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.
Insurance Status of U.S. Organ Donors and Transplant Recipients: The Uninsured Give, but Rarely Receive
By Andrew A. Herring, Steffie Woolhandler, and David U. Himmelstein
International Journal of Health Services
Volume 38, Number 4
In September of 2005, one of us (Herring), then a third-year medical student, cared for a previously healthy 25-year-old uninsured day laborer who arrived at the emergency department with rapidly advancing idiopathic dilated cardiomyopathy. The patient was ultimately deemed unsuitable for cardiac transplantation. The decision on transplantation was driven, in part, by realistic concern about the patient’s inability to pay for long-term immunosuppressive therapy and to support himself during recovery. Absent such resources, the likelihood of a successful outcome is compromised. The clinicians caring for him faced a wrenching dilemma: deny the patient a transplant, or use a scarce organ for a patient with a reduced chance of success. He died of heart failure two weeks after his initial presentation. This tragedy inspired us to examine data on the participation of the uninsured in organ transplantation, both as recipients and as donors.
Organ transplantation is an expensive, life-saving technology. Previous studies have found that few transplant recipients in the United States lack health insurance (in part because patients may become eligible for special coverage because of their disability and transplant teams vigorously advocate for their patients). Few data are available on the insurance status of U.S. organ donors. The authors analyzed the 2003 National Inpatient Sample (NIS), a nationally representative 20 percent sample of U.S. hospital stays, and identified incident organ donors and recipients using ICD-9-CM diagnosis and procedure codes. The NIS sample included 1,447 organ donors and 4,962 transplant recipients, equivalent after weighting to 6,517 donors and 23,656 recipients nationwide; 16.9 percent of organ donors but only 0.8 percent of transplant recipients were uninsured. In multivariate analysis, compared with other inpatients organ donors were much more likely to be uninsured (OR 3.41, 95% CI 2.81-4.15), whereas transplant recipients were less likely to lack coverage (OR 0.08, 95% CI 0.06-0.12). Many uninsured Americans donate organs, but they rarely receive them.
Because of the mismatch between the numbers of individuals who are candidates to receive organ transplants and the numbers of donors available, sometimes difficult decisions have to be made as to who will receive the transplants. As complex as these decisions are, it is a sad commentary that, in the United States, we add one additional complicating factor: Does the potential recipient have insurance?
It is reassuring to note that the dedicated transplant teams can sometimes break through this barrier through vigorous advocacy on behalf of their patients. But it is wrong that they should have to do that. And it is especially wrong that uninsured candidates may be unsuccessful in negotiating this barrier.
These life and death decisions are not based on a lack of money; we are already spending more than enough. Rather people are dying merely because of the way we allocate that money. A single payer national health program would remove money as a consideration and allow us to concentrate on the other moral and ethical factors that should determine who lives and who dies.
What a terrible decision to have to make. But let’s not make it based on ability to pay.
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.
Aetna and Partners in Care Test New Approach to Health Care Services
November 13, 2008
New Model Creates a “Medical Home” for Patients that is Based on a Strong Primary Care Relationship and Close Coordination with Other Care Providers
Aetna (NYSE: AET) and Partners In Care, Corp. (PIC) today announced a pilot program to test an innovative new health care model that will make the health care system an easier place for patients. Called a “Patient-Centered Medical Home” the model emphasizes the role of the primary care physician (PCP) in managing and coordinating patient care across a range of care providers, including specialists and hospitals.
The Patient-Centered Medical Home concept of care has been under development since the mid-90s and is based on a patient having an ongoing relationship with a personal physician trained to provide first contact and continuous, comprehensive care. This personal physician leads a team of care providers at the practice level who collectively take responsibility for the ongoing care of patients, looking beyond the walls of their own office, and communicating with the patient’s other providers to assure the treatment plans are followed. The concept is designed to nurture and strengthen the relationship between the patient and physician.
“PIC sees its role as a physician organization as finding ways to support the practicing physicians in their effort to improve the overall quality of care provided to their patients, and by rewarding physicians for achieving national certification standards. This joint effort will have a significant impact,” said Kevin O’Brien, President & CEO, Partners In Care.
Partners in Care, Corp.
Constituted as a for-profit, closely held, New Jersey corporation, the equity is held by seventy individual shareholders belonging to the United Medical Group (UMG).
Using the techniques developed under full-risk contract management, PIC has bundled patient health advocacy, managed care administration, and medical informatics into a series of customizable product and service lines. Our customer base includes individual physician practices, large physician organizations, mid-sized employers, health plans, and benefit consultants / brokers.
Our very expensive but highly dysfunctional system of financing health care has resulted in serious deficiencies and neglect of the infrastructure of our health care delivery system. Foremost amongst these problems is the rapid deterioration of the primary care infrastructure.
It is not as if we have remained unaware of this very serious deficiency. In fact, the American Academy of Family Physicians, the American College of Physicians, the American Academy of Pediatrics, and the American Osteopathic Association have supported the medical home concept as a model for reinforcing primary care. The label is not important. What is important is the concept that everyone should have available a primary care entry point that improves access to coordinated, comprehensive health care services. This is not about gatekeepers. It’s about everyone receiving the health care that they need.
Our dysfunctional, fragmented, multi-payer and no payer system of financing health care has been incapable of realigning incentives and appropriately allocating resources to build and maintain the primary care structure that we need. We spend more money and we get less.
Don’t worry. Aetna, in partnership with Partners in Care, has usurped the “medical home” label to… provide us with a comprehensive primary care system? Well… No. On top of our flawed systems of financing and delivering care, they are adding “customizable product and service lines.” With our system already weighted down with an excess of egregiously wasteful administrative services, they are using the medical home label to sell us even more egregiously wasteful administrative services!
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.
Why Does U.S. Health Care Cost So Much? (Part I)
By Uwe E. Reinhardt
The New York Times
November 14, 2008
The graph (available at the link below) tells a compact story of United States health spending relative to that of other nations.
Shown on the horizontal axis is the gross domestic product per capita in 2006. The vertical axis represents 2006 health spending per capita. The data points in the graph represent two dozen developed countries that are members of the Organization for Economic Cooperation and Development (O.E.C.D.).
The data are expressed in Purchasing Parity Dollars (PPP$). This metric is designed to adjust for cross-national differences in the purchasing power of national currencies relative to the real goods and services. One can think of PPP$s as dollars that buy roughly the same basket of real goods and services in different countries.
You’ll notice that there is enormous variation in health spending per capita in different countries within the O.E.C.D. But the graph also indicates that there exists a very strong relationship between the G.D.P. per capita of these countries (roughly a measure of ability to pay) and per-capita health spending.
Just knowing the G.D.P. per capita of nations helps us explain about 86 percent of the variation in how much different countries pay for health care for the average person. Canada, for example, on average spent only PPP$3,678 on health care per person in 2006, which is about 55 percent of the amount the United States paid per person. But Canada’s G.D.P. per capita in 2006 was also smaller than the comparable United States figure, although not that much smaller (it was 84 percent of the American level).
The line helps us estimate that roughly $1,141 of the $3,036 difference between Canadian and American health spending per capita — or 38 percent — can be explained by the underlying difference in G.D.P. per capita alone.
An additional insight from the graph, however, is that even after adjustment for differences in G.D.P. per capita, the United States in 2006 spent $1,895 more on health care than would have been predicted after such an adjustment. If G.D.P. per capita were the only factor driving the difference between United States health spending and that of other nations, the United States would be expected to have spent an average of only $4,819 per capita on health care rather than the $6,714 it actually spent.
Health-services researchers call the difference between these numbers, here $1,895, “excess spending.” That term, however, is not meant to convey “excessive spending,” but merely a difference driven by factors other than G.D.P. per capita. Prominent among these other factors are:
1. higher prices for the same health care goods and services than are paid in other countries for the same goods and services;
2. significantly higher administrative overhead costs than are incurred in other countries with simpler health-insurance systems;
3. more widespread use of high-cost, high-tech equipment and procedures than are used in other countries;
4. higher treatment costs triggered by our uniquely American tort laws, which in the context of medicine can lead to “defensive medicine” — that is, the application of tests and procedures mainly as a defense against possible malpractice litigation, rather than as a clinical imperative.
There are three other explanations that are widely — but erroneously — thought among non-experts to be cost drivers in the American health spending. To wit:
1. that the aging of our population drives health spending
2. that we get better quality from our health system than do other nations, and
3. that we get better health outcomes from our system
I will comment in more detail on factors that do and do not drive health spending in subsequent posts.
Whoa. This one’s pretty heavy, but you really don’t have to understand Purchasing Parity Dollars and the other economic lingo to be able to understand the take-home message.
There is an important reason to present the economic data, and that is that we need to approach health care reform using highly credible factual data. Many individuals have an opinion as to why heath care costs in the United States are so high, but those views are often based on nothing more than hearsay, and often are incorrect. Reform must be based on solid facts.
So what is Prof. Reindardt’s take-home message? Although somewhat repetitive, it is worth emphasizing these points again.
What does NOT increase costs:
1. Living longer does NOT contribute significantly to health care costs. Most health care spending occurs near the end of life, and we are allocated only one death apiece. That spent on chronic diseases during the additional years of life expectancy is negligible when compared to end-of-life spending.
2. Higher quality of health care in the United States is NOT a cause of increased health care costs for the simple reason that the quality of our health care is quite mediocre, on average, when compared with other nations.
3. Better health outcomes are NOT a reason for higher health care costs simply because our outcomes are not better by most measures, and on several measures we are worse.
What DOES increase costs:
1. Nations with a high GDP have more money to spend on health care, and they spend it. (The graph in the original article demonstrates this point well. It also demonstrates that the United States is the single outlier of the two dozen nations, with much higher per capita spending than would be projected by our very high GDP.)
2. The United States pays higher prices for health care services and products than do other nations for the same services and products. This was demonstrated in the Health Affairs article, “It’s the Prices, Stupid.” Our dysfunctional system of financing health care has not been capable of optimizing prices (think of pharmaceuticals). We could do much better using negotiated pricing through a single financing system.
3. Our fragmented, multi-payer system has resulted in profound administrative waste, adding significantly to our high health care costs. Proposals to limit administrative costs of private insurers to 15 percent of their revenues will have very little impact since many are already at that level, and this limit will not provide any relief for the administrative burden that our multi-payer system has placed on the health care delivery system. Administrative savings would be possible only by adopting a simpler health insurance system.
4. Our costs are higher because of our greater use of expensive, high-tech services and equipment that all too often provides no benefit and may even be detrimental. We need to identify those services not providing value so that we can redirect our resources elsewhere (a complex but doable task).
5. Our American tort system has provoked the use of flat-of-the-curve defensive medicine that wastes resources, thereby increasing costs. How we should reform the tort system remains controversial, but it must be addressed.
6. The contraction of our primary care infrastructure has contributed indirectly to our high health care costs. Primary care environments provide quality care at a lower cost. Shifting health care access to specialized environments increases costs through some of the mechanisms listed above. Overuse of emergency departments is a problem because of the strain on the capacities of the system, but it is not much of a contributor to increased costs since the marginal costs of the additional load are quite small.
Everyone agrees that health care reform must address the high costs of health care. Most current proposals merely expand the way we are already paying for care without changes that will have any major impact on these cost drivers.
Instead of expanding our current dysfunctional financing system and then attempting to transform it into a social insurance model, it would be so much easier and much less expensive to simply replace it with a single payer national health program.
Lessons from the U.K.
By Martin Roland, D.M.
The New England Journal of Medicine
November 13, 2008
The United Kingdom takes the importance of primary care for granted. The U.K. government is effectively the country’s single payer, and successive administrations have been convinced by mounting evidence that primary care promotes high-quality, cost-effective, and equitable health care. If anything, the U.K. government has become more convinced over the past 15 years that strong primary care needs to be at the heart of the country’s health care system — quite the reverse of the situation in the United States. U.K. primary care physicians now have average earnings of $220,000 (in U.S. dollars), which is more than many specialists earn.
Having a single-payer system helps a great deal in terms of organizing quality-improvement activities.
U.K. primary care physicians increasingly work in multidisciplinary teams, with nurses taking on an increasing proportion of the work. Nurses see patients with minor illnesses and assume responsibility for the routine management of chronic diseases.
Having a single-payer system also means that U.K. primary care physicians hold each patient’s lifelong record, which includes a letter regarding every visit to a specialist. Virtually all primary care physicians use electronic medical records, and laboratories now generally download lab results directly into family practitioners’ computer systems. Again, the government took advantage of having a single-payer system to define common standards to which all suppliers of electronic medical records must adhere.
It is hard to discuss U.K. medical care without mentioning universal coverage. Although it may not be politically achievable in the United States, universal access to care is probably the key factor behind findings that U.K. citizens have better health outcomes than their U.S. counterparts despite having health care costs that are a fraction of those in the United States.
What can we learn from the U.K.? Through a single payer system the U.K. has been able to build a strong primary care infrastructure with teams organized to provide high-quality coordinated care for everyone. They have done this at a fraction of the costs of U.S. health care, while compensating their primary care physicians very generously.
And how is the U.S. going to use this information? We are going to reject it because it is not a uniquely American solution. Instead, we are about to expand our dysfunctional, fragmented, wasteful, costly system of financing health care, simply because it is uniquely American!?
The U.K. system, like that of many other nations, uses their power as a monopsony to purchase much greater value in health care. The United States now wants to use our tax dollars as credits to help us purchase individual plans that do not cooperate but compete. That competition not only results in tremendous administrative waste, it also destroys any prospect of creating an effective monopsony.
So we are going to tax ourselves to provide even more funds to our unique, corporate-model private insurers to allow them to burn up more resources while establishing a barrier to much needed delivery system reform (a barrier because the financing is fragmented).
We do have a very weak monopsony in the form of Medicare. Can’t we learn lessons from Medicare, and then project the improvements that we could make if it were converted into a strong monopsony? Maybe as a single payer that wouldn’t be uniquely American, but couldn’t we pretend it is until we achieve the structural reform that we desperately need?
Senator Takes Initiative on Health Care
By Robert Pear
The New york Times
November 11, 2008
Without waiting for President-elect Barack Obama, Senator Max Baucus, the chairman of the Finance Committee, will unveil a detailed blueprint on Wednesday to guarantee health insurance for all Americans by facilitating sales of private insurance, expanding Medicaid and Medicare, and requiring most employers to provide or pay for health benefits.
… would eventually require everyone to have health insurance coverage, with federal subsidies for those who could not otherwise afford it.
… broadly compatible with Mr. Obama’s campaign promises. But Mr. Baucus’s 35,000-word plan would go further than Mr. Obama’s in one respect, eventually requiring all people — not just children — to have coverage.
… create a nationwide marketplace, a “health insurance exchange,” where people could compare and buy insurance policies. The options would include private insurance policies and a new public plan similar to Medicare.
Insurers could no longer deny coverage to people who had been sick. Congress would also limit insurers’ ability to charge higher premiums because of a person’s age or prior illness.
People would have a duty to obtain coverage when affordable options were available to all through employers or through the insurance exchange. This obligation “would be enforced, possibly through the tax system,” the plan says.
People age 55 to 64 should be able to buy Medicare coverage if they do not have access to a public insurance program or a group health plan.
Medicaid would be available to everyone below the poverty level…
The State Children’s Health Insurance Program would be expanded to cover all uninsured youngsters in families with incomes at or below 250 percent of the poverty level …
He would offer tax credits to small businesses to help them defray the costs of providing health benefits to employees.
To make insurance more affordable for those who buy coverage on their own, Mr. Baucus would offer tax credits to individuals and families with incomes at or below four times the poverty level…
Call to Action, Health Reform 2009
Senator Max Baucus, Chairman, Senate Finance Committee
November 12, 2008
Once affordable, high-quality, and meaningful health insurance options are available to all Americans, it will be each individual’s responsibility to have coverage. This step is necessary to make the entire health care system function properly.
In order to make health coverage affordable for all Americans, refundable tax credits would be available to individuals and families with incomes at or below four times the Federal poverty level. These tax subsidies would be available to individuals and families who purchased coverage through the Health Insurance Exchange. The Independent Health Coverage Council would define what an “affordable” premium is, taking into account the reasonable percent of income to be spent on health care coverage. The premium subsidy would make up the difference between the amount suggested by the Council and the premium amount charged by the plan. The amount of the subsidy could be based on a benchmark that would be equal to a locally adjusted, average premium in the Exchange. This construct would encourage individuals to be prudent purchasers of health care policies.
Each of the key challenges facing our health care system — lack of access to care, the cost of care, and the need for better-quality care — must be addressed in concert. Covering millions of uninsured through a broken health system will be fiscally unsustainable. Attempting to address the inefficiencies plaguing our system and the perverse incentives in the delivery system without covering the uninsured will fail to alleviate the burden of uncompensated care and cost shifting. The time for incremental improvements has passed; health care reform must be comprehensive in scope.
This Call to Action provides a starting point for the upcoming health care reform debate. It is a vision and not a legislative proposal. It is comprehensive but not an exhaustive exploration of every health care issue that can or should be considered.
The next crucial step is a constructive dialog on policy priorities among policymakers, stakeholders, health policy thought leaders and the public. Consensus will be difficult to achieve, but common ground from which to build can and must be found.
Call to Action, Health Reform 2009 (98 pages):
2009 Health Reform Plan
Sen. Max Baucus
November 12, 2008
Sen. Baucus: “Some people suggest the United States should have a single payer system. I disagree. I don’t think a single payer system makes sense in this country.”
As the powerful chairman of the Senate Finance Committee, and as a person passionately dedicated to comprehensive health care reform, we need to listen to what Sen. Max Baucus has to say. “Call to Action, Health Reform 2009″ is his white paper describing serious problems with our health care system, and includes a collection of legislative proposals to address those problems. It is an important report because it does represent what seems to be the prevailing views in Washington, D.C. on the direction for reform.
There are many valuable recommendations in this report. Some of them should be enacted soon as possible as urgent measures to hold us over while we are pressing forward with comprehensive reform. Others can be enacted independently of the comprehensive legislative package. But some represent flawed policy concepts and should never be enacted.
Only one of the major flaws will be touched on here: the mandate for individuals to purchase their own health plans should they not be covered under their employers’ plans.
Under this proposal, a family of four will have to fully fund their own coverage if their income is over $84,800 (four times the poverty level). According to the 2008 Milliman Medical Index, a family of four is already paying an average of $15,600 for health care. That means that this family would be paying over 18 percent of their income for health care. Since this is average, many families would be paying a much higher percentage.
Many in the policy community believe that health care expenditures over 10 percent of income expose individuals or families to the potential of financial hardship. To keep expenditures at 10 percent, a family of four with average medical expenses would require an income over $156,000. Those with above average expenses would require even greater incomes.
Financing health care with private health plans no longer makes sense. We need a single universal risk pool that is funded equitably using progressive tax policies. Sen. Baucus says that he doesn’t think that a single payer system makes sense in this country, but it’s the only system that does.
Bottom line blues
By Karen Caffarini
American Medical News
November 17, 2008
Medical Group Management Assn. members were asked to name the tasks their practices found most challenging.
50.1% Collect from self-pay, high deductible and/or health savings account patients
28.7% Collect from commercial payers
14.5% Collect from Medicare
Medical groups certainly have many challenges, but one of the more important is getting paid. This survey of Medical Group Management Association members provides some important lessons.
Twice as many groups found that collecting from private health insurers was very challenging compared to the challenge of collecting from Medicare. This is not a surprise. Previous studies have confirmed that private insurers do place a significant administrative burden on the health care delivery system. It is difficult to comply with the various rules and procedures of a multitude of private plans, especially when those plans use innovative methods to delay (work the float) or avoid altogether paying claims for legitimate services.
Medicare does contribute to a lesser degree to this burden. Medicare is much more consistent in applying their rules, and they do not engage in behavior designed to avoid paying for services rendered in good faith. But Medicare does add to the complexity by using rules and administrative procedures that differ from those of the private plans. If Medicare were the only payer, the one set of rules designed to pay for legitimate services would greatly simplify the process for the providers of health care.
Much has been written about how out-of-pocket expenses have impaired access to beneficial health care products and services. Although cost sharing has caused some patients to decline services that they perceive to be of marginal value, many have also declined services that they know they should have. Many in the policy community oppose cost sharing because it is a blunt instrument that impairs access, and because it has only a negligible impact on our total health care spending.
This survey reveals another problem with patient cost sharing. Medical groups have found that collecting the patients’ share of the payments has been even more challenging. About twice as many groups find that this is a challenge compared to that of collecting from private insurers, and almost four times as many as that of collecting from Medicare. Cost sharing represents another excessive, inappropriate administrative burden placed on the health care delivery system.
The solution? A single payer national health program. (Yes, this is repetitive, but isn’t anyone listening?)
Health Spending In OECD Countries: Obtaining Value Per Dollar
By Gerard F. Anderson and Bianca K. Frogner
In 2005 the United States continued to spend much more on health care than any other OECD country. In spite of myriad cost containment initiatives during the past thirty-five years, the annual rate of increase in real U.S. health care spending is slightly above the average annual rate of increase in the median OECD country. And the United States experienced the largest increase in the percentage of its GDP dedicated to health care among all OECD countries during 1970-2005. What does the country have to show for this higher level of spending? U.S. life expectancy is lower than would be predicted based on U.S. per capita income. The United States is just as likely to be in the bottom or top half on a series of health indicators. The value per dollar for health care in the United States is further complicated by limitations in access to care; the country is not able to provide universal insurance coverage, despite its high levels of private and public spending per capita. Health reform efforts should focus on improving the value per dollar spent on health care, in addition to other reform goals of extending coverage to all and reducing unnecessary health care spending, so that Americans get the health care system they are already paying for.
The United States spends far more per capita on health care than any other nation, yet we are obtaining very poor value for our spending. How many times have we heard that? And it doesn’t change.
Although much of the discussion on reform has been on how we can get everyone covered, many in the policy community have cautioned that universal coverage is not enough. We need to introduce reforms that will result in a high performance system.
Some have used this to dismiss single payer as being inadequate because it only expands coverage without addressing the serious deficiencies in our health care system. Nothing could be further from the truth. Single payer not only covers everyone, it also creates our own public monopsony, or single purchaser of health care services and products. The single payer system, functioning as our own purchasing agent, finally would be in a position to demand value for our health care investment. We will never receive that from the private insurance industry, even though we have given them over half of a century to try to provide us with value.
We’re paying for a high performance system. It’s high time that we get it.
The Health Care Challenge: Sailing Into a Perfect Storm
By Uwe E. Reinhardt
The New York Times
November 7, 2008
Even if the financial markets had not gone into a tailspin and the economy had not slouched toward a prolonged recession, non-elderly Americans in lower-middle-income families — those with family incomes between $20,000 and $60,000 — would have sailed into a perfect storm brewing in health care. Roughly one-third of American households fall into that category.
Consider a family headed by two income earners each with a gross wage base of $30,000. One might be a taxi driver, and the other a sales clerk in a department store or at, say, Home Depot.
By “gross wage base” is meant here the sum of all of the debits that an employer makes to the account “Payroll Expense” for an employee. It includes the employee’s cash take-home pay, all the income taxes and Social Security taxes and other deductions — for example, the employee’s contributions towards health insurance and pensions — withheld from the employee’s paycheck, as well as the employer’s share of Social Security taxes and the employer’s contributions toward the employee’s health insurance, pension, vacation pay, sick days and so on. It is a sum that supports all taxes paid by or on behalf of the employee and all fringe benefits earned by the employee, whether formally paid by the employer or taken out of the employee’s paycheck.
It follows from this definition of gross wage base that it must support all of the health expenditures made by or on behalf of the family in a given year — that is, the employer’s contribution to premiums for the employee’s health insurance, the employee’s own contribution and the employee’s out-of-pocket health spending.
According to the Milliman Medical Index, this total health spending figure for a typical non-elderly American family of four had reached an average of $15,600 by 2008. It had grown at an average compound growth rate of about 8.6 percent from $11,192 in 2004.
To return to our family with an assumed gross wage base of $60,000: If that gross wage base grew by, say, 3 percent per year over the next decade, to $80,600 by 2017, while total family health spending grew by, say, 8 percent per year over the same time frame, to $33,700 by 2017, then about 41 percent of the family’s gross wage base would be taken up by health care alone, before any deductions for taxes or fringe benefits. If the wage base grew by 4 percent, health spending still would absorb about a third of the family gross wage base.
These numbers, which are realistic, suggest that before long the gross wage base earned by American households will become too small a donkey to carry the load of the family’s spending on health care. It will put before Americans an uncomfortable choice.
Either Americans in the higher income strata must step up to the cashier’s window to help subsidize, with higher income taxes, the health care of the most hard-working members of the lower income classes, or the United States will have to evolve toward a noticeable two-tiered or multi-tiered health care system, with bare-bones, low-tech health care for families in the bottom half of the income distribution and increasingly superior, high-tech health care for families in the upper-income strata.
It is one of the several unpleasant trade-offs facing President-elect Barack Obama.
2008 Milliman Medical Index
The total medical cost in 2008 for a typical family of four is $15,609.
If we are truly serious about establishing an affordable system that would provide all necessary care for everyone, we have to seriously look at the Milliman Medical Index numbers. We are already spending an average of $15,609 for a family of four, with a typical family income of maybe $60,000. Those numbers no longer compute.
If we include everyone, how should we pay this bill? Should we attempt to continue with an administratively wasteful and inequitable system of private health plans with unaffordable premiums? Or should we adopt an efficient and equitable single payer national health program.
Regardless, if we want everyone to have the health care that they should have, higher income individuals must help pay for the care of those with modest incomes, as Uwe Reinhardt explains.
If we used private health plans, we would have to depend on an unstable and administratively burdensome system of sliding scale subsidies to help pay these high premiums (tax credits, vouchers, employer and/or individual indexed mandates, etc.).
If we established a single payer national health program, it would be simple to finance it with an equitable, stable and administratively efficient system of progressive taxes.
$15,000 means a lot to a great many of us and forces us to make choices that we shouldn’t have to make. For the wealthy, the progressive tax that they would pay would not force them into any difficult choices at all. It would merely be reflected in some numbers that would appear in the forms provided by the accountant. The emotional trauma of being exposed to some numbers on a sheet of paper is not a very big price for them to pay.
AMA wants physicians to stake a claim for accurate insurer payments this fall
October 29, 2008
As part of its national campaign to save the health system billions of dollars by improving the accuracy and efficiency of medical claims processing, the American Medical Association (AMA) today announced it has selected November for the first national Heal that Claim Month.
Many physician practices often experience an increase in claim denials from health insurers during the last quarter of the year, making November an ideal time to appeal inappropriately underpaid and denied claims. An estimated 90 percent of claim denials are preventable and 67 percent of denials are recoverable, according to the Advisory Board Company, a Washington-based research organization. Based on those estimates, physicians collectively lose billions of dollars a year of revenue to health insurers.
Heal that Claim Month is part of the AMA’s ongoing Heal the Claims Process campaign, which launched last June with the unveiling of the AMA’s first National Health Insurer Report Card, an objective comparison of the nation’s largest health insurers and their claims processing performance.
2008 National Health Insurer Report Card
Contracted payment rate adherence
On what percentage of records does the payer’s allowed amount equal the contracted payment rate?
Aetna – 70.78%
Anthem – 72.14%
CIGNA – 66.23%
Coventry – 86.74%
Health Net – not reported
Humana – 84.20%
UHC – 61.55%
Medicare – 98.12%
Appeal that Claim
When a physician practice assumes that the reimbursement it receives from health insurers is always accurate, the practice may lose revenue. Even when a practice codes claims correctly, health insurers may still inappropriately deny, delay or significantly reduce payments. By implementing claims auditing processes, you can ensure that health insurers pay your practice appropriately for your physician procedures and services.
Step 1: Determine who will be responsible for auditing health insurer payments
Step 2: Collect recommended health insurer auditing resources
Step 3: Run monthly collection reports
Step 4: Review the health insurer explanation of benefits (EOB)/remittance advice (RA) on each claim identified on the collection report
Step 5: Identify the health insurer basis for the denied, delayed or partially paid claim
Step 6: Gather supporting documentation to corroborate reversal of the health insurer’s determination through the claims appeals process
Step 7: Develop a claim appeal letter and resubmit the claim to the health insurer
Step 8: Maintain a health insurer follow-up log
Step 9: Hold claims processing and review meetings
Step 10: Continue to appeal inappropriately denied, delayed or partially paid claims
Appeal that Claim (65 pages):
The AMA has selected November as the first national Heal that Claim Month. The problems that this addresses must be fairly significant if they are going to declare a special month to address them; so what are these problems?
The U.S. health care financing system is infamous for its profound administrative waste. Some of it is due to the fragmented system of a great multitude of private payers plus public programs with various rules and regulations which increase the complexity of the billing process. Besides the administrative costs of the insurers, which is typically about 18 percent of their premiums (i.e., medical loss ratio of 82 percent), the administrative burden that this system places on physicians and hospitals consumes about another 12 percent of the insurance premiums.
These numbers refer to the routine of claims preparation and processing. But the 2008 National Health Insurer Report Card demonstrates that the nefarious behavior of the private insurers has compounded the complexity by reimbursing at rates significantly below those that were established in contracts with the physicians.
The private insurers are cheating, and they depend on physicians being overwhelmed by this administrative burden to not get caught in their evil deeds. This goes far beyond the complex routine of private insurance administrative processes. This is racketeering.
In the ultimate of ironies, the AMA has responded with an additional, complex, burdensome administrative process to ferret out the private insurers that cheat (which is all of them!), so that they can demand reimbursement at rates that the insurers contractually agreed to. Understanding the element that they are dealing with, the final step recommended is to continue to assert compliance with these contracts agreed to by these recalcitrant crooks.
So what is the AMA recommendation for reforming this horrendous, highly wasteful system? More of it! They want to expand the market of private health plans and use our tax funds to provide credits for purchasing these plans.
The AMA should take a closer look at their own National Health Insurer Report Card. All of the private insurers are crooks, but our own public insurer, Medicare, has over a 98 percent compliance with contracted rates. Just imagine if Medicare were the only payer. The ease and transparency of the process would likely result in 99.99 percent compliance.
Instead of wasting more time and resources on a Heal that Claim Month, we need to proclaim January 2009 as a New and Improved Medicare for All Month!
November 4, 2008
President-elect Barack Obama:
America, we have come so far. We have seen so much. But there’s so much more to do. So tonight let us ask ourselves, if our children should live to see the next century, if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?
This is our chance to answer that call. This is our moment. This is our time: to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American dream and reaffirm that fundamental truth that out of many, we are one; that while we breathe, we hope; and where we are met with cynicism and doubt and those who tell us we can’t, we will respond with that timeless creed that sums up the spirit of a people:
Yes, we can.
Yes we can!
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