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 spar over health care claim
July 21, 2010
The gloves are off in the fight for the Democratic nomination for governor (Vermont). Former State Senator Matt Dunne is calling out Senator Peter Shumlin for what he says is a troubling misstatement.
Peter Shumlin first said it two weeks ago in an online questionnaire, then again this week in a mailing to voters: “I am the only candidate who sponsored a single-payer health care bill.” Dunne says that is simply not true.
“The facts are that I also sponsored a single-payer health care bill,” Dunne told reporters outside the Statehouse Wednesday.
He did. During the 1993-1994 legislative session when Dunne was serving as a State Representative he co-sponsored a bill that would have created a single-payer system. He wants a public retraction of Shumlin’s claim and is requesting that Shumlin send out another mailer with the correction.
“It is critically important that Peter Shumlin take action and take action quickly to correct the record, to be clear in public that he was factually wrong,” says Dunne.
When two candidates for governor are engaged in a political skirmish as to which one is the bona fide single payer supporter, then we know that single payer is back on the table (at least in Vermont).
Our last four posts have examined the PPACA from the perspectives of the four main goals of health care reform — cost containment, affordability, improved access and quality of care. Here we draw these goals together in asking whether this legislation delivers enough to be worth the $1 trillion investment over the next 10 years, and whether it will really work.
On the positive side of the ledger, the PPACA brings some welcome changes:
• Will extend health insurance to 32 million more people by 2019.
• Provides subsidies to help many lower-income Americans afford health insurance.
• Starting in 2014, expands Medicaid to cover 16 million more lower-income people.
• Provides new funding for community health centers that could enable them to double their current capacity.
• Eliminates cost-sharing for many preventive services.
• Phases out the “doughnut hole” coverage gap for the Medicare prescription drug benefit.
• Will create a new national insurance plan for long-term services: Community Living Assistance Services and Supports (CLASS) program.
• Will establish a nonprofit Patient-Centered Outcomes Research Institute to assess the relative outcomes, effectiveness and appropriateness of different treatments.
• Initiates some limited reforms of the insurance industry, such as prohibiting exclusions based on pre-existing conditions and banning of annual and lifetime limits.
• Contains some provisions to improve reimbursement for primary care physicians and expand the primary care workforce.
On the negative side of the ledger, however, these are some of the reasons that the PPACA will fall so far short of needed health care reform that it is not much better than nothing:
• Surging health care costs will not be contained as cost-sharing increases for patients and their families.
• Uncontrolled costs of health care and insurance will make them unaffordable for a large and growing part of the population.
• At least 23 million Americans will still be uninsured in 2019, with tens of millions more underinsured.
• Quality of care for the U. S. population is not likely to improve.
• Insurance “reforms” are so incomplete that the industry can easily continue to game the system.
• New layers of waste and bureaucracy, without added value, will further fragment the system.
• With its lack of price controls, the PPACA will prove to be a bonanza for corporate stakeholders in the medical-industrial complex.
• Perverse incentives within a minimally-regulated market-based system will still lead to overtreatment with inappropriate and unnecessary care even as millions of Americans forego necessary care because of cost.
• The “reformed” system is not sustainable and will require more fundamental reform sooner than later to rein in the excesses of the market.
How did this latest reform effort get so far off track? Here are three of the major reasons:
• The issues and policy options were framed as the political process was hijacked by the very interests that are largely responsible for today’s cost, access and quality problems in health care. As examples, the drug industry lobbied successfully to avoid any price controls of drugs, as the VA does so well; the insurance industry avoided real rate controls over their premiums and ended up with other loopholes to game the new system; and all of the corporate stakeholders will gain subsidized new markets without significant regulation of the market.
• The quest for bipartisanship was futile as reform got run over in the middle of the road. The big questions cannot be answered in the political center, such as whether health care should be a right or a privilege, or whether health care resources should be allocated based on ability to pay or medical need.
• Market failure was not recognized as the wellspring of our system problems. When it was agreed to “build on the strengths of the present system” instead of more fundamental reform, corporate stakeholders and their lobbyists found willing legislators to craft centrist “remedies” which could be sold to the public as reform. But the various incremental tweaks of our existing system, such as employer and individual mandates, have failed over the last 20 or 30 years to remedy cost, access and quality problems. In the absence of real health care reform, we can now expect these kinds of unfavorable outcomes in coming years:
• soaring costs without effective price controls throughout the system.
• managed care fails to control costs or improve quality.
• persistent financial and other access barriers for many millions of Americans.
• growing backlash by physicians and consumers.
• gaming of private plans and adverse selection in public plans.
• consolidation among hospitals sustaining high prices.
• increased cost-sharing for employees as employers cut back benefits.
• continued high levels of inappropriate and unnecessary care.
• added bureaucracy and waste in an even more fragmented and dysfunctional system.
We have yet to learn that an unfettered health care marketplace can only perpetuate our problems, not fix them. Most industrialized nations have learned this many years ago, and are able to achieve better quality of care with improved outcomes for their populations even as they spend much less on health care than we do. We have to conclude that a larger role of government will be required to assure real and sustainable health care reform.
There is a fix in plain sight for our problems — single-payer financing coupled with a private delivery system. The private insurance industry has outlived its usefulness, and is only being kept alive by government subsidies, whether by overpayments of private Medicare plans or this latest provision in the PPACA to pay out nearly half of a trillion dollars in subsidized premiums for their inadequate coverage.
When will we have the political will to face up to our real problems in health care and show that the democratic process can still work?
Adapted from “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” 2010, with permission of the publisher Common Courage Press. http://commoncouragepress.com/index.cfm?action=book&bookid=402
In our last three posts, we examined how the Patient Protection and Affordable Care Act of 2010 (PPACA) stacks up against the goals of reform for cost containment, affordability and access to care. Here we consider what its likely impact will be on the quality of care, the fourth major goal of the reform effort.
For starters, quality of care in the U.S. is highly variable, and is unsatisfactory for many millions of Americans, as these cross-national comparisons against other nations with one or another form of universal access clearly show:
• The U.S. ranks last among 19 industrialized countries in “amenable mortality rates,” deaths that could have been prevented by timely and effective health care; that translates to about 101,000 excessive deaths per year in this country. (Nolte, E, McKee, CM. U.S. has most preventable deaths among 19 nations. Health Affairs 27 (1):58-71, 2008)
• The U.S. ranks last among 23 industrialized nations on infant mortality, with rates double those of Iceland, Japan and France. (Schoen, C, Davis, K, How, SKH, Schoenbaum SC. U.S. health system performance: A national scorecard. Health Affairs Web Exclusive, W457-475, 2006) http://www.commonwealthfund.org/Content/Publications/In-the-Literature/2006/Sep/U-S–Health-System-Performance–A-National-Scorecard.aspx
• Lower-income people in this country receive worse care than their higher- income counterparts on 21 of 30 primary care quality measures, four to five times higher rates of disparity compared to Australia and Canada. (Huynh, P, et al. The U.S. health care divide. Commonwealth Fund, April 2006)
On the plus side, the PPACA does make some attempts to improve the quality of care through such provisions as these: expanded access to care; elimination of cost-sharing for preventive services; establishing a comparative effectiveness research initiative; expansion of health information technology (HIT); and modification of payment mechanisms (e.g. accountable care organizations, or ACOs, and “value modifiers” for physician reimbursement).
But these are important ways that will largely cancel out the impact of these efforts to improve the quality of care:
• We can expect an increase in cost-sharing (with reduced affordability) as employers downgrade the actuarial value of their coverage and as insurers market their underinsurance products in the individual market and through exchanges. A recent study of Medicare Advantage plans found that increased co-payments resulted in fewer outpatient visits, more hospital admissions and longer hospital stays for patients with hypertension, diabetes and a history of acute myocardial infarction. (Trivedi, AN, Moloo, H, Mor, V. Increased ambulatory care copayments and hospitalizations among the elderly. N Engl J Med 363 (4):320-8, 2010)
• The critical shortage of primary care physicians and an underfunded primary care infrastructure persist as our specialist-dominated workforce continues to provide more care than is appropriate or necessary, with less coordination and worse outcomes. For optimal quality of care, patients need both primary care and appropriate specialist care. (Parchman, M, Culter, S. Primary care physicians and avoidable hospitalization. J Fam Pract 39: 123-6, 1994) (Beal, AC, Doty, MM, Hernandez, SE, Shea, KK, Davis, K. Closing the divide: How medical homes promote equality in health care: results from the Commonwealth Fund 2006 Health Care Quality Survey)
• The new Patient-Centered Outcomes Research Institute lacks the authority to mandate or even endorse coverage and reimbursement rules for any particular test or treatment. (Kaiser Health News staff. True or false: Seven concerns about the new health care law. March 31, 2010)
• Perverse incentives will still permeate the system because of largely unchanged reimbursement policies (mostly fee-for-service) and coverage decisions influenced more by politics and lobbying by industry than hard scientific evidence of efficacy and cost-effectiveness. Procedures will continue to be over-reimbursed, primary and cognitive care services will remain under-reimbursed, and there will be little restraint over excess volume of services in most practice settings. These are examples of how big this problem is:
• One-third of U.S. births today are by Caesarian section (compared to a national average of just 5 percent in the 1960s). (Neergaard, L. Overtreated: More medical care isn’t always better. Associated Press, June 7, 2010)
• About one-third of tests and treatments are inappropriate or unnecessary and often harmful. (Wennberg, JB, Fisher, ES, Skinner, JS. Geography and the debate over Medicare reform. Health Affairs Web Exclusive W-103, February 13, 2001)
• Investor-owned hospitals, HMOs, nursing homes and mental health centers provide more expensive care of lower quality than not-for-profit facilities. (Geyman, JP. The Corrosion of Medicine: Can the Profession Reclaim its Moral Legacy? Monroe, ME. Common Courage Press, 2008, p 37)
• Well-reimbursed imaging procedures are greatly overused, thereby increasing risk of cancer; as an example, a recent report found that Illinois hospitals are using twice as many double CT scans (one with dye, the other without) than the national average, believed by many experts to be unwarranted. (Graham, J. New government report raised questions about CT scans at Illinois hospitals. Chicago Tribune, July 12, 2010)
• Wider adoption of health information technology has not been demonstrated to improve outcomes of care in most non-integrated parts of our health care “system”; most of the increase in medical computing has been driven by financial and billing reasons, not quality of care. And most quality improvement efforts have been based on process measures, such as use of beta blockers after a heart attack or use of hemoglobin A1C in diabetes, without good correlation with actual outcomes. (Chaudhry, B, Wang, J, Wu, S, Maglione, M, Mojica, W, et al. Systematic review: Impact of health information technology on quality, efficiency and costs of medical care. Ann Int Med 144 (10):742-52, 2006) (Himmelstein, DU, Wright, A, Woolhandler, S. Hospital computing and the costs and quality of care: A national study. Amer J Med 123 (1):40-6, 2010)
• The long-delayed experiments with accountable care organizations and bundled payments are likely to be ineffective in improving quality of care in non-integrated practice settings which involve non-salaried physicians. So despite what we are being asked to believe by supporters of PPACA, we cannot really expect much, if any, improvement in the quality of care for the U.S. population as a result of this legislation.
Adapted from Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform, 2010, with permission of the publisher Common Courage Press. www.commoncouragepress.com
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. 5808 – To amend the Patient Protection and Affordable Care Act to establish a public health insurance option.
Introduced July 21, 2010 by Rep. Lynn C. Woolsey, with 128 cosponsors
The Library of Congress
SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.
(a) (1) ESTABLISHMENT- For years beginning with 2014, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary’) shall provide for the offering through Exchanges established under this title of a health benefits plan (in this Act referred to as the `public health insurance option’) that ensures choice, competition, and stability of affordable, high-quality coverage throughout the United States in accordance with this section. In designing the option, the Secretary’s primary responsibility is to create a low-cost plan without compromising quality or access to care.
Letter from Douglas W. Elmendorf, Director
To: Honorable Fortney Pete Stark, Chairman, Subcommittee on Health, Committee on Ways and Means
Congressional Budget Office
July 22, 2010
Under the proposal (H.R. 5808), a public health insurance plan would be established and administered by the Secretary of Health and Human Services (HHS), and it would have to charge premiums that fully cover its costs for benefit payments and administrative expenses.
The Congressional Budget Office (CBO) estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges.
In deciding whether to enroll in the public plan, potential subscribers would consider those premium differences along with various other factors, including the number of providers who chose to participate in that plan. CBO expects that some providers would decline to participate in the public plan because its payment rates would be lower, on average, than private plans’ payment rates. Even so, many providers would be likely to participate, in part because they would expect a plan administered by HHS to attract a substantial number of enrollees.
Taking into account all of the relevant factors, CBO estimates that roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan. CBO estimates that about 25 million people would purchase coverage individually through the exchanges in the 2017–2019 period under the proposal; in addition, about 13 million people would be expected to obtain employment-based coverage through the exchanges — so total enrollment in exchange plans would be about 38 million. Total enrollment in the public plan would thus be roughly 13 million.
Compared with projections of enrollment under current law for the 2017–2019 period, CBO estimates that about three-quarters of a million more people would obtain individually purchased coverage and about three-quarters of a million fewer would have employment-based coverage. The proposal would have minimal effects on the number of people with other sources of coverage and on the number of people who would be uninsured.
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion. That estimate includes a $37 billion reduction in exchange subsidies and a $27 billion increase in tax revenues that would result from changes in employment-based coverage, partly offset by an $11 billion increase in costs for providing tax credits to small employers.
So here is the stand-alone bill for the public insurance option that created so much controversy during the reform process. As we look closer at this option, we can see that the great tragedy of the public option debate was that this almost worthless proposal diverted our attention away from the debate that we should have been having – a debate over whether or not we should enact a single, universal public insurance program.
Let’s look first at the very narrow impact of the features of the public option, and then we’ll look at the very broad and crucial implications of returning to this debate instead of the one that we should be having.
First of all, what impact would this have on the numbers of insured? The additional three-quarters of a million individuals net who would obtain individually purchased coverage would be offset by approximately the same number who would no longer have employer-sponsored coverage. Enacting the public option will produce no net gain in the numbers of individuals insured.
CBO estimates that premiums for the public option will be 5 to 7 percent lower than the premiums for the private plans offered in the exchanges. This savings is from a combination of lower administrative costs for the public option, and the ability of the government to extract greater price and fee concessions from the providers of health care. Paying a slightly lower premium may not be wise if the providers start bailing out of the system.
Also, the supporters of this measure shouldn’t pretend that the very modest reduction in administrative costs of these public plans somehow addresses the profound administrative waste throughout our system. The single payer model would be effective in reducing this waste by hundreds of billions of dollars, whereas H.R. 5808 merely takes a paring knife to plans that would cover only about 4 percent of us, while neglecting the profound administrative waste of the other insurers and the administrative burden that they place on the health care delivery system. The public option is merely another plan in the insurance exchange markets, and, as such, fails to provide the fundamental structural financing reform that we need.
Further, the 5 to 7 percent difference could easily be lost in the fog of comparing the government subsidies for the exchange plans with the employers’ contributions to the premiums of employer-sponsored plans. A policy that has a very modest benefit for 13 million people is unimpressive when we are trying to fix a system so that it takes care of all 310 million of us.
CBO estimates that the measure would reduce the federal budget deficits through 2019 by about $53 billion, partly by decreasing subsidies in the exchanges and increasing income and payroll taxes for those losing employer-sponsored coverage. This reduction in government spending results in increased costs to individuals – a trend that already is having a negative impact on affordable access to health care. Nevertheless, 53 billion dollars is hardly a blip when you consider that we’ll be spending about 30,000 billion dollars on health care through 2019. Besides, though CBO is required to estimate the impact on the federal budget, what we really care about is our total national health expenditures (NHE) and not the portion that passes through a government budget.
So the narrow impact is that the public option fails to meet the goals of reform since it does nothing to increase the net numbers of individuals with insurance, and it doesn’t even provide a blip in our NHE.
The broader impact of H.R. 5808 is much more consequential. Considerable political capital will be consumed in efforts to enact it. The managers of the bill would understand that any consideration of a single payer national health program would have to be left off of the table since that model actually would accomplish the goals of reform. To go through another process that alienates so many colleagues in the health care justice camp risks creating an impasse to real reform that could last many years or perhaps even a decade or two.
The financing infrastructure of the Patient Protection and Affordable Health Care Act cannot work to achieve equitable health care financing for everyone. We can’t afford to waste political capital on a legislative amendment that merely appeases those who lost the public option debate, but does nothing to build the solid financial infrastructure that we need.
Let’s spend all of our political capital on real reform: a single payer national health program – an improved Medicare for everyone.
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.
Cigna Medical Group Announces Grand Opening of CMG CareToday Clinic in South Chandler, Ariz.
Cigna Medical Group
July 19, 2010
Cigna Medical Group has announced the opening of its newest CMG CareToday convenience care medical clinic in South Chandler, Ariz. This brings the total number of clinics to 10 since CMG CareToday’s launch in 2007.
Staffed by board-certified nurse practitioners and physician assistants, the clinics offer walk-in medical care for unscheduled patients with low acuity conditions such as colds, flu, sore throat, lower back pain, ear aches, bladder infections and pink eye. In addition, the clinics offer pregnancy tests and child and adult immunizations, including flu shots. School, sports and camp physicals are also available.
“CMG CareToday is a convenient alternative that can accommodate local residents who may be unable to see their primary care physician because of time or other issues,” said Corinne Bell, DO, MBA, medical director of CMG CareToday. “Expanding the number of clinics Valleywide gives residents a place to go for non-emergency care and provides quick relief for common illnesses.”
First time visits to any CMG CareToday location are $29 retail; subsequent visits are $59. Lab services range from $10 to $15 and a select number of generic prescription medications are available for $10 or $15. CIGNA customers, and individuals covered under other accepted health plans, pay only their office visit co-pay or co-insurance. Additionally, Cigna Medical Group patients who visit CMG CareToday will have their medical records transferred seamlessly through an electronic health record directly to their primary care physician for future follow-up.
About Cigna Medical Group
Cigna Medical Group, the multi-specialty group practice division of CIGNA HealthCare of Arizona, Inc., is one of the Valley’s largest group practices with more than 30 offices located throughout Metropolitan Phoenix, including three Urgent Care centers and 10 CMG CareToday convenience care clinics. To learn more about Cigna Medical Group and the services they provide, please visit www.CignaMedicalGroup.com.
About CIGNA Corporation
CIGNA (NYSE: CI), a global health service company, is dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioral health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world. To learn more about CIGNA, visit www.cigna.com.
Cigna is no longer simply one of the largest, for-profit, private insurance corporations in the nation, it is now a component of the health care delivery system. From the Cigna Medical Group website: “CIGNA is the only managed care organization in Arizona that operates multi-specialty centers designed to help you conveniently receive care and move on with your busy day.”
With tighter regulation under the Patient Protection and Affordable Care Act, the private insurers are looking for innovative solutions that will ensure a bright future for their executives and shareholders. What better opportunity is there than to expand their intrusion into health care delivery? Imagine the expansion of a chain of nurse practitioner- and physician assistant-staffed convenience care clinics with CIGNA branding in bright neon lights.
What next? Accountable care organizations (ACOs) with full control of physicians and hospitals? Imagine each hospital in your community with a building-top mounted branding neon sign – WELLPOINT, UNITEDHEALTH, AETNA, CIGNA, HEALTH NET, HUMANA, though further consolidation could leave us with maybe just three market choices: WellPoint, UnitedHealth, and Kaiser Permanente. Maybe we could end up with only one: UnitedWellPoint.
Though this seems farcical, instead of simply controlling the puppet strings of health care – the insurance function – these national corporations would like to take over the puppets as well.
You say that’s impossible? I remember telling my colleagues what we could expect when the legislation passed that enabled the managed care revolution. They said that the scenario I described was impossible, and, besides, they would never sign the contracts anyway. It didn’t take long.
How could we end up with one or more UnitedWellPoints? The steamrollers for ACOs are fired up and beginning to roll. Physicians will have almost no say in this transformation. The fight for control will be between the hospitals and the major private insurers. What kind of a contest will that be with thousands of local hospitals competing for control with a few large national insurance companies that already hold the money?
Wouldn’t it be much safer to give entire control of the purse strings to an improved Medicare? At least then any redesign of the health care delivery system would benefit patients rather than shareholders.
Medicaid Provision Could Turn Into ‘Another SGR,’ Some Advocates Fear
By Amy Lotven, Inside Health Reform
America’s Health Insurance Plans (AHIP)
June 23, 2010
Under the reform law, starting in 2013 Medicaid payments for primary care physicians must equal 100 percent of Medicare payments, but Congress only funded the policy for two years due to fiscal constraints.
The Republican Study Committee (RSC), in a March 26 policy brief on the health reform law, calls the payment boost a “budget gimmick” and notes that “history has shown that this two-year increase will likely be increased every year after the ‘sunset date,’ thus hiding the true cost of the provision.”
“While many conservatives may believe that physicians in Medicaid should be paid more, many may believe that we should not be expanding this flawed program to begin with.”
The RSC also notes that the provision could be seen as “just another SGR,” referring to the annual congressional move to stave off physician payment cuts resulting from Medicare’s sustainable growth rate.
But primary care stakeholders are already working to mitigate the issue. The American Academy of Family Physicians says that it will be asking lawmakers to extend the provision to cover a longer period. “It is likely that any extension will be of specified duration because of its impact on the federal budget,” AAFP writes on its web site. “Nonetheless, physicians are not likely to begin taking Medicaid patients if they know that the higher payment rates are not going to continue. As Medicaid coverage expands, this will create an untenable situation in which more patients will be covered but have no physician practice that can take them,” the site adds.
The provision in the final legislation was obviously crafted so as to address fiscal constraints, AAFP President Lori Heim said. Essentially, the legislation expands Medicaid to an estimated 17 or so million people starting in 2014 and as of now the funding is slated to end that same year. If all of these people gain access to physicians at that point, what will happen in 2015? Heim asked.
Physician Participation in Medi-Cal
California HealthCare Foundation
While 90% of California physicians are accepting new patients and 73% accepting new Medicare patients, only 57% reported accepting new Medi-Cal patients.
Medi-Cal patients are concentrated in a small share of practices, with 25% of physicians providing care to 80% of Medi-Cal patients.
Medicaid, being a welfare program with piddling political support, has been chronically underfunded. Yet, in the reform legislation, expansion of Medicaid eligibility is one of the more salient policies, designed to extend Medicaid coverage to perhaps 17 million more individuals. Will we have enough willing primary care professionals to take care of them?
Close to half of physicians already are unwilling to accept any Medicaid patients at all, and the patients who do receive care tend to be concentrated amongst one-fourth of physicians.
Congress recognized that there would be a reluctance on the part of primary care physicians to absorb this influx of Medicaid patients, so they increased payment rates for primary care services to the same level as Medicare. But the increase is scheduled for only two years merely because an arbitrary federal spending limit constrained the reform policies.
The increased fees will apply the year before and the first year of the Medicaid expansion. Physicians are already unhappy with the continued uncertainties over the future of Medicare payments since Congress has repeated failed to enact a revision to the SGR formula (sustainable growth rate), without which physicians could see dramatic reductions in Medicare payments. Physicians do not see Congress as reliable partners.
Why would any physician sign up a large number of new Medicaid patients in 2014, if the next year rates will be reduced to levels that already have caused physicians to refuse to participate in the program? It is likely that the one-fourth of physicians who already are dedicated to caring for Medicaid patients will be inundated, and at a time when we already have a serious primary care crisis.
The increased funding for community health centers may provide some relief, but serious logistical problems may impair adequate access – problems such as health center location and transportation to it, the shortage of primary care professionals to staff the centers, and the continual struggle with funding. Also, whether Medicaid patients are seen in primary care practices or community health centers, access to specialized care is very limited, primarily because of a lack of willing providers.
Medicaid is branded with the stigma of being a welfare program because it is a welfare program, quite unlike Medicare which is a social insurance program. Not only is Medicaid humiliating for the patients, it also creates fiscal problems for the health care delivery system because of chronic underfunding.
The Medicaid problem could be eliminated quite easily. It would be much more efficient, equitable, and less costly overall to have a social insurance program that covered absolutely everyone – an improved Medicare for all.
Insurers Push Plans That Limit Choice of Doctor
By Reed Abelson
The New York Times
July 17, 2010
As the Obama administration begins to enact the new national health care law, the country’s biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals.
The plans, being tested in places like San Diego, New York and Chicago, are likely to appeal especially to small businesses that already provide insurance to their employees, but are concerned about the ever-spiraling cost of coverage.
But large employers, as well, are starting to show some interest, and insurers and consultants expect that, over time, businesses of all sizes will gravitate toward these plans in an effort to cut costs.
The tradeoff, they say, is that more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks. That could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health-care choices.
But companies may be able to reduce their premiums by as much as 15 percent, the insurers say, by offering the more limited plans.
Many insurers also expect the plans to be popular with individuals and small businesses who will purchase coverage in the insurance exchanges, or marketplaces that are mandated under the new health care law and scheduled to take effect in 2014.
Prominent officials like Mr. Obama and Hillary Rodham Clinton learned to utter the word “choice” at every turn as advocates of overhauling the system.
But choice — or at least choice that will not cost you — is likely to be increasingly scarce as health insurers and employers scramble to find ways of keep premiums from becoming unaffordable. Aetna, Cigna, the UnitedHealth Group and WellPoint are all trying out plans with limited networks.
The size of these networks is typically much smaller than traditional plans. In New York, for example, Aetna offers a narrow-network plan that has about half the doctors and two-thirds of the hospitals the insurer typically offers. People enrolled in this plan are covered only if they go to a doctor or hospital within the network, but insurers are also experimenting with plans that allow a patient to see someone outside the network but pay much more than they would in a traditional plan offering out-of-network benefits.
The insurers are betting these plans will have widespread appeal in the insurance exchanges as individuals gravitate toward the least expensive options.
The new health care law offers some protection against plans offering overly restrictive networks, said Nancy-Ann DeParle, head of the office of health reform for the White House. Any plan sold in the exchanges will have to meet standards developed to make sure patients have enough choice of doctors and hospitals, she said.
How widespread these plans will become is anybody’s guess, and some benefits consultants wonder if these plans represent any real solution to high medical costs. The narrow network, if it is based on the insurers’ ability to demand low prices, may be “just another short-term fix,” warned Barry Schilmeister, a consultant at Mercer.
But many insurers say they are still figuring out how to persuade people to choose these plans rather than force them to enroll. “What’s not changed are the old techniques of black-belt managed care,” said Mark T. Bertolini, Aetna’s president. “We have to create the same kind of model without the ‘Mother, may I.’ What we want is the ‘Mother, should I.’ ”
The managed care revolution brought us restricted networks of physicians, hospitals and other health care services. These restrictions, which limited patients’ choices of their health care professionals and facilities, did produce a one-time notch in the curve of rising health care costs. The insurers did this by contracting lower rates with health care providers, and then imposing financial penalties on patients who chose their care outside of the networks.
Patients were not pleased with limitations placed on their choices, but generally were not rebellious since they were often able to continue to see their own physicians, or, if not, were usually satisfied with their in-network substitutes.
The major insurers have been experimenting for some time with much more restrictive networks – networks in which they could contract for much lower rates in exchange for a higher patient volume. Individuals and employers have not responded to these market efforts because the restrictions were too severe. They excluded popular health care professionals and hospitals, sometimes completely, or sometimes by requiring unaffordable coinsurance payments by the patients.
But the environment has changed. The premiums for health plans are now very close to being truly unaffordable for most individuals and employers. With individuals being mandated to purchase insurance, and employers being exposed to penalties if their employees purchase plans in the exchanges, the market for plans with affordable premiums is being forced. The insurers must come up with plans that will meet the test of the market. The deeply-discounted, more tightly restricted plans are now finding their market.
These plans are terrible. Many will lose their primary care professionals. They will often not be able to use their local hospitals and many of their local specialists. Most referrals to centers of excellence will be prohibited. Although the Patient Protection and Affordable Care Act (PPACA) will require that provider networks provide choice, the law does not prohibit intolerably Spartan networks.
This, of course, is a setup for the death spiral of adverse selection for the plans with more adequate networks. Individuals with more significant problems will select plans that can better meet their needs, while the healthy will flee to the plans with Spartan networks once the premiums skyrocket.
When individuals shift to the more restricted plans, what will happen to the large number of physicians and hospitals that are denied contracts? Obviously their financial viability would be threatened, and many would shut down. As if we didn’t already have enough problems with the deterioration in our primary care infrastructure, much of the entire health care delivery infrastructure could begin to crumble.
PPACA contains many measures designed to improve the functioning of the private insurers, but most of them will drive premiums even higher. Insurance innovations such as the Spartan provider networks were fully predictable.
What should really alarm us is that the business world thrives on innovation. Think of the possibilities that the private insurance industry can devise. Actually, it is very difficult for us who are trying to figure out how to get patients the care they need to come up with innovative concepts that will protect the business model of the private insurance industry, no matter the cost to patient care. It isn’t in our DNA.
But there is absolutely no doubt whatsoever that we will see innovation, and it won’t be healthy for patients, nor for their health care professionals.
TAKE ACTION: The article provoked a large number of responses on The New York Times website, many supportive of Medicare for all, single payer, national health program, and health care justice in general. ADD YOUR RESPONSE. Go to the article and post your opinion, even if only a sentence or two. If you are not registered, it is easy to do, so don’t let that deter you. The New York Times needs to hear from us so that they will investigate why there is such broad support for a national health program. (At least click “Recommend” on response #232.)
Public sector workers paying more of their health care costs
By Bobby Caina Calvan
The Sacramento Bee
July 15, 2010
Workers in private industry have felt the sting of rising health insurance premiums and out-of-pocket costs for decades. Now, as government budgets bleed, public employees are starting to share the pain.
In the past year, Sacramento’s largest school districts have trimmed health care coverage. Local and state government officials also are looking for ways to save.
And while public employee unions have made preserving health benefits a priority, they have been pressed to give ground or face more layoffs.
In his proposed budget, Gov. Arnold Schwarzenegger is seeking to cut $152.8 million in health premium expenses by requiring the California Public Employees’ Retirement System to offer lower-cost coverage, possibly with fewer benefits, or give the state authority to do so.
Health insurance costs have “reached the point where we can’t sustain those benefits,” said Lynelle Jolley, spokeswoman for the state Department of Personnel Administration.
Private employers have continued to shift more of the costs of health care to their individual employees. This has had deleterious financial and health impacts since it has made health care access less affordable. Now, even with union representation, public employees also are experiencing deterioration in their coverage.
That’s a one-way street. Plans for public employees will never improve but will likely further deteriorate to match the 60 to 70 percent actuarial value plans to be offered by the state insurance exchanges.
“After all, why should we taxpayers have to buy these people good insurance when we have to put up with our lousy plans?” But those who express this sentiment have it backwards. Why should they have put up with crappy insurance when we could all have a program that works even better than most plans for public employees?
As we’ve said many times, the private insurance model doesn’t work anymore. We can have that program that works for all of us, if we, as voters, demand it.
Health Insurance Exchanges and the Affordable Care Act: Key Policy Issues
By Timothy Stoltzfus Jost, J.D.
The Commonwealth Fund
July 15, 2010
Health insurance exchanges are the centerpiece of the private health insurance reforms of the Patient Protection and Affordable Care Act of 2010 (ACA). If they function as planned, these exchanges will expand health insurance coverage, improve the quality of such coverage and perhaps of health care itself, and reduce costs. Previous attempts at creating health insurance exchanges, however, produced only mixed results. This report identifies the earlier attempts’ problems, enumerates the key issues that are critical for overcoming those problems, analyzes in detail the ACA’s provisions addressing these issues, and discusses further policy options.
As part of successfully implementing the new exchanges, the U.S. Department of Health and Human Services (HHS) and the states must address issues that undermined the earlier attempts. These issues are:
• Adverse selection.
• Numbers of participants.
• Market coverage and structure.
• Choice without complexity.
• Transparency and disclosure.
• Administrative costs.
• Market or regulator?
• Administering subsidies and mandates.
• State, regional, or national exchanges?
• Relationships with employers.
• Cost control.
“Health Insurance Exchanges and the Affordable Care Act: Key Policy Issues,” by Timothy Stoltzfus Jost, should be read in full (44 pages) by everyone who cares about the future of our health care system. The Executive Summary alone is not adequate to understand the implications of the issues he discusses. Every page requires attentive reading since each is covered with red flags, far too many to cover in a qotd commentary.
It is an especially important report for those who believe that the health insurance exchange model is a satisfactory compromise for moving forward, while dismissing further efforts to create a public national health program. It is also important for single payer advocates (improved Medicare for all) since it is important to understand the red flags raised by this report, and be able to debate them with others.
Many of the issues listed would disappear under a single payer system. For instance, in spite of the measures in the law, adverse selection (concentrating high-cost patients in health plans) cannot be eliminated by the insurance exchanges, yet it would disappear in a single universal risk pool. That is especially important since adverse selection has destroyed previous insurance exchanges in numerous states.
The numbers of participants in the exchange plans are also crucial. A few unhealthy individuals can wipe out a plan if there isn’t a large number of healthy individuals to absorb the costs through the plan premiums. It has been estimated that 24 million people will obtain their coverage through the exchanges. Distribute that amongst the fifty states, and then divide those numbers up amongst the “large” selection of plans in the “robust” markets of the exchanges, and you can see that many plans would likely fail due to the small numbers of insured.
Although an important goal of reform was administrative simplification, insurers will still have most of their administrative costs, as will the physicians and hospitals, and yet another layer of administration is added in the operation of the exchanges.
The premium subsidies, cost-sharing subsidies, and the mandates and penalties, in a system with ever-shifting eligibilities, creates a complex financing structure that is totally unnecessary. It is far simpler to finance the entire health care system through equitable taxes.
The reform act was designed to perpetuate the employer role in providing health care coverage, but increasing costs and increasing fragmentation through various public and private programs is increasing the complexity of the decision process for employers, creating an uncertain future for employer-sponsored plans. It would be far easier to remove the employer as keeper of the health plan, and simply provide a single, comprehensive public plan for everyone.
And cost control? It didn’t happen.
You likely don’t have time to read the full report now, but download it and read it this weekend, or at any other time that you have a break.
The Patient Protection and Affordable Care Act of 2010 (PPACA) is being touted by its proponents as moving the country to near-universal coverage and a great step ahead in U.S. health care. But what does this really mean? Are the many barriers to care almost a thing of the past?
On the plus side, the PPACA does offer these welcome provisions:
• Extending health insurance to 32 million more people by 2019.
• Allowing parents to keep their children on their policies until age 26.
• Expansion of Medicaid to cover 16 million more lower-income Americans.
• New funding for community health centers that could allow them to double their patient volume.
However, on the other side of the ledger, there are many problems that will render restricted access to care for tens of millions of Americans, an ongoing and even increasing problem. These examples show how far short of the mark the PPACA falls on access to care:
• There will still be 23 million people without any kind of health insurance in 2019.
• Federal support for Medicaid expansion will not kick in until 2014.
• More than 32 million other Americans will be under-insured in 2019, as a result of these kinds of circumstances:
Despite the hype we hear about “near-universal” access just down the road with PPACA, the above leads us to believe that access to care will remain inadequate for much of the population. In our next post, we will look at what this year’s health care “reform” legislation means for the quality of care Americans receive.
Adapted from “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” 2010, with permission of the publisher Common Courage Press. www.commoncouragepress.com
Physicians for a National Health Program's blog serves to facilitate communication among physicians and the public. The views presented on this blog are those of the individual authors and do not necessarily represent the views of PNHP.
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