CANS President
Cause and Effect
I celebrated my 65th birthday earlier this year. It was hard to miss for a few reasons. First, the solar eclipse 2024 occurred on that day. As it was crossing through Dallas where I have family, I had arranged to be there after seeing the 2017 solar eclipse in Columbia, Missouri. If you are an astronomical aficionado, these events are not to be missed.
The second reason is that my birthday (and that of John Kusske’s) falls on Harvey Cushing’s birthday. Cushing was born 155 years ago in Cleveland, Ohio, 170 miles from my birthplace.
And last, about 6 months before my birthday and several months after, I received scores of Medicare notices from various insurance companies. I was constantly reminded that those Medicare taxes I’d been paying over my working career could finally be used. And of course, it was a reminder that I am getting older.
Medicare will celebrate its 60th birthday next year. It was signed into law by Lyndon B. Johnson on July 30, 1965. According to the Social Security tables, life expectancy at age 65 in 1965 was 77.9 for men and 81 for women. In 2023, life expectancy at age 65 was 17.9 more years for men (age 82.9) and 20.5 (age 85.5) for women.
It is said that age is a number, but as we all know, some numbers carry more weight than others: first birthday, the age to drive, the age of adulthood, the age to drink (responsibly), and the age of retirement. This last number is often met with trepidation. It is a sign that we are on that down slope of life; that our time to make a change in the world, our community, our family, and in ourselves is limited.
Our neurosurgical careers bisect many milestones in our lives from spending much of our youth toiling to learn the trade. Then in our early midlife, we juggle career and family often in that order. Many of us then become part of the sandwich generation-raising children and carrying for elderly parents. And then it’s here: age 65 and the decision about retirement.
Several years ago, I read two formative books for me: Steve Jobs by Walter Isaacson and The Gentle Art of Swedish Death Cleaning by Margareta Magnusson. Steve Jobs was a minimalist with a penchant for Zen gardens, simple lines, and less materialism. This influenced his designs of his products and his Apple stores.
The Gentle Art of Swedish Death Cleaning is also a testament to living with less and leaving less for your children to deal with after your death. These books and the cleaning of my parents’ house when they moved to assisted care, were life altering approaches to life and aging for me.
As an American society, we know we waste a lot. As a surgeon, we see this too with thrown out sutures, half used medication tubes and vials, plastic IV bags, and one-use halos. As the new year and my retirement loom close, my resolution this year is to do more with less. I’ll let you know how I do. After all, resolutions are a funny thing.
And lastly, a blessed, peaceful, and happy new year to everyone.
As shown in Chang & Martin’s Health Affairs analysis—retweeted and highlighted by Adam Fein—commercial inpatient hospital price growth appears to be driven largely by system affiliation and nonprofit hospitals. Ironically, these nonprofit systems show the highest rate of price increases. Since hospital prices directly translate into higher insurance premiums, these findings shed light on a key source of frustration with the U.S. healthcare system. Comparing this trend to our January GOTM—which indicated that physician fees have stayed relatively flat over the past 20 years—further underscores the primary driver of rising healthcare spending.
Luigi Mangione is a villain. That shouldn’t be controversial.
The assertion that insurance denials don’t kill people shouldn’t be controversial, either.
Yet there has been a disturbing trend of people justifying Mangione’s crime. We see it in Elizabeth Warren’s tepid “condemnation,” where she states, “you can only push people so far. And then they start to take matters into their own hands,” and in mainstream journalists declaring they feel “joy” over the assassination. Even more alarming is the emerging cult fan base around Mangione, as though a CEO of an insurance company is directly responsible for patient deaths.
Let us recall what an insurance company actually does. It is a third-party payer, meaning it reimburses hospitals and doctors after services have been provided. By definition, it cannot cause death. If a doctor or a hospital truly believes a treatment is lifesaving, they can simply perform it. They are not legally required to seek approval from an insurer to save someone’s life.
The real ire should focus on hospitals that refuse care without explicit prior authorization—despite their stated mission and their sizable tax breaks for providing essential community services. These same hospitals often deny lifesaving care to patients with public insurance. They then engage in aggressive debt collection against patients for questionably indicated procedures that insurance will not cover. An insurance company, by contrast, does not provide care; hospitals do. They can choose to proceed with potentially lifesaving treatment regardless of payment guarantees. Refusing care until payment is secured is where the true ethical breach lies—not in an insurer’s denial of a claim.
If an insurance company denies payment after the fact, and such a denial still falls within the terms of coverage, that conflict can be fought between the hospital and the insurer. The patient need not be burdened. Of course, insurance companies are far from perfect. We all know their prior-authorization and recoupment practices are fraught with problems and in need of serious reform. However, denying payment is not the same as denying care. Physicians take an oath to treat patients, and if we truly believe a procedure is lifesaving, we should proceed with it and address payment issues later. Blaming insurers for denying payment is merely shifting responsibility from where it truly belongs—on the healthcare providers who could, and should, act regardless of reimbursement.
Of course, there is an economic reality to running a practice or a hospital. Repeated failures by an insurance company to cover contractually obligated services should bring legal sanctions and tort liability; leave the patients out of it. This doesn’t absolve insurance companies of their responsibility to pay for approved treatments. However, on the flip side, asking insurers to pay for treatments that are experimental or lack consistent benefit effectively forces every premium-paying member to shoulder the cost of expensive, unproven procedures.
Some measure of utilization control is inevitable. If private insurance companies aren’t doing it, then the government will. Doctors and hospitals can overstate treatment benefits—especially when there is a financial incentive. Some entity must provide a stop to needless expense. Doctors and hospitals are not blameless. We all know that not every recommended procedure is genuinely necessary; any neurosurgeon familiar with marginal spine surgeries can attest to that.
Ultimately, while insurance companies should be held accountable for fulfilling their contractual obligations and maintaining fair coverage policies, they are not the ones literally denying or withholding care. Hospitals and physicians hold the power to provide lifesaving treatments first, then tackle payment disputes later. By focusing our ire on the system-wide factors—price gouging, debt collection practices, and insufficient oversight of medical necessity—we stand a better chance of driving meaningful reform and ensuring that patients receive the care they truly need, without having to fear financial ruin or becoming pawns in a blame game that obscures the real ethical responsibilities of our healthcare system.
“Alia iacta est.”
-Attributed to Julius Caesar, 49 BC
The recent surge in the profile of United Healthcare since the murder of its CEO on the streets of New York City in the early morning of December 4th this year has, yet again, people jumping on bandwagons and missing the point.
United Healthcare is a multibillion-dollar company that has a presence in, some say control, and controls an exceedingly large amount of money and resources in healthcare. Since the passage of the affordable care act, arguably one of the largest asset shift in the history of this country, with the insurers raking in 371 billion dollars since it became law. 40% of that amount went to United Healthcare. Meanwhile by some report, UHC denies 1 in 3 claims made, and utilizes an AI algorithm to speed those denials up to breakneck speed. Click here for more information.
Most hard-core capitalists and (even some medium-core ones) would like say “so?” I had one relative tell me, who was sympathetic on one breath and the next “well, they bring value to their shareholders.” True, they do. So does, Tesla, Ford, Apple and a litany of other companies both in and around goods and services that are consumed by the American public. The big difference is these companies make a product that people can and do consume. What would happen if Apple sold you a product that turns out was just a cardboard cutout of a computer? Or, if Tesla sold you a car that didn’t actually go anywhere? Caveat emptor? The key concept is this: a reasonable person would expect if they paid for insurance, the insurer would cover their care that is deemed appropriate by their treating physician. This is not difficult, and we need to stop giving cover to insurers. They can already buy 371 billion dollars’ worth of cover and don’t need physicians’ help to excuse their behavior.
In case you are wondering what they are responsible for: here is a link to the fiduciary responsibilities of a group health plan, its administrators, and participants according to the US department of labor.
A recent GAO report shows that 16 million people are on the ACA marketplace, with 165 million (over half of America) getting their plans through an employer. The premiums are lower for ERISA plans but the cost is actually more, once other factors are accounted for by rebates, fees and so forth, the employees paid MORE than the Marketplace plans enrollees paid. 33 states were examined for this study. And, in 2022, the study average deductibles for ERISA plans were lower than for Marketplace plans, but Marketplace plans had a higher percentage of the in zero deductible plans. We should probably assume then there must have been some kind of cost offset, with the deductibles being significantly higher in some of the Marketplace plans.
The Marketplace limits the out-of-pocket expenses for an individual at $9,200 and a family at $18,400 for a family. As these limits tighten, given the sheer number of people still on ERISA plans, it might be argued that costs are shifting to the employee-sponsored plans. What is fascinating to watch as the blockbuster profits rise, almost exponentially, and the costs being shouldered by other folks in this country, it’s easy to see why there is so much unrest. The man who shot the Brian Harrison, a young man named Luigi Mangione has garnered mostly negative attention. A small subset of people have engaged in fetishization of his image as below, taken from social media. Comparisons were made with he and Kyle Rittenhouse, an Illinois native who crossed into Wisconsin and killed a skateboard-wielding protester with an assault rifle. Rittenhouse was later found not guilty and was later invited to Turning Point USA as a guest speaker. Social media is turning those who commit murder into media darlings.
Killing an insurance CEO is not in the interest of civil integrity and does not move us towards resolution of the salient problems with payers. In an Article in the Atlantic, Adrienne LaFrance (https://www.theatlantic.com/politics/archive/2024/12/decivilization-political-violence-civil-society/680961/) stated:
“(r)ecent bloodshed is not new to America, not even close, yet this is still a distinctly precarious time. Along with layers upon layers of social conditions that make us especially prone to political violence, the Machiavellianism of contemporary politics has stoked both the nihilism of those who believe that violence is the only answer and the whitewashing of recent violent history.”
She stated to pull back from the brink was to trust in institutions and processes, and reject violence encouraged by anyone, “whether that person is sitting in the White House or standing in the street.” It should be noted however, that understanding a violent act does not mean condoning it. We must speak out against it but also comprehend why some are celebrating it, as much as we revile it.
With the population perceiving less value in their insurance, more out of pocket expenses, born out in the GAO report tensions is high. With many or our loved ones’ experiences with denial and our own fights against capricious prior authorization denials (and we do need PA to an extent), we are reaching a tipping point. The public perception of a multimillionaire CEO as a source of their frustration and turning toward murder is a dangerous precipice, but our society has been dabbling in violence as a solution for social problems, such as elections, for some time now.
Despite the violence and its necessary rejection, the truth is pretty straightforward: insurers are enabled by the current status of the ACA to pay record payouts to their shareholders while failing their fiduciary duty to pay for reasonable, community-standard and evidence-based care. To label anyone who justifies the murder of the man anything more than just a murderer is making the mistake and not understand the reasons why it happened. The murderer may have been a narcissist. And I would challenge the rise of narcissism is not new, nor limited to the left nor the right.
In a recent Facebook post on the Physician Community board, someone compared to the current state of healthcare to the time of the French Revolution. A comment by another person recounted a visit to Versailles when their spouse turned to them and stated they understood why the populace rose up and led to such a bloody insurrection. They did not condone the acts. It’s important to differentiate understanding why something happened to celebrating it. It seems in this age of clicks, likes, and engagement farming, we have forgotten the subtleties of human comprehension.
There is a very bright, very persistent red “check engine” light flashing, and it has grown brighter and brighter with each passing year we do not fix the Affordable Care Act. Expect more violence, as seen in a recent TMZ report of a Florida woman who threatened Blue Cross Blue Shield. https://www.tmz.com/2024/12/12/florida-woman-arrested-said-delay-deny-depose-on-call-with-insurance-luigi-mangione/These acts could be considered forms of domestic terrorism. We have all seen that are a disgusting side effect of not fixing things and demonizing the other.
While fixing the ACA, instead of repealing it, will be the harder, less campaign friendly, and much less sexy idea, it is a better idea than pulling the plug to spite a lot of people who voted for it. Limiting corporate profits when it comes to healthcare should be passive, not a state-mandated policy. But, to achieve true competition, just like any sports match, court case, or human interaction since the ancient Mesopotamians, must have rules and guidelines. There are a multitude of regulations, that have been there all along that are simply not enforced. As the insurance marketplace shrinks, further consolidation will drive the cost of insurance up. Suddenly kicking thousands, if not millions (16 to be exact) off the marketplace plans will flood the healthcare system with the uninsured and underinsured. The already under-funded Medicaid (Medi-Cal) system will tax the state-sponsored systems. Taxes will be raised further to offset the cost.
As people feel more and more unable to effect change in their lives, both right and left, expect more Kyles and Luigis and their canonization. Maybe we should stop trying to shove each other into boxes just to prove a point that our theory works (or likely doesn’t) and get the work done. Institutions exist for a reason, and, as Timothy Snyder says in his book “On Tyranny,” we need to defend our institutions, not defund them.
Alex Lopez, MD
Despite numerous controversies in healthcare, most people agree that it is expensive. An individual’s health is their most valuable asset; consequently, companies charge patients a premium to maintain it. A common perception of the US healthcare system is its exorbitant costs. The US ranks last compared to ten developed countries regarding access to care, equity, and outcomes. Given how much Americans spend on healthcare, one would expect better results. In the JAMA Health Forum, Professor David Cutler outlines three strategies to help reduce healthcare costs without compromising patient care: 1) reducing the need for care, 2) lowering excessive prices, and 3) shifting to lower-cost practices.
Healthier people require fewer medical resources, resulting in lower costs. Treating diseases that have progressed to severe stages is expensive. Emphasizing preventative medicine can lead to healthier individuals and prevent the progression of various diseases, saving money and fostering a healthier population. Advances in medicine have significantly reduced hospitalizations for cardiovascular diseases, contributing to decreased spending. Additionally, improvements in lung and colorectal cancer screenings have enabled earlier detection and intervention, reducing advanced cases and, consequently, acute care costs. Smoking rates have declined significantly and are at an all-time low since 1944. More individuals in 2024 recognize smoking as harmful than in 1944, demonstrating the success of shifting societal stigmas.
Obesity in the U.S. is a large issue, pun intended, as it is linked to various co-morbidities. Hypertension remains a problem in the country. However, hypertension, obesity, and hyperlipidemia can be treated with medications. High costs paradoxically lead to reduced medication adherence. Since many of these medications are expensive, this deters the patients needing them most from taking them correctly. Just as the Affordable Care Act made cancer screenings free, a similar approach could be applied to effective medicines for treating chronic diseases. Policies can be implemented to create healthier environments for patients by increasing taxes on high-calorie foods and beverages to promote healthy eating and addressing air pollution, which contributes to respiratory issues. Cutler suggests environmental changes at the community level to build a healthier environment and, consequently, reduce expenses population.
Brand-name medications with exclusive patents quickly come to mind when thinking about contributors to exorbitant healthcare spending. These brand-name medications far exceed the costs of discovery and production, including the expenses associated with failed research. In 2022, the Inflation Reduction Act enabled Medicare to negotiate prices for specific medications, ensuring affordable insulin and mandating rebates to the Medicare program when pharmaceutical companies increase their prices faster than inflation. This act has resulted in substantial savings for Medicare. Expanding the list of negotiated medications and including private payers would also lower costs. Similar practices should be implemented in the private sector to negotiate for reduced costs and prices.
Cutler further outlines three strategies to help minimize provider costs: leveraging technology, utilizing advanced practice providers, and effectively allocating medical resources. In line with the October SES journal article, artificial intelligence can reduce healthcare expenses, whether employed in the prior authorization process or enhancing workflow, such as improving a radiologist’s efficiency by allowing more imaging reviews. Additionally, having APPs operate at the top of their credentials could boost the efficiency of various clinics, enabling physicians to handle complex cases. Moreover, using outpatient surgery when appropriate instead of inpatient surgery can help alleviate hospital strain and lower healthcare costs. Finally, Cutler discusses less favorable methods for minimizing healthcare costs, such as Medicare continuing to cut physician reimbursements. However, this approach could widen the payment gap between private and Medicare patients and may lead to fewer providers willing to accept Medicare patients. Cutler provides practical solutions to help patients save money without sacrificing healthcare quality. Most would agree that technology is set to play a crucial role in healthcare, enhancing patient care while lowering costs. Pharmaceuticals, insurance companies, and providers need to collaborate to reduce healthcare expenses without sacrificing quality. Emphasizing preventative measures, enacting legislation to promote lifestyle changes, and improving access to medications can hopefully lead to healthier individuals while lowering healthcare costs.
Dr. Lopez provides a great overview of the journal club article. However, he cites some common myths about the American healthcare system regarding our outcomes. Contrary to popular belief, the U.S. healthcare system does not rank at the bottom in access or outcomes. The Commonwealth Fund study that reported such findings is severely flawed—though that is a conversation for another time. In reality, the U.S. has far better access to physician and hospital services than many peer countries, and our outcomes are superior when patients interact with the healthcare system. We consistently rank at or near the top in outcomes after trauma, cancer, heart attack, and stroke.
Turning to Cutler’s piece: I had the honor of testifying alongside the esteemed Dr. Cutler in the U.S. Senate. He is a brilliant economist and was kind and humble in our interaction. Nonetheless, his article overlooks several major drivers of high healthcare costs.
A principal issue is hospital consolidation (see this month’s graphic of the month). Multiple sources, including a recent KFF report, confirm that consolidation drives prices higher. Cutler does not address the specific federal policies that promote consolidation—namely, the 340B program, the lack of site-neutral payments, Certificate of Need laws, and the ban on physician-owned hospitals.
Additionally, a significant proportion of healthcare costs stem from administrative overhead tied to government regulations, Medicare billing requirements, compliance mandates, quality metrics, and other paperwork. Such administrative burdens stifle competition by making it more difficult for new entrants—like physician-owned practices or specialty clinics—to compete and reduce costs. Moreover, policies like the medical loss ratio (MLR) requirement in the Affordable Care Act can disincentivize insurers from competing on price; they may end up inflating overall spending to meet mandated ratios, ultimately driving costs up.
Cutler suggests further cuts to Medicare reimbursement. Yet when price controls—or partial controls, such as in Medicare—compress margins in one sector, hospitals recoup lost revenue from private payers, resulting in higher insurance premiums. As hospitals face artificially low reimbursement rates or mandated price ceilings, many respond by cutting corners, reducing services, or merging with competitors to achieve greater economies of scale—thus fueling further consolidation and diminished competition.
Dr. Cutler’s strategies for reducing the need for care, lowering excessive prices, and shifting to lower-cost practices align with those who think more government intervention can curb spending without creating shortages. Yet, a more comprehensive approach should include a critical examination of the market distortions that drive up healthcare costs. Policies that promote hospital consolidation, administrative complexity, and price controls can inadvertently inflate costs and reduce competition. Ensuring that payment structures, regulatory policies, and administrative demands are optimized for competition and innovation—not consolidation—will ultimately yield a more affordable, higher-quality healthcare system. Only by addressing these deeper, systemic issues can we both control costs and maintain the superior outcomes Americans experience once they enter the healthcare system.