, we are shelling out 30K a day, that’s half a police officer a day”
– ICU – Mean intensive care unit cost and length of stay were 31,574 +/- 42,570 dollars and 14.4 days +/- 15.8 for patients requiring mechanical ventilation and 12,931 +/- 20,569 dollars and 8.5 days +/- 10.5 for those not requiring mechanical ventilation http://www.ncbi.nlm.nih.gov/pubmed/15942342
- Fall of the Blues source http://consumersunion.org/wp-content/uploads/2013/03/yourhealthdollar.org_blue-cross-history-compilation.pdf
- “The U.S has one of the shortest lengths of stays in hospitals per country” http://www.oecd-ilibrary.org/docserver/download/8111101ec033.pdf?expires=1441290089&id=id&accname=guest&checksum=3D103CEAC83C04E955EDAB1DC02D9C0D
- “We go to the doctor about 4.2 times a year the Japanese go 13 times” http://www.oecd-ilibrary.org/sites/health_glance-2011-en/04/01/g4-01-01.html?itemId=/content/chapter/health_glance-2011-29-en&_csp_=785dba4abcba409e00e41ac61cf308b1
- Nurse discussion about billing and complexity file:///C:/Users/HP%20ENVY%2015/Downloads/FinalPaperworkReport.pdf
- US physicians spend 84k a year just to interact with the private health insurance industry
– We estimated physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency—just 27 percent of the $82,975 per physician per year spent in the United States. US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans—nearly ten times that of their Ontario counterparts. If US physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year.
- Taiwan’s spends 1.5-1.6% of its total budget on administration http://www.brookings.edu/research/opinions/2015/05/14-taiwan-national-healthcare-cheng
I’m getting 1.7 here “Another critically important factor is the NHIA’s powerful information technology (IT)-driven administrative system, which provides high administrative efficiency at low cost. In 2014 the administrative budget for the NHI was 1.07 percent of total NHI expenditure” http://www.commonwealthfund.org/publications/in-the-literature/2014/sep/hospital-administrative-costs
- Rationing Discussion
- Data from the CDC Summary Health Statistics for the U.S Population: National Health Interview Survey, 2012
– About 25.9 million persons (8%) delayed seeking medical care in the last year due to cost and 19.2 million (6%) did not receive needed care due to the cost of care
– Adults aged 18-44 and 45-64 were more likely than older adults and not children to delay seeking or not receive medical care due to cost.
– Persons in the lowest income group were about 10 times as likely as person in the highest income group to not receive needed medical care due to cost and more than 6 times as likely to delay seeking medical care.
– Persons under age 65 who were uninsured were about 3x as likely as persons who had Medicaid and other insurance to delay seeking or not receive needed medical care due to cost.
– Persons who were in fair or poor health were about three or four times as likely as persons who were in excellent or very good health to delay seeking or not receive needed medical care due to cost
– Among persons under age 65, those with Medicaid (9%) were more likely than those who had private insurance (4%) and those who were uninsured (4%) to have stayed overnight in the hospital once in the past year.
- “84,000 lives could be saved yearly if the U.S lowered its preventable death rate”
- Berwick waste study “Eliminating Waste in U.S Healthcare”
- Healthcare waste-
- Dartmouth 30% Excess Medicare spending According to the Dartmouth Institute for Health Policy and Clinical Practice, 30 percent of all Medicare clinical care spending is unnecessary or harmful and could be avoided without worsening health outcomes.
$690 billion Waste in health care A September 2012 Institute of Medicine report estimated that $690 billion was wasted in US health care annually, not including fraud.
The Institute of Medicine breaks those numbers down, they also have us at a $765 billion total in waste
- “MRI’s cost $12,000 when in fact it could really cost them $300 to provide”
– Charges for a single MRI scan vary widely across the country for reasons beyond startup costs. According to the recently released Medicare data, MRIs charges are as little as $474 or as high as $13,259, depending on where you go. (Another recent study of medical claims by Change Healthcare found that in-network prices for certain MRIs can run from $511 to $2,815.) http://time.com/money/2995166/why-does-mri-cost-so-much/ Article also notes the national average is $2,600
- Hospital prices and variation http://www.huffingtonpost.com/2013/05/08/hospital-prices-cost-differences_n_3232678.html
Provider Savings footnotes:
For provider savings we added all providers together and looked at the Himmelstein study which showed that 26 percent of total expenditures was wasted in excess administration, which is the highest In comparison to other countries hospitals.
- U.S. far out in front again – in hospital administrative wasteA Comparison Of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far. By David U. Himmelstein, Miraya Jun, Reinhard Busse, Karine Chevreul, Alexander Geissler, Patrick Jeurissen, Sarah Thomson, Marie-Amelie Vinet and Steffie Woolhandler.
Health Affairs, September 2014 http://www.pnhp.org/news/2014/september/us-far-out-in-front-again-in-hospital-administrative-waste
- Analysis of hospital administrative costs across eight nations: Canada, England, Scotland, Wales, France, Germany, the Netherlands, and the United States. We found that administrative costs accounted for 25.3 percent of total US hospital expenditures—a percentage that is increasing. Next highest were the Netherlands (19.8 percent) and England (15.5 percent), both of which are transitioning to market-oriented payment systems. Scotland and Canada, whose single-payer systems pay hospitals global operating budgets, with separate grants for capital, had the lowest administrative costs. Costs were intermediate in France and Germany (which bill per patient but pay separately for capital projects) and in Wales. Reducing US per capita spending for hospital administration to Scottish or Canadian levels would have saved more than $150 billion in 2011.
Bureaucracy consumes one-quarter of US hospitals’ budgets, twice as much as in other nations: Health Affairs study http://www.pnhp.org/news/2014/september/bureaucracy-consumes-one-quarter-of-us-hospitals%E2%80%99-budgets-twice-as-much-as-in-ot
A study of hospital administrative costs in eight nations published today in the September issue of Health Affairs finds that hospital bureaucracy consumed 25.3 percent of hospital budgets in the U.S. in 2011, far more than in other nations.
Hospital administrative spending totaled $667 per capita in the U.S., vs. $158 in Canada, $164 in Scotland, $211 in Wales, $225 in England and $325 in the Netherlands.
Administrative costs were lowest (about 12 percent) in Scotland and Canada, whose single-payer systems fund hospitals through global, lump-sum budgets, much as a fire department is funded in the U.S.
The article attributes the high administrative costs in the U.S. to two factors: (1) the complexity of billing a multiplicity of insurers with varying payment rates, rules and documentation requirements; and (2) the entrepreneurial imperative for hospitals to amass profits (or, for nonprofit hospitals, surpluses) in order to fund the modernization and upgrades essential to survival.
“We’re squandering $150 billion each year on hospital bureaucracy,” said lead author Dr. David Himmelstein, a professor at the CUNY/Hunter College School of Public Health and lecturer at Harvard Medical School. “And $300 billion more is wasted each year on insurance companies’ overhead and the paperwork they inflict on doctors.”
He added: “Only a single-payer reform can squeeze out the bureaucratic waste and use the money to give patients the care they need. Instead, we’re layering on more bureaucracy in insurance exchanges and ‘accountable care organizations”
He added: “Only a single-payer reform can squeeze out the bureaucratic waste and use the money to give patients the care they need. Instead, we’re layering on more bureaucracy in insurance exchanges and ‘accountable care organizations.’
Dr. Steffie Woolhandler, senior author of the study, said: “For three decades our policy makers have pushed market-oriented strategies that have turned health care into a business. As a result, Americans now have the world’s costliest health care, and our life expectancy is years shorter than in most other wealthy nations. It’s time to admit that, when it comes to caring for sick people, markets don’t work.”
- Physician Practices in the U.S. Spend Nearly $83,000 Annually Per Physician on Administrative Costs, Nearly Four Times as Much as Canadian Practices Spend
- Physician practices in the U.S. spend significant amounts of time and labor interacting with multiple health plans on claims and billing, obtaining prior authorization for patient services, and dealing with pharmaceutical formularies. The physician and staff time spent on these interactions is estimated to cost at least $82,975 per physician annually in the U.S., compared with $22,205 in Ontario, Canada, according to a study published in the July issue of Health Affairs. The study was partially supported by The Commonwealth Fund
- The amount spent on these activities by practices in the U.S was nearly four times that spent by their counterparts in Ontario interacting with Canada’s single-payer system, according to estimates by lead author Dante Morra of the Department of Medicine at the University of Toronto and colleagues, based on surveys of physicians and administrators. If U.S. physician practices had administrative costs similar to those in Ontario, the total savings for U.S. health spending would be about $27.6 billion per year.
The authors note that per capita health spending in the U.S. is 87 percent higher than in Canada—$7,290 vs. $3,895 annually—saying that “many factors contribute to the high cost of health care in the United States, but there is broad consensus that administrative costs are high and could be reduced
Additional findings from the study, “U.S. Physician Practices Spend Nearly Four Times as Much Money Interacting with Health Plans and Payers than Do Their Canadian Counterparts”:
U.S. physicians spend 3.4 hours per week interacting with health plans, significantly more than the 2.2 hours per week Ontario physicians spend interacting with the Canadian single payer plan. Most of the difference comes from one hour per week that U.S. physicians spend obtaining prior authorizations.
Nurses and medical assistants spend 20.6 hours per physician per week on administrative tasks related to health plans, nearly 10 times the time spent by Canadian practices. More than 13 of these hours per week are spent obtaining prior authorization for medical services that physicians believe are needed by patients.
U.S. clerical staff spend 53.1 hours per physician per week on administrative tasks related to insurance, compared to 15.9 hours in Ontario. Most of the difference comes from the time U.S. clerical staff spend on billing (45.5 hours) and obtaining prior authorizations (6.3 hours)
Senior administrators of physician practices in the U.S. spend much more time per physician than their Canadian counterparts on overseeing claims and billing tasks: 163.2 hours a year in the U.S. compared to 24.6 hours a year in Ontario.
Physician practices spent very little time submitting quality data to health plans in either the United States or Ontario.
- From Bloomberg business: http://www.bloomberg.com/news/articles/2015-04-14/u-s-drug-spending-increases-most-in-13-years-to-373-9-billion“U.S Drug Spending Increases most in 13 years to 373.9 Billion”“Last year’s $43 billion growth in spending on medicines was the highest ever,” said Murray Aitken, executive director the IMS Institute for Healthcare Informatics, which issued the report. The institute is part of IMS Health Holdings Inc., a data company that tracks prescription drug use.Much of the increase came from treatments for hepatitis C, cancer, diabetes and multiple sclerosis after U.S. regulators approved more new drugs than any year since 2001. In total, spending on prescription drugs rose 13.1 percent in 2014, according to the report.
11.7 million Americans gained health coverage under the Patient Protection and Affordable Care Act, they weren’t a major driver of the spending growth, Aitken said. The main contributors were new and expensive specialty treatments, which include medicine for viral diseases, cancer and auto-immune disorders such as rheumatoid arthritis.
Drugmakers introduced four new products for hepatitis C, a liver virus that’s infected about 3 million people in the U.S. The drugs are among the most expensive treatments ever, with Gilead Sciences Inc.’s Harvoni listing at more than $1,000 a pill. In total, the U.S. spent $12.3 billion on the treatments, according to the report.
- Prescription drug spending jumps 13% to record $374 billion in 2014From LA Times: http://www.latimes.com/business/la-fi-drug-costs-20150414-story.htmlThe influx of millions of people newly insured under the Affordable Care Act was less of a factor than expected — about $1 billion of the spending growth, it said.
The bulk of that was from people seeking breakthrough treatments for hepatitis C — a cure that came with a wallop at the cash register. A 12-week treatment of Gilead Sciences Inc.’s breakthrough hepatitis C drug Sovaldi could cost more than $80,000 per patient.
Gilead’s drugs Sovaldi and Harvoni drove nearly 10 times as many people to start treatment for hepatitis C last year than in 2013, the report said. Sovaldi, in its first full year on the market, became the top-selling drug in the United States, the report said.
- Why do Americans spend so much on pharmaceuticals?
http://www.pbs.org/newshour/updates/americans-spend-much-pharmaceuticals/The United States spends almost $1,000 per person per year on pharmaceuticals. That’s around 40 percent more than the next highest spender, Canada, and more than twice as much as than countries like France and Germany spend.Prices in the U.S. for brand-name patented drugs are 50 to 60 percent higher than in France and twice as high as in the United Kingdom or Australia.
- http://www.huffingtonpost.com/2014/04/17/health-care-costs_n_5160819.html More Proof That American Health Care Prices Are Sky-High
- A prescription for Nexium, a popular remedy for acid reflux disease and other stomach ailments, costs $215 on average in the U.S., which is more than 3.5 times the cost in Switzerland, the second-most-expensive nation for Nexium prescriptions, and almost 10 times more than what Dutch people pay.
- Sales of Sovaldi, New Gilead Hepatitis C Drug, Soar to $10.3 Billion
- Gilead Sciences sold $10.3 billion of it’s new hepatitis C drug Sovaldi in 2014.
- Its success with hepatitis C more than doubled Gilead’s overall revenues to $24.9 billion in 2014, compared to $11.2 billion a year earlier. Net income after certain adjustments was $13.3 billion, or $8.09 per diluted share, compared to $3.5 billion, or $2.04 per diluted share for 2013.
- In the fourth quarter alone, revenue was $7.3 billion, compared to $3.1 billion for the fourth quarter of 2013. Net income, after adjustments, was $3.9 billion, or $2.43 per diluted share, compared to $930 million, or 55 cents per diluted share, a year earlier.
- In addition Gilead has stuck a deal with Indiana manufacturers to create a generic version of the pill which will cut the drugs price by 99% for poor countries. For example in the U.S Sovaldi costs 1,000 a pill or $84,000 for the recommended 12 week treatment, in India it is likely to be sold for less than $1,800 for a 24 week treatment. Gilead plans to introduce the drug in India for about $10 a pill. 1 percent of the price in the U.S – http://www.nytimes.com/2014/09/16/business/international/maker-of-hepatitis-c-drug-strikes-deal-on-generics-for-poor-countries.html