Tag: Medicare

Originally published at Forbes.com on February 1, 2022.

Back last June, the FDA made the controversial decision to approve a medication intended to treat Alzheimer’s disease, despite the lack of solid evidence of that drug’s effectiveness, and the strong appearance that the drugmaker had cherry-picked studies to include only a single trial and exclude those which showed no effectiveness. What’s more, the drug, Aduhelm, had significant side effects, a list price of $56,000 per year, and even its theoretical mechanism of action did not square with emerging developments in the research. From all reports, the drug was approved because of the strong wish for an effective treatment rather than because this particular drug was effective.

But earlier this month, the Centers for Medicare and Medicaid Services (CMS) provided Medicare-watchers with some good news: they plan only to cover this drug only through “coverage with evidence development (CED),” which means that “FDA-approved drugs in this class would be covered for people with Medicare only if they are enrolled in qualifying clinical trials.” This remains only a draft proposal, with a 30 day comment period before it is finalized, expected to be on April 11.

As Rachel Sachs at Health Affairs explained immediately following the announcement,

Medicare only covers products and services that are “reasonable and necessary” for diagnosis or treatment. CMS is able to use the NCD [National Coverage Determination] process to evaluate the evidence in support of a new product or service and determine whether this standard is met. Although most products that meet the FDA’s standard of “safe and effective” are likely to meet the “reasonable and necessary” bar, the two are in fact different. Yesterday’s NCD provides a strong, clear statement of CMS’ independence and willingness to enforce its own legal standards for its own agency priorities.”

And the New York Times reported that this was, in fact, “the first time that C.M.S. limited Medicare beneficiaries’ access to an F.D.A.-approved drug in this way.”

This followed prior reports that nearly half the 2022 Medicare Part B premium increase, or about $10 per month, was due to Aduhelm costs, though subsequently manufacturer Biogen announced a price cut down to $28,000.

In the meantime, the public comments submitted thus far can be viewed by the public at the CMS website, and a skim through those comments posted as of this writing (and largely dating to the period just after approval, in July/August of 2021) by medical professionals, shows widespread criticism of the FDA approval.

And Biogen has responded to the CMS decision by increasing the enrollment levels of its confirmatory trial, though only from 1,300 to 1,500 participants, a far cry from the expected 50,000 patients if it was widely available. At the same time, a rival drugmaker, Eli Lilly, has submitted initial data for its own similar drug, donanemab, for which it hopes to receive approval and launch at the end of this year. If Eli Lilly’s data is similarly inconclusive, of course, it is deserving of the same caution.

So far, so good — in fact, a rare win for common sense.

Unfortunately, though, the Alzheimer’s Association disagrees, and is engaged in a campaign to call on the public to oppose this decision — a campaign which readers who spend time on twitter will have noticed in the form of frequent ads urging people to “tweet at the president” to tell him to reverse the decision. They imply that this is discrimination, and that people with Alzheimer’s are being treated unfairly, saying in their alert that “No president has allowed this to happen with treatments for diseases like cancer, heart diseases and HIV/AIDS, and we can’t let it happen for Alzheimer’s.” And similarly, in the news update on their website, they write, “Medicare has always covered FDA-approved treatments for those living with other conditions like cancer, heart disease and HIV/AIDS. For CMS to treat those with Alzheimer’s disease differently than those with other diseases is unprecedented and unacceptable” — wholly failing to mention the very real concerns about whether this drug is effective in the first place. And, yes, if a drug with similarly-questionable effectiveness were on the table for cancer or heart disease, I would hope that CMS would be just as cautious.

What’s more, the CEO of the Alzheimer’s Association, Harry Johns, was even more accusatory, calling the decision “shocking discrimination against everyone with Alzheimer’s . . . especially women and minorities” — the latter claim because in principle individuals with money would be able to pay for the drug out of pocket. And in an interview, Johns did not acknowledge any of the concerns shared by others, but simply repeated the claim that, since it was approved by the FDA, it should be paid for by Medicare.

And, finally, a few words of international comparison: as Medicare was deliberating on its decision, December, the European Medicines Agency voted against approval of Aduhelm (which is most likely binding for the UK as well), and Japan likewise decided to require additional data, a step that could require several further years as they wait for the same additional study results as CMS is requiring.

Whether CMS stands its ground or succumbs to public pressure remains to be seem, but their decision on Aduhelm is an encouraging sign.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on September 20, 2021.

Among the changes coming if the Democrats succeed in their $3.5 trillion reconciliation bill would be the inclusion of dental, vision, and hearing coverage through Medicare, possibly in 3 – 5 years due to implementation challenges, and with suggestions of a voucher/cash payout in the meantime. There is not yet an official cost estimate as the details are still being negotiated, but a similar proposal in 2019 would have cost $358 billion over 10 years.

At the same time, late last month, the latest Trustees’ Report for Medicare determined that the Medicare Part A Trust Fund will be exhausted in the year 2026, which, if you do the math, is a mere five years from now. At that point, Medicare would have to cut reimbursement rates for doctors by 9%, increasing to 20% in 2045, or even more if the report’s assumptions don’t pan out.

How will the new dental benefits — assuming they remain in the bill — affect Medicare Part A and its trust fund? Strictly speaking, not at all. The new benefits would be a part of Part B of the program, that is, doctors’ charges, rather than Part A, which covers hospital charges. In one respect, it would be its own benefit structure entirely, since, unlike “regular Part B” Medicare, the proposal would have the federal government pay 100% of the benefit’s costs, rather than requiring participants to pay a 25% cost-share premium. It would, in a way, become Medicare Part E.

All of which means I am increasingly convinced of my prediction from back in June: the future shortfalls in revenue for Part A benefits will not be dealt with by increasing dedicated Part A funding sources, or by changing reimbursement rates, but simply by allocating general tax revenues to pay for these benefits. It simply makes no sense to imagine that Congress and the administration, while in the middle of implementing a brand-new benefit funded wholly through general revenues, would feel any need to solve the wholly-artificial problem of an evaporating Medicare Part A trust fund.

Again, you heard it here first: the Medicare Part A trust fund is a red herring. It is irrelevant. And I suspect that the policy experts really know this. In fact, immediately after the Trustees’ Reports were issued, I listened to a webcast by experts on the subject, and I asked this very question: in a world in which Part A of Medicare is only one part of a bigger picture with Parts B and D being funded through general revenues and through premiums, how relevant is the Trust Fund, anyway? And the experts’ answer was simply this (paraphrased, of course): “the value of the Trust Fund is that it captures the public’s attention in a way that isn’t possible simply by saying that overall government spending on Social Security and Medicare is increasing unsustainably.”

And they might be right. Our national debt rises year after year, and those warning against its long-term risks are Cassandras, ignored while alternatingly Republicans promise their base that tax cuts will pay for themselves with economic growth and Democrats promise their base that social welfare government spending increases are “investments” which will pay for themselves. Worse, according to the Committee for Responsible Federal Budget, the current Reconciliation spending proposal “fit[s] $5 trillion to $5.5 trillion worth of spending and tax breaks into a $3.5 trillion budget,” through gimmicks such as legislating an extension of the child tax credit only through 2025 but with tax-increase pay-fors stretching over 10 years, and with the expectation that Congress will be compelled to make the credit permanent with some other funding source in the future, as well as delaying the implementation of other benefits to later in the 10 year period to declare the “10 year cost” to be low. Add in the pundits proclaiming that low interest rates mean we can borrow as much as we want, and it is certainly a heck of a lot easier to get Americans’ attention with reporting that “the Trust Fund will run out of money!” than “our debt level is growing year after year and the economic consequences could be devastating, though we don’t know exactly what will happen or when.”

It’s nothing new for politicians to promise their constituents free lunches, but it is new territory to do so for Medicare, which individuals have tended to believe they have “earned” (just as with Social Security) through the payment of their FICA tax and by paying the Part B and D premiums (though that only covers 75% of the cost). It’s hard to underscore how significant a change it is to create a new Medicare benefit which wholly untethers Medicare from even this partial degree to which Americans earn their benefits, let alone doing so in the context of a bill with “tax (only) the rich” funding and massive deficit spending that further reinforce the message, “this is free money” and would destroy the very notion of social insurance as “we’re all in this together.”

As Americans, we have benefitted tremendously from the dollar’s status as the global reserve currency, from low interest rates, and from other circumstances which have insulated us thus far from direct effects of persistent deficit spending. But imagining that will last forever means the eventual fall will be all that much harder.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on June 7, 2021

Earlier today, the FDA gave its approval to a new Alzheimer’s medication, the first to be approved in nearly 20 years: aducanumab, given the brand name Aduhelm. The wife of one patient, cited in the New York TimesNYT -1.4% credited it with slowing disease progression “enough to allow him to participate in tasks like choosing an assisted-living facility.” Another, cited at Sky News, said it “changed my life.” A third, at Stat News, described “improvements in his cognition and ability to focus, he said, which has been massively positive for his family.”

But the reality is that the relevant studies submitted to the FDA are troubling. As described at the Times (above, as well as here) and at Stat News, and in a commentary piece by experts at the Times, the drug’s initial trials were deemed a failure. They were halted in March 2019, but afterwards, the company, BiogenBIIB 0.0%, analyzed the data and announced that one of the trials showed evidence of effectiveness. Because they only submitted this one effective study, rather than the two the FDA usually requires, they will be required to conduct additional studies — though it seems unlikely they would be able to recruit particularly many patients if the drug is already on the market, and study participants wouldn’t know if they have the drug or a placebo. What’s more, it is simply not appropriate, from a statistical analysis perspective, to cherry-pick studies, and rationalize reasons why the studies showing an effect are “good” and the ones showing no difference are not. As one expert, Dr. G. Caleb Alexander from the Johns Hopkins Bloomberg School of Public Health, explained at the Times,

“Biogen’s interpretation of data using after-the-fact analyses was ‘like the Texas sharpshooter fallacy — the idea that the sharpshooter shoots up a barn and then goes and draws a bull’s-eye around the cluster of holes that he likes.’”

What’s more, the FDA used a special process called accelerated approval, “using a regulatory pathway that lets the agency accept different types of evidence in areas where patients lack options,” as described at Bloomberg.

And this approval comes despite the latest scientific research calling into question the very theoretical explanation for how it might work. Aduhelm removes the amyloid brain plaques long believed to be the cause of Alzheimer’s. But this explanation has been never been proven, and, in fact, according to other researchers, “almost 40% of patients with dementia do not have amyloid plaques in their brains while many people who die with normal cognition do have them.”

And there is real harm to this development. In the first place, this treatment is not without side effects, including brain swelling. In the second place, the list price for the medication is expected to be $56,000 per year, not including the cost of brain scans used to assess eligibility. Because it’s an injection administered at a doctor’s office, rather than a pill, it’s covered under Medicare Part B — and, yes, while the Biden administration pledges to cut the cost of drugs through “negotiation,” existing Medicare Part D rules tie insurer’s hands with a long list of drugs that must be covered, limiting negotiating power.

But we cannot even begin to travel the path towards lowering the cost of medications and of Medicare spending, generally, if that path includes covering drugs with benefits that may be more mirage than real. To be sure, the FDA’s mission is not to evaluate cost-effectiveness of drugs, but there is no other agency with this role in the United States, and the FDA’s bend-the-rules approval suggests that anyone who truly dares suggest that the path towards lowered Medicare costs must necessarily include a more skeptical eye and greater demands of proof of effectiveness, will struggle to find a receptive audience.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on June 1, 2021

According to the most recent report, from 2020, the Medicare HI (Hospital Insurance, or Part A) Trust Fund is projected to be emptied in the year 2026. That’s well before the Social Security Trust Fund’s projected insolvency in 2034, and when that happens, Medicare will only be able to pay 90% of Part A benefits, dropping down to 80% in 2038.

So why aren’t our elected officials, and why aren’t Americans themselves, more concerned?

When it comes down to it, I’ll suggest to readers that they don’t really believe that it matters. And with the Biden administration’s 2022 budget proposal comes a fairly strong indication that this is their point of view as well, that they expect, when the Trust Fund well comes dry, to simply tap general federal revenues for the necessary funds, in exactly the same manner as is done for Parts B (doctors) and D (drugs).

Here’s the key sentence:

“The President supports providing Americans with additional, lower-cost coverage choices by: creating a public option that would be available through the ACA marketplaces; and giving people age 60 and older the option to enroll in the Medicare program with the same premiums and benefits as current beneficiaries, but with financing separate from the Medicare Trust Fund.”

To be sure, this is more aspirational than concrete, and wholly lacks a cost estimate. But previous proposals from Biden or other Democrats had been unclear about the nature of the proposal and its financing, with various iterations suggesting that the near-retirees would pay “at cost,” benefitting from Obamacare subsidies as well as the lower cost of a buy-in, relative to private insurance, due to the low provider reimbursement rates fixed by Medicare.

This single sentence makes it clear that’s not the case: the only premiums paid by Medicare recipients are partial-cost payments for Parts B and D. For Part B, this is 25% of the cost for most retirees; for those with income above $85,000/$170,000 single/married, premiums are higher, reaching as much as 85% of the total cost for the highest earners. For Part D, the premium is set to cover 25.5% of the standard drug benefit, plus any extra costs charged by particular private providers for enhanced benefit levels, and an extra flat charge for higher earners. The remaining cost, 75% of Part B and 74.5% of Part D, is funded by the federal government through its general revenues.

What’s more, Part A is premium free, paid for by the contributions of workers through their Medicare FICA taxes. (There’s a small exception, in the form of workers with so little work history in the US, either on their own or by their spouses, that they do not qualify for any Social Security benefits, who must pay either $259 or $471 per month to receive Part A, depending on the number of quarters of coverage earned by the individual or his/her spouse.)

To declare that Medicare Parts B and D will be funded from general revenues for individuals ages 60 – 64, is simply to expand existing government-funded benefits.

To provide Medicare Part A, premium-free, to those ages 60 – 64, likewise funded from general revenues, is to create a path, whether intended or not, towards the funding of Part A from general revenues, for everyone, to the extent that the dedicated FICA revenues fall short. It is simply inconceivable that Congress could establish a system in which hospital charges are handled differently for the two groups of ages 60 – 64 and 65+, and apply a cap or alternate reimbursement rates for the second group. The only way this proposal makes sense is if is paired with a plan, or, less concretely, at least an intention, generally speaking, to meet future shortfalls in Part A, with general tax revenues, rather than any more elaborate cost-control and dedicated tax revenues approach.

And that’s not necessarily a bad thing. Given the complexity of Medicare funding as it stands, and the intertwining of Medicare expenditures with ordinary public health spending, perhaps the entire concept of a Trust Fund and fixed, dedicated, funding for one, but only one, part of Medicare, doesn’t really continue to make sense. (For example, the fact that it is Medicare that funds the hospital residency system for the training of new doctors, and that there is a cap on the numbers of residencies, may be contributing to a shortage of physicians. Does this make sense?) It will continue to be crucial that the government find a way to pay the medical costs of the elderly in a manner that maximizes their well-being while being financially prudent and responsible, but that does not necessarily mean that the artificial construct of a “Trust Fund” should be an ongoing part of this effort.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on April 30, 2021.  While the legislation never passed, I think the background/context for “Medicare expansion” is still relevant.  

The American Families Act — Biden’s new spending proposal covering paid leave, child benefits, childcare subsidies, tuition-free community college, and more, but lacks one component progressives had been calling for: an expansion of Medicare, in terms of benefits provided and age eligibilities.

Here’s an excerpt from yesterday’s Washington Post:

“Congressional Democrats are planning to pursue a massive expansion of Medicare as part of President Biden’s new $1.8 trillion economic relief package, defying the White House after it opted against including a major health overhaul as part of its plan. . . .

“They specifically aim to lower the eligibility age for Medicare to either 55 or 60, expand the range of health services the entitlement covers and grant the government new powers to negotiate prescription drug prices. . . .

“Roughly 100 House and Senate Democrats led by Rep. Pramila Jayapal (Wash.) and Sen. Bernie Sanders (I-Vt.) publicly had encouraged Biden in recent days to include the overhaul as part of his latest package, known as the ‘American Families Plan,’ which proposes major investments in the country’s safety net programs. . . .

“Sanders said Wednesday he would ‘absolutely’ pursue a Medicare expansion as lawmakers begin to translate Biden’s economic vision into legislation. Sen. Ron Wyden (D-Ore.), the chairman of the tax-focused Finance Committee, similarly pledged that he would ‘look at every possible vehicle’ to lower drug costs.

“And Sen. Richard J. Durbin (Ill.), the Democrats’ vote-counter in the chamber, said he planned to push for Medicare reforms he saw as a ‘game changer.’”

Democrats and, to a lesser degree, Republicans have been on a quest to reduce prescription drug costs for years, and even in the waning months of the Trump administration, there had been efforts to implement a “most favored nation” pricing model, in which Medicare would pay drug prices equivalent to those paid by other developed countries; an executive order mandating this for Part B drugs was issued in September, published as a rule in November, and halted via injunction from a lawsuit in January. Proposals to expand this concept to Part D drugs are still pending, but have bipartisan approval; more extreme proposals such as the promise to seize patents and produce drugs via compulsory licensing, of course, do not.

But what exactly is the plan, when it comes to demands to expand Medicare eligibility? There have been two versions floated about: the first offers a “buy in” to otherwise-uninsured near-seniors, and the other simply offers the benefit under the same terms as for those already age 65. The letters from Sen. Sanders and Senate Democrats and from House Democrats do not spell out precisely their intention when they call for eligibility expansion alongside benefits expansion. Can it be inferred from their claim that Medicare would save $500 billion over 10 years with prescription drug price-control and the money could be used to “expand and improve Medicare,” that they intend for their pre-65 Medicare to be exactly as “free” as 65+ Medicare? Politico reports that merely to add dental, vision, and hearing benefits would cost $350 billion, but that Sanders, when asked, declined to discuss the costs of his proposals:

“He said he doesn’t want to just pick a target; he wants to check off as much as can be done to help people across the country and then figure out just how much that would cost.”

What is the actual cost of Medicare expansion? Even in a moderate form down to age 60, one estimate is between $40 billion to $100 billion per year, which, at the higher end, or with a further eligible drop down to age 55, would be far, far more than the projected savings from drug price controls, even without the addition of the benefit enhancements.

As to the various buy-in proposals, Kaiser evaluated several of the proposals being floated as of 2018. These proposals keep the Medicare benefit design, with its Part A, B, and D benefits, calculate the cost of benefits plus administrative expenses, and use the ACA structure to provide premium subsidies. The proposals would also require that all existing Medicare providers accept new patients at the same, low, Medicare reimbursement rates as for existing over-65s, and it is this low-reimbursement mandate, not superior management or reduced administrative costs, which would reduce the cost of this coverage to recipients. And for any iteration of “buy-in,” or any of the “Medicare for All” proposals from the various Democratic candidates, the ultimate impact of including far more medical care into the “Medicare rates” is something that generates a lot of worry, without much of a sense, even from experts, as to what would happen when providers are squeezed and cannot cost-shift from Medicare to private-insurance patients.

One analysis from 2019 attempted to model the effects of some sort of Medicare expansion, based on a hypothetical non-profit hospital system, in which private-sector insurance rates are double those of Medicare. This hypothetical did not include doctors’ practices, only hospitals. It found that its current 2.3% profit margin would drop to a 1.6% margin, in the case of a voluntary buy in for those age 50 and above, where employers could not shift coverage to Medicare; if employers did have the ability to move their older employees to Medicare, the hospitals would have a 5.3% loss; for a public option for all ages, that hospital system would have an 8.4% loss. (I was unable to find a similar analysis of doctors’ revenues.)

It stands to reason, then, that, however much the United States may be overpaying when it comes to drug costs, there is no such simple answer when it comes to costs for healthcare, in general, where expanding the number of recipients of care at Medicare rates (or, even more extreme, the Medicaid rates), would open up a can of worms. Proposals exist to reduce the cost of medical care, far more broadly speaking than simply forcing down reimbursement rates or expanding the number of people eligible for the lowest rates, but this is a far greater challenge than sloganeering, or simply declaring a new form of government benefit.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.

Originally published at Forbes.com on June 18, 2020.

When it comes to planning for retirement, the fundamental math is straightforward: your income in retirement (including reasonable savings spend-down) must equal or exceed your expenses.

Experts therefore worry about retirement readiness in terms of the degree to which Americans will have sufficient income in retirement — for example, the Center for Retirement Research calculates a National Retirement Risk Index by measuring the degree to which Americans are likely to reach or fall short of an objective of “maintain[ing] their pre-retirement standard of living in retirement.” But that’s only half of the equation; equally important but not addressed nearly as often is the other half, the expense side. And it’s for this reason that I want to share some bits & pieces of a recently-published book, The Price We Pay: What Broke American Health Care – And How To Fix It, by Marty Makary, as I clear out my bookshelf of library books in anticipation of my library’s re-opening.

Makary is a surgeon and professor and, according to his Wikipedia profile, “an advocate for high-consensus, common-sense reforms in healthcare.” His book, based on his own efforts at reform, profiles shocking ways in which healthcare costs are higher than they ought to be, and ways to reduce those costs without impacting — or even improving — quality of care.

The book begins with the example of a health fair at an African American congregation in Washington, D.C., where medical staff screen patients for “claudication” — a blockage of a leg artery which can be removed by a stenting procedure, the same sort of procedure that had become enormously popular for heart vessels, but now, thankfully, in decline after having been shown not to be beneficial in most cases, and subject to public scrutiny. This new income stream — costing patients modest sums and Medicare substantially more, $10,000 for a brief procedure (or triple the cost for private insurance) — “can generate $100,000 in one day when a doctor owns the facility,” Makary writes, and nearly always without genuine medical necessity, but instead by means of identifying prospective patients through health fair or after-church screenings.

Makary then backs up a bit to discuss the scandal of hospitals overcharging patients in any instance where they don’t have in-network insurance, whether they’re uninsured or simply out-of-network. Examples he gives of hospitals billing patients “chargemaster” rates that are as much as 3 – 5 times higher than what insurance companies pay, offering meager reductions for “financial assistance,” then taking to court patients who can’t pay are appalling enough (and are just as prevalent among nominally non-profit as for-profit hospitals) that Congress is already looking at remedies to “surprise billing,” or had been doing so, in a bipartisan effort, before the pandemic hit.

Another example that’ll make your blood boil is the escalating cost of air ambulances: rather than hospitals owning the helicopters, private companies moved in. The charges were no longer covered by insurance, or, at any rate, they were covered on an out-of-network basis so that patients were left with high residual costs, and patients opened up horrifically-enormous bills: $50,000; $100,000; or more — and, what’s worse, for cases where the air ambulance wasn’t even necessary, but medical staff recommend or insist on it, receiving kickbacks along the way, and patients have no idea of the cost they’re incurring.

And while price-gouging might be solved by putting all Americans on a government-run healthcare system with prescribed payscales, that’s only one component of the problem. Makary profiles obstetricians with excessively-high C-section rates because doctors want to avoid disruption to their evenings, doctors who counsel and perform back surgery for patients who (as is nearly always true) would be better off with physical therapy, doctors who perform an upper endoscopy and a lower colonoscopy on two separate days to maximize billing rather than both-at-once to maximize patient welfare; and more. He describes the overuse of opioid prescriptions for no other reason than lack of effort in the medical profession to determine what was actually best for patients rather than doing what they’d always done. He even cites his own experience being prescribed heartburn medication rather than diet modification, and cholesterol-reducing statins without addressing his particular health- and family history. “Medicare for All” offers no answers here, especially given its promises of unlimited medical care with any provider.

More rackets: health insurance brokers who sell their employer-clients on the insurance plan which pays them the largest commission rather than offering clients the best deal. (Employers are increasingly aware and moving to other business models.) Pharmacy benefit managers where rebates and “spreads” leave employers struggling to manage costs (especially since there are only three such firms bidding on employers’ business, stymying employers’ efforts to cut costs) and employees deceived as to the true cost of their medications. “Wellness programs” which don’t actually improve the well-being of employees.

What’s to be done? One of Makary’s own initiatives is simply to prod those doctors who are not cynically abusing the system, to reduce their overtreatment by educating them that they are far beyond the norm in their field. He also uses his position within his profession to educate his peers about what’s going on with medical costs that they may be wholly unaware of.

But the recommendation that’s the most promising is a complete re-do in terms of how healthcare is delivered, as illustrated by a new provider called Iora Health. This is a company, Iora Health, Inc., not a social services agency, but their business model is about improving their Medicare patients’ health in the long term by doing more than simply scheduling annual physicals or 15 minute visits and waving them away until the next appointment. Patients don’t simply have a doctor – they are assigned a health coach, and

“Iora doctors and nurses are free to take care of people in whatever way they see fit, ranging from home visits, to giving a ride to see a specialist, to enrolling their patients in one of their classes. They pride themselves in spending a lot of time with patients so they can understand the individual’s goals, struggles, and barriers. The Iora health coaches make everyone’s job a lot easier” (p. 157).

Their clinics have a community room where they host cooking classes and game nights. They follow up with patients who miss appointments, and provide rides if needed. They investigate the life circumstances of patients who don’t take their medication rather than writing them off. (How many of us have family members of our own who could have benefitted from this?)

Makary calls them the “Tesla of health care” — radically transforming healthcare, especially for Medicare enrollees with complex needs. And their results are impressive.

“After at least three months of engagement with an Iora care team, the number of patients whose hypertension was controlled increased from 59% to 74%. Results from a cohort of 1.176 Iora Medicare enrollees over an 18-month period showed hospital admissions cut in half and emergency department visits reduced by 20%. The totalmedical spending by the insurer declined 12%. Since that study, Iora has now reduced health care spending for the populations they care for by 15%. Imagine what a 15% reduction in Medicare’s roughly $1 trillion budget would mean for the country” (p. 164). Iora has practices in Texas, North Carolina, Atlanta, Phoenix, and elsewhere. A similar company, Oak Street Health, has 21 locations in Illinois, and a total of 36 elsewhere. ChenMed’s locations are primarily in Florida. All three provide services specifically for Medicare patients.

And their business model? The clinic is paid an annual lump sum.

Yes, they’re an HMO, more-or-less, though they work with insurers/Medicare, rather than directly with patient-customers — and, at the same time, HMOs were supposed to transform healthcare, decades ago, but didn’t. Why not? Are we ready for another try? Let’s hope so.

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.