Shine Lecture: Got Insurance? Don’t Be Too Sure.
By the numbers, the health insurance picture in the US keeps looking up. A new federal report released this month found that the provisions of the Affordable Care Act (ACA) have resulted in an estimated 20 million people gaining health insurance coverage between the passage of the law in 2010 and early 2016—an historic reduction in the uninsured.
But for health policy expert Emily Friedman, a prolific author who is contributing editor of Hospitals & Health Networks and a longtime writer for the Journal of the American Medical Association, the numbers disguise a more troubling story. Many of those who are covered by Medicare, Medicaid, or plans offered through the ACA exchanges or by employers face hefty co-payments or deductibles, spiraling prescription drug costs, and barriers to care that often are unexpected.
Navigating the four “tiers” of the insurance marketplaces, each with a different level of coverage and network of providers, can be mindboggling, Friedman says. And she worries that more and more consumers believe they have adequate coverage and access—when, in fact, they have neither.
“How difficult is it to find out what your insurance covers? Let me put it this way,” Friedman says. “It would be easier to figure out the theory of relativity.”
Friedman, who has written more than 800 articles on health care quality, finance, and ethics in the last four decades, will deliver the 6th annual Cathy Shine Lecture at the School of Public Health on Wednesday, March 23, from noon to 1 p.m. (Hiebert Lounge, 72 East Concord St.). Sponsored by the Department of Health Law, Policy & Management, the lectureship honors the late Cathy Shine, an advocate for human rights who died in 1992.
Friedman’s talk, titled, “Barely Covered: Underinsurance and Its Impact on Access to Care,” is her latest attempt to make sense of a law that she has called “a Grand Experiment, and a risky one.” While she has supported the ACA in concept, she says that its implementation has been rife with problems, including a lack of effective cost-control provisions.
“The cost issue is the great black box of health care,” she says. “No one in the health care field can tell you what a service or procedure actually costs. The system is built on billing and benefits, not on actual costs.”
Friedman, an adjunct assistant professor of Health Law, Policy & Management, was named one of the “Top 25 Women in Healthcare” by the editors of Modern Healthcare in 2005. She has edited several books on ethics in health care and women’s health.
In advance of her talk, she spoke about the challenges facing federal health care reform.
Q: By all accounts, the ACA has significantly reduced the number of uninsured Americans. Is there a downside to that expansion of coverage?
A: There is, if we look at the pool of people who supposedly have benefitted by gaining access to insurance. The ACA has set up a tiered coverage system—the bronze, silver, gold, and platinum levels—with different deductibles and co-pays. At the silver level—the one that most people choose—the plans hinge on heavy cost sharing. Many of those people can’t afford the deductibles and co-payments, and so providers are forced to cover the losses from caring for those patients.
The main reason I supported the ACA is because, in principle, it mandated that insurers could no longer discriminate against sick people. Insurers generally only want to cover healthy people, of course, but now they have to cover everyone. So what I was hoping they would do is to move from risk aversion to risk management—not just tending to the sick, but helping people to stay well. That didn’t happen. Instead, they started messing around with drug formularies and access.
Q: How do people know if they’re underinsured?
A: If you do your homework, you can try to find out what the co-pays are, what the deductibles are, and what the medication formularies are. But 99 percent of the population is not going to do that. They find out when the bills arrive.
For example, my Blue Cross Blue Shield premium went up 35 percent this year—and there’s nothing I can do about it until the open enrollment period in the fall. And if you’re unlucky enough to have Parkinson’s disease or cancer or another serious illness, wait until you see those bills. Many insurers have manipulated their pharmaceutical formularies so that drugs for those conditions are in the highest cost-sharing tiers. If you are facing 40 percent cost sharing on a drug that costs $10,000 a month, well, talk about sticker shock.
We have a growing population of these underinsured. They’re people who bought silver plans on the exchanges, with high cost sharing for pharmaceuticals and other services, or people who are in pockets of the country with extremely skimpy Medicaid plans. The law is too complicated, and the administration has done a terrible job of explaining it to people. That’s why it’s hard for people to even recognize that they’re underinsured.
Q: So do you see the costs of care just continuing to spiral out of control?
A: The fact is, as long as health care costs continue to escalate the way they have historically, no coverage program is sustainable because no one’s going to be able to pay for it over the long term. The more expensive health care gets, the less patients are able to afford it. So hospitals end up serving as insurance companies because they have to pick up the costs that patients can’t pay.
Unfortunately, in my opinion, what’s covered in most plans is cost-based and not evidence-based. Cost is the basis of everything. It leads to both under-care and over-care. To combat over-care, I recommend putting physicians on salary, instead of fee-for-service, so they have no financial incentive to over-practice. That’s a piece of the solution.
Q: Why haven’t pharmaceutical costs gone down, as the ranks of the insured have grown and there’s more demand for medications?
A: To keep down the costs of prescription drugs, only three things can happen, and you’re probably not going to see the government do any of them: regulate the costs, stop giving pharmaceutical manufacturers endless patents so that no one else can get in on the market, or introduce more competition. Competition does tend to reduce prices. But when a company has a sinecure for a drug, there’s no incentive for it to lower the price. The drugs that are introduced by its competitors tend to be “me too” drugs that are just made by a different company.
Someone should hold the insurers to account instead of allowing or forcing them to pay whatever price is demanded for these more expensive drugs. Also, it should be illegal for the pharmaceutical manufacturers making brand name drugs to keep bribing other companies to keep generics off the market.
Q: So is cost the major issue?
A: It’s also a matter of expanding access to care. We now have this phenomenon of “narrow networks.” There’s a difference between coverage and access. Coverage means that you’ve got theoretical insurance, and providers are supposed to take it. Access means that some providers actually will take you as a patient. If you have coverage and nobody will take you, then your coverage is meaningless. For example, only about half of physicians in this country will accept Medicaid patients.
There are cases where doctors or hospitals simply get dropped out of the network of providers. In Harris County, Texas, for instance, most insurers excluded M.D. Anderson Cancer Center from their networks. Several insurers in Washington State tried to exclude Seattle Children’s Hospital. An expensive academic medical center suddenly finds itself off the menu.
In the same way, Medicare Advantage plans can drop your doctor any time, and there’s nothing you can do about it. These are decisions that are driven by insurance companies, not by clinicians.
Q: Are you concerned that we’re creating a tiered system of health care that benefits the wealthy?
A: Well, certainly, the increase in some of the so-called concierge practices—where you pay a premium to your doctor and, in return, he or she becomes a more accessible personal physician—is due to the fact that they can do this. If they can make an extra buck, they’re going to make it. Why Medicare allows this is beyond me.
Q: What about prevention? Is there any progress on that side of health care?
A: There’s no nice way to say this: Nobody makes money on prevention. In some of my presentations, to illustrate this, I pick someone from the audience and say, “Look, he doesn’t have measles!” I could do the same with Zika today.
The point is, prevention is not news. It’s just not sexy. Public health is underfunded and undervalued. If we funded our public health departments, if we respected our public health professionals, we would not have had a lot of the crises that we see today. It deserves so much more attention than we give it.