SCOTUS, the Individual Mandate, and Stuart Butler

It’s been a while since I’ve posted here. Just today, a new article of mine was published in Politico Magazine — available by clicking here.

Between now and the end of June, the US Supreme Court will rule on whether the entire Affordable Care Act should be overturned because of, once again, the mandate on individual Americans to purchase health insurance if they can afford to do so, or to pay a tax penalty if they don’t. In late 2017, Pres. Trump and the Republican-controlled Congress reduced the mandate penalty to zero — triggering a new federal lawsuit by the Texas Attorney General to overthrow the whole law.

In anticipation of that, I describe the 33 year history of the mandate in US health policy & politics, with particular attention to the individual who first brought notice to it in 1989, Stuart Butler, then of the Heritage Foundation and now of the Brookings Institution. In the process, I consider the 40 year history of free-market fundamentalism and neoliberalism in the US, an era that I and many others believe is now coming to an end.

I hope you like it and let me know what you think.

US Health Care in Our Neoliberal Era

[This commentary was published by the Milbank Quarterly on June 24, 2020.]

For some years I’ve pondered a Commonwealth Fund chart showing the growth in gross domestic product (GDP) for health care comparing the United States with 10 other high income nations, starting in 1980 and ending in 2018. It shows that 40 years ago, US spending was among the highest but still part of the pack of 11. In the early 1980s, for the first time, US spending leapt above the others, with the distance between the United States and the rest growing ever wider over four decades. This prompts a question: what happened to US health care in the early 1980s–and since then?

Expert opinions abound, as Austin Frakt showed in two New York Times columns on that question, here and here. I suggested then—and now—that a big part of the answer involves the broad economic and political trade winds of the late 1970s and 1980s, often called “Reaganomics” or “supply-side economics” because President Ronald Reagan ushered in a new era in the United States. The term that fits best is “neoliberalism,” which evokes an updating of Adam Smith’s 18th century economic ideas. The 20th century version was inspired by Austrian economist Friedrich Hayek and his key American collaborator, Milton Friedman, among many others. A big part of what happened to US health care in the 1980s and beyond, I hypothesize, for better and worse, resides therein.

Between the late 1940s and the late 1970s, Hayek, Friedman, and collaborators promoted far-reaching ideas to replace the prevailing paradigm of President Franklin Roosevelt’s New Deal liberalism inspired by Keynesian pro-government economics. The neoliberal agenda proposed government reforms in order to guarantee wide-open markets: cutting taxes at all government levels as often as possible, repealing regulations anywhere and everywhere, shrinking or privatizing government at nearly all levels, suppressing organized labor, encouraging free-market trade globally, accepting inequality as the price societies pay for economic freedom, making recipients of publicly provided services and benefits pay as much as possible, and reorienting corporate thinking and behavior to promote return on equity to shareholders as their only legitimate goal. Though health care was not an explicit part of the neoliberal formula, it remained close to Friedman’s thinking (his doctoral dissertation was a frontal assault on government licensure of physicians).

Hayek, Friedman, and company succeeded. Their beliefs became the accepted wisdom of governments across the globe, especially in 1979-1981 with the rise to power of Margaret Thatcher in Great Britain, Deng Xiaoping in China, and Ronald Reagan in the United State, all avid promoters of neoliberal ideas. In prior years, neoliberal ideas (under varied names) had gained prominence in the academy, within corporations and pro-business organizations, and among large numbers of Americans through, for example, the 1980 PBS documentary series, Free to Choose, created and narrated by Friedman with his wife Rose.

The New Deal era lasted for 48 years, from 1933 until Reagan’s inauguration in 1981. The neoliberal era is now in its 40th year. Like any 40 year-old Oldsmobile, rust, cracks, and failing systems abound. Signs include: President Trump’s heretical war on trade, deficit-exploding tax cuts benefiting the wealthy and corporations, anger over “deaths of despair” tied to opioid and other addictions and economic distress, awareness and revulsion about rising levels of inequality across society, and spreading rejection of absolutist “shareholder capitalism.” Last August, the Business Roundtable reversed its 20-year old statement on the “Purpose of the Corporation” to abandon shareholder primacy as the only legitimate goal for corporate America.

But what about health care? Between 1980 and 2020, US health care spending rose far above US economic growth and spending levels in all other high-income nations, while growth in health insurance premiums and cost-sharing increased well beyond advances in household income. On key population health indicators, the United States performs worse than most nations (in some cases, the worst) on life expectancy, infant and maternal mortality, chronic disease mortality (e.g., diabetes), levels of overweight and obesity, suicides, and gun violence), and glaring systemic health inequities. Despite high spending and technological advances, Americans give their system among the lowest satisfaction ratings of any nation. Now with the still-unfolding adverse impact of the Covid-19 pandemic, the US health care system stands on a brink. Not a pretty 40-year track record, in spite of oversized capital investments and world-class salaries and profits.

Between 1965 and the 1980s, for the first time, we saw major infusions of investor capital into all corners of our health care system, courtesy of shareholder-owned for-profit companies who often cut long-lasting ties with local communities. Many welcomed this trend as the “right” medicine for what was recognized as an ailing system. In 1984, health care futurist Jeff Goldsmith described the unfolding transition from government controls to deregulated competitive markets as “the death of a paradigm.” Private markets had evolved to a stage, he argued, where they could better control rising health care costs than could government bureaucrats.

In 1986, the Institute of Medicine released a 600-page report on “For Profit Enterprise in Health Care.” Though the Commission documented extraordinary growth in for-profit enterprise across the system in 1965-1985 (with wide sector variations), they found no evidence to convict for-profits of “killing” health care, instead identifying pluses and minuses that called for closer monitoring.

Today, residents of the United States experience higher spending with worse outcomes and the lowest rate of health insurance coverage among high-income nations, even with gains from the Affordable Care Act. And the for-profit acceleration is not slowing. In fact, one of the fastest growing elements in the for-profit space is private equity, often described as “capitalism on steroids.” Most Americans don’t know it, but private equity firms are principally responsible for today’s scandal of “surprise medical billing.”

US health care tends to look inwards to find solutions to big problems within its own tight borders. Yet, looking outside the health care neighborhood may provide compelling insights and important answers.

Outside the health care circle, large segments of the American public want meaningful systemic change. A 2018 document from the William and Flora Hewlett Foundation, Beyond Neoliberalism is a clarion call for a new policy sphere that is forming in think tanks, academia, advocacy and activist organizations, and the legal community, including surprising allies from Republican/conservative quarters, such as Senator Marco Rubio (R-FL), who now publicly rejects the notion of shareholder primacy. The search is on for a new paradigm for American society. Depending on the outcomes of the November 3rd federal elections, this movement may find itself on a fast track to influence or a slow boat to who-knows-where.

Sometimes we’re like fish in a water-filled tank. Noticing the water can be tough because it’s everywhere. While other societies around the globe have vigorous debate over neoliberal policies in their midst, Americans are mostly unaware. To many, the notion that we still live in the Ronald Reagan era seems bizarre. And yet, here we are. As Maya Angelou wrote: “If you don’t know where you’ve come from, you don’t know where you’re going.” Victor Fuchs put it this way in his 2002 book, Who Shall Live?: “If change is to be for the better, it should be based on an understanding of why things are the way they are.”

US health care faces many challenges within its own space. Some of the biggest challenges, though, connect health care to larger American societal concerns, such as inequality and climate change. We’re all in this mess together, and we need to think and act that way more.

Lost in the ACA: Bit Parts in a Landmark Law

I wrote this article for the Journal of Health Policy, Politics and Law for their special edition on the 10th anniversary of the signing of the Affordable Care Act. You can access the full PDF by clicking here. You can view the full Table of Contents of the issue by clicking here. And here’s my abstract:

“The Affordable Care Act (ACA) is a mosaic across a spectrum of health policy domains. The law contains hundreds of smaller and mostly unnoticed reforms aimed at nearly every segment of American health policy. Ten years later, these pro-visions include successes, failures, and mixed bags, which should be considered in any full assessment of the ACA. This article examines 11 from each of these 3 categories, drawn from 9 of the ACA’s 10 titles. These mini-narratives deepen recognition that the ACA is our best example of comprehensive health reform and defies simplistic judgments.”

Why Medicare for All Won’t Happen in 2021

If Democrats can further advance toward near-universal coverage without the life-or-death struggles of Medicare for All, they just might achieve meaningful and historic progress even as they preserve political capital to make progress on other compelling and urgent policy needs.

I wrote this new piece for the Health Affairs Blog published on Feb. 21 2020.

Medicare For All: What History Can Teach Us About Its Chances

John E. McDonough

February 21, 2020 10.1377/hblog20200218.541583

Too much time has been spent in this presidential campaign season arguing about Medicare for All. It is not because it’s a bad idea. It is because, for the foreseeable future, Medicare for All has zero political chance to become law. To begin understanding why, consider the 70-year history of legislative efforts in the US to advance toward universal coverage. And then consider the realities in the current US political environment.

Let’s start with a capsule political history of serious federal efforts in the US to achieve or advance universal health coverage. Exhibit 1 synthesizes our history since 1950 of full-on attempts to enact national legislation to advance toward universality.

Exhibit 1: Significant efforts to achieve or advance universal health care in US Source: Author’s analysis.

Exhibit 1 details six health coverage expansion efforts by five US presidents, indicating the year of decision, plus party control of the White House, Senate, and House of Representatives. I characterize each effort as comprehensive, meaning an attempt to achieve full universality in one bill, or incremental meaning advances for discrete and previously disenfranchised subpopulations. The final column shows the outcome of the effort.

Some may see omissions. Presidents Ronald Reagan and George W. Bush achieved important expansions in Medicare via laws covering catastrophic costs (enacted in 1988, repealed in 1989) and outpatient prescription drugs (enacted in 2003), respectively. Both efforts involved benefit increments, not insurance coverage expansions. Others may resist describing President Lyndon B. Johnson’s (LBJ’s) historic 1965 law creating Medicare and Medicaid as incremental; yet President Harry S. Truman’s 1950 failure to win comprehensive universal coverage led health advocates in that era to lower ambitions, targeting only senior citizens (LBJ’s win), and hoping future laws would go further. I include the 1997 enactment of the Children’s Health Insurance Program (CHIP) as an incremental gain.

Insights leap from this table. First, over 70 years, serious, full-on presidential and congressional campaigns to enact full or near-universal health coverage—with the exceptions of President Richard Nixon in 1974 and President Bill Clinton in 1997—were during periods of unified Democratic control of the White House, Senate, and House of Representatives (aka: the Trifecta). Furthermore, landmark coverage advances in 1965 and 2010 came from US Senates with 68 and 60 Democratic members, respectively, while losses in 1950, 1974, and 1994 occurred with 54-, 56-, and 57-seat Democratic majorities, respectively. Based on this small sample, it is not just having a Trifecta that matters; it’s having a super-majority Trifecta.

Second, since 1950, windows of opportunity to advance universal coverage occur rarely, measuring 15 years between Truman’s and LBJ’s efforts, 9 between LBJ’s and Nixon’s, 20 between Nixon’s and Clinton’s, and 16 between Clinton’s 1994 effort and Barack Obama’s.

Third, among these six efforts (no hint at statistical significance although 70 years is a good run), three comprehensive bills lost and three incremental bills passed. Except for the limited—and subject-to-appropriation—CHIP program in 1997, a substantial Democratic Trifecta was a precondition for success.

In modern US history, say the 40-year era between 1981 and 2020, how many of those 40 years were characterized by Trifectas of either major party? Exhibit 2 shows results.

Exhibit 2: Partisan control of White House, Senate, and House: 1981–2020

Source: Author’s analysis. * In 2001, Republicans had Trifecta control until Vermont Senator James Jeffords switched to Democrat in late May of that year.

Four of the past 40 years saw Democratic Trifectas in two fleeting periods, the first two years each of the Clinton and Obama administrations, both characterized by contentious and ambitious drives to advance universal coverage, comprehensive and incremental respectively. Both drives were factors in Democrats losing their majorities in the House and Senate in 1994 and in the House in 2010. One clear conclusion: Since 1980, Trifecta control comes and goes, and goes more easily than comes.

Now, let’s examine the same results for the New Deal era: 1933–80 (exhibit 3).

What a difference a political era makes! In contrast to the New Deal era, our modern neoliberal era, kicked off by President Ronald Reagan, is characterized by a decided preference for divided government. Since moments of Democratic Trifecta control have been so fleeting, that demands responsibility to be mindful and strategic when those opportunities arise.

Exhibit 3: Partisan control of White House, Senate, and House: 1933–80

Source: Author’s analysis.

University of California, Los Angeles political scientist Mark Peterson notes: “To explain in brief the problematic politics of (health) reform in the U.S., just enunciate four simple words: the United States Senate. It is likely to remain the biggest stumbling block in the years ahead.” Based on the 1994 and 2010 experiences, plus lack of public support for Medicare for All by any incumbent Republican Senate or House member today, expecting any GOP support in 2021 would be foolhardy.

What are the prospects for Democratic majority control of the US Senate in 2021—and for a supermajority with at least 60 Democratic votes needed to avoid death by filibuster? According to the non-partisan Cook Political Report and the University of Virginia’s Center for Politics’ “Crystal Ball,” If Democrats beat the odds and win a Senate majority, they will at best have a 1–2 votes majority. While impeachment and economic uncertainty could upend that balance, hopes for a Democratic supermajority are close to zero, and hopes for a slender Democratic majority are 50–50 at best.

If Republicans hold majority control in the US Senate in 2021, prospects for any substantive health coverage expansion legislation drop precipitously. If Democrats have a tremendously successful night on November 3, 2020, they will be lucky to hold 51 Senate seats. One key fact: Of the 23 Republican-held Senate seats up in 2020, only two are in states that Hillary Clinton won against Donald Trump, Colorado and Maine.

Going for the gold ring of Medicare for All with a slender Democratic majority may guarantee repeating the 1950 and 1994 experiences, squandering another rare moment of Trifecta control. Meanwhile, groups such as the Urban Institute and the Commonwealth Fund have crafted sophisticated and smart reform proposals to achieve near-universality short of Medicare for All. Many of their proposals could be enacted by Congress using the budget reconciliation process that only requires 51 votes for Senate passage. Plausible pathways to universal coverage exist without the “burning down the house” risks of Medicare for All.

Just about anyone I know who supports the public purpose behind Medicare for All (I’m one of them) also supports action on other urgent, compelling matters affecting the nation’s health and well-being, including climate change, immigration reform, voting rights, campaign finance reform, tax reform, education policy, infrastructure, gun policy, and so much more.

Shareholders, Stakeholders, and US Health Care

I haven’t had as much time to write as I would like because of other commitments. One of those commitments has been working on the Robert Wood Johnson Foundation’s Culture of Health program as it relates to the U.S. business community. That experience has deepened my interest in the corporate role in the health care space and the health care role in the business space. This new Milbank commentary outlines some of my interests. More to come, I hope. Please send your comments to: jmcdonough@hsph.harvard.edu

August 19, 2019 was a big day for The Business Roundtable (TBR), the Washington, DC non-profit association of chief executive officers of major US companies. The organization released a new “Statement on the Purpose of the Corporation” signed by 183 CEOs declaring that the interests of workers, customers, communities, and “other stakeholders” should be as important as the interests of a company’s shareholders.¹ This represented a significant change from its 1997 Statement that declared “the principal object of a business is to generate economic returns to its owners.”

While actions, not statements, will reveal real intent over time, this change was noteworthy—including for the US health care sector. The subject has deep roots in American society, especially in the advocacy of the late economist Milton Friedman, who derided corporate social responsibility as “fundamentally subversive” and asserted that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”²

In the 1970s and 1980s, Friedman’s notion powered a movement in the United States, Great Britain, and around the globe called “neoliberalism” that promoted deregulation, defanged labor unions, shrunken government, and ever lower taxes. From business schools to high cathedrals of capitalism “greed is good” became more than a movie line from Wall Street and its iconic Gordon Gekko. Binyamin Applebaum’s new book, The Economists’ Hour, lays out the neoliberal narrative, warts and all, in compelling detail.

In recent years, polite rebellion has broken out in business circles against the presumption of shareholder primacy. In January 2019, BlackRock CEO Larry Fink, in an open letter to CEOs, asserted that companies that “fulfill their purpose and responsibilities to stakeholders reap rewards over the long term. Companies that ignore them stumble and fall.”³ Back in 2009, then-Microsoft CEO Bill Gates advocated for “creative capitalism” to confront societal needs, while business strategy guru Michael Porter introduced “shared value” into the business lexicon. Whole Foods CEO John Mackey has made hay with his attempted movement and 2013 book Conscious Capitalism.

Today, companies have many organizations, associations, and pathways with which to engage in societal improvement and stakeholder engagement. Environmental, social, and governance criteria (ESG) are the recognized set of standards by which companies are measured for social consciousness, among others.

What about US health care and this neoliberal era in which we still breathe? The connections are multiple, deep, and noteworthy. For starters, of the 183 CEO signers of the TBR statement, only 11 come from companies primarily embedded in the health sector, such as Pfizer, CVS Health, and Siemens, far less than a proportionate share of health care’s 18% jumbo slice of the US economy. And it is not difficult to view TBR’s statement as whitewash, especially when signers include CEOs of Johnson & Johnson and Mallinckrodt Pharmaceuticals, companies that are neck deep in the nation’s opioid marketing scandal.

Influential US political and economic historians refer to the period from the late 1970s through today as the “Reagan era,” crowned during the presidency of Ronald Reagan who declared in his inaugural address that “(i)n this present crisis, government is not the solution to our problem, government is the problem.” His term in office ushered in the modern era of tax cuts, growing inequality, wage stagnation, diminished unionization, and repeated assaults on government legitimacy. The “Neoliberal Era” may be a better fit. An important question is whether Donald Trump represents the end of this era or the start of something new.

Coincidentally or not, in the early 1980s US national health spending as a percent of gross domestic product (GDP) split from rates in other advanced nations toward its current extreme outlier status. US spending on health increased from about 8% of GDP in the late 1970s to 17.8% in 2017, far ahead of the nation with the second highest rate of national spending on health, Switzerland, at 12.2%.

In return for this massive societal investment in medical care, we have the world’s most technologically advanced health care system along with the highest prices in the world for any category of medical services or products one can imagine. The rush of private investment capital into our medical sector has resulted in cutting-edge medical care, advanced drugs and medical devices, and the highest salaries of any professionals in American society.

In these 40 years, we also have seen three consecutive years of declining life expectancy, a deep anomaly among our international peers, humiliating rates of infant and maternal mortality, shocking levels of gun violence, and extreme incidence of overweight and obesity. As economist John Komlos has documented, during World War II, native born Americans were the tallest among advanced nations, both men and women—we are now among the shortest.⁴ For good measure, Americans are also among the most dissatisfied with our health care system. For what it is worth, money doesn’t buy us good health or happiness.

In this epoch, we have seen enormous growth in private investor funding into a sector formerly dominated by nonprofits or government, in hospitals, physician practices, home health, hospice, air ambulances, and much more. The pharmaceutical industry has always been for-profit, yet its extraordinary concentration has ballooned its pricing structure. The for-profit health sector keeps evolving, assuming new forms. As Gondi and Song document, between 2010 and 2017 the value of private equity deals involving acquisition of health-related companies, mostly hospitals and physician practices, increased 187% reaching $42.6 billion.⁵

Could the investor dominance of much of US health care explain at least part of our outlier status on health spending and outcomes? It is hard to imagine that the investor-driven corporatization of American society could have left medical care untouched. Even today, the most common complaint from conservatives and Republicans about US health care is that government regulation thwarts the free market.

The notion that we could put this massive bulk of toothpaste back into the tube seems preposterous. The economic and political power of the incumbent system would easily stymie any serious challenge, including the apparent one, a nationalized “Medicare for All” structure. Assuming anything of this magnitude could get through Congress—or the Supreme Court—is a daunting stretch. And yet, the real frustrations of Americans with a system organized first and foremost to serve money and power before patients deserve attention.

If, as the Business Roundtable advocates, we are embarking on a new national conversation concerning the role of the for-profit corporation in American society, perhaps we should also instigate a parallel and sustained national examination and conversation about the history, experience, and results from for-profit corporatization of our health and medical care sector. It is clear that this revolution produces good and bad results for American society and for the world. Is it time for a reckoning?

References

The Business Roundtable. Statement on the Purpose of the Corporation. Washington, DC. August 19, 2019. https://opportunity.businessroundtable.org/wp-content/uploads/2019/09/BRT-Statement-on-the-Purpose-of-a-Corporation-with-Signatures.pdf. Accessed October 30, 2019.
Friedman M. The social responsibility of business is to increase its profits. New York Times Magazine. September 13, 1970.
Fink L. Larry Fink’s 2019 letter to CEOs: profit and purpose. BlackRock. January 2019. https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter. Accessed October 30, 2019.
Komlos J, Buar M. From the tallest to (one of) the fattest: the enigmatic fate of the American population in the 20th century. Economics and Human Biology. 2004;2:57-74.
Gondi S, Song Z. Potential implications of private equity investments in health care delivery. JAMA. 2019;321(11):1047-1058.

Published in 2019
DOI: 10.1111/1468-0009.12432

On health performance, Mass. is not a shining star

[Commonwealth Magazine published this analysis and commentary on May 4 2019.]

Many Bay State health care cognoscenti and politicos like to brag about Massachusetts health statistics. For years now, Massachusetts has performed well, at or near the top, in surveys of key health indicators among the 50 US states.

For example, the United Health Foundation’s 2016 America’s Health Rankings had Massachusetts in 1st place (though we dropped to 7th in 2018). We were 2nd in the Commonwealth Fund’s State Health System Performance Scorecards in 2018. And we showed up 5th in the U.S. News & World Report’s Best States survey. Not too shabby.
2019-ma-v-oecd-national-health-data_Page_1-e1556919514405-768x456
Maybe we should limit the self-congratulations. Perhaps we’re not as good as we like to believe. What if comparing ourselves with retrograde US states sets the bar too low? By contrast, the Massachusetts education policy community routinely examines benchmarks comparing our state’s performance with that of other advanced nations, not with US states where looking smart is no big challenge. Here’s a recent example:

“If Massachusetts were a nation, it would share the top spot in reading with eight other nations worldwide. In science, the state’s students and those from 10 nations came in second, trailing only students from Singapore. In math, 11 other nations were ahead of the Commonwealth. The results come from the 2015 Program for International Student Assessment (PISA), a triennial international survey designed to assess how well 15-year-old students can apply their knowledge and skills.”

So, how does Massachusetts compare on key health statistics with those of other advanced nations? Are we tops? Do we win the crown or not?

Not.

With research assistance from a diligent graduate student, I examined 12 key health performance indicators for Massachusetts and matched them with comparable stats from 11 advanced nations: the US, Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. I included core public health measures often included in international and US comparative performance studies:

Obesity among adults
Adult smoking
Population with health insurance
Infant mortality
Life expectancy at birth
Share of gross domestic product (GDP) spent on medical care
Maternal mortality
Suicide mortality
Having a regular physician or place of care
Mortality attributable to health care
Population experiencing cost-related access problems
Population with out-of-pocket health care costs greater than $1,000 in past year

Some argue that it is illegitimate to compare a nation as large as the US with comparatively puny competitors. For comparative purposes, the US population in 2017 was 325.7 million, and the 10 non-US comparators’ combined population was 322.8 million. For this analysis, I examined the 10 non-US nations as a group and individually with the US and with Massachusetts – 12 categories in all. The accompanying table provides data and rankings for Massachusetts, the US, and the average of the other 10 nations. (To see the full table with sources and with details on all 11 examined nations and Massachusetts, click here.)

How does the US come out? On the 12 measures among 12 nations (treating Massachusetts as a nation), the US ranks 12th worst on 8 measures, 10th worst for 2 measures, and 9th and 7th worst for 1 measure each. Looking at the three units – 10 nations, US, and Massachusetts – our nation comes in last on 11 of 12 measures, and best on zero.

What about Massachusetts? On 8 of the 12 measures, we’re in the bottom half; on 4 of those, we come in at #11, one rank better than the US, and worse than everyone else. We’re 11th best out of 12 on health insurance coverage, life expectancy, share of Gross Domestic Product spent on medical care, and having a regular physician or place of care. We are 9th best on maternal mortality and infant mortality.

On the other hand, we are best among the 12 on having a low suicide rate, and 2nd best on mortality attributable to medical care. On the rest, we are in the middle of the pack. When just looking at the 10 non-US nations collectively, the US, and Massachusetts, we are best on 5 indicators, and worse than our competitor nations on 7, though better on all of these than the US.
Surprises? I incorrectly expected that Massachusetts would be better than 4th on adult smoking. I did not realize that the Massachusetts suicide rate would be so positive. It is remarkable that while Massachusetts has the highest rate of health insurance coverage among all 50 states, at 97.3 percent, our rate is lower than the rates in all 10 non-US nations.

Because Massachusetts has such a high level of spending on medical care, I expected we would spend a larger proportion of our state’s GDP on health care than the US and come in dead last. Instead, we’re 11th. What explains this? It’s not so much the numerator (health care spending), as it is the denominator (the state’s high total GDP) which reflects a far more affluent state than most of the other 49. Even though our spending looks high, it is lower than the US average in its burden.

Looking to education policy as a model, Massachusetts should be less concerned with comparisons to other states’ performance, and more attuned to comparing our results with those of other advanced nations. Massachusetts policy experts would do well to pay closer attention to factors that influence the superior performance of these nations to ours. If other nations can kick our butts so convincingly on maternal and infant mortality, life expectancy, health care spending, and other essential measures, then we should focus more on how we can close the gap with these nations than comparing ourselves with our fellow states.

For the past decade, since passage of the state’s 2006 universal health care law and the 2012 cost containment law, Massachusetts has focused on controlling health care cost increases. While this has been a valuable and successful effort, I believe it also has crowded out attention to key determinants of health, especially obesity, that drive up health care spending substantially and harm public health. Perhaps it is time for the Commonwealth to reassess its core health system priorities.

Case Studies in Medicare for All

[I wrote this new commentary, “Case Studies in Medicare for All,” for the Milbank Quarterly.]

George Santayana’s famous quote—“Those who cannot remember the past are condemned to repeat it”—comes to mind when considering prospects for a “Medicare for All” or single-payer health system revolution. There is history here demanding attention that goes beyond President Harry Truman’s ill-fated effort in the late 1940s. Since 1994, four states have taken a cold, hard, and serious look at single payer and backed off, three via voter ballot initiatives and one by legislation. Collectively, they offer a compelling “starter’s package” of case studies on Medicare for All. Let’s take a closer look at each and then consider the patterns.

California Here We Don’t Come, 1994. Voters rejected Proposition 186—the California Health Security Act—by 73% to 27%. The initiative appeared on the November 1994 ballot only two months after the final and ignominious death of Bill and Hillary Clinton’s health reform plan. Throughout 1993-1994, single-payer advocates preached that Democrats were squandering a historic opportunity by advancing the Clinton’s complicated and indecipherable proposal instead of moving single-payer legislation. The California initiative would have been financed by new taxes on employers, individuals, and tobacco products. A diverse group of “good guy” proponents had enough organizational heft to collect more than one million signatures statewide to qualify for the ballot. Continue reading “Case Studies in Medicare for All”

The Secret Weapon behind State Medicaid Expansions

This post appeared in the Health Affairs Blog on March 29, 2019: “The Fairness Project: A New Kid on the Block’s Role in Voter Driven Medicaid Expansions.”

One surprising outcome from the November 2018 mid-term elections was voter approval of ballot initiatives expanding Medicaid coverage in Idaho, Nebraska, and Utah. These victories were preceded by a similarly successful ballot initiative in Maine in November 2017. In three of the four states (not including Nebraska), Republican leaders have attempted to thwart the will of voters by undermining or negating the initiative wins. In the process, the issue of Medicaid expansion as permitted under the Affordable Care Act (ACA) has become reinvigorated.

Unknown by most is that a relatively new and ambitious national organization called The Fairness Project was key to these significant health access victories in all four states. The Fairness Project’s background story is compelling, as are on-the-ground stories of the roles it played in each state. The Fairness Project also bears watching because as many as 14 state governments still are unwilling to expand Medicaid as authorized by the ACA in the next two years. Six of those states allow citizens to advance policy initiatives to the ballot, including Florida and Missouri. Planning for 2020 is already well underway.

The inspiration for The Fairness Project came in 2014 from Dave Regan, president of the labor union Service Employees International Union-United Healthcare Workers West (SEIU-UHW). Regan wrote a widely distributed letter suggesting that organized labor was squandering power and influence by focusing heavily on collective bargaining while ignoring the economic needs of tens of millions of unorganized lower-income workers. As a Californian, he had seen firsthand how citizen ballot initiatives can achieve wins outside of traditional paths to power. The Fairness Project launched in 2015 with support from the SEIU-UHW.

An Impressive History

Between 2016 and 2018, The Fairness Project played a key role in winning ballot initiatives to mandate minimum wage increases in Arizona, Arkansas, Colorado, Maine, Missouri, and Washington State. In California, the District of Columbia, and Massachusetts, The Fairness Project ballot initiative efforts triggered legislatively mandated minimum wage increases without going to the voters. In the same period, The Fairness Project won ballot initiatives to mandate paid sick leave in Arizona, Michigan, Washington State, and San Antonio, Texas, and to cap payday loan interest rates in Colorado.

And then there is Medicaid for low-income uninsured Americans. By 2019, The Fairness Project’s four Medicaid wins opened doors for expanded coverage for a total of 405,000 uninsured low-income individuals in Idaho (90,000), Maine (70,000), Nebraska (90,000), and Utah (155,000). (Utah lawmakers scaled back the voter-approved expansion—although as detailed below, The Fairness Project helped reduce the legislation’s damage to expansion efforts—while efforts to undo the voters’ decision failed in the Idaho legislature.) The Fairness Project also got involved in the unsuccessful 2018 ballot campaign in Montana to raise tobacco taxes by $2 per pack to permanently finance that state’s Medicaid expansion implemented in 2015. The Montana expansion is likely to survive beyond its initial 2019 authorization, although with a different financing source than tobacco taxes. (See Exhibit 1 for state details.)

Exhibit 1: State Medicaid Expansion Ballot Initiatives 2017–18, Vote Totals And Financing

Source: Ballotpedia.

The Fairness Project’s Methods

The Fairness Project’s executive director is Jonathan Schleifer, former chief policy officer for Iraq and Afghanistan Veterans of America and former executive director of Educators for Excellence in New York. Since 2016, his seven-person team has learned many lessons about winning ballot initiatives.

Most important is the need for early and significant investments in professional polling, policy and legal research, and signature collection. “Most ballot initiative campaigns are underfunded and under-resourced, especially at the beginning, and most funders don’t want to invest in the early and crucial incubation period,” he observes. “Campaigns get bled during signature collection and then lack resources to win. We make early risky investments in incubation work, research, coalition building, grassroots/grasstops organizing, and signature collection.”

The Fairness Project works with local activists and groups to build professional campaign websites, exploit social media, raise local and national funding, hire staff, ensure that polling is rigorous and honest, and ride “shotgun” with state-based partners for the campaign’s duration. As of 2018, its track record is an impressive 16 wins and 1 loss; its minimum wage increases have put an estimated $7 billion into low-income workers’ pockets.

Maria Weeg, who served as general consultant to Idaho’s campaign, saw The Fairness Project as a helpful bridge between the long-time and legislatively focused “Close the Gap Coalition” and the newer “Reclaim Idaho” grassroots movement. “The Fairness Project provided another voice in the room, much-needed resources, cutting-edge data, and facilitation to bring the two groups together.” In the end, the campaign raised $1.77 million, half from instate sources and half from The Fairness Project’s national donor base. Two weeks before Election Day, the campaign secured a public endorsement from outgoing Republican Governor Butch Otter, who had opposed Medicaid expansion up to then.

RyLee Curtis managed the “Utah Decides Healthcare” campaign. “We could not have found someone in Utah who knew how to run at this level,” she concludes. Unlike in Nebraska and Idaho, the Utah initiative included a funding mechanism through a modest 0.15 sales tax hike; opponents exploited this to reduce the final “yes” vote to 53 percent from pre-election polling estimates around 60 percent. Most of the $3.8 million raised in support—except for about $300,000 raised locally—came from The Fairness Project. “This was a blessing,” says Curtis. “We would never have had the money and resources to make this happen without their help along with our countless volunteers.”

The Fairness Project’s effectiveness continued in all three states after the November wins, helping state groups to organize to defend their victories. In Utah, the state Senate had passed a watered-down version that requires a federal Medicaid waiver and specified that if federal approval were not provided, no expansion would happen, negating the entire voter initiative. Local groups descended on the state House of Representatives and won a vital change—signed by Governor Gary Herbert (R)—that if a federal waiver is not approved, the original initiative will be implemented as written.

Unsurprisingly, financing is a challenge. In Montana, the $2 tobacco tax proposal drew $18 million in opposition spending from that industry. The inclusion of sales tax funding in Utah’s plan reduced their expected margin of victory. On the other hand, lack of financing in the 2017 Maine initiative gave then-Governor Paul LePage (R) the argument to stall implementation until his departure 14 months later. Given these experiences, articulating a generalized financing theory is challenging. It will be case by case for the time being.

The Road Ahead

Going forward, The Fairness Project will continue its minimum wage, paid sick leave, and other campaigns to help disadvantaged workers. It also intends to keep working on state Medicaid expansions. Only six of the remaining 14 non-Medicaid expansion states allow citizen ballot initiatives: Florida, Mississippi, Missouri, Oklahoma, South Dakota, and Wyoming. The jewel of these is Florida with as many as 1.25 million potential Medicaid enrollees, including many recent exiles from Puerto Rico. However, the only feasible pathway to voter-driven expansion in Florida requires a constitutional amendment that carries a high voter signature threshold and a required 60 percent voter approval margin; the Sunshine State also has one of the nation’s more expensive media markets. Moreover, lawmakers in Florida and Missouri as well are even now contemplating how to make the ballot requirements even more onerous.

More than a few savvy health policy leaders demurred in supporting The Fairness Project’s Medicaid campaigns in 2017 and 2018. The Project’s leaders, undeterred, saw opportunity where others only saw risks and downsides. As Marcel Proust wrote: “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” Schleifer and colleagues’ new eyes have helped to transform the nation’s political landscape regarding Medicaid. Here’s hoping that they keep looking.

The Health Reformers’ Dilemma

[The Milbank Quarterly just published this new commentary that I wrote for their November 2018 edition.]

Ever since the US Supreme Court ruled in 2012 that the expansion of Medicaid as required by the Affordable Care Act (ACA) must be optional rather than mandatory for states, health care advocates have worked heart and soul to convince their state governments to adopt the expansion. For Virginians, the moment arrived in 2018 after years of frustration—with a catch. The only politically viable pathway to expansion included a detested provision, known as the “work requirement,” that obligates many new enrollees to work or else forfeit coverage. What to do?

I explored this dilemma with health justice advocates in Virginia, the first state to confront work requirements that had not previously expanded Medicaid. In November 2017, Virginia voters elected a respected new Democratic governor named Ralph Northam along with an eye-popping jump in the number of Democrats in the state’s House of Delegates, leaving them just 2 votes shy of majorities in the House and Senate. In May 2018, solid bipartisan majorities formed to enact Medicaid expansion after years of discouraging defeats. The wrinkle was including a work requirement and imposing cost sharing on Medicaid beneficiaries. Continue reading “The Health Reformers’ Dilemma”

Might We See a Medicaid Wave Start Next Week?

[This column appeared on the Health Affairs blog on Thursday, November 1.]

Ever since the U.S. Supreme Court ruled in 2012 that states must have an option whether or not to expand Medicaid as authorized in the Affordable Care Act, expansion has been a long, slow slog, state by state, inch by inch. While blue states had mostly lined up to expand Medicaid by 2013, nearly every purple and red state proved to be a battlefield. Today, 19 states have yet to expand, with 31 in the “yes” column (plus the District of Columbia) (see table 1). The last state to expand, #31, was Louisiana in mid-2016. But, might a mighty Medicaid wave be coming courtesy of the November 6^th elections? The answer is a definite maybe.

Right now, all that’s certain is that Virginia will become state #32 to expand Medicaid in January. The state enacted the 400,000-person expansion last May, albeit with a “work requirement” to be filed with the Centers for Medicare and Medicaid Services (CMS) sometime in 2019.

Maine is certain to become #33 early next year if Democratic Attorney General Janet Mills wins the Governor’s Chair. In November 2017, Maine voters approved expansion—59-41 percent—in a state ballot initiative. Departing Republican Governor Paul LePage refused to implement the expansion in spite of strong legislative support to do so, as well as an order from Maine’s highest court. In previous years, the Legislature failed by only a small number of votes to override LePage’s vetoes (5 times). Progressive forces expect to pick up state legislative seats on November 6^th, so it’s also possible expansion could happen with a new Republican governor, supportive or not.

State Adoption Of ACA Medicaid Expansion (By Year)

SOURCE: Advisory Board. “Where the States Stand on Medicaid Expansion.” June 8 2018. Accessed Oct. 29 2018 at: https://www.advisory.com/daily-briefing/resources/primers/medicaidmap

Medicaid On the Ballot

Activists in three states—Idaho, Nebraska, and Utah—are standing in the wings hoping to be states #34, 35, and 36 depending on the outcomes of state ballot initiatives in each of them on November 6^th. Montana has an initiative on the ballot to continue its expansion with dedicated funding.

While Idaho’s departing Governor Butch Otter fought consistently against Medicaid expansion throughout his tenure, he recently changed his position and announced his support for the Medicaid ballot initiative. Republican gubernatorial candidate Brad Little says he will respect the ballot initiative’s outcome—even though the measure does not specify how to finance the 10 percent financing match states will need to pay by 2020 (7 percent in 2019). Two organizations, Idahoans for Healthcare and Reclaim Idaho raised $594,191 by the late September reporting deadline, while the opposition Work, Not ObamaCare has raised $29,999. Idaho’s Hospital and Medical Associations contributed nearly $200,000 to the “yes” effort. Recent polling shows 66 percent support, including 77 percent from independents and 53 percent from Republicans. The yes campaign co-chair is Republican State Representative Christy Perry.

Nebraska previously did not have enough support to overturn a Governor’s veto against expansion. Nebraska Governor Pete Rickets maintains his opposition as he coasts toward an easy re-election. But it’s a spirited race for Nebraska Initiative 427, the Medicaid Expansion Initiative that would cover an estimated 90,000 low-income Nebraskans. The lead organization—Insure the Good Life—has raised $1.69 million as of late September to support a yes vote, versus $0 by the opposition Americans for Prosperity. The “yes” camp’s largest contributor is a national progressive political action committee called the “Fairness Project” which also backed the 2017 Maine Medicaid initiative and which has donated $1.19 million. Other key supporters include the Nebraska Hospital Association, the state health center association, Nebraska AARP and 24 other organizations.

Of the three ballot initiative campaigns, Utah’s is the most compelling. Proposition 3 would raise the state’s sale tax from 4.70 to 4.85 percent to fully finance the expansion for 150,000 low-income Utah residents. In 2021, that is projected to raise $88 million to cover the state’s projected $78 million share of the $846 million total expansion cost (the federal government pays the rest). A February 2018 poll showed 68 percent support among Utah voters. As in Nebraska, the national Fairness Project is driving the campaign, providing $2.7 of the $2.83 million raised as of late September. A wide array of health care and religious organizations are public supporters. No organization is registered with the state in public opposition to the initiative, as of late September.

To thwart the proposal, in March, Governor Gary Herbert signed House Bill 472 into law to expand Medicaid for individuals with household incomes no higher than 95 percent of the federal poverty line, as opposed to 138 percent in Proposition 3, as authorized under the ACA. HB472 would also impose work requirements on many enrollees and would cover 90,000 as opposed to the initiative’s 150,000. Earlier this year, the Trump Administration rejected a plan similar to HB472 that was advanced by Oklahoma to expand Medicaid eligibility no higher than 100 percent of the federal poverty level. So it is unclear whether the Trump Administration will allow the Utah HB472 expansion to go forward.

Montana is another state with a Medicaid expansion ballot initiative facing the voters on November 6^th, but to continue the existing expansion. The state expanded Medicaid in 2015, though only through 2019. The November 6^th ballot will present an initiative, I-185, to continue expansion past 2019 by raising tobacco taxes by $2 a pack as the state’s funding source. Healthy Montana for I-185 backers have raised $4.8 million and are battling the tobacco industry in the form of Montanans Against Tax Hikes (MATH) which has invested at least $12 million to defeat the initiative; 97 percent of the MATH’s money has come from Altria Client Services, maker of Marlboro cigarettes and other smoking products. If voters approve, the expansion will continue without restraints. If the referendum fails, the legislature still could pass a new funding law, likely with a work requirement attached.

Other Election Day Impacts

Of the 14 remaining non-expansion states, the November 6^th results may have consequential impact. If Democratic candidates win currently competitive gubernatorial races in Florida, Georgia, Kansas, and Wisconsin, and pick up legislative seats, that could alter the Medicaid expansion equation. This would be especially true in Kansas where prior expansion efforts were thwarted by a narrow inability to override gubernatorial vetoes by only three votes. In other states, notably North Carolina with Democratic Governor Roy Cooper, significant Democratic gains in the state legislature may also have a consequential impact.

Some noteworthy features of this issue are worth considering. First, in many of these remaining states with Republican control, the price of expansion is likely to include work requirements on many newly eligible enrollees—as occurred in Virginia this past year. Unless ruled illegal by the federal courts, this national experiment will more than likely run at least for the duration of Republican control of the executive branch. As is apparent from the track record in Arkansas thus far, this is about values and ideology more than dollars and sense.

Second, after six years of fighting the Medicaid expansion wars, it is clear that most expansion opponents are not going to change their minds. Not much is left to say that hasn’t been said countless times before. As we saw in Virginia, a change of mind accompanies a change in occupants of legislative and gubernatorial seats. And in the four November 6^th ballot initiative states, if successful, we should anticipate that one or more of the affected Governors may imitate Maine Governor LePage in seeking to block expansion in spite of voter sentiment.

Third, in spite of all the uproar, it is significant that not one expansion state has gone back on it, or even considered doing so. The closest an expansion came to a rollback was the election of hard right conservative Matt Bevin as Kentucky’s governor in 2015. Bevin abandoned his pledge to repeal Kentucky’s ground-breaking and successful Medicaid expansion early in his gubernatorial campaign, and never returned to that stance, turning to mandatory work requirements as the next best thing.

Much like how the public’s support for banning pre-existing condition exclusions has become calcified in the public’s mind from the battles of 2017 and 2018, similarly the expansion of Medicaid has become hard-wired into public consciousness in the states that adopted it.

I have yet to read an insider’s account on how and why the U.S. Supreme Court lined up 7 votes to secure their atrocious 2012 ruling to make Medicaid expansion an option for states. It is true that their decision played a role in compelling Americans to grapple with and understand the rationale and importance for Medicaid expansion. But at what a damn price!

Continue reading “Might We See a Medicaid Wave Start Next Week?”