Use H.R. 676 to unify the reform movement

Posted by on Wednesday, Feb 4, 2015

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.

Doctors group hails reintroduction of Medicare-for-all bill

Physicians for a National Health Program, February 4, 2015

Single-payer health program would cover all 42 million uninsured, upgrade everyone’s benefits and save $400 billion annually on bureaucracy, physicians say

A national physicians group today hailed the reintroduction of a federal bill that would upgrade the Medicare program and swiftly expand it to cover the entire population.

The “Expanded and Improved Medicare for All Act,” H.R. 676, introduced last night by Rep. John Conyers Jr., D-Mich., with 44 other House members, would replace today’s welter of private health insurance companies with a single, streamlined public agency that would pay all medical claims, much like Medicare works for seniors today.

Proponents say a Medicare-for-all system, also known as a single-payer system, would vastly simplify how the nation pays for care, improve patient health, restore free choice of physician, eliminate copays and deductibles, and yield substantial savings for individuals, families and the national economy.

“The global evidence is very clear: single-payer financing systems are the most equitable and cost-effective way to assure that everyone, without exception, gets high-quality care,” said Dr. Robert Zarr, president of Physicians for a National Health Program, a nonprofit research and educational group of 19,000 doctors nationwide.

“Medicare is a good model to build on, and what better way to observe Medicare’s 50th anniversary year than to improve and extend the program and its benefits to people of all ages?”

Zarr, a Washington, D.C.-based pediatrician, continued: “An expanded and improved Medicare-for-All program would assure truly universal coverage, cover all necessary services, and knock down the growing financial barriers to care – high premiums, co-pays, deductibles and coinsurance – that our nation’s patients and their families are increasingly running up against, often with calamitous results.

“Such a plan would save over $400 billion a year currently wasted on private-insurance-related bureaucracy, paperwork and marketing. That’s enough money to provide first-dollar coverage for everyone in the country – without increasing U.S. health spending by a single penny.…


H.R.676 – To provide for comprehensive health insurance coverage for all United States residents, improved health care delivery, and for other purposes.

114th Congress

Introduced:  02/03/2015

Sponsor:  Rep. Conyers, John, Jr. [D-MI-13] (Introduced 02/03/2015)

Cosponsors:  44

Committees:  House – Energy and Commerce; Natural Resources; Ways and Means

Latest Action:  02/03/2015 Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last night, Rep. John Conyers reintroduced in the 114th Congress H.R. 676, his single payer bill based on an expanded and improved Medicare that would cover everyone. Although the implementation of the Affordable Care Act has diverted attention from this model of reform that actually would provide affordable care for everyone, nevertheless, its reintroduction provides us with actual legislation that we can use in our advocacy for a more efficient and effective health care program for the nation.

Those who are attempting to establish state-level single payer systems will find this legislation to be essential since it addresses the federal barriers that prevent states from establishing a bona fide single payer system. Vermont’s experience showed us that they had to abandon the single payer concept early on because of these barriers, though they continue to try to move forward with incremental measures that can never lead to single payer, that is without enabling federal legislation.

H.R. 676 should be used by all supporters of health care justice as an advocacy piece to further educate the public at large on the clear moral imperative of the single payer model. That includes those working on state single payer systems and those busy helping to implement the Affordable Care Act. No matter how busy you are, you still need to use every opportunity to advocate for a system that takes care of the health care needs of the entire nation. The Affordable Care Act does not do that.

H.R. 676 has been posted to the website (link above), and within the next few days, the entire text of the bill will be added. Right now you can see the list of the 44 cosponsors and then use that list to encourage other members of Congress to become cosponsors as well. The Republicans concur that the Affordable Care Act needs to be replaced with a program that actually is affordable and portable. A minority of Republican and Independent voters understand that an improved Medicare for everyone would be an ideal solution. As we craft our messages, we must keep Republicans and Independents in mind. We care about their health as well.

At any rate, make H.R. 676 the central piece of your advocacy for health care justice for all. The nation’s health depends on it.

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President Obama’s consumer-directed recommendations for Medicare

Posted by on Tuesday, Feb 3, 2015

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.

Fiscal Year 2016 Budget of the U.S. Government
Office of Management and Budget

Reducing Cost Growth by Encouraging Beneficiaries to Seek High-Value Services.

The Budget includes structural changes that will encourage Medicare beneficiaries to seek high-value health care services. To help improve the financial stability of the Medicare program, the Budget reduces the Federal subsidy of Medicare costs for those beneficiaries who need that subsidy the least. The Budget includes several modifications for new beneficiaries starting in 2019, such as a modified Part B deductible and a modest copayment for certain home health episodes. Research indicates that beneficiaries with Medigap plans that provide first, or near-first-dollar coverage have less incentive to consider the costs of health care services, thus raising Medicare costs and Part B premiums for all beneficiaries. The Budget applies a premium surcharge for new beneficiaries beginning in 2019 if they choose such Medigap coverage. Together, these proposals would save approximately $84 billion over 10 years.…

Using the rhetoric of encouraging Medicare beneficiaries “to seek high-value health care services,” President Obama is recommending in his FY 2016 Budget the application of more consumer-directed, moral hazard suppressing, skin-in-the-game measures that shift more costs away from the government and onto Medicare beneficiaries. Although the recommended measures are not dramatic, they are steps that move away from a position of egalitarian social solidarity (a progressive view), and toward a position of encouraging greater personal responsibility for health care (a conservative view).

Thus, as negotiations begin on the federal budget, instead of taking a position of strongly supporting beneficial progressive policies for Medicare, President Obama has adopted policies supported by conservatives as his opening position in the negotiations. Any union negotiator will tell you that you do not give up anything before you go to the table. Yet President Obama is not only declining to ask for any progressive improvements to Medicare, he is also giving the conservatives policies that they support. That leaves him in the position of starting negotiations only after having moved to the right, into their camp, and then attempting to achieve compromises with the much more highly polarized Republicans who have moved to the extreme far right.

So what specifically is wrong with his relatively benign-looking recommendations?

He would reduce “the Federal subsidy of Medicare costs for those beneficiaries who need that subsidy the least.” That is, he will charge much larger Medicare premiums for those with higher incomes. That will diminish the support of the plutocrats who have the political power to instead drive us closer to the premium support model of private insurance plans advocated for by conservatives such as Paul Ryan (the new Chair of House Ways and Means). Funding for Medicare should be completely separated from the benefits. Instead it should be fully funded through progressive taxes, ensuring full fixed benefits for everyone, with equitable funding based on ability to pay.

He supports “a modified Part B deductible.” That modification, of course, is a higher deductible for Part B (physician) services. It is true that higher deductibles do reduce spending modestly by causing patients to forgo beneficial health care services. But erecting financial barriers to care is exactly the opposite of what we should be doing with a program that should be designed to remove financial barriers, thereby encouraging people to get the care that they should have. Medicare should be a prepaid system for everyone.

He would initiate “a modest copayment for certain home health episodes.” Home health care is a more economical and humane way of providing health care services for many people with advanced illnesses. Individuals in those circumstances may not have enough funds for cost sharing. Introducing copays is a definitive first step in shifting ever more of the costs of home care to patients, and certainly more steps would follow. Bad move.

Conservatives have long targeted Medigap plans because they allegedly create the moral hazard of patients using more health care simply because it is free at the point of care – deductibles and coinsurance being paid by the plan. This theory is based on a misinterpretation of the results of the RAND HIE. Hypochondriasis is very rare. People always have a legitimate medical reason for going to the doctor.

However, rather than requiring a minimum amount of cost sharing in the Medigap plans, President Obama’s recommendation is to apply a surcharge to the Medigap premiums. Medigap plans are already one of the worst values in health insurance, and jacking the premiums up even more with surcharges is certainly a move in the wrong direction. Perhaps this is an indirect way of intimidating people into forgoing Medigap plans in order to expose them to more out-of-pocket costs, or perhaps to stimulate a market for more spartan Medigap plans with no first dollar coverage. Regardless, it is another push toward the perverse method of reducing spending by making appropriate health care less affordable.

If nothing else, this shows that the conservative, consumer-directed advocates have won the rhetorical debate. It astounds me how many people across the political spectrum have bought the meme that paying medical expenses out-of-pocket gives people pride in exercising their personal responsibility.

Are people in other countries with lower costs and first-dollar coverage ashamed that they abandoned personal responsibility by walking out of their health care facility without making an out-of-pocket payment? If they are ashamed, they have been very effective in hiding it behind the false pride they show in their egalitarianism. Or, could it be? Are they actually egalitarian? Can we try that?

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Blue Cross of California sifts markets

Posted by on Monday, Feb 2, 2015

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 Choices Dwindle In Rural California As Blue Shield Pulls Back

By Pauline Bartolone, Capital Public Radio
Kaiser Health News, January 30, 2015

Blue Shield of California used to sell policies to individuals in every county in the state, according to the Department of Managed Health Care, one of California’s two teams of health insurance regulators. But by 2014’s open enrollment period, Blue Shield had pulled out of 250 zip codes throughout the state, including four entire counties: Alpine, Monterey, Sutter, and Yuba.

The gaps are particularly felt in the top third of the state, where thousands of residents now have only one choice of insurer if they want to buy a health plan on the exchange.

Blue Shield of California declined an interview with NPR. But in a written statement, the company reported that it’s not selling in certain areas of California because it could not find enough health providers willing to accept a level of payment that would keep premiums low. According to the statement, the company also is not selling in areas where there is no contracted hospital within 15 miles.

Because of the broad changes in the individual health insurance market under the Affordable Care Act, “there is no accurate apples-to-apples comparison between the individual market in 2013 and the individual market in 2014 and beyond,” Blue Shield said, adding that “coverage areas were designed to meet regulatory guidance and with patient access to care in mind.”

Blue Shield of California is acting within the law, says Shana Alex Charles, director of health insurance studies at UCLA’s Center for Health Policy Research. She says Blue Shield could have offered to pay health care providers more. But, at the same time, she adds, insurance companies can’t be forced to operate at a loss.

“There’s no public charge that says they have to be in those zip codes,” she says. “If they determine that it’s not within their company’s best interests to remain there and sell their product there, then they won’t be there.”…

Blue Shield of California has pulled out of 250 California zip codes in the Covered California program (California’s insurance exchange under the Affordable Care Act), citing inability to negotiate low prices with the local health care providers.

Nonprofit Blue Shield of California and for-profit Anthem Blue Cross were the only Covered California insurers in many zip codes in the state. It is ironic that the for-profit Blues plan – Anthem Blue Cross – has continued to serve areas where coverage is more difficult, whereas the nonprofit Blues plan – Blue Shield – has pulled out. So much for the theory that nonprofit Blues plans are public service models while for-profit Blues are primarily profit-making business models. They have become the same animal, with the for-profits leading the way.

Blue Shield blames regulatory guidelines requiring that patients have access to care. By refusing to contract with the local providers, patients would have been required to travel long distances for care – a violation of the Affordable Care Act.

Some might blame Blue Shield for demanding rates that were too low to adequately cover costs, whereas others might blame the providers for demanding rates that provided excessive profits, but the primary blame does not lie with either party. It is the model that uses private insurers as financial intermediaries that is defective and should be blamed.

Contrast that with Medicare, which is a public insurer that administers the rates to be paid. Medicare is not setting rates to ensure that the government is profiting off of the program. Rather it is setting rates to be sure that the health care delivery system is adequately funded so that it will be there when patients need it.

It is true that Medicare rates are not always optimal, but that is because it is only one payer in a dysfunctional, multi-payer system which makes rate setting much more difficult. If Medicare were the only payer for the entire nation, it could set rates with much greater precision, paying legitimate costs and fair margins.

Although the Blues had their day as health insurers serving in the public interest, those days are long gone. It is time for a single payer, improved Medicare for all.

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Pew: The Precarious State of Family Balance Sheets

Posted by on Friday, Jan 30, 2015

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 Precarious State of Family Balance Sheets

The Pew Charitable Trusts, January 29, 2015

  • The majority of American households (55 percent) are savings-limited, meaning they can replace less than one month of their income through liquid savings.
  • Most families face financial strain across all balance sheet elements: income, expenditures, and wealth. In addition to being savings-limited, households face other financial challenges; just under half of families are “income-constrained,” reporting household spending greater than or equal to their income; and 8 percent are “debt-challenged,” with payments equal to 41 percent or more of their gross monthly income. Fully 70 percent of households face at least one of these problems, with many confronting two or even all three.


Previous Pew research has shown that family finances are a critical component of future economic mobility, not just for individuals but also for their children. However many families, even those with relatively high incomes, are walking a financial tightrope, and have little, if any, cushion to absorb an unexpected financial emergency. What’s more, this is not a new phenomenon. While the most recent recession shined a spotlight on the fragility of family balance sheets, the downturn alone did not cause households’ financial insecurity; many of the indicators explored here have been stable for the past 30 years.

No single solution exists for stabilizing family balance sheets. Putting families on solid financial footing and the road to upward economic mobility will require a selection of thoughtful and strategic policy interventions. As policymakers strive to increase opportunity for all Americans, policies and programs that support asset accumulation will be key. These efforts will also require careful design and rigorous evaluation to ensure that they are effective in helping families improve all elements of their balance sheets.…

Far too many American families simply do not have the income or assets to meet unexpected expenses such as health care, especially now that insurers are shifting more of the costs to patients. This Pew report recommends “thoughtful and strategic policy interventions,” carefully designed and rigorously evaluated to be sure they are effective. We already have a carefully designed and rigorously evaluated proposal for health care – a single payer national health program, aka an improved and expanded Medicare for all. We merely have to enact and implement it.

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A Canadian physician responds to Gov. Pence’s Medicaid program

Posted by on Thursday, Jan 29, 2015

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.

Yesterday’s Quote of the Day (“Government supports rotten teeth for patients in poverty”) discussed the Medicaid waivers obtained by Indiana Governor Mike Pence. Today’s post continues on that topic.

The Goal Was Simplicity; Instead, There’s a Many-Headed Medicaid

By Margot Sanger-Katz
The New York Times, January 28, 2015

Indiana has become the latest Republican-led state to expand its Medicaid program as part of the Affordable Care Act. As has become the pattern, it was done with a series of waivers from particular federal requirements.

When the state’s governor, Mike Pence, announced the news on Tuesday, the focus of his speech was less about his state’s decision to embrace this part of Obamacare than about the special concessions he’d been able to extract from the Obama administration.

Newly eligible Medicaid recipients will have to pay monthly premiums or be locked out of certain services, he announced, and higher-earning beneficiaries who fail to pay will be shut out of the program for six months. People who use the emergency room frequently will need to pay higher co-payments than the federal government has ever allowed.

The provisions, designed to encourage residents to take more responsibility for the costs of their health care, break new ground in what the Obama administration will allow in exchange for expansion.

NYT Readers’ Comments:

By Bob Solomon, MD
Edmonton, Canada

You live in “Cloud-Cuckoo Land” in the fantasy you have the best medical care system on earth. Baloney. Check it out.

Canada is right next door. Come see how a sane federal health plan works, covering all and ensuring that (1) we live longer, (2) we have fewer chronic ills, (3) we have lower cost drugs, (4) we have lower cost hospitals, (5) we have lower cost operations, (6) we have lower accounting costs for all parties, and (7) we have no medical bankruptcies and impoverishment anywhere, for any income, for the unemployed, for the elderly. Long waits for ER? I waited 4 minutes for an asthma attack to be dealt with, 2.4 hours for a minor ear problem — wax. In Philly, I waited 2.4 for a back injury. Twice. So no difference.

We get free (tax-paid) care in Alberta. No out of pocket, no minimum, no exclusions, no co-pays, no nothin’.

Premiums exist in certain provinces: $35 a month per person or about that, and some people purchase extended coverage. I also pay approx. $1200 a year for added features: free or nearly free drugs, and a large subsidy for glasses, hearing aids, private rooms, canes, and things like that.

Americans live in a “exceptional” med world — a medical services madhouse. It was not created by ACA, of course. And because of the med and drug and hospital corporations, I mean “people”, and the know-little-or-nothing GOP, it was ensured to endure after ACA. Medical madness is still a disease you need to cure.

Denying poor people dental care simply because they cannot pay the premium, as Pence’s program does, defies logic. Does sentencing poor people to rotten teeth truly motivate them to find money that they don’t have in order to provide them with the “dignity to pay for their own health insurance”?

Does Pence propose that we change the rhetoric from “skin in the game” to “rotten teeth in the mouth”?…

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Government supports rotten teeth for patients in poverty

Posted by on Wednesday, Jan 28, 2015

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.

Indiana Will Allow Entry to Medicaid for a Price

By Abby Goodnough
The New York Times, January 27, 2015

After a lengthy back-and-forth, the Obama administration has agreed to let Gov. Mike Pence of Indiana, a Republican, expand Medicaid on his own terms, including some that have not been allowed before under federal rules.

The plan will extend coverage to an additional 350,000 Indiana residents with incomes of up to 138 percent of the federal poverty level — about $16,100 for a single person and $27,310 for a family of three — starting next month.

Mr. Pence, like several Republican governors before him, insisted on adding a conservative twist to the expansion, mostly by requiring beneficiaries to pay something toward their coverage. Under his plan, most people will have to pay monthly premiums equaling 2 percent of their household income — between about $3 and $25 a month for a single childless adult — for coverage that includes dental and vision benefits.

At the Obama administration’s insistence, people who earn less than the poverty level will not have to pay premiums. But if they do not, their coverage will be downgraded to exclude dental and vision benefits. And they will owe co-payments for medical care, including $4 for a doctor’s visit and $75 for a hospitalization.

In another unusual concession, the Obama administration will let Indiana lock some people out of coverage for six months if they stop paying monthly premiums.

Joan Alker, executive director of the Georgetown University Center for Children and Families, called the Indiana plan “enormously complicated” and questioned the fairness of withholding dental and vision coverage from those who cannot come up with premium payments.

“It’s just common sense that when people take greater ownership of their health care,” Mr. Pence said, “they make better choices.”…


Gov. Pence gets federal OK for Medicaid alternative

By Shari Rudavsky and Maureen Groppe
Indystar, January 27, 2015

Those who are eligible for the plan already live at the poverty level, said Timothy Jost, a law professor at Washington and Lee University and a healthcare reform expert. People who by definition are already having trouble covering basic costs such as food and rent will struggle to make an addition payment. Instead, they may opt not to participate in the program or avoid getting care.

“The question is how far is CMS willing to go in accommodating governors or states that want to work their own policy agenda into the Medicaid program,” Jost said. “This is pretty much pushing the limits of how far they should go if it’s not beyond it.”

Throughout the months of back and forth with federal health officials, Pence had said he was not willing to compromise on the personal responsibility piece.…

This is insane! In an age when we are supposed to be a society that cares enough to see that all of us receive the health care that we need, we still have amongst us those who insist that people with no assets, often homeless, frequently missing meals, are supposed to exercise “personal responsibility” by paying funds that they don’t have as a condition for receiving much needed medical care.

And, oh, if they don’t come up with those funds, let their teeth rot out. That will show them! And sentence some of them to six months without any medical care at all.

We have covered extensively the irrationality and inhumanity of the consumer-directed, moral hazard-based policies that erect financial barriers to care for the four-fifths of us with minimal or modest resources. But this exposes the colors of these “skin in the game “ advocates. What kind go people are we that we elect individuals like this to take charge of our federal and state governments. What is government all about? This!? It can’t be. Tell me it isn’t.

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HHS creating policy out of rhetoric devoid of science

Posted by on Tuesday, Jan 27, 2015

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.

Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health Care

By Sylvia M. Burwell, U.S. Secretary of Health and Human Services
The New England Journal of Medicine, January 26, 2015

Now that the Affordable Care Act (ACA) has expanded health care coverage and made it affordable to many more Americans, we have the opportunity to shape the way care is delivered and improve the quality of care systemwide, while helping to reduce the growth of health care costs. Many efforts have already been initiated on these fronts, leveraging the ACA’s new tools. The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways: using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models; changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and harnessing the power of information to improve care for patients.

As we work to build a health care system that delivers better care, that is smarter about how dollars are spent, and that makes people healthier, we are identifying metrics for managing and tracking our progress. A majority of Medicare fee-for-service payments already have a link to quality or value. Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018. Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients. This is the first time in the history of the program that explicit goals for alternative payment models and value-based payments have been set for Medicare. Changes assessed by these metrics will mark our progress in the near term, and we are engaging state Medicaid programs and private payers in efforts to make further progress toward value-based payment throughout the health care system.

Although we have much to celebrate regarding increased access and quality and reduced cost growth, much of the hard work of improving our health care system lies ahead of us.


Early Evidence On Medicare ACOs And Next Steps For The Medicare ACO Program (Updated)

By Mark McClellan, S. Lawrence Kocot, and Ross White
Health Affairs Blog, January 22, 2015

On December 1, CMS released a Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program (MSSP), which requests feedback for changes CMS is considering for the Medicare accountable care organization (ACO) programs in 2016 and beyond. The proposal suggests significant potential alterations to the program, many of which we recently reviewed, that would address major issues that ACOs and others have raised: uncertainty and inexperience at transitioning to increasing levels of risk, lack of timely and accurate data, changes in attributed patient populations from year-to-year, and financial benchmarks that fail to account for regional variations and continue to reward high ACO performance over time.

Ideally, big changes in key features in a major program like the MSSP would be based on extensive empirical evidence on what determines success in the program. Unfortunately, only limited evidence, including case studies and some comparative data, is available on the determinants of success for Medicare ACOs, and thus on the MSSP.…


Unpacking The Medicare Shared Savings Proposed Rule: Geography And Policy

By Scott Heiser, Carrie Colla, and Elliott Fisher
Health Affairs Blog, January 22, 2015

The Centers for Medicare and Medicaid Services (CMS) recently announced a Notice of Proposed Rulemaking (NPRM) for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs).

Of the 220 ACOs in the program that participated in the first performance year, 53 earned shared savings, 52 saved money but not enough to meet the required “minimum savings rates,” and the other 115 did not accrue savings (spending on patients assigned to the ACO was greater than projected).

Depending on one’s perspective, the early results of the MSSP are either promising or disappointing. On the one hand, nearly a quarter of qualifying ACOs achieved shared savings in the first year of performance; on the other, three-quarters either did not lower spending or did so but failed to exceed the minimum savings rate.

Improvements in the benchmarking formula, the risk adjustment methodology, and perhaps additional incentives to sustain high performance over a longer period are worth exploring.…


Measuring Success in Health Care Value-Based Purchasing Programs

By Cheryl L. Damberg, Melony E. Sorbero, Susan L. Lovejoy Grant Martsolf, Laura Raaen, Daniel Mandel
RAND Corporation

Value-based purchasing (VBP) refers to a broad set of performance-based payment strategies that link financial incentives to providers’ performance on a set of defined measures in an effort to achieve better value by driving improvements in quality and slowing the growth in health care spending. Policymakers are grappling with many policy decisions about how best to design and implement VBP programs so that they are successful in achieving stated goals.

Although the past decade has witnessed a fair amount of experimentation with performance- based payment models, primarily P4P programs, we still know very little about how best to design and implement VBP programs to achieve stated goals and what constitutes a successful program.…


Medicare’s payment reform push draws praise and fears

By Melanie Evans and Paul Demko
Modern Healthcare, January 26, 2015

“I think we can all agree that moving away from fee-for-service and moving toward more value-based payment is a really good idea,” said Dr. Ashish Jha, a health policy professor at Harvard University who studies healthcare quality. “The challenge is, how do you measure value? If you don’t do that well, then these models can end up being not only not all that helpful, but even hurtful.”

With weak incentives, Medicare’s shift to alternative contracts could amount to little actual change, said Mark Pauly, an economist and health policy professor at the University of Pennsylvania. “It’s not a sledgehammer. If the penalty or reward is relatively modest, then a cynic could say what’s the big deal?”…

Since the beginning of the reform process we have been inundated with rhetoric about how health reform is going to improve quality and slow spending, but the mechanisms proposed were more “wish lists” than being proven mechanisms based on sound policy science. Now we have an announcement from HHS Secretary Sylvia Burwell that, even though we have not progressed much beyond the rhetoric, these mechanisms will be put into place by the end of 2018.

An extensive RAND report confirms that we still don’t know how to do this. Advocates such as Elliott Fisher and Mark McClellan report that, although we need extensive empirical evidence, only limited evidence is available. Harvard policy professor Ashish Jha says that “these models can end up being not only not all that helpful, but even hurtful.” And University of Pennsylvania policy professor Mark Pauly, of “moral hazard” fame, even says “what’s the big deal?”

Primum non nocere…

… and, second, let’s put into place policies that really would benefit everyone – a single payer national health program, aka an improved Medicare for all.

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Patient-centered medical homes in Louisiana had minimal impact on Medicaid population’s use of acute care and costs

By Evan S. Cole et al.
Health Affairs 2015;34:87-94

We sought to evaluate the effect of patient-centered medical home certification of Louisiana primary care clinics on the quality and cost of care over time for a Medicaid population. … We found no impact on acute care use and modest support for reduced costs and primary care use among medical homes serving higher proportions of chronically ill patients.

Primary care use was lower in patient-centered medical homes compared to control clinics, but both ED use and ambulatory care-sensitive inpatient and ED use were higher.

This analysis provides some evidence that cost per patient is reduced only when a large proportion of the Medicaid patients served by the patient-centered medical home are chronically ill. However, the evidence is not robust. (p. 1729)

Yet another study finds that “medical homes” don’t save money and have little impact on quality. This study examined 27 clinics in the New Orleans area that received certification as “medical homes” during 2008 and 2009. What makes this study particularly interesting is that “homes” were promoted with great fanfare by the Bush administration and Louisiana’s health policy establishment just nine years ago as an essential piece of the solution to the devastation inflicted on New Orleans’ primary care system by Hurricane Katrina. Michael Leavitt, secretary of health and human services (HHS), and Louisiana “home” advocates left a paper trail that records the groupthink that created and sustained their unrealistic expectations of “homes.” Now, nine years later, we can look back and compare reality with groupthink.

In my last comment on this blog, I said the “medical home” fad is muddling the debate about how to solve the health care crisis because it pretends the problem afflicting the primary care sector is improper “design” or “structure” when the real problem is inadequate resources.

What’s true in medicine is true in health policy: If you don’t diagnose correctly, you can’t prescribe correctly. If you think the primary care sector needs “redesign,” you will prescribe “medical homes” and “breaking down silos” and other nostrums with labels connoting a change in structure. If, on the other hand, you conclude the proper diagnosis is too few resources, then you recommend more resources.

You might think post-Katrina New Orleans would be one of those situations where it would be impossible to screw up the diagnosis. You might think inadequate resources would be the obvious diagnosis of the injury suffered by that city’s primary care system. The hurricane left New Orleans with a severe shortage of physicians, and of hospital and nursing home beds. In the face of such devastation, you might think defective “structure” or “design” would be an obviously inaccurate diagnosis.

You would be wrong. You underestimated the power of managed-care groupthink.

The Bush administration diagnosed New Orleans’ problem as a “design” problem, and Louisiana’s health policy elite enthusiastically agreed. Federal and Louisiana policy makers (“prescient local leaders,” according to Rittenhouse et al., p. 1730) proposed inflicting the “medical home” experiment on New Orleans’ beleaguered primary care work force as the solution to the alleged “design” problem.

Katrina hit in August 2005, just as the “medical home” fad was germinating within the American health policy establishment. In February 2007 the fad burst into view with the publication of the “Joint Principles of the Patient-Centered Medical Home” by the American Academy of Family Physicians and three other primary-care associations. By 2008, despite the complete lack of evidence for the claim that “homes” could cut costs and only weak evidence for the claim that “homes” could improve quality, the “patient-centered medical home” (PCMH) had won the endorsement of virtually the entire health policy establishment, including the Medicare Payment Advisory Commission, many federal and state legislators, and great swaths of academia.

The influence of the PCMH fad is evident in a “concept paper” published in October 2006 by a group that called itself the Louisiana Health Care Redesign Collaborative. The purpose of the paper was to explain to HHS Secretary Levitt how the collaborative proposed to “rebuild … the health care system in the Greater New Orleans area.” The very fact that the collaborative put the word “redesign” in its name tells you it had already adopted the “defective design” diagnosis. The collaborative listed the PCMH solution as the number one “reform” it intended to endorse if HHS would send some money (see p. 1).

The idea of inflicting the PCMH experiment on New Orleans in its time of crisis was apparently hatched within HHS. Secretary Leavitt sent “explicit instructions” to Louisiana that state policy makers would have to propose a “redesigned health care system” if they wanted HHS assistance (see p. 3 here).

The collaborative, a group of Louisiana health policy leaders, happily obliged. They put “redesign” in their name. And in their concept paper, they enthusiastically embraced the “defective structure” diagnosis and the unproven claims for PCMHs. In the excerpts from the concept paper presented below, note the use of “redesign” and “transformation,” words that in 2006 were just beginning to become the buzzwords that signified one’s allegiance to managed care theology in general and the “defective structure” diagnosis in particular.

As the area slowly recovers from Katrina, an opportunity to redesign the health care system … presents itself. [HHS] Secretary, Michael Leavitt, has recognized the opportunity and has challenged Louisiana to propose a redesigned health care system. [p. 2]

The medical home model … will reduce the high costs associated with the current reliance on emergency departments for the care of urgent, ambulatory-sensitive conditions. The evidence shows that such a model will improve health.

The medical home model forms the foundation for … the ultimate transformation of the way care is provided in the current Medicaid program. … This should result in better quality and lower costs. [p. 6]

None of these claims were evidence-based in 2006, and none are today.

Having extracted from Louisiana the necessary pledge of allegiance to conventional managed care wisdom, Leavitt awarded a $100 million grant (called the Primary Care Access and Stabilization Grant) to the Louisiana Department of Health and Hospitals (LDHH) in July 2007. LDHH offered even more money to clinics that applied to the National Committee for Quality Assurance (NCQA) to receive certification as a PCMH during 2008 and 2009.

Now the first rigorous analysis of those clinics that received NCQA certification – the paper by Cole et al. quoted above – has shown that none of the expectations for PCMHs articulated in the Redesign Collaborative’s concept paper were realistic. Contrary to the claims made in 2006 by Louisiana’s “prescient local leaders,” Cole et al. found that New Orleans PCMHs failed to cut costs for Louisiana’s Medicaid program, and that patients of PCMHs used fewer primary care services, were more likely to be treated in an emergency department, and were more likely to be treated in an inpatient or emergency department setting for ambulatory-care sensitive conditions than patients in non-PCMHs.

Because the 27 PCMHs studied by Cole et al. received more resources than the non-PCMH controls (they received money both from the HHS grant and PCMH “bonuses” from LDHH), we may infer that when those extra resources are tacked onto the cost of treating PCMH patients, the PCMH experiment substantially raised total Medicaid spending and presumably total spending for the entire New Orleans area. What proportion of the higher costs incurred by PCMHs was wasted on busywork and what proportion improved the lives of New Orleans residents is impossible to say because the amount and disposition of the additional money allocated to the PCMH clinics was of no interest to Cole et al.

There can be little doubt that at least some of the extra resources, notably those used to hire more doctors and nurses and to retain health care professionals currently on staff, benefited patients. A 2012 examination by Rittenhouse et al. of the effect of the PCMH experiment on the adoption of PCMH “processes” (as opposed to cost and quality outcomes of those processes) reported that the PCMH clinics “increased the number of patients served” (p. 1734).

But that analysis also showed that as the federal and LDHH subsidies came to an end, PCMH clinics began to abandon “PCMH processes” in order to focus on avoiding bankruptcy. “Implementing new models of care became a second-tier priority, after simply keeping the clinic doors open,” Rittenhouse et al. reported (p. 1736). This is precisely what you would have expected if your diagnosis of post-Katrina New Orleans had been insufficient resources, not “defective design.” The observation by Rittenhouse et al. is consistent with other evidence that the financial cost of meeting NCQA’s “gold-plated” PCMH criteria places severe stress on PCMHs that do not receive sufficient compensation for those costs.

The contrast between the omnipresent happy talk about “homes” and the conclusions reached by Cole et al. is stark. Some readers may be wondering whether the Cole paper is out of line with other research. The answer is no, it is not. This is true whether we restrict our analysis to Medicaid-related research or broaden our scope to include all research on “homes.” Here I’ll comment only on the Medicaid-related research.

Cole et al. stated that their paper “constitutes the only external evaluation to date of New Orleans’ communitywide implementation of medical home capability and processes in the region’s safety net” (p. 1730). In fact, their paper appears to be the first and, to date, the only rigorous analysis of PCMH Medicaid programs in any state (half the states have implemented PCMH Medicaid programs). Cole et al. noted, “Few studies have specifically evaluated the effect of care provided by patient-centered medical homes on a Medicaid population,” and of those “none appear to have been peer reviewed.” (pp. 87-88). This is consistent with this statement by Mary Takach in her review, published in 2012, of research on Medicaid PCMHs: “Notably absent from this review of state patient-centered medical home initiatives are rigorous evaluations of whether or not these initiatives and their payment models work” (p. 2438). At this date, then, it appears that the study by Cole et al. is the definitive study on the impact of PCMHs not just on Medicaid spending on New Orleans PCMHs but on all existing PCMH Medicaid programs.

A decade has gone by since “prescient” health policy entrepreneurs endorsed the “home” fad. The fad has had its day in the sun. It is time to junk it along with the “defective design” diagnosis and acknowledge that what the primary care sector needs is more resources. Those who yearn to believe that costs can be reduced by improving quality should shift their focus from “homes” serving everyone in a “population” to specific services targeted at relatively tiny, select groups of people who are very sick. A few studies suggest that medical costs can be reduced by amounts that exceed the cost of the quality-improving intervention when the intervention is directed at carefully selected, chronically ill patients, such as children with debilitating illness or elderly patients with hypertension and congestive heart failure.

But these studies are few and far between. The idea that we can “quality improve” our way to lower costs with “homes” and other managed care fads contradicts research and common sense. If we are serious about lowering health care costs, we must focus on reducing administrative waste and high prices. We could achieve reductions in some prices with “all-payer” systems in which state or federal agencies set limits on fees and prices. But to achieve a substantial reduction in prices and administrative waste, we must abandon the unending managed care experiment and the multiple-payer system that are together driving up prices and administrative costs and rely instead on a single-payer system.

Kip Sullivan is a member of the board of Minnesota Physicians for a National Health Program. His articles have appeared in The New York Times, The Nation, The New England Journal of Medicine, Health Affairs, the Journal of Health Politics, Policy and Law, and the Los Angeles Times.

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Prescribing an epiphany for Ron Pollack and Henry Aaron

Posted by on Monday, Jan 26, 2015

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.

Costs derail Vermont’s dream of a single-payer health plan

By Jay Fitzgerald
The Boston Globe, January 25, 2015

For decades, liberal activists yearned for a European-style, single-payer health system that they argued would lead to more affordable, efficient, and comprehensive medical coverage for all citizens. When Vermont four years ago enacted a landmark bill to establish the nation’s first single-payer health care system, they saw their long-sought dream about to be fulfilled.

But reality hit last month.

(Henry Aaron)

“The idea of single-payer, or a Medicare-for-all type program, has always been a cherished dream for many in the Democratic Party,” said Henry J. Aaron, a senior fellow at the Brookings Institution, a liberal-leaning Washington think tank. “In truth, there had never been a hard, developed plan to implement such a dream. In Vermont, they finally developed a plan, and look what happened.”

In Europe, many countries built their universal health care systems from scratch, with some starting early last century when most citizens had no medical coverage and any services provided by governments were welcome, the Brooking Institution’s Aaron said. That allowed those countries to slowly build and expand health care systems over decades.

But in the United States private insurance arrangements between employees and employers have expanded and matured over the decades, with many people with insurance expecting a high level of medical service. So, switching to a single-payer system would need to meet those higher expectations — and higher costs — all at once, Aaron said.

“It’s easier to build from scratch than when a system is already up and running,” he said. “We could have maybe created a single-payer system 60 or so years ago, when insurance wasn’t as complete and widespread. But it would be very disruptive and costly today.”

(Ron Pollack)

Ron Pollack, executive director of Families USA, a national organization representing health care consumers, said he has long believed in the benefits of a single-payer system. But he also remembered his talks with Kennedy. The late senator, Pollack said, expressed regrets he didn’t earlier embrace insurance-based universal care, rather than holding out for a single-payer system that never materialized.

Pollack said activists might be better off pushing to improve provisions of the Affordable Care Act. “It may change in time and single-payer might become reality,” Pollack said. “But the political reality and the fiscal realities make it a very tough sell.”…

I have greatly admired Ron Pollack and Henry Aaron through the decades. They share with us our desire to expand health care justice to all. So why do I feel tormented when I hear comments from them?

Perhaps it’s because we chose different paths at the intersection of policy and politics. Ron Pollack says that he has long believed in the benefits of a single-payer system. Henry Aaron says that we could have created a single payer system sixty or so years ago. Yet Pollack says, “the political reality and the fiscal realities make it a very tough sell.” And Aaron says, “it would be very disruptive and costly today.”

Early on, Pollack decided to join forces with the neoliberal Democrats in supporting reform that would gain the support of the insurance and pharmaceutical industries – a political path with realistic potential. Aaron’s views have been more perplexing, such as when he attempted to refute a meticulous landmark study on the profound administrative waste in health care by using back-of-the-envelope numbers. We were not alone in our amazement when another very prominent health care economist said that he didn’t understand why Aaron did that.

At any rate, they both clearly understand the policy superiority of single payer. More importantly, they understand what that means when it comes to reducing suffering and financial hardship – fundamental principles in health care justice.

It wasn’t the policies that needed to be changed. It was the politics. Maybe someday Aaron and Pollack, and the multitude of others who bailed on single payer, will have an epiphany and join the effort to change the politics. How much more suffering and hardship do they have to witness before they are ready? We cannot change the errors of the past, but we can do the right thing going forward.

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Gallup – Health care remains a top financial burden for American families

Posted by on Friday, Jan 23, 2015

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.

Americans See Healthcare, Low Wages as Top Financial Problems

By Art Swift
Gallup, January 21, 2015

Healthcare costs and lack of money or low wages rank as the most important financial problems facing American families, each mentioned by 14% of U.S. adults.

Gallup has been asking Americans about the most important financial problem facing their family in an open-ended format for the past 10 years. Healthcare this year has returned to the top of the list for the first time since early 2010, when the Affordable Care Act, or “Obamacare,” was signed into law. Still, Americans viewed it as an even bigger financial problem in 2007, when a range of 16% to 19% said it was most important.

For Americans earning $75,000 or more a year, retirement savings, college expenses and healthcare costs rank as the most important financial problems. Among lower-income Americans, retirement savings and college expenses are less important. Healthcare costs, however, have double-digit-percentage support across the board.

Bottom Line

The American economy continues to recover. With Gallup’s Economic Confidence Index in positive territory for the first time since the Great Recession, and with President Barack Obama stating that the U.S. last year had its best year for job growth since 1999, certain financial problems have receded from the nation’s memory, while others have persisted in the forefront. Americans have consistently cited healthcare, a topic of fierce debate this decade, as one of the most important financial problems, and it remains so.…

The recent slowing in the rate of increases in health care costs has been good news for those supervising budgets of government health programs and for employers providing employee health benefits, but how has it impacted patients? This new Gallup poll shows that health care costs remain one of the most important financial problems facing American families. The Affordable Care Act has not provided the level of financial relief from medical bills that Americans want and need.

Under the current financing model, there is virtually no prospect for future relief. In fact, the trend of placing an ever greater financial burden on “health care consumers” will likely compound medical debt problems for patients. We need a new model. We need a single payer national health program.

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