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.

Why a “No” Vote on Question 1 on Nurse Staffing Ratios

[I co-wrote this opinion column with Paul Hattis for Commonwealth Magazine.]

SHOULD MASSACHUSETTS establish mandated nurse-to-patient ratios in law for all the state’s acute care hospitals? This 25-year-old conflict between the Massachusetts Nurses Association and Massachusetts Hospital Association will be determined at the polls on November 6 as Question 1.

We think not.

We are university professors who care about Massachusetts health care policy. We both connect with Massachusetts’ leading health care consumer advocacy organizations who worry about access, cost, and quality in Massachusetts’ health care system—and we don’t speak for them.

We have advocated publicly for better pay, working conditions, and training for health care workers in hospitals and nursing homes. We know the vital importance of organized labor as representatives of health care workers to meet their needs and to promote a higher quality care for patients. We are not eager to take a position opposed to the Massachusetts Nursing Association.

After seeing data advanced by groups on both sides, especially data and analysis from the Massachusetts Health Policy Commission, we believe the evidence, the better policy choice, and the more socially just result—especially for lower income households and communities—points to a no vote. The Legislature should demand that both sides come together to create a more workable set of solutions to improve quality of care in our state’s hospitals. Continue reading “Why a “No” Vote on Question 1 on Nurse Staffing Ratios”

What Does the Beth Israel/Lahey Health Merger Tell Us?

FOR THE BETTER part of this decade, Massachusetts had been on a roll regarding its health system’s performance. Since passage of the 2006 universal health insurance law, we’ve been tops in having the lowest number of uninsured the nation. Recent national surveys on cost, quality, access, and public health from the Commonwealth Fund, the United Health Care Foundation and others show the Bay State to be best or among them. As Michael Widmer noted in his October 7 Upload piece, over the past five or so years, even the state’s performance on controlling costs has also been a national standout.

Still, history teaches that these trends can turn downward on a dime. And self-congratulations can obscure lingering and insidious system weaknesses. The current controversy over the proposed merger of Beth Israel Deaconess Medical Center, Lahey Health, and other hospitals and physician organizations into “Beth Israel Lahey Health” (BILH) brings into sharp relief underlying systemic problems that are getting worse, not better.

Last week, the state’s Health Policy Commission released its final analysis of the cost, quality, and access impacts of the merger. They estimate $158.2 to $230.5 million in added annual costs above current projections from this deal. Also last week, the health commission reported on the projected annual costs of Question 1, the November Massachusetts ballot initiative that would set statutory nurse-patient ratios in all acute care hospitals – estimating $679 to $949 million in new annual costs in our $61.1 billion state health system. Continue reading “What Does the Beth Israel/Lahey Health Merger Tell Us?”

Revisiting the Land of the Individual Mandate

[This new commentary was just published by the Milbank Quarterly.]

The years 2013 through 2016 were excruciating for the Massachusetts Health Connector. In 2013, the Connector was among the nation’s most troubled federal/state health insurance exchanges, as it endured an epic collapse of its new website to help consumers purchase individual health insurance. Since then, it has taken a step-by-step and low-key “no news is good news” approach to rebuilding trust and credibility with its 252,000 clients.

Now the silent period is ending. In 2006, Massachusetts was the first and only state to enact an individual health insurance mandate, the essential model for the federal individual mandate included in the Affordable Care Act (ACA) in 2010 and implemented in 2014. In last December’s Tax Cuts and Jobs Act, President Trump and Congress neutered the ACA mandate by reducing the financial penalty to 0. Despite widespread reports to the contrary, the mandate was not repealed, and the law, with its mandatory reporting requirements, remains on the books.

Thus, Massachusetts now returns to the spotlight as the nation prepares to examine the impact of the federal action, testing 1 state’s experience against that of the other 49. In 2015, the last year for which tax data is publicly available, only 3% of adult tax filers in Massachusetts reported not having insurance meeting state standards, corroborating other data sources indicating that it has the lowest rate of uninsurance in any state (the most recent US Census data shows Massachusetts at 97.5% coverage). Depending on an uninsured person’s household income, the monetary penalty ranges between $21 and $96 for each month without coverage. As of early February, at least 9 other Democratic-leaning states are considering adopting a similar mandate. Continue reading “Revisiting the Land of the Individual Mandate”

MassHealth’s New World of ACOs — and a Mighty Upstart

[I wrote this commentary for the spring issue of Commonwealth Magazine. I am watching the new crop of 17 Accountable Care Organizations — ACOs — with great interest. This is a nationally important demonstration that also holds risks for the medical care of many MassHealth enrollees.]

ON MARCH 1, the state’s Medicaid program—known as MassHealth—entered a new era with the launch of 17 accountable care organizations, or ACOs, aiming to provide better coordinated care at lower costs to its low-income enrollees. It’s an ambitious effort with lots of risk and big potential rewards. Within this is another compelling effort to redefine how community health centers fit into the changing health care landscape of Massachusetts and the nation.

Christina Severin, CEO of C3, the new accountable care organization formed by community health centers.

It began with a serendipitous encounter at a grocery store. Sometime in the fall of 2014, Christina Severin bumped into Lori Berry at the seafood counter of the Brighton Whole Foods market. Severin, a long-time leader in the MassHealth scene, had been mulling the creation of a community health center-based non-profit to join the cohort of ACOs being planned for as many as two-thirds of the 1.9 million Massachusetts residents who rely on the program. Continue reading “MassHealth’s New World of ACOs — and a Mighty Upstart”

Looking Back on the Desegregation of U.S. Hospitals in 1966

[Last summer, I wrote the following review of The Power to Heal: Civil Rights, Medicare, and the Struggle to Transform America’s Health Care System by David Barton Smith. The review just came out in The Common Reader. I still think the book is required reading in our times. And I love the cartoon!]

On a Saturday morning in January 1967 Dr. Jean Cowsert, an African-American physician, was found shot to death in front of her home in Mobile, Alabama, after a stone had been thrown through her front window and she went out to investigate. Though police concluded that she had accidentally shot herself, in the months prior to her death she had been a key confidential informant to officials from the U.S. Department of Health, Education and Welfare (HEW) concerning the Mobile Infirmary’s publicized efforts to thwart patient desegregation of its facilities. A HEW official’s carelessness may have inadvertently disclosed her identity to desegregation opponents.

Dr. Cowsert’s is one of many compelling stories in David Barton Smith’s powerful account of U.S. hospital desegregation in 1966, triggered by the convergence of national civil rights mobilization, the 1964 Civil Rights Act and the 1965 enactment of Medicare. In The Power to Heal: Civil Rights, Medicare, and the Struggle to Transform America’s Health Care System Smith tells how federal health officials—with backing from President Lyndon Johnson, HEW Secretary John Gardner, and other federal officials—mobilized to achieve a startlingly rapid transformation of America’s hospitals, erasing the stain of racial segregation that had always prevailed across the nation, North, South, East, and West.

Smith’s account stands in vivid contrast to the equally compelling and failed story of American public school desegregation, best told in the 1976 Pulitzer Prize-winning Simple Justice: The History of Brown vs. Board of Education and Black America’s Struggle for Equality by Richard Kluger. In that case, the 30-year struggle to overturn “separate but equal” racial segregation in public education, culminating in a landmark 1954 U.S. Supreme Court’s 9-0 decision in Brown v. Board of Education, to this day has been mostly unachieved. A bold court decision was fatally undermined by a subsequent enforcement ruling committing the nation to an unsuccessful implementation strategy called “with all deliberate speed.” The contrast between successful desegregation of U.S. hospitals versus failed desegregation in public education is instructive.

Smith writes: “In four months, civil rights activists … transformed the nation’s hospitals from our most racially and economically segregated institutions to our most integrated. In four years, they changed patterns of use of health services that had persisted for half a century. The fundamental moral imperative—that those needing medical care should receive it—began for the first time to reflect actual use of services. A profound transformation, now taken for granted, happened almost overnight.”

A bold court decision was fatally undermined by a subsequent enforcement ruling committing the nation to an unsuccessful implementation strategy called “with all deliberate speed.” The contrast between successful desegregation of U.S. hospitals versus failed desegregation in public education is instructive.

As with so many aspects of American society prior to the 1960s, segregation ruled. A 1952 report by the South Conference Education Fund titled “The Untouchables: The Meaning of Segregation in Hospitals” documented 12 deaths of African Americans denied admission to white-only hospitals governed by white physicians and white dominated medical associations. In most of the nation, black-only hospitals were under-staffed, under-financed, and under-equipped.

Beginning in the 1940s, black health professionals who were systematically excluded from the white medical mainstream, supplied backbone in the struggle for civil rights in hospitals, in schools and across American society. Theodore Roosevelt Mason Howard, MD, Sonnie Wellington Hereford III MD, Reginald Hawkins DDS, W Montague Cobb MD PhD, Charles Watts MD, George Simkins Jr. DDS—these are long-forgotten names of physicians who stood up for justice in their communities and in courts.

Though the 1946 Hill-Burton Act banned racial discrimination in new and expanded hospitals for which it provided ample federal funds, the law explicitly sanctioned “separate but equal” facilities. A 1962 federal lawsuit, Simkins vs. Moses Cone, attacked the constitutionality of that provision, winning crucial support from the Kennedy Administration, and upheld by the U.S. Supreme Court in March 1964 just as Congress was passing that year’s landmark Civil Rights Act. That law’s Title VI, for the first time, prohibited using federal funds for racial segregation.

Passage of the bold 1964 law, though, was insufficient to compel hospital desegregation. The critical catalyst was the passage of Medicare in July 1965 providing many millions of dollars in payment for medical services for senior citizens for the first time. Though Title VI clearly applied, its remedies and enforcement powers were meager. The question became: Would President Lyndon Johnson enforce Title VI compliance in Medicare by blocking payments to racially segregated hospitals? An initial push for voluntary desegregation failed as surveys conducted by civil rights activists had proven in mid-1965.

With only six months until the July 1, 1966, inauguration of Medicare, “Gardner was launching perhaps the riskiest domestic policy initiative in the nation’s history. It tied together the fate of Johnson’s two signature pieces of legislation—the Civil Rights Act and Medicare,” Smith writes.

In December 1965, HEW Secretary Gardner distributed a memo declaring that Medicare compliance with Title VI “is too important to be treated as anything less than the highest of priorities in our total program,” committing staff and resources to the task. With only six months until the July 1, 1966, inauguration of Medicare, “Gardner was launching perhaps the riskiest domestic policy initiative in the nation’s history. It tied together the fate of Johnson’s two signature pieces of legislation—the Civil Rights Act and Medicare,” Smith writes.

Gardner’s team quickly concluded that success would require “no ‘all deliberate speed’ pass for hospitals wishing Medicare funds. No money should go to any facility where race played any role in the treatment of patients, employees, or medical staffs.” Compliance was handed to HEW’s Public Health Service managed by U.S. Surgeon General William H. Stewart and the new HEW Office of Equal Health Opportunity. But with months before Medicare’s rollout and more than 4,000 noncompliant hospitals, how could they achieve this seemingly impossible task?

When HEW leaders put out a call for volunteer temporary federal employee transfers to perform compliance, more than 1,000 employees, mostly from the Social Security Administration and the Public Health Service, answered yes. They included “bench scientists from NIH, veterinarians, pharmacists, managers of Social Security field offices, venereal disease investigators, even a ‘medical officer from the Indian Health Service complete with an Eskimo secretary.’”

The challenges were daunting. A January 1966 review concluded that at least two-thirds of Southern and border state hospitals were out of compliance, while many Northern hospitals operated as de facto segregated facilities. On March 4, 1966, Surgeon General Stewart sent a letter to all U.S. hospitals with this message: “To be eligible to receive Federal assistance or participate in any federally-assisted program a hospital must be in compliance with Title VI … Representatives from the Department of Health Education and Welfare Regional office will be visiting hospitals on a routing periodic basis …” Three weeks later, Dr. Martin Luther King offered his historic judgment: “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

Smith provides many anecdotes of intransigent hospital officials who tried to hoodwink inspectors, concluding that “the vast majority of the hospitals chose to comply in order to get the Medicare payments, and it was remarkable how fast and dramatic the changes were.” Literally overnight, the blood supply from the Louisiana Red Cross Blood Bank, previously labeled “white” and “colored,” was integrated. At a June 15 White House meeting with hospital officials, President Johnson declared: “The federal government is not going to retreat from its clear responsibility … and I hope that you will not retreat either.” By June 15, more than 80 percent of hospitals were complying, and by June 30, the number had risen to 94 percent. “By January 1967,” Smith reports, “the mopping up, with only a few exceptions, had been completed.”

Not all changes were welcome. According to Smith, “within two decades of the implementation of Medicare, all but four of the more than 400 20^th century historically black hospitals had closed or converted to other purposes.” The Office of Equal Health Opportunity was disbanded by President Richard Nixon. And the problems of racial and ethnic inequities and disparities in health and health care are enduring national concerns.

Still, the rapid and effective desegregation of U.S. hospitals is one of our nation’s—and our health care system’s—shining moments. Smith’s book is the authoritative source to understand the political, social, economic, and cultural context of this transformation. Perhaps as monuments to Confederate generals are demolished, we might find space for a monument to Dr. Jean Cowsert.