A new study found that having been prescribed an antidepressant previously was associated with an increased risk of depressive relapse after full recovery. The risk was about three times higher than for those who had never taken an antidepressant.
The research was led by Jay Amsterdam and Thomas Kim at the University of Pennsylvania and published in the Journal of Clinical Psychopharmacology.
They write, “These findings support prior evidence of a negative influence of the number of prior antidepressant treatment trials on the likelihood of response and suggest that the number of prior antidepressant trials may also be associated with a greater odds of depressive relapse and a shorter time to relapse.”
According to Amsterdam and Kim, previous studies have found that a prior antidepressant trial results in up to a 50% loss of effectiveness for the next attempt. In the latest study, they wanted to see if previous prescriptions were associated with an increased risk of relapse after recovery.
Antidepressant use after recovery is sometimes recommended as it is thought to reduce the likelihood of relapse. However, research has been equivocal about whether long-term use prevents depressive episodes. Amsterdam and Jay’s study may provide some evidence that, rather than protecting against relapse, continued antidepressant use, and previous antidepressant use, are associated with an increased likelihood of relapse.
Their study included 148 people with the Bipolar II diagnosis and who had recovered from a major depressive episode. They were randomly assigned to groups: one group took fluoxetine (Prozac) after recovery, one group took lithium, and one group took a placebo (fake pill).
In the study, people taking fluoxetine were slightly less likely to relapse—about a third of those participants relapsed, compared to about half of those taking lithium or a placebo. However, the largest predictor of whether someone would relapse was whether they had taken antidepressants before being enrolled in the study. For each previous prescription of antidepressants, the risk of relapse went up about one and a half times. Those who had taken antidepressants were 2.93 times more likely to relapse than those who had not.
The researchers controlled for a variety of possible confounding variables, such as age, sex, race, number of previous episodes of depression and mania, age of onset, and baseline symptom severity. This means that they tested the theory that worse depression was associated with both increased antidepressant use and increased risk of relapse. After controlling for this possibility, their findings remained: there was still a significant, large effect of previous antidepressant use on the increased risk of relapse.
According to Jay and Amsterdam, the evidence is “particularly disturbing” as it supports the idea of iatrogenic harm: the long-term neurobiological effects of antidepressants damage the monoaminergic neurotransmitter system, resulting in loss of effectiveness and risk of relapse.
The authors write that “some cases of resistant depression may be iatrogenic in nature and result from repeated or long-term antidepressant use.”
The risks and benefits of long-term and repeated antidepressant use have rarely been studied, but previous research has found that long-term use is associated with diminishing effects on depressive symptoms and increasing adverse health outcomes. According to the authors, more than 25% of people taking antidepressants have been using them for more than 10 years. Only 5.8% take antidepressants for less than 2 months.
The data for this study came from a study of fluoxetine’s effectiveness in which less than halfof the participants were considered to recover from depression after taking the drug. In addition, that study was open-label, which tends to inflate the potential benefits of the drug due to the placebo effect.
****
Amsterdam, J. D., & Kim, T. T. (2019). Prior antidepressant treatment trials may predict a greater risk of depressive relapse during antidepressant maintenance therapy. Journal of Clinical Psychopharmacology, 39(4), 344-350. doi: 10.1097/JCP.0000000000001049 (Link)
Researchers have long known that people who are more extraverted tend to be happier, leading some to suggest that encouraging extraverted behaviour could improve wellbeing. Last year we reported on the first trial of such an intervention, which found that acting like an extravert for a week led to an increase in positive emotions in certain people. Now a second study appears to have replicated that result — and shown that behaving like an introvert may also reduce wellbeing.
In the new study, published in the Journal of Experimental Psychology: General, Seth Margolis and Sonja Lyubomirsky at the University of California, Riverside, asked 131 participants to alter their behaviour over a two week period to be more extraverted or introverted. For one week, participants were encouraged to act as “talkative”, “assertive” and “spontaneous” as possible; for the other, they were told to act “deliberate”, “quiet” and “reserved” (all participants completed both weeks, but half began with the extraverted week while the others began with with the introverted week).
To encourage the participants to actually alter their behaviour, the researchers asked them to list five specific changes they planned on making, and then sent them periodic reminders of their task throughout the study. At various points across the two weeks, the participants completed scales measuring their experience of positive and negative emotions and others aspects of wellbeing, as well as their personality traits.
Compared to baseline levels at the start of the study, participants experienced more positive emotions during the extraverted week — and also showed reduced positive emotions during the introverted week. Some other measures of wellbeing, such as feelings of connectedness and flow (the experience of being immersed in — and enjoying — an activity) were also boosted by acting extraverted and reduced by acting introverted.
However, these results didn’t hold for all measures of wellbeing. For instance, participants seemed to have reduced negative emotions compared to baseline during both interventions (although the exact pattern of results differed depending on whether participants began with the extraverted or introverted week).
The results add to the small, albeit growing, body of evidence that acting like an extravert can improve certain aspects of wellbeing — particularly measures of positive emotion. But the authors suggest that their biggest contribution is to show that acting like an introvert can also have an effect. “Given that introversion is generally not regarded as desirable or advantageous in U.S. culture … we believe our most compelling results are those showing that well-being decreases can be substantial when people act more introverted than usual,” they write.
Still, it seems too soon to suggest that we should we all begin behaving like extraverts. The study the Digest reported on last year found that people who had high trait levels of introversion didn’t report the same benefits of acting like an extravert as the rest of the participants, and actually became more fatigued and experienced more negative emotions. On the other hand, the new paper found that baseline levels of extraversion and introversion didn’t affect the results – but it’s still clear that researchers need a better understanding of how individual differences could influence the effectiveness of the intervention.
And it will also be important to figure out which behaviours are actually causing the increases or decreases in wellbeing reported in these studies. It’s not yet clear whether it was being more “talkative”, “assertive”, or “spontaneous” that resulted in an increase in wellbeing in the extraverted week, for instance, and the researchers suggest examining changes in a more specific sub-set of extraverted behaviours in the future. “We hope that research from our and others’ laboratories encourages future investigators to test the potential of behavioral interventions to spur both personality change and well-being gains,” they conclude.
Companies are increasingly using algorithms to manage their remote workforces. Called “algorithmic management,” this approach has been most widely adopted in gig economy companies. For example, ride-hailing company Uber substantially increases its efficiency by managing some three million workers with an app that instructs drivers which passengers to pick up and which route to take.
Being managed in this way offers some benefit to self-employed workers as well: for example, Uber drivers are free to decide when and for how long they would like to work and which area they would like to serve. However, our research reveals that algorithmic management is also frustrating to workers, and their resentment can lead them to behave subversively with the potential to cause real harm to their companies. Our research also suggests some ways that companies can mitigate these concerns while still taking advantage of the benefits of management by algorithm.
Together with Lior Zalmanson (Tel Aviv University) and Robert W. Gregory (University of Virginia), we conducted a multi-method study of Uber drivers in New York and London. We collected data by informally and formally interviewing 34 drivers, observing drivers in action, analyzing more than 1,000 online forum posts, and reviewing media coverage of Uber in several waves between December 2015 and September 2018.
We found that Uber drivers have three areas of consistent complaints about working “for” algorithms, concerns that we’ve also seen in other companies using algorithmic management:
Constant surveillance. As soon as they log onto the Uber app, drivers are watched and scrutinized by the platform’s algorithms; the app tracks their GPS location, speed, and acceptance rate of customer requests. It instructs them which riders to pick up where, and how to get to the riders’ destinations. If the drivers diverge from the app’s instructions they can be penalized or even banned from the platform. Regardless of whether the attention comes through an app or in person, we know that scrutiny of work can reduce productivity.
From our study we found that drivers found performance evaluations in the form of customer ratings particularly frustrating. We believe this may be because they amplify Uber drivers’ negative feelings about constant surveillance with an additional layer of technology-mediated attention.
Little transparency. While the app is learning a lot about them, Uber drivers find it frustrating how little they know about the app. They find the lack of transparency of the underlying logic of the complex algorithms frustrating, believing it to be an unfair system which manipulates them subtly without their knowledge or consent. (Indeed, Uber has previously admitted to drawing on insights from behavioral science to nudgedrivers to work longer hours).
Uber drivers, as well as other gig economy workers such as courier and delivery workers at Postmates and Deliveroo, are demanding more transparency about the allocation of jobs, the compilation of their ratings, and their payment structure. However, companies such as Uber argue they can’t reveal the secret recipe of their algorithms to competitors. Furthermore, recent advances in AI and machine learning mean that algorithms can now learn and dynamically adjust to any given environment, allowing for the automation of more sophisticated tasks (such as managing the workforce). But the more sophisticated these algorithms get, the more opaque they are, even to their creators.
Dehumanization. Drivers at Uber report feeling equally lonely, isolated, and dehumanized. They don’t have colleagues to socialize with or a team or community to be part of. They lack the opportunity to build a personal relationship with a supervisor. Those on crowd-work platforms like Amazon Mechanical Turk have raised similar complaints as they conduct “micro-tasks” such as classifying content or participating in surveys.
Drivers have responded to their various frustrations with these algorithms by identifying clever ways to work around them. For instance, one driver in the Uberpeople.net forum wrote: “Play the system, don’t let it play you. We all know that these companies like to offer better incentives to drivers that miss some time. So, drive Uber for one week, Juno next, Lyft third and etc. I switch between Uber/Juno weekly.”
They are also angry enough — and feel disempowered enough — that they are finding creative ways to make their displeasure known; for instance, drivers are gaming the system by artificially causing surge pricing. They are also getting political; especially in the gig economy, drivers of ride-hailing services and couriers seek to compensate for the social isolation they experience in their every-day routine by actively engaging in online communities, but companies themselves aren’t involved in those platforms. Instead, more-adversarial union-type organizations have sprung up as drivers or couriers look to support each other, such as Seattle-based workers’ rights organization Working Washington, which drew together couriers delivering for Postmates, DoorDash, and other on-demand services.
In order to address these challenges and mitigate their risks to the business — and, not least, to implement ethical practices — we suggest that companies who manage all or part of their workforce through algorithms:
Share information. In theory, algorithmic management can increase transparency, since even learning algorithms that are used to manage workers reflect a set of rules and procedures that comply with the strategic goals of upper management. It may not be possible to share the algorithm itself with workers, but company leadership can and should share with them the data and goals that informed it.
Invite feedback. To counterbalance the unidirectional commands that the algorithm hands down to drivers, companies should find ways to democratically include them in decision-making, for example by involving them into committees or councils that discuss and negotiate work related internal regulations. Getting workers actively involved in discussions about the design of algorithm-driven systems would do much to build more engaged and supportive workforces.
Build in human contact. People need people. Organizations should develop formal, supportive communities where workers feel like members and can make social connections. Adding a human element to the way people are managed will help workers feel less like they are being treated as machines. For instance, some of the drivers in our study spoke fondly of New York ride-hailing firm Juno (acquired by Gett in 2017), which, early in its existence, employed an extensive human customer support system that eagerly helped drivers with questions or problems.
Build trust. Implementing benefits that improve worker’s welfare, such as providing financial support in case of illness, or better sick pay or maternity leave, may be a first step to humanizing the company and mitigating the anger of employees who are managed by faceless algorithms.
Regulators across the globe are already seeking to implement regulations around some of these recommendations in order to benefit an algorithmically managed workforce. For instance, in 2017, it was ruled that Uber will need to pay UK-based drivers a minimum wage, and provide sick and holiday pay. Given the rapid pace of technological progress, and the tempting economic benefits for companies, we believe that algorithmic management will become more common in the coming years. As more companies manage their labor force in this way — and as they incur the anger of the workforce that makes their core offerings possible — it becomes that much more incumbent upon them to take some of these steps on their own.
The combination of two osteoporosis drugs — the potent antiresorptive drug denosumab (Prolia, Amgen) and a high dose of the bone-growth stimulating teriparatide (Forteo, Lilly) — substantially improves bone mineral density (BMD) at levels exceeding those seen with any other treatment, offering potentially effective treatment for those with osteoporosis at high risk of fragility fractures, say the authors of a new study.
“The combination of denosumab and high-dose teriparatide results in large increases in areal BMD and volumetric BMD of the hip and spine resulting in increases in estimated bone strength, which has not been achieved with any previously evaluated monotherapy or combination therapy approaches,” they stress in their article, published online August 22 in the Lancet Diabetes & Endocrinology.
“Considering that skeletal integrity cannot be fully restored in most patients with established osteoporosis at present, this 40-µg regimen [of teriparatide] is likely to provide benefits for women at the highest risk of fragility fracture,” write Joy N. Tsai, MD, Endocrine Unit, Massachusetts General Hospital, Boston, and colleagues, detailing results of the DATA-HD trial.
According to an accompanying editorial, the new study supports recent Endocrine Society guidelines that advise grading people according to their risk of fracture to determine the most appropriate therapy.
“[These results] indicate the possibility of refining treatment for patients with osteoporosis at high risk of fracture and personalizing treatment for these patients beyond the one-size-fits-all approach currently used (ie, predominantly prescribing bisphosphonates),” writes Sundeep Khosla, MD, Mayo Clinic College of Medicine, in Rochester, Minnesota.
Cost Currently Prohibitive but Generic Teriparatide on Horizon
A key caveat for the combination therapy, however, is cost.
Based on current pricing estimates, a 15-month regimen with the higher dose of teriparatide could run to approximately $76,000, and, according to Khosla, “the experience of most clinicians in the United States is that gaining insurance company approval for combination therapy for osteoporosis is virtually impossible.”
However, the US patent for teriparatide expires in August 2019, opening the door for potential generic preparations that could make the combination regimen more affordable for patients.
Tsai told Medscape Medical News: “We agree that insurance issues may limit the use of this regimen and are hopeful that an affordable generic teriparatide formulation will be available.”
DATA-HD Examines Higher Dose of Teriparatide
Tsai and colleagues explain by way of background that, in contrast with many other chronic, age-related diseases, osteoporosis remains a disease primarily treated with monotherapy.
And although the number of osteoporosis therapies has expanded substantially over the past two decades, currently available antiresorptive and anabolic medications typically achieve only modest increases in BMD or reductions in nonvertebral fracture rates.
In a previous trial published in 2013, the Denosumab and Teriparatide Administration (DATA) study, the same authors looked at the same combination and found denosumab was able to fully inhibit the effects of bone resorption induced by teriparatide while allowing for bone formation by teriparatide, boosting the effects on hip and spine BMD compared with either drug alone.
For the DATA-HD trial, they sought to determine the effects of a higher dose of teriparatide (40 µg versus 20 µg, the standard FDA-approved dose used in DATA).
The new study included 76 postmenopausal women with osteoporosis randomized between October 2014 and June 2016 to the 20-µg (n = 39) or 40-µg (n = 37) teriparatide injection dose daily for 9 months.
And at 3 months, both groups started denosumab 60 mg by subcutaneous injection every 6 months for 12 months.
At 15 months, among 69 participants who completed at least one post-baseline visit, those in the 40-µg teriparatide group showed significantly greater increases in mean areal BMD compared with the 20-µg group (17.5% vs 9.5%; P < .0001).
Greater increases were also observed in the 40-µg group in mean femoral neck areal BMD (6.8% vs 4.3%; P = .04) and total hip areal BMD (6.1% vs 3.9%, respectively; P < .0001).
Benefits Outweigh Risks in Those at Very High Risk of Fracture
The most common adverse events were joint pain, occurring in 38% of patients in the 20-µg teriparatide group and 46% in the 40-µg group, and fatigue, reported in 31% and 38%, respectively.
Nausea was reported in 43% of patients in the 40-µg group versus 21% in the 20-µg group. No deaths were reported.
“Reassuringly, the most common symptoms seen in our trial are similar to the ones seen in a larger phase 3 trial (assessing 20- and 40-µg doses of teriparatide),” first author Tsai told Medscape Medical News.
And any concerns about the potential side effects of higher doses do appear to be outweighed by the benefits to those with a high fracture risk, Khosla told Medscape Medical News.
“Although common, the nausea and joint pain [with the high-dose teriparatide combination] tend to be mild and physicians generally have the patient take the injections at night so they do not interfere with normal activities.”
“So yes, for the patient at very high risk of fracture, the benefits likely do outweigh the risks,” Khosla noted.
He added that another critical issue to consider with the high-dose combination therapy is the need to treat patients with sustained anti-resorptive therapy following combination treatment to prevent the loss of BMD increases that were gained.
“Those data are pending, but denosumab is such a potent inhibitor of bone resorption that, biologically, the expectation is that it would prevent bone loss upon completion of combination treatment,” he said.
The study was supported by the Dart Family Foundation, National Institutes of Health, and National Institute of Arthritis and Musculoskeletal and Skin Diseases. Tsai and Khosla have reported no relevant financial relationships. Disclosures for the other authors are listed in the article.
Lancet Diabetes Endocrinol. Published online August 22, 2019. Abstract, Editorial
It’s back-to-school time. Helping kids with attention-deficit/hyperactivity disorder (ADHD) start the year right and do well both at home and at school usually requires the combined efforts of school professionals and primary care providers. We asked Thomas Power, PhD, ABPP, a psychologist and director of the Center for Management of ADHD at the Children’s Hospital of Philadelphiato share with us his tips for school interventions for children with ADHD.[1]
The foundation of an effective approach to school intervention is fostering a strong teacher-student relationship, which will help students to be more engaged in school and learning, relate more effectively with their peers, and regulate their behavior more effectively.
There are a few strategies that teachers can use to improve their relationships with students. They can spend some classroom time each week trying to get to know the student as a person—not just as a learner in their classroom—and they can affirm the child frequently for independent, responsible, and respectful behavior. In addition, teachers can make an effort to get to know the parents and establish a strong partnership with them.
The ABC Approach
I encourage teachers to use an ABC approach to behavior change in the classroom: Antecedents, Behaviors, Consequences.
Identify the antecedents. It is important to focus first on the antecedents. Teachers need to set the child up for success in the classroom. This can be done by seating the child near the teacher, which may better enable the child to pay attention. If the teacher is trying to get the child to listen better to instructions, the teacher could approach the student, establish eye contact, give the direction in a concise and clear way, and check for understanding.
Select the behaviors to address. Next, the teacher needs to select target behaviors. The teacher should try to target only two or three behaviors. Define the behaviors in a way that is specific, and indicate what the student should do more often. In the beginning, try to select behaviors that are not too difficult so as to get off to a good start.
Remember the consequences. Finally, establish consequences. It is important for teachers to administer very frequent positive reinforcement by targeted behaviors, such as praising the child for responsible and respectful behaviors.
Verbal correction is useful as a consequence, but it is important for teachers to provide at least four times more positive reinforcement than verbal correction. Students with ADHD often are not as responsive to the typical kinds of positive reinforcement that are administered to other learners. It is usually important for teachers to increase the strength of reinforcement by using token reinforcements systems, whereby tokens can be exchanged for privileges.
A particularly useful approach to behavior change that can be used by the teacher is a daily report card. This involves collaboration between the teacher and the parents to identify two or three target behaviors for change. Teachers are asked to evaluate the student, usually one or more times during the course of the day, using a rating scale that might vary from 1 to 4, with 1 referring to “work harder” and 4 referring to “tremendous job.”
For example, the teacher could evaluate the student on a daily report card with two or three target behaviors, complete the checklist at the end of each class period, and at the end of the day, the student would take that report card home. The student and the parent would tally up the number of points earned that day, which would be compared with an established goal. Parents should establish a goal that will ensure at least an 80% success rate. If the child reaches the goal, the child can earn a privilege or a token.
For Older Kids: Organization Skills Training
For older children and adolescents with ADHD who are highly disorganized, the ADHD program at CHOP recommends organization skills training, which teaches students to keep track of homework assignments, organize materials, manage time during homework, and plan for tests and long-term assignments. Students receive repeated practice during and between sessions, and they receive performance feedback about how they are doing in those areas.
Organization skills training can be provided by school professionals, such as a guidance counselor or a special education teacher, who have been trained to use the intervention. These are relatively brief interventions. Typically, the intervention includes about 15 sessions at approximately 30 minutes per session.
It is often said that defense wins games, but offense wins elections.
Donald Trump stayed on offense in 2016 and willed himself to an improbable White House win. But the limits of his offensive skills and connection to working-class America were exposed during the 2018 elections, when congressional Republicans failed to muster anything close to Trump’s tireless campaigning and massive rallies. Instead, they left the party playing defense on the winning issue of the election: health care.
For Republicans to win up and down the ticket in 2020, the White House and congressional GOP must fix this failure. They must be on offense to win the battle of health care ideas.
Right now, the Grand Old Party is driving its latest health care train toward a ledge, rushing to release a plan early this fall, crafted by conservative academics and establishment policy wonks far removed from the 63 million everyday Americans who put Trump in office. It’s not too late to tap the brakes and reset the compass.
My reporting suggests there is a better approach — one for, by and of the people.
First, Republicans must cogently educate the public on how ObamaCare fundamentally altered private health care for the worse — creating mega-medicine giants who have hijacked the patient-doctor relationship, put profit over personalized care and set the stage for the one-size-fits-all prescription of single-payer universal health care.
The stories of patients deprived of quality treatment and doctors thwarted from providing good care must be told. Tales of care-rationing in neighboring Canada won’t suffice. American patients and doctors must tell their personal stories.
Once they’ve made a compelling case against the current and future perils of socialized Big Medicine, Trump and congressional Republicans must forge a populist free-market plan to counter the left’s simplistic “Medicare for All” mantra.
The plan needs 10 or fewer propositions — much like former House Speaker Newt Gingrich’s “Contract with America” that sealed the 1994 election. Choice, affordability, protecting pre-existing conditions and restoring the doctor-patient relationship eroded by ObamaCare must be pillars.
In the end, Americans need health insurance options that preserve their access to favorite caregivers without breaking their budget.
To craft such a plan, Republicans don’t need the ivory-tower ideas of conservative think tanks and congressional and agency policy wonks. Time and again, those have failed to provide a plausible free-market health plan, ever since conservatives used the “Harry and Louise ads” to kill Hillary Clinton’s deeply flawed care plan of 1994.
Instead, Republicans need to do what Trump did in 2016 when he crafted his winning “America First” platform: listen to real people, patients and doctors, and measure their needs, wants and challenges. It’s something the GOP traditionally has done poorly.
Americans don’t want a vague GOP concept with pithy promises. They want a private-plan alternative with options that can be personalized: Each voter should be able to plug in the family’s needs to an online calculator and quickly identify a free-market plan that meets their needs and budget.
With a successful prosecution of the flawed ObamaCare and single-payer approaches and a compelling private alternative, Republicans finally need a marketing slogan as effective and memorable as “Make America Great Again.” With a common battle cry, they also need consistent messaging on what’s right with their plan and wrong with that of the left.
Polling data and my interviews about health care with voters around the country demonstrate that a majority of Americans know the broad pillars of the plan they want: my health, my doctor, my wallet, my choice.
Republicans have a distinct advantage over the Medicare for all plan put forth by Sen. Bernie Sanders (I-Vt.) or former vice president Joe Biden’s one-step-away-from-single-payer approach. Most voters implicitly understand the lesson of the mouse trap — that free cheese smells and tastes good until the trap snaps down. In other words, free isn’t really free. Socialized Big Medicine comes with a heavy cost.
President Trump, House Minority Leader Kevin McCarthy (R-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.) have an opportunity to create the first market-driven choice health insurance plan in decades. They need to stop the plan that conservative wonks intend to rush out in September and build an initiative with data on voter needs and wants, tangible health plans and Madison Avenue-quality messaging.
The good news is that a group of doctors, patients and small business owners, including the Job Creators Network (which led the successful 2017 drive for tax cuts), has been meeting a few miles from the White House in a row house near Pennsylvania Avenue to build a “three-legged stool” solution. They are crafting their plan in the disruptively innovative way that Apple built the iPhone franchise or Chrysler the minivan craze: with market research, straightforward products and seamless messaging.
They have put into the field a market survey of patients and doctors to measure what they fear in the current system and the choices they’d like to have in the private market. The group has assembled data on how ObamaCare has made a few health care companies richer and more powerful while shrinking the choices, quality and personalization of health care delivery.
They can document, under ObamaCare, how 53 percent of American doctors no longer own their practices, having been forced into insurer-hospital collectives. They have documented how large numbers of ObamaCare recipients who don’t get subsidies have dropped from the program. They have developed an analysis of how Big Medicine has led to unnecessary tests to generate profits, and led to the rationing of personalized care. And they are chronicling the extinction of the independent family doctor across American communities.
This group will release health care plans and easy-to-use calculators to show how the choices of those who were surveyed can be fashioned into affordable, personalized health insurance. And they have assembled an army of doctors, patients and small business owners tens of thousands strong that is ready to take the case to the grassroots.
President Trump and his GOP congressional allies should embrace this private initiative. It has the data to show the perils of socialized Big Medicine, and it has the potential sales points of a new era of personalized health plans on the free market.
Your health, your doctor, your wallet, your choice. Who could argue with that?
“The insurance companies last year alone sucked $23 billion in profits out of the health care system.”[1] — Elizabeth Warren
“[P]rivate insurance companies in this country spend between 12 and 18 percent on administration costs.... We can save approximately $500 billion a year just in administration costs.”[2] — Bernie Sanders
“It is inhumane to make people go through a system where they cannot literally receive the benefit of what medical science can offer because some insurance company has decided it doesn’t meet their bottom line in terms of their profit motivation.”[3] — Kamala Harris
Reality
Health insurance is expensive because spending on hospital and physician services is high. Insurers are unpopular because they bear the main responsibility for controlling this spending—but their doing so saves consumers money and focuses resources toward better care. A comparison of plan options under Medicare can quantify the value added by private insurance management. Private plans reduce costs by about 10%, allowing them to provide over $1,000 in extra health-care coverage to each Medicare enrollee every year.
Key Findings
1. Health insurance accounts for only a small fraction of American health-care costs.
Americans spent $3.3 trillion on health care in 2017, of which 34% was on hospitals, 28% on physician services, 13% on nursing care, and 11% on prescription drugs.[4]
Expenses incurred by private insurers together account for 7% of U.S. health-care spending—the largest element of which are taxes.[5]
2. Money that insurance companies spend on administration reduces the overall cost of the health-care system.
Public management costs more because there is no profit motive to shed unnecessary hospital and physician costs and many political motives to maintain them.
Insurers spend billions administering provider networks, claim reviews, and cost-sharing because these greatly reduce the cost of purchasing medical services.
3. In the Medicare system, private plans give enrollees better-quality medical care at 10% less cost.[6]
Private Medicare Advantage (MA) plans save money by steering patients to more cost-effective care. Individuals enrolling in private plans enjoyed reduced medical costs and lower mortality than those with equivalent medical risks enrolled in publicly administered coverage.[7]
Efficiencies generated by private plans help fund extra benefits, such as prescription drug coverage, lower out-of-pocket costs, and dental care—worth an average of $1,284 per Medicare beneficiary per year.[8]
On the Record
“Eliminating the overhead costs incurred by private insurers would not reduce the cost of health care; it would cause wasteful spending to soar.”— Chris Pope, Senior Fellow
Health Insurance Costs Are Not Why American Health Care Is Expensive
As with most other types of goods and services, Americans spend more on health care than any other nation in the world. In 2017, Americans “consumed” $3.3 trillion in medical care—accounting for 17% of GDP, or about $10,200 per capita. Of this amount, 53% resulted from government spending, 36% from privately financed insurance, and 11% from individuals paying out-of-pocket.,[9]
Health-care costs are overwhelmingly costs associated with medical facilities and staff. In 2017, 34% of U.S. health-care spending was on hospitals, 28% on physician services, 13% on nursing care, and 11% on prescription drugs.[10] The cost of each element, of course, appears in private health-insurance premiums.
Health-insurer profits in 2018 were 3.3% of revenues—the same as the industry’s average profit margin during 1990–2008.[11] This is fairly low, relative to the 8.9% average across industries.[12] Health-insurance premiums are regulated by states, and in 38 states the largest insurer on the individual market was a nonprofit organization.[13]
In 2017, private health insurers incurred $230 billion in administrative costs, including taxes and profits—7% of U.S. health-care spending.[14] The largest element of these administrative costs were taxes imposed by state and federal governments—accounting for 4.7% of premiums and 30% of all administrative costs.[15]
Other administrative costs can be divided into two categories: fixed costs associated with enrollment; and variable costs associated with claims. In neither case is there a free lunch to be gained from public administration.
The various up-front costs (processing of applications, marketing plans to new enrollees, underwriting, and meeting regulatory capital reserve requirements) can be significant when individuals switch plans, but they are negligible for the large-employer group plans in which most privately insured Americans are enrolled.[16] The costs of persuading individuals to voluntarily enroll in private insurance plans compare favorably with the cost of raising revenue for mandatory public insurance through taxes, which can be expected to reduce overall economic output—the loss of which may be about $2 for every $1 in revenue raised.[17]
Many of the arrangements associated with processing reimbursement claims are the same under private insurance and publicly managed plans. The diagnostic and procedure codes used to document the provision of medical services are the same in both instances, and Medicare employs private insurers as contractors to process bills.[18] However, Medicare has traditionally paid for whatever claims are submitted, with little oversight; private insurers, by contrast, engage in far more active management of payments to ensure that the care purchased offers the best value for the money.
Private Insurers Spend Money on Administration Precisely Because It Controls and Reduces Medical Costs
The value of claims reviews is clear if one examines traditional Medicare’s publicly managed option, which verifies the legitimacy of only 0.3% of the 1.5 billion payments that it makes every year.[19] In April 2019, 24 people were charged with a $1.2 billion scam to claim reimbursement from Medicare for medical equipment.[20] The Medicare program is notoriously vulnerable to such fraudulent claims; in 2018, 8% of the program’s payments were estimated to have been improperly made.[21]
The elements of Medicare for which patients bear no out-of-pocket costs are particularly susceptible to fraud, as beneficiaries can be induced to sign for services that they never received. For instance, CMS estimated that Medicare had an improper payment rate of 59% for home health services in 2015.[22] The claim that by eliminating cost-sharing, reductions in administrative costs will save money overall, therefore does not stand up to scrutiny. A MedPAC study of the impact of Medigap’s supplemental insurance Plan F, which eliminates Medicare out-of-pocket costs for all services, found that it increases the program’s medical costs by 27%.[23]
Private insurers also attempt to minimize their susceptibility to fraud, low quality, and inflated costs by developing networks of preferred providers whose integrity they trust and whom they are able to reward for delivering care in a cost-effective way. This also gives insurers the ability to negotiate discounts with providers, to cut out unnecessarily costly facilities, and to steer patients toward better-quality sources of care. Private insurers are free to experiment with new benefit designs and have an incentive to provide additional preventive-care services to enrollees if these can help avoid costly hospitalizations.[24] Despite frequently voiced frustrations, 85% of Americans with private insurance rate the quality of their health care “excellent” or “good,” compared with 79% in Medicare or Medicaid.[25]
A publicly managed health-care program is inevitably a highly politicized one, as politicians afraid of shortfalls in access to care are easily manipulated by provider interest groups, and every attempt to shed costs turns into a political battle.[26] That has repeatedly made it difficult for Medicare to rein in and reform flawed payment arrangements that are universally acknowledged to be dysfunctional, and it is why Medicare has an outdated benefit structure with separate deductibles for hospital and physician services but no cap on out-of-pocket costs.[27]
Case Study: Medicare Shows Benefits of Private Insurance Management
Advocates of single-payer health-care reform habitually make their case by comparing the U.S. health-care system with that of other nations. But countries differ from the U.S. in so many ways (such as wage rates, medical needs, political systems, income levels, access to medical technology, and other government policies) that this does little to identify the specific impact of public management. For example, the fact that the U.S. has a higher rate of death from heart disease than Japan says more about the relative obesity rates in each country than it does about the relative merits of their health-care systems.[28]
Medicare beneficiaries have the choice of receiving their benefits directly from the federal government or through competing private insurers under Medicare Advantage. This choice offers the best apples-to-apples comparison of the relative merits of public and private administration. It allows us to compare the quality and cost of health care received by the same segment of the population, in the same country, entitled to the same benefits, through the same delivery system, with a very similar level of public subsidy.[29]
Even after including administrative expenses (12.5%) and profits (2.3%), the cost at which Medicare Advantage plans “bid” to deliver the standard Medicare benefit to enrollees with equivalent medical needs averages about 10% less than publicly managed coverage.[30] MA plans use efficiency gains to attract enrollees by offering extra benefits (such as prescription drug coverage without the traditional Medicare Part D premium, lower deductibles, and dental benefits), worth an average of $1,284 per person per year.[31] Oversight by insurers is never fun, but few people want to pay so much extra just to avoid the nuisance.
Health-care costs are 10%–25% lower for patients with equivalent medical needs in privately managed Medicare plans. Those in private plans are consistently more likely to use cost-effective forms of medical care: consulting primary-care physicians more, relative to specialists; receiving 25% more outpatient surgery but 7% less inpatient surgery; and being more likely to recover from procedures at home than in post-acute-care hospitals.[32] And seniors who must participate in traditional Medicare when MA plans leave their local market experienced a more than 50% increase in hospitalization costs but no improvement in care quality.[33]
The share of Medicare beneficiaries enrolled in private Medicare plans increased from 22% in 2008 to 31% in 2016.[34] Strikingly, geographic areas with increased enrollment in private Medicare plans have seen health-care costs decline even for those not enrolled, as medical providers reduced their employment of inpatient procedures, diagnostic tests, and post-acute care.[35]
Private insurers are the main driver of cost-effectiveness in American health care. If they were eliminated, the ability for medical providers to bill for services of marginal value would be almost entirely unchecked.
NAIC, “U.S. Health Insurance Industry: 2018 Annual Results”; MedPAC, “The Medicare Advantage Program,” p. 14, suggests 9%–11%, depending on the extent of unmeasured coding intensity differential. The savings may be greater, given the disincentive that MA’s rebate structure provides to bidding low. See Pope, “Enhancing Medicare Advantage.”
