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.

AMA pushing for defined contribution for Medicare

Posted by on Thursday, Nov 29, 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.

Strengthening Medicare for Current and Future Generations

Interim Meeting of the AMA House of Delegates
Report 5 of the Council on Medical Service, (Reference Committee J) AMA, November 2012

The Council recommends that the AMA support transitioning Medicare to a defined contribution program that would enable beneficiaries to purchase coverage of their choice through a Medicare exchange of competing health insurance plans. Traditional Medicare would be an option in the Medicare exchange.

In addition to supporting transitioning Medicare to a defined contribution program, the AMA should continue to strongly advocate for related Medicare reforms. Policies related to balance billing, private contracting, and the repeal of the Medicare Independent Payment Advisory Board remain particularly relevant and should be reaffirmed. Similarly, the AMA should continue to support incentives to encourage people to contribute to health savings accounts, and to promote their use as a means to ensure access to high quality medical care. It is also critical that the AMA continue to advocate for the other Medicare reforms articulated in Policy H-330.896, particularly restructuring beneficiary cost-sharing in order to provide incentives for appropriate utilization while discouraging unnecessary or inappropriate care, and increasing the Medicare eligibility age to reflect increases in the average life expectancy in the United States.


Newsmakers:Ardis Hoven, President-Elect, American Medical Association

The Medicare NewsGroup, November 27, 2012

For Dr. Ardis Hoven and other veteran policymakers within the American Medical Association (AMA), the nation’s largest medical organization’s move to support transitioning Medicare away from a defined-benefit to a defined-contribution system has been a long time coming.

“(The) AMA has been working on Medicare policy to improve the program about 25 years, on an off,” said Hoven, who was first elected to the AMA board of trustees in 2005, following many years as a member and chair of the AMA Council on Medical Service. That council was where AMA’s policy to move to a defined contribution began.

As Congress and the White House look in the coming weeks for new ideas to reduce the deficit and avoid the so-called fiscal cliff, Hoven sees promise. She believes the AMA’s newly approved set of policy principles for a Medicare defined contribution will receive serious consideration in Washington.…

In recent years it appeared that the AMA had an epiphany and began to transition from an organization that defended the interests of physicians to an organization advocating for the interests of patients. They supported the Affordable Care Act as an improvement over the status quo, and they even elected as their president, Jeremy Lazarus, a very fine gentleman noted for patient advocacy, especially as a spokesman on behalf of the uninsured.

Judging from the interim meeting this month of the AMA House of Delegates, the epiphany fizzled. Ardis Hoven, the AMA President-elect, and her co-conspirators from the Council of Medical Services succeeded in advancing AMA’s official support of the conversion of Medicare from a defined benefit to a defined contribution. This gradually transfers risk from the taxpayers who fund Medicare to the pockets Medicare beneficiaries themselves. Many Medicare patients already face financial hardship, and this will only make their problems worse.

Why would the AMA do this? As a Life Member of AMA, I can present my own subjective observations. During my medical career, membership in the AMA dramatically declined. Those leaving did not find the AMA to be particularly relevant, whereas those remaining tended to be politically conservative, wishing to advance policies that would conform with their conservative ideology. But it wasn’t just political ideology that drove the AMA. Some physicians with more progressive views also remained, hoping to improve AMA policies from within, but they remained in the minority.

I hate to say it, but there does seem to be a more nefarious agenda than that dictated by their political ideology. This may sound like an oversimplification, but I don’t think it is: they want patients to pay their full fees in cash. They do not want an intermediary to control fees or to establish any other rules on how their services are to be reimbursed.

Just look at the report they approved this month (excerpt above). Defined contribution shifts more of the responsibility for health care spending to the patients’ pockets. Balance billing allows physicians to collect directly from the patient the balance of their full fees regardless of what any intermediary authorizes. Private contracting allows the physician to contract directly with the patient for full fees, again with no third party intervention. Health savings accounts are cash accounts which the physicians can tap directly. “Restructuring beneficiary cost-sharing in order to provide incentives for appropriate utilization” is code language for requiring patients to pay more in cash for any care they receive. Increasing Medicare eligibility age is a scheme to postpone the day that their patients become eligible for a public program that limits cash payments from patients. And there is much to be said about the Medicare Independent Payment Advisory Board (IPAB), good and bad, but the AMA fears this most of all since it would place control of their fees in the hands of an independent government board. (Much more needs to be said about IPAB, but not here.)

We saw what happened at the start of the Medicare program. Physicians were able to set their own fees, and fees skyrocketed. As much as the AMA House of Delegates wants physicians to have full control of fees, we can’t allow it. We also don’t want to leave that control in the hands of private insurers that have pressing interests which have priority over patients. No, we need to place control in the hands of our own public administrators who will always place patients first, understanding that a quality health care system also requires adequate funding.

Ardis Hoven says that she believes “the AMA’s newly approved set of policy principles for a Medicare defined contribution will receive serious consideration in Washington.” Do PNHP members have something to say about this? It’s time for op-eds, letters to the editor, community forums, and direct communication with your elected representatives. The topic is hot in D.C. Do it now.

Health care and education are key to economic recovery

Posted by on Wednesday, Nov 28, 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.

Economic Recovery and Social Investment: A Strategy to Create Good Jobs in the Service Sector

By Robert Kuttner
New America Foundation, Demos, November 2012

Today’s prolonged economic slump is fundamentally different from an ordinary recession. In the aftermath of a severe financial collapse, an economy is at risk of succumbing to a prolonged deflationary undertow. With asset prices reduced, the financial system damaged, unemployment high, consumer demand depressed, and businesses reluctant to invest, the economy gets stuck well below its full employment potential.

What’s needed is aggressive fiscal policy – and not the kind of fiscal policy promoted by the austerity lobby to “restore confidence” and allay supposed fears of inflation. The problem isn’t low confidence in deficit-reduction. Banks are now sitting on about $1.8 trillion in cash or government securities – because they can’t imagine where to profitably invest it. Businesses are delaying investment in expansion not because they are fretting about deficit projections for 2023. They are waiting to see customers with money to spend, and general austerity will only reduce that spending power.

But where should this fiscal policy be directed? One, obviously, is investment in a green economy and modern public infrastructure. The other – too little appreciated – is increased outlay in human services, of the sort that can create good, non-exportable jobs and improve the life prospects of the next generation, as well as provide stable, counter-cyclical sources of employment and demand. Government also has the power to structure other service-sector work as decent jobs.

Public investment, including public investment in the service sector, can help the economy climb out of the current deflationary trap – and establish a foundation for a stronger middle class in the future.

The Case for Investing in People

The economic collapse triggered by the financial crisis that exploded in September 2008 represented the collision of three trends. One was the license given to speculative finance resulting from increasingly reckless deregulation.

The second trend was the worsening income distribution.

Third, since the early 1980s, the economy has been losing good, middle class jobs, especially in manufacturing.

So where will the sources of increased demand and good, middle class jobs come from? One obvious candidate is the creation of good, professional service jobs improving the quality of education and care for the young, the old, and the sick.

We are shifting irrevocably to a service economy. But there are political choices to be made (or evaded). One path leads to an economy of minimum-wage fast food workers and security guards, many of them with temporary or part time jobs, on one extreme – and billionaire hedge fund managers and takeover artists, on the other. The other leads to a commercial sector of decent wages and terms of work and a human service sector of middle class professionals that serve social needs – which in turn make for a more productive economy and decent society.

Good Human Services as Social Investment and Economic Stimulus

Millions of jobs serving the very young, the very old and the very sick are low-wage jobs. This is a social decision, not the product of private supply and demand, because the qualifications and earnings for these occupations are set socially. A person caring for three-year-olds, for instance, can be a glorified baby sitter with minimum certification as a day care worker – or a well trained professional in child development. The job can pay minimum wage, or it can be a middle-class occupation and career. This social choice governs not just the quality of the job, but the quality of the early education given – especially to young children who begin life with fewer inherited advantages than the children of the professional class and the business elite.

A nursing home worker, likewise, can be a nurse-aide making $8 an hour, or a licensed practical nurse or trained recreation aide earning almost twice that, closer to $30,000 a year. Well-qualified and trained nursing home personnel produce not just better career opportunities and economic stimulus, but better quality of life for the elderly. Having competent staff is more efficient in the long run because there is less turnover, less need for outlays on recruitment, better morale, and fewer incidents of neglect that require far more expensive medical treatment.

I’ve done a rough, order-of-magnitude calculation and found that for an annual expenditure of about $100-$150 billion (or under one percent of GDP), we could set a national policy goal of guaranteeing that all human service jobs are professional jobs that pay at least $25,000 a year (which is itself a lower minimum bar than others have suggested). This requires professionalizing some occupations, as well as universalizing the availability of some categories of woefully underfunded services such as early education. As long as the current deflationary economy persists, this funding could come from additional government borrowing. As the economy recovers thanks to the additional stimulus, the normal increase in revenues could pay for part of the cost, supplemented by increased progressive taxation.

One of the great problems of the manufacturing economy, and of some services such as software engineering, accounting, call center work, and repair of jet engines, is that globalization allows these jobs to be done offshore by lower-paid workers. Human service jobs, by contrast, must be performed at home. If we have a national policy of guaranteeing that they are good jobs, there is no risk that they move overseas. We get the quadruple benefit of macro-economic stimulus, better jobs, better quality services, and (in the case of the young) improved lifetime opportunity and productivity.

The shift to upgrading work in the service sector, especially work in the human services, can be part of a deficit-financed macro-economic recovery strategy to address the nation’s current unemployment crisis and slow recovery. But this is not enough. It should also be part of a long-term effort to upgrade both the quality of work and of social services. The mistaken slogan of the February 2009 Recovery Act was “timely, targeted, and temporary.” That precluded any medium or long term planning. To adapt to the needs of an economy of the future, efforts to improve service sector employment need to be planned, pro-active, and permanent.…

Framing is important. Right now our nation’s fiscal problems are being framed as a budget deficit requiring austerity measures such as a decrease in spending on Medicare and Medicaid. Instead, we should be framing the problem as a need to improve our economy by establishing policies that promote and expand our service economy, especially in education and health care.

What does this have to do with single payer? Simply that an expanded and improved Medicare program covering everyone would provide an excellent avenue to expand and improve the type of health care service jobs that are discussed in this paper.

Robert Kuttner’s 11 page paper on economic recovery and social investment should be downloaded, read in its entirety, and shared with others – especially members of Congress who can’t seem to get the framing right.

The administrative challenge of the health insurance exchanges

Posted by on Tuesday, Nov 27, 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.

Obama faces huge challenge in setting up health insurance exchanges

By Elise Viebeck
The Hill, November 25, 2012

The Obama administration faces major logistical and financial challenges in creating health insurance exchanges for states that have declined to set up their own systems.

Since different states have different insurance markets and different eligibility requirements for Medicaid, Obama’s Health and Human Services Department can’t simply take a system off the shelf as a one-size-fits-all fail-safe.

“You can’t simply deploy one federal exchange across the board,” said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation.

“Each state is different — their eligibility systems are different, their insurance markets are different. [HHS is] going to have to build these exchanges to fit into the context of each state.”

Experts have predicted that the department will soon have to tap budgets from its other programs to cover exchange costs. Other have said it might charge fees on the insurance purchased in its exchanges once they are launched.

The idea behind the exchanges is to match the uninsured with plans that meet their needs and reflect their eligibility (or lack thereof) for government help.

In practice, the process will require websites that can process massive amounts of personal information from users and yield search results for everyone.

Each portal will require a front end — the interface consumers will use to submit their information and shop for plans — and a specialized back end that is customized based on the state.

HHS will also construct a range of other systems: a federal data hub for verifying user identity; programs for user assistance; a way to certify that health plans meet federal standards; a way to navigate the exchanges via phone or apply for coverage by mail; and so on.

Experts expressed one main concern across the board — that people eligible for Medicaid but not for the exchanges might fall through the cracks in federally run systems, since enrollment in the program is run by states.…

One unique feature of health care financing in the United States is our shameful administrative excesses. The new state insurance exchanges required by the Affordable Care Act (ACA) add to that waste, whether run by the states or by the federal government by default.

To begin with, since the plans offered by the exchanges will be in the individual and small group markets, under ACA they will be allowed to keep 20 percent of the insurance premiums for their own administration and profits.

Next, the exchanges will be much more complex than a mere website from which to compare and choose plans. These portals (exchanges) will require a complex front end to determine eligibility or lack thereof for Medicaid or for the premium subsidies which vary based on the actuarial values of the plans and the incomes of the applicants. Also the managers of the exchanges will have considerable work on the back end in establishing plan eligibility to participate in the exchanges, evaluating the essential health benefits of each plan, confirming that each metal level (bronze, silver, gold, platinum) meets actuarial standards, meeting regulatory requirements that vary from state to state, and providing a mechanism for the purchaser to intelligently navigate the maze established by the exchanges.

Obviously there will be considerable administrative costs associated with these exchanges – costs that are beyond the 20 percent retained by the insurers. ACA requires that the exchanges be self-sustaining, meaning that these administrative costs must be paid by the insurers (beyond the 20 percent) or by the purchases of the plans. Either way, those enrolling in plans through the exchanges will ultimately bear the costs of these administrative excesses.

Finally, physicians, hospitals and other providers of care will continue to bear the costs of the excessive administrative burden placed on them by this fragmented, complex financing system. Instead of providing administrative relief, the exchanges further increase the administrative burden and excess costs of allocating our health care dollars.

Readers already know how over 99 percent of this portion of our administrative waste could be eliminated. Enroll each individual once, at birth, in a single national health program – an improved Medicare that includes everyone. So why aren’t we doing it?

Proposed religious exemption from health insurance mandate

Posted by on Monday, Nov 26, 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.

H.R. 6597

Rep. Judy Biggert and 57 cosponsors
November 16, 2012


This Act may be cited as the “Equitable Access to Care and Health Act” or the “EACH Act”.


(a) IN GENERAL.—Paragraph (2) of section 5000A(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

“(i) IN GENERAL.—Such term shall not include an individual for any month during a taxable year if such individual files a sworn statement, as part of the return of tax for the taxable year, that the individual was not covered under minimum essential coverage at any time during such taxable year and that the individual’s sincerely held religious beliefs would cause the individual to object to medical health care that would be covered under such coverage.
“(ii) NULLIFIED IF RECEIPT OF MEDICAL HEALTH CARE DURING TAXABLE YEAR.-Clause (i) shall not apply to an individual for any month during a taxable year if the individual received medical health care during the taxable year.
“(iii) MEDICAL HEALTH CARE DEFINED.—For purposes of this subparagraph, the term ‘medical health care’ means voluntary health treatment by or supervised by a medical doctor that would be covered under minimum essential coverage and—
“(I) includes voluntary acute care treatment at hospital emergency rooms, walk-in clinics, or similar facilities, and
“(II) excludes—
“(aa) treatment not administered or supervised by a medical doctor, such as chiropractic treatment, dental care, midwifery, personal care assistance, or optometry,
“(bb) physical examinations or treatment where required by law or third parties, such as a prospective employer, and
“(cc) vaccinations.”.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect as if included in the amendments made by section 1501 of the Patient Protection and Affordable Care Act.

H.R. 6597, the “Equitable Access to Care and Health Act,” is a proposed amendment to the Affordable Care Act that would provide a religious exemption to an individual from a penalty for being uninsured, providing that the individual files a sworn statement, as part of the tax return, that “the individual’s sincerely held religious beliefs would cause the individual to object to medical health care that would be covered” under health plans mandated by the Affordable Care Act.

If any medical care were obtained, that would nullify the exemption, and penalties for being uninsured would apply. Theoretically, that would separate those whose religious beliefs regarding abstaining from health care were sincere, from those who would submit a sworn statement merely to avoid the penalty while remaining uninsured. In actuality, even with such religious beliefs, individuals might find it difficult to refuse care in some instances such as major trauma.

If you check the list of cosponsors, you will see that this act does have very broad bipartisan support. It seems like a reasonable amendment, though it still doesn’t protect the rest of us from the costs of care that the person might receive when the medical imperative is greater than the religious conviction.

Is there a better way of doing this? Of course. Include everyone in a single national health program. Do not fund it based on medical need, but fund it through equitable, progressive tax policies. Under such a system, anyone can decline medical care for whatever reason, religious or otherwise (except if the person’s disorder constitutes a genuine threat to public health).

Should a person be required to pay taxes into a universal health care system? I can answer that by stating, as a pacifist, I vehemently object to paying taxes to fight wars. Yet I cannot be allowed the option of withholding my allocated tax assessment assigned to our nation’s military ventures. Nor can anyone be allowed to opt out of paying taxes for any public service that, through our democratic process, we decide to provide for the public good. That includes health care.

Health insurance exchanges may be too small to succeed

Posted by on Friday, Nov 23, 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.

Health Insurance Exchanges May Be Too Small to Succeed

By Dana P. Goldman, Michael Chernew and Anupam Jena
The New York Times, November 23, 2012

With the re-election of President Obama, the Affordable Care Act is back on track for being carried out in 2014. Central to its success will be the creation of health-insurance exchanges in each state. Beneficiaries will be able to go to a Web site and shop for health insurance, with the government subsidizing the premiums of those whose qualify. By encouraging competition among insurers in an open marketplace, the health care law aims to wring some savings out of the insurance industry to keep premiums affordable.

Certainly, it is hard to be against competition. Economic theory is clear about its indispensable benefits. But not all health care markets are composed of rational, well-informed buyers and sellers engaged in commerce. Some have a limited number of service providers; in others, patients are not well informed about the services they are buying; and in still others, the quality of the service offerings vary from provider to provider. So the question is: What effect does insurer competition have in a marketplace with so many imperfections?

The evidence is mixed, but some of it points to a counterintuitive result: more competition among insurers may lead to higher reimbursements and health care spending, particularly when the provider market – physicians, hospitals, pharmaceuticals and medical device suppliers – is not very competitive.

In imperfect health care markets, competition can be counterproductive. The larger an insurer’s share of the market, the more aggressively it can negotiate prices with providers, hospitals and drug manufacturers. Smaller hospitals and provider groups, known as “price takers” by economists, either accept the big insurer’s reimbursement rates or forgo the opportunity to offer competing services. The monopsony power of a single or a few large insurers can thus lead to lower prices. For example, Glenn Melnick and Vivian Wu have shown that hospital prices in markets with the most powerful insurers are 12 percent lower than in more competitive insurance markets.

So health insurance exchanges are probably welcome news for hospitals, physicians, and pharmaceutical and medical device companies throughout the United States. If health insurance exchanges divide up the market among many insurers, thereby diluting their power, reimbursement rates may actually increase, which could lead to higher premiums for consumers.

There is some evidence on how insurer market power affects premiums. Leemore Dafny, Mark Duggan, and Subramaniam Ramanarayanan have found that greater concentration resulting from an insurance merger is associated with a modest increase in premiums — suggesting that concentration may not help consumers so much — although they did report a reduction in physician earnings on average. Over all, however, the evidence is limited and mixed.

Greater competition in the insurance industry — either through health insurance exchanges or other measures — may not lower insurance premiums. Weakening insurers’ bargaining power could instead translate into higher costs for all of us in the form of higher premiums.

In financial markets, we ask if banks are too big to fail. When it comes to health care, perhaps we should ask if insurers are too small to succeed.

It is true that very large insurers within the exchanges can use their monopsony power (controlling the market as exclusive buyers) by demanding lower prices for health care services, but only for their own plans. Most health care costs will still be covered by employer-sponsored plans, Medicare, Medicaid and other programs. Thus plans offered by the exchanges cannot have much impact on our total national health expenditures.

Another difficulty with the monopsony power of private insurers is that when they are investor owned (WellPoint, UnitedHealth, Aetna, etc.), their first priority must be to use their leverage to benefit their investors. That results in insurance innovations that often are not particularly transparent, but have adverse consequences for the patients they insure. The private sector exercising power as a monopsony can be as evil as a monopoly.

In contrast, a public monopsony can be very beneficial in getting prices right – high enough to ensure adequate capacity in the delivery system, yet low enough to ensure value in health care.

The ultimate beneficent monopsony would be a single public program covering absolutely everyone (“single payer”). We could achieve this easily by improving Medicare and then making it universal. Health policy studies have proven that this would not only cover everyone, but it would finally bring us that elusive goal of health care reform – bending the cost curve to sustainable levels.…

AHIP response to new rules on essential health benefits

Posted by on Wednesday, Nov 21, 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.

Essential Health Benefits, Actuarial Value, and Accreditation Standards: Ensuring Meaningful, Affordable Coverage (HHS)
November 20, 2012

On November 20, 2012, the Department of Health and Human Services (HHS) published a proposed rule that helps consumers shop for and compare non-grandfathered private health insurance options in the individual and small group markets by promoting consistency across plans, and protecting consumers by ensuring that plans cover a core package of items and services.

Specifically, this rule outlines health insurance issuer standards related to the coverage of essential health benefits (EHB) and the determination of actuarial value (AV), while providing significant flexibility to states to shape how EHB are defined.

The Affordable Care Act sets forth that EHB be equal in scope to benefits offered by a “typical employer plan.”  To meet this requirement in every state, the proposed rule defines EHB based on a state-specific benchmark plan, including the largest small group health plan in the state. The rule proposes that states select a benchmark plan from among several options identified in the proposed rule, and that all plans that cover EHB must offer benefits that are substantially equal to the benefits offered by the benchmark plan. This approach balances consumers’ desires for an affordable and comprehensive benefit package, our legal requirement to reflect the current marketplace, and issuer flexibility to offer innovative benefit designs and a choice of health plans.


AHIP Statement on ACA Implementation

America’s Health Insurance Plans (AHIP)
November 20, 2012

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni released the following statement on proposed rules released today by the U.S. Department of Health and Human Services on implementation of the Affordable Care Act (ACA):

“As implementation of the ACA moves forward, the focus needs to be on affordability for consumers and employers.

“For health insurance exchanges and new insurance market rules to work, coverage needs to be affordable and there needs to be broad participation in the system.  While additional flexibility on essential health benefits (EHB) is a positive step, we remain concerned that many families and small businesses will be required to purchase coverage that is more costly than they have today.  It also is important to recognize that the new EHB requirements will coincide with the new restrictions in age rating rules that also go into effect on January 1, 2014.  Both of these provisions may incentivize young, healthy people to wait to purchase insurance until they are sick or injured, driving up costs for everyone with insurance.”…

The Department of Health and Human Services has provided states with considerable flexibility in establishing essential health benefits (EHB) in the individual and small group insurance markets. The states will not have to require benefits that are typical of large employer health benefit programs, but rather the benefits will correspond to existing small group plans, as long as some services in each of ten required categories are included. These plans will be inadequate for those who require benefits that are not covered, not to mention the limitations of excess cost sharing and insufficient provider networks.

Yet the insurance lobby group, AHIP, complains that many families and small businesses would have to purchase coverage that is more costly than they have today. The reason that plans with the minimal essential benefits would be more costly is that the current individual and small group market is saturated with plans that are so substandard that they fail to provide adequate financial security in the face of medical need. With the new essential health benefits requirement, the insurance industry would lose the right to sell these highly profitable, but substandard plans. They will have to raise their standards to the level of mediocrity, as required by the new EHB rule.

Once again they state that “coverage needs to be affordable.” They have previously stated that health care costs need to be controlled, but, in the absence of any truly effective method of doing that, they need to be able to use innovative product design to keep their premiums competitive in the insurance market. The new EHB rule along with the actuarial value rule allows them the flexibility to be quite innovative. The bottom line is that in the conflict between affordable insurance premiums and adequate protection for patients, they will always choose to protect their market rather than protect patients.

The insurance industry understandably is interested in its own welfare. If that means compromising the adequacy of their plans, then so be it. But does that mean that we have to accept compromise in our health and in our financial security? We wouldn’t if we dismissed the private insurers and established our own improved Medicare program for everyone.

Uninsured have higher mortality after surgery for brain tumors

Posted by on Tuesday, Nov 20, 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.

Postoperative Mortality After Surgery for Brain Tumors by Patient Insurance Status in the United States

By Eric N. Momin, MD; Hadie Adams, MD; Russell T. Shinohara, PhD; Constantine Frangakis, PhD; Henry Brem, MD; Alfredo Quiñones-Hinojosa, MD
Archives of Surgery, November 2012

Among patients with brain tumors with no other major medical condition, uninsured patients (but not necessarily Medicaid recipients) have higher in-hospital mortality than privately insured patients, a disparity that was pronounced in teaching hospitals. These findings further reinforce prior data indicating insurance-related disparities in medical and surgical settings.

These insurance-related disparities might be explained by 1 of 3 possible mechanisms. Insurance status could influence health outcomes by affecting (1) a patient’s overall state of health, (2) the ability to access care (affecting the acuity of disease presentation), or (3) the quality of treatment that is provided.

Insurance-related disparities are not unique to the field of neurosurgery. Uninsured patients fare worse than privately insured patients in the settings of critical illness (higher chance of having life support withdrawn), ischemic or hemorrhagic stroke (higher mortality and neurologic impairment), myocardial infarction (higher mortality), and physical trauma (higher mortality). However, it is not clear that enrolling in a state-funded health plan would help the uninsured because Medicaid recipients also seem to experience a similar disparity in other settings, including pneumonia, appendicitis, abdominal aortic aneurysm repair, limb-threatening ischemia, and surgery for colorectal carcinoma. Of note, this Medicaid disparity was also present in our full cohort but was not convincingly present in the adjusted analysis of patients with no comorbid disease, especially in teaching hospitals.

Uninsured patients operated on for brain tumors have a higher in-hospital mortality than do insured patients. Regardless of the reasons why, this study adds to the abundance of studies that demonstrate that being uninsured can be bad for your health. Even patients with Medicaid may experience similar adverse outcomes.

The Affordable Care Act will leave 30 million uninsured, and it relies partially on Medicaid to expand coverage. Thus the Affordable Care Act may still be bad for the health of many of us.

We need a single program that provides all of us with high quality care – an improved Medicare for all. We should not put up with a deficient health care program that leaves some of us sick or even dead.

Primary care physicians’ experiences in ten countries; U.S. stands out

Posted by on Monday, Nov 19, 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.

A Survey Of Primary Care Doctors In Ten Countries Shows Progress In Use Of Health Information Technology, Less In Other Areas

By Cathy Schoen, Robin Osborn, David Squires, Michelle Doty, Petra Rasmussen, Roz Pierson and Sandra Applebaum
Health Affairs, November 15, 2012

To explore the experiences of physicians as health reform policies unfold, we surveyed primary care physicians in the following ten countries in 2012: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Switzerland, the United Kingdom, and the United States.

Swiss and US patients often face substantial deductibles as well as cost sharing, although Swiss health insurance standards reduce rates for low-income people and limit out-of-pocket liability to levels well below those in the United States.

The United States is alone among the study countries in segmenting the population by income and age for government-sponsored health insurance and in its lack of coordinated policies across multiple private and public insurers.

US and Canadian physicians’ responses to questions regarding after-hours arrangements mirror patients’ experiences: In the 2010 international population survey on patient experience with health care services, Canadian and US patients were more likely than those in other countries to have used emergency departments and among the most likely to say that it was difficult to obtain health care after hours.

In 2012, 59 percent of US physicians said that their patients often have difficulty paying out-of-pocket costs for medical care – a percentage well above that in any other country.

In the United States, physicians’ perceptions of affordability or difficulties getting specialized care varied by patient insurance mix. Doctors with high proportions of uninsured or Medicaid patients were the most likely to say that their patients often faced long waits for specialized care.

To gauge primary care physicians’ perspectives overall, the survey asked about their views of their country’s health system, their satisfaction with the practice of medicine, and their perceptions of change in recent years. Repeating a pattern observed in earlier surveys, US and German physicians were the most negative about their health care systems, with only 15 percent and 22 percent, respectively, saying that the system needs only minor changes versus fundamental change or rebuilding. German and US physicians were also the least likely to say that they were satisfied or very satisfied with practicing medicine.

As countries aim to reduce health care costs, some countries have looked to coverage restrictions on treatments or medications or to reviews of physician care decisions. Although such interventions may target the appropriateness of care, they can also have the unintended consequence of imposing time and administrative burdens on physicians. Among the study countries, US physicians were the most likely to say that such time concerns are a major problem: More than half of US respondents said that they or their staff spend too much time getting patients care because of coverage restrictions on treatment or medications.

Notably, the share of Dutch doctors expressing concern about this issue has more than doubled since the 2009 survey (increasing from 10 percent to 26 percent). This suggests that problems are emerging with the growing complexity of health insurance practices in the Netherlands.

Regarding after-hours access to primary health care services, all of the study countries except the United States and Canada have policies for after-hours coverage. The low rates of after-hours arrangements reported by Canadian and US physicians indicate that such arrangements are slow to develop if they must depend on the actions of individual practices.

Insurance design also matters. US physicians stand out, as they have in past surveys, for saying that their patients often have difficulty paying for care and that insurance restrictions on care decisions consume substantial doctor and staff time. The other countries in the study all provide universal coverage and, with the exception of Switzerland, have little or no cost sharing for primary care and essential medications. All of the other countries limit out-of-pocket expenses to levels well below those typical in US insurance.

In contrast to other countries with multiple insurers, US private insurers often use prior authorization and employ varying drug formularies and complex benefit designs, with little standardization. Recent studies confirm that the resulting insurance-related complexity adds substantially to US practice costs as a result of increased paperwork and time demands.

In patient surveys, the United States also stands out for insurance-related time concerns. US experiences provide a cautionary example for other countries regarding the time and resource costs of complexity.

In general, US primary care physicians’ views and experiences endorse the need for reform, including enhanced access. US physicians who reported that their patients often faced cost or other access barriers were the most likely to say that the system required major change.…

We spend by far the most money per capita on health care. Yet, compared to primary care physicians in other nations, U.S. physicians are by far the most negative about our health system, with only 15 percent saying that “the system needs only minor changes” (versus fundamental change or rebuilding).

The perspective provided by the excerpts posted above should drive the citizens of our nation to demand comprehensive reform. Are we up to it?

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