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 Care Cost and Utilization Report: 2010
Health Care Cost Institute
The Health Care Cost Institute (HCCI) was created in September 2011 to provide comprehensive data on health care costs and promote independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending.
HCCI’s research activities are based on de-identified data voluntarily provided by Aetna, Humana, Kaiser Permanente, and UnitedHealthcare, four of the nation’s largest insurers.
The 2010 HCCI Health Care Cost and Utilization Report is the first report of its kind to track changes in expenditures and utilization of health care services by those younger than 65 covered by employer sponsored, private health insurance (ESI).
Average annual per capita health care spending for beneficiaries younger than 65 and covered by employer-sponsored group insurance in 2010.
1.6% & 3.3% –
The consumer price index (CPI-U), a measure of price inflation, and the growth rate of average per capita spending on group ESI beneficiaries younger than 65 (2009-2010). Per capita spending outpaced overall price inflation in 2010.
2.6% & 7.1% –
Growth rate of estimated per capita health care spending by insurers and beneficiaries, respectively, between 2009 and 2010.
Summary of the Executive Summary
We find continued growth in per capita and estimated aggregate health care spending in this population, although that growth is less than 4 percent. This is consistent with the Centers for Medicare & Medicaid Services’ findings regarding national health expenditures. Patients’ out-of-pocket share of prices paid went up, although the cost-sharing rate on a per capita basis (including beneficiaries who did not use services) did not change much. Prices increased across all categories of service, with outpatient services experiencing the fastest growth. Unlike other recent reports on health care spending, we find that the increased spending is mostly due to unit price increases rather than changes in the quantity or intensity of services.
S&P Healthcare Economic Indices
March 2012 Update
7.84% – S&P Healthcare Economic Commercial Index
2.41% – S&P Healthcare Economic Medicare Index
Until now, much of our information on health care costs has been obtained from government sources – especially Medicare and Census data. The Health Care Cost Institute is an effort on the part of the private insurance industry to share their data in an effort to improve research and analysis on the causes of the rise in U.S. health care spending.
Cooperating in this effort are Aetna, Humana, Kaiser Permanente, and UnitedHealthcare. Conspicuously absent are Cigna, and especially WellPoint.
Many reasons are given for our very high health care costs, but this study adds to the evidence that price increases are the most important factor (except, of course, for the administrative waste that is usually ignored in studies like this). The excess increase in prices is a particularly relevant observation since this study was limited to individuals under 65 with employer-sponsored, private health insurance.
This report establishes beyond any doubt that the nation’s largest private insurers have been ineffective in controlling health care prices (not to mention generating more administrative waste). In spite of the contracts that the private insurers have with health care providers, health care price increases continue to greatly exceed the rate of inflation. Also, the most recent S&P Healthcare Indices confirm, once again, that our government Medicare program has been far more effective in controlling per capita health care costs than have the private commercial insurers.
All other nations control health care prices. Medicare controls health care prices. Only our private insurers have been incompetent in slowing price escalation. This is yet more evidence that private insurer intermediaries functioning relatively autonomously in the health care marketplace are ineffective in bringing us better pricing of health care products and services. This is a job for government, not the marketplace.
We are often accused of being unfairly critical of the private insurers since it is not their fault that health care prices are so high. Do we really care whether or not it is their fault? Prices are high, and they haven’t helped. They are a profoundly expensive administrative industry. We should continue to waste our vast sums on their ineffective model of price containment?
Look at the growth rates of per capita health spending that they report in this study of their own industry. The spending by the insurers increased at a rate of 2.6%, a feat that they were able to accomplish partly by increasing beneficiaries costs by 7.1%! Is that the kind of assistance that we need from this industry?
It’s time to throw them out of the Temple (a biblical proxy for all religious and secular moralists).
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 Poverty Manifesto: The Rich and the Rest of Us
By Tavis Smiley and Cornel West
With history as our guide, we can chart the moment Americans got addicted to credit cards and the quest for the American Dream became a shopping-mall like adventure. Spending a cold night camped out in a parking lot to be the first in line when a store opens and getting trampled by a crowd competing for “the sale of the day” doesn’t even seem to matter. But deep down we knew we’d never attain the lifestyles we saw on television. As brainwashed, robotic consumers armed with unending credit, we sought to transform our living-large fantasies into reality. Now, our supersized ambitions have been downsized.
The “new poor” find themselves standing shoulder to shoulder at the welfare office, food pantry, or thrift store with people they used to disregard. As the politicians they elected predict a doomed “entitlement nation” and boast of shredding the poor’s safety nets, the former middle class tries to reconcile these contradictions by clinging to the belief that this is a temporary destination, that somehow “they” are still better than “those people.”
How do we get folk to understand that there is no “they,” there is no “them”? Too many American are falling through gaping holes scissored out of America’s safety net. Income inequality is real. There is an institutionalized divide between the wealthy and the poor, so that what we now have are the rich and the rest of us.
The new poverty numbers are forcing middle class families to rely on services that traditionally impoverished Americans have depended on for years.
According to the U.S. Department of Agriculture’s 2012 figures, over 46 million Americans (14 percent of the population) are now living on food stamps with the average recipient receiving $150 worth per month. Actually, “food stamps” have had a makeover in America. During the late 1990s, the government phased out the facsimile printed money for a specialized swipe-as-you-go debit-card system that can be processed for purchases in grocery stores and major retailers just like any other consumer.
For most of us, 46 million people poor enough to qualify for food-stamp debit cards is a depressing thought. But for banking and investment giant JPMorgan Chase, every time a new welfare debit card is issued, profits tick up a notch. The company is the largest, first, and only contracted processor of food-stamp benefit cards in America. In 2009, two years after the recession officially began, the company posted profits of $11.7 billion on revenues of $115.6 billion – a 109 percent jump and a 14 percent increase over the previous year. Christopher Paton, manager with JPMorgan’s public-sector benefit payments division, described how the welfare card division contributed to company profits:
“Right now, volumes have gone through the roof in the past couple of years. The good news, from JPMorgan’s perspective, is the infrastructure that we built has been able to cope with that increase in volume.”
We recognize that the President’s health care reform bill will make health care more available to millions of Americans in 2014, but we are also cognizant of the aggressive efforts, particularly from the Right, to overturn the bill. Regardless of partisan political machinations, no American should die because they lack health insurance or access to quality health care. Medical insurance with the single-payer option should become a reality for all Americans, and we must invest in publicly funded community health centers and hospitals. Then the poor and uninsured will have other options than emergency rooms as their only source for primary care or early death.
Much has been written about the social justice topics addressed in this book by Tavis Smiley and Cornel West. “The Rich and the Rest of Us” is of particular value because it is written in a style that all of us, not just policy wonks, can easily understand and resonate with. It includes “The Poverty Manifesto” which hopefully will re-prioritize our thinking, moving us forward with an action plan to achieve social justice for all.
Single payer activists who are frustrated with the lack of progress in advancing a model of health care financing that is a moral imperative, will recognize a major hurdle touched upon in their book. There is no “they,” and there is no “them.” There’s only “us,” and that includes the 1 percent. We’re going to have to do this together.
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.
Dental Abuse Seen Driven by Private Equity Investments
By Sydney P. Freedberg
Bloomberg, May 16, 2012
Isaac Gagnon stepped off the school bus sobbing last October and opened his mouth to show his mother where it hurt. She saw steel crowns on two of the 4-year-old’s back teeth.
“The dentist man got me,” Gagnon remembers her son saying.
Isaac’s dentist was dispatched to his school by ReachOut Healthcare America, a dental management services company that’s in the portfolio of Morgan Stanley Private Equity, operates in 22 states and has dealt with 1.5 million patients. Management companies are at the center of a U.S. Senate inquiry, and audits, investigations and civil actions in six states over allegations of unnecessary procedures, low-quality treatment and the unlicensed practice of dentistry.
ReachOut is one of at least 25 dental management-services companies bought or backed by private-equity firms in the last decade. Dentists contract with the companies for marketing, scheduling, staff recruitment, supplies and other services. The companies account for about 12,000, or 8 percent, of U.S. dentists, according to Thomas A. Climo, a Las Vegas dental consultant.
Some of them have been riding a boom in Medicaid outlays on dentistry, which rose 63 percent to $7.4 billion between 2007 and 2010, outstripping the 4.9 percent growth in other dental spending. ReachOut and several of its private equity-backed rivals seek patients like Isaac Gagnon, who are covered by Medicaid, the federal-state insurance program for the poor and disabled.
On May 2, All Smiles Dental Center Inc., a management company owned by Chicago-based Valor Equity Partners, filed for bankruptcy protection. Its hand was forced in part by a Texas Medicaid action cutting off payment to some of its clinics because of allegedly “excessive” and “inappropriate” orthodontic care, according to an All Smiles executive’s affidavit included in the filing. All Smiles was part of a state audit in which 90 percent of Medicaid claims for orthodontic braces were found to be invalid because they weren’t medically needed, according to Christine Ellis, one of the auditors.
The All Smiles collapse followed another bankruptcy filing in February by Nashville-based Church Street Health Management LLC, which cited the costs of defending itself against lawsuits and investigations. Church Street is owned by Arcapita Inc., Carlyle Group LP (CG) and other private equity firms and affiliated with the Small Smiles network of dental clinics.
Dentistry is a fragmented, “cottage” industry ripe for management services, said Robert Fontana, chief executive officer of Aspen Dental Management, owned by Leonard Green & Partners, a Los Angeles private equity concern.
Management companies have “moved from being vendors of services,” such as patient billing, “into increasingly complex arrangements under which some — not all — have embedded themselves deeply into every aspect of the dental practice,” said Ken Burgess, an attorney for the North Carolina dental board.
Although Isaac reported to his mother, “The dentist man got me,” we should be concerned not only about the fate of Isaac and patients like him, but also about the fate of professionalism in dentistry and the fate of our tax dollars in this government-financed Medicaid program, now that private equity firms are moving “into increasingly complex arrangements under which some have embedded themselves deeply into every aspect of the dental practice.”
This fairly long Bloomberg article (link above) provides many more details that should make us question the wisdom of passively allowing private equity firms to take control, when their mission is profit, and low-income children with dental problems are merely their means to profit.
Dentistry is not alone here. We are seeing a massive transfer of Medicaid patients, including dual-eligibles, from traditional fee-for-service physicians to managed care organizations. States are shifting from an emphasis on trying to obtain decent care for these low-income patients, to an emphasis on trying to control the Medicaid component of the state budgets.
The managed care organizations continue to promise higher quality at lower costs, though the historical record is certainly not particularly supportive of these alleged outcomes. Patient advocates have expressed concern about the disruption in care and questionable access to future care, especially for specialized services. State authorities seem to be ignoring access and quality issues and focusing on spending, as they move forward with a let’s-try-this-and-we’ll-see-if-it-works attitude, and if it doesn’t, at least we’ve saved money.
A well designed single payer system would eliminate Medicaid – an underfunded program tainted with a welfare mentality – and would include everyone in a comprehensive program which would cover all appropriate dental services.
Under such a program Isaac would not have had to suffer torture and indignity “while several adults held him on the dental table,” as he received an “excessive” number of x-rays and “unnecessary” root canals. He would have been treated like any other child would be in an uptown dental practice, even if in a downtown clinic.
We can do this.
Dr. Bruce Goldberg, director of the Oregon Health Authority, speaks at a panel as Dr. Arnold Relman, Dr. Marcia Angell and Cathy Schoen look on. (All photos by David Young.)
By Samuel Metz, M.D.
From April 26-28, Oregon Physicians for a National Health Program and the Mad as Hell Doctors hosted a visit to our state by Drs. Marcia Angell and Arnold Relman, past editors of the New England Journal of Medicine.
The initial set of events took place in Portland, as this 2-page flyer illustrates. First was the Thursday Oregon Health and Science University presentation, organized primarily by Richard Bruno (OHSU medical student and winner of the Student Activist award at the national PNHP convention this year) with assistance from other members of the OHSU medical student PNHP chapter. The 150-seat auditorium was filled with students, residents, physicians, nurses, and administrators; it had standing room only.
Drs. Angell and Relman then had a brief meeting with Oregon Gov. John Kitzhaber, M.D., in which they discussed health care innovations in Oregon. The governor was urged to consider a single-payer program for Oregon.
The Thursday afternoon event at Legacy Good Samaritan Hospital was similarly well attended, with about 80 people packed into a small conference room. Dr. Stephen Jones, chair of internal medicine at Legacy Health Systems, was principally responsible. He was also a co-moderator on Friday’s panels.
The Friday morning panel, which included the participation of Cathy Schoen of the Commonwealth Fund and Dr. Bruce Goldberg, director of the Oregon Health Authority, was attended by 85 people, mostly non-physicians and non-single-payer types simply interested in learning about reform. The summary by Amanda Waldroupe of the Lund Report, titled “Panel on Health Reform Focuses on Ditching the Insurance Industry,” is accurate.
The evening panel was attended by 45 people, many of whom had not attended the morning session. Both crowds were enthusiastic.
The Saturday single-payer rally at the Majestic Theatre in Corvallis had 200-250 attendees. Many were from Eugene, Salem, and Portland. This event was organized primarily by Dr. Mike Huntington of Corvallis PNHP and MAHD, and Betty Johnson, a longtime single-payer advocate from Mid-Valley Health Care Advocates. Mike and Betty are now key participants in the newly reorganized Health Care for All Oregon.
The Saturday evening fund-raising dinner was held at my house. Thirty-five people attended and listened in rapt attention to Drs. Angell and Relman, the brief presentations from each and then a long discussion period. Most were senior physicians. Others included a county judge, the head of the port of Portland, and the president of the Oregon State Council for Retired Citizens. Valuable connections were made by the PNHP and MAHD representatives.
Important results of these events, especially the Friday panels, included raising awareness among non-activist businesspeople of the critical nature of health care reform and the legitimacy of a single-payer option. For many, this was the first time single payer was discussed in a credible, nonpartisan environment.
Another valuable result was the relationship built between the organizers of these events and a variety of organizations new to single payer. These included all organizations listed on the flyer as sponsors or distributers of publicity, plus a few added after the flyer was created: The Oregon Business Council, multiple neighborhood business organizations, professional organizations for realtors, Project Access Now, and several smaller charitable organizations.
Finally, flyers were sent to each of Oregon’s 90 state legislators. Most did not reply, though a few sent regrets; but in a few cases contact was made with legislative aides, contacts valuable when the Legislature considers its next single-payer bill.
One reason so many organizations collaborated in sending out flyers was, I suspect, that nothing in the Friday panel advertising materials explicitly mentioned single payer. While each of the panel participants and moderators understood the value of single payer (and several are strident advocates), few attendees were aware of this beforehand. This permitted many neutral people to hear about single payer without their attendance showing visible support for the concept.
My lessons from this experience:
* “If you’ve got what people want, it’s easy to sell.” In this case, many people drawn to the Thursday and Friday presentations knew Drs. Angell and Relman only as distinguished senior academic physicians. Every medical organization was happy to lend a hand, as were organizations with experience in health policy (the Foundation for Medical Excellence, the Northwest Health Foundation, We Can Do Better). Featuring recognizable names helped our cause.
* We were fortunate to include Dr. Bruce Goldberg, widely respected as a calm, rational, nonpartisan advocate for Oregon’s health care needs. While he did not speak about single payer himself, his presence on stage with single-payer advocates lent great prestige to the program and enormous credibility to other panelists who did.
* The efforts to contact a large sample of business organizations provided value in itself. I now know more about who is doing what and who represents whom than I did before. My contact list includes many helpful executive directors and program administrators, now on a first name basis with me. When MAHD and PNHP plan their next event, many doors will open graciously for us.
* The Saturday rally was the only event designed and billed as a single-payer rally. This served an important need to reward, recharge, and motivate the current advocate population. In addition to the outreach to the unconverted of the previous two days, this solidified the visit of Drs. Angell and Relman. In the course of three days, our guests spoke to the choir, the pews, and a lot of people just passing by.
What would we plan for Drs. Angell and Relman during their next visit? Meetings with the editorial boards of the three largest newspapers in Oregon. Individual and group meetings with legislators and legislative caucuses. Guest appearances at physician organizations, notably the Oregon Medical Association and the Medical Society of Metropolitan Portland, both of which were happy to send flyers for the Thursday and Friday events. By the way, our guests have not ruled out another visit in a few months.
2012 Milliman Medical Index
Milliman Research Report
The annual Milliman Medical Index (MMI) measures the total cost of healthcare for a typical family of four covered by a preferred provider plan (PPO). The 2012 MMI cost is $20,728, an increase of $1,335, or 6.9% over 2011. This is the first year the average cost of healthcare for the typical American family of four has surpassed $20,000.
Of the $20,728 medical cost for a family of four, the employer pays about $12,144 in employer subsidy while the employee pays the remaining $8,584, consisting of $5,114 in employee contributions and $3,470 in employee out-of-pocket costs.
Out-of-pocket costs are of particular significance given PPACA’s focus on actuarial value, a concept predicated on the percentage of a plan’s costs that is paid out of pocket by the insured. Figure 8 (link below) indicates how, as was the case last year, the MMI’s plan remains slightly better than a gold plan as defined by PPACA. The MMI plan has maintained a relatively stable actuarial value over time because employers typically adjust their plan designs on an annual basis to keep pace with increases in the underlying medical trend. If no such adjustments were made and deductibles and copays remained static, the plan would become richer and would eventually exceed the platinum threshold.
In addition to a typical PPO plan, many employers are providing employees an option that includes higher out-of-pocket cost sharing in exchange for employer contributions to a health savings account and lower payroll deductions. Along these lines, some plans that may become available through the state insurance exchanges may contain lower actuarial values than the type of plan exemplified by the MMI.
In the past year, the MMI plan did not undergo significant design changes. Long-term, employers may be looking for new design concepts that tackle the ongoing cost-control challenge. Design concepts under consideration may include a possible move toward increased use of defined contribution concepts and continued momentum toward high-deductible plans or plans leveraging accountable care organizations (ACOs).
Impact on MMI Family of Four
While several aspects of healthcare reform would have meaningful impact on the cost of insurance coverage, the effect on the total cost of care is very limited for our family of four. For example, medical loss ratio rules and stringent review of health insurance increases may reduce insurer profits and also put pressure on insurers to be as efficient and low-cost as possible. But the cost of care for this family of four is still $20,728, which excludes insurer profits and administrative expenses.
While efforts to be more administratively efficient may lead to lower premiums, they do not directly affect the cost of delivering healthcare to the MMI family of four.
The 2012 Milliman Medical Index (MMI) shows that the average cost of health care for a family of four is now over $20,000 – actually pushing $21,000 ($20,728).
The MMI measures the average spending on health care for a family of four that is insured through an employer-sponsored PPO plan. It does not include the administrative costs or profits of the insurers nor the administrative costs of the employers to manage their health benefit programs. It includes only what is actually spent on health care.
Keep in mind that this represents spending on a relatively healthy component of our society – the healthy workforce and their young healthy families. It does not include those unable to work because of chronic disabilities, nor older, retired individuals who generally have greater health care needs. Thus if you pool everyone together in a universal risk pool, it can be anticipated that average costs would be even higher.
Median household income in 2010 was $49,445. This is not a family unit that is identical to an individual and his family of four with employer-sponsored insurance. Also this does not include the employer’s contribution to the health insurance premium which most economists consider to be paid by foregone wage increases. Nevertheless, it does provide a rough perspective showing that health care costs are placing an unbearable strain on household budgets.
Current proposals are aimed at reducing the financial burden on employers, but, as this report indicates, actual health care costs are not reduced by these measures. Thus the financial burden is being shifted more to workers and their families. Since these plans are, on average, slightly better than the gold plans in the exchanges (80 percent medical loss ratio) and most participants in the exchanges will have lower-valued bronze or silver plans, the burden will be even greater for those in the PPACA state exchanges.
We desperately need a more efficient and more equitable health care financing system. It is only as far away as the enactment of an improved Medicare for all.
Education Gaps between Family Physicians and Licensed Nurse Practitioners
From the Association of Family Medicine Residency Directors
Annals of Family Medicine, May/June 2012
As millions of Americans gain coverage for medical care in the coming years and as the need for primary care in patient-centered medical home (PCMH) models increases, our medical homes will need to provide more access to care. One such method is through advanced physician extenders which include physician assistants and nurse practitioners. Many entities are talking about allowing Advanced Registered Nurse Practitioners (ARNPs) work more independently without physician involvement. However, the vast difference in clinical training between family physicians and ARNPs is significant. Also, an effective provider in a PCMH is expected to manage without consultation a broad spectrum of disease. Therefore, practices without physician counterparts could lead to a tier of primary care that is limited in its effectiveness. ARNPs are a tremendous asset in providing some primary care services, ideally partnered with physicians in group settings, but have significant limitations when independently evaluating and managing undifferentiated patients due to the superficial coverage of medical topics during their training. The skill sets are complementary to each other, but not equal.
ARNP schools exhibit a wide variation of training standards from school to school and from state to state. There is no national accreditation body like the Accreditation Counsel for Graduate Medical Education (ACGME) that monitors advanced nursing profession schools or creates national standards for clinical experiences. Without a similar structure to the ACGME, it is impossible to assess the quality of the education across these various schools.
The diagnostic challenges primary care physicians face on a daily basis require they have extensive clinical exposure in order to perform efficiently. The depth of knowledge required to filter undifferentiated patients’ complaints and to understand the subtleties of management is vast. The average family medicine physician has 21,000 total hours of training, most of it with clear patient management responsibilities and decreasing levels of supervision. The total hours of training a nurse practitioner receives is 2,300 to 5,300 hours depending on the advanced nursing program, and much of the clinical training is observational. Many states only require a 30-day observation period of a licensed active physician before an ARNP can deliver care unsupervised. Grandfathering people into independent practice would be like grandfathering a family physician into a subspecialty after doing a month of observation in that specialty.
In the end, to practice independently, one should be judged by those who have the experience and background to make that assessment. Family physicians are the experts of primary care in this country and our understanding of what it takes to practice competently and independently is quite thorough. Family physician faculty that teach residents are skilled at making such assessments.
We believe there are excellent roles for physician extenders who work in collaborative settings with physicians, enabling more independence for the physician extenders. The medical team in the PCMH has key roles for Physician Assistants and ARNPs within its structure. Just as physicians gain greater skill with experience, these practitioners will gain great skill in many aspects of primary care as their experience develops over time. However, the underlying knowledge base and formative clinical experience cannot be shortcut. Not knowing what one doesn’t know can be dangerous to the public. On the physician side, we would never allow a 2nd- or 3rd-year medical student (who would have the equivalent amount of training as an ARNP), to evaluate and manage patients independently. Though states may pass laws that allow other providers with less training to practice independently, it doesn’t change the reality that without competent physician supervision, we are lowering the standard of acceptable primary care and creating a 2-tiered system of access for our community.
Todd Shaffer, MD, MBA, Michael Tuggy, MD, Stoney Abercrombie, MD, Sneha Chacko, MD, Joseph Gravel, MD, Karen Hall, MD, Grant Hoekzema, MD, Lisa Maxwell, MD, Michael Mazzone, MD and Martin Wieschhaus, MD
Broadening the Scope of Nursing Practice
By Julie A. Fairman, Ph.D., R.N., John W. Rowe, M.D., Susan Hassmiller, Ph.D., R.N., and Donna E. Shalala, Ph.D.
The New England Journal of Medicine, January 20, 2011
The critical factors limiting nurse practitioners’ capacity to practice to the full extent of their education, training, and competence are state-based regulatory barriers. States vary in terms of what they allow nurse practitioners to do, and this variance appears not to be correlated with performance on any measure of quality or safety. There are no data to suggest that nurse practitioners in states that impose greater restrictions on their practice provide safer and better care than those in less restrictive states or that the role of physicians in less restrictive states has changed or deteriorated.
Sixteen states plus the District of Columbia have already liberalized and standardized their scope-of-practice regulations and allow nurse practitioners to practice and prescribe independently.
This is a critical time to support an expanded, standardized scope of practice for nurses. Economic forces, demographics, the gap between supply and demand, and the promised expansion of care necessitate changes in primary care delivery. A growing shortage of primary care providers seems to ensure that nurses will ultimately be required to practice to their fullest capacity. Fighting the expansion of nurse practitioners’ scope of practice is no longer a defensible strategy. The challenge will be for all health care professionals to embrace these changes and come together to improve U.S. health care.
Is there a difference between a nurse and a physician? More specifically, can advanced registered nurse practitioners replace family physicians in the independent practice of medicine? Or should they?
These are important questions. There is an urgent need to reinforce our primary care infrastructure. Should we do this by continuing to expand medical homes by including nurse practitioners as parts of teams led by primary care physicians? Or should we encourage the independent practice of nurse practitioners in competition with physician practices?
Since there is a shortage of family physicians, it seems that the proper solution would be to train more family physicians. Is it really logical to convert another category of health care professionals – nursing – into independent physicians?
Advanced nurse practitioners have much to contribute to the team comprising the medical home. But would it be proper for medical homes to be led by nurses while excluding physicians?
It’s really all about the patient. Medical teams should be designed foremost to serve the patient. It seems like there should be a physician in there somewhere.
Massachusetts Health Care Cost Trends – Premiums and Expenditures
Commonwealth of Massachusetts
Health and Human Services, May 2012
The premium trends section of the report discusses trends in premiums paid by employers and consumers for health insurance, and the medical expenses and retention charges included in premiums. The analysis shows that the growth of premiums has slowed in recent years, although small groups continued to experience the highest adjusted premium rates and increases, and overall premium increases continue to outpace inflation. The slowing growth of premiums in Massachusetts is consistent with a national trend, suggesting that macroeconomic factors beyond the Commonwealth may be partially responsible. In addition, there is evidence that group purchasers are selecting insurance packages with fewer benefits or higher cost sharing requirements, a phenomenon known as “benefit buy-down.” Buy-down can result in lower observed premiums, but may reduce access to care or increase out-of-pocket expenditures.
To no surprise, group purchasers in Massachusetts are engaging in “benefit buy-down” of health plans, which reduces access to care and increases out-of-pocket expenses for patients. Since the policies of the Affordable Care Act are very similar to the Massachusetts program, we can anticipate an acceleration of a national trend of benefit buy-down, establishing underinsurance as the new standard for the nation.
It doesn’t have be this way.
Workplace Wellness Programs
Health Policy Brief
Health Affairs, May 10, 2012
The Affordable Care Act of 2010 will, as of 2014, expand employers’ ability to reward employees who meet health status goals by participating in wellness programs–and, in effect, to require employees who don’t meet these goals to pay more for their employer-sponsored health coverage. Some consumer advocates argue that this ability to differentiate in health coverage costs among employees is unfair and will amount to employers’ policing workers’ health.
Wellness program content
Typical features of wellness programs are health-risk assessments and screenings for high blood pressure and cholesterol; behavior modification programs, such as tobacco cessation, weight management, and exercise; health education, including classes or referrals to online sites for health advice; and changes in the work environment or provision of special benefits to encourage exercise and healthy food choices, such as subsidized health club memberships.
Inducements to participate
Although almost all workplace wellness programs are voluntary, employers are increasingly using incentives to encourage employee participation. These incentives range from such items as t-shirts or baseball caps to cash or gifts of significant value
Employers are also linking participation in wellness programs to employees’ costs for health coverage–for example, by reducing premium contributions for workers who are in wellness programs, or by reducing the amounts they must pay in deductibles and copayments when they obtain health services. Another trend among employers who offer multiple health plans is to allow participation in a comprehensive plan only to those employees who agree to participate in the wellness program. Those employees who do not participate in a wellness program are offered a less comprehensive plan, or one that requires them to pay more in premiums or cost sharing.
What are the concerns?
There is widespread support for wellness initiatives in the workplace among both employers and employees. At the same time, there is conflict over programs that tie rewards or penalties to individuals achieving standards related to health status–and especially over those arrangements that affect employee health insurance premiums or cost-sharing amounts.
In general, business groups want employers to have maximum flexibility to design programs with rewards or penalties that will encourage employees to not only participate but also to achieve and maintain measurable health status goals, such as quitting tobacco use or reducing body mass index. They argue that individuals should bear responsibility for their health behavior and lifestyle choices and that it is unfair to penalize an employer’s entire workforce with the medical costs associated with preventable health conditions as well as the costs of reduced productivity.
Unions, consumer advocates, and voluntary organizations such as the American Heart Association are generally wary of wellness initiatives that provide rewards or penalties based on meeting health status goals. They are concerned that, rather than improving health, such approaches may simply shift heath care costs from the healthy to the sick, undermining health insurance reforms that prohibit consideration of health status factors in determining insurance premium rates.
They argue that such incentives are unfair because an individual’s health status is a result of a complex set of factors, not all of which are completely under the individual’s control. For example, genetic predisposition plays a significant role in determining many health status factors, including such attributes as excess weight, blood pressure, blood sugar, and cholesterol levels. Consumer advocates also caution that poorly designed and implemented wellness initiatives may have unintended consequences, such as coercing an individual with a health condition to participate in an activity without adequate medical supervision.
Another concern is that tying the cost of insurance to the ability to meet certain health status goals could discriminate against low-income individuals or racial and ethnic minorities. These individuals are more likely to have the health conditions that wellness programs target and also may face more difficult barriers to healthy living.
These barriers may include some that are work related, such as having higher levels of job stress; job insecurity; and work scheduling issues, including shift work. Barriers outside of work may include personal issues, such as financial burdens, and environmental factors, such as unsafe neighborhoods, poor public transportation, and lack of access to healthy food.
In addition, some critics warn that wellness program requirements may be used to discourage employees from participating in their employers’ health benefits plan by making their participation unaffordable. Employers might use a system of rewards or penalties totaling thousands of dollars annually to coerce employees who cannot meet health status goals to seek coverage elsewhere, such as through a spouse’s plan; a public option, such as Medicaid; or a separate private plan purchased through the new health insurance exchanges.
Altruistic employers who, out of the goodness of their hearts, offer wellness programs to their employees, also theoretically benefit by improving productivity through having a healthier work force. These are admirable goals. But employers are now playing the blame game as they use their programs to penalize employees who have medical needs, by reducing their health care benefits and increasing financial barriers to care.
Employers can enhance employee health through work-sourced exercise and nutrition programs, through work safety measures, and through programs such as smoking cessation. In sharp contrast, disease screening should be provided privately in an entirely separate primary care environment where the screening is a part of a comprehensive, integrated health care program that belongs to the patient, not the employer.
Above all, whereas the medical health status of employees should be maintained through the health care delivery system, never, never should the employer be allowed to reduce health care benefits because the employee has greater needs.
This is yet one more reason why health insurance should be totally dissociated from employment. If we had an improved Medicare that covered everyone, health care access would be continuous throughout life, and barriers to care could never be used to punish individuals unfortunate enough to have manifested or contracted medical problems.
Growth Of Consumer-Directed Health Plans To One-Half Of All Employer-Sponsored Insurance Could Save $57 Billion Annually
By Amelia M. Haviland, M. Susan Marquis, Roland D. McDevitt and Neeraj Sood
Health Affairs, May 2012
Enrollment is increasing in consumer-directed health insurance plans, which feature high deductibles and a personal health care savings account. We project that an increase in market share of these plans — from the current level of 13 percent of employer-sponsored insurance to 50 percent — could reduce annual health care spending by about $57 billion. That decrease would be the equivalent of a 4 percent decline in total health care spending for the nonelderly. However, such growth in consumer-directed plan enrollment also has the potential to reduce the use of recommended health care services, as well as to increase premiums for traditional health insurance plans, as healthier individuals drop traditional coverage and enroll in consumer-directed plans. In this article we explore options that policy makers and employers facing these challenges should consider, including more refined plan designs and decision support systems to promote recommended services.
From the Study Results
Consumer-directed enrollees in these large employer plans spent less on health care than enrollees in traditional plans even in the year prior to their enrollment, and the estimates above controlled for this favorable selection into the consumer-directed plans. In particular, the diagnosis-based prospective risk scores predicted 25 percent lower spending per capita for those who selected a consumer-directed health plan.
Thus, continued growth in enrollment in consumer-driven health plans implies premium increases in traditional plans that will retain somewhat sicker enrollees.
From the Discussion
Consumer-directed plans raise concerns about out-of-pocket spending because deductibles are high, and federal regulations allow health savings account plans to impose family out-of-pocket maximums of up to $12,100 in 2012. Out-of-pocket maximums for health reimbursement arrangements are not constrained by law until 2014, when all exchange plans must comply with the health savings account limit.
There is particular concern regarding health care access for vulnerable families—those with low incomes or family members with high-cost chronic conditions—which might face higher costs under consumer-directed plans.
The use of all six of the preventive treatments examined in this article was negatively affected in the first year of consumer-directed plan enrollment, despite plan provisions that reimbursed some of these preventive services at 100 percent of allowed charges.
Our findings that reductions in spending occur through lower spending per episode, more use of generic versus brand-name drugs, less use of specialists, and lower inpatient hospitalization suggest that these plans do induce changes in treatment choices and not just access. Further research is required to determine whether these are appropriate changes, and our findings concerning preventive care demonstrate that more information is needed to improve consumer decision making.
Choice of Plans
When employers offer a new consumer-directed plan as an option, it typically attracts employees and families who are healthier and whose health care costs are less than those of people who enroll in other plans. Left unchecked, this can produce adverse selection and higher premiums in traditional plans.
Risk selection and consequent increases in premiums for traditional plans could destabilize the health insurance exchanges, where diverse plan offerings will be encouraged.
Enrollment in consumer-directed health plans probably will grow in the coming years, motivating enrollees to cut back on spending and producing savings for employees, employers, and the nation as a whole. But we need better information to help enrollees and their health care providers identify high-value care, and we need more refined plan designs and decision support systems to promote the use of such care. Promising developments include the investment in comparative effectiveness research by the Affordable Care Act and employers’ efforts to develop value-based insurance designs that reduce enrollee cost sharing for certain high-value services.
Existing research does not adequately address the long-term effects of consumer-directed health plans on health care spending and recommended care. Current evidence about reductions in preventive care is a concern, and it will be important to monitor indicators of care quality in consumer-directed and other plans. In the individual and small-group markets, it will be important to adopt effective risk-adjustment methods to maintain a broad choice of plans that includes both higher cost-sharing and lower cost-sharing options.
Growth of Consumer-Directed Health Plans to One-Half of All Employer-Sponsored Insurance Could Save $57 Billion Annually
California HealthCare Foundation
This link is to a press release on the Health Affairs article above. It also includes a link which allows free access to the full article.
The title of this Health Affairs report seems to encourage the widespread adoption of consumer-directed health plans (CHDPs) – a theme repeated in the press coverage of this article. Yet much has been written about the adverse consequences of these plans, especially their impact in reducing the use of beneficial preventive, diagnostic, and therapeutic health care services.
Even if it were true that putting half of all employees and their dependents into CHDPs would reduce spending by $57 billion, that is only two percent of our national health expenditures. Reducing spending by causing harm is terrible policy, especially when other measures such as single payer would reduce harm instead, while controlling costs more effectively.
The California HealthCare Foundation release (link above) included a Reader Comment by Betty Hillman. Her insightful words express our concerns:
“CDHPs only work well for the healthy. Speaking for someone who works for a top 100 company that offers ONLY CDHPs, and has chronic health issues of genetic origin, I am officially defined as ‘underinsured’, because my out-of-pocket costs are very high; they have nearly bankrupted me, even while working in a professional position.
“It is yet another way for corporations to reduce spending on employees and give it to investors. Welcome [back] to the 19th century. The almighty dollar continues to reign supreme. It is sad that so many do not understand that there is no way that corporations, inc insurance companies, will ever provide low-cost insurance without being forced to — by the government or the people, take your choice.”
Even if efforts were made to force them to, the insurance companies can no longer provide low-cost insurance that provides adequate financial protection for those who need health care. Ms. Hillman would be served best if we were to adopt an Improved Medicare for All.
The Growing Power Of Some Providers To Win Steep Payment Increases From Insurers Suggests Policy Remedies May Be Needed
By Robert A. Berenson, Paul B. Ginsburg, Jon B. Christianson and Tracy Yee
Health Affairs, May 2012
In the constant attention paid to what drives health care costs, only recently has scrutiny been applied to the power that some health care providers, particularly dominant hospital systems, wield to negotiate higher payment rates from insurers. Interviews in twelve US communities indicated that so-called must-have hospital systems and large physician groups — providers that health plans must include in their networks so that they are attractive to employers and consumers — can exert considerable market power to obtain steep payment rates from insurers. Other factors, such as offering an important, unique service or access in a particular geographic area, can contribute to provider leverage as well. Even in markets with dominant health plans, insurers generally have not been aggressive in constraining rate increases, perhaps because the insurers can simply pass along the costs to employers and their workers. Although government intervention — through rate setting or antitrust enforcement — has its place, our findings suggest a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.
From the Discussion
More concretely, increased recognition of the role of provider pricing in rising health spending could stimulate both market-oriented and regulatory responses. Market-oriented approaches are generally based on benefit designs that make consumers more aware of costs and give them direct incentives to select low-cost options. However, these approaches, such as tiered networks, have been discussed for many years and are proceeding slowly. Nevertheless, renewed employer willingness to support choice-limiting networks with few providers could help balance negotiating leverage between providers and health plans.
Alternatively, in the face of rising premiums, employers unwilling to adopt more restrictive benefit designs might support more direct regulation of provider rates, perhaps setting upper bounds on permissible rates negotiated between health plans and providers in relation to Medicare rates.
Further Acceleration in US Healthcare Costs in February 2012 According to the S&P Healthcare Economic Indices
April 19, 2012
The S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.75% over the 12-months ending February 2012.
Specific S&P Healthcare Economic Indices:
7.73% – S&P Healthcare Economic Commercial Index
6.78% – S&P Professional Services Commercial Index
8.41% – S&P Hospital Commercial Index
2.72% – S&P Healthcare Economic Medicare Index
3.55% – S&P Professional Services Medicare Index
1.94% – S&P Hospital Medicare Index
This Health Affairs article explains how health care providers – particularly dominant hospital systems – through consolidation and other market manipulations, have been able to position themselves as “must-have” hospital and physician group systems that health plans must include in their networks so that they are attractive to employers and consumers. This “must-have” status allows these providers to demand steep payment increases from the private insurers.
Note that this leverage is applied through private insurers. Government programs such as Medicare are not intimidated by the market clout of these provider systems. Medicare simply pays rates that are enough to keep the provider systems from dropping out of the government program.
How much difference is there between the administered rates of Medicare and the market negotiated rates of the private insurers? Look at the most recent S&P Healthcare Economic Indices.
The latest twelve month per capita increase in the S&P Hospital Medicare Index was 1.94%. For the same twelve months, the per capita increase in the S&P Hospital Commercial Index – the rate increase for private insurers – was an astonishing 8.41% – more than four times the increase in the Medicare Index!
The highly respected authors of the Health Affairs article state that “a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.” Fine. The health policy literature is replete with data that will explain why Medicare is so much more effective than the private insurers in controlling health care costs. Have another look at the literature. Then let’s reject the private insurers and their market manipulations, and move forward with adopting an improved Medicare for all.
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