Study shows US has poorest health, widest health care gap between rich and poor

As Senate health plan calls for gutting Medicaid

By Kate Randall
15 July 2017

A new study reveals findings that will come as no surprise to most American workers and youth: In the United States, your level of income defines your access to health care, the quality of care you receive, and whether you will meet with an early death because of it. The US also has the poorest health overall among high-income countries.

Using survey data to measure and compare patient and physician experiences across 11 countries, the Commonwealth Fund’s “Mirror, Mirror 2017: International Comparisons Reflect Flaws and Opportunities for Better US Health Care” finds that the US ranks last overall on providing equally accessible and high-quality health care, regardless of income.

The report compares health care system performance in the US with that of 10 other high-income countries, ranking them in five areas: care process, access, administrative efficiency, equity and health care outcomes. The US ranks last overall, and last in all but one area studied, care process, in which it came in fifth.

If the United States were a politically healthy society, the release of this report would sound alarm bells in the White House and on Capitol Hill. Why, in “the greatest country on earth,” is the health of its citizens in such a deplorable state? What can be done to remedy what can only be described as a health care emergency of crisis proportions?

Instead, the study’s release follows the unveiling Thursday of the Senate Republicans’ latest version of their Better Care Reconciliation Act (BCRA), which proposes to slash $772 billion from the Medicaid program for the poor, and the Affordable Care Act’s expansion of Medicaid. The Congressional Budget Office estimated that an earlier version of the bill would leave 22 million more uninsured by 2026 than under current law.

The Commonwealth study points to factors contributing to this appalling US health report card, which will only be worsened under whatever health care “reform” is hatched in Washington. Life expectancy, after improving in recent years, has been aggravated by the opioid crisis. As the baby boom population ages, more people in the US are living with age-related disease, placing increased pressure on the health care system.

These are problems that could be confronted with timely and accessible health care, but these services are woefully inadequate. In particular, poor access to primary care has contributed to inadequate prevention and management of diseases. And in the US, far more than any other country studied, lower-income people are far more likely to lack access to affordable care, and to suffer and die because of it.

Forty-four percent of lower income people reported financial barriers to care, compared to 26 percent of those with higher incomes. By comparison, in the UK only 7 percent of people with lower incomes and 4 percent with higher incomes reported that costs prevented them from getting care.

According to the study, in the US population as whole in the past year:

• 33 percent had cost-related access problems to medical care.

• 32 percent skipped dental care or check-ups due to cost.

• 27 percent were denied insurance payment for care or did not receive as much as expected.

• 20 percent had serious problems paying or were unable to pay medical bills.

• 60 percent of doctors reported patients often had difficulty paying for medications or out-of-pocket costs.

• 54 percent of doctors reported time spent on insurance claims is a major problem.

• 54 percent of doctors reported a major problem getting patients needed medications or treatment because of insurance coverage restrictions.

These problems are worse in the low-income segment of the US population. For example, 44 percent of this group had a cost-related access problem to medical care, and 45 percent skipped dental care or a check-up due to cost. There is also a 24 percent gap between those in the above average and below average income groups who skipped dental care due to cost.

The study uses “average” income, which was about $75,000 in 2016, as the dividing line between upper and lower income. However, multimillionaires and billionaires skew this average upwards, and due to the growing income inequality in the US, the health care problems of those living in poverty in the “below average” group are most likely underrepresented.

Some of the most shocking statistics presented are on population mortality, in which the US ranked last in every category studied compared to the other 10 countries.

• Infant mortality: 6 deaths per 1,000 live births, compared to Sweden, with 2.2 (the lowest)

• Life expectancy at age 60: 23.5 years in the US, compared to 25.7 in France (the highest)

The study also examined “mortality amenable to health care,” or deaths considered preventable by timely and effective medical care. The US had 112 deaths per 100,000 people that could have been prevented with timely and effective care. This is more than twice the rate in Switzerland, at 55 per 100,000.

The US also had a much lower decline in these preventable deaths over 10 years, falling by only 16 percent compared to 34 percent in the Netherlands.

The US spent $9,364 per person on health care in 2016, compared to $4,094 in the UK, which ranked first overall in health care. In other words, while spending far more per person, the US population has poorer health than the other 10 countries studied.

Such figures evoke howls from both big business parties for spending to be slashed. Typical were the recent comments of Trump’s Health and Human Services Secretary Tom Price who said, while claiming to be committed to fighting the opioid epidemic that killed 60,000 people in the US last year, “We don’t need to be throwing money” at the crisis.

What goes unmentioned in such statements is the root cause of the health care crisis in America: a health care system based on capitalist profit. The for-profit insurance companies, pharmaceuticals and giant health care chains are not in business to promote the health of the American people, but to boost their bottom lines.

Whatever health care legislation is passed in Congress—either by the Republicans, or in a bipartisan “compromise” with the Democrats—will be based on this capitalist model. The Republicans’ House and Senate health bills are, in fact, based on Obamacare, incorporating the structures set up under the Democratic legislation.

The central purpose of Obamacare was to shift costs from the government and corporations to the working class, with health care increasingly rationed on a class basis. The Commonwealth Fund’s findings on the state of US health care, particularly those on mortality, are an indication of the preliminary results of this bipartisan strategy.

Behind the BCRA’s proposals to gut Medicaid, and to give the private insurers even more latitude to boost profits through offering shabby, high-cost coverage, lies a calculated effort to reduce life expectancy for working people, and to send many of the old, sick or disabled to an early grave.


When Poverty Is Profitable

A new book details how foster-care agencies and other safety-net programs hire consultants to maximize their funding and divert it from its intended use.

Carlo Allegri / Reuters
America’s safety-net programs are meant to help the poorest and most vulnerable access meet their basic needs—food, medical care, and safe housing—and there’s an ongoing debate about just how robust and successful these programs are.In his new book, The Poverty Industry: The Exploitation of America’s Most Vulnerable Citizens, Daniel L. Hatcher, suggests that the problems plaguing programs such as foster care and Medicaid are deeper and more troubling than most realize. Hatcher, a professor at the University of Baltimore’s School of Law, writes:

States and their human service agencies are partnering with private companies to form a vast poverty industry, turning America’s most vulnerable populations into a source of revenue … The resulting industry is strip-mining billions in federal aid and other funds from impoverished families, abused and neglected children, and the disabled and elderly poor.

How does this happen? Hatcher uses the example of the foster-care system, where some states enlist the help of private consultants to come up with strategies to maximize disability claims for children in its care. That results in higher payouts from the federal government. But instead of using that money to care for children, the money is diverted, and used for other things the state deems necessary.

I spoke with Hatcher about his book, how states and private groups help abuse the safety net, and how to prevent such abuses. The interview below has been lightly edited for clarity.

Gillian B. White: One of the central themes you discuss in the book is this premise of an “iron triangle” related to poverty.  The term “iron triangle” is a general way of describing the intersecting relationship between government agencies, special-interest groups, and legislators. Can you walk me through how this concept applies to the mechanisms that are supposed to protect the poorest Americans?

Daniel L. Hatcher: With poverty’s iron triangle, you have the relationship between the federal government, between the state government, and between the poverty-industry private contractors. Funds that are intended to help vulnerable populations are misused, either the states are misusing the funds and routing them into general coffers or sometimes other uses. And a significant amount of that federal aid is used to pay the private contractors.

White: You cite some pretty disturbing, egregious first-hand examples of poor people being gamed by the very services meant to protect them. How did you happen upon this information?

Hatcher: My first job at Legal Aid was representing children in the Baltimore City foster-care system. Over a year, I probably represented 300 children or more. That experience has stayed with me: Seeing what these children are going through both while they’re in foster care, what brought them into foster care, and how they’re struggling when they leave foster care. I encountered this practice where the agencies that exist to serve foster children are taking their resources. It really spurred me into action.

White: How does this exploitation work, say in the case of foster services?

Hatcher: You have foster agencies across the country—these agencies that exist to serve abused, neglected children—partnering with revenue-maximization consultants. One of the strategies they use is to go after children’s survivor and disability benefits. They hire contractors to try to increase the number of children in their care determined to be disabled, or target those children that have deceased parents. It’s not to provide additional resources to those children or actually use those services to improve services for the child’s conditions, but to take the money as a state-revenue source. Then contractors will cut sometimes a contingency fee, sometimes a flat fee, depending on the arrangements.

I represented a former foster child in Maryland. He had been in foster care since he was 12. His father died while he was in foster care. The father worked, paid into the system, and so his child earned a survivor benefit, which is much like life insurance. The state applied for that money on his behalf and applied to become a representative payee to take control of the money. And then took the money. The foster-care agency took his money without even telling him he had this benefit that his father had left him. So that harm is not only just taking a cash benefit from a maltreated child, but it’s taking away a connection to a deceased parent that can have a vast emotional benefit.White: And the foster-care system is just one example, right? Where else to these abuses exist?

Hatcher: What’s most rampant are Medicaid maximization and diversion strategies. For these plans, states target nursing homes or hospitals that serve a disproportionate share of the poor, or schools with disabled children. They claim additional funds and then route the federal aid to general state coffers.

There are some states that are using the money as intended, but I look at the states that are, in my view, misusing federal aid. New Jersey, for example: You have the Christie administration forcing school districts—by statute —to participate in a statewide project, working with a private contractor to maximize the number of schoolchildren receiving school-based Medicaid. The Medicaid funds are intended to help provide for special-education and special services for those children. But when the schools participate, they often have to pay for the state’s share of costs to start with, and that administration’s budget is taking over 80 percent of the funds from the disabled-school children to bolster general state coffers.

White: How would such flagrant abuses manage to go unchecked?

Hatcher: Most people have no idea this is happening or they can’t understand it when they read a report about this budget shell game.

Part of the problem is a lot of the economic theory behind fiscal federalism has ignored the relationship between government and private contractors, and ignored the fact that state governments are cash-strapped, so they’re looking for money wherever they can get it. They’re going after these sources of federal aid not to provide the aid services as intended, but as a general revenue mechanism.White: What’s the solution? Is there one?

Hatcher: The regulations that are implemented in terms of how states use money need more teeth. I don’t think that the federal government has been strong enough in making it absolutely clear that federal Medicaid funds are supposed to be used for their intended purposes. That could be done either through regulation or through legislation. Often the agencies already have the capacity under the current regulatory structure to do this. One concern is private contractors. You have states hiring private contractors to come up with all these illusory strategies to maximize federal-aid funds, and then the states will sometimes divert those funds to other use. Sometimes those very same private contractors are then hired by the federal government to try to reduce payout of federal-aid funds.

I think that the book provides strong evidence that block grants are a horrible idea. If you have a governor, under the current structure of Medicaid that includes complex, strict, regulatory requirements—in terms of how the money is supposed to be claimed and used—who’s still finding ways to use budget shell games to maximize and divert funds, what would that governor do if you just hand him a blank check? We need to have simplified systems, to be sure, and greater monitoring to ensure that money is being used as intended. But a block grant would lead to greater misuse of aid funds intended for vulnerable populations.

White: Money is at the heart of all of this and you talk a lot about how states are cash strapped. How can that obstacle be overcome?

Hatcher: Fairer tax mechanisms to raise revenue that the states need are necessary in order to fund government. You have foster agencies that are so underfunded that they’ve reached the point that they’re even looked to taking money from beneficiaries. That should be a huge red flag that something’s wrong with the way our government is financed.

I don’t think that the evidence and the research findings in the book support any conclusions to cut government aid. We’re already incredibly underfunded in terms of the services that are provided to low-income individuals and children. If you have a governor that’s misusing federal aid the answer isn’t to cut federal aid—it’s to stop the governor from misusing the federal aid.

White: Are you hopeful that these changes will actually happen?

Hatcher: Awareness is key here. It’s very simple: a realignment of purpose. States and agencies that exist to serve vulnerable populations need to stay true to their reason for existing.

When we become aware that foster-care agencies are taking funds for abused and neglected children, hopefully our outrage will increase to a level where we stop the practices. When we become aware that a state like New York is receiving an F grade in nursing-home care, but is using nursing homes to leverage additional federal funds and then taking those monies away from the nursing homes, I hope that outrage will increase to the point where we curtail those practices.

Study ranks US health care system last among 11 nations

By Kate Randall
21 June 2014

The US health care system consistently underperforms relative to other industrialized countries, according to a new study from the Commonwealth Fund. Among the 11 nations covered in the study—including seven Western European countries, Canada, Australia and New Zealand—the US ranks last or near last on access to care, efficiency and equity of treatment between the rich and poor.

The June 2014 edition of “Mirror, Mirror on the Wall: How the Performance of the US Health Care System Compares Internationally” utilizes patients’ and physicians’ survey results on health care experience ratings on various dimensions of care in 2013. The study shows that despite spending more per capita than any nation in the world, the US health care system leaves millions with poor quality care.

The authors note that the US is the only one of the 11 countries studied that does not have some type of universal health insurance coverage. Without substantiation, they suggest that implementation of the Affordable Care Act (ACA) “could further encourage more affordable access and more efficient organization and delivery of health care, and allow investment … that could improve the performance of the US health care system.”

More on this later, but suffice it to say here that the government’s own projections show that the health care reform commonly known as Obamacare, which keeps the for-profit health care system in place, will leave millions of Americans without insurance. At the same time, it provides the framework for the health care industry to boost its profits at the expense of the medical needs of the population.

In addition to earning the poorest overall ranking, the US ranks last in access to care due to cost, and in inequities of health care delivery between populations with above-average and below-average incomes. The US had the highest percentages of people in the last year who reported foregoing care and treatments for cost-related reasons or had difficulty paying for it:

* 37 percent reported that due to cost they did not fill a prescription, skipped a medical treatment, test or follow-up, or had a medical problem but did not visit a doctor.

* 28 percent of patients reported their insurance was denied or did not pay as much as expected.

* 23 percent of patients had serious problems paying or were unable to pay medical bills.

* 41 percent paid out-of-pocket expenses in excess of $1,000.

The Institute of Medicine defines health care equity as “providing care that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location, and socioeconomic status.” The US scored last or second to last in 8 of the 10 categories measuring equity between those with above-average income and those with below-average income (with median income as the dividing line, about $52,000 in 2013).

Some of the most glaring inequities for 2013 included:

* 39 percent of those with below-average incomes had a medical problem but did not visit a doctor because of cost, compared to 17 percent for those with above-average incomes.

* 30 percent of the below-average income group did not fill prescriptions or skipped doses, compared to 12 percent of those with above-average incomes.

* 27 percent of those with below-average incomes rated their quality of care as “fair/poor” compared to only 7 percent in the above-average income group.

Not surprisingly, the US also ranked abysmally on three indicators of “healthy lives”: deaths that could be prevented with timely and effective care, infant mortality, and healthy life expectancy. The US infant mortality rate of 6.1 per 1,000 live births is nearly triple that of Sweden, which stands at 2.1. The US rate of 96 preventable deaths per 100,000 is nearly double that of France’s 55.

The study finds that even insured and higher-income Americans were more likely than their counterparts in other countries to report problems such as not getting recommended tests and treatments and filling prescriptions. The authors note: “This is undoubtedly a reflection of the lack of comprehensive health insurance coverage and the high out-of-pocket costs for care in the US.”

The Commonwealth Fund goes on to assert: “The Affordable Care Act is designed to ameliorate some of these problems.” In reality, the Congressional Budget Office has projected that by 2023, after a decade of Obamacare, a staggering 31 million people will remain uninsured. These will include those whose resident states are not expanding Medicaid under the ACA, undocumented immigrants excluded from ACA subsidies, and those who choose not to purchase coverage because they cannot afford it.

The central feature of Obamacare, the “individual mandate,” will work to exacerbate the inequities in the US health care system. Under the legislation, individuals and families who are not insured through a government program such as Medicare or Medicaid must obtain insurance or pay a penalty.

The insurance exchanges set up under the ACA offer coverage for purchase from private insurance companies, who stand to profit from this new captive collection of customers. As there is no meaningful government oversight on what the for-profit insurers can charge, premiums are expected to rise from their already high rates in future years.

People shopping for coverage in the first year of the ACA have found that the least expensive ‘bronze” plans often come with deductibles in excess of $5,000, which must be paid before any coverage kicks in. These and other out-of-pocket costs will have the effect of forcing individuals and families to self-ration their medical care.

Those who choose not to purchase coverage will face a tax penalty. By 2016, this annual penalty will rise to 2.5 percent of taxable income, or $695 per adult and $347.50 per child (up to $2,085 per family), whichever is greater. In other words, people will be charged significant penalties for the privilege of remaining uninsured.

The Commonwealth Fund reports that the US spent $8,508 on health care expenditures per capita in 2011. New Zealand, at $3,182, spent the least. As the US also scores last on efficiency measures—excessive insurance paperwork, inefficient medical records systems, duplicate testing, unnecessary emergency visits—it is not surprising that this ranking is high.

What the report fails to explain, however, is that the primary driver of health care costs in America is the for-profit health care system, under which the insurance companies, pharmaceuticals and big hospital chains are raking in ever-greater profits as the quality of medical care and access to it are increasingly reduced for millions of working class families.

“Mirror, Mirror on the Wall” is an indictment of this for-profit health care system. A solution to this very real health care crisis lies not in Obamacare but the reorganizing of society on a socialist basis. This would include putting an end to medicine-for-profit and the establishment of free, high-quality, state-run health care for all.