Public and private payment of hospital complications

Posted by on Wednesday, Apr 17, 2013

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.

Relationship Between Occurrence of Surgical Complications and Hospital Finances

By Sunil Eappen, MD; Bennett H. Lane, MS; Barry Rosenberg, MD, MBA; Stuart A. Lipsitz, ScD; David Sadoff, BA; Dave Matheson, JD, MBA; William R. Berry, MD, MPA, MPH; Mark Lester, MD, MBA; Atul A. Gawande, MD, MPH
JAMA, April 17, 2013

We found that under private insurance and Medicare, which cover the majority of US patients, the occurrence of surgical complications was associated with higher hospital contribution margins. Depending on payer mix, efforts to reduce surgical complications may result in worsened near-term financial performance.

The financial effects of surgical complications varied considerably by payer type. Complications were associated with more than $30 000 greater contribution margin per privately insured patient ($16 936 vs $55 953) compared with less than $2000 per Medicare patient ($1880 vs $3629). In contrast, for Medicaid and self-pay procedures, those with complications were associated with significantly lower contribution margins than those without complications.

http://jama.jamanetwork.com/article.aspx?articleid=1679400

And…

Making Surgical Complications Pay

By Uwe E. Reinhardt, PhD
Editorial, April 17, 2013, JAMA

In this issue of JAMA, Eappen et al reach the troublesome but not surprising conclusion that hospitals in the United States can profit handsomely from postsurgical complications, even if the hospitals could avoid them.

Under the federal Medicare program, payment for all of the services involved in hospital inpatient treatment has been bundled since the mid-1980s into 1 payment per inpatient case categorized into 1 of 745 distinct diagnosis related groups (DRGs) of cases, which are categorized by adjustments for complications and comorbidities. This approach has made Medicare a pioneer in payment reform that has since been copied worldwide.

According to the authors’ propensity-adjusted estimates, a patient with 1 or more complications results in a $39 017 (95% CI, $20 069-$50 394) greater contribution margin than a patient without complications if the care is reimbursed by a private payer. In contrast, for Medicare, the gain in complication-related contribution margins is only $1749 (95% CI, $976-$3287). This observation contradicts the prevailing perspective that private insurers are axiomatically assumed to be smarter payers than government-run Medicare. However, if, as the authors imply, many of the observed postsurgical complications were avoidable, then perhaps Medicare should more appropriately be considered a smarter payer than private insurers. By having moved to the bundled DRG payments for inpatient care as early as the mid-1980s, Medicare appears to have largely avoided rewarding hospitals financially for avoidable mistakes.

However, the data reported by the authors appear different for the state-run Medicaid programs. Essentially, Medicaid did not even cover the hospital’s variable costs of treating Medicaid patients. Suggesting to the public that fellow citizens receiving Medicaid have adequate health insurance but then not covering even the clinicians’ and hospitals’ variable costs of treating those patients might warrant the label of “government-initiated Medicaid fraud.”

http://jama.jamanetwork.com/article.aspx?articleid=1679384

In reporting this JAMA article on surgical complications and hospital finances, headlines throughout the nation are stating that hospitals profit from surgical errors. The story that should be reported is that private insurers have been richly rewarding hospitals for surgical complications, whereas Medicare has largely avoided paying these rewards.

Specifically, private insurers pay an average of $39,000 more for surgical complications whereas Medicare pays only $1,700 extra. Obviously the government has done a much better job than the private sector in ensuring value in our health care purchasing, not to mention providing incentives to improve performance.

The government isn’t always right, as the Medicaid program demonstrates. Being chronically underfunded, Uwe Reinhardt suggests that the resulting underpayments “might warrant the label of ‘government-initiated Medicaid fraud.'”

Medicare’s prospective payment system using DRGs (745 diagnosis-related groups) has improved payment levels, but it still provides an incentive for the provision of excess care. There is a better way. Hospitals should receive global budgets based on legitimate costs, just as our fire and police departments are budgeted. Periodic re-budgeting will compensate for changing medical and community requirements. Of course, incentives catering to passive investors should be removed by converting all hospitals to nonprofit status.

Global budgeting for hospitals is just one of the features of the single payer model of reform as advocated by Physicians for a National Health Program, all of which together would result in an affordable system of high-quality care for everyone. We should go for it.

Fox News: Obamacare takes food off the table

Posted by on Tuesday, Apr 16, 2013

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.

Nation’s biggest movie theater chain cuts workweek, blaming ObamaCare

By Perry Chiaramonte
FoxNews.com, April 15, 2013

The nation’s largest movie theater chain has cut the hours of thousands of employees, saying in a company memo that ObamaCare requirements are to blame.

Regal Entertainment Group, which operates more than 500 theaters in 38 states, last month rolled back shifts for non-salaried workers to 30 hours per week, putting them under the threshold at which employers are required to provide health insurance. The Nashville-based company said in a letter to managers that the move was a direct result of ObamaCare.

One Regal theater manager told FoxNews.com the move has sparked a wave of resignations from full-time managers who have seen their hours cut by 25 percent or more.

The manager told FoxNews.com ObamaCare has had the unintended consequence of taking food off his table.

“Mandating businesses to offer health care under threat of debilitating fines does not fix a problem, it creates one,” he said. “It fosters a new business culture where 30 hours is now considered the maximum in order to avoid paying the high costs associated with this law.

Regal, which operates cinemas under the names Regal Cinemas, Edwards Theatres and United Artists Theaters and recently purchased Oregon-based Hollywood Theaters for $191 million, did not respond to repeated requests for comment from FoxNews.com. The publicly-traded company’s stock has risen nearly 30 percent over the last year.

http://www.foxnews.com/us/2013/04/15/nation-biggest-movie-theater-chain-…

It is no surprise that Fox News would frame the 30 hour work week requirement under the Affordable Care Act as “ObamaCare has had the unintended consequence of taking food off (the) table.”

Regal Entertainment Group is only one of many employers who have decided to limit part time workers to 30 hours to avoid the requirement of providing them with health insurance. That does create financial hardships for lower-income employees. They must either find more part time work, in which case they still wouldn’t be eligible for employer-sponsored health plans, or they must find a new, full-time job at a time in which unemployment rates are quite high.

Fox’s framing indicates that the problem is the requirement in “ObamaCare” for larger employers to provide health insurance for their employees, or face a penalty for not doing so. Fox is right when you consider that legislation designed to expand health care coverage instead has the result of causing low-income workers to lose one-fourth of their work week hours, and still remain uninsured. But is this really the prime issue?

The problem that needs to be framed properly is the tens of millions in our nation who have no insurance. How do we cover those people? Obviously a single payer national health program financed equitably through progressive taxes would solve the problem, without taking food off of anyone’s table.

Instead, if we look only at the coverage provisions of the Affordable Care Act, we see an administratively complex, wasteful, fragmented system of a multitude of varying eligibilities and coverage requirements that can never ensure that everyone has stable coverage indefinitely. In fact, it is estimated that after the provisions are in full force, there will still be 30 million people without any coverage at all (CBO). What is worse, we will be paying much more than we would have if we were instead to adopt a single payer, improved Medicare for all.

Until we start doing a better job of framing the problems, we are not going to come up with the right solutions.

U.S. cancer drug policy is scandalous

Posted by on Monday, Apr 15, 2013

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.

Compared To US Practice, Evidence-Based Reviews In Europe Appear To Lead To Lower Prices For Some Drugs

By Joshua Cohen, Ashley Malins and Zainab Shahpurwala
Health Affairs, April 2013

Abstract

In Europe drug reimbursement decisions often weigh how new drugs perform relative to those already on the market and how cost-effective they are relative to certain metrics. In the United States such comparative-effectiveness and cost-effectiveness evidence is rarely considered. Which approach allows patients greater access to drugs? In 2000–11 forty-one oncology drugs were approved for use in the United States and thirty-one were approved in Europe. We compared patients’ access to the twenty-nine cancer drugs introduced into the health care systems of the United States and four European countries (England and Wales, France, Germany, and the Netherlands). Relative to the approach used in the US Medicare program in particular, the European evidence-based approach appears to have led to reduced prices for those drugs deemed worthy of approval and reimbursement. The result is improved affordability for payers and increased access for patients to those drugs that were available. The United States lacks a systematic approach to assessing such evidence in the coverage decision-making process, which may prove inadequate for controlling costs, improving outcomes, and reducing inequities in access to care.

From the Discussion

The current method in the US Medicare program of seemingly “muddling through elegantly” appears incapable of striking a fiscally sustainable balance between cost and access, particularly with respect to cancer drugs. Spending on cancer treatments continues to grow at double-digit rates annually, which in turn has led to much higher cost sharing for patients. This has an impact on the kind of treatment that Medicare beneficiaries get because patients with better insurance, or those who are able to pay higher out-of-pocket costs, have better access to care.

Conclusion

Medicare policy makers might do well to draw lessons cautiously from the experiences of health care systems that have integrated clinical and economic evaluations into decision making. Should the US Medicare program decide to move toward more systematic use of comparative effectiveness findings, there are formidable challenges inherent in the US system that will need to be addressed.

One challenge is payer fragmentation. The diffuse system of payers would probably make the uptake of comparative effectiveness evidence segmented and uneven.

A second challenge is the view of many oncologists that resources are unlimited. In a US-based survey conducted in 2009, nearly 80 percent of oncologist respondents said that patients should have access to “effective” care regardless of costs. An implied cost-effectiveness threshold was calculated at $300,000 per quality-adjusted life-year. Needless to say, having Medicare pay for every cancer treatment that cost up to that amount would not be feasible in the long run.

There is room in the US Medicare program for more systematic and coordinated methods and a process for developing and implementing evidence relative to cost and cost-effectiveness. The immediate goal should be to encourage a more evidence-based process of decision making by closing the gap between what providers, payers, and policy makers know in pharmaceutical care and what they do.

http://content.healthaffairs.org/content/32/4/762.abstract

Cancer drug policies in the United States, compared to other nations, result in higher drug costs, intolerable out-of-pocket costs, and inequitable access to the drugs – preventing many people from receiving comparatively effective drugs, while enabling others to have very expensive drugs of little or no value, wasting our healthcare dollars.

We can do far better in establishing drug policies that are evidence-based and cost-effective based on quality-adjusted life-years. First we need to elect leaders who care more about us, as patients, than they care about kowtowing to the pharmaceutical giants and other special interests.

When it comes down to it, it really is our fault when we fall for the government-can’t-do-anything-right malarkey, and elect those who disseminate this false notion.

Stanford Business Professor Jeffrey Pfeffer on Administrative Waste

Posted by on Friday, Apr 12, 2013

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 Reason Health Care Is So Expensive: Insurance Companies

By Jeffrey Pfeffer
Bloomberg Businessweek, April 10, 2013

As Congressional budget battles heat up—or roll along, depending on your time perspective—the cost of health care in America receives a lot of attention. Unfortunately most of the discussion is largely off the mark about where the preventable, unnecessary costs really are.

The thing that few people talk about, and that no serious policy proposal attempts to fix—the arrangement that accounts for much of the difference between health spending in the U.S. and other places—is the enormous administrative overhead costs that come from lodging health-care reimbursement in the hands of insurance companies that have no incentive to perform their role efficiently as payment intermediaries.

More than 20 years ago, two Harvard professors published an article in the prestigious New England Journal of Medicine showing that health-care administration cost somewhere between 19 percent and 24 percent of total spending on health care and that this administrative burden helped explain why health care costs so much in the U.S. compared, for instance, with Canada or the United Kingdom. An update of that analysis more than a decade later, after the diffusion of managed care and the widespread adoption of computerization, found that administration constituted some 30 percent of U.S. health-care costs and that the share of the health-care labor force comprising administrative (as opposed to care delivery) workers had grown 50 percent to constitute more than one of every four health-sector employees.

What remains missing even in the discussion of the enormous administrative burden is not just how large, both in absolute dollars and as a percentage of health costs, it is, but also how few incentives there are for insurance companies to stop wasting their and everyone else’s time.

Unless and until we as a society pay attention to the enormous costs and the time wasted by the current administrative arrangements, we will continue to pay much too much for health care.

(Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at Stanford University’s Graduate School of Business.)

http://www.businessweek.com/articles/2013-04-10/the-reason-health-care-i…

Individuals who understand the single payer model will find nothing new here from a policy perspective. What is important about this article is that it is a precise statement about administrative waste, coming from a professor at Stanford University’s Graduate School of Business, and published in Bloomberg Businessweek.

There is hope that others may finally understand how we can control spending while improving value in health care, and then join together to act on it. The Harvard/CUNY professors cited by Pfeffer – PNHP’s David Himmelstein and Steffie Woolhandler – stand ready to provide guidance on the reform that we so desperately need.

Online brokers want a cut of the action

Posted by on Wednesday, Apr 10, 2013

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.

In Obamacare, online insurance brokers see potential windfall

By Sarah Kliff
The Washington Post, April 8, 2013

Online insurance brokers see a potential windfall when the federal government doles out billions in subsidies to buy help Americans buy health insurance. And they are asking state governments to help them score it.

The online brokers want millions of new insurance customers to be able to use those subsidies to buy health coverage through their Web sites, rather than shop exclusively on the new exchanges being set up by states and the federal government.

“We have the expertise and already generate a tremendous amount of volume of sales,” says Gary Lauer, CEO of EHealth, the country’s largest online insurance broker. “The exchanges are spending a lot of money to enroll people, which is all fine, but we could do the same thing at no charge to the federal government.”

EHealth CEO Lauer does acknowledge that the site has financial motivations when it sells a health insurance plan. But he also contends that the federal regulations are strong enough to ensure that consumers get the same experience, no matter where they purchase coverage.

“We’re a profit-making company,” he said. “Our revenue source is the commission paid to brokers. It’s not an additional charge, it’s built into the premium, the same premium on the exchange. The only difference is the carrier will pay us a commission.”

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/08/in-obamacare-…

As Gary Lauer, CEO of EHealth states, “We’re a profit-making company.” Yes, they are a company that draws dollars (over 150 million of them in 2012) away from our heath care funds, and yet provides absolutely no services or products directly related to actual health care.

It is particularly irritating when he states that his firm can provide health insurance brokerage services for the exchanges being established under the Affordable Care Act “at no charge to the federal government,” because the charges are “built into the premium.”

Who pays those charges? The insurance companies certainly do not deduct these expenses directly from their profits. They weren’t born yesterday. As Lauer states, the charges are built into the premiums. Thus they are paid jointly by plan enrollees and by the federal government in the form of premium subsidies.

The expenses of these brokerages or of the state insurance exchanges wouldn’t even exist if we had one universal program instead of a multitude of private insurers, which in themselves generate tremendous administrative waste while imposing greater administrative burdens and costs on the actual providers of health care.

By insurance industry standards, maybe Gary Lauer’s compensation is modest ($1.67 million in 2012), but if he is providing us nothing of value, then any amount is too much.

Haven’t we had enough? Isn’t it time for an improved Medicare that covers everyone? Then Gary Lauer would have to get a real job.

Other nations’ lessons on cost containment

Posted by on Tuesday, Apr 9, 2013

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

Health Care Cost Containment Strategies Used In Four Other High-Income Countries Hold Lessons For The United States

By Mark Stabile, Sarah Thomson, Sara Allin, Seán Boyle, Reinhard Busse, Karine Chevreul, Greg Marchildon and Elias Mossialos
Health Affairs, April 2013

The past decade has been one of relative affluence for the countries we reviewed (Canada, England, France, and Germany), particularly when compared to the budget scenarios they face over the next few years. It may not be surprising, therefore, that health care costs grew relatively quickly during 2000–10 and that there is limited evidence of the success of recent cost containment strategies.

That said, the four countries discussed here continue to make use of public budgeting and price-setting mechanisms to contain costs in the health care sector, as they have in previous decades. The greater use of public budgeting and price-setting mechanisms, along with the much higher public shares of health care financing in these countries, remain the greatest contrasts between them and the United States.

Our review also revealed that in 2000–10 the four European countries moved away from strategies that simply shifted costs to households through across-the-board budget cuts, rationing of services, and increases in user charges. We found a growing focus on the cost-benefit ratio through the greater use of health technology assessment, activity-based funding with centrally set prices, and value-based approaches to paying for drugs. Although these policies may not drive down costs, they are likely to produce more efficient use of health care resources in the future.

Our review suggests that the four countries have had some success in using a variety of public policy tools and that the United States may wish to emulate their policies to reduce the growth rate in drug spending. The policies include relatively simple levers such as large-scale negotiations with pharmaceutical manufacturers and sellers as well as budget caps. Our review also suggests that the United States may wish to use more challenging tools, such as cost-effectiveness analysis that sets prices for new technologies based on the technologies’ relative value and value-based user charges.

It seems unlikely, however, that the US system will move toward the types of volume and price controls used in the countries examined here. Thus, although the United States is also moving toward policies aimed at changing the cost-benefit ratio and promoting economic efficiency, it is likely that the large gap in health care spending between the four countries in our study and the United States will remain.

http://content.healthaffairs.org/content/32/4/643.abstract?etoc

Cost containment strategies in the four nations studied – Canada, England, France, and Germany – depend largely on the government, especially through public budgeting and price setting. The authors point out that it is unlikely that the United States will move toward such policies, thus the large gap between our health care spending and that of these four countries will remain.

Also of note is the fact that other more recent cost containment innovations in these four countries have shown only limited evidence of success. It is still the government engagement that perpetuates their success.

Of great significance for the United States is the fact that these nations have moved away from strategies that simply shifted costs to households. Our emphasis on consumer-directed approaches that increase cost sharing through high deductibles, coinsurance, more restrictive provider networks, and our government efforts to reduce “entitlement” spending, are all moving in the wrong direction. Costs can be controlled without impairing access by erecting financial barriers.

The lesson is simple. We need beneficial public policies, designed to serve patients, to displace private sector policies (enabled by government complicity) that currently prioritize the interests of business stakeholders over those of patients.

Dependent verification programs. What a crime!

Posted by on Monday, Apr 8, 2013

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.

Fraud in the Workplace? Evidence from a Dependent Verification Program

By Michael Geruso, Harvey S. Rosen
The National Bureau of Economic Research (NBER), April 2013

Many employers have implemented dependent verification (DV) programs, which aim to reduce employee benefits costs by ensuring that ineligible persons are not enrolled in their health plan as dependents. We evaluate a DV program using a panel of health plan enrollment data from a large, single-site employer. We find that dependents were 2.7 percentage points less likely to be reenrolled in the year that DV was introduced, indicating that this fraction of dependents was ineligibly enrolled prior to the program’s introduction. We show that these dependents were actually ineligible, rather than merely discouraged from re-enrollment by compliance costs.

http://papers.nber.org/papers/w18947?utm_campaign=ntw&utm_medium=email&u…

And…

Help Prevent Health Plan Enrollment Fraud

Blue Cross Blue Shield of Hawaii
Hawaii Medical Service Association

Health plan enrollment fraud occurs when a person or company intentionally misrepresents facts to improperly receive health care products and services. This includes adding a person who is not eligible for health plan coverage as a dependent on a health plan.

It is a criminal offense under state and federal laws to fraudulently enroll someone onto a health plan. Enrolling ineligible dependents can lead to increased health care costs for employers. Penalties include fines, immediate loss of health plan coverage, or imprisonment.

http://www.hmsa.com/community/awareness/fraud/employers.aspx

And…

Dependent Eligibility Verification Project

CalPERS

The initial phase of the DEV project includes an amnesty period that runs from now through June 30, 2013. If you have one or more dependents on your health plan, you will receive a letter with further details on the DEV project, including dependent eligibility criteria and an Amnesty Disenrollment Document. During the amnesty period, we encourage you to carefully review the definition on an eligible dependent and identify on the Amnesty Disenrollment Document all ineligible dependents who should be removed from your health plan.

http://www.calpers.ca.gov/index.jsp?bc=/member/health/dev.xml&pst=ACT&pc…

There are many circumstances in which a de facto dependent is not technically a dependent when it comes to enrollment in a health plan. Enrolling such individuals is considered a criminal offense. Many employers have instituted dependent verification programs in order to ferret out this fraud. Is this really what we want to be doing?

It seems ironic that at a time in our history when theoretically we are attempting to enroll as many individuals as possible in health insurance programs, we are pushing a program designed to disenroll individuals currently covered as dependents when they are not technically entitled to such coverage.

We are expanding yet more administrative excesses which are resulting in the opposite of our policy goals. That is, we are increasing the numbers of uninsured through application of these dependent verification programs.

Wouldn’t it be far simpler to have a system that automatically covers everyone, regardless of dependency status or any other criteria? Instead of advancing policies that make health care coverage a crime, shouldn’t we make health care a right for all?

TRICARE is coming up short for our military and their families

Posted by on Thursday, Apr 4, 2013

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.

TRICARE Multiyear Surveys Indicate Problems with Access to Care for Nonenrolled Beneficiaries

Government Accountability Office (GAO), April 2013

In fiscal year 2012, the Department of Defense (DOD) offered health care services, including mental health care services, to about 9.7 million eligible beneficiaries in the United States and abroad through TRICARE, DOD’s regionally structured health care program.

The number and type of civilian providers available to serve TRICARE beneficiaries can vary depending on a beneficiary’s location and choice of coverage among TRICARE’s three basic plans—TRICARE Prime, TRICARE Standard, and TRICARE Extra. We use the term “nonenrolled beneficiaries” for beneficiaries who are not enrolled in TRICARE Prime and who use the TRICARE Standard or Extra options, or TRICARE Reserve Select (TRS).

Nearly one in three nonenrolled beneficiaries experienced problems accessing care, and they rated their satisfaction with care generally lower than Medicare fee-for-service beneficiaries.

Nearly one in three nonenrolled beneficiaries experienced problems finding civilian providers who would accept TRICARE. Those in PSAs (Prime Service Areas with TRICARE Provider networks) experience more problems finding primary and specialty care than those in non-PSAs.

Civilian providers’ acceptance of new TRICARE patients has decreased over time. Mental health providers report lower awareness and acceptance than other provider types.

http://www.gao.gov/assets/660/653487.pdf

TRICARE is a health care service program for active duty military, their dependents, and military retirees – a program that is particularly important for those who cannot use military health facilities nor the VA system. The results of this survey should make us ashamed of how we treat the military and their dependents.

Straight to the point, if we had a single, comprehensive health care system that served everyone and included all health care professionals and institutions, this report would not have been necessary. We really do need an improved Medicare that includes everyone.

The Intermountain scandal that isn’t

Posted by on Wednesday, Apr 3, 2013

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.

Intermountain Healthcare pays $25.5M to settle violations of federal law

By David Wells
Fox 13 News, Salt Lake City, April 3, 2013

Utah’s largest health system self-disclosed violations of federal health care laws and agreed to pay the United States $25.5 million to settle its claims, according to a statement from the United States Department of Justice.

“These issues were primarily technical in nature and involved things such as lack of proper paperwork involving leases of physician offices and service agreements,” said a statement on Intermountain Healthcare’s website.

The DOJ statement said Intermountain Healthcare admitted to violating the Stark Statute by employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain Healthcare.

“People should expect that hospitals and doctors care more for their patients than their bottom line profits,” said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. “So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations.  We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice.”

This link includes statements from Intermountain Healthcare and from the United States Department of Justice:
http://fox13now.com/2013/04/03/intermountain-health-care-pays-25-5-m-to-…

The Settlement Agreement:
http://www.modernhealthcare.com/assets/pdf/CH8778043.PDF

Most of us have grown weary of the scandalous behavior of our corporate health care system, and so we are no longer surprised by the by headlines notifying us of multimillion dollar penalties assessed against these nefarious entities. In fact we say, “Good riddance.” However, in this instance involving Intermountain Healthcare, it is almost refreshing to see that the story behind the headlines can renew our faith in our health care system.

Intermountain Healthcare is a large, non-profit, highly ethical, integrated health care system in Utah. It has an excellent reputation for providing efficient, high quality care, and for being innovators in improving the delivery of health care. That is why it was surprising to see their name in the headlines reporting yet another scandal.

But a scandal it isn’t. Intermountain Healthcare violated provisions of the Stark statute designed to prevent referral arrangements that could provide perverse incentives for personal profit in health care. The Intermountain violations were technical, involving a flawed formula for physician compensation, and involving improperly documented rental arrangements for use of medical space.

Intermountain discovered these violations on their own. Instead of trying to cover them up, they reported them to the U.S. Attorney for Utah. Considering the total lack of criminal intent, the technical nature of the violations, the lack of harm done, and the self-disclosure of the errors, it can be argued that the $25.5 million penalty was excessive.

What does this have to do with single payer reform? Simply that there is a world of difference between a health care system structured on a business model with a primary mission to make money, and a health care system structured on a service model designed to take care of patients. Intermountain functions as the latter. It is a non-profit, integrated health care system that would be an ideal component of a single payer national health program.

Technical violations will always be with us, but they are understandable errors when the goal is to take care of patients, but not when the goal is to deliberately siphon off health care dollars for personal gain.

The Salt Lake Tribune – If ACA fails, single payer is next

Posted by on Monday, Apr 1, 2013

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.

Last chance: If ACA fails, single payer is next

Editorial Board
The Salt Lake Tribune, March 30, 2012

The Patient Protection and Affordable Care Act should be seen as what it is: One last opportunity for the private health insurance market to prove that it can offer a service that covers the millions of Americans who were previously left out, at a cost that we — as individuals, employers and taxpayers — can afford.

If that is a goal beyond the grasp of the existing system, then it needs to be finally swept aside in favor of something that will meet those needs.

But this is, or should be, the private health insurance industry’s last chance. If Obamacare fails, a return to the cold-hearted free market is not a realistic or humane choice.

An entity with the chops to bargain down the actual cost of care is necessary. At the very least, a robust public option, an idea President Obama bargained away in the creation of the ACA, must be provided. Better still would be a single-payer plan — Medicare for all.

http://www.sltrib.com/sltrib/opinion/56079343-82/care-health-insurance-c…

It is already clear that the structure of the private health insurance market that is perpetuated by the Affordable Care Act will continue to fail us – providing us only care that is too expensive and leaves too many out. Not even a competing “robust public option” can alter that. Now is the time to enact a single payer plan – an improved Medicare for all.

Let’s hope that the editorial board of The Salt Lake Tribune – and all other influential observers of the health care scene – will recognize sooner rather than later that the private insurance industry has failed us once again and has to go.

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Physicians for a National Health Program's blog serves to facilitate communication among physicians and the public. The views presented on this blog are those of the individual authors and do not necessarily represent the views of PNHP.

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