Saturday, Congress voted overwhelming (House 335-91, Senate 88-9) to keep the government funded until Nov. 17 at 2023 levels. No surprise. Congress is supposed to pass all 12 appropriations bills before the start of each fiscal year but has done that 4 times since 1970—the last in 1997. So, while this chess game plays out, the health system will soldier on against growing recognition it needs fixing.
In Wednesday night’s debate, GOP Presidential aspirant Nicki Haley was asked what she would do to address the spike in personal bankruptcies due to medical debt. Her reply:
“We will break all of it [down], from the insurance company, to the hospitals, to the doctors’ offices, to the PBMs [pharmacy benefit managers], to the pharmaceutical companies. We will make it all transparent because when you do that, you will realize that’s what the problem is…we need to bring competition back into the healthcare space by eliminating certificate of need systems… Once we give the patient the ability to decide their healthcare, deciding which plan they want, that is when we will see magic happen, but we’re going to have to make every part of the industry open up and show us where their warts are because they all have them”
It’s a sentiment widely held across partisan aisles and in varied degrees among taxpayers, employers and beyond. It’s a system flaw and each sector is complicit. What seems improbable is a solution that rises above the politics of healthcare where who wins and loses is more important than the solutions themselves. Perhaps as improbable as the European team’s dominating performance in the 44th Ryder Cup Championship played in Rome last week especially given pre-tournament hype about the US team.
While in Rome last week, I queried hotel employees, restaurant and coffee shop owners, taxi drivers and locals at the tournament about the Italian health system. I saw no outdoor signage for hospitals and clinics nor TV ads for prescriptions and OTC remedies. Its pharmacies, clinics and hospitals are non-descript, modest and understated. Yet groups like the World Health Organization (WHO) and the Organization for Economic Cooperation Development (OECD) rank Servizio Sanitario Nazionale (SSN), the national system authorized in December 1978, in the top 10 in the world (The WHO ranks it second overall behind France). “It covers all Italian citizens and legal foreign residents providing a full range of healthcare services with a free choice of providers. The service is free of charge at the point of service and is guided by the principles of universal coverage, solidarity, human dignity, and health. In principle, it serves as Italy’s public healthcare system.” Like U.S. ratings for hospitals, rankings for the Italian system vary but consistently place it in the top 15 based on methodologies comparing access, quality, and affordability. The U.S., by contrast, ranks only first in certain high-end specialties and last among developed systems in access and affordability.
Like many systems of the world, SSN is governed by a national authority that sets operating principles and objectives administered thru 19 regions and two provinces that deliver health services under an appointed general manager. Each has significant independence and the flexibility to determine its own priorities and goals, and each is capitated based on a federal formula reflecting the unique needs and expected costs for that population’s health. It is funded through national and regional taxes, supplemented by private expenditure and insurance plans and regions are allowed to generate their own additional revenue to meet their needs. 74% of funding is public; 26% is private composed primarily of consumer out-of-pocket costs. By contrast, the U.S. system’s funding is 49% public (Medicare, Medicaid et al), 24% private (employer-based, misc.) and 27% OOP by consumers.
Italians enjoy the 6th highest life expectancy in the world, as well as very low levels of infant mortality. It’s not a perfect system: 10% of the population choose private insurance coverage to get access to care quicker along with dental care and other benefits. Its facilities are older, pharmacies small with limited hours and hospitals non-descript. But Italians seem satisfied with their system reasoning it a right, not a privilege, and its absence from daily news critiques a non-concern. Issues confronting its system—like caring for its elderly population in tandem with declining population growth, modernizing its emergency services and improving its preventive health programs are understood but not debilitating in a country one-fifth the size of the U.S. population.
My take:
Italy spends 9% of its overall GDP on its health system; the $4.6 trillion U.S spends 18% in its GDP on healthcare, and outcomes are comparable. Our’s is better known but their’s appears functional and in many ways better.
Should the U.S.copy and paste the Italian system as its own? No. Our societies, social determinants and expectations vary widely. Might the U.S. health system learn from countries like Italy?Yes. Questions like these merit consideration: Might the U.S. system perform better if states had more authority and accountability for Medicare, CMS, Veterans’ health et al? Might global budgets for states be an answer? Might more spending on public health and social services be the answer to reduced costs and demand? Might strict primary care gatekeeping be an answer to specialty and hospital care? Might private insurance be unnecessary to a majority satisfied with a public system? Might prices for prescription drugs, hospital services and insurance premiums be regulated or advertising limited? Might employers play an expanded role in the system’s accountability? Can we afford the system long-term, given other social needs in a changing global market?
Comparisons are constructive for insights to be learned. It’s true in healthcare and professional golf. The European team was better prepared for the Ryder Cup competition. From changes to the format of the matches, to pin placements and second shot distances requiring precision from 180-200 yards out on approach shots: advantage Europe. Still, it was execution as a team that made the difference in its dominating 16 1/2- 11 1/2 win —not the celebrity of any member.
The time to ask and answer tough questions about the sustainability of the U.S. system and chart a path forward. A prepared, selfless effort by a cross-sector Team Healthcare USA is our system’s most urgent need. No single sector has all the answers, and all are at risk of losing.
Team USA lost the Ryder Cup because it was out-performed by Team Europe: its data, preparation and teamwork made the difference. Today, there is no Team Healthcare USA: each sector has its stars but winning the competition for the health and wellbeing of the U.S. populations requires more.
Paul
Quotables
Re: healthcare trends: “According to the laws of economics, when supply exceeds demand or demand is flat or declining relative to supply, price goes down. In healthcare however, the inverse has been true for decades, but the status quo is unsustainable for the health of Americans. Despite significant investments and initiatives to ‘transform’ the $4.3T health economy, little has changed. Analysis of emerging and intensifying industry trends, however, suggests stakeholders may soon have no other option but to start playing by the immutable rules of a negative-sum game.”
Trilliant Health Chief Research Officer, Sanjula Jain, Ph. “2023 Trends Shaping the Health Economy” Trilliant Heath Report www.trillianthealth.com
Re: value-based care and CMMI: “The Medicare payment trend landscape got a little more confused at the end of the month when CBO issued a new report titled Federal Budgetary Effects of the Activities of the Center for Medicare & Medicaid Innovation (CMMI). In 2010 when Obamacare was enacted, CBO projected that CMMI would realize net savings during its first ten years (i.e., 2011-2020) to the tune of $2.8 billion (when the reduced medical spend from the Center’s payment models is offset by the cost of operating the Center and its model portfolio). However, CBO now projects that CMMI will increase federal spending during its second decade (i.e., 2021 to 2030) by $1.3 billion…
So, what does all this analytical CBO mumbo jumbo mean? It means that the current CBO analysis recognizes that CMMI does not expect to have a lot of opportunities over the next decade to expand its models. Unlike bending the cost curve, this view is not a reason to celebrate. Instead, it means that CMMI is not realizing its full, original potential…
In sum, the scrutiny of Medicare value-based care payment models often focuses on whether they are saving significant money for the Medicare Trust Funds. While an important consideration, it should not be the exclusive one when evaluating the success of value transformation. Quality improvements, better care coordination, and healthier populations resulting from value-based payment models should be the key metrics. Smarter spending is much more than just lower spending. That both are happening now is the real reason to celebrate.”
“Is VBC Saving the Federal Government Money? It’s Clear as Mud” Jeff Micklos, Executive Director, Healthcare Transformation Task Force www.hcttf.org
Re: weight loss drugs: “The development of GLP-1 agonist drugs to treat diabetes and, increasingly, support weight loss represents one of the most significant trends shaping the healthcare industry today. Given the prevalence of obesity in the US and worldwide and the documented link between obesity and other conditions—including cardiovascular disease, the leading cause of death globally—we believe the effects of this new drug class will extend far beyond the drugmakers themselves.”
Healthcare Future Report: W eight Loss Drugs Pitchbook September 29, 2023 www.pitchbook.com
Re: antibiotic business model: “The push for antibiotics to fight fast-evolving superbugs is snagging on a broken business model.
Six startups have won Food and Drug Administration approval for new antibiotics since 2017. All have filed for bankruptcy, been acquired or are shutting down. About 80% of the 300 scientists who worked at the companies have abandoned antibiotic development…
The reason, the companies say: They couldn’t sell their lifesaving products because the system that produces drugs for cancer and Alzheimer’s disease—which counts on companies selling enough of a new treatment or charging a high enough price to reward investors and make a profit—isn’t working for antibiotics…
The U.K. in 2019 started a subscription-style model to pay drugmakers for new antibiotics based on their potential public-health value. U.S. lawmakers have considered similar legislation. Bipartisan bills reintroduced in the House and Senate in April committed $6 billion to purchase new antibiotics to treat drug-resistant infections. They haven’t received a vote. “
Dominique Mosbergen dominique.mosbergen@wsj.com
Industry Studies
Study: misinformation sources: Researchers analyzed the prevalence of non–evidence-based treatment for COVID-19 in the US and the association between such treatment and endorsement of misinformation as well as lack of trust in physicians and scientists. Finding:
“Those reporting trust in physicians and hospitals and in scientists were less likely to receive non–evidence-based medication. Respondents reporting trust in social media) and in Donald Trump were more likely to have taken non–evidence-based medication. Individuals with greater scores on the American Conspiracy Thinking Scale were more likely to have received non–evidence-based medications…These results suggest that the potential harms of misinformation may extend to the use of ineffective and potentially toxic treatments in addition to avoidance of health-promoting behaviors.
Perlis et al “Misinformation, Trust, and Use of Ivermectin and Hydroxychloroquine for COVID-19” JAMA Health Forum September 29, 2023;4(9):e233257. doi:10.1001/jamahealthforum.2023.3257
Study: out of pocket health costs for women: Per Deloitte, women at every age have higher out-of-pocket expenses for their health care than men despite having similar health insurance and after removing maternity care. Deloitte actuaries analyzed
- Women each year pay $15.4 billion more out of pocket for health care.
- Women use health care more often, with 10% more in total health expenditures relative to men. But they still saw out-of-pocket expenditures that were 18% higher after removing maternity costs.
- For people with commercial insurance, the value of benefits for women is more than $1.3 billion less than men.
- The cost to employers to cover this actuarial value gap is less than $12 per employee or less than $1 a month.
- 46% of men have less than $1,000 in claims compared to 35% for women
Deloitte www2.deloitte.com
Study: telehealth satisfaction strong among young adults: Per the JD Power survey of 5400 consumers who used telehealth services at least once in the past year:
- Satisfaction with telehealth is significantly higher among younger patients and ease of use is key to experiences. Members of Generation Y, who were born between 1977 and 1994, and Generation Z, born between 1995 and 2004, report a satisfaction score of 714 out of 1,000. But Baby Boomers, born between 1946 and 1964, and people born earlier had a significantly lower score of 671. The satisfaction gap between older and younger generations is widest when it comes to digital channels and appointment scheduling, which could mean older users are struggling to use telehealth providers’ digital interfaces, the study argues.
- Mental health visits make up a large portion of overall telehealth claim lines too, and access to virtual visits may have boosted the number of people who could receive care for common mental health disorders.
- “At the same time, we are seeing some significant barriers to adoption in some populations, particularly among older patients and underserved populations who are struggling with digital channels and having challenges with access and ease of use,”
- Overall satisfaction was 172 points higher when patients rated digital channels as “very easy” to use compared with “not very easy” to use. 28% of respondents reporting convenience as a primary reason for picking virtual over in-person care and 17% citing the ability to get care fast.
- Overall satisfaction with the telehealth experience is highest when it comes to the people involved in providing the care, like doctors, physician’s assistants, nurses and nurse practitioners, and whether the visit met the patient’s needs.
JD Power www.jdpower.com
Insurance coverage: Percentage of Adults 19 to 64 years with Health Insurance Coverage
by Region, 2021 and 2022
| Region | 2021 | 2022 |
| Northeast | 92.6% | 93.3% |
| Midwest | 92.3% | 92.8% |
| South | 84.0% | 84.8% |
| West | 89.0% | 90.3% |
US Census Bureau, September 12, 2023
