Physicians For a National Health Care Plan
By Kev Coleman
HealthPocket, February 26, 2015
When HealthPocket first investigated Medicaid acceptance in 2013, it found that only 43% of the healthcare providers examined were formally listed as accepting Medicaid. Since the original 2013 study, Medicaid enrollment has continued to rise as the Affordable Care Act has led many states to increase the income eligibility range for the program. Medicaid, along with the Child Health Insurance Program (CHIP), currently covers approximately 1-in-5 people in the United States. This year, the temporary increase in Medicaid payments to primary care physicians discontinues with only 15 states indicating that they intend to maintain the payment increase (fully or partially). The reduction in Medicaid reimbursement to primary care physicians has brought with it a concern that Medicaid acceptance, already low among healthcare providers, will drop further.
HealthPocket found that in 2015 only 34% of the healthcare providers examined were listed as accepting Medicaid insurance. This represents a 21% decrease from the listings of Medicaid acceptance found in the 2013 data for the same categories of healthcare providers.
Since both the 2013 analysis and 2015 analysis relied upon the same government data source and provider record parameters, the marked decline in Medicaid acceptance is significant. In particular, the data calls into question whether the temporary increase in Medicaid payments to primary care physicians effected any lasting improvements to Medicaid acceptance.
Why Do Some Healthcare Providers Avoid Medicaid?
A common explanation given for Medicaid lower acceptance is the program’s reimbursement rate to healthcare providers. Medicaid typically pays 61% of what Medicare pays for the same outpatient physician services. To make matters worse, the Medicare payment benchmark is already lower than payments for the same services from private insurers. It is estimated that Medicare typically pays 80% of what commercial health insurers pay. Consequently, in comparison to commercial health insurance from private insurance companies, Medicaid payments represent a reduction on a reduction.
One of state governments’ responses to the problem is the use of managed care organizations to serve some portion of a state’s Medicaid population. However, as a 2014 Health & Human Services study noted, state standards regarding the ratio of primary care physicians to Medicaid managed care enrollees can vary widely (1-to-100 to 1-to-2,500) as do their methods for determining compliance with these standards. Consequently, Medicaid enrollees can face the prospect of long distances and/or long waits to access care under the program.
From the Conclusion
HealthPocket’s comparison of Medicaid acceptance listings from 2013 to 2015 illuminates an alarming trend for those dependent on Medicaid for their healthcare: a reduction in Medicaid acceptance occurring during a period of Medicaid enrollee expansion. How federal and state governments will reverse this trend remains to be seen. The temporary increase in Medicaid payments to primary care physicians from 2013 to 2014 does not appear to have produced a lasting increase in Medicaid acceptance and the expiration of this increase may contribute to further healthcare provider attrition from the Medicaid program.
By Richard Gottfried, Chair, Committee on Health, New York State Assembly, and sponsor of A05062 (S03525), “The New York Health Act”
If the Medicaid recipient’s doctor were paid the same as my doctor, this wouldn’t be a problem. And if we were all in the same health plan, the wealthy and well-connected would see to it that their doctors were paid fairly, and the rest of us (and our doctors) would share the benefit. If we’re all in the same boat, we’ll all do better.
by John Geyman, M.D.
Author of How Obamacare is Unsustainable.
Now that Obamacare (the Affordable Care Act or ACA) is just turning five years since its enactment in 2010, it is time to assess its progress and shortfalls. This is the first of three posts that will deal with its experience toward its major goals—expanding access to care, cutting costs and making care more affordable, and improving the quality of care. A fourth post will follow that deals with the takeaway lessons from this five-year experience.
The initial goal of the ACA was to extend health insurance to 32 million more people by 2019, about one-half of that number through expansion of Medicaid. Online insurance exchanges were to be set up by states or the federal government to allow people to comparison shop for new coverage. Most uninsured with incomes above 138 percent of federal poverty level (FPL) would be required to purchase insurance or face penalties. In order to help them to afford new coverage, those with incomes between 138 and 400 percent of the FPL ($32,913 to $95,400 for a family of four) would receive federal subsidies. New requirements were to be established for insurers, including prohibiting them from denying coverage based on pre-existing conditions, requiring them to cover 10 categories of defined benefits, requiring them to cover at least 60 percent of health care costs (actuarial value of the bronze plan, leaving patients responsible for the remaining 40 percent of costs), requiring insurers to accept every individual and employer that applies for coverage, and others.
Now, five years after the ACA’s enactment, these are some of its major accomplishments so far:
- Federal health insurance exchanges have been set up in 37 states through the HealthCare.gov. marketplace, together with state exchanges in the other states.
- After the first enrollment period ended in February 2014, there were 9.5 million fewer uninsured, with the uninsured rate among adults dropping from 20 percent to 15 percent; the uninsured rate for people in poverty fell from 28 percent to 17 percent in states that expanded Medicaid, but from only 38 percent to 36 percent in non-expanding states. (1)
- In the second open enrollment period ending in February 2015, about 11 million people signed up, three-fourths in federal exchanges and the others through state-run exchanges; this number, however, includes many who were automatically re-enrolled from the first year and will likely drop a bit in coming months for failure to pay premiums, as occurred after the end of the first enrollment period.(2)
- About 85 percent of the newly insured are expected to be eligible for subsidies, unless the U.S. Supreme Court rules them out, in which case it is expected that as many as 8 million will drop coverage in a chain reaction that would send premiums soaring. (3)
Although these sign-ups reflect significant progress, the ACA will fall far short of its goals, as shown by these examples:
- At best, there will still be at least 30 million uninsured in 2019, plus unknown millions more, especially those in the young adult 18-34 age range who find the costs of insurance too high.
- As a result of 22 states choosing not to expand Medicaid, almost 5 million people fall into the “Medicaid coverage gap,” earning too much to be covered by existing Medicaid and too little to be eligible for subsidies (4); most non-expanding states require parents to earn less than 50 percent of the FPL ($11,925 for a family of four) in order to be eligible for Medicaid (5), while some are even more restrictive (e.g. Alabama, which cuts off Medicaid eligibility at incomes of just 18 percent of FPL, just $4,293 for a family of four).(6)
- Small businesses with less than 50 full-time employees, though eligible to purchase coverage through the Small Business Health Options Program (SHOP), have shown little interest in doing so, with many instead dropping previous coverage and offering raises to employees as they seek coverage on the exchanges. (7)
- As insurers seek to contract with lower-cost hospitals and physicians, they disrupt many patients’ choices and relationships with them. Networks are shrinking all over the country, with many patients unaware of whether their doctors and hospitals are in-network, vulnerable to high out-of-network deductibles and out-of pocket costs, and often having to change physicians.
- With a shortage of at least 45,000 primary care physicians, and with only 20 percent of U.S. physicians practicing primary care, it is difficult for many people newly insured under the ACA to gain access to comprehensive care; a 2013 study found that only two-thirds of U.S. primary care physicians would accept new Medicaid patients, partly due to low reimbursement rates (8); and a December 2014 report found that one-half of 1,800 physicians listed by 200 private Medicaid plans in 32 states would not accept new Medicaid patients or were unavailable at their last known address. (9)
- In order to gain eligibility for subsidies, most people signing up for coverage on the exchanges select “silver” plans with actuarial values of 70 percent; but that still leaves them responsible for 30 percent of their health care costs, which pose a financial hardship for many.
- For many patients insured through the exchanges, constant changes in coverage and networks often result in surprise bills that are so confusing that they avoid going to the doctor. (10)
- While the ACA requires coverage of “pediatric services,” they are so poorly defined that most states exclude coverage of children with special health care needs. (11)
- The ACA has been very friendly to the health insurance industry, allowing them wide latitude to game expanded markets in their pursuit of profits. These examples make the point—permitting insurers to exclude 70 percent of essential community providers from their networks, allowing them to market limited benefit plans that pay a one-time cash benefit of as little as $10,000 or $20,000 upon diagnosis of a critical illness, and protecting them from losing money through a “risk corridor” program.
Based on the above, together with trends going forward, it is clear that the ACA has failed to remedy the nation’s access to care problem. In the next post, we will see how well it is doing in containing costs and making health care more affordable.
- Collins, SR, Rasmussen, PW, Doty, MM. Gaining ground: Americans’ health insurance coverage and access to care after the Affordable Care Act’s first open enrollment. The Commonwealth Fund, July 10, 2014.
- Pear, R. Obama cites health plan tally of 11.4 million. New York Times, February 17, 2015.
- Alonzo-Zaldivar, R. As sign-up deadline nears, a new risk for Obama health law. Associated Press, February 13, 2015.
- Rau, J. Some seeking insurance told they didn’t qualify, others balked at cost, poll finds. Kaiser Health News, January 29, 2015.
- Glied, S, Ma, S. How states stand to gain or lose by opting in or out of the Medicaid expansion. The Commonwealth Fund, December 2013.
- Dispatches. The Progressive Populist, February 15, 2015, p. 22.
- Janofsky, A. Small businesses spurn health exchanges. Wall Street Journal, January 8, 2015: B 4.
- Decker, SL. Two-thirds of primary care physicians accepted new Medicaid patients in 2011-12: A baseline to measure future acceptance rates. Health Affairs 32 (7): 1183-1187, 2013.
- Pear, R. Half of doctors listed as serving Medicaid patients are unavailable, investigation finds. New York Times, December 8, 2014.
- Rosenthal, E. Insured, but not covered, New York Times, February 7, 2015.
- Grace, AM, Noonan, KG, Cheng, TL et al. The ACA’s pediatric essential health benefit has resulted in a state-by-state patchwork of coverage with exclusions. Health Affairs 33 (12): 2136-2143, December 2014.
Adapted in part from my new book, Geyman, JP. How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans. Friday Harbor, WA. Copernicus Healthcare, 2015.
By Constance Sjoquist
Gartner, January 28, 2015
Payer CIOs need to enhance, append or replace their existing core administrative systems to more effectively compete in an increasingly complex healthcare environment. Vendors are developing newer or re-engineering existing solutions to meet this demand.
Historically, the vendor options for core claims administrative systems have been somewhat limited. A handful of legacy solutions have dominated the payer space for years. Often highly customized to a payer’s unique business environment or utilized only for a specific line of business (LOB), core administration systems have been expensive and difficult to replace, upgrade, enhance or consolidate without incurring significant risk or downtime.
In the last several years, an enormous amount of change has occurred in the healthcare market and is impacting payers’ requirements of their core administrative solutions. New demands include the need to comply with an increased number of regulatory requirements, manage a growing number of contractual arrangements and support new distribution channels. Payers are finding it necessary to make the shift from a historical group to a largely individual membership base and are seeking new and differentiated capabilities that will help ensure they can remain relevant and competitive.
In response, vendors in the healthcare core administrative space have begun to significantly shift their product strategy or market focus to address new payer challenges. While this has brought about innovation and choice, it has also led to a disparate market, causing confusion over what exactly the essential elements of a core administrative system are. Vendors that once dominated the market have recently merged or have been acquired, causing uncertainty around their future product road maps. Some vendors have completely dropped their product offerings for a particular LOB or have shifted their technology strategy to offer only nonlicensed software solutions.
Gartner receives a steady volume of inquiries and requests for information on core administrative vendors, as these run the business applications that necessitate an enormous amount of a payer’s IT resources and budget. Healthcare payers are looking to modernize their application portfolios, comply with government regulations and lower their cost of doing business. Payers are also seeking functionality that will allow them to support new health models, such as accountable care organizations (ACOs), pay for performance (PFP) and value-based networks (VBNs). Inquiries focus on who can provide new technology approaches to the development, deployment and management of existing core administrative applications, as well as which vendors offer solutions to support future payer needs.
Core administrative vendors are challenged to adapt and develop their solutions to address these disruptive changes in the healthcare industry, as well as to adapt to rapid advancements in technology.
Industry disruptions include:
- * The shift from a wholesale (group) to a retail (consumer) decision maker requiring greater support for user-specific preferences
- * Demand for transparency tools to support member enrollment, care and payment decisions
- * Providers becoming risk-bearing entities requiring real-time information on payment and reconciliation in their provider applications that parallels payers’ application status
- * Establishment of payer/provider contractual arrangements requiring increased coordination of information and workflows and greater accountability of services and payments
- * Ongoing regulation and compliance changes requiring timely updates, audits and reports
- * The expanding number of distribution channels requiring increased support for enrollment and related services
The healthcare market is expected to continue along a path of rapid change and innovation. There is great uncertainty as to where the market is headed and what technologies will be necessary to adapt and succeed. Core administrative vendors are aggressively vying for position and are competing to manage current expectations and address future client demands.
This report from Gartner is instructive in that it demonstrates the profound increase in administrative complexity in health care, much of which is directly attributable to a dependency on markets as opposed what we would have under a publicly administered single payer system. Administrative functions in health care are essential, but it is the private sector that has created a bureaucratic quagmire. Gartner is just trying to help the private sector make sense of it.
This does not let the government off the hook. By supporting the current fragmented, dysfunctional model of health care financing, the government is placing a greater burden on the private sector. We are all paying the price in higher costs and in bearing the the burden of systemic inefficiencies. By design, a single payer system would reduce this administrative complexity.
H&R Block, February 24, 2015
So far in the 2015 tax season, H&R Block (NYSE: HRB), the world’s largest consumer tax services provider, is seeing a majority (52 percent) who enrolled in insurance via the state or federal Marketplaces paying back a portion of the Advance Premium Tax Credit (APTC). The average amount paid back is $530, decreasing the tax refund on average by 17 percent, according to analysis almost six weeks into the 2015 tax season.
The average tax penalty for not having insurance was $172, an indication that most taxpayers are paying more than the flat-fee of $95 per uncovered adult penalty many consumers anticipated.
“The level of payback of the Advance Premium Tax Credit is significant in that it’s costing taxpayers a large percentage of their refund – a refund many of them count on to pay household expenses,” said Mark Ciaramitaro, vice president of H&R Block health care and tax services.
For next tax filing season, it is important to note that the base penalty will increase to the greater of $325 or 2 percent of household income for 2015.
So far, 52 percent of those receiving a tax credit last year to help pay their premiums for the ACA exchange plans are having to pay back an average of $530 – certainly an unpleasant surprise for individuals subsisting on modest budgets.
Fortunately, for most individuals that repayment will be through a reduction in their tax refunds rather than an additional payment to be made from funds on hand. Nevertheless, many people look forward to receiving their tax refunds in order to be able to meet other important expenses.
Under a single payer system, there is no premium to be paid and thus no need for subsidies based on income. It is much simpler and even more equitable to fund the entire system through progressive taxes.
By Tim Vogus, Associate Professor of Management at Vanderbilt University
The Conversation, February 23, 2015
In his new book, America’s Bitter Pill, Steven Brill dives deep into the history of the Affordable Care Act (ACA) and how it was passed. He concludes that, although providing more Americans with health insurance is worthy of praise, the ACA does far too little to address the costs of health care.
And he makes his own proposal for bringing costs down: consolidation. As hospital systems expand and eye ways to grow even more, Brill proposes that these systems start to insure patients as well as treating them. If the hospital system is the insurer, he reasons, it has an incentive to keep costs down. And these new integrated systems would treat all their patients’ needs from primary care, to surgery and more. In short – treating the whole patient.
Economists and other researchers have been looking at what consolidation, big integrated systems and dwindling competition mean for health care. And so far, it looks like consolidation isn’t a cure for high costs or a way to improve care. In fact, it might make it harder for hospitals to deliver care well.
Consolidation is already happening
Hospital consolidation is either “horizontal,” like buying a hospital and reducing the number in the market, for instance, or “vertical,” like buying clinics and physician practices.
The truth is that hospitals are already a long way down this road. Both kinds of consolidation are happening and in recent years there has been unprecedented consolidation, with more planned for 2015.
And the ACA creates an incentive for organization to consolidate and offer insurance by encouraging the development of Accountable Care Organizations (ACOs). These are networks of doctors, hospitals and other care providers that coordinate care for patients. The idea is that they save money by increasing efficiency because they care for all of the patients health needs. That means everything from primary care to specialists, hospital services and more. ACOs are especially prominent in Medicare, but the Department of Health and Human Services (HHS) is pushing for more of this quality- and value-based contracting over traditional fee-for-service.
Some critics say that consolidation in general means that hospital systems have a tremendous amount of market power – something that isn’t known for keeping costs down. But Brill argues that any concerns about the market power these systems would hold can be overcome by simple regulations to ensure minimum competition.
So in other words, both Brill and the ACA would push health care delivery toward large integrated entities that would manage the entire spectrum of patient needs from insurance to primary care checkups to cancer treatment to managing chronic disease. But research shows that consolidation has a poor track record of keeping costs down and that very large organizations have trouble delivering care and working efficiently.
Consolidation doesn’t have a track record of keeping costs down
Earlier attempts to control costs through consolidation did not succeed. In the 1990s integrated delivery networks attempted to lower costs, but failed due to financial losses from purchasing physicians practice, difficulties with integration and managing risk. Researchers argue that new attempts to control costs through consolidation are likely to experience similar disappointing results.
Martin Gaynor of Carnegie Mellon and Robert Town of the University of Pennsylvania’s Wharton School summarize recent research indicating that increases in consolidation – and the resulting lack of competition – lead to higher health care costs. And these increases are especially high in consolidated markets with few hospitals.
Beyond higher costs, consolidation can also reduce the quality of care provided. Research from outside the US suggests that increases in consolidation can have a negative impact on survival from heart attack. Concentrated markets also mean less choice for patients when it comes to choosing hospitals or doctors, and research indicates that more choice can lead to better health outcomes for procedures like coronary artery bypass graft surgery.
Bigger systems don’t always make for better care
Brill also ignores another major problem: integrating and operating a very large or consolidated health system is hard.
In research at a large, academic medical center, Brian Hilligoss and I found even simple, everyday care transactions and decisions are fraught with problems. Different units, like general medicine and emergency, have different workplace cultures and different ways of operating, which can make integration difficult. Units might be interdependent, but their administration is separated. And the physical size of these organizations matters too. The hospital we studied occupied over 6 million square feet putting a lot of physical distance between units and between doctors and patients. In our study we found that these factors led to a heavy reliance on technology to coordinate care rather than direct communication.
In another study Hilligoss found that this poor integration between different units in the hospital means that doctors rely on an elaborate process of “selling patients” to other departments in order to transfer them. One department has to make a case for the patient to be transferred to another department, even if that is where they objectively need to be. And inpatient services have the right to refuse transfers.
We found that physicians have to consistently engage in elaborate workarounds to carry out their work. And nurses face similar challenges in complex organizations. Anita Tucker of Brandeis University documents how, like doctors, they frequently encounter operational failures like missing materials and information that require workarounds.
Mergers don’t always mean coordinated care
The consolidation encouraged by Brill exacerbates all the challenges identified in this research. For example, in her book Code Green, Dana Beth Weinberg documents how the merger of Beth Israel and Deaconess hospitals in Boston had profound effects on the way care was delivered at the bedside. The merger prioritized cost reductions through higher patient loads for each nurse which undermined Beth Israel’s comprehensive and influential primary nursing model. In practice that meant shifting critical patient care tasks away from highly skilled registered nurses to less skilled aides which compromised care quality.
And early evidence from Accountable Care Organizations suggest that is difficult for different organizations to integrate their cultures. Sara Kreindler of the University of Manitoba and colleagues examined early Accountable Care Organizations and found that in no case did these organizations see themselves as integrating different groups into one whole. In fact, the organizations studied painstakingly avoided the idea of integration.
While Brill’s work offers a compelling personal narrative and a provocative and thorough recounting of the development and passage of the ACA, it has substantially less to offer as guidebook for change. He fails to sufficiently grapple with existing economic research, earlier attempts to achieve similar aims, and the real difficulties posed by consolidation for those doing the hard work at the point of care delivery.
(The article includes links to resources cited plus a response by Steven Brill and a reply by the author.)
Considerable attention has been directed to the phenomenon of provider consolidation. It is celebrated by some as a means of providing greater efficiency and quality by means of integration of services, advancing the model of accountable care organizations. Others have criticized consolidation because of its anti-competitive influence on markets, driving prices ever higher.
This article by Professor Tim Vogus is presented in its entirety since it explains why we need to look elsewhere than provider consolidation if we truly want to improve value delivered by our health care system.
If we had publicly-administered health care financing through a single payer system, then consolidation would not be a tool of gaining greater market leverage and thus higher prices. Rather, consolidation would occur only if it improved the delivery of care. Single payer is a much more effective way of achieving our goals of improving quality while controlling costs.
Mathematica Policy Research, January 2015
In October 2012, the Center for Medicare and Medicaid Innovation of the Centers for Medicare and Medicaid Services (CMS), in a unique collaboration between public and private health care payers, launched the Comprehensive Primary Care (CPC) initiative to improve primary care delivery in seven regions across the United States. …The substantial transformation … is expected to achieve better health care, better health outcomes, and lower costs.
Some managed care proposals lack evidence but can be subjected to testing to see if they work. Other managed care proposals lack evidence and cannot be tested because they are too vaguely described. The “patient-centered medical home” (PCMH) is an example of the latter. The Comprehensive Primary Care Initiative, a test of the PCMH “model” being conducted by the Center for Medicare and Medicaid Innovation (CMMI), illustrates the problem. It tests too many vaguely defined variables at once.
First, a word about labels. The CMMI chose the label “comprehensive primary care” (CPC) rather than “medical home” for an insubstantial reason: It wanted to involve multiple insurers in the experiment, and in their view previous “home” experiments used only single insurers. But “CPC” is clearly just the PCMH concept with a different label. CMMI tells us the CPC Initiative “builds on the ‘medical home’ concept,” and that it is authorized by Section 3021 of the Affordable Care Act, which mentions the “patient-centered medical home” but not “comprehensive primary care.” Not surprisingly, the CPC Initiative is widely seen as a test of the PCMH concept.
Here is how the CMMI defines the CPC experiment:
Over the next four years, the Comprehensive Primary Care Initiative will evaluate whether a core set of comprehensive primary care functions, coupled with payment reform, enhanced data to guide practice improvement, and the meaningful use of health information technology, can achieve better health, better health care, and lower costs through continuous improvement. (p. 1)
Notice first that four variables are being tested at once:
• “a core set of … care functions” (i.e. the usual “features” attributed to “homes”)
• “payment reform,”
• “enhanced data,” and
• “meaningful use of HIT.”
Multiple components within the thing being tested – the intervention, the drug, etc. – is not necessarily an impediment to testing. Scientists often test entities or methods that contain multiple variables; the “Mediterranean diet” and the Diabetes Prevention Program are examples. What makes the CPC “model” untestable is the vagueness of all four of the variables. Any one of these variables alone would be impossible to test. Bundling all four into a single “model” creates a conceptual mess.
To grasp how messy this “model” is, please click here and view the circular diagram. Viewer discretion is advised. At first glance you think you’re looking at a mandala from the cover of a Grateful Dead album. Upon closer examination you realize you’re looking at an attempt by your government to explain the “logic” of the CPC Initiative. This mandala bears the title, “Comprehensive Primary Care Initiative Logic Diagram.” (You can find this title if you click here and scroll down to “additional information.”)
The mandala attempts to explain each of the four elements of the CPC “model,” but further explanation only deepens the viewer’s sense of being drawn down a rabbit hole where you hear words coming out of people’s mouths but they’re not making sense. For example, we discover that the first variable – “comprehensive primary care functions” – consists of five “functions.” These functions have labels we have heard before from “home” advocates such as “patient and caregiver engagement” and “coordination of care across the medical neighborhood.” How do we operationalize (reduce to measurable components) “engagement”? How would we know that patient X is “engaged” while patient Y is “unengaged”? How do we operationalize “coordination” and “medical neighborhood,” much less coordination “across” said medical neighborhood?
CMMI’s mandala is no better at explaining the other three elements of the CPC “model.” To take one example for each of those elements:
• “enhanced accountable payment” somehow consists of “strategic use of practice revenue”;
• “continuous improvement driven by data” somehow consists of “culture of improvement”; and
• “use of HIT” includes “continuous improvement of HIT.”
“Accountable payment”? “Strategic use?” “Culture of improvement?” “Improvement of HIT,” continuous or otherwise? How would we recognize these things (sorry, “thing” is the best descriptor I can come up with) if we happened to stumble over one?
CMMI attempted to operationalize the four variables by listing a series of tasks each “practice” must complete. (In the “medical home” rabbit hole, there are no “clinics” anymore. They are all “practices.”) CMMI calls these tasks “milestones.” The “milestones” become more numerous and specific over the course of the four-year demonstration (click here to see all the “milestones”). Here are the nine “milestones” for the first year (2013) as reported by Mathematica in their report on the first-year of the CPC experiment:
• Estimate CPC revenues and develop a plan for their reinvestment in the practice.
• Stratify patients by risk status and provide care management to high-risk patients.
• Ensure 24/7 access to the medical record for the practice’s providers.
• Assess and improve patient experience with care by conducting a patient survey or forming a patient and family advisory council … that meets quarterly.
• Use data to guide care improvement by selecting one quality and one utilization measure on which to focus.
• Improve care coordination in the medical neighborhood by selecting one area for focus.
• Improve patient shared decision-making capacity by selecting one decision aid.
• Participate in the regional learning community.
• Attest to Stage 1 meaningful use. (Table 6.1, p. 82)
Mathematica assures us these tasks not mere busywork. “While the Milestones themselves are not evidence based,” writes Mathematica, “they are rooted in strong conceptual thinking about what activities a practice needs to pursue to achieve comprehensive primary care.” (p. 81) This is classic managed care gibberish. The key phrases are so abstract they could mean anything, and the logic is circular. (The “milestone” requiring use of a decision aid is in fact evidence-based, but it is the only one.)
These milestones are more specific than the mushy labels in the CPC “logic” mandala, but they are still so vague they leave enormous latitude for clinics to react with diverse activities – activities so diverse that the uniformity of behavior necessary to test any milestone is impossible to achieve. Is the “patient and family council” (PFAC) a bona fide council if it consists of one patient and one family member? How would a clinic know when it has “focused” on its “one quality measure” or on “coordination in the medical neighborhood”?
Here, from the Mathematica report, is an example of how the amorphous “milestones” encourage diverse behaviors:
Among the 100 practices that choose to form a PFAC to help assess and improve patient experience with care, all reported having more than one patient on the PFAC. … The most common area of focus – communication – was chosen by 59 percent of practices. (p. 85)
So some PFACs will have more than two patients, some won’t. Some will “focus” on “communication,” whatever that means, and others will “focus” on something else. (Incidentally, do two-patient advisory committees reveal “strong conceptual thinking?”)
The CPC Initiative, like all tests of the “medical home,” attempts to assess the impact of too many vaguely defined variables at once. It is time to terminate experiments testing the fuzzy “home model” and shift the funds to experiments that test more plausible and more testable hypotheses. If the goal of the PCMH movement is simply to strengthen primary care, then let’s funnel more resources into primary care. If the goal is to take better care of chronically ill patients, then let’s conduct research on specific services for specific types of patients and, for those services that are shown to work, let’s invent a billing code for them and pay for them.
Kip Sullivan, J.D., is a member of the board of Minnesota Physicians for a National Health Program. His articles have appeared in The New York Times, The Nation, The New England Journal of Medicine, Health Affairs, the Journal of Health Politics, Policy and Law, and the Los Angeles Times.
By Bob Herman
Modern Healthcare, February 20, 2015
The CMS has proposed increasing health insurers’ Medicare Advantage payment rates by 1.05% for 2016, a move that kicks off a 45-day dogfight in Washington before the rates are cemented.
The base rate was an 0.95% average decrease, but “when combined with expected growth in plan risk scores due to coding,” Advantage plans will actually receive the 1.05% hike in revenue next year, according to a release from the CMS posted late Friday afternoon. Risk scores relate to how Medicare pays for the health status of beneficiaries. CMS pays more for patients who have more health conditions and less for those who are healthier.
Like last year, Advantage plans that earn at least four stars out of five will receive a 5% bonus payment in 2016, the CMS said. Any plans with 3.5 stars or fewer will continue to get no additional payments.
Breaking from proposals in the previous two years, the CMS said it will not propose any adjustments to the use of home visits for patient risk assessments. Many Advantage plans diagnose the severity of patients’ illnesses at home instead of in a physician’s office. But this has raised concerns that many plans are falsely inflating the diagnoses in a bid to warrant higher payments for sicker members, a process called upcoding.
Medicare Advantage’s risk-assessment process has been under fire from policymakers and consumer advocates who argue private insurers are purposefully bilking money from the program, which covers 17.3 million people as of this month. The Medicare Payment Advisory Commission has said the risk scores of Advantage patients have grown more rapidly than those of regular fee-for-service beneficiaries, and the current risk-score payment reductions mandated by the Affordable Care Act may not be enough.
Humana, one of the largest Advantage insurers in the country, disclosed this week that it is facing increased scrutiny from the U.S. Justice Department for its risk-adjustment practices.
Health insurers have already begun their Medicare Advantage lobbying campaign in the hope of extracting higher rates come April. The Coalition for Medicare Choices, part of America’s Health Insurance Plans, has aired several ads featuring seniors advocating for the private plans.
Many members of Congress have also weighed in on the process. A bipartisan group of 53 senators, led by Chuck Schumer (D-N.Y.) and Mike Crapo (R-Idaho), sent their own letter to Tavenner this week urging the agency to “minimize disruptions for beneficiaries enrolled in the MA program by maintaining payment levels and providing a stable policy environment for 2016.”
The health insurance industry also happens to be one of the top financial backers of Schumer and Crapo. Since 2009, health insurers have given more than $493,000 to Schumer’s campaigns and more than $234,000 to Crapo’s, according to OpenSecrets.org.
**CMS proposes 2016 payment and policy updates for Medicare Health and Drug Plans
CMS Press Release, February 20, 2015
The Centers for Medicare and Medicaid Services (CMS) today released proposed changes for the coming year for the Medicare Advantage (MA) and Part D Prescription Drug Programs that will advance Health and Human Services Secretary Sylvia M. Burwell’s vision of building a better, smarter health care system and moving the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.
The proposed changes reflect the commitment to a Medicare program that delivers better care, spends health care dollars more wisely and results in healthier people.
NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties
SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter
CMS, February 20, 2015
Section H. Medicare Advantage Coding Pattern Adjustment
Below we offer three analyses that strongly suggest that the health status of MA enrollees is no worse, and more likely is better, than the health status of FFS beneficiaries of similar age, gender, Medicaid, and institutional status. These include analyses of self-reported health status and mortality rates, as well as Part D drug information.
Self-Reported Health Status. Analysis of self-reported data on health status and on whether the respondent has ever been diagnosed with one of a variety of conditions from the 2006-2011 Medicare Current Beneficiary Survey (MCBS) suggests that the average risk for MA enrollees is approximately 96% of the average risk for FFS beneficiaries.
Mortality Rates. Mortality rates for MA beneficiaries are significantly lower than mortality rates for FFS enrollees. For example, in 2012, the mortality rate in MA was 81% of the mortality rate in FFS. (It is possible that lower mortality rates result from better quality of care in MA, but it seems more likely, given the size of the difference, that this reflects, at least in part, relative health status.)
Part D Drug Information. MA enrollees are significantly less likely than FFS beneficiaries to be prescribed drugs that are predictive of high expenditures. HHS has used information from Part D data to construct risk scores for MA and FFS enrollees, and has found that MA enrollees are at significantly lower risk than demographically similar FFS beneficiaries.
Of the three sources of information that are independent of the diagnoses reported by MA plans, each suggests that MA enrollees are at similar or lower risk than demographically similar FFS beneficiaries.
CMS Advance Notice (172 pages): http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Down…
Letter from U.S. Senate members to Marilyn Tavenner, CMS Administrator:http://www.usatoday.com/story/news/nation/2015/02/20/medicare-advantage-…
The 2016 base rate for private Medicare Advantage (MA) plan payments was to have decreased by 0.95%, phasing in a correction of the overpayments that have been made to the MA plans. Instead, CMS will increase the payment rates by 1.05%, a full 2.0% increase over the projected base rate. This is the fourth year in a row that CMS has violated the intent of ACA and other legislation to bring MA rates down to the equivalent of payments made in the traditional fee-for-service Medicare program.
CMS’s Advance Notice provides three sources of evidence demonstrating that the MA patients are a healthier subset of patients than those in the traditional Medicare program. Since this results in adverse selection in the traditional Medicare program, the rates paid to MA plans should be even lower than payments made in the traditional program, not higher.
The record is now clear that the MA plans have been using various methods of upcoding the severity of illness of their customers (known to us as patients) thus qualifying for higher risk adjustment payments. One of the latest schemes is to make home visits, not to provide more care but merely to try to find more diagnoses to be used in inflating risk adjustments – diagnoses that do not appear in the billing documents from physicians and hospitals! Although this abuse is widely recognized, CMS said “it will not propose any adjustments to the use of home visits for patient risk assessments.” This is at a time that the Justice Department has increased its scrutiny of these likely criminal acts.
As if we didn’t have enough reason to be disgusted with our government, over 50 Senators have sent a letter to CMS Administrator Marilyn Tavenner requesting preservation of the overpayments made to the MA plans. The rhetoric of the letter is clearly that of America’s Health Insurance Plans (AHIP) – the lobby organization for the health insurance industry. To no surprise the lead signers of the letter, Senators Mike Crapo and Charles Schumer, between them have received from the insurance industry close to three-quarters of a million dollars.
The Coalition for Medicare Choices has already begun its intense campaign to drum up public support for MA overpayments, of course disguised as protecting Medicare. It surely surprises no one that this organization is headquartered not only in the same building as AHIP, but it even shares the same suite.
Perhaps even more ominous is the statement in the CMS press release that states that the proposed changes “will advance Health and Human Services Secretary Sylvia M. Burwell’s vision of building a better, smarter health care system and moving the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.” And the the Senators’ letter that states, “At the time of broad agreement on the need to shift U.S. health care to focus on care coordination, quality, and value-based payments, it would be counterproductive to jeopardize a program that is already driven by and aligned toward those goals.” This political support of MA plans clearly advances the agenda of privatizing Medicare – only one step away from converting to a defined contribution premium support (voucher) program – the dream of the private insurance industry.
So who is paying the higher costs of these private MA plans? We, the taxpayers, and the beneficiaries in the traditional Medicare program who are paying higher Part B premiums to help fund this gift to the private insurers.
If there were even a thread of moral fiber left in D.C., instead of shamelessly supporting overpayments to the private insurance industry, our representatives would be advocating for using those funds to improve benefits for all Medicare beneficiaries. Under that scenario, the private insurers who are keeping three-fourths of the overpayments, would be dismissed. But then Crapo and Schumer would likely decide that three-quarters of a million dollars is too dear of a price to pay for a strand of moral fiber.
By Jean P. Hall
The Commonwealth Fund, February 13, 2015
As the new Congress convenes and the Supreme Court prepares to hear arguments in the King v. Burwell case challenging tax subsidies for insurance purchased through the federally facilitated marketplaces, proposals to repeal and replace the Affordable Care Act (ACA) are resurfacing. Many of these rely on high-risk health insurance pools to cover people with preexisting health conditions.
In fact, the risk pools are suggested as a viable alternative to the ACA’s ban on preexisting condition exclusions in the individual market and the marketplaces. My recent analysis of high-risk pools, however, explains why these entities simply are not a realistic alternative to coverage requirements under the ACA. In a nutshell, high-risk pools:
- are prohibitively expensive to administer,
- are prohibitively expensive for consumers to purchase, and
- offer much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.
Recent proposals to replace ACA reforms with high-risk pools focus on using state-based programs, but historical experience with 35 state-based high-risk pools and more recent experience with the national Pre-Existing Condition Insurance Plan (PCIP) illustrate the problems with this approach. Even though state-based high-risk pools charged premiums of up to 250 percent of those charged to healthy beneficiaries in the individual insurance market, premium revenues paid just 53 percent, on average, of program costs. In addition to these high premiums, enrollees in state-based high-risk pools faced annual deductibles as high as $25,000 and annual coverage limits as low as $75,000. Past research indicated that high costs and limited benefits associated with high-risk pool coverage resulted in delayed or forgone care and adverse outcomes for enrollees. Many also accrued medical debt despite having insurance.
For these reasons, use of high-risk pools in lieu of marketplace and Medicaid expansion coverage would result in greater state and federal costs, fewer people with preexisting conditions able to obtain coverage, and coverage that fails to meet the often greater needs of people with chronic conditions.
Brief: Why a National High-Risk Insurance Pool Is Not a Workable Alternative to the Marketplace
Those who wish to repeal or at least drastically reduce the provisions of the Affordable Care Act realize that they must come up with a replacement.
Most of the proposals would grant much greater flexibility to insurance products while reducing regulatory oversight. The problem that creates is that individuals with high medical expenses tend to be shut out of the insurance market. To ensure coverage for these individuals, high-risk insurance pools have been proposed.
This article and the brief that it is based on explain why high-risk pools are not a satisfactory solution. The premiums are unaffordable, and the pared-down benefits are unsatisfactory. These over-priced plans do not provide the financial protection that patients with chronic disorders need.
Even with the Affordable Care Act, enrollment in the temporary high-risk pools had to be closed early because they proved to be too expensive, threatening depletion of the allotted funds. They provide poor coverage at a very high cost.
With a single payer system this problem disappears. Funding is based on ability to pay, through the tax system, and not on the basis of anticipated medical expenses. Everyone receives the care they need, regardless of their health status. The fragmented plans supported by the repeal and replace people cannot do that.
Report Back from the 4th Annual Students for a National Health Program (SNaHP) Summit
The 4th annual SNaHP summit took place on Saturday, February 14, 2015, on the medical campus of the University of Illinois-Chicago. More than 170 medical and health professional students from over 50 schools gathered to discuss single payer, develop their activism and advocacy skills, and create a national strategy for achieving Medicare for All. There were students from states that had never been represented before including, among others, Alabama, Florida, Tennessee, and North Carolina. The fact that so many students, more than double the number that attended the prior year, flocked to Chicago on Valentine’s Day is a testament to the growing commitment of health professional students to achieving equitable and universal access to health care. Click on the link below to view presentations and photos from the conference.
By Scott Goldberg, MS3
I had the honor of delivering the opening address – entitled “Where We’ve Been and Why We’ll Win – at the 4th annual SNaHP summit. The talk focused on the century-long struggle for national health insurance, what we can learn from these efforts, and why students are well-positioned to spark a broad, social movement for single payer. Here is an excerpt from the speech:
“Now, I’m not disillusioned by the 100-plus year history of failing to achieve national health insurance. In fact, there are important lessons that can inform our efforts and that give me hope that we will be successful where those before us were not.
First, the AMA has opposed single payer since 1917. But while the AMA could honestly say it represented the voice of doctors, it no longer can. Only about 20 percent of physicians are members. This provides an opening, for another physician organization to step into the void that speaks on behalf of what is just and right for patients. You may see where I’m going with this – but this is where Physicians for a National Health Program comes in. PNHP is the only physician organization dedicated to the sole purpose of transforming American health care by passing NHI. And the organization can only grow. If there are 800,000 active doctors in this country, then about 2.5% of them are members of PNHP. This means we, as students and future doctors, have a lot of work to do to get our colleagues to sign up. We should be doing this on a daily basis. Think about all the time you spend with fellow students, residents and even attendings. Think about how many times the issue of insurance comes up and you want to scream out: “If we had single payer, this would not be an issue!” Now, every time that thought comes to mind, do something about it. Mention single payer and encourage those around you to sign up for PNHP. These conversations are not, at the core, political. They are essential to the foundations of our profession, and we must normalize them. I want you to recruit at least one new colleague to PNHP each month. It’s a modest ask, but if everyone here does it we’ll have nearly 2,000 new members in a year. Then, we can start to envision a future where PNHP will usurp the AMA as the organization that speaks on behalf of doctors.
While the AMA might have been a major barrier to NHI in the 20th century, our biggest barriers now are private health insurance companies and Big Pharma. You all know that we are facing one of the most well-financed and formidable opponents in American history. Both have fought tooth and nail against single payer with their army of lobbyists and have contributed heavily to candidates for public office to protect their position and maximize their profits. It is no secret that they spent $173 million to defeat the public option, which amounted to about a million dollars a day during the debate over health reform. So when we talk about single payer, we must talk about the massive profits reaped at the expense of patient care. The neoliberal corporate agenda has infiltrated health care and we must vigilantly fight back against the idea that health care is a commodity and, instead, declare that health care is a public good that all Americans, regardless of race or class, should have access to.
But I am not discouraged by our well-resourced foes for three reasons. One, their arsenal of smear tactics is dwindling. The fear of “socialized medicine” is waning. Communism coming to America is an outdated notion. Two, these companies are universally despised. A recent poll demonstrated that almost all Americans believe that private insurance companies are the biggest problem in our system. So there’s our message right there – we must get rid of private insurance companies to have real health reform. Three, ultimately, the system cannot function without us. If we remain silent, we will only allow these companies to continue to reap massive benefits at the expense of our patients and our professional code of ethics. If we, as health care providers, are united in opposition, we will not be defeated.
You may believe that after 100 years of struggle we will never achieve single payer. But let me tell you why we will win and what we have to do to get there.
I want you to look around you. Our movement is growing exponentially. There are now 35 student PNHP chapters, with 10 new ones in the last year alone. There are 19,602 PNHP members, 731 of whom are students. The second SNaHP summit had 40 students, the third had 80, and the fourth has 160. I emphasize this growth because, historically, students have been the stimulus and source for broader activism. Just recently in Chile, following three years of nationwide student protests, the country will make college tuition-free and are paying for it with a 27% tax on corporations. Look at the civil rights movement in the US. It was the Student Nonviolent Coordinating Committee (SNCC) that spearheaded the civil rights movement. The Freedom Riders, not all, but the majority were young people and students. Over time, it grew and became a mass popular movement and achieved historic things. We don’t know the names of the leaders of SNCC, but that is the point with movements. We know the name of Martin Luther King Jr, but who do you think organized the marches, the talks, the sit-ins? Members of SNCC did. They did the heavy lifting of organizing, going door to door, and putting their lives on the line. Our movement does not need a figurehead. It needs unified direct action.
As Noam Chomsky has said: ‘Direct action carries the message forward in a very dramatic fashion. Direct action means putting yourself on the line. It indicates a depth of commitment and clarification of the issues, which often stirs other people to do something.’ Achieving single payer will require resistance and civil disobedience. All the great movements in history have. Look again at the civil rights movement. Institutional segregation had been going on for hundreds of years, but what sparked the movement? A couple of incidents of direct action. Rosa Parks insisting on sitting in the front of the bus. Black students sitting at a lunch counter in Greensboro. Without these actions, the movement would probably never have happened. You can make as many speeches as you like but they will never have the effect of those actions. And while the movement started with students, it became broad-based and diverse. Just like the movement for single payer, we must reach out to and build ties with labor unions (over 600 have already endorsed HR 676), civic and faith-based movements, and even small businesses. While businesses may seem like natural allies of the private insurance companies, many of them feel the strain of paying to insure their employees and would clearly benefit from government-run health insurance.
In closing, Americans are literally dying for equitable, universal health care access. And so I know that deep down you feel, as I do, that the time has come for direct action. The question is – when do we get started? Here’s one idea – Medicare’s 50th birthday is coming up and a nationwide coordinated action would be a powerful first step.
When I talk to people about single payer, I often hear: “Oh yeah, I support single payer but it will never happen in this country.” I tell them that people once thought the abolition of slavery and women’s suffrage could never be won – that these were “unrealistic” dreams. And yet both of these “unrealistic” dreams were ultimately won. While moderates were advocating for incremental change, the activists pushed for revolutionary change and were successful. What seemed impossible yesterday is something we accept as a given today. So next time someone says single payer will never happen, tell them this: “If you believe it won’t happen, it never will. But if you believe that the only way it will happen is to actually do something about it, then I am sure you will make the only choice that a moral and principled person would, and that is to join me in this struggle.”
Scott Goldberg is a medical student at the University of Chicago Pritzker School of Medicine and a member of the board of directors of Physicians for a National Health Program.
By William Shrank, Alan Lotvin, Surya Singh, and Troyen Brennan
Health Affairs Blog, February 17, 2015
Health care reform is intended to lower costs, but they are still rising, albeit less steeply than in the past. Moderation is not however the case in the area of specialty pharmacy. The medications to treat Hepatitis C are the most cited examples of a general inflationary trend, but the pipeline of expensive medications is extensive.
Yet, policymakers and payers appear unwilling to undertake significant cost controls on medication pricing. Indeed the controversy over the $84,000 price tag for Sovaldi (sofosbuvir) has largely faded, suggesting a certain resiliency in our system’s ability to absorb costs.
We believe that resiliency is about to be challenged in a manner unlike we have seen in the past, at least in the area of pharmaceuticals. A number of pharmaceutical manufacturers are developing a new class of medication to manage high cholesterol — the PCSK9 (proprotein convertase subtilisin/kexin 9) enzyme inhibitors.
The PCSK9 inhibitors will be specialty medications and likely priced as such. While we will not know exact pricing until the first generation of these medications is approved for use by the Food and Drug Administration sometime in mid-2015, estimates of annual pricing for these injectable drugs are in the range of $7,000 – $12,000. Given the number of people potentially eligible for treatment with the PCSK9 inhibitors will number in the millions, the potential overall expenditures by payers are huge.
As this is chronic therapy, PCSK9 sales could be expected to persist and grow over time, and will likely be the highest selling class of medications in history. Plus, as a biologic agent, there will not be a simple pathway to cheaper generics in a 10-15 year timeframe. Even in a system that costs $4 trillion per year, a single therapy adding $100-200 billion in costs annually is extraordinary.
Managed pharmacy care, indeed the health care system, has never seen a challenge like this to our resilience in absorbing costs. Payors, the employers, and health insurers, will first be shocked, then expect action. Action will take the form of compliance with clinical guidelines, and careful managed care oversight.
But in addition, perhaps the costs of PCSK9 inhibitors will push us to develop some consensus about the pricing of new specialty medications, as part of a more thoughtful discussion about the use of scarce resources on behalf of patients.
(The authors are from CVS Caremark and CVS Health.)
****President Obama’s Precision Medicine Initiative
The White House, January 30, 2015
Building on President Obama’s announcement in his State of the Union Address, today the Administration is unveiling details about the Precision Medicine Initiative, a bold new research effort to revolutionize how we improve health and treat disease. Launched with a $215 million investment in the President’s 2016 Budget, the Precision Medicine Initiative will pioneer a new model of patient-powered research that promises to accelerate biomedical discoveries and provide clinicians with new tools, knowledge, and therapies to select which treatments will work best for which patients.
The Obama Administration will forge strong partnerships with existing research cohorts, patient groups, and the private sector to develop the infrastructure that will be needed to expand cancer genomics, and to launch a voluntary million-person cohort. The Administration will call on academic medical centers, researchers, foundations, privacy experts, medical ethicists, and medical product innovators to lay the foundation for this effort, including developing new approaches to patient participation and empowerment.
In the United States, innovation and research in health care have been well rewarded… too well rewarded. The hepatitis C drugs, and now the PCSK9 inhibitors for high cholesterol are cases in point.
Our obsession with letting the market perform its miracles has led to a culture in which we accept and even expect the medical entrepreneurs to be rewarded with the maximum prices that the market will bear. In fact, prices have been pushed up well beyond what any normal functioning market would bear simply because the new products are able to bury their prices in the risk pools established by the private insurers and the pharmacy benefit managers.
Prices are so outrageous that now even the pharmacy benefit managers are complaining, as in the article by Shrank, et al. It is interesting that they suggest, as a solution, “careful managed care oversight.” Yet it is the intermediary “care managers” that have permitted this outrage. Besides, the private insurers are using these high prices to their advantage by placing these drugs in tiers that shift much of the costs to patients, thereby chasing away patients that would have higher health care costs.
President Obama’s Precision Medicine Initiative, as proposed, should have us all concerned. He calls for public-private partnerships that include medical product innovators. You can be assured that these biomedical innovators have already plotted to share in this lucrative market, knowing that their products will be introduced with prices in the stratosphere after they complete the nuisance stage of developing the products for the market.
The government already plays a role in taxpayer financed research. The public has a vested interest in these products and the government should be protecting our interest. When markets go awry it is the government that has the responsibility to step in and right the wrongs. Since the private insurers and pharmacy benefit managers have served us so poorly, we should replace them with our own public program – a single payer national health program. That would end our culture of developing new products that have outrageously high prices built in as an essential component.
By The Editors
Bloomberg View, February 16, 2015
Obamacare’s goal to expand access to health care has been only half a success: More Americans have insurance, but a rise in cost sharing means fewer can use it. Copayments — those predetermined charges you pay at the doctor’s office — are a big part of the problem. In recent years, they’ve risen to the point where they no longer work as they’re meant to.
In theory, charging moderate fees to see a doctor or get a procedure gives people an incentive to consider whether they really need it. Done carefully, copays can thus reduce unnecessary spending, benefiting everyone.
That means the charges have to be just large enough to influence people’s decisions, and not so big as to keep people from getting the care they need. Yet copays have been going up significantly. In the past five years, the average price to see a primary care doctor has risen 20 percent. For a specialist it’s gone up 29 percent, and for outpatient surgery it’s up 43 percent. And that’s just for employer-sponsored insurance; on average, those covered through the Affordable Care Act’s exchanges face even higher expenses.
No wonder 22 percent of people now say the cost of getting care has led them to delay treatment for a serious condition. That’s the highest percentage since Gallup started asking in 2001. Another poll found that as many as 16 million adults with chronic conditions have avoided the doctor because of out-of-pocket costs.
The wisdom of copayments also relies on the notion that consumers understand the incentives the payments are supposed to impose. Yet almost two-thirds of Americans don’t know what costs they face for using an emergency room or a walk-in clinic, a recent survey found.
When copayments grow too big and confusing to be effective cost controls, they merely shift an ever-greater share of insurance costs away from premiums. And this undermines the basic purpose of insurance, which is to spread the risk of unforeseen costs across populations and over time — among not just the minority who need care, but also everyone covered by the plan. Unlike premiums, out-of-pocket payments concentrate spending on the few who get sick.
Canada has disposed of almost all out-of-pocket costs for doctor and hospital services since 1984 — and still spends half as much per person on health care as the U.S. does. While Canadians are more likely to see a doctor in any given year, they’re less likely than Americans to wind up in the hospital.
Rather than ban copayments entirely, however, the U.S. could make better use of their ability to steer people away from high-cost, low-value care.
The government should also look at extending copay subsidies to lower-income beneficiaries on employer plans and lowering the cap on out-of-pocket costs.
It is reassuring when we see representatives of the business community shining light on the deficiencies in our system of health care financing. In this article, the editors of Bloomberg View explain that higher out-of-pocket spending shifts costs away from premiums, which are designed to spread the risk, and instead concentrates spending on those who get sick. As they state, this undermines the basic purpose of insurance.
As they explain. “Canada has disposed of almost all out-of-pocket costs for doctor and hospital services since 1984 — and still spends half as much per person on health care as the U.S. does.”
However, the Bloomberg editors, like most of the policy community, as a principle of faith insist that we must still have modest copayments as an incentive to deter low-value care. As if the administrative waste of managing deductibles, copayments, and coinsurance were not already enough, they would add further to these administrative excesses by applying income-indexed subsidies to the copayments of employer-sponsored plans, just as has been done with the ACA exchange plans.
Canada has shown us that the policies inherent in their single payer system are far more effective in controlling excess spending than are our feeble, market-based policies such as cost sharing. The differences in the health spending trajectories of the two nations are proof enough; Canada has bent the cost curve and we have not. Cost sharing has hardly had even a negligible impact in our total spending.
We do know that cost sharing can impair access to necessary care and create financial hardships for some. Since it hasn’t controlled costs and single payer would, we should make the change to a single payer national health program with first dollar coverage. That would pool risks and improve access without creating burdens for anyone, except maybe a transitional burden for those in the insurance industry who would have to find more gainful employment.
Steven Brill, author of the well-known 2013 Special Report, Why Medical Bills Are Killing Us, in Time magazine has just released his new book, America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System. (1) Based upon in-depth reporting of interviews with more than 240 people involved in various ways across our health care industry, he gives us an inside look at how the Affordable Care Act was written, passed, implemented and changed over the last five years.
The result is an honest, damning indictment of our market-based system, with all its profiteering and run away costs. He concludes that the ACA, despite the hype of some of its architects and supporters, will fail to contain costs:
There’s nothing in the legislation that brings down the cost of healthcare. . . . The bad news is that the taxpayers are paying for it and they’re paying the same exorbitant prices that make the system so unworkable. . . . The drug companies are making more money, the hospitals are making more money, the medical device makers are making more money, and everybody is happy except the taxpayer. (2)
Brill’s description of the flaws of our profit-driven system are further amplified by his own personal experience with open-heart surgery for an aortic aneurism. After an eight-day hospitalization, his medical bills came to $197,000. Some time later, even Stephen Hemsley, president and CEO of UnitedHealth Group, his health insurance company, could not explain the medical bills and explanation of benefits.
Brill’s meticulous and well documented reporting of our system problems falls apart when it comes to fixing these problems. There is somehow a striking disconnect between his objectivity in the first part of the book and the proposals he puts forward toward the end. Yes, he is very well informed, is a graduate of Yale Law School, and has had personal experience as a patient, but that does not make him a health policy expert, as many of his readers now expect. He says in his book, as he was recovering from surgery, he began to frame his “unusual idea” of how to go beyond the Affordable Care Act, which he believes is unsustainable because of costs, and to fix U.S. health care:
At first, pieces of it came in the form of seemingly random thoughts that popped up during the extra time I had to read and watch television. But they soon began to come together. (3)
These are the components of his seven-part proposal for regulating our health care system:
- Require that any market have at least two big, fully integrated provider-insurance companies (e.g. Kaiser); large markets could have more.
- Cap the operating profits of what would be those now-allowed dominant market players, or oligopolies, at perhaps 8 percent, compared to the current average of about 12 percent.
- Cap the salaries and bonuses of hospital employees (including the CEOs) who do not practice medicine full-time at 60 times the amount paid to the lowest paid full-time physician, typically a first-year resident.
- Establish ombudsman’s offices in each oligopoly to streamline the appeals process for patients who believe they have received inadequate care, and for physicians who feel they have been pressured to limit care.
- Any government-sanctioned, oligopoly-designated integrated system should have a physician with practice experience as its top executive.
- Require any sanctioned, oligopoly provider to insure a certain percentage of Medicaid patients at a stipulated discount.
- Require these regulated oligopolies to charge any uninsured patients no more than they charge any competing insurance companies whose insurance they accept, or a price based on their regulated profit margin if they don’t accept other insurance. (4)
While there may be merit in some of these proposals, Brill’s brief prediction of how they would reform our system is unpersuasive and comes across as only wishful thinking, uninformed by evidence. His “plan” would just add another layer to our flawed system, based especially on getting some of its providers bigger yet somehow more accountable. There are many problems with his proposals. For example, what would they do for people in many parts of the country, including rural areas, and why is “bigger is better” a solution to our already consolidating system?
For some reason, Brill ignores mountains of experience and evidence that there are more logical and proven ways to rein in our out-of-control system. For example, he recognizes in his first chapter that the U.S. spends more ($3 trillion in 2014) than the next 10 biggest spenders on health care combined: Japan, Germany, France, China, the United Kingdom, Italy, Canada, Brazil, Spain, and Australia. But then he shows no interest in finding out how these countries can spend so much less on health care than we do while also providing better access and usually better outcomes of care. Recent years have seen a growing information base of how they do it, including T. R. Reid’s excellent 2009 book The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, in which he notes, after study of the experience in France, Germany, Japan, the UK, and Canada, that:
The American system does well when it comes to providing medical care, but has a rotten system for financing that care. . . . All the other rich countries have found financing models that cover everybody and they still spend much less than we do. We’ve ignored those foreign models, partly because of “American exceptionalism”—the notion that the United States has nothing to learn from the rest of the world. (5)
Brill also ignores long-standing efforts in this country to enact universal coverage through a single-payer system, improved Medicare for all, as embodied in John Conyers’ bill in the House, H. R. 676. He cavalierly dismisses this alternative in these words: [My proposed regulations are] certainly more realistic than pining away for a public single-payer system that is never going to happen. (6)
Good as Brill’s book is (and I strongly recommend it) in the diagnosis of our health care problems—the toxicity of our profiteer-dominated system— his proposed treatment is speculative and uninformed by evidence. At best, if implemented, his proposals would just tinker around the edges of our problems.
We still need to ask more fundamental questions before we can see how to go forward with real health care reform, such as: who is the health care system for? (our current answer is the profiteering, mostly corporate stakeholders, not patients and their families); should health care be just another commodity for sale on an open market?; and is health care a personal right (as it is in most advanced countries), or a privilege based on ability to pay?.
Brill and I agree on one reality—the ACA is unsustainable because of its inefficiency, increasing bureaucracy, and unaffordable costs to taxpayers as well as patients and families. As all this becomes more clear, he asks, as we all should, what should follow the ACA? My just released book, How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans, describes and supports the single-payer solution, improved Medicare for all, as a public financing system costing less than the ACA, coupled with a more accountable private delivery system. (7) I hope that readers will read both books and compare their merits based on evidence and experience.
- Brill, S. America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System. New York. Random House, 2015.
- Brill, S. Health care expert Steven Brill on Obamacare: “Everybody is happy except the taxpayer.” Real Clear Politics Video, January 5, 2015.
- Ibid # 1, pp. 418-419.
- Ibid # 1, pp. 438-441.
- Reid, TR. The Healing of America: A Global Quest for Better , Cheaper, and Fairer Health Care. New York. The Penguin Press, 2009, pp. 225-226.
- Brill, S. Ibid # 1, p. 441.
- Geyman, JP. How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans. Friday Harbor, WA. Copernicus Healthcare, 2015.
By John P. Geyman
International Journal of Health Services, February 10, 2015
The Affordable Care Act (ACA) was enacted in 2010 as the signature domestic achievement of the Obama presidency. It was intended to contain costs and achieve near-universal access to affordable health care of improved quality. Now, five years later, it is time to assess its track record. This article compares the goals and claims of the ACA with its actual experience in the areas of access, costs, affordability, and quality of care. Based on the evidence, one has to conclude that containment of health care costs is nowhere in sight, that more than 37 million Americans will still be uninsured when the ACA is fully implemented in 2019, that many more millions will be underinsured, and that profiteering will still dominate the culture of U.S. health care. More fundamental reform will be needed. The country still needs to confront the challenge that our for-profit health insurance industry, together with enormous bureaucratic waste and widespread investor ownership throughout our market-based system, are themselves barriers to health care reform. Here we consider the lessons we can take away from the ACA’s first five years and lay out the economic, social/political, and moral arguments for replacing it with single-payer national health insurance.
Will the ACA be different, and if so, in what ways? And if it won’t work, what next? These are the questions we will deal with in this article, drawing from my just-published book, How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans. The goals of this article are three-fold: (a) to compare the goals and claims for the ACA with its actual experience in the areas of access, costs, affordability, and quality of U.S. health care; (b) to summarize lessons we can already take away from its first five years; and (c) to briefly consider economic, social/political, and moral arguments for replacing the ACA with NHI.
Full Text (PDF – 17 pages):http://joh.sagepub.com/content/early/2015/01/24/0020731414568505.full.pdf
In this paper, John Geyman summarizes the content of his important new book, “How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans.” It is already clear that the Affordable Care Act has not and will not provide adequate repairs to our fragmented and dysfunctional health care system. Rather than inflicting more suffering by continuing this flawed experiment in health policy, we should immediately begin the transition to a system that will work – a single payer national health program.
Both this IJHS article and his book serve as important resources in educating the nation on why this transition should be initiated as soon as possible. They should be distributed widely.
The book is available through the PNHP website here.
This week the Forum Club of Sun City Palm Desert (a California retirement community) held a forum on single payer health care. Forum Club Secretary Mike Wedekind, a Canadian, spoke on Canada’s single payer system, and I spoke on the problems with the U.S. system that would be amenable to enactment of a single payer system.
Since it was an after-dinner meeting, I expected the usual laid-back audience with a few partaking of postprandial snoozes. On the contrary, we received great feedback from the attendees. Many attending were snowbirds – relatively affluent and generally politically conservative Canadians who maintain a winter residence in this desert community.
After we each spoke for twenty minutes, the attendees met at round tables to discuss various aspects of U.S. and Canadian health policies. Then a moderator from each table presented their quite astute observations.
I spoke individually with several of the attendees. Even though the Forum Club is explicitly non-partisan, I received no negative comments about a single payer system for the United States. In fact, the reason that I decided to write this commentary was the response of the Canadians. Though most seemed to be politically conservative, there was absolutely no indication that they thought that somehow their single payer system was deficient, especially compared to ours, except for a problem with queues for some elective services such as joint replacement. There was no mention of the need to privatize health care since they already have a private health care delivery system. They certainly see no need for intrusive, wasteful private insurers, other than to provide supplementary benefits outside of their Medicare.
It made me wish that it was as easy to converse on this topic with conservatives here in the United States. A poll last month revealed that 23 percent of Republicans already support “an expanded, universal form of Medicare” (as do 79 percent of Democrats and 45 percent of Independents).
Everyone should give some thought as to what the message might be that resonates with the Independents and Republicans who are supportive, but, above all, what is it that causes Canadians across the political spectrum to be so supportive of their Medicare? We have to deliver that message here in the United States.
By Caroline F. Pearson
Avalere, February 11, 2015
New analysis from Avalere Health finds that some exchange plans place all drugs used to treat complex diseases – such as HIV, cancer, and multiple sclerosis – on the highest drug formulary cost-sharing tier.
“Plans continue to innovate on benefit design in the exchange markets,” said Dan Mendelson, CEO of Avalere. “These designs are calibrated to optimize enrollment by delivering low and stable premiums – the primary metric that consumers use to select a plan.”
Specifically, in five of the 20 classes of drugs analyzed, plans placed all drugs in a class on the specialty tier. Specifically, in the Protease Inhibitor and Multiple Sclerosis Agents classes, 29 and 51 percent of plans respectively place all drugs, including available generics, on the highest tier.
Moreover, a subset of plans in each of 10 drug classes1 placed all single-source branded drugs in a class on a specialty tier. Specifically, in 8 of the 10 classes, 2015 exchange plans were more likely than 2014 plans to assign all single-source branded drugs to the highest cost sharing tier. A single-source branded medication is a brand name drug without a generic equivalent. The practice was most common for some cancer drugs and drugs used to treat multiple sclerosis. Roughly 30 percent of plans also place all single-source drugs for HIV/AIDS on the specialty tier.
“Enrolling in a plan that places all medications for a particular disease on the specialty tier can mean significant out-of-pocket costs for consumers, particularly if they do not qualify for cost sharing reductions,” said Caroline Pearson, Vice President at Avalere.
Some plans in the insurance exchanges are placing all drugs used to treat complex diseases, such as HIV, cancer, and multiple sclerosis, on the highest drug formulary cost-sharing tier. We have covered this terribly abusive process before, but this update shows that they are “increasingly” placing all medications for expensive conditions into specialty drug tiers. In spite of the pushback, it’s getting worse, not better.
The reasons are obvious. Higher patient cost sharing reduces the insurer’s portion of the payment for the drugs. Higher cost sharing increases the probability that patients will not fill their prescriptions due to the cost, saving the insurer even more money. Most importantly, placing all drugs for an expensive chronic disorder in the highest tier greatly increases the probability that the insurer will not have to cover these high cost patients as they much more likely will obtain their insurance from a competitor.
What then will the competitor do? It’s obvious. They will also move these drugs to the highest tier. That is the nature of business competition. When we rely on private insurance plans to cover health care, we should expect that those plans will always follow an optimal business model.
This devious policy is great for insurers’ businesses, but it is terrible for patients. Health care reform should have been all about the patient. We can still make it so by firing the private insurers and placing our own public insurer in charge through an improved Medicare that covers everyone.
Mathematica Policy Research, January 2015
CMS successfully convened 31 unique other payers (3 to 9 per region) and together with them provides non-visit based monthly care management fees in addition to traditional payments for practices to invest in redesigning and transforming care. (For the median practice, this funding was equivalent to 19 percent of total [non-CPC] practice revenue, or about $70,045 per clinician, in CPC’s first program year.) In addition to this funding, CPC also provides practices with learning activities as well as data feedback on cost, service use, quality of care, and patient, provider, and staff experience, to assist in their transformation. [p. xiii]
Across all seven regions in the first year, early results suggest that CPC has generated enough savings in Medicare health care expenditures to nearly cover the CPC care management fees paid by CMS for attributed Medicare FFS beneficiaries, although not enough to generate net savings. [xiv]
This report by Mathematica analyzes the first year of a four-year experiment being conducted in eight states by the Center for Medicare and Medicaid Innovation, an agency established within the Centers for Medicare and Medicaid Services (CMS) by the Affordable Care Act. The experiment is widely seen as a test of the “patient-centered medical home” (PCMH), although CMS does not call it that. CMS entitled the experiment the Comprehensive Primary Care (CPC) Initiative. The Mathematica report concludes that the experiment has not saved money for CMS.
This report is unusual in that it contains information on the cost of “medical homes” from both the provider’s and the insurer’s perspective. Although the “medical home” fad is almost a decade old, research on how much it costs providers and insurers to finance the goods and services necessary for clinics to qualify as “homes” is almost nonexistent.
According to Mathematica, the clinics participating in the CPC experiment have received subsidies equal to 19 percent of the clinics’ revenues. These subsidies (“non-visit based monthly care management fees,” as Mathematica calls them) were provided by CMS and 31 private insurers, including United Healthcare, Anthem, Aetna, and Cigna. These subsidies do not include the subsidies many clinics received from the federal government to buy electronic medical records, nor the subsidies previously received by the two-fifths of the clinics that had been certified as PCMHs prior to the start of the CPC experiment. Finally, the 19 percent figure does not include expenditures by CMS and the 31 insurers on training and “data feedback … to assist with transformation.” The total cost of the experiment – those incurred by both the clinics and the insurers – is, therefore, more than 19 percent of clinic revenues.
Mathematica also reports in a table (ES-2, p. xxi) that Medicare’s subsidies raised Medicare spending on the patients “attributed” to the clinics by 3 percent and that the clinics cut Medicare spending on medical care by 2 percent for a net change in total spending of plus 1 percent. In per-member-per-month (PMPM) terms, Medicare spent an additional $20 PMPM on “attributed” Medicare patients and saved only $14 PMPM. But, to repeat, the 3 percent and $20 PMPM figures do not include the cost to CMS of the training and “data feedback.”
Mathematica does not report analogous data for the private insurers. The report tells us only that Medicare’s payments to the clinics were much larger than those of the private insurers. Medicare accounted for only 26 percent of “attributed” patients but provided 64 percent of the subsidies.
The 19 percent figure for Medicare beneficiaries is consistent with anecdotal data I cited in a comment I posted here a month ago. That evidence suggested that the costs clinics must incur to qualify as PCMHs is somewhere in the neighborhood of 15 to 20 percent of clinic expenditures.
Although the information in the Mathematica report is unusually helpful, that is not saying much given the near total absence of research on the cost of “homes.” The report still leaves fundamental questions unanswered. Is a 19 percent increase in funding enough to finance the purchase of the extra staff and equipment clinics need to “transform” into providers of “comprehensive care” or PCMHs? Mathematica offers only vague statements on this important question. Here is one of the few comments on this issue from the 173-page report: “For many practices, CPC’s PMPM care management fees were an important motivation for participation. … Practices that had begun participation in a local or regional PCMH initiative prior to CPC viewed the additional revenues as less important.” (p. 24)
Here is another fundamental question the report leaves unanswered: Would the CPC experiment save more than it costs if CMS were to raise or lower the subsidies? For example, what would happen if CMS were to double the subsidies to 40 percent of clinic revenues and 6 percent of CMS payments? Would the participating clinics improve the health of their patients so dramatically that CMS’s medical costs would drop by 10 percent, for a net savings of 4 percent? The report offers no information to help us answer that question.
I predict that when this four-year experiment is over Mathematica will still be unable to address these questions. These questions will be unanswerable because the hypothesis that CMS is testing is too vague to be tested. I will have more to say about this in another comment about the Mathematica report that I will post soon.
Kip Sullivan, J.D., is a member of the board of Minnesota Physicians for a National Health Program. His articles have appeared in The New York Times, The Nation, The New England Journal of Medicine, Health Affairs, the Journal of Health Politics, Policy and Law, and the Los Angeles Times.
By Jessica Schubel and Sarah Lueck
Center on Budget and Policy Priorities, February 7, 2015
Considerable uncertainty surrounds the potential scope of the “waivers for state innovation” authorized under the Affordable Care Act (ACA), which allow states to modify how they implement key elements of health reform beginning in 2017. Also known as “1332 waivers” for the section of the ACA creating them, the waivers are attracting attention as a way states may pursue their own approaches to expand coverage, including alternatives that would represent a significant departure from the ACA’s standards and requirements.
Many aspects of the ACA, however, cannot be waived. Moreover, the ACA establishes several conditions that states must satisfy if they diverge from ACA standards and requirements. These conditions ensure that states using the ACA’s waiver authority continue to meet the overarching goals of health reform, such as extending access to affordable health coverage that provides a basic level of benefits.
In addition, section 1332 waiver authority doesn’t extend to Medicaid or the Children’s Health Insurance Program (CHIP). If a state wants to change these programs at the same time that it changes how it implements health reform, it can simultaneously request approval of a Medicaid or CHIP demonstration project under section 1115 of the Social Security Act. Section 1332 waivers aren’t themselves “super waivers” that give states sweeping new authority over Medicaid or CHIP (or Medicare), as some have suggested.
This paper describes key elements of 1332 waivers, how states may use them, what conditions states must satisfy to receive federal approval, and how they interact with existing waiver authority related to other federal health programs.
“Forget about our gridlocked Congress. We’ll get an ACA waiver and enact our own state-level single payer system, just like Saskatchewan did in Canada.” Great idea. The problem is that the Sec. 1332 waivers authorized in the Affordable Care Act are extremely limited in their scope. This very helpful article from CBPP explains the uses and limitations of the Sec. 1332 waivers.
Although the limitations are disappointing, single payer activists should vigorously proceed on two fronts. While Congress remains non-receptive to legislation moving us toward single payer, efforts should continue on a state level to enact whatever single payer policies are possible. That not only would make the eventual transition to a single payer system smoother, but it would also improve access and affordability for those who need relief now.
The more important front is to immediately step up advocacy for federal legislation, using John Conyers’ H.R. 676 – the Expanded and Improved Medicare for All Act – in educating the public as to reform that would really work. Although the Republican-controlled 114th Congress is preoccupied with responding to the Affordable Care Act and will not advance a single payer bill, nevertheless it is essential that we use this time to educate, form coalitions, educate, initiate grassroots efforts, and educate. As people discover how severe the deficiencies in our current system are, they will want to hear about a system that does not take away their choices while exposing them to financial hardship.
So understand the limitations of Sec. 1332 waivers as you continue your advocacy for state reform, but, by all means, simultaneously intensify your efforts for federal legislation that will enable not only your state, but all states, to ensure that everyone in the nation will have access to all essential health care services, free of financial barriers.
By Elisabeth Rosenthal
The New York Times, February 7, 2015
The Affordable Care Act has ushered in an era of complex new health insurance products featuring legions of out-of-pocket coinsurance fees, high deductibles and narrow provider networks. Though commercial insurers had already begun to shift toward such policies, the health care law gave them added legitimacy and has vastly accelerated the trend, experts say.
The theory behind the policies is that patients should bear more financial risk so they will be more conscious and cautious about health care spending. But some experts say the new policies have also left many Americans scrambling to track expenses from a multitude of sources — such as separate deductibles for network and non-network care, or payments for drugs on an insurer’s ever-changing list of drugs that require high co-pays or are not covered at all.
For some… narrow networks can necessitate footing bills privately. For others, the constant changes in policy guidelines — annual shifts in what’s covered and what’s not, monthly shifts in which doctors are in and out of network — can produce surprise bills for services they assumed would be covered. For still others, the new fees are so confusing and unsupportable that they just avoid seeing doctors.
(B)y endorsing and expanding the complex new policies promoted by the health care industry, the law may in some ways be undermining its signature promise: health care that is accessible and affordable for all.
San Juan Capistrano, CA
The private insurance industry will always place a priority on optimizing its business model, which means maximizing revenues (premiums) and minimizing expenses (payments for patient care). Earlier managed care models proved unpopular because of denial of care, but now they have devised innumerable methods of denying payment instead, in full or in part. Many examples are found in this article.
In sharp contrast, an insurer owned by the public, such as Medicare, has a mission of serving patients. That is, our own public stewards are there to help us get the care we need. They are not there to try to produce a profit for the government; after all, its our own tax dollars.
We are close to the threshold wherein the public will no longer tolerate private insurers shifting ever more costs onto patients with health care needs, while taking away our choice of our health care professionals.
What is our way out? Improve Medicare and expand it to include everyone.
Some conservative commenters have pointed to Switzerland as a country which only uses private insurance companies and appears to have a system that works.
- The Swiss government writes a basic policy that all companies are required to offer with no change. Thus all the chicanery reported in the article is avoided. The policy is accepted by all doctors. People know exactly what they are getting. Everyone must have the basic policy.
- The private insurance companies may make no profit on the basic policy.
- The health care results of Switzerland are about average among the 10 or 12 wealthiest countries which is to say they are considerable better than we get.
- If the cost of insurance is more than 8% of a family’s income. they receive a subsidy from the government. About 40% receive such subsidies.
- We pay about 50% more for health care than the Swiss, but the Swiss pay almost 50% more than the other wealthy countries most of which use a variation of single payer.
- The Swiss government and insurance companies pay careful attention to the practices of its physicians wrt to poor practice, unnecessary tests, and overcharges. A suspected doctor will receive a dreaded “blue letter” from the insurance company requiring him to justify his practice.
If we can’t have an efficient single payer system like the UK or Canada, for example, I would settle for something like the Swiss system. It would do away with most of the scams illustrated in Rosenthal’s great series.
San Juan Capistrano, CA
In Reply to Len Charlap
The Swiss health care system is certainly superior to what we have in the United States, precisely because of the reasons cited by Dr. Charlap. However, a comprehensive report by OECD and WHO of the Swiss system was released in 2011, and, if you read it carefully, you will also find these features of the Swiss system – features they share with us:
- Highly inefficient and fragmented
- Profound administrative waste
- Inequitably funded
- Regressive financing
- Wide variations in premiums
- Highest out-of-pocket costs
- Increasing managed care intrusions
- Insurers game the system
Because of the inadequacies of the Affordable Care Act we need to return to the negotiating table to fix our health care system. But when we do, let’s not start from a position of compromise, thereby allowing private insurers to continue to inflict these abuses on us. Let’s begin with a bona fide single payer system – an improved version of Medicare that covers everyone.
This may be the most important article in Elisabeth Rosenthal’s outstanding series on health care costs and pricing in the United States. She shows that the Affordable Care Act failed to prevent private insurers from reducing their own risks by shifting much more of the costs onto patients, while reducing patient choice by further limiting their networks of approved providers.
Both access and affordability are worse now than they were with typical plans available a generation ago. The nation expanded the numbers covered by insurance, but at a cost of of leaving too many patients broke and without adequate access to care.
In my first posted response to her article, I repeated our oft-expressed view that it makes a difference on whether we finance health care through private insurers structured to optimize their business success or though public insurance designed specifically to serve patients. Elisabeth Rosenthal shows that what is good for insurers is bad for patients.
Some may wonder why I included two responses on the Swiss health care system when this article is on the poor quality of private health plans in America.
First I want to say that Len Charlap is one of the more astute and ethically-driven commentators in the readers’ response sections of The New York Times. His highly appropriate response to this article explains that our private insurance products could be greatly improved if we adopted the policies that the Swiss have in their country to regulate and control the excesses of the private insurance industry. Such a system theoretically would be more politically feasible in the United States since it is supported by a few prominent conservatives such as Harvard Professor Regina Herzlinger.
We definitely do need to return to the negotiating tables since the ACA reforms are intolerably flawed. Although I certainly agree with Len Charlap that the Swiss system definitely would be superior to what we have, I do have a problem supporting a Swiss-style private insurance model as our opening position on renegotiating reform. Imagine having to compromise with those on the far right who would insist that patients have greater financial exposure to the health care that they receive. They would perpetuate and make even worse the very problems that Elisabeth Rosenthal discusses in her article.
The reason that I am reposting our responses here is that Len Charlap’s comment received very high exposure since it was selected and displayed as a “NYT Picks” and at the top of the list of “Readers’ Picks.” On the other hand, my response to him was held until some time after the comments section was closed, and then, when it was posted, it was buried under 300 plus responses, and thus had virtually no visibility.
My response to him listed findings from a OECD/WHO report that revealed that the Swiss private insurance plans, though certainly better than ours, still had many serious deficiencies that we should reject as we go back to the tables to fix our sick system. Many NYT readers may assume from Len Charlap’s comment that the Swiss system is the answer, or at least a reasonable compromise with broad political support (except that the current Republican proposals move even further away from the highly regulated Swiss system).
So the point of discussing these comments on the Swiss system is found in my concluding remark in my second post above:
“Because of the inadequacies of the Affordable Care Act we need to return to the negotiating table to fix our health care system. But when we do, let’s not start from a position of compromise, thereby allowing private insurers to continue to inflict these abuses on us. Let’s begin with a bona fide single payer system – an improved version of Medicare that covers everyone.”
Press Release from Senator Richard Burr (R-N.C.), February 5, 2015
Today, U.S. Senator Richard Burr (R-N.C.), Senate Finance Chairman Orrin Hatch (R-Utah), and House Energy and Commerce Chairman Fred Upton (R-Mich.) unveiled the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act — a legislative plan that repeals Obamacare and replaces it with common-sense, patient-focused reforms that reduce health care costs and increase access to affordable, high-quality care. In contrast with Obamacare and its government-centered mandates and regulations, this bicameral proposal empowers the American people to make the best health care choices for themselves and their families.
The Patient CARE Act provides a legislative roadmap to repeal the President’s health care law known as Obamacare and replace the law with common-sense measures that would:
Establish sustainable, patient-focused reforms:
- Adopt common-sense consumer protections;
- Create a new protection to help Americans with pre-existing conditions;
- Empower small businesses and individuals with purchasing power;
- Empower states with more tools to help provide coverage while reducing costs; and
- Strengthen consumer directed health care and allow Americans to buy coverage across state lines.
Modernize Medicaid to provide better coverage and care to patients:
- Transition to capped allotment to provide states with predictable funding and flexibility.
Reduce defensive medicine and rein in frivolous lawsuits:
- Medical Malpractice reforms.
Increase health care price transparency to empower consumers and patients:
- Require basic health care transparency to inform and empower patients.
Reduce distortions in the tax code that drive up health care costs:
- Cap the exclusion of an employee’s employer-provided health coverage.
Empower Small Businesses and Individuals with Purchasing Power:
- Targeted tax credit to help buy health care.
The Patient Choice, Affordability, Responsibility, and Empowerment (Patient CARE) Act:http://energycommerce.house.gov/sites/republicans.energycommerce.house.g…
The Affordable Care Act has fallen far short of the health care reform that America desperately needs, and the Republicans have repeatedly voted for its repeal. To supposedly show that they are sincere about wanting to fix our health care system, they have introduced The Patient Choice, Affordability, Responsibility, and Empowerment (Patient CARE) Act – not formal legislation but rather a nine page white paper (accessible at the link above).
Although some have labeled this the Republican response to the Affordable Care Act, House speaker John Boehner has assembled another task force to prepare what presumably will be a more formal response, though likely only a more detailed version of this proposal.
When you read past the glowing rhetoric of this white paper, it becomes obvious that this is merely a rehash of several of the policies that Republicans have supported for the past few decades. They would remove mandates for insurance coverage, open the markets to plans with grossly inadequate, stripped-down benefits, sell insurance plans across state borders in a race to the bottom, shift more of the responsibility of paying for care to patients in need, expand the use of high deductible health plans, expand the use of health savings accounts (which do not work when they are empty), shift more of the responsibility of funding care for the poor to the cash-strapped states through Medicaid block grants, make comprehensive plans even less affordable by taxing them, establish under-funded high-risk insurance pools that are too small to meet the need, etc., etc.
These policies will leave more people uninsured, and the majority of those with insurance will end up with lousy plans because they will not be able to afford more comprehensive benefits. These plans will impair access and expose patients to financial hardship and even personal bankruptcy. With fewer funds directed to health care, our health delivery infrastructure could deteriorate, negatively impacting care for even the affluent.
However, the Republicans are doing us a favor. They are publicizing the deficiencies of the flawed reform program brought to us by the Democrats, and they are exposing their own flawed concepts of reform. That provides us with an opportunity to reenter the national dialogue on health care reform. Instead of continuing to rummage through bad policies, we can inject into the debate single payer policies that are truly effective. With the 2016 presidential political season already underway, we need to be sure that voters understand that their health care depends on the policies supported by the politicians they elect.
Yesterday’s message was about John Geyman’s book, “How Obamacare Is Unsustainable: Why We Need a Single-Payer Solution for All Americans” – a book written specifically for the purpose of ensuring that single payer occupies a prominent position in today’s political arena. For those who missed it yesterday, the message can be accessed here.
By John Geyman, M.D.
Copernicus Healthcare, January, 2015
As we all know, the intense debate over Obamacare, or the Affordable Care Act (ACA), is a polarizing issue that sharply divides political parties and the public. Confusion reigns over its benefits, problems and prospects as claims and counterclaims fill press and media coverage.
This book is an attempt to make sense out of all of this – to cut through the rhetoric, disinformation and myths to assess what is good and bad about the ACA, and to ask whether or not it can remedy our system’s four main problems – uncontrolled costs, unaffordability, barriers to access, and mediocre, often poor quality of care.
In Part One, we will briefly trace historical roots of various reform attempts over the years, and summarize some of the major trends that have changed the delivery system, professional roles and values, the ethics of health care, and the role of government vs. the private sector. In Part Two, we will compare the ACA’s promises with realities of what it has accomplished, examine its initial outcomes on access, cost containment, affordability and quality of care, ask whether its flaws can be fixed with a private insurance industry, and point out the lessons that we can already take away from the first five years of the law. In Part Three, we will discuss the many myths that are perpetuated by opponents of single-payer national health insurance (NHI) and show how that approach stands ready to deal directly with what has become a national disgrace – our increasingly fragmented and cruel health care system that serves corporate interests at the expense of ordinary Americans. We will make the case for NHI in three ways – economic, social/political, and moral. Most other advanced countries around the world came to this conclusion many years ago.
Why this book now? With the 2014 midterm elections behind us, divisions between the parties are even more polarized. The future of health care is even more uncertain. The 2016 election cycle is already underway, and both parties have to confront the failures of yet another incremental attempt to reform our so-called health care system. We have a short year and a half to re-assess where we are and try once again to get health care reform right. As much of the public knows all too well, the stakes get higher every day.
“How Obamacare Is Unsustainable” can be purchased through PNHP for $15.00, here. It is also available through Amazon.com and BarnesandNoble.com for $18.95.
John Geyman has been a prolific writer of books describing the major deficiencies in health care in the United States, but “How Obamacare Is Unsustainable” is set apart from the others for a couple of important reasons. He explains what has been wrong with our five year experiment in reform and what we can do about it, and, especially pertinent, it is timed to coincide with a moment in history in which there will be an intense national dialogue recognizing the health care failures of the past and present, with a demand for political solutions as we enter the season of the 2016 presidential election.
Just today, Sen. Burr, Sen. Hatch and Rep. Upton released a nine page report being characterized as the Republican response to Obamacare (though Speaker Boehner has requested another, likely similar proposal from a House team that includes Rep. Upton). Unfortunately, the Burr/Hatch/Upton response is highly partisan and thus gets most of the policy wrong. Although the Affordable Care Act was conceived as a non-partisan solution, it too became partisan as the politics shifted from a largely right-wing concept advanced by Democrats (non-partisan) to an exclusively Democrat-endorsed proposal (highly partisan). In the turmoil, the result ended up being the most expensive model of reform, yet it contained terribly flawed policies that fall intolerably short of universality, affordability, accessibility, efficiency and equity. Both the Democrats and the Republicans are wrong.
As we enter the pending national dialogue on reform we need to move the rhetoric from partisan sniping to informed discussions of policy. We know where Congress lies in the highly-polarized partisan divide, but what about the nation?
According to a January 2015 Gallup poll, 42% of voters are Independents, 29% are Republicans, and 28% are Democrats. Thus a plurality is non-partisan.
According to that same Gallup poll, 45% of Independents support getting their insurance “through an expanded, universal form of Medicare.” To no surprise, 79% of Democrats also support universal Medicare, but, of great importance, 23% of Republicans do as well. When people understand policy, the partisan polarization diminishes.
At this time in history, it is imperative that all solutions be on the table, including those that give up on comprehensive reform (Burr/Hatch/Upton), those that perpetuate unacceptable mediocrity (the Affordable Care Act), and those that would actually achieve the goals that a large majority of Americans support (single payer, improved Medicare for all).
This is why John Geyman’s book is so timely. It is a book on optimal policy. It can be contrasted with today’s partisan release on the Republican answer to Obamacare. Their nine page proposal can be accessed at the following link:http://www.burr.senate.gov/public/_files/FINAL%20Patient%20CARE%20Act%20…
Partisan politics has not served us well with the Democrats giving us overpriced and mediocre reform and the Republicans proposing to further expose patients to the perverse dysfunctions of the market. Maybe Independents can help us stamp out partisanship and instead become serious about doing what is right for the nation.
Right now we have a chance to change history. We should make widely available John Geyman’s book based on sound, effective policy – just what the nation desperately needs.