How Medicare Was Won

https://www.thenation.com/article/how-medicare-was-won/

senior citizens supporting Medicare at the 1964 Democratic National Convention

 

The history of the fight for single-payer health care for the elderly and poor should inform today’s movement to win for Medicare for All.

In August of 1964, 14,000 retirees arrived by the busload in Atlantic City. Representing the National Council of Senior Citizens (NCSC), the former railroad workers, dressmakers, and auto assemblers marched 10 blocks up the fabled New Jersey boardwalk to the Democratic National Convention at the Convention Hall. The group, which was organized and bankrolled by the AFL-CIO, moved en masse in floral housecoats and sandwich boards with slogans like “Our Illnesses Burden Our Families” and “Senior Citizens Vote, Remember Medicare.” They intended to push President Johnson to extend public health insurance to millions of Americans.

Astonishingly, less than a year later, they won. Medicare was signed into law in July of 1965 in Independence, Missouri, at a ceremony attended by former president Harry S. Truman, whose push for national health insurance (NHI) had collapsed nearly two decades before. The landmark law created a public-sector insurance pool for Americans 65 and over, which remains today the closest thing to a robust universal entitlement in the US health-care system. Its successful passage (which also passed Medicaid, to insure the very poor) stands in sharp contrast to multiple failed efforts to install a universal single-payer system.

A half-century later, we’re witnessing the early stages of yet another popular thrust toward single payer, increasingly billed as “Medicare for All.” The nomenclature intends to evoke associations with the popular, trusted program, and is perhaps easier for Americans to latch onto than a phraseology that threatens to trigger a tedious lesson in comparative health policy. But if the conceptual jump from Medicare to Medicare for All can serve as a rough model for achieving universal health care in the United States, we should also look to the history of the social movements that achieved something that then, too, seemed impossible.

No one imagines expanding Medicare to all Americans will be easy. Nothing quite like this has ever been accomplished in the United States. Yes, dozens of peer countries have built coherent, humane, universal health-care systems out of entrenched private ones. Yes, mass movements have won major leftist reforms. Yes, advanced private industries of various nations have been nationalized. But human history offers no examples of these things happening in combination, which is what winning Medicare for All will require.

The most viable push toward NHI in American history crumbled in the late 1940s, ruthlessly crushed by not only insurers and pharmaceutical companies but also the American Medical Association. (Physicians, whose already handsome salaries began to rise in the postwar era, feared the blow that NHI could strike to their paychecks, professional prestige, and autonomy, since a government payer would also reduce their control over prices.) As such, the AMA famously shook down its membership for $25 apiece to fund the multimillion-dollar campaign that injected the phrase “socialized medicine” into mainstream American culture.

In this context, it’s perhaps tempting to view Medicare as a capitulation to industry pressure and political challenges, rather than as evidence they can be flouted. After all, Medicare (and, for that matter, Medicaid) targeted the most vulnerable patients. Many single-payer skeptics insist that Medicare managed to pass because it covered the people private insurance left behind. In his book Harry S. Truman Versus the Medical Lobby: The Genesis of Medicare, historian Monte Poen presents Medicare as a sort of compromise between the unfettered free market and the dashed dreams of the 1940s.

While it’s true that the enactment of Medicare didn’t pose nearly the threat to certain health-care-industry stakeholders that the NHI did or that Medicare for All would, it would be a mistake to fully dismiss its applicability to the current political fight. For one thing, the common talking point that Medicare extended insurance to a population who didn’t have it, rather than squashing existing private infrastructure, doesn’t bear out. A full half of elderly Americans did have private insurance plans when Medicare was signed into law. Commercial health insurers initially opposed the program, and began to support it only when it became clear a large administrative role would be preserved for for-profit insurers.

More importantly, while insurance companies certainly fought against health-care-financing reforms, physicians associations and hospitals are typically considered to have been the more significant opponents—they believed Medicare to be a likely conduit for eventual full-scale single payer (and all the government interference they assumed would come with it), and struck back with more or less the same zeal that they mustered decades earlier. As historian Jill Quadagno puts it, the AMA fought Medicare with “every propaganda tactic it had employed during the Truman era.” Such tactics included a widespread media blitz, advertising in doctors’ offices, and visits to congressmen from physicians in their districts. One tactic, called “Operation Coffee Cup,” deputized physicians’ wives to host ladies’ gatherings, at which they’d play their guests an anti-Medicare PSA starring actor Ronald Reagan.

This time, the AMA and its allies failed, but not for lack of trying. So it’s unfair to ascribe Medicare’s triumph to a lack of industry resistance, which was actually quite strong. The more crucial variable distinguishing Medicare from the NHI battles that fizzled before and since was a mass movement of people demanding it, having coalesced at a moment when powerful liberatory struggles against white supremacy and poverty had transformed what could be deemed politically possible.

Organized labor went all-in for Medicare, which took substantial pressure off unions for their retirees’ mounting health-care costs. Their enthusiasm contrasted with their relationship with universal initiatives before and since, despite their largely supporting most on paper. The reasons for labor’s tepid support for single payer have been debated by historians: For one thing, the unions’ success at collectively bargaining for employer-provided health benefits during the Truman-era reform battles perhaps reduced their motivation to prioritize national health-care solutions, the ongoing absence of which almost certainly highlighted the advantage of union membership. Since the 1970s, ever-rising health-care costs strengthened the case that labor’s interests would be served by removing health-care benefits from tense contract negotiations, but declining labor power during America’s rightward political shift tied them to a Democratic Party establishment unwilling to back single payer during the health-care debates of the 1970s and ’90s.

Today, with a slim majority of congressional Democrats vocally warming up to Medicare for All, and the ACA’s so-called “Cadillac Tax” poised to hit hard-won union-bargained health plans, the pro-labor case for single payer has never been more obvious. Indeed, each of the high-profile wildcat teachers’ strikes widely cited health-care benefits as a central demand. While the AFL-CIO has endorsed single payer, the question of whether workers will rally around Medicare for All they way they did for its namesake could well depend on how the movement’s stakeholders deal with those who stand to be displaced by the streamlining effect of large-scale reform.

But beyond institutional heft or the weight of its endorsements, the most impactful contribution organized labor made to the Medicare fight was a committed army of thousands of boots on the ground, many of them seniors who stood to benefit from the legislation or the family members who worried about how they’d care for them. Even the most precursory survey of 20th-century universal-health-care movements makes their most egregious failure stunningly obvious: They were nearly all top-down operations practically devoid of participation of ordinary people intent on changing the status quo.

By the time the NCSC marched in Atlantic City, this movement was already years in the making. It had been building momentum for the idea that would become Medicare in the 1950s, under a Republican president who, in is 1954 State of the Union address, had affirmed he was “flatly opposed to the socialization of medicine.” Rather than standing by waiting for better electoral luck, the Medicare movement fought to make theirs a winning campaign issue that would help to elect Democrats, not the other way around.

For years, the NCSC spearheaded letter-writing campaigns targeting media outlets and elected officials, and did any media outreach it could. It churned out brochures to counter the messaging of the powerful medical lobby, printing and distributing millions of pamphlets and fliers. As Blue Carstenson, then head of the NCSC, recounted later, “We had to make it a cause and we made it a cause…. We charged the atmosphere like a campaign…. We were always jammed in there and there was a hustle and bustle atmosphere. And when reporters came over they were always impressed by telephones ringing and the wild confusion and this little bitty outfit here that was tackling the whole AMA in a little apartment on Capitol Hill…. This was news. It used to make every reporter chuckle or smile.”

So too did the NCSC learn to push the buttons of electoral politics: It organized groups to testify before Congress about insurance premiums, which rose as much as 35 percent some years, like some ACA marketplace plans. And of course, Carstenson’s formidable elderly army turned out to campaign events. When Democrat George Smathers declined to support Medicare before the 1964 election, NCSC members organized town-hall meetings throughout the state—including one in Fort Lauderdale that was allegedly so successful that the organizers had to upgrade to a bigger venue three different times. Their message made appeals to all ages: Relief for seniors’ medical costs, they argued, will also reduce financial pressure on their working-age children, who’d in turn have more room in the budget to raise their own kids.

If the participants in today’s movement for Medicare for All intend to succeed, they must preempt the imminent counterattack of a health-care industry with far more fortunes at stake than the one their counterparts vanquished in 1965. This will require a mass mobilization of people making themselves seen and heard, whose demands for universal public insurance must reach a fever pitch to force candidates and current officials to capitulate. Doing so will demand a broad variety of tactics, including direct action, canvassing, printed materials, and public events, geared toward not only  persuading regular voters but also inspiring new ones.

Finally, this vision of justice must extend beyond the realm of health care alone. It is nearly impossible to imagine Medicare passing outside the political context set forth by the civil-rights movement, and the so-called War on Poverty. These years-long mobilizations of oppressed people had forced the political reckoning that fostered large-scale reform. It is no coincidence that the New Deal and the Great Society—however short they may have fallen—came about in large bursts rather than undetectable spurts.

Paradigm-shifting reforms have been delivered by broad coalitions confronting a common enemy. It’s up to advocates to compel people living under the US health-care system to see themselves and one another as part of a single constituency, from the poorest uninsured to those saddled with punishing paperwork, office staff chained to bad jobs for benefits, providers-turned-pawns of corporate conglomerates, and expectant mothers bracing themselves for exorbitant out-of-pocket costs atop weeks of unpaid maternity leave. And it must be done in solidarity with struggles on behalf of all oppressed Americans—people of color, the unhoused, the disabled, and others—whose subjugation benefits the very moneyed interests who’d prefer to keep things as they are.

All the evidence tells us that robust universal programs build solidarity, and create an impassioned base that enthusiastically defends them. Once Medicare for All is in place we can expect the same. Until then, it’s up to advocates to compel as many people as possible to envision the radically different society that stands to inherit it—and to accept nothing less.

Fitch brightens its view on nonprofit hospitals

https://www.healthcaredive.com/news/fitch-brightens-its-view-on-nonprofit-hospitals/529618/

Dive Brief:

  • Fitch Ratings said its “Rating Watch” for U.S. nonprofit hospitals and health systems is over after the organizations showed improved or stable results this year.
  • During a six-month review of 125 existing issuers, Fitch affirmed 52% of the graded facilities and upgraded 28%.
  • More than 93% of rating changes moved only one to two notches. There were two extreme outliers. Fitch downgraded Lexington Medical Center six notches due to pension liability. Presence Health Network, meanwhile, shot up seven notches.

Dive Insight:

Fitch’s move is a sign of optimism for nonprofits reeling from years of wobbly financial times. The report comes months after Moody’s revised its outlook for the sector from stable to negative. That move followed nonprofit hospitals seeing more credit downgrades in 2017.

Nevertheless, Fitch’s announcement this week shows that hospitals are finding ways to combat tough finances, including lower reimbursements and inpatient admissions. One way acute care hospitals confront those issues is by investing in outpatient services. The strategy helps health systems defend market share.

At the end of 2017, Fitch said investing in outpatient assets is usually favorable for credit profiles, but also leads to “more economic cyclicality and seasonality in patient volumes for hospital companies.”

In its report this week, Fitch said a hospital’s cash and investment portfolio and asset allocation policy play significant roles in its creditworthiness. Balance sheet strength is also an essential piece of ratings — more than operational success or size and scale.

Fitch said size and scale are no longer direct rating factors. However, Fitch may consider if the size and scale enhance or weaken its ability to provide rating stability.

“As borne out by Fitch’s rating actions, it is apparent that providers with strong net leverage are able to withstand potential financial pressures and return to existing rating levels more quickly than credits without strong balance sheet metrics,” the ratings agency said.

Fitch’s review of 125 existing issuers was just under half of its total acute portfolio. Fitch Ratings Senior Director Kevin Holloran said it’s somewhat surprising there were more upgrades than downgrades.

About half of the upgrades were connected to criteria revision, 14% based on credit reasons and 34% because of a combination of credit and criteria reasons. On the other end, about half of downgrades were based on criteria review, 24% on credit reasons and 24% on a combination of credit and criteria factors.

Holloran said upgrades were mostly from “long-time consistent performers that benefited from a ‘new look’ through the lens of our upgraded criteria.” Downgrades were more varied, but balance sheet strength played a pivotal role in predictable credit stability.

Fitch said the future rating trajectory for nonprofit hospitals is “normalcy.” That said, Holloran noted that the sector is dealing with multiple operational challenges this year. Those issues, including external factors, such as regulations and legislation, could drag into 2019.

 

 

 

Humana files suit against 37 drug makers accusing them of price fixing

https://www.healthcarefinancenews.com/news/humana-files-suit-against-37-drug-makers-accusing-them-price-fixing?mkt_tok=eyJpIjoiWlROaE56WXlNV1JrTlRRNSIsInQiOiJtQUlRODhrK2xUNW00em4rcUIyWEg0enJuVFBPXC9DUEl0VGhLTWNNUHFwcmdCMG5FTm9cLzNPbzQ4Sm5pR1hcL1wvSzBvNmU2Z0RFVGloQlBpU0Z4bnFhZmFEWnJUWXVmdHZcL3V1UEd0dzB5MFF5XC96OTNHWUpPVkpyaVRDRTRPaTYraSJ9

Image result for humana headquarters

The conspiracy involving secret meetings resulted in higher prices for insurers, the government and consumers, the lawsuit claims.

Humana has brought a lawsuit against 37 pharmaceutical companies including Novartis, Mylan and Teva, alleging price fixing for numerous generic drugs.

The conspiracy increased the profits of the drug makers and others working with them at the expense of consumers, the government and private payers such as Humana, the lawsuit said.

Humana wants to recover damages it said it incurred from overcharges for certain widely-used generics, according to the lawsuit filed Friday in federal court for the Eastern Division of Pennsylvania.

Humana said the conspiracy is far-reaching among the drug makers to manipulate markets and obstruct generic competition. They agreed to fix, increase, stabilize and/or maintain the price of the drugs specified, along with other drugs, the court document said.

Humana accuses the pharmaceutical companies of secret meetings and communications at public and private events such as trade association meetings held by the Generic Pharmaceutical Association and others.

Humana’s allegations are based on personal knowledge and information made public during ongoing government investigations, the insurer said.

The pricing fixing is also under investigation by federal and state authorities, the lawsuit said.

The Attorneys General of 47 states, Washington, D.C. and Puerto Rico have filed a civil enforcement action against most of the named defendants, alleging agreements to fix 15 drug prices, the lawsuit said.

The Department of Justice has convened a grand jury to investigate a number of the defendants for price increases ranging from 100 percent to 400, 2,600 and 8,000 percent, Humana said.

The price increases are consistent with Medicare Part D price increases found by the Government Accountability Office for many of the subject drugs.

Among the drugs for which GAO identified “extraordinary price increases” — defined as a price increase of 100 percent or more — between the first quarter of 2011 and the first quarter of 2015, are, according to Humana, Amitriptyline, an antidepressant; Baclofen, a muscle relaxant and anti-spastic agent; Benazepril, an ACE inhibitor to treat hypertension; Clobetasol, a steroid and anti-inflammatory agent;  Clomipramine, an antidepressant for obsessive compulsive disorder; Digoxin, used to treat heart failure and atrial fibrillation; Divalproex for seizure disorders; Doxycycline (in Hyclate form) an antibiotic; Leflunomide for rheumatoid arthritis; Levothyroxine, a thyroid drug to treat hypothyroidism; Lidocaine, an anesthetic;  Nystatin, an antifungal for skin infections; Pravastatin to lower cholesterol; Propranolol, a beta blocker to treat hypertension; Ursodiol, to decrease the amount of cholesterol produced by the liver; and Verapamil, to treat hypertension, angina and certain heart rhythm disorders.

 

CMS allows Medicare Advantage plans to negotiate Part B drug prices, implement step therapy

https://www.fiercehealthcare.com/payer/cms-allows-medicare-advantage-plans-to-negotiate-part-b-drug-prices-implement-step-therapy?mkt_tok=eyJpIjoiWlRsak1qTmpPV0poTVRBeCIsInQiOiI4TVwvbjloekN1OGJxWlJVTUw1djE5YXZkNlhONEpUQ3pXVFpmN3hlckFBcFRhSFBVRURkcCtVSmhpbVF0NlZoYkVmNVpHczVKbjBLXC9ZbjkxUlwvQVYrdm9FemhcL0FId3BmWkYzelg0a2tcLytaUEpHZ2VlU0dScldoRGJhWXlwUDlzIn0%3D&mrkid=959610

The Centers for Medicare & Medicaid Services (CMS) is giving Medicare Advantage (MA) plans more power in how they pay for Part B drugs.

The agency will allow MA plans to negotiate Part B drug prices with manufacturers, as well as to implement step therapy for Part B drugs. Plans will be required to pass half of the savings generated through negotiation to patients.

Negotiating Part B drug prices will foster competition and allow MA plans to get a better deal for their enrollees, according to CMS. These negotiations may also lead to price decreases in traditional Medicare.

The move represents perhaps the most significant step in the administration’s push to reduce drug prices, offering a new lever to combat ever-increasing costs.

Step therapy is a form of prior authorization that requires patients to try a “preferred” drug—that is, a less-expensive biosimilar— before the plan will cover a different, more expensive one. CMS says this will reduce costs for plans and beneficiaries alike.

Under the Affordable Care Act, at least 85% of plans’ savings must go toward healthcare services and quality improvement activities.

Further, the new policy requires “more than half of the savings required to be passed on directly to patients,” CMS said in a press release. A memo (PDF) from the agency says the savings may come in the form of “gift cards or other items of value.”

It is “unique that Medicare Advantage has not done this,” said CMS administrator Seema Verma in a press call on Tuesday evening, noting that traditional Medicare and private insurance plans have long been allowed to implement a step therapy policy.

MA plans will not be required to implement step therapy. Those that decide to do so must inform beneficiaries before the next enrollment period in October.

Verma added that patients and doctors can appeal the step therapy requirement through the existing appeals process.

The Pharmaceutical Care Management Association (PCMA), a trade association representing pharmacy benefit managers (PBMs), called the move “an important step toward reducing costs for the program and beneficiaries,” adding that “some of the highest priced drugs are found in Medicare Part B.”

Opponents of step therapy, who sometimes call it “fail first,” say limiting medication options can have negative consequences for consumers.

Step therapy policies “dangerously intrude on patient safety” and “weaken the doctor/patient relationship by negating the healthcare plan that they created together,” according to patient advocacy organization Fail First Hurts.

Part B drugs are either generally administered by a physician, administered via durable medical equipment, or otherwise specified by statute.