Kicking the can down the road

Posted by on Monday, Mar 25, 2013

That’s what you get when you kick the can down the road
Northeast Public Radio commentary (WAMC and affiliates)
March 22, 2013
Andrew D. Coates, MD, FACP

“Kicking the can down the road” is an idiom that means to defer something crucial in hopes that the problem will become someone else’s responsibility. The other day it occurred to me that “kicking the can down the road” has become a trademark of contemporary governments worldwide — from the European debt crisis, to the so-called sequester, to the decision to defer changing the tax on New York’s wealthy until a non-election year.

In many ways President Obama’s “health care overhaul,” the Affordable Care Act, is another example of kicking the can down the road. Here at the third anniversary of the reform, the bulk of the law will not begin to take effect until next year — and its full process will continue through 2019, all the way to the Presidential election after the next Presidential election.

Perhaps then it is small wonder that the Kaiser Family Foundation Health Tracking Poll found this week that a solid majority of Americans, fifty-seven percent, have no idea what the impact of the Affordable Care Act will be. Three years after “health care overhaul” was signed into law we’re still Waiting for Godot.

The Kaiser Foundation pollsters had the good sense to ask about things that were part of the debate four years ago but not part of the law. They found that a majority of people mistakenly believe that the reform will implement a so-called “public option” insurance plan. Four of ten people think that there are government “death panels” empowered to decide whether Medicare beneficiaries live or die, although this too has no basis in reality.

The real facts, however, are not encouraging. Inadequate access to care, uninsurance, underinsurance, medical bankruptcy and state-by-state rationing of care for the poor remain the order of the day. The real experience for those in need of medical care has not improved. Indeed in many communities it has worsened.

Still, the Affordable Care Act promises private insurance for the uninsured — starting next year. The plans offered through the state exchanges will be benchmarked to cover a minimum of 60 percent of the anticipated health care costs.

That means that a family plan purchased on the on the New York exchange will cost about $21,000 in a year in premium payments, plus an anticipated $12,500 in out of pocket expenses. Of course you can pay more if you want better coverage. In other words, starting this fall the uninsured will be able to sign up for unaffordable — yet insufficient — health coverage.

Families earning less that $92,000 will be given tax subsidies for insurance premiums, — but each family eligible will face a significant, personalized, calculus problem about whether or not to purchase insurance.

The Kaiser Family Foundation’s polling found that most people have no idea about this. I think this reveals popular wisdom. Some things we might rather not know! Cynicism and distrust amounts to a healthy impulse in this case.

When it comes to health policy, the mainstream media consistently fails to lead with the facts. He-said, she-said reporting, with no grounding in facts, dominates. Casual attention to NPR and the daily papers invited the conclusions that both death panels and socialism were debated on Capitol Hill.

The real problem is that the Affordable Care Act kicked the can down the road, rather than taking responsibility for the health care crisis that the United States has right now. Small wonder that people don’t know how the law will change the status quo — when the ACA never aimed to to change the status quo in the first place. Unaffordable underinsurance will remain the best we can do.

That’s what you get when you kick that can down the road — until the day when the cans in the road block the way forward. Soon now we will all need to face the fact that nothing short of a public, national single-payer health program will be able to control costs, guarantee access to all, improve the quality of care — and raise us all up.

Can we recover waste by identifying geographic variations in health care?

Posted by on Monday, Mar 25, 2013

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.

Interim Report of the Committee on Geographic Variation in Health Care Spending and Promotion of High-Value Health Care: Preliminary Committee Observations (2013)

Institute of Medicine
The National Academies

A geographic value index would adjust payment to all providers within a defined area based on aggregate measures of spending and quality. The committee sought to determine empirically whether providers within a defined area behave similarly (e.g., exhibit similar patterns of service use across sub-regions, clinical conditions and quality measures). Consistent with a body of literature, analyses commissioned by the committee observed variation in health care spending at every geographic level (Hospital Referral Regions, Hospital Service Areas, Metropolitan Statistical Areas) studied, and additional research found variation among hospitals within Hospital Referral Regions, among physicians in the same group practice, and even within individual providers when treating different conditions. Further, Hospital Referral Regions do not consistently rank high or low across quality measures, nor is there a consistent relationship between utilization and various quality measures. These preliminary observations suggest that a geographic value index would reward low-value providers in high-value regions and punish high-value providers in low-value regions.

Health policy leaders suggest that, to improve value, payment reforms need to create incentives to encourage behavioral change in the locus of care (provider and patient), and thus payment should target decision-making units, whether they be at the level of the individual providers, hospitals, health care systems, or stakeholder collaboratives. Payment reforms contained in the ACA (e.g., value-based purchasing, accountable care organizations, bundled payments) and being tested in the commercial market and Medicaid, do target decision makers rather than geographic areas. Because these reforms are relatively new, there is little evidence to date about their effects on the value of care. Nevertheless, the results of the subcontractors’ work for this study suggest that tying a decision-making unit’s payment to its actions, as these reforms do, is preferable to induce desired changes in care. Further, because post-acute care, particularly home health and skilled nursing, is a major source of unexplained variation in Medicare spending, reforms that address incentives to overuse post-acute care, including fraud in that use, could have a large impact on health care efficiency.

http://www.iom.edu/Reports/2013/Geographic-Variation-in-Health-Care-Spen…

Health care spending tends to fall under a Bell curve. Most of it falls in the middle, but some falls under the low end (low-cost) and some falls under the high end (high-cost). The Dartmouth studies have confirmed the geographical nature of this distribution. Thus much attention has been directed to devising methods of recovering the allegedly excessive spending in the high-cost regions. This report casts doubt that such an effort would be productive.

To begin with, the Bell curve or Gaussian distribution (normal distribution) is to be expected even when resources are being used properly. Further, this variation is found not only between geographic regions, but also between hospitals within the same regions, between physicians within the same group practices, and even by the same physicians managing different conditions. Thus measures designed to reduce spending only in geographical regions at the high end will be too blunt because they would reduce not only high-cost care of lower value, but they also would reduce legitimately high-cost care that is providing full value.

The authors of this Institute of Medicine report suggest that payment reforms instead should target decision makers rather than geographical areas. The decision makers include individual providers, hospitals, health care systems, and stakeholder collaboratives. Health payment reforms of the Affordable Care Act are designed to do just that. These include measures such as accountable care organizations, value-based purchasing, and bundled payments. Of course, adjusting payments based on these and similar reforms are much more complex administratively than merely adjusting payments based on regional spending levels.

It is questionable as to whether or not such payment systems could ever be effective in significantly improving value in the entire health care system since most impacts of the payment models are effective only at the margin, if even there. Further, Gaussian distributions would apply to these new models as well, making it likely that payment adjustments would be inappropriate for some, even if appropriate for others.

Think of the Bell curve again, but for decision makers rather than geographical regions. Many have suggested that 30 percent of health care represents wasteful spending. What if you lop off the upper 30 percent of care under the Bell curve? First you have to believe that you can identify low-value care in advance – a highly unlikely scenario. Then you have to assume that all care in the lower 70 percent provides value whereas that in the upper 30 percent does not – a preposterous assumption.

What about the lower 30 percent of the curve. Does it really represent high-value, low-cost care? Or does it represent care that is not being delivered (and therefore not measured), even if it should be. Shouldn’t we be directing more efforts to be sure that we are meeting patient needs, even if it could increase health care spending?

We are looking for ways to slow down the outrageous increases in spending for what is often mediocre care. These feeble measures that are designed to tweak decision makers are complex and likely will cost as much to administer as any meager savings that they could realize. Some of the ideas may be worth pursuing, such as value-based purchasing, but we should not deceive ourselves that these are the grand solutions for our excessive spending.

All other wealthy nations provide care for everyone at much lower costs, and they have done it without playing these pseudo-wonk policy games. We can’t rely on silly, little tweaks. We need fundamental reform of our health care financing system. We need a single payer national health program.

Nelson Lichtenstein (“Obamacare’s other benefit,” L.A. Times, March 19) is correct to hint at the potential for human liberation that universal, free access to necessary health care would bring to the United States, especially in view of the declining standard of living for the great majority of our population.

But his effort to spin the Affordable Care Act (ACA) and the corporate-backed enrollment of millions of people in private insurance plans as a liberating blow for democracy is an impossible stretch.

In this new, post-ACA era, inadequate access to care, uninsurance, underinsurance, medical bankruptcy and state-by-state rationing of care for the poor will remain the order of the day.

Enrollment in Medicaid and/or a costly, insufficient private insurance policy will not prove liberating for the American people, let alone for those who gain such inadequate “coverage.”

The present acceleration of hideous inequalities, long a hallmark of our unjust health system, will further erode, not restore, democracy in the United States.

Health system planning in the U.S. is increasingly based upon maximizing corporate profits, consolidating financial control, and otherwise enhancing corporate interests. It is based less and less upon individual and community health needs.

Despite its modest benefits, the ACA does not resolve these problems. In many ways it exacerbates them.

Yet Lichtenstein waxes enthusiastic about the potential for the ACA’s state health insurance exchanges, the instruments through which the government aims to compel the uninsured to purchase private health insurance, to contribute to a new flowering of civic involvement and democracy.

He does this even as he acknowledges that the “stakeholders” in the drive to expand private insurance and Medicaid are the big insurers, private hospitals and Big Pharma.

On top of this Lichtenstein invokes the great progressive reform movements of the last 100 years – the battle for women’s suffrage, the fight for jobs and justice during the Great Depression, the struggle for Civil Rights, and the movement to save the environment – as the inspiration for …  enlisting people in exchanges where they can buy what will certainly be shoddy private health insurance.

“Because signing up for Obamacare will be complicated,” he envisions a campaign modeled on an army of H&R Block tax preparers! This notion of “Obamacare civic activism” is not only wrongheaded as historical analogy — it is shockingly disrespectful of the creative self-action and self-sacrifice of so many, including those who gave their lives for the causes he cites.

When it comes to health care needs in the United States, we must keep our eye on the prize. The fact remains that nothing short of a public, national single-payer health program will be able to control costs, guarantee access to all, improve the quality of care and protect the vulnerable.

Yes, the movement that wins health care for all will need to draw lessons from the great social movements of the past. Yes, real health reform will give new impetus to our nation’s democracy.

Peddling private health insurance policies to the working poor will not get us there.

Low cost eHealthInsurance plans exposed

Posted by on Thursday, Mar 21, 2013

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.

eHealth Data: Premiums 47% Higher for Individual Health Insurance Plans with Comprehensive Health Benefits

eHealthInsurance
March 18, 2013

Today eHealth, Inc., parent company of eHealthInsurance.com, America’s first and largest private online health insurance exchange, released a ‘Cost of Comprehensive Health Benefits’ report. This new report shows that average monthly premiums for individual health insurance plans are forty-seven percent (47%) higher than average when they cover a comprehensive list of eight health benefits.

Since 2005, eHealth’s Cost and Benefits report has tracked the percentage of plans surveyed that cover eight health benefits deemed to be comprehensive by eHealth, including: Laboratory and X-Ray; Emergency Services; Prescription Drugs; Chiropractic; Maternity; OB/GYN; Periodic Exams; and Well Baby care.

In 2010, the Affordable Care Act (ACA) created a new list of ten Essential Health Benefits (EHBs) that all major medical health insurance plans must cover at an actuarial value of 60% or more in order to fulfill the federal mandate for health coverage, beginning in January of 2014.  Those EHBs include: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

The data presented in this report do not reflect the impact that new Essential Health Benefit (EHB) standards will have on plan prices, nor does the report take into account other factors that may impact the cost of health insurance in 2014. Not only do some of the benefits differ and overlap, but chiropractic care is not deemed to be an EHB by the ACA.

“These data provide valuable insight into the cost of health insurance plans as consumers prepare to enroll in the more comprehensive health plans that will become available with the Affordable Care Act,” said eHealth Senior Vice President of Carrier Relations Robert Hurley. “Our report does not provide an ‘apples to apples’ comparison of plans that cover the essential health benefits established in the Affordable Care Act, but it does provide some interesting insight into the potential impact that new benefits standards could have on the cost of health insurance plans in the individual health insurance market.”

http://news.ehealthinsurance.com/news/ehealth-data:-premiums-47-higher-f…

And…

Richer health benefits cost 47% more, industry report warns

By Chad Terhune
Los Angeles Times, March 19, 2013

“I think consumers can expect new health plans next year are going to be somewhere between 40% to 60% more expensive,” said Bob Hurley, eHealth’s senior vice president of carrier relations. “I think there is a fair amount of concern that the health plan requirements are too rich.”

http://www.latimes.com/business/money/la-fi-mo-health-insurance-rates-20…

Many critics of the Affordable Care Act (ACA) say that the health plans to be offered in the proposed state insurance exchanges should be replaced with plans that have fewer regulatory requirements and that can be sold across state borders. They often cite the bargain prices of plans offered by eHealthInsurance as an example of how we could make health insurance more affordable for everyone. So what is eHealthInsurance offering?

By their own analysis, eHealthInsurance does not consider their plans to be comprehensive unless they offer the eight benefit categories listed in the article excerpt above. If those benefits are included, the premiums are 47 percent higher for both individual and family plans than the premiums for their cheapest plans. Note that these eight benefits are not the same as the ten benefit categories that are required as essential health benefits under ACA, so it is likely that the premiums under ACA will be even more than 47 percent higher than the cheap eHealthInsurance plans. This doesn’t even take into consideration cost sharing such as the deductibles.

There is already concern that the benchmark silver plans under ACA, with an actuarial value of only 70 percent (patient pays 30 percent of costs, which might be partially offset by income-indexed subsidies), may leave patients vulnerable to excessive out-of-pocket costs. If the stripped down eHealthInsurance plans were allowed as replacements for exchange plans, it is inevitable that most enrollees would face financial hardship should they develop significant medical problems.

So what is the response of eHealthInsurance? eHealth senior vice president Robert Hurley says, “I think there is a fair amount of concern that the health plan requirements are too rich.”

This exposes the highly touted low cost eHealthInsurance plans as the shoddy plans that they are. You might be nominally insured, but don’t you dare get sick.

What “forgiveness formula” would be appropriate for medical debt?

Posted by on Wednesday, Mar 20, 2013

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.

Forgiveness Formulas

By Casey B. Mulligan, Economics Professor, University of Chicago
The New York Times, March 20, 2013

In an ideal world, collecting debts would be as simple as asking debtors to pay their obligations when they are able to. But in reality most businesses have found that they need to obtain other assurances, such as collateral or the option to shut off services to a delinquent payer. Otherwise it is too easy for debtors to claim hardship and walk away without paying.

On the other hand, many families and other debtors do experience genuine hardship. In those cases it can be compassionate and even efficient to at least partly forgive the debts of people who have fallen on hard times. Many economists see loan defaults as (sometimes) an efficiency-enhancing form of risk-sharing.

One approach would be for lenders to develop and disclose a “forgiveness formula” that would clearly define “hard times” and indicate precisely what kind of forgiveness is possible. The advantage of forgiveness formulas is that distressed borrowers can be certain where they stand with the lender and can readily evaluate whether they were treated “fairly.”

Hospitals are also known to partly forgive medical debts incurred by the uninsured, while they make no accommodation for many others. Some states require hospitals to explain in writing how they go about discounting charges for hardship patients, but you might guess that hospitals worry that patients will game those calculations in order to pay less.

One advantage of health reforms that get more people on health insurance is that by getting people to pay for their health care before they get sick, the reforms reduce the number of cases in which clear forgiveness has to be traded off with formula gamesmanship.

A forgiveness formula for hospitals?

Other nations have been successful in providing health care to everyone at a cost much below that of our dysfunctional system here in the United States. Their programs often have first dollar coverage; therefore medical debt is almost unheard of – certainly a minuscule fraction of what we have here.

Instead of establishing strategies for forgiveness in the future, wouldn’t it be more logical to establish a health care financing system in which debt forgiveness would never need to be a consideration?

http://economix.blogs.nytimes.com/2013/03/20/forgiveness-formulas/

‘Grand Theft Medicine’: the Video Game

Posted by on Tuesday, Mar 19, 2013

By David Ray, M.D.

I have practiced medicine for 35 years, 28 of those years focusing on HIV medicine. For the past 14 years I have practiced primary care and HIV medicine at a community health center, and for the past seven years have endured the intrusion of Electronic Medical Records into my practice.

I now realize that gradually over these past seven years of EMR, my daily routine has become essentially a not-very-enjoyable video game. Here is a description of this not-ready-for-prime-time video game:

Like most video games currently on the market, this game is played in a darkened room, with a keyboard and a mouse (I suspect someone somewhere is working on a controller for this game). As you navigate through the labyrinth of this game, you encounter your enemies:

1. The Acronyms: These odious entities include the PCMHs, the ACOs, the PPACAs, the NCQAs, and the JCAHOs, among countless others. Each of them has a voluminous set of rules which must be satisfied during every round of the game.

2. The Regulators: A subset of the Acronyms, including HRSA, CMS, Part A, and the dreaded Grantors (a peculiarity only in the variety of the game I play, called FQHC). Again, each has a daunting armory of requirements that must be negotiated with to successfully complete a round.

3. The Deniers: You know them … Aetna, United Healthcare, Fidelis, and on and on. Part of what’s so scary about the Deniers is that there are so many of them and each one of them employs slight variations of a huge catalogue of obstacles that must be continually negotiated. The penalties they mete out include Prior Authorizations and Formulary Changes which can change from round to round and day to day. Stay on your toes for these guys!

4. The Litigators: A shadowy group which hovers in the background of each round, and will pounce on any slight miscalculation and ruin your day.

5. The ICD-10s: Even the creators of the game don’t seem to understand these monsters and always are under or overestimating their demands on the player.

So now we play the game! I should point out that this game is produced by many different manufacturers and designers, so if you play in more than one place, you’ll have to learn a whole new set of control commands to play successfully (not to mention safely and reimbursably – the latter is always the paramount design consideration, of course!).

Because there are so many different and complex variations, and because they are written by people who never actually play the game, these programs are buggy … shutting down, freezing, jumping from screen-to-screen and level-to-level with maddening unpredictability. They often are also unpredictably slow at times due to the complexity of the game … yet speed is always of the essence. Have fun!

Oh, I forgot to mention that there are the Unexpecteds and the Queues! These are bits and pieces that pop up randomly during play and must be addressed to complete the game. They can include Phone Messages, Lab reports, Diagnostic Imaging reports, Messages, Actions, Electronic prescriptions and others that I can’t even remember.

So every day now, with over three decades of experience in clinical medicine, I play this game for which I am totally unprepared. Of course, the goal is to get through as many rounds as you can each day. Sometimes the game is so exciting I continue to play when I go home (I never used to be able to do that before).

And one more thing … in between every round, there is something called “Patients” which requires that you leave the playstation and interact with some human beings who do not understand or play this game at all. They want to steal your time and distract you from the fun you are having in your office!

There may also be “Staff” who actually can intrude into the game at times, but at other times also try to distract you from your play.

This game is so complex you’d think it would have a small market and be tough to sell … but fortunately for the manufacturers, our political leaders, who will never, ever, play this game and who have very limited evidence that it is a good or useful game, have mandated that all doctors buy and play it. Gee, thanks!

And yet I have this nagging feeling that this game could be much simpler, and that a desire to help Patients was why I went into medicine. Can somebody help me out here?

David A. Ray, M.D., practices internal medicine in Albany, N.Y.

The cost of failing to use government price negotiation for drugs

Posted by on Tuesday, Mar 19, 2013

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.

State Savings with an Efficient Medicare Prescription Drug Benefit

By Dean Baker and Nicole Woo
Center for Economic and Policy Research (CEPR), March 2013

Americans pay far higher prices for prescription drugs than do people in other wealthy countries. The reason that other countries spend so much less on drugs is that their governments negotiate prices with the pharmaceutical industry. The United States government could adopt the same approach with the Medicare drug program and use its market leverage to negotiate the same, or even lower, prices as are paid by other wealthy nations. This issue brief finds the potential savings to states would be enormous, cumulatively between $31 billion and $73 billion over 10 years, and also each state individually could expect significant savings.  California leads the way, with potential savings between $3.3 and $7.8 billion. The next six top-saving states are Florida, New York, Texas, Pennsylvania, Ohio and Illinois, all with projected savings of at least $1 billion per year.

http://www.cepr.net/index.php/publications/reports/state-savings-with-an…

Those who have followed health policy closely are already aware that we could have had much lower drug spending in the Medicare Part D drug program had we authorized government price negotiation with the pharmaceutical industry, just as other governments have done so successfully. This new report from CEPR puts a price on the waste that we tolerate merely because we don’t place demands on our legislators to fix the system.

Think about this a little bit more. If we demanded government price negotiation not only for those of us enrolled in the Part D Medicare program, but for all of us who need prescription medication, just think of how much more reasonable our pharmaceutical spending would be. We could do this simply by adopting a single payer, improved Medicare for all program.

But the drug savings would be only the beginning. By now, most of you are aware of the many other single payer policies that would produce enough total savings to ensure high-quality care for all of us, while making our health care delivery system affordable for the entire nation. Why are we not beating down the doors of Congress?

A disaster in the making – defined contribution for employer plans

Posted by on Monday, Mar 18, 2013

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.

To Save, Workers Take On Health-Cost Risk

By Anna Wilde Mathews
The Wall Street Journal, March 17, 2013

Last fall, two big employers embarked on a radical new approach to employee health benefits, offering workers a sum of money and allowing them to choose their health plans on an online marketplace. Now, the first results are in: Many workers were willing to choose lower-priced plans that required them to pay more out of their pockets for health care.

The new online marketplace, operated by consulting firm Aon Hewitt, a unit of Aon PLC, was used by more than 100,000 employees of Sears Holdings Corp. and Darden Restaurants Inc. (Olive Garden and Red Lobster), as well as Aon itself, to pick plans for 2013. The employers gave workers a set contribution to use toward health benefits, and they could opt to pay more each month to get richer plans, or choose cheaper ones that might have bigger out-of-pocket fees, such as higher deductibles.

Such employer-centric marketplaces, known as private exchanges, are separate from the public exchanges created by the federal health overhaul law, which will be set up by state and federal governments. However, the public exchanges, serving individual consumers and small businesses, will operate on a similar principle of allowing people to shop for health coverage in an online marketplace.

Companies offering the exchanges say that a lot of employers are considering the approach. “The interest level is like nothing I’ve ever seen,” said Eric Grossman, a senior partner at Mercer.

Change in workers’ choices:

Consumer-Directed Health Plan (Higher deductible)
2012: 12%
2013: 39%

Health Maintenance Organization (HMO)
2012: 18%
2013: 14%

Preferred Provider Organization (PPO)
2012: 70%
2013: 47%

http://online.wsj.com/article/SB1000142412788732363960457836642025118832…

Be prepared. Very shortly you will be hearing from the supporters of consumer-directed health plans (CDHPs) of the phenomenal success of these plans wherein you put consumers in charge of the money to be used for their health plan purchases. In the first year of this program, there has been a massive shift from more traditional preferred provider organizations (PPOs) to these CDHPs. But you have to understand why this is really terrible news.

Under the traditional employer-sponsored defined benefit health plans, the employers purchase plans for their employees, with the employees paying a percentage of the premium. If the employer offers options, the employee will often select the plan that requires a lower contribution – typically a PPO, but with enough benefits to provide some health security.

Under this newer model of employer-sponsored defined contribution health plans, the employers give a fixed amount of money to each employee to be used to select plans from these private insurance exchanges. Since the employees become responsible for 100 percent of the premium costs above the employer defined contribution, the employees have a much greater incentive to choose plans with the premiums that are closest to the amount of the employer defined contribution – typically a cheaper CDHP.

The experience in the first year alone, with this Aon-operated exchange, 23 percent of employees dropped PPOs, and 4 percent dropped HMOs, resulting in increased enrollment in CDHPs from 12 percent in 2012 to an astonishing 39 percent in 2013!

While the CDHP advocates spread the word that giving consumers control of their health insurance dollars will lower health care spending by allowing employees to “buy only the insurance that they need,” they will remain silent on what really happened. They shifted risk from the employers and their insurers onto the backs of the employees.

How does this work? First, it is important to understand that the workforce and their young families are the healthiest sector of our society. When selecting a plan, it is understandable that many workers would prefer to take home more money in exchange for the risk of paying more out of pocket in the unlikelihood of a major medical event occurring in the next year. People who live check-to-check welcome trading a higher net income for accepting more risk should a low-odds event happen to them.

Keep in mind that a minority of workers or their family members actually will face major medical events. Should that occur, these individuals, who have quite modest incomes, will be responsible for huge medical bills – bills because of the very high deductibles, high coinsurance, and all costs of out-of-network care in these plans that tend to have more limited networks.

This is a setup for personal bankruptcy. Should these CDHP-enrolled employees lose their bets and end up with major injuries or major medical disorders, a very large percentage of them will face this prospect . This is exactly the opposite of what their health care coverage should be providing. The system should ensure that financial barriers to care are removed so that patients can access the care that they need without having to face severe financial hardship.

So when the CDHP advocates tout the success of empowered health care insurance shoppers, they will be able to claim that it works really well for most workers and their families (only not for those who end up needing health care). We need to keep exposing this con job.

Steven Brill on using single payer to “clean up the system”

Posted by on Thursday, Mar 14, 2013

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.

Experts debate all-payer setups vs. Medicare for all

By Brett Norman
Politico, March 14, 2013

Health care prices are too damn high.

That’s the punch line to the provocative Time magazine piece “Bitter Pill” by Steven Brill, who laid out his diagnosis of the problem Wednesday at a Center for American Progress panel.

He cited sky-high hospital executive salaries and operating margins, monopolistic and opaque pricing by providers and a fearsome lobbying force — many times larger than those of the oil and gas or defense industries — that has beaten policymakers into submission.

“The lap-doggery to the health care industry is bipartisan,” he said. The article has sent hospitals and other stakeholders to the wall in defense of the system, and it’s fueling debates in policy circles.

But while many policy experts agree with much of Brill’s diagnosis of factors that are driving up costs, there’s far less consensus on what to do about it.

Brill said the voluminous feedback he’s received since publishing the article breaks down along two lines. Conservatives believe consumers need to have more “skin in the game” — to pay more of health costs so they become more conscientious shoppers and put pressure on providers to more efficiently compete for their business. And liberals see the solution in Medicare-for-all, a single-payer system, amplifying the negotiating might the federal health care program already leverages to keep costs down.

Brill rejected the single-payer possibility as impractical in his article but now says that he is increasingly siding with that camp. “It’s sort of the cleanest way to clean up the system,” he said.

Brill believes that the federal health care law in general does little to control costs and will most likely drive up the cost of insurance because of new requirements for more robust coverage.

He gave little credence to the Beltway policy wonk goal of transforming the health care system away from paying for quantity of services provided to paying for health outcomes and the quality of care. He said similar efforts to move the legal profession away from billing by the hour and toward meeting performance benchmarks have either failed or proved more expensive.

http://www.politico.com/story/2013/03/experts-debate-all-payer-setups-vs…

Steven Brill provided such a convincing argument for using Medicare as a universal program to control health care spending that he now seems to be convincing himself that we should look beyond the current approach of dismissing single payer as impractical. As he says, single payer is “sort of the cleanest way to clean up the system.”

Don’t look for workplace wellness programs to produce significant cost savings

Posted by on Wednesday, Mar 13, 2013

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 Hospital System’s Wellness Program Linked To Health Plan Enrollment Cut Hospitalizations But Not Overall Costs

By Gautam Gowrisankaran, Karen Norberg, Steven Kymes, Michael E. Chernew, Dustin Stwalley, Leah Kemper and William Peck
Health Affairs, March 2013

This study examined the effectiveness of a program put in place by BJC HealthCare, a hospital system based in St. Louis, Missouri, that tied employees’ eligibility to participate in the system’s most generous health plan with participation in a wellness program. We found reductions in inpatient costs but similar increases in non-inpatient costs. Therefore, we conclude that although the program did cut some hospitalizations, it did not save money for the employer in the short term. This finding underscores that wellness program incentives under the Affordable Care Act are unlikely to greatly reduce health care spending over the short run.

http://content.healthaffairs.org/content/32/3/477.abstract#aff-7

And…

Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers

By Jill R. Horwitz, Brenna D. Kelly and John E. DiNardo
Health Affairs, March 2013

The Affordable Care Act encourages workplace wellness programs, chiefly by promoting programs that reward employees for changing health-related behavior or improving measurable health outcomes. Although there may be other valid reasons, beyond lowering costs, to institute workplace wellness programs, we found little evidence that such programs can easily save costs through health improvement without being discriminatory. Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees — those from lower socioeconomic strata with the most health risks — probably bearing greater costs that in effect subsidize their healthier colleagues.

Despite the proliferation of wellness programs, drawing reliable conclusions about their financial returns on investment is difficult. Safeway credits its program with holding per capita health care costs flat from 2005 to 2009. However, employers’ reports are largely anecdotal. Some of them may attribute savings to wellness programs that could have resulted from unrelated causes, such as concurrent benefit restructuring or selection via restrictions on participation in the programs to certain job categories. A review of employer wellness studies concludes that they commonly suffer from insufficient controls, selection, and inadequate data.

http://content.healthaffairs.org/content/32/3/468.abstract

Workplace wellness programs were included in the Affordable Care Act partly as a means of promoting better health, but also as a means of reducing future health care spending though prevention of disease. The problem is that there is little empirical evidence that there is a potential for large cost savings from these programs. The two articles cited tend to confirm that wellness programs should not be relied upon to control future spending.

In no way does this mean that workplace wellness programs should be abandoned. Promoting health is a beneficial endeavor and should be encouraged. Rather, there are two other take-home lessons from these articles.

If financial incentives are included in wellness programs, they should be very carefully designed. The article by Jill Horwitz and her colleagues shows that savings to employers may result in the shifting of costs to employees who are more vulnerable due to their lower socioeconomic status which is associated with greater health risks. Using wellness funds for the already healthy while penalizing the more vulnerable is not wise policy.

The other lesson is that we should not pretend that wellness programs, along with the other tweaks in the Affordable Care Act, are going to bring us enough cost savings such that we can abandon efforts to enact the fundamental reforms that we need to ensure that absolutely everyone receives essential health care services under a program that we can afford.

Enacting a single payer national health program – an improved Medicare for all – is perhaps the most important step that we can take to promote wellness for all of us. Of course, there are many other public health measures that we should support, including addressing our serious socioeconomic inequities and injustices. But enacting single payer would be a great first step.

About this blog

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.

News from activists

PNHP Chapters and Activists are invited to post news of their recent speaking engagements, events, Congressional visits and other activities on PNHP’s blog in the “News from Activists” section.