Personal data breaches for 4.9 million patients

Posted by on Thursday, Feb 24, 2011

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 General Hospital settles potential HIPAA violations

U.S. Department of Health and Human Services
February 24, 2011

The General Hospital Corporation and Massachusetts General Physicians Organization Inc. (Mass General) has agreed to pay the U.S. government $1,000,000 to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, the U.S. Department of Health and Human Services (HHS) announced today.

http://www.hhs.gov/news/press/2011pres/02/20110224b.html

And…

Report details health care reform theft

By Susan R. Miller
South Florida Business Journal
February 23, 2011

As the nation moves toward growing use of electronic medical records, data vulnerability becomes increasingly evident.

A new report released on Wednesday by Kaufman, Rossin & Co., showed 4.9 million patients had their personal health information compromised as a result of 166 data breaches that occurred during the first year of the Health Information Technology for Economic and Clinical Health (HITECH) Act.

All of the breaches occurred between Sept. 21, 2009 and Sept. 21 2010, the first year when breach incidents were publicly reported to the Secretary of the Department of Health and Human Services.

http://www.bizjournals.com/southflorida/news/2011/02/23/report-details-health-care-reform-theft.html

And…

athenahealth

An increasing majority of physicians finds that EHRs slow them down during the exam.

Sixty percent of physicians agree with the statement that the EMR/EHR “slows down the doctor during patient exams.”

http://www.athenahealth.com/index.php?open=26

Although Congress gave up on trying to provide health insurance coverage for everyone, they did try to deliver on the promises of higher quality, fewer errors, greater efficiency, increased security of patient health information, and lower costs through measures designed to expand the use of IT (information technology), especially through EMRs (electronic medical records). Are these promises being fulfilled?

Before delivering on the other promises, a health IT system must first, above all, ensure confidentiality of patient information. Today the Department of Health and Human Services released a report confirming that perhaps the most prestigious medical institution in the nation – Massachusetts General Hospital – is being fined $1,000,000 for violation of patient privacy rules. The documents were left on a subway train. Though this was not directly an IT breach, read on.

Yesterday a report was released by Kaufman, Rossin & Co., an accounting firm, that showed that, in the last year alone, almost five million patients had their personal health information compromised due to various other unrelated data breaches.

In this age of cloud computing, personal electronic data can easily be transmitted into cyberspace for all the world to see forever. Sure, the various vendors and stewards of the systems can show you their great security safeguards so there is no need to be concerned. Then how in the… did these 4.9 million patients have their personal health information compromised?

And the other IT promises? We covered this in a qotd last month (Jan. 21) in reviewing an article from PLoS Medicine. Quoting from that article:

“Our systematic review of systematic reviews on the impact of eHealth has demonstrated that many of the clinical claims made about the most commonly deployed eHealth technologies cannot be substantiated by the empirical evidence. Overall, the evidence base in support of these technologies is weak and inconsistent, which highlights the need for more considered claims, particularly in relation to the patient-level benefits, associated with these technologies. Also of note is that we found virtually no evidence in support of the cost-effectiveness claims.”

The highly touted accountable care organizations (ACOs) called for in the Patient Protection and Affordable Care Act are a variety of ill-defined health delivery organizations having only one thing in common: an integrated IT system using EMRs. Not only are these systems expensive and vulnerable to security breaches, the report from athenahealth shows that EMRs also slow down patient care. Why are we placing all our bets on ACOs?

This has all been a distraction that has diverted us from doing what we really need to do – establish affordability and universality through an improved Medicare that covers everyone. Can’t we get on with that task now?

Massachusetts’ Medicaid director comments on single payer

Posted by on Wednesday, Feb 23, 2011

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.

Medicaid chief: Single payer may be better than ‘devil-may-be’ market

By Kyle Cheney
Boston Herald
February 20, 2011

A senior Patrick administration health care official said Friday that a single payer system may work more effectively and efficiently than Massachusetts’s existing insurance market, a high-profile endorsement that raised eyebrows at a legislative hearing.

“I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better,” said Terry Dougherty, director of MassHealth – the state-run Medicaid plan that insures nearly 1.3 million Massachusetts residents – when lawmakers asked for his “personal view” on a single payer system.

Dougherty noted that MassHealth, by far the largest program in state government, spends just 1.5 percent of its $10-billion-a-year budget on administrative costs – compared to about 9.5 percent by the private market, according to studies by the state Division of Health Care Finance and Policy. That figure won plaudits from several lawmakers on the panel, including some who have supported implementing a statewide single payer system.

After his remarks, Dougherty told the News Service that he’s learned to appreciate “elements of single payer” during his 30 years in health care.

“It’s got to be better than this devil-may-be marketplace,” he said. “We don’t build big buildings. We don’t have high salaries. We don’t have a lot of marketing, which makes, to some extent, some of the things that we do easier and less costly than some things that happen in the marketplace. Overall, my point is, we have individuals who work in state government in MassHealth … who are just as smart, just as tactile, just as creative as people who work in the private sector, but they work for a lot less money.”

http://news.bostonherald.com/news/politics/view/20110220medicaid_chief_single_payer_may_be_better_than_devil-may-be_market/

It is no surprise that so many individuals are suggesting that we may be heading toward a single payer system. It is becoming more obvious that the federal reform effort and the Massachusetts plan on which it was based have proven to be the most expensive model of reform while falling short on the goals of universality, efficiency and equity, as was predicted by those of us at PNHP and others. But these words from Terry Dougherty, director of the Medicaid program for Massachusetts, are of paramount significance since he has first hand experience with one of the cornerstones of reform – expansion of the Medicaid program.

When someone who really knows what we’re actually doing within this expensive, dysfunctional model of reform says that single payer has “got to be better,” we should listen. Listen, and then act.

Legislative committees approve copays for Medi-Cal

Posted by on Tuesday, Feb 22, 2011

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.

Calif. Assembly, Senate Budget Committees Pass Spending Plans

California Healthline
February 22, 2011

On Friday, California’s Assembly Committee on Budget and Senate Budget and Fiscal Review Committee passed nearly identical state budget plans.

Changes to Medi-Cal

Both budget committees approved a plan to establish mandatory copayments for Medi-Cal beneficiaries, which would reduce state spending by about $584 million, according to a Senate analysis.

The plan calls for copays of:
$3 and $5 for some prescription drugs;
$5 for physician and dentist visits;
$50 for emergency department visits; and
A maximum of $200 for hospital stays.

The plan also calls for the state to reduce Medi-Cal payments to health care providers by the amount of the copays.

Health care providers have expressed concern that they will face higher costs if Medi-Cal beneficiaries are unable to afford the higher copays.

http://www.sacbee.com/2011/02/20/3416369/browns-countdown-day-42-medi-cal.html

Although California has been at the bottom of the states in Medicaid payment rates, the state legislative committees recently passed another 10 percent cut in those rates. Now they have also approved legislation to reduce rates further by the amount of these copayments, amounts that will surely be absorbed by the providers since the Medicaid population lives in poverty or near-poverty and will not be able to pay these copayments. That’s understandable when you consider that the federal poverty level for 2011 is an annual income of $10,890 for an individual.

Yet the Patient Protection and Affordable Care Act will greatly expand the Medicaid population. The losses faced in the Medi-Cal program cannot be made up by an increase in volume. The additional load displaces privately insured patients, and the losses to the providers increase. The physicians who refuse to see Medi-Cal patients thrive, whereas those overloaded with Medi-Cal patients are threatened with insolvency. Let me emphasize that, based on my own personal experience, this is no exaggeration.

As a welfare program representing a population without an adequate political voice, Medicaid will always be underfunded. Simple common decency dictates that we should eliminate this program and replace it and the rest of the dysfunctional financing system with an improved Medicare for all program that serves everyone well.

Krauthammer backs into single payer

Posted by on Monday, Feb 21, 2011

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.

Krauthammer on health care, trains, Mideast

By Susan Taylor Martin
St. Petersburg Times
February 20, 2011

Susan Martin: Besides being a commentator, you are a medical doctor who criticized health care reform as a “2,000-page bill that will generate tens of thousands of pages of regulations.” Isn’t that a great argument for the simplicity of Canadian-style universal health care?

Charles Krauthammer: It is. But it seems to me there are two choices. We have the best medical care in world but it is the most expensive and we waste a lot. What you need to do is reduce the complexity and inefficiency. If we can’t get it right, we’re eventually going to a single-payer system. At least it doesn’t have this incredible, absurd complexity of ObamaCare. It’s the worst of the worst. It has the complexity of our (present) system and doesn’t give the universal coverage of single payer.

http://www.tampabay.com/news/perspective/article1152425.ece

Charles Krauthammer may be a conservative columnist, but he is very bright, having been awarded a Pulitzer Prize, and, as a Harvard-trained physician, he can speak knowledgeably about our health care system. His conclusions? Our health care system is the most expensive and wastes a lot due to its complexity and inefficiency, while Obamacare has brought us this incredible, absurd, worst-of-the-worst complexity which would not only be reduced by single payer, but single payer would also provide us with universal coverage.

We hear it over and over again from informed individuals: Since costs are out of control and too many individuals will remain uninsured or under-insured, a single payer system may be inevitable. But there has been a shift. We used to hear this from informed liberals, but now we hear it primarily from informed conservatives (with a few notable exceptions such as Bernie Sanders).

It’s not that we don’t understand the efficiency and effectiveness of single payer; we clearly do. The opposition has been primarily from those who, on an ideological basis, oppose any role of government in health care, other than as a safety net for the indigent. But even their icon of liberty, Friedrich Hayek, stated in his classic, The Road to Serfdom, “Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.”

The logic for single payer is there, and there is no longer any reason to perpetuate the ideological divide. The conservatives need to revisit Friedrich Hayek, and the liberals need to review again the tenets of social justice, perhaps beginning with Article 25 of The Universal Declaration of Human Rights. Once we get our respective camps in order, we should find that we have a common meeting ground.

“The Road to Serfdom” by F.A. Hayek:
http://www.press.uchicago.edu/ucp/books/book/chicago/R/bo4138549.html

“The Universal Declaration of Human Rights”
http://www.un.org/en/documents/udhr/index.shtml

Medical malpractice insurance loss ratios

Posted by on Friday, Feb 18, 2011

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.

Calif. insurance commissioner seeks lower medical malpractice rates

By Kathy Robertson
Sacramento Business Journal
February 17, 2011

California Insurance Commissioner Dave Jones, already at loggerheads with health plans over high rates and excessive rate increases, is turning his attention to medical malpractice companies.

Jones expressed concerns about high medical malpractice rates Thursday and said he’s asked companies that do business in California to reduce them.

The Doctors Company, the largest medical malpractice insurer in California, had a 10.1 percent loss ration for 2009, according to department figures posted on its website.

That means for every $1 of premiums collected, 10-cents was paid out in claims.

Norcal Mutual Insurance Co, the second-largest medical malpractice insurer in California, had a loss ratio of 29.72 percent in 2009, and the Medical Insurance Exchange of California, No. 3 in the state, had a loss ratio of 25.34 percent.The nonprofit Consumer Watchdog applauded Jones’ call for rate reductions.

The group pointed to data from the National Association of Insurance Commissioners that shows for every $1,000 in premiums paid in 2009 in California, $222 went to pay claims of injured patients, $243 to pay insurance company adjusters and defense lawyers and more than $280 to profit, not including additional investment income earned or taxes paid.

http://www.bizjournals.com/sacramento/news/2011/02/17/jones-seeks-lower-malpractice-rates.html

National Association of Insurance Commissioners – Countrywide Summary of Medical Malpractice Insurance (37 pages):
http://www.naic.org/documents/research_stats_medical_malpractice.pdf

And…

Medical-liability bill approved by House committee

By Jessica Zigmond
ModernHealthcare.com
February 17, 2011

Members of the House Judiciary Committee on Wednesday voted 18-15 to approve the medical liability reform bill that physician Phil Gingrey (R-Ga.) introduced late last month.

Ultimately, the law would limit non-economic damages to $250,000 and makes each party liable only for the amount of damages that is directly proportional to that party’s percentage of responsibility.

http://www.modernhealthcare.com/article/20110217/NEWS/302179959/

California has a combined medical malpractice loss ratio of 22 percent. That is, of the very expensive malpractice insurance premiums being paid, 78 percent does not end up compensating those experiencing medical injuries but is diverted to the insurers and defense lawyers. This is yet one more of a multitude of reasons why our tort system is serving these injured individuals so poorly.

Reforming the system has continued to be an elusive goal. The Republicans have now cleared a malpractice reform bill through the House Judiciary Committee. The legislation is similar to that passed many years ago in California, yet obviously the California approach is not working well.

We do need malpractice reform, but not because it will save money; it won’t. We need to replace the system with a non-adversarial dispute resolution process designed to provide compensation for medical injury. Since most individuals suffering medical injury currently do not sue, the probability is that expanding compensation for which patients are entitled will cost more than any savings recovered by a reduction in defensive medicine.

There is some question as to how much defensive medicine could be eliminated anyway since, presumably, tests to prevent lawsuits are tests that could identify an important problem that would otherwise be missed. Just because a test has a low yield doesn’t mean that it shouldn’t be done.

We need to strengthen the relationships between patients and their health care professionals. They need to work together as a team, even when inevitable cases of medical injury occur. That is why we need malpractice reform that, above all, places the interests of patients first.

Tax day surprise for some exchange participants

Posted by on Thursday, Feb 17, 2011

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

A Slippery Slope To Defunding The Health Law

By Timothy Jost
Kaiser Health News
February 15, 2011

A key provision of the health law that will provide 19 million consumers with tax credits to help afford their health insurance has been raided once. Now, Republicans are planning to raid it again.

Here’s the background: In late December Congress was looking for money to help pay for a plan to stop dramatic scheduled cuts in doctors’ Medicare reimbursements. As a temporary fix, the lame duck Congress changed a part of the new health law so that some consumers will have to pay back a hefty chunk of their tax credits. That change is expected to save the government $16 billion over 10 years.

Now Congress is again looking for money – this time to offset the funds lost with the repeal an unpopular health law provision that involves 1099 tax reporting requirements. Republicans are proposing another increase in the liability of tax credit recipients to raise the necessary revenue.

To understand why the proposal is worrisome, it is necessary to understand the function of the new tax credits. They are designed to help finance insurance premiums beginning in 2014, and are, perhaps, the most important provision in the new law for making health care affordable to middle-class Americans. They will be available on a sliding scale to families with incomes up to 400 percent of the federal poverty level. This is $88,200 for a family of four, but most of the money will go to families with far less income.

Here’s how they work. The amount of the tax credit for which people are eligible is based on annual income for the year the credits are received. But, because people will likely need help paying their insurance premiums during that tax year, the law provides for advance payments of the credits. These payments are made directly to the insurer on a monthly basis. The insurance exchanges, through which individuals will purchase health coverage, will determine eligibility for tax credits based on a taxpayer’s prior year tax return. (Taxpayers can provide more recent information if their income or family circumstances have changed.) At the time taxpayers file their annual tax return, the advance payments will be reconciled against the tax credit for which the taxpayers are eligible using their annual income reported on their return. If the advance payments are greater than the final tax credit, the taxpayer will get a bill from the Internal Revenue Service.

Excess advance payments can happen easily and will happen often. The income of hourly-wage lower and middle-income Americans often fluctuates from week to week and is difficult to predict. Dependents may leave or return home. Family members may become eligible for Medicaid or CHIP. Taxpayers may be eligible for a premium tax credit in the early months of the year while unemployed but then get a job with coverage and no longer need premium assistance. Or they may lose a job part way through the year and face dramatically reduced income, even though their full year reported income remains high.

All these changes will affect the subsidy calculation. It will be difficult for the exchanges to keep up with changes in family circumstances and for families to know what changes they should report and to whom. It is inevitable that there will be some inconsistency between advance payments based on estimated income for the year and the final credit determined at tax time.

Originally, when the health overhaul was signed into law, the amount the government could recover was capped at $400 for families with incomes below 400 percent of poverty. The amendment adopted in December increases the amount families will owe on a sliding-scale basis. Under the December amendment families with incomes at 200 percent of poverty will have to pay back as much as $1,000; families with incomes at 400 percent will have to pay back up to up to $2,500. It also, however, puts some limits on overpayments for families up to 500 percent of poverty.

The “1099 fix” legislation, which is likely to be considered this week by the House Ways and Means Committee, would require families at 200 percent of poverty to pay $1,500, and families earning a dollar more than 400 percent of poverty to pay back their entire tax credit.

It is important to understand what is at stake here.

Fear of potential end-of-year liability could be a substantial deterrent to participation in the advance premium tax credit program. It was estimated that the December amendment increased the likely number of uninsured after 2014 by about 200,000 people, who would rather be uninsured than face substantial repayments. Millions more consumers will face unanticipated financial burdens. This is likely to create a powerful backlash, as Americans who thought they were receiving a tax credit to help them purchase insurance find out it was in fact only a loan, and that they owe the IRS a substantial debt.

http://www.kaiserhealthnews.org/columns/2011/February/021511jost.aspx

Update:  Today (Feb. 17) the House Ways and Means Committee approved the 1099 repeal bill, including the requirement for “consumers earning more than 400 percent of the poverty line to pay back the subsidy.”

http://thehill.com/blogs/healthwatch/health-reform-implementation/144847-1099-repeal-gets-trickier-with-house-bill

In choosing to base reform on private insurance plans, our policy makers introduced an administrative complexity that that would have been totally unnecessary had they selected instead a universal risk pool funded equitably through taxes. The private insurance model requires that a specific premium be assigned to each individual or family, even though those premiums are no longer affordable for the majority of us. Thus they had to devise a very complex system of subsidies to lessen the financial burden of premiums (though still unaffordable for many even with the subsidies).

These subsidies, of course, are based on the current year’s income, but the advance payments made directly to the insurers are based on the previous year’s income. Because income levels change frequently for many individuals and families, many will be receiving incorrect subsidies. The Internal Revenue Service determines the corrected subsidies, based on actual income, when the tax return is filed the following year.

If income increases, it is likely that excessive premium subsidies will have been credited since the payment to the insurers is semi-automatic. Under the Affordable Care Act (ACA) as originally enacted, once the tax return is filed, the individual or couple is billed for overpayments of the subsidies, up to a maximum of $250 for an individual or $400 for a family. Since this is an additional tax bill added to full income taxes already being paid, it was felt that amounts above these limits would be a hardship for most individuals and families.

That has changed. The newly enacted “doc fix” (postponing scheduled sharp reductions in physicians’ reimbursements for Medicare) was paid for partly by raising the reimbursement requirement up to $2500. There are very few families that would not have difficulty paying this tax day surprise, added to their full income taxes.

Today the bill eliminating the burdensome 1099 requirement for small businesses cleared its first hurdle by a party-line vote in the House Ways and Means Committee. The lost revenues would be offset by a further increase in the subsidy repayment requirement – up to a full refund for those over 400 percent of the federal poverty level. Thus a family of four with an income of just one dollar over $89,400 (400% FPL for 2011) could be hit with a bill from the IRS for nearly a full year’s premium – on top of their full income taxes – if their subsidies had been based on a very low income the prior year. Now that’s a tax day surprise that would be devastating for any of us.

Admittedly, this is only a minor technicality, but try to tell that to those who will receive massive tax day bills from the IRS.

This is not only unfair, it is so unnecessary. We can fix this by funding a single national risk pool that covers everyone, using equitable progressive tax policies.

No longer would we have to link individuals and families to premiums in the private insurance market. We don’t need the private insurers at all (and we certainly wouldn’t need to give them 15 to 20 percent of the premiums for their own intrinsic purposes).  The system will have already been paid for through taxes, and people would simply receive the care that they need, when they need it.

Simpler. Cheaper. And better. Taking care of us all. Why don’t they get it?

Justin Bieber’s bodyguard

Posted by on Wednesday, Feb 16, 2011

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.

Justin Bieber Talks Sex, Politics, Music and Puberty In New ‘Rolling Stone’ Cover Story

Rolling Stone
February 16, 2011

The Canadian-born (Justin) Bieber never plans on becoming an American citizen. “You guys are evil,” he jokes. “Canada’s the best country in the world.” He adds, “We go to the doctor and we don’t need to worry about paying him, but here, your whole life, you’re broke because of medical bills. My bodyguard’s baby was premature, and now he has to pay for it. In Canada, if your baby’s premature, he stays in the hospital as long as he needs to, and then you go home.”

http://www.rollingstone.com/music/news/justin-bieber-talks-sex-politics-music-and-puberty-in-new-rolling-stone-cover-story-20110216

They say that you should not use anecdotes to make policy, but when the policy science we know supports the millions of anecdotes Americans have regarding our “evil” ways in health care, it is time to use them to make policy. Just ask Justin Bieber’s bodyguard.

Medicare administrative costs – an update

Posted by on Tuesday, Feb 15, 2011

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.

2011 Primer on Medicare Spending and Financing

Kaiser Family Foundation

Administrative Costs

The costs of administering the Medicare program have remained low over the years – less than 2 percent of program expenditures. As such, program administration is not a contributing factor to Medicare’s expenditure growth. Administrative costs include all expenses by government agencies in administering the program (HHS, Treasury, the Social Security Administration, and the Medicare Payment Advisory Commission). Also included are the cost of claims contractors and other costs incurred in the payment of benefits, collection of Medicare taxes, fraud and abuse control activities, various demonstration projects, and building costs associated with program administration.

http://www.kff.org/medicare/7731.cfm

And…

Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance

By Robert A. Book, Ph.D.
The Heritage Foundation
June 25, 2009

“The fact is that, in recent years, Medicare administrative costs per beneficiary have substantially exceeded those costs for the private sector, this despite the fact that, as critics note, private insurance is subject to many expenses not incurred by Medicare. Contrary to the claims of public plan advocates, moving millions of Americans from private insurance to a Medicare-like program will result in program administrative costs that are higher per person and higher, not lower, for the nation as a whole.”

http://www.heritage.org/research/reports/2009/06/medicare-administrative-costs-are-higher-not-lower-than-for-private-insurance

The costs of administering the Medicare program remain at less than two percent of program expenditures. Several other reports have been circulated claiming that the administrative costs are much higher. Some of these recalculations add in administrative costs that they claim were excluded from the Medicare numbers, such as the administrative costs of claims contractors, costs of collecting Medicare taxes, and the costs of policing fraud and abuse.

Not only are these costs already included in the “less than two percent” calculation, resulting in true double counting by those challenging the numbers, but the costs they estimate are often pie in the sky, resulting in even greater embellishments of the numbers.

They also play with the numbers, using calculations based on per beneficiary services, or excluding those non-administrative services that the private insurers force on us, and using this as a distraction to dismiss as irrelevant the true percentages paid for administrative services.

Not only do they claim that Medicare administrative costs are understated, they also claim that the true administrative costs of insurers are very close to or even less than their “corrected” Medicare numbers. If that is true, then why have the insurers claimed that they will have difficulty keeping their own administrative costs down to fifteen to twenty percent, a requirement of the Affordable Care Act? And that fifteen to twenty percent doesn’t even include the tremendous administrative burden that they place on the health care delivery system.

So Heritage’s Robert Book claims that a Medicare-like program would result in higher administrative costs for the nation as a whole, than would private insurance.

How do we confront this? Do we simply reply that their circus antics are not credible, and walk away? Or do we simplify our rhetoric and call them what they are – liars? That might not sell well to a public that clings to the lies of the right, while rejecting the process of critical thinking.

By Dr. Ida Hellander

This is a two-stage bill which attempts to use the establishment of the required health benefit exchange under PPACA as a bridge to a “public-private single payer health care system” (Green Mountain Care) upon receipt of the required federal waivers. Here are some representative quotes:

“This bill proposes to set forth a strategic plan for creating a single payer and unified health system. It would establish a board …. ; establish a health benefit exchange for Vermont as required under federal health care reform laws; create a public-private single payer health care system to provide coverage for all Vermonters after receipt of federal waivers” (p. 1).

“The intent of the general assembly is to establish the Vermont health benefit exchange in a manner such that it may become the foundation for a single payer system” (p. 5).

“Green Mountain Care shall be implemented upon receipt of a waiver … of the Affordable Care Act. As soon as available under federal law, the secretary of administration shall seek a waiver to allow the state to suspend operation of the Vermont health benefit exchange and to enable Vermont to receive the appropriate federal fund contribution ….” (p. 44).

Comments and concerns

1. The reforms enacted prior to the implementation of single payer are inadequate and delay fundamental reform for 3-6 years. Several states have enacted reforms in the past only to repeal them before full implementation.

2. Provisions necessary for cost-control, such as an annual budget, and separate operating and capital budgets for hospitals, do not appear in the legislation, but do (confusingly) appear in the summary and testimony on the bill by Anya Rader Wallack (summary, p. 3 and testimony, p. 8).

3. The section on pilot projects for payment reform/ACOs appears to allow insurance companies to run ACOs: (p. 15) “the scope of services in any capitated payment should be broad and comprehensive, including prescription drugs, diagnostic services, services received in a hospital, mental health and substance abuse services, and services from a licensed health care practitioner … and may consider “whether to include home health services and long-term care services as part of capitated payments.” Only insurers can bear this much risk, and indeed the three private insurers in Vermont are already involved in developing ACOs.

4. The section on administration allows an insurance company to bid for “administration of certain elements of Green Mountain Care.” This adds unnecessary expense to the program.

5. What will the cost sharing be? (p. 39) “Green Mountain Care shall include cost-sharing and out of pocket limitations as determined by the Vermont health reform board … there shall be a waiver of the cost-sharing requirement for chronic care for individuals participating in chronic care management and for primary and preventive care.” Cost-sharing limits access to care and is ineffective at controlling costs; it should be eliminated.

6. There is no ban on investor-owned health facilities.

7. On the bright side, the single-payer plan includes Medicare and Medicaid (p. 40, 41-42), workers’ compensation and retirees (p.38); covers all “residents” (not just citizens, p. 37); there is at least a nod to the need to have comprehensive benefits including long-term care (if the budget allows); there is language on retraining displaced administrative workers (p. 56); bulk purchasing of drugs and supplies; use of “smart card” technology as in Taiwan (p. 37); and insurance coverage that duplicates the single payer is proscribed (p.41). (This last feature is contradicted, however, by a provision that allows employers to retain their existing coverage.)

8. Some additional features: There is an emphasis on mental health parity and an adequate supply of mental health professionals; emphasis on primary care and use of “medical homes” (this could be good or bad, depending on if they are part of an insurance company-run delivery system).

9. Finally, the bill does not specify financing, except to say that two options will be presented for consideration and all options for raising revenues will be considered (not just a payroll tax, as Dr. William Hsiao had recommended).

Conclusion

Single-payer advocates will have to fight to strengthen the single payer section of this bill, keep single payer in the bill at all (there will likely be attempts to strike it), get the necessary federal waivers and make single payer (aka “Green Mountain Care”) a reality.

Dr. Ida Hellander is executive director of Physicians for a National Health Program.

The Vermont health bill: a brief analysis

Posted by on Tuesday, Feb 15, 2011

By Drs. David Himmelstein and Steffie Woolhandler

The proposed Vermont health reform legislation includes two distinct elements: clear plans to rapidly implement the deeply flawed federal health reform (PPACA) in Vermont; and a vague outline of a single-payer plan that might be implemented six years hence if the feds were to allow it.

In contrast to the bill’s detailed prescription for implementing PPACA, the sections on the single-payer plan leave much to the imagination, punting decisions on critical issues to a board appointed by the governor. It seems that the board is to determine whether critical services like long-term care are included in the benefits package; whether co-payments will be affordable or daunting; how hospitals, home care agencies, nursing homes and doctors will be paid; and whether capital funds are to be allocated separately from operating funds (the sine qua non of effective health planning). And the bill includes no plan for funding the single-payer program.

Happily, the legislation would enroll all Vermont residents (regardless of immigration status) in the single-payer plan. In one critical area the bill seems to come down on both sides of the fence. While it would proscribe the sale of private coverage that duplicates the public plan if the single-payer program is implemented, it would also allow employers to opt out of the plan.

Finally, its uncritical embrace of the latest health policy fad – Accountable Care Organizations (ACOs) – would bolster the role of private insurers, at least in the short run. The bill calls for pilot projects in which an ACO would receive capitation payments which would cover all care for a defined population, including long-term care, prescription drugs, etc. Insurers are the only organizations in Vermont with the financial muscle to take on such “full risk” contracts.

In sum, the Vermont bill evidences good intentions and bold promises, but leaves the make-or-break decisions about restructuring health care financing for a later date. This “kick the can down the road” approach is worrisome in a state where the governor and Legislature change every two years, and where multi-stage health reforms have been enacted in the past, only to see the planned reforms abandoned without being implemented. In this context, ongoing mobilization of a broad-based single-payer movement will be critical. Such a mobilization can bolster the governor’s evident enthusiasm for the single-payer project and maintain the courage of the Legislature as they face the inevitable onslaught of corporate opposition to real health care reform.

Drs. Himmelstein and Woolhandler are co-founders of Physicians for a National Health Program.

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