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.
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
2012 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.
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.
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.
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.
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.
A Decade Of Health Care Access Declines For Adults Holds Implications For Changes In The Affordable Care Act
By Genevieve M. Kenney, Stacey McMorrow, Stephen Zuckerman and Dana E. Goin
Health Affairs, May 2012
Over the past decade, access to health care deteriorated among nonelderly adults. The likelihood of having a usual source of care, having seen a dentist, and having had an office visit all declined. In addition, the likelihood of having had an emergency department visit rose slightly.
Consistent with other sources, the National Health Interview Survey data pointed to significant increases in rates of Medicaid coverage and uninsurance and decreases in rates of private coverage for adults between 2000 and 2010.
The declines in access found among all adults are also reflected within each coverage category. Among the privately insured, significant declines occurred for half of the access measures. There was improvement in one measure — a 1.6-percentage-point increase in the likelihood of having an office visit. However, privately insured adults were more likely to have unmet medical and unmet dental needs in 2010 compared to 2000, and they were more likely to have delayed needed care because of cost and noncost reasons.
Similarly, adults with public coverage experienced reductions in receiving an office visit and increases in unmet medical needs from 2000 to 2010. Especially striking were the increases in unmet dental need and delayed care for noncost reasons (increases of 9.1 and 4.7 percentage points, respectively) among adults with public coverage.
We also found that people with public coverage were less likely to have a usual source of care, to have received an office visit, and to have received a dental visit in 2010 compared to 2000.
Although the above indicates that the deterioration in access was not limited to uninsured adults, it was particularly pronounced for this population. Access to care worsened for uninsured adults for all eight access measures.
From the Discussion
This analysis revealed a noticeable deterioration in access to care among nonelderly US adults during the first decade of the twenty-first century. Access declined for adults in every category, but the most dramatic declines occurred among the uninsured.
More fundamental systemic problems may be reflected in the increased likelihood of delays in care for noncost reasons that we observed among both children and adults. These increases were particularly large among publicly insured adults during the past decade — a time of substantial increases in Medicaid enrollment. This may have strained providers’ capacity or willingness to serve Medicaid patients in some areas of the country.
In addition, despite increased funding for community health centers and continued supplemental payments through Medicare and Medicaid, the safety net has not been able to fully meet the increased need for care among the nation’s growing uninsured and publicly insured population.
Experience also indicates that there is no guarantee providers could adapt quickly to meet the needs of an influx of a large number of newly insured adults. When reforms similar to the Affordable Care Act were implemented in Massachusetts, overall access to care improved; however, some measures of unmet need for care also increased as more people sought care.
The US health care system could respond similarly under the Affordable Care Act, meaning that both the newly insured and those who already have coverage could have problems getting timely appointments or could experience long waits at the doctor’s office. This could be especially true in areas that experience large increases in coverage relative to provider capacity. If these problems with access emerge, they could dampen the potential benefits of the Affordable Care Act.
This study from the Urban Institute provides further confirmation of what we already knew. Uninsured individuals have impaired access to health care. What should be particularly alarming to us about this report is that the two coverage expansions in the Affordable Care Act – private insurance and Medicaid – have also been associated with further impaired access over the past decade.
Medicaid’s problem is that it is chronically underfunded. As it expands, health care professionals and institutions are finding that they are less able to serve this population as their losses escalate.
Private insurance also has been associated with a decline in access resulting in greater unmet medical needs. This is most likely due to the unique nature of private insurers competing in the marketplace. To slow the increases in premiums, insurers have shifted more costs to patients, especially through high deductibles, which impairs access because of lack of affordability. They also have reduced access to providers through the use of network contracting. The actuarial values of their plans are declining, leaving greater financial exposure to patients in need of health care. The business model of private insurance works better for the insurers when barriers are erected to care.
This study is receiving wide coverage in the press today, with headlines to the effect that health care access will decline if the Affordable Care Act is overturned. What needs to be emphasized is that health care access has been declining under the two programs to be expanded by the Affordable Care Act – private insurance and Medicaid.
What should be covered in these articles is that if we want to improve access, we can do it by removing financial barriers for everyone, simply by adopting a single payer national health program – an improved Medicare for all.
A New Approach To Cutting MA’s Health Costs: Throw Spaghetti
By Rachel Zimmerman
WBUR, May 4, 2012
When Massachusetts passed sweeping health insurance reform in 2006, a crucial piece was missing from the landmark legislation: how to control rising medical costs.
Today, state lawmakers unveiled an ambitious new proposal to do just that.
Here are some details of the House bill, officially the Health Care Quality Improvement and Cost Reduction Act of 2012, presented today by lawmakers. The state Senate is expected to introduce its own version of the plan next week.
1. Oversight: A new, quasi-governmental agency called the Division of Health Care Cost and Quality would oversee the transition to the new payment and delivery system with a board including consumer, government and industry representatives.
2. Cost-Cutting: To curb the increase in medical spending, the plan establishes a cap for health-care spending linked to the local economy, the Gross State Product, minus one-half a percent (years 2016 through 2026, then plus 1 percent).
3. Leveling The Field: The state could impose a 10 percent “luxury tax” on pricey hospitals that charge more than 20 percent of the state median price for a given service without being able to justify that higher price. (Two earlier reports by Attorney General Martha Coakley found that certain hospitals exploited their market clout and charged higher prices without offering better quality care.) Hospitals would pay this penalty into a “distressed hospital” fund for institutions that serve a high proportion of poor and vulnerable patients.
4. Accountable Care Organizations would take on greater prominence, though the bill stresses that joining an ACO would be voluntary for patients and providers. The bill defines the size of an ACO as bigger than 15,000 people and no larger than 400,000. Patients would have the right to appeal decisions made by their ACO doctors, and have the right to a second opinion.
5. Shifting Payments: The state’s medical establishment would continue its shift toward global payments and away from fee-for-service systems. The measure would “transition the industry to adopt alternative payment methodologies such as global payments and bundled payments for acute and chronic conditions.”
6. Technology: Electronic health records would be required for all providers by 2017.
7. Greater transparency would be attained through detailed pricing available to consumers on the Web, as well as greater disclosure of out-of-pocket costs to patients up front.
8. Streamlining Care: The measure stresses greater coordination of care through primary care, and the establishment of “patient-centered medical homes” so that patients could have a single point of coordination for all types of care.
9. MedMal: New rules on medical malpractice would create a 180-day cooling off period while both side try to negotiate a settlement. Also, the measure would allow providers to freely offer an apology to a patient.
10. Tiering: Under a provision called “smart tiering” patients might pay more for more expensive services.
11. Upping The Rates: The bill would make several changes to Medicaid, including increasing MassHealth rates paid to providers.
12. Training: Funding for workforce training and development are included in the measure, and a provision would forgive loans to primary care doctors who practice in rural or underserved areas.
MIT economics professor Jonathan Gruber, an architect of the state’s 2006 health law and an advisor to President Barack Obama on the national Affordable Care Act calls the new House proposal “aggressive, broad and visionary.”
“This is an incredibly hard problem,” said Gruber, speaking on WBUR’s Radio Boston today. “What I like about this…is that it’s really taking the spaghetti approach to cost control; let’s throw a bunch of things against the wall and see what sticks. They’re doing a bunch of different things all of which might work.”
Health Care Quality Improvement and Cost Reduction Act of 2012:
When the Massachusetts reform act was about to be enacted in 2006, MIT economist and Romney consultant Jonathan Gruber acknowledged that the issue of rising costs was not adequately addressed in the legislation, saying that the bill should be passed to get people covered and then the cost problem could be fixed later. So now, the cost fix, he says, is to throw spaghetti against the wall and see what sticks.
If you look at the spaghetti in the new bill being introduced, you will see that there is not much there to stick, as far as costs are concerned. The measures summarized above, and described in detail in the bill available at the link, really do very little to control costs. Several of them are simply reiterations of some of the measures in the Affordable Care Act.
Massachusetts desperately needs reinforcement of its primary care infrastructure (as does the entire nation), and this legislation takes strides in that direction. But most of the rest of the bill is a diversion from what Massachusetts really needs to do – replace their antiquated, fragmented financing system with an efficient and equitable single payer program. Once in place, it would be much easier and less costly to make the necessary improvements in the infrastructure of their health care delivery system.
The topic of yesterday’s Quote of the Day message: “Should a single payer system include complementary and alternative therapies?”
Martha Livingston, Ph.D., Professor of Health and Society, SUNY College at Old Westbury, responds:
May 4, 2012
I am deeply troubled both by the JAMA piece you cite here and by your comment. The author – and you – have lumped together a world of different treatment modalities and individual treatments, and you have further characterized them all as “quackery.” Not all CAM treatments are the equivalent of “drugs.” And there is good science demonstrating the efficacy of many treatments referred to as CAM. The JAMA author has chosen to cite only studies that did not show a therapeutic effect of a particular single treatment, and you have apparently decided that there are therefore no rigorous scientific studies showing the efficacy of any alternative treatment.
The term CAM itself is problematic, suggesting that all such treatments complement “regular” medicine. Lumped under the heading of CAM are not only various herbal and other non-PhRMA-manufactured products, but “alternative,” that is, “non-M.D.” practitioners, and entire methods of treatment. So the issues really must be distinguished and analyzed, e.g.,
1. Who gets to research various treatments?
2. Who gets to practice medicine or, more broadly, healing?
3. Who gets to decide who’s right?
Briefly, there is a long, convoluted history inextricably tied to issues of power, class and racism, e.g., the suppression of midwifery and continuing suppression of the superior woman-centered model of childbirth; the dismissal of traditional healing systems, e.g., the 4000 years of Traditional Chinese Medicine (TCM).
Further, proponents of (some) “alternative” modalities argue that a huge proportion of what is practiced in “regular” or “scientific” medicine has no scientific basis whatever, and only the weight of generations of apprenticeship behind it.
I doubt that you are prepared to defend that all that is practiced in “regular” medicine is supported by good science, yet you aren’t dismissive of all regular doctors as quacks. If you’d like to learn more about the science of other-than-standard medical practice, I refer you to the terrific body of work by Dr. Adriane Fugh-Berman of Georgetown, a longtime PNHP member.
Finally, I think it’s really important not to toss grenades into our coalition, Don. Many PNHP members, both physicians and non-physicians, are supportive of some of the practices lumped together under the umbrella of CAM. We need each other, and must agree to disagree about many issues, this one included.
qotd: Should a single payer system include complementary and alternative therapies?
Martha Livingston’s message reflects the tenor of many of the anticipated responses to my biased opinions expressed in yesterday’s Quote of the Day – views that I made clear were my own and did not represent the policy position of PNHP.
When the views are expressed as support or opposition to complementary and alternative medicine (CAM), passions run high and conflict is inevitable. That is the way I framed the message – quite deliberately to carry my point. But the real issue is not CAM. It is where do we draw the line on where our collective tax funds in a single payer national health program should be distributed?
There should be very little disagreement with a framing that all reasonable, beneficial, affordable, effective, preventive, diagnostic and therapeutic health care services should be covered under a single payer system. There should also be agreement that blatant quackery such as the Hoxsey cancer treatment should not be covered, though some still disagree with this.
Merriam-Webster defines “medicine” as “the science and art dealing with the maintenance of health and the prevention, alleviation, or cure of disease.” “Science” is defined as “the state of knowing; knowledge as distinguished from ignorance or misunderstanding.” “Art” is defined as “skill acquired by experience, study, or observation.”
Medicine is science combined with art, but it is not not art alone. If we are going to pay for the health care of other people, this is the standard that we should meet.
As you read the following quote from my comment yesterday, dismiss from your mind the arbitrary categories of “traditional medicine” and “complementary and alternative medicine.” Simply read carefully what I wrote:
“The application of science to medicine is a dynamic. Many older approaches prove to be ineffective or even harmful. As we gain new evidence, those approaches should be denied payment from our collective health funds, whether private or government. Beneficial new approaches should be added. These decisions should continue to be based on science.”
In medicine, we need to dump the bad and bring in the good – some of which may arise from CAM. CAM was chosen for discussion yesterday because it is a rich resource of unscientific and sometimes artless interventions of the type that we should not be asking our fellow countrymen to fund. If we want those services, we should pay for them ourselves.
For those who insist that the art of medicine is all we need and that we do not need the science, I can only say that our health care financing system cannot bear paying for extravagances such as the $120 million paid for “The Scream,” or $120 billion to be allocated for “scream therapy.”
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