Means testing Medicare

Posted by on Tuesday, Dec 11, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Democrats warm to Medicare change that late Sen. Edward Kennedy opposed

By Elise Viebeck
The Hill, December 8, 2012

Democrats in Congress are changing their tune on means testing in Medicare, an idea the late Sen. Edward Kennedy (D-Mass.) resisted for decades.

Leading Democratic lawmakers have suggested that raising premiums for wealthy Medicare beneficiaries could be a matter of common ground with Republicans in the ongoing deficit-reduction talks.

“I think that is reasonable and certainly consistent with the Democratic message that those who are better off in our country should be willing to pay a little more,” Senate Majority Whip Dick Durbin (D-Ill.) said Thursday.

The idea of affluence testing is not new — wealthy Medicare recipients already pay higher premiums for doctor visits and prescription drug coverage.

But negotiations to avoid the so-called “fiscal cliff” open the door to new measures that would make Medicare costs more progressive based on income.

Last week, Senate Finance Committee Chairman Max Baucus (D-Mont.) called the idea “somewhat attractive” as a bargaining chip for talks on the so-called fiscal cliff.

Sen. Claire McCaskill (D-Mo.) remarked that “Donald Trump may need medication, but he certainly doesn’t need the government to pay for it.”

And Congressional Black Caucus Chairman Emanuel Cleaver (D-Mo.) called means testing a good way to bolster Medicare’s budget without cutting benefits.

“We already have a substantial amount of means-testing in the Medicare program — most significantly, there is no cap on the income subject to the Medicare tax,” said (Rep. Henry) Waxman in a statement to The Hill.

“That is the right way to ask the better-off to pay more. And in fact, we also have means testing now of the Part B and Part D premiums. It is a mistake to go further.”…

Now that health care costs are unbearably high, Medicare must be progressively financed since moderate- and low-income individuals can no longer bear the full costs. A major step forward was the removal of the cap on wages subject to Medicare taxes, so higher income individuals pay more. The Affordable Care Act also added a new 0.9% Medicare tax for incomes over $200,000/$250,000.

In addition, in order to help cover Medicaid expansion and subsidies for the exchange plans, the Affordable Care Act also added a 3.8% tax on investment income, again for those with incomes over $200,000/$250,000. So we have already embarked on policies that make health care financing progressive, though we need to do more, but only on the financing end.

Medicare benefits should be the same for everyone. We should eliminate premiums and cost sharing, and we should expand benefits so that administratively wasteful Medigap and retiree health benefit programs are no longer necessary. Low income individuals should receive the same standard of care as the wealthy, just as was the intent in enacting the traditional Medicare program.

Introducing means testing, which we have already begun with Part B and Part D premiums, reduces support of wealthier beneficiaries who are annoyed by these additional charges. Once the principle of means testing is established, the budget hawks ratchet it up, driving wealthier individuals to look for private options, currently available as the Medicare Advantage plans. It is only one small additional step to introduce premium support – vouchers – where the wealthy will take their money and run. Once you lose support of wealthier individuals who have a strong political voice, then Medicare will descend down the path toward becoming a welfare program, like Medicaid.

We cannot allow this bipartisan attack on Medicare to proceed. Mobilize the forces!

John Goodman says the problem is the anti-capitalist mentality

Posted by on Monday, Dec 10, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The Anti-Capitalist Mentality

John Goodman’s Health Policy Blog
By John Goodman
National Center for Policy Analysis, December 10, 2012


Have you ever noticed that people who worry about inequality seem to be focused only on certain kinds of inequality? When they obsess about the income and wealth of the top 1%, they seem to be bothered by only some of those at the top, and not others.

For example, have you ever seen Robert Reich or Paul Krugman or any like-minded complainer bemoan the huge salaries of professional athletes?

Even more puzzling, when is the last time you saw any of them assailing worthless heirs?

Something else is odd about the sociology of the anti-inequality crowd. They seem to be unfazed by inequality created by government.

Take the recent Powerball outcome. At $588 million, it was the largest lottery prize in history ― to be shared by two ticketholders.

Then there is the entire structure of elderly entitlements. They mainly take from people who have less and give to people who have more.

Think about that last finding for a moment. Throughout the country, families who are struggling to get by and who cannot afford to buy their own health insurance are paying 15% of their income to fund hip and knee replacements for our true leisure class, so they can get back out on the golf course.

But when Paul Krugman writes about the top 1%, this is not who he has in mind. He is complaining about the incomes of people who run large companies. He wants their tax rate to be 91%!

I think Ayn Rand may have been right. The left is populated by people who are not especially bothered by those who become wealthy by virtue of birth or luck or good fortune. They do not even seem to be bothered by the winner-take-all feature of professional sports that confers millions of dollars on some athletes while those who were almost as good languish in near poverty. No, who they obsess about are the creators, the builders, the entrepreneurs.

They don’t hate the wealthy who don’t deserve their wealth. They hate the wealthy who do deserve it.

(John Goodman understandably wants his comments to be read in full, which you can do at the following link.)

Reader Comments:

Don McCanne says:
December 10, 2012 at 12:30 pm

Although everyone already understands this, it is still important to distinguish between equality and equity. Most progressives are not striving for equality of income and wealth, rather the goal is equity – introduce an element of fairness in distribution.

Although sometimes expressed as an anti-corporate bias, the objection is more to policies favoring massive perverse distributions, as from rent seeking for instance. Rent seeking that provides little net benefit to society while the rent seekers scoop up the wealth, to many of us represents an intense sense of unfairness.

The work of Piketty and Saez demonstrates the unfairness that has now become the norm. In the face of a massive transfer to the wealthy, median household incomes are no longer enough to bring average families the American Dream – paying for essential needs while allowing enough for higher education of their children, adequate retirement accounts, medical costs for those with greater needs, and perhaps even a modest improvement in housing and transportation, and even an occasional well-earned vacation. And keep in mind the obvious that half of all households fall below the median.

With equitable public policies in a wealthy nation like the United States, hard working families should be able to realize the American Dream. That’s fair. What isn’t fair is for the rent seekers to establish a plutocracy and use it to break up our unions, clobber our retirement and health programs, ship jobs out of the country, saddle higher education with intolerable debt, all of this and similar abuses on top of filling their coffers with funds they have wrested away from the main source of our productivity – the workers of America.

Inequality will always be with us, but we do need policies that increase fairness by reducing inequity in America.…

This blog on “The Anti-Capitalist Mentality” does pertain to health care reform in that we will never have an equitable health care system for all until we decide that equity – fairness – must be a primary goal of public policy.

Dow Jones and health care: A dangerous liaison

Posted by on Monday, Dec 10, 2012

By Gabriel Komjathy, M.D.

Recently UnitedHealth Group replaced Kraft Foods as one of the stocks on the prestigious Dow Jones Industrial index.

UnitedHealth is the first health care stock to be so “honored.” The reason cited: the health care sector now comprises one-sixth of our economy. That figure is more than double that of other developed industrial nations.

Wall Street must be satisfied as their investors continue to reap heavy profits off of people’s illnesses. It proves to me that the initial outcry by private health insurers against the Affordable Care Act (ACA) was feigned. Most of the provisions in the ACA offer further advantages for the corporate health care industry.

For one, 20 million new customers will be enrolled into various privately run insurance plans. The premiums for many of these folks will be heavily subsidized by taxes paid by you and me. Yet there will be virtually no restrictions on premium increases, deductibles and out-of-pocket expenses.

No wonder Wall Street is smiling.

Our privately based corporate health care system will continue to degrade the dignity and take advantage of our most vulnerable citizens.

During the economic turndown of 2008-9, health care stocks were among the few that were not adversely affected. This aberration was due to two factors.

For one, illness continues during recessions. It is not a product or commodity you can “cut back” on.

Second, many people are forced to cut back on discretionary spending during hard times. In order to avoid co-pays, many people skipped important preventive and routine visits to their health professional. Non-urgent health care concerns were ignored. Meanwhile, insurance companies continued to collect the rising health insurance premiums.

As a physician who has practiced in the U.S. and Canada for 32 years, I can tell you that preventive and routine visits often play a crucial role in the continuity of care. The early manifestations of many serious illnesses, including cancer, are often detected on slight abnormities seen on routine tests such as blood counts and urinalysis. These tests should not be neglected because of avoiding a $25 co-pay – but they often are, and understandably so. These are hard times.

The overall result of this dynamic is the achievement of a “healthier bottom line” for the medical insurance companies at the expense of the health of the population.

Examine your own situation or that of that of a loved one, and consider what would happen if either of you became seriously ill. Medical bankruptcy is just one injury or illness away for millions of Americans.

The conclusion is that in providing health care coverage, corporate America has failed to deliver. The costs of coverage are rising at a much higher rate than that of other services and there continues to be no true controls over them. Our health system is cumbersome, inefficient and has not improved the overall health of our nation.

The new health law will regrettably not change this picture very much.

Our country needs a standardized, universal and single-payer health care system. It need not be necessarily run by the government, but be strictly controlled by a federal agency.

However, private insurance companies, whose primary concern is their bottom line, should no longer run the show.

The well-being of our bodies, minds and economy depend on forming a fair and efficient health care system. All of us should have a stake in it, not just an exclusive elite minority of private stockholders.

Let’s not allow the calamity of Wall Street dictate the fate of our own personal health like it did with our “net worth.” We must act soon.

On behalf of the thousands of people that I have had the privilege to help over the years, I have a request.

I urge everyone to contact their legislators, regardless of political party, on both the state and federal levels. Urge them to overcome the meddlesome influence of lobbyists and demand, on your behalf, a meaningful and complete overhaul of our health care system.

Dr. Gabriel Komjathy practices urology in the Twin Cities area of Minnesota. He is a member of the Minnesota chapter of Physicians for a National Health Program.

Decline in general medicine career choices

Posted by on Friday, Dec 7, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

General Medicine vs Subspecialty Career Plans Among Internal Medicine Residents

By Colin P. West, MD, PhD and Denise M. Dupras, MD, PhD
JAMA, December 5, 2012

This study of a large national sample of internal medicine residents confirms that general medicine remains a less common career plan overall than subspecialty medicine. Combined with the fact that only a small minority of medical students express interest in general medicine and primary care careers, the small number of internal medicine residents reporting plans for generalist careers means a very limited number of generalists can be expected to enter practice each year.

This update confirms that internal medicine residents are selecting the subspecialties in preference to general medicine and primary care. In light of the pressing need for improving our primary care infrastructure, what policies should we support?

Since family medicine residents almost always eventually enter primary care, should training programs de-emphasize general internal medicine and place more emphasis on family medicine, while relegating internal medicine to the subspecialties? That would improve the allocation of residency slots since you would not be losing general medicine residents to the subspecialties after their residencies began. This is not to suggest that subspecialists should skip all training in general medicine. The purpose would be to stem the loss of generalists from the training programs.

Also many agree that the role of nurse practitioners in primary care should be expanded. This would be especially valuable in integrated health systems and medical homes. If so, the expansion should be coordinated with the family medicine programs to achieve an optimal balance of primary care professionals.

Since we aren’t getting the numbers right, shouldn’t we consider an alternative approach? If we had a federally funded national health program, wouldn’t we be striving to improve the use of our resources to be sure that our health care infrastructure is better balanced? Our current dysfunctional, fragmented method of financing our health care system doesn’t seem to be doing the job very well.

Greg Scandlen explains the irrationality of the individual mandate

Posted by on Thursday, Dec 6, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The Crown Jewel of ObamaCare Failures

By Greg Scandlen
National Center for Policy Analysis (NCPA), December 5, 2012

Now we get to the biggest failure of them all — the individual mandate. The premise was simple: If people aren’t buying what they should (in this case, health insurance), pass a law telling them they have to, and they will. Presto, Change-o problem solved!

Now, to be fair, Congressional Democrats weren’t quite that simple minded. They threw in lots of subsidies and required that insurers enroll anyone who applied, no questions asked. So, they made it affordable and available, along with being mandated. So, it should work like a charm, right?

Well, maybe in a vacuum. But in reality this rule is being inserted into a very complex and mature system of existing subsidies, responsibilities, and incentives. In this case, one of the primary factors is the role of employers in providing and paying for coverage.

Many people, including this writer, believe that placing that responsibility on employers was a major policy screw-up that created all the wrong dynamics in health care and virtually eliminated market functions because the payer and the consumer were not the same person.

Nevertheless, it is a system we have lived with for two-thirds of a century. Almost everything about health care and employment has been built around that relationship — prospective employees consider a company’s health benefits when deciding to take a new job; employers devote a lot of staff time and resources on choosing benefit programs; laws and regulations are written to ease the problems of interruption of benefits when people change jobs; courts are concerned that employers may not always fulfill their obligations to their workers. Not all employers provide benefits, but all feel an obligation and responsibility to do so, and the ones who don’t offer health benefits often feel conflicted about it.

Unwinding all this, even if desirable, is extremely complex and should take a very long transition period as we all learn new ways of doing things.

Enter ObamaCare. This law provides stark incentives for employers to get out of the business immediately. It even assuages any guilt feelings the employer might have by, first requiring that they continue to help pay for it, and next, by offering workers richer subsidies than the employer typically can. An employer will be able to save many thousands of dollars per worker by dropping coverage and sending employees to the Obama Exchange where they will get a choice of benefits plans and substantial subsidies if they make under 400% of the poverty level. Instead of paying, say, $10,000 per worker for coverage, now the employer can pay a simple $2,000 penalty and use the savings to give each worker a raise. Most employers will be able to save even more by reducing their HR departments, and they will be freed of complaints about any problems with the health plan they offer.

In February, 2011 McKinsey & Company did a large (1,329) survey of employers asking about their intentions with the Affordable Care Act and found that 30% said their company would “probably” or “definitely” drop coverage as a result. McKinsey is an extremely credible firm, but that didn’t stop supporters of ObamaCare from lambasting the survey because it was not consistent with other economic analyses. McKinsey had to issue a statement explaining it was not intended to be an economic analysis, it was an opinion survey. I would argue that such a survey is probably far more accurate than an economic analysis that must rely too much on assumptions. Indeed, it likely understated the situation. As employers learn more about the requirements of the new law they are more likely to run away from it.

We can’t know until it happens how many employers will drop coverage, but the 30% estimated by McKinsey may be the minimum. That could mean 50 million or more people who used to get employer coverage no longer will. For those employees this means:

*  No more automatic enrollment going along with the job. People will have to take the initiative to find out about the Exchange.
*  No more pure community rating of the employee share of premiums. The Exchange will vary premiums every year based on a person’s age.
*  No more paycheck deductions of the employee share of premiums. People will have to make some kind of payment arrangement for their share of the premium.
*  No more convenient and friendly HR Department people to answer questions. People will have to seek out an “Exchange navigator” to get their questions answered.

These employees are also likely to find at the Exchange:

*  A clunky web site run by the state or federal government laying out the coverage options.
*  Overpriced insurance options. (Because insurers can no longer ask medical questions, they will have no idea what kind of risks they are enrolling, or the premiums needed to cover those risks. They will err on the side of caution and charge higher premiums.)
*  Confusion about how much they will be charged for their share of the premium. (They will be subsidized, but the amount of the subsidy will vary according to their age, income, geographic location, family size, and choice of plan.)
*  Insurance plans that cover a bunch of stuff they don’t want or need.
*  No reliable source of personalized information. (Ever tried to call the Medicare helpline?)

Finally, they will realize that they don’t need to go through all this. They can delay making a decision until they really need to get health care services:

*  Exchange coverage is guaranteed to accept them at any time with no questions asked.
*  They can save a whole lot of money by not paying premiums and using that money for more pressing needs.
*  There is no meaningful penalty for failing to enroll. What penalty there is applies only to people who make enough money to pay income taxes, and it can be collected only by seizing whatever tax return is due the taxpayer. This can be easily avoided by upping deductions at the start of the year.

Most people have very few medical expenses in the course of a year. According to this chart 50% of the people in the United States consume only 3.9% of all health care expenses each year, while the top 20% consume 78.3%. People in the top 20% will certainly want to be covered but the bottom 50% get no advantage from insurance coverage. They spend far less on services than they would on insurance premiums.

(Scandlen includes here a slide taken from a presentation on “Medicare for All” by Paul Y. Song, MD of Physicians for a National Health Program, graphically demonstrating this distribution of health care consumption.)

Obviously not everyone will make the choice to go uninsured. People who are risk-adverse, or who have ongoing medical needs, or who have small children, will continue to be covered. But every year, every person will have to decide how best to spend their money. A very large number will decide they have better things to do with that money than spend it on insurance coverage they don’t want and never use.

The odds are that after all the trauma and expense of enacting and implementing ObamaCare, we will have fewer people insured than we did before it was enacted.

Greg Scandlen is a very well informed and respected member of the policy community who has been associated with conservative/libertarian organizations such as the National Center for Policy Analysis, Cato Institute, Galen Institute and Heartland Institute. This article for NCPA is presented in its entirety to demonstrate how much agreement there is with those of us at Physicians for a National Health Program in defining some of the problems with the highly flawed Affordable Care Act (Obamacare). This article could have been written by one of us at PNHP.

He does not offer any solutions in this particular article, though had he, it would undoubtedly be from his area of expertise and advocacy – consumer-driven health care, including health savings accounts and health reimbursement arrangements. That, of course, is quite a contrast from the single payer solution advanced by PNHP.

When there is so much agreement on what is wrong, why can’t we agree on the solution? Perhaps it’s our respective goals. We at PNHP want everyone to have affordable access to all essential health care services, as a matter of social justice. The advocates of consumer-driven health care seem to place the will of the individual consumer above that of society’s collective will for health care justice. But the divide is not quite that simple.

Supporters of an improved Medicare for all still agree that the patient (health care consumer) should make the ultimate decisions on his or her individual health care, after being informed on the options. The role of the government is to remove the financial barriers to that care.

The consumer-driven advocates would add to the health care consumer (patient) the responsibility of making spending decisions so that they would shop for higher quality and greater value. The role of the government would be to ensure access to basic health care services for those who lack the financial resources to pay for that care.

The problem with the consumer-driven approach is that is what we have now, and it isn’t working. Except for a marginal tax benefit, it doesn’t matter whether the patient’s share of cost comes from a health savings account or from other personal funds. The system perpetuates uninsurance and under-insurance which exposes far too many to financial hardship in the face of medical need.

An improved Medicare for all would eliminate financial hardship for individual patients while using public policies to reduce the excessive escalation of our collective health care spending. The latter is a task that our private insurers cannot master, but is ideally suited to a single, national, publicly-administered insurance risk pool.

Greg Scandlen understands this. He understands the inadequacies of his consumer-directed approach. I wish he could explain to us better, in terms devoid of ideology, just what is wrong with our approach – an approach that would provide everyone the care that they need in a progressively-financed system that we can all afford.

Will Liz Fowler determine the drugs you can have?

Posted by on Wednesday, Dec 5, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Analysis finds big state-by-state swings in prescription coverage

By Sam Baker
The Hill, December 4, 2012

President Obama’s signature healthcare law requires insurance plans to cover a range of prescription drugs, but the number of drugs covered will vary widely from state to state, according to a new analysis from Avalere Health.

Based on its analysis of state benchmark plans, Avalere said some states cover as little as 45 percent of available drugs, while others cover more than 99 percent.

“This means that … linking drug coverage to the benchmark formulary will result in drastically different coverage requirements state-to-state,” Avalere said.…

Map of state variations in number of drugs covered:…


Obamacare architect leaves White House for pharmaceutical industry job

By Glenn Greenwald
The Guardian, December 5, 2012

When the legislation that became known as “Obamacare” was first drafted, the key legislator was the Democratic Chairman of the Senate Finance Committee, Max Baucus, whose committee took the lead in drafting the legislation. As Baucus himself repeatedly boasted, the architect of that legislation was Elizabeth Folwer, his chief health policy counsel; indeed, as Marcy Wheeler discovered, it was Fowler who actually drafted it.

What was most amazing about all of that was that, before joining Baucus’ office as the point person for the health care bill, Fowler was the Vice President for Public Policy and External Affairs (i.e. informal lobbying) at WellPoint, the nation’s largest health insurance provider (before going to WellPoint, as well as after, Folwer had worked as Baucus’ top health care aide).

More amazingly still, when the Obama White House needed someone to oversee implementation of Obamacare after the bill passed, it chose … Liz Fowler.

Now, as Politico’s “Influence” column briefly noted on Tuesday, Fowler is once again passing through the deeply corrupting revolving door as she leaves the Obama administration to return to the loving and lucrative arms of the private health care industry: “Elizabeth Fowler is leaving the White House for a senior-level position leading ‘global health policy’ at (pharmaceutical giant) Johnson & Johnson’s government affairs and policy group.”

It’s difficult to find someone who embodies the sleazy, anti-democratic, corporatist revolving door that greases Washington as shamelessly and purely as Liz Fowler.…

A well designed, national, single payer financing system would ensure that everyone would receive whatever appropriate drugs they might need. Instead, we have an inefficient, fragmented, costly financing system that imposes regulatory and financial barriers in the way of many needed medications, in a manner inconsistent from state to state.

Congress and the President could have consulted with those fine folks at Physicians for a National Health Program, and then we would have a system that serves the needs of patients. Instead, they consulted a “sleazy, anti-democratic, corporatist,” Liz Fowler, who orchestrated a program that instead primarily serves the needs of the insurance and pharmaceutical industries. She had previously played a key role in the 2003 Medicare Prescription Drug Act (MMA), a program that prohibits government contracting for drugs under Part D of Medicare. She entered the revolving door as a pawn of the insurance industry and departs as a pawn of the pharmaceutical industry – the very industries for which she wrote the legislation.


We can change it.


Posted by on Wednesday, Dec 5, 2012

Even as we marvel at the latest advances in medical technology in this country, a dire and unacceptable consequence of these changes is already in plain sight—the loss of the patient as person in the process of our fragmented and dysfunctional health care “system.”

There are so many ways in which patients as persons get lost in the increasingly chaotic landscape of today’s health care environment. These are some of the trends that perpetuate and escalate this problem:

• A multi-payer financing system with some 1,300 private insurance companies that creates perverse incentives for physicians and other providers to deliver increased volume of inappropriate and unnecessary services to grow their revenues.
• Lack of price controls throughout the system.
• A largely for-profit private health insurance industry that profits by covering less care.
• A system driven by a business ethic more than a service ethic with health care just another commodity for sale on an open market.
• A medical-industrial complex that has become solidly entrenched over the last 40 years with tremendous economic and political power.
• Reimbursement policies that favor procedures and specialized services over more time-intensive services typical of primary care, geriatrics and psychiatry.
• A physician workforce that has become dominated by non-primary care specialists with little knowledge of the patients as persons, as members of families and communities.
• A disconnect between ambulatory care and hospital care, with primary care physicians following their patients into the hospital now a rarity.
• Hospitalists trying to coordinate hospital care of patients with little knowledge of their prior care and often insufficient communication among multiple specialists.
• A growing use of electronic medical records, a necessary and welcome change but marred by competing systems that don’t speak to each other and largely omit any information of patients as persons.

As a result of these changes, the present state of health care in this country, to an increasing extent involves strangers caring for strangers, with patients’ narratives and life stories no longer a key element guiding decisions about their own health care. This is a serious problem, not yet part of our national conversation, that has led to a growing gap between the care that patients need and deserve and what they receive.

Can the person be restored as the central object of health care in today’s profit-driven system? The challenges are daunting and will require a long-term social, economic, political and cultural shift. In a broad view, we need a paradigm shift similar to that of the Copernican revolution, when the Renaissance astronomer conceived a heliocentric cosmology that displaced the Earth from the center of the universe. Such a shift in U.S. health care, that puts patients and families at the center of health care, is illustrated by Figure 1.

Figure 1 (Click Here)

As has already occurred in most advanced countries around the world, we need to turn around how we think about health care in this country in these kinds of ways:

• Shifting from a system based on ability to pay to one based on medical need.
• Moving from health care as a commodity to a basic human right and need.
• Moving from a dysfunctional, fragmented and exploitive private health insurance industry to a single-payer improved Medicare for All coupled with a private delivery system.
• Moving from political and lobbyist-driven coverage policies toward those based on scientific evidence of efficacy and cost-effectiveness.
• Replacing today’s unaccountable system with one that stewards limited health care resources for the benefit of all Americans in a single risk pool (“Everybody in, nobody out”).

Many lines of reform would help to move present dynamics in health care toward a more patient-centered process. Financing and payment reforms would go a long way in that direction. Improved Medicare for All (H.R. 676) would establish universal access to health care for all Americans. It would also facilitate other enabling steps such as achieving price controls on the supply side and encouraging growth of new approaches to primary care that are more person-centered.

The missing element in today’s depersonalized health care is time—listening and talking time between patients, their physicians and other health care professionals—during which patients can relate their narratives that can then be integrated into plans for their care. We already know that trust between physicians and patients built over years improves medical outcomes and enhances healing.

As system problems of U.S. health care impact more ordinary Americans with diminished access to affordable care and as growing millions forego essential care, we are now seeing a renewal of literature in the medical humanities as a counter trend to depersonalized care that too often does not meet patients’ needs. Health Affairs, as the premier health policy journal, has had a regular feature for years dealing with patient narratives. The American Medical Student Association (AMSA) has established its Humanities Institute, now offering workshops exploring the ART of medicine, including sessions on narrative medicine and writing for social justice. A number of books are charting new territory in this direction, including Norman Cousins’ Anatomy of an Illness, Arthur Kleinman’s The Illness Narratives, Howard Brody’s Stories of Sickness, and Rita Charon’s Narrative Medicine: Honoring the Stories of Illness. Copernicus Healthcare is adding to this promising trend with its forthcoming release of The Art of Medicine in Metaphors: A Collection of Poems and Narratives, edited by James Borton. This kind of writing builds on a rich earlier tradition of medical writing in this genre, including the poetry of Dr. William Carlos Williams in the last century.
As Dr. Charon notes in her 2006 book:

I hope that the frame of narrative medicine can gather new combinations of us—from the humanities, from all the health professions, from the lay world, the business world, the political world—and make new relations among us, so as to look with refreshed eyes at what is means to be sick and to help others get well.”(1)

This hope gives us a vision toward better, more humane health care. Admittedly, it is a Herculean task to reverse well-entrenched trends in our dysfunctional market-based health care system, and paradigm shifts take a long time. But our present system is not sustainable, reforms are not impossible, and in order to progress, we first need this kind of vision.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It, Breaking Point: How the Primary Care Crisis Endangers the Lives of Americans, and Health Care Wars: How Market Ideology and Corporate Power are Killing Americans).”

Physicians find insurer ACO payment models “completely unfavorable”

Posted by on Tuesday, Dec 4, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Medical practices wary of insurer efforts on new payment programs

By Victoria Stagg Elliott
American Medical News, December 3, 2012

Medical practices have a low opinion of how insurers are operating emerging payment programs, such as accountable care organizations, patient-centered medical homes, shared savings and payment bundling, according to a survey of 800 practices released Nov. 14 by MGMA-ACMPE.

Researchers asked practices to rate the willingness of seven large payers to engage in innovative models on a scale of one, meaning completely unwilling, to five, which indicates completely willing. Medicare Part B scored the highest at 1.95, and United Healthcare was the highest private payer at 1.82.

When asked to rate the favorability of these payment models to the practice on a scale of one to five, Medicare Part B scored highest at 1.68.

Health industry insiders said the scores on innovative payment models reflect physicians’ frustrations with programs they believe were not designed for their specialty or size, and that insurers were not flexible in negotiating terms.

ACOs serve 25 million to 31 million patients, a “remarkable achievement for a care arrangement that was scarcely on the map at all two years ago,” according to a report released Nov. 26 by management consulting company Oliver Wyman.

Cigna’s collaborative accountable care program includes 42 participating entities, mostly large, with about 10,000 physicians providing care for 400,000 members. A paper in the November Health Affairs found the plan’s ACO program improved quality and lowered costs.…


Practice Perspectives on Payer Performance, 2012


For the fifth year in a row, the Medical Group Management Association (MGMA) has conducted its poll to determine group practice professionals’ attitudes about payer interactions.

Of the payers who are willing to engage in innovative payment models (accountable care, shared savings, medical homes or payment bundling), how favorable or unfavorable do you consider these options to be to your practice?

Rating average / Payer

1.68  Medicare Part B
1.62  United Healthcare
1.62  Aetna
1.58  Cigna
1.57  Anthem
1.55  Humana
1.48  Coventry

(Based upon a 5 point scale where 1 = Completely unfavorable, 2 = Moderately unfavorable, 3 = Neutral, 4 = Moderately favorable, and 5 = Completely favorable.)


A Collaborative Accountable Care Model In Three Practices Showed Promising Early Results On Costs And Quality Of Care

By Richard B. Salmon, Mark I. Sanderson, Barbara A. Walters, Karen Kennedy, Robert C. Flores and Alan M. Muney
Health Affairs, November 2012

Cigna’s Collaborative Accountable Care initiative provides financial incentives to physician groups and integrated delivery systems to improve the quality and efficiency of care for patients in commercial open-access benefit plans.

Although not statistically significant, these early results revealed favorable trends in total medical costs and quality of care.

These early results should sound the alarms on our current efforts to implement accountable care organizations (ACOs). We’ve barely begun and already about 30 million patients have been assigned to ACOs. Yet look at how that is working.

Health care professionals in group practices were polled on how favorable or unfavorable the insurers’ innovative payment models, primarily ACOs, were to their practices. The average rating for all insurers was in the 1s – “completely unfavorable”!

Further, we are now seeing the same response from the insurers that we did with earlier efforts at managed care. They were telling us then that we were receiving higher quality care at lower cost. As it turned out, costs continued to rise and quality remained mediocre.

Now Cigna is reporting that the recent Health Affairs article that they authored showed that their “ACO program improved quality and lowered costs.” Yet the article actually states that these early results were “not statistically significant.”

This turkey has already taken off, and yet it can’t fly. The health care of 30 million patients is already at stake, and they are being cared for health care professionals who find the arrangement COMPLETELY UNFAVORABLE!

Cash upfront for ED visits?

Posted by on Monday, Dec 3, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

New ED drama? Hospitals demand upfront fee for nonemergencies

By Kevin B. O’Reilly
American Medical News, December 3, 2012

(A small) but growing number of hospitals give patients whose problems are deemed nonemergent a choice: Pay an initial fee to get the problem treated in the ED, or seek care elsewhere. The fees range from $100 to $180 for uninsured patients, or the relevant co-pay or deductible for insured patients.

Hospitals implementing the pay-first policy say it complies with the Emergency Medical Treatment and Active Labor Act because all patients receive the federally required medical screening regardless of ability to pay. It is only after a patient’s condition is deemed nonemergent that upfront payment for further treatment in the ED is discussed.

Yet many doctors interviewed for this article found the growing trend alarming. They said it unfairly targets patients with poor access to primary care and is unlikely to alleviate ED crowding because nonurgent problems make up less than 10% of visits. Emergency physicians added that the policy could result in tragedy, because some seemingly nonemergent conditions quickly worsen, and because some patients with life-threatening problems may wrongly decide to steer clear of the ED to avoid pay-first fees.

The pay trend is severely misguided, said Arthur L. Kellermann, MD, MPH, who served on an Institute of Medicine emergency care panel and now is a health policy researcher at the RAND Corp., an independent nonprofit think tank.

“People don’t go the ER as a recreational event,” he said. “If you tell me you have an urgent care clinic or walk-in clinic or other places where these people can go straight to, then OK. But to tell someone to just go away if you don’t have $150, you have to be ignoring the fact that if they had somewhere to go they wouldn’t be there in the first place. And you have to be damn sure that this patient doesn’t have a more serious problem. This is putting a Band-Aid on a gunshot wound.”

“There are truly people who come to the ED with something very benign, and it ends up being a major medical issue,” said Patrick O’Malley, MD, an emergency physician in a suburb of Columbia, S.C. “Determining who those patients are right at the front door is difficult.”

The pay-first policy appears to be aimed at discouraging uninsured patients from visiting the ED, said Leora Horwitz, MD, assistant professor of general internal medicine at Yale University School of Medicine in Connecticut.

“A much better solution to this kind of problem would be to incentivize primary care doctors to provide the care that’s needed, to have evening hours, weekend hours, and to have more urgent care centers,” Dr. Horwitz said. “There are many ways to improve access for patients without barring the door of the ER as your solution.”

Over half of emergency department (ED) visits are truly urgent or emergent and should be seen within minutes. About 35 percent are semi-urgent and should be seen within a couple of hours. Only 8 percent are non-urgent and could be seen the next day. Which of these patients should never be seen in the ED?

If you assume that patients are fully capable of assessing the urgency of their own problems and and that triage nurses are fully capable of never making a judgement error, then perhaps the 8 percent who are non-urgent should be seen by their primary care professionals at the next available appointment. But such an assumption is a stretch since the true urgency often cannot be determined with absolute certainty until there is a full assessment of the problem.

Maybe that head cold is an acute bacterial sinusitis, which could lead to meningitis or an abscess with sepsis. Maybe that gastrocnemius strain is thromboplebitis, which could result in a pulmonary embolism. Maybe that migraine is a rupturing berry aneurysm, which… well, you know. Then again, maybe these really are minor, non-urgent problems that do not need assessment in the ED.

How do you decide that? Do you have the triage nurse make a decision to turn the patient away at the front desk with no further ED evaluation? That can be a problem if the nurse’s initial screen misses a serious problem, which is certainly possible, even if infrequent.

The answer is easy. In this age of consumer-directed health care, you do not turn anyone away. Instead, you require the patient who seems to have a non-urgent problem to use their health care shopping skills by requiring a payment up front. Thus the ultimate decision is not left with the triage nurse but rather is left with the least qualified individual in the ED – the patient.

Some patients will make the wrong decision – bad policy. This is overkill, perhaps literally.

If a local ED is truly overburdened with routine medical problems, the proper management should be to adjust capacity in the health care system. If primary care services need to be extended to evening and weekend hours, improve capacity so that can be done. If the void can be filled with a free-standing urgent care clinic, then establish that. The ED itself could be expanded to include a wing for less urgent problems, staffed with a nurse practitioner of primary care physician, if appropriate for the community. The marginal cost should not be much different from a free-standing, off-hours clinic, if that.

Under a single payer system, some adjustments in capacity can be made by administrators of the global budgets for the facilities. More extensive changes might involve separate budgets established for capital improvements. But creating financial barriers to care runs the risk of having the patient decide to forgo beneficial health care that just might possibly be lifesaving.

If the ED is crowded with the worried well, fix the system. Don’t kill the seriously ill patient hidden amongst them.

NAIC Senior Issues Task Force rejects cost sharing under Medigap plans

Posted by on Friday, Nov 30, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

2012 Fall National Meeting

Senior Issues Task Force
National Association of Insurance Commissioners (NAIC), November 30, 2012

Patient Protection and Affordable Care Act
(a) ‘(y) ‘(1) IN GENERAL- The Secretary shall request the National Association of Insurance Commissioners to review and revise the standards for benefit packages described in paragraph (2) under subsection (p)(1), to otherwise update standards to include requirements for nominal cost sharing to encourage the use of appropriate physicians’ services under part B. Such revisions shall be based on evidence published in peer-reviewed journals or current examples used by integrated delivery systems…

11-5-12 Draft of proposed letter from NAIC to HHS Secretary Kathleen Sebelius

(Excerpts of draft)

Pursuant to section 3210 of the Patient Protection and Affordable Care Act (ACA) you have requested the National Association of Insurance Commissioners (NAIC) to review and revise the NAIC Medicare Supplement insurance (Medigap) model regulation to include nominal cost sharing in Medigap Plans C and F to encourage the use of appropriate physicians’ services.

The NAIC has performed its requested review of the standards for Plans C and F under Section 3210 of the ACA.  We were unable to find evidence in peer-reviewed studies or managed care practices that would be the basis of nominal cost sharing designed to encourage the use of appropriate physicians’ services. Therefore, our recommendation is that no nominal cost sharing be introduced to Plans C and F. We hope that you will agree with this determination.

Medigap is a product that has served our country’s Medicare eligible consumers well for many years, offering them security and financial predictability with regard to their Medicare costs. Medigap’s protections are now inappropriately being held responsible for encouraging the overuse of covered services and increasing costs in the Medicare program.

The statute requires the NAIC to base nominal cost sharing revisions on “peer-reviewed journals or current examples of integrated delivery systems”. However, the Subgroup discovered that there is a limited amount of relevant peer-reviewed material on this topic. None of the studies provided a basis for the design of nominal cost sharing that would encourage the use of appropriate physicians’ services. Many of the studies caution that added cost sharing would result in delayed treatments that could increase Medicare program costs later (e.g., increased expenditures for emergency room visits and hospitalizations) and result in adverse health outcomes for vulnerable populations (i.e., elderly, chronically ill and low-income).

The Subgroup also gathered information from integrated delivery systems (Medicare Advantage plans) but concluded that, because these managed care plans make medical necessity determinations for Medicare, that any such practices were not directly relevant for Medigap.

In summary, based on our thorough review and deliberation on this topic, we believe, and hope that you will agree, that no changes should be made to Plans C and F to add beneficiary cost sharing at this time.

Respectfully submitted,…

From a health policy perspective, this is a big deal. A very big deal! The National Association of Insurance Commissioners (NAIC) is perhaps the most credible and authoritative organization involved with private health insurance. Although this decision by their Senior Issues Task Force is limited to Medigap coverage of Medicare cost sharing, the principles involved challenge the wisdom of trying to control health spending by creating consumer sensitivity to health care prices through deductibles, coinsurance and other forms of cost sharing.

One very fundamental issue with cost sharing is that now we have enough studies to show that there is absolutely no doubt that exposing patients to up-front costs causes many of them to avoid obtaining health care services or products that are beneficial. Cost sharing should be rejected on this basis alone, as the highly flawed policy that it is.

Another crucial point is that the policy community tremendously overestimates the savings that could be achieved by expanding cost sharing. They base their estimates primarily on the findings of the RAND Health Insurance Experiment (RAND HIE). This was a large study of a healthy workforce and their young, healthy families, during a few healthy years of their lives. When they were faced with significant cost sharing they did modestly reduce their use of health care. Obviously that was selective since they would not be parsimonious when it came to disease or injury that threatened life or limb (where most health care spending is).

Since the subjects in the RAND HIE were fundamentally healthy, most of them used little health care during the year and so care forgone because of the cost sharing proved to be a significant percentage of the total spending on their health care. As an example, if $1000 of care were recommended for a person who decided to forgo $300 worth of it but accepted the other $700 worth, then the policy people conclude that cost sharing reduces spending by 30%. They then apply this to total health spending and conclude that we can save 30% of health care costs by requiring deductibles, copayments, and coinsurance.

The defect with this reasoning is that these healthy people consume only a minute fraction of our total health care. The 20% of people with more serious problems consume about 80% of all health care. Because of their serious problems, these people quickly use up their deductibles, and then cost sharing plays only a very minor role. As a percentage of their care received, forgone care rapidly approaches 0%. Thus the percentage savings to the system for this high cost sector is almost negligible.

So the alleged 30% savings applies only to a very small portion of our total health expenditures. Even there, the NAIC conclusion is that forgone care can “result in delayed treatments that could increase Medicare program costs later and result in adverse health outcomes for vulnerable populations.” The NAIC is right to reject this flawed cost sharing policy that saves little and can have serious adverse outcomes. After all, it is the patient that really counts.

Now, as far as the Medigap plans are concerned, they are outrageously overpriced, largely because of their profoundly wasteful administrative excesses. It would be much less expensive to roll the benefits over into the traditional Medicare program. There would be zero extra administrative costs, and even a net reduction since processing the cost sharing has its own administrative costs.

Folding Medigap benefits into Medicare should be a no brainer, especially since it is one of the steps that we want to take in order to improve Medicare as we convert it into a single payer national health program covering all of us – an improved Medicare for all.

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