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.
HHS Essential Benefits ‘Bulletin’ Draws Tide Of Comments
Kaiser Health News
February 2, 2012
As the official window of time allowed for groups to react to the Department of Health and Human Services essential benefits proposal closed, a variety of objections, concerns and common themes became clear.
CQ HealthBeat: State ‘Flexibility’ For Essential Benefits Gets Cool Reception
A tide of objections and worries rolled in just before Tuesday’s deadline for health groups to react to a Department of Health and Human Services proposal on essential health benefits. Input from health interests and consumers on the benefits “bulletin” is not being made public by the Obama administration, which asked that comments be sent to an email address rather than posted on a government website as would be the practice with a proposed regulation (Norman, 2/1).
Politico Pro: EHB Comments Show Some Common Themes
Believe it or not, businesses, insurers and consumers do see eye to eye on essential health benefits — well, on some parts, anyway. They’re at odds on some of the bigger issues, which doesn’t exactly come as a surprise. The comments submitted to HHS on its essential health benefits approach shows a wide divide between consumers … and businesses and insurers, who don’t see enough safeguards to keep the essential health benefits package affordable (Millman, 2/2).
Yesterday we reported that some of the most politically powerful organizations in the nation have joined together in a coalition to try to weaken the package of “essential health benefits” that will be required of health plans under the Affordable Care Act. Excerpts from two new articles covered in the Kaiser Daily Health Policy Report should have us even more concerned.
In Politico Pro, it is reported that businesses and insurers “don’t see enough safeguards to keep the essential health benefits package affordable.” The proposal already has reduced the required benefits down to the relatively austere level of small group plans offered in the various states. These plans leave patients facing financial hardship when they must access health care.
Yet the powerful businesses and insurers want an even lower standard of benefits in order to keep the health benefits package affordable. The insurers want to protect their markets by keeping the insurance premiums affordable, and businesses also want the lowest premiums they can negotiate. Low premiums equate with higher out-of-pocket expenses for those with medical needs. In trying to make the health insurance plans more affordable, actual health care for the patients will be even less affordable.
As we have seen, the process has always been about powerful interests, with only a passive concern for patients.
In CQ HealthBeat, we see that comments on the proposal are being “sent to an email address rather than posted on a government website as would be the practice with a proposed regulation,” and are “not being made public by the Obama administration.”
The White House gave these special interests carte blanche with secretive access during the reform process. Secrecy continues. Should we be surprised when the final rule on “essential health benefits” pleases business and insurance interests, at a cost of exposing those with health care needs to greater financial hardship? No, not surprised. Outraged is more like it!
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Essential Health Benefits Coalition
January 31, 2012
To: HHS Secretary Kathleen Sebelius
From: Neil Trautwein, National Retail Federation
Re: Request for Information on the Essential Health Benefits Bulletin
The Essential Health Benefits Coalition (“EHBC”) appreciates the opportunity to provide comments in response to the “Essential Health Benefits Bulletin” as issued by Department of Health and Human Services’ (HHS’s) Center for Consumer Information and Insurance Oversight (CCIIO) on December 16, 2011.
As you finalize the definition of the Essential Health Benefits (EHB) package, we want to emphasize our concerns regarding the affordability of coverage for small employers and individuals under the Affordable Care Act (ACA). HHS seeks to give states flexibility to structure their own EHB package using private market coverage options in use today to serve as benchmarks. Yet these benchmark options are subject to the same state mandates that today keep coverage unaffordable and out of reach for many small employers and individuals. We urge HHS to consider an approach that balances reasonably comprehensive benefits with affordability for employers and individuals. A definition that does otherwise will make health coverage more expensive for employers and individuals to purchase and make jobs more difficult for employers to create.
Excerpt from recommendations:
Specifically, we urge the Department to reiterate that the Bulletin reflects the statutory requirements that:
* The EHB package does not dictate cost sharing requirements.
* Use of benefit limits included within benchmark plans is not barred.
* Future state mandates will not be added to the benchmark plan.
* Use the benchmark plan only to define the 10 categories of EHBs required by the ACA, and not any additional benefits that the benchmark may cover.
Members of the Essential Health Benefits Coalition Steering Committee:
American Osteopathic Association
America’s Health Insurance Plans
Blue Cross Blue Shield Association
Express Scripts Inc.
National Association of Health Underwriters
National Association of Manufacturers
National Association of Wholesaler-Distributors
National Federation of Independent Business
National Retail Federation
Pharmaceutical Care Management Association
Retail Industry Leaders Association
U.S. Chamber of Commerce
HHS has proposed that “essential health benefits” for plans under the Affordable Care Act need meet only the minimal standard of state regulated plans in the small group market. Now a coalition of the usual suspects which push self-serving reforms is proposing to further weaken the “essential health benefits” standard.
The details of their recommendations are not nearly as important as the fact that this maneuver represents what has been wrong with the reform process all along. The vested interests have been in the front seat while the guileless patients have had to accept their work product – a mandate to purchase unaffordable under-insurance, amongst many other flawed policies.
Instead of fighting over the definition of minimal essential benefits in a highly flawed health financing program, we should be joining with the nation’s patients in demanding that our elected leaders quit listening to these self-serving interests and instead enact a program that puts patients in the front seat – an improved Medicare for all.
Addendum: Members of the American Osteopathic Association (AOA) may want to advise their leadership that, as a patient-oriented organization, AOA should immediately withdraw from this dastardly coalition.
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.
The End of Health Insurance Companies
By Ezekiel J. Emanuel and Jeffrey B. Liebman
The New York Times, January 30, 2012
Here’s a bold prediction for the new year. By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.
… thanks to the accountable care organizations provided for by the health care reform act, a new system is on its way, one that will make insurance companies unnecessary. Accountable care organizations will increase coordination of patient’s care and shift the focus of medicine away from treating sickness and toward keeping people healthy.
… accountable care organizations will typically be paid a fixed amount per patient, along with bonuses for achieving quality targets. The organizations will make money by keeping their patients healthy and out of the hospital and by avoiding unnecessary tests, drugs and procedures. Thus, they will actually have a financial incentive to hire that nurse for follow-ups.
In addition to providing better and more efficient care, A.C.O.’s will also make health insurers superfluous. Because they will each be responsible for a large group of patients (typically more than 15,000), they will pool the risk of patients who have higher-than-average costs with those with lower costs. And with the end of fee-for-service payments, insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so. Payments can flow directly from an employer, Medicare or Medicaid to the accountable care organizations. A.C.O.’s will require enhanced information systems to track patients and figure out how to deliver more effective care, but this analytic capacity will be directed at improving health outcomes, not at imposing barriers to those seeking treatment.
A.C.O.’s are not simply a return to the health maintenance organizations of the 1990s. Although in both models patients are members of a provider network with a specific group of doctors and hospitals, and both are paid primarily per member rather than per procedure or test, there are big differences between them. H.M.O.’s were often large national corporations far removed from their members. In contrast, A.C.O.’s will consist of local health care providers working as a team to take care of patients who are likely to be members for years at a time.
A few health insurers see this asteroid coming. Wellpoint, for example, bought the clinic operator CareMore for $800 million last summer to make the transition into the A.C.O. business. Others, like the Optum unit of UnitedHealth Group, are developing data analysis services to provide to future A.C.O.’s. If they don’t want to go the way of the dinosaurs, insurance companies will have to find a new business to be in, one that is useful in the new world of coordinated care.
San Juan Capistrano, CA
The policy community, as represented by Ezekiel Emanuel and Jeffrey Liebman, speaks in glowing terms about idealistic, altruistic accountable care organizations (ACOs) in which health care professionals and institutions join together to improve quality and lower costs. Yet the specifics of the Medicare Shared Savings program that would establish ACOs through the Affordable Care Act (ACA), has only a superficial resemblance to these idealistic models.
The fact that the two largest for-profit insurers in the nation – WellPoint and UnitedHealth – are going after the ACO business is proof that we are in for more of the same. Eliminating private insurers by merely setting up ACOs is a pipe dream. The state insurance exchanges mandated by ACA are exchanges of private insurance plans, not ACOs.
We need to improve Medicare, dump the private insurers including the Medicare Advantage plans, and provide Medicare for everyone. Medicare has been far more effective than the private insurers in controlling costs, and would be even more so if it were our own publicly-financed single payer system.
‘Free’ preventive care can cost patients big money: Is procedure a screening or therapeutic?
By Tom Kisken
Ventura County Star, January 28, 2012
Patients are getting charged as much as $3,000 for screenings they thought would be free under a federal health care reform mandate that promises free preventive care.
Most of the problems revolve around colonoscopies — screenings designed to detect colon and rectal cancers that kill about 52,000 Americans a year.
The procedure has been covered by federal health care reform for men and women 50 and older since September 2010, although many older insurance policies are exempt from the new provision.
Some patients are still receiving bills for deductibles or co-pays when the procedures show an abnormal growth called a polyp that can develop into cancer.
Insurance companies may charge for screenings or tests if patients show symptoms of cancer or are going through a colonoscopy as a follow-up to an earlier diagnosis, said Robert Zirkelbach, spokesman for the trade group. But many insurers consider colonoscopies to be preventive care — and covered — regardless of whether polyps are present, he said. Bills are sent when they aren’t told the nature of the procedure.
“One of the challenges is: How are those procedures being coded by physicians?” he said. “Is it clear that it’s a preventive service?”
Some doctors, however, insist the issue isn’t coding, but rather money and the insurers’ desire for it.
“That is subterfuge,” said Dr. Paul Sanders, a Thousand Oaks gastroenterologist, contending insurers are shifting blame from themselves to physicians. “It’s utter baloney. The insurance companies have quite intentionally blocked any way that anybody could understand what they’re going to, and not going to, pay for.”
Charles Rosen, a Simi Valley insurance broker and president-elect of the California Association of Health Underwriters, tells clients to minimize chances of any billing confusion by not talking to a doctor about any health concerns during a screening exam.
“If you have a pending issue, make another appointment,” he said.
Colonoscopy is one of several cancer screening tests that are covered 100 percent – no deductibles nor coinsurance are required. What separates out colonoscopy from the other screening tests is that it is frequently converted, on the spot, to a therapeutic procedure when polyps are detected and removed.
Somewhere between the billing office for the physician or outpatient department and the processing of the claim by the insurer, the diagnostic and procedure coding is changed from the free screening test to the therapeutic procedure, subject to cost sharing. The physician blames the insurer, and the insurer blames the physician. But it is the patient who is harmed by being required to pay the out-of-pocket costs of a therapeutic procedure after having been promised a free screening test.
As is typical in our health care financing system that turns decisions over to private insurers (even if only private administrators of Medicare), the president-elect of the California Association of Health Underwriters advises patients to withhold medical information until after they have received their free screening. Only then should they inform their physician about the rectal bleeding or the tenesmus that they have been experiencing. What’s a little fraud if it is only the patient that is committing it?
There are two policy lessons here.
One is that deductibles, co-payments and coinsurance should be eliminated for all appropriate care. Payment issues should not interfere with health care decisions made by the patient with the best advice of the physician. The harm dome by erecting financial barriers to care is potentially far greater than the almost negligible decrease in our national health expenditures that would result from cost sharing (most of which is merely shifted from the insurer to the patient). Obtaining appropriate health care should not result in the assessment of cost sharing penalties or fines.
The second policy lesson is that we need to throw the middleman crooks out. Only that industry would come up with a solution that patients should be instructed to lie to their health care professionals. Not a lie to withhold information? Isn’t the oath for swearing in, “The truth, the whole truth, and nothing but…”? Maybe the whole truth is confidential proprietary information. At least that’s what the insurers keep telling us when we ask for transparency.
Medicare Advantage: CMS Should Improve the Accuracy of Risk Score Adjustments for Diagnostic Coding Practices
We found that diagnostic coding differences exist between MA plans and Medicare FFS and that these differences had a substantial effect on payment to MA plans. We estimated that risk score growth due to coding differences over the previous 3 years was equivalent to $3.9 billion to $5.8 billion in payments to MA plans in 2010 before CMS’s adjustment for coding differences. Before CMS reduced 2010 MA beneficiary risk scores, we found that these scores were at least 4.8 percent, and perhaps as much as 7.1 percent, higher than the risk scores likely would have been as a result of diagnostic coding differences, that is, if the same beneficiaries had been continuously enrolled in FFS. Our estimates suggest that, after accounting for CMS’s 3.4 percent reduction to MA risk scores in 2010, MA risk scores were too high by at least 1.4 percent, and perhaps as much as 3.7 percent, equivalent to $1.2 billion and $3.1 billion in payments to MA plans.
One of the greatest abuses of the private insurance industry is taking advantage of favorable selection. Through deceptive practices such as selective marketing, they enroll healthier individuals while receiving higher premiums appropriate for a less healthy population.
To correct for this, payment is modified through risk adjustment (RA) – reducing payments for healthier populations and increasing payments for less healthy populations. If health care spending is to be equitable, risk adjustment is mandatory in a multi-payer system such as that of the Affordable Care Act.
We now have considerable experience with risk adjustment between the private Medicare Advantage plans and the public fee-for-service Medicare program. The experience is not good. As Medicare has refined the risk adjustment tools, the private Medicare Advantage plans have found new ways to game the system which have resulted in even greater overpayments for their patients who are healthier than the data submitted by the insurers would indicate.
This GAO report recommends that Medicare needs to increase its data collection and revise its application of risk adjustment in an attempt to recover some of the overpayments that would be made in the future. However, the experience to date indicates that the private insurers will use the greater complexity to further game the system to their own advantage.
PNHP co-founders Steffie Woolhandler and David Himmelstein state it well in this comment on risk adjustment:
“RA (risk adjustment) folks have been making this claim for decades; great improvement is just around the corner. To us, the most interesting part of the 2004 enhancement of Medicare Advantage RA is not that plans beat it, but that the gaming was actually much more lucrative AFTER the enhancement than before. Static analyses of RA schemes can virtually always come up with schemes that explain far more of the variance than existing schemes – ie. they’re better. But once incentives are based on a particular RA scheme, the gaming is on. There is absolutely no evidence that RA works or can work in the dynamic reality of profit-seeking health care insurers/providers.”
Private insurers operate on market principles. They will always place business interests first. They chase the money.
A universal public insurance program operates in the interests of patients. Gaming risk adjustment is a totally foreign concept to administrators of a single payer system.
Why would we ever want to have private plans involved at all? Dump them and we’ll get rid of the problems of adverse selection and favorable selection. Keep them and they’ll always game the system. They win, and we lose.
How the Health and Social Care Bill 2011 would end entitlement to comprehensive health care in England
By Allyson M Pollock, David Price, Peter Roderick, Tim Treuherz, David McCoy, Martin McKee, Lucy Reynolds
The Lancet, January 26, 2012
The National Health Service (NHS) in England has been a leading international model of tax-financed, universal health care. Legal analysis shows that the Health and Social Care Bill currently making its way through the UK Parliament would abolish that model and pave the way for the introduction of a US-style health system by eroding entitlement to equality of health-care provision. The Bill severs the duty of the Secretary of State for Health to secure comprehensive health care throughout England and introduces competitive markets and structures consistent with greater inequality of provision, mixed funding, and widespread provision by private health corporations. The Bill has had a turbulent passage. Unusually, the legislative process was suspended for more than 2 months in 2011 because of the weight of public concern. It was recommitted to Parliament largely unaltered after a “listening exercise”. These and more recent amendments to the Bill do not sufficiently address major concerns that continue to be raised by Peers and a Constitution Committee of the House of Lords, where the Bill now faces one of its last parliamentary hurdles before becoming law.
Fundamental to the Bill are provisions that transform a mandatory system into a discretionary one with structures that permit the introduction of charging for services that are currently free under the NHS, as well as a system in which much delivery would be privatised. Under the current statutory framework the Government has a legal duty to secure comprehensive health care, whereas, under the new system, substantial discretionary powers will instead be extended to commissioners and providers of care. These measures will increase inequalities of provision.
The whole system has been publicly administered and funded on the basis of contiguous geographical areas by bodies, now called primary care trusts (PCTs), that act on behalf of the Secretary of State and have responsibility for the health-care needs of everyone in their area.
The Bill creates two new bodies with responsibility for managing care: an NHS Commissioning Board and Clinical Commissioning Groups (CCGs), the number of which remain unclear. PCTs will be abolished and not replaced.
Clause 12 of the Health and Social Care Bill repeals the Secretary of State’s “duty to provide” specific services. Instead, a “duty to arrange” provision is imposed on each of the many CCGs that will also have transferred to them the power to determine what care is necessary to meet all reasonable requirements. However, CCGs will not have the duty to promote a comprehensive free health service.
As well as transferring powers from the Secretary of State to other bodies, the Bill leaves each CCG free to choose the patients for whom they have responsibility. Unlike PCTs, CCGs will not be responsible for all residents within contiguous geographical areas. CCGs select patients, initially assembling their patient populations on the basis of general practitioners’ (GPs) lists; they will not have to cover everyone in a geographical area but only “persons for whom it [the CCG] has responsibility”. Nor will they be required to arrange for the provision of all the services that are currently part of the comprehensive health system.
These changes will have substantial legal consequences. First, the duty to provide a national health service throughout England would be lost if the Bill became law. It would be replaced by a duty on an unknown number of CCGs, not GPs, to arrange provision as they see fit for various sections of the population for which they are separately responsible. Second, CCGs would not be bound by the “duty to continue to promote a comprehensive free health service” when exercising their functions. Under present law, according to a judgment of the Court of Appeal, the Secretary of State “has the duty to continue to promote a comprehensive free health service and he must never, in making a decision [about services provided], disregard that duty”. Third, the Secretary of State’s accountability to Parliament for the provision of services to patients in the new NHS will be diminished.
The Government has not disclosed the radical nature of this reform.
In the USA, opposition to health reforms under both the Clinton and Obama administrations is articulated as erosion of personal freedom by increasing government powers. Conversely, pro-market reforms of universal health systems in Europe are often justified on the grounds that they increase personal freedom by transferring powers from government to non-governmental or commercial bodies and by increasing choice. Citizens’ rights in democracies are underpinned not just by limitations on government powers but also by legal duties imposed on governments, such as those that guarantee citizens access to health care. The Bill would withdraw this legal underpinning. As the Bill enters its final critical stages it is crucial that Peers observe three red lines for the NHS (below) and are fully aware of the key parts of the legislation that would abolish core NHS functions, if they are to safeguard the NHS for future generations.
Red lines to protect the NHS
# The Secretary of State must have the duty to secure provision of comprehensive and equitable health care for the whole of the population of England, taking action whenever there are problems.
# CCGs (Clinical Commissioning Groups), operating on behalf of the Secretary of State, must make sure that comprehensive and equitable health care is available for everyone and be responsible for all residents living in single geographically defined areas that are contiguous, without being able to pick and choose patients.
# Nothing must be done that undermines the ability of the Secretary of State to fulfil the duty to secure provision of comprehensive and equitable health care, by bringing more of the NHS within the scope of EU competition law so that, in particular:
* There must be no increase in the commercial contracting of health services;
* The current authorisation system for central regulation of Foundation Trusts must be retained;
* Statutory functions of CCGs must be carried out by NHS staff, with CCG finances being used solely for the benefit of patients;
* Statutory and enforceable codes of conduct must be laid down for all NHS bodies, underpinned by sanctions that are rigorously policed;
* Information about commercial contracting, including the planning, procurement, financing, and monitoring, must be available as a matter of course.
http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(12)60119-6/fulltext (The Lancet is offering access to this important article for free, but they do require registration.)
The Conservative government of David Cameron is about to destroy England’s National Health Service, as we know it. While we are struggling in our attempt to ensure health care for everyone (and are still not receiving it under the Affordable Care Act), the British government is severing its responsibility to secure comprehensive health care throughout England.
Health care justice is an international cause. We should partner with our colleagues in England to support their cause in this moment of crisis, as they later partner with us to see that health care justice becomes a reality in the United States… and throughout the world.
Children’s, Blue Cross deal curbs payments
The Boston Globe
January 24, 2012
Children’s Hospital Boston has agreed to a three-year contract with Blue Cross Blue Shield of Massachusetts…
Perhaps most important, Children’s and its doctors groups will accept global payments for the first time, meaning they will be given a budget for patients’ care rather than billing for each visit and procedure.
“The contract is completely aligned with our aggressive and comprehensive efforts to take costs out of the system, while also improving quality,” said Children’s president Sandra Fenwick.
Until recently, it was thought unlikely that specialty providers such as Children’s, a 395-bed teaching hospital that is a national leader in pediatric research and training, would join the new global payment plans being offered by insurers.
Fenwick said the deal makes Children’s the first pediatric hospital in the nation to take global payments instead of traditional fee-for-service reimbursements. The contract also covers the Children’s Physicians Organization, made up of 959 specialists, and the Pediatric Physician Organization at Children’s, which includes 279 primary care doctors.
Under a well designed single payer system, hospitals would be funded through global budgets, much like police and fire departments, libraries and other civic institutions. Single payer eliminates the need to provide complex, itemized billings for each and every patient to any of hundreds of third party payers. The hospitals are simply paid a global fee that covers all of their costs for the year. As Canada and other nations have shown, global budgeting dramatically reduces the high costs of the administrative excesses that U.S. hospitals face.
Blue Cross Blue Shield of Massachusetts has now negotiated the first contract with a pediatric hospital that they say uses global budgeting. So can we use this as an experiment to prove that global budgeting will work in the United States? Unfortunately, no.
This contract has almost nothing in common with global budgeting under a single payer system. A global budget limited to one insurer does not place the entire hospital under a single global budget. Far from it. They still have to interact with all other payers in our fragmented financing system. Further, the products and services provided to Blue Cross Blue Shield patients must be segregated and itemized separately to know the amount of the budget to be negotiated. The uncertainties on how to allocate various hospital costs also can result in inequities amongst the various payers, likely making Blue Cross Blue Shield a winner while other payers lose.
When we are told later on that we do not want hospitals globally budgeted under a single payer system because it did not work for Children’s Hospital Boston, be prepared to answer that this was not global budgeting. This was merely another individual contract between one hospital with its physicians’ organizations and one insurer, under a fragmented financing system in which it was impossible to achieve the efficiencies of globally budgeting of the hospital’s entire costs.
We can even invent a term based on what this process is. It is “segregated budgeting.” We can make that a pejorative term by demonstrating that it is merely another insurer gimmick in our dysfunctional system of financing health care. Let’s keep the definition of “global” clean, and not let the insurers steal it from us.
What We Give Up for Health Care
By Ezekiel J. Emanuel
The New York Times, January 21, 2012
When it comes to health care, most liberals are committed above all to ensuring that every American has insurance. In their view, the greatest achievement of the health care reform act passed under President Obama is to finally erase the moral stain of the United States’ being the only major developed country without universal coverage. But we also hold the questionable distinction of having the world’s most expensive health care system — what about cost control? For many liberals, that just sounds like a cover for heartless conservatives who care only about cutting benefits and not about helping people in need.
But liberals are wrong to ignore costs. The more we spend on health care, the less we can spend on other things we value. If liberals care about middle-class salaries, public education and other state-funded services, then they need to care about controlling health care costs every bit as much as conservatives do.
During the campaign season and into 2013 — a vital year for health care legislation — liberals must make the issue of cost control their own.
(Ezekiel J. Emanuel is an oncologist, former White House adviser and a vice provost and professor at the University of Pennsylvania.)
San Juan Capistrano, CA
Truly universal coverage and effective cost containment were the goals from the beginning, but Congress and the administration selected a model of reform that cannot possibly bring us either.
It is likely that tens of millions will remain uninsured because of affordability issues, and the measures supposedly designed to control costs will have very little impact. A new CBO report confirms that some of the mechanisms proposed have already been shown to be ineffective in pilot studies.
All other wealthy nations provide comprehensive services to everyone, and at prices that on average are half that of the United States. The other nations use similar technology, experience aging of their populations, and have similar rates of health care utilization, yet they are still able to contain their costs. The difference is that they have strong public oversight of their systems of social insurance or government health services.
Although single payer systems are well recognized for their savings through administrative efficiencies, they use many other tools to slow the increases in health care costs. These tools are not experimental, like those in the Affordable Care Act. They have already proven to be effective beyond any doubt in nations with such systems.
We can cover absolutely everyone, which should make the liberals happy, and we can do it while truly bringing our health care costs under control, and isn’t that what the conservatives want as well?
‘Sorry for your loss — here’s your bill’
By Robert Remington
Calgary Herald, January 20, 2012
With the family of deceased Canadian skier Sarah Burke facing a U.S. medical bill topping the value of an average Calgary home, I was reminded Friday of a quote by the late Justice Emmett Hall, a crusader for Canada’s public health-care system.
“We as a society are aware that the trauma of illness, the pain of surgery, the slow decline to death are burdens enough for the human being to bear without the added burden of medical or hospital bills penalizing the patient at the moment of vulnerability,” Hall wrote in a 1979 review of publicly funded health insurance.
To help Burke’s husband Rory Bushfield pay an expected $550,000 medical bill for nine days of intensive care in Utah, a website was set up by Burke’s agent asking for donations. The site had reached nearly $200,000 as of this writing Friday afternoon, prompting the Canadian Freestyle Ski Association to announce that the amount was enough that her family “will not have any financial burden related to her care.”
The association’s statement seemed odd, considering that the website was $350,000 short of its intended goal, but not if you understand the vagaries of a private health system dominated by big private insurers.
In the U.S. health system, “nobody pays the sticker price, except for those who are squeezed, which is normally the uninsured,” says Steve Morgan, a health policy analyst with the University of British Columbia’s Centre for Health Services and Policy Research.
“Big insurance doesn’t pay retail,” Morgan says of the U.S. health system. Typically, he says a hospital will present a bill big enough to choke a horse and the insurance company will negotiate it down. Individuals without insurance, or those who are under-insured, have little or no negotiating power and often end up paying bills that are financially devastating, Morgan said.
Burke was apparently not adequately insured in the U.S. Her ski association only covers sanctioned events. Because the event at which she was injured and subsequently died was an unsanctioned competition put on by her sponsor, Monster Energy Company, the ski association’s insurance did not cover her.
It was not clear if Burke’s family thought she was adequately covered, or if Monster had insurance for her. The company did not say if it would help cover her medical bills, which Morgan says is not surprising.
Monster, he said, could have negotiated behind the scenes to get the price down. The Canadian Freestyle Ski Association said the family had not yet received a final bill for her hospitalization, but that it is expected to be approximately $200,000, roughly the amount that had already been collected.
Morgan says Burke’s case should be a sobering reminder to Canadians of what could happen in a privately-insured market, rather than a public system where everyone is insured against a catastrophic event.
In 2000, the U.S. health policy journal Health Affairs wrote about the issue under the heading “Gouging the Medically Uninsured: A Tale of Two Bills.”
“Overcharging the uninsured is one of the many unintended and largely overlooked results of our decade-long obsession with curbing health-care costs,” it said. “Powerful interest groups — government, employers, insurers, hospitals, medical equipment vendors, and health care professionals — have fought vigorously to protect their interests. The uninsured, with no organized voice, emerge as losers.”
Since 2001, family health insurance premiums in the U.S. have increased 113 per cent, according to the Kaiser Family Foundation, with annual premiums for employer-sponsored family health coverage growing to $15,073 in 2011. Due to the economic downturn, the number of Americans going without insurance has grown by one million to 49.9 million people.
We complain of health-care costs and outcomes in Canada, but the U.S. ranks behind Australia, Canada, Germany, the Netherlands, New Zealand and the U.K. in five areas of health system performance: quality, efficiency, access to care, equity and mortality, according to a report by the Commonwealth Fund.
“Our failure as a country to ensure basic health care for all of its citizens is in part to blame,” Glenn D. Braunstein, chairman of the Department of Medicine at Cedars-Sinai Medical Center in Los Angeles, wrote Friday in the Huffington Post.
It is, indeed, a sobering reminder to Canadians how lucky we are. As one commentator wrote of the Burke family’s experience with the U.S. system: “We are sorry for your loss. Here’s your bill.”
Instead of commenting on the cruel and inhumane health care financing system we have in the United States, let’s remember Sarah by spending a moment with her:
Is U.S. Health Spending Finally Under Control?
By Uwe E. Reinhardt
The New York Times, January 20, 2012
“Growth in U.S. health spending remains slow in 2010” was the headline of a news release on Jan. 9 by the Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services. At an increase of 3.9 percent over national health spending in 2009, “the rates of health spending growth in 2009 and 2010 marked the lowest rate in the 51-year history of the National Health Expenditure Accounts,” the release said.
The $64,000 question is how soon the excess growth of health spending will descend from its historical average of 1.5 to 2.5 percent first to, say, 1 percent or so, and eventually to 0 percent.
It is tempting to view the relatively lower cost growth in recent years as a first step in that direction. But nothing in the history of health spending in the United States suggests that this is the time to break out the Champagne to celebrate that victory.
After all, low rates of spending increases in 2009-10 could just be the lagged effect of the deep recession in 2008-9. There is evidence in the literature that health spending does not completely march to its own drummer, regardless of what happens in the rest of the economy, but instead tends to rise and fall somewhat with the rest of the G.D.P., albeit with a lag of one to two years. The safest bet is that on the long road to eventual zero excess growth in health spending, we will ride up and down quite a few more times on the health-spending roller coaster.
Now why is it reasonable to assume that excess cost growth will just have to decline to zero in the long run – that is, to assume that health spending will not eventually grow faster than G.D.P. and perhaps even more slowly?
Economists would explain such a trend as follows: as the fraction of G.D.P. devoted to health care increases, the added satisfaction, or utility, that people derive from added health care is likely to diminish relative to the added satisfaction derived from consuming more of other things. It could explain a gradual decline in the excess growth of health care spending.
Finally, economists retreat here to the one law on which they all agree, namely, Stein’s Law, named for the late economist Herbert Stein: “If something cannot go on forever, it will stop.” Trust us. It will, in the long run.
San Juan Capistrano, CA
How close we already are to meeting the limits of Stein’s Law is exemplified by 1) the current cost of health care for a family of four with an employer-sponsored PPO – $19,393 (Milliman), and 2) median household income – $49,445 (2010).
Although these are not measures of identical family units, they do provide enough of a perspective to show that we have run out of space in family budgets to pay for health care. The forgoing of wages to pay for employer-sponsored health benefits has crimped family budgets to the extent that frugality has become, by necessity, the norm.
We can continue as we are, allowing personal hardship to increase, or we can have our public stewards take control, as they have in other nations. They have been successful in ensuring that everyone has health care at costs averaging only half of those in the U.S.
A properly designed Medicare for all would work just fine for all of us.
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