Obamacare’s Other Success, Under Threat
By Editorial Board
Bloomberg View, July 20, 2016
Obamacare has made great strides toward its signature goal: to reduce the number of Americans without health insurance. Unfortunately, another important goal — ensuring that everyone’s insurance policy provides adequate coverage — remains under siege in the courts and Congress.
Before the Affordable Care Act, private health insurers were free to exclude coverage for all sorts of care.
Moreover, if anyone’s medical expenses grew too high, insurers could cut them off. A serious or complicated illness or injury could leave people essentially uninsured.
Obamacare changed things by establishing 10 categories of benefits that most insurance plans must cover — including hospitalization, prescription drugs, laboratory services and mental health care — and prohibiting annual or lifetime limits on those benefits.
This month, however, a federal appeals court ruled that people can buy plans with far more limited coverage. Yet those who buy such plans risk being surprised twice — first when they’re saddled with the tax penalty for not carrying adequate insurance, and then when they need care and find their coverage doesn’t go as far as they thought.
Republicans in Congress have likewise targeted Obamacare’s minimum coverage requirements, arguing that consumers, not the government, should determine what services they want insurers to provide.
The majority of Americans believe that everyone should have the health care that they need when they need it, and that we need a financing system that will pay for it. Others believe that they should take care of their own health care needs and not be required to pay into a risk pool that covers the health care of others. So should the health insurance system provide comprehensive coverage for all, or should it allow individuals to purchase coverage for only those benefits they perceive they might need?
“As a man, why should I have to pay for maternity benefits I’ll never use?” “As a woman, why should I have to pay for treatment of prostate cancer – a disease that I’ll never have?” “I take good care of myself; why should I have to pay for care of disorders of others due to their smoking, illicit drug use, reckless driving, sexual promiscuity or whatever?” “I’m healthy so why can’t I wait until I will likely need health care instead of wasting money on insurance now?”
“I want to take care of myself by buying only the insurance I need now, and everyone else can buy whatever they feel they need.” But what about that unexpected disorder that racks up medical bills of $350,000? “Well, I didn’t mean that. Nobody can pay those bills, so the government should pay it instead.”
So we’re divided between “we’re all in this together” and “I’ll take care of myself, and you’re on your own.” But medical care doesn’t work that way. The twenty percent of people who use eighty percent of health care are reliant on pooled funds to pay for their health care. Most of the eighty percent who are relatively healthy will someday shift into the high health care needs group and likewise also be dependent on pooled funds.
Although the Affordable Care Act was a step forward in pooling health care risk, there is a campaign to move us in the other direction. An effort to shut down inadequate plans was reversed by the Supreme Court, even though those plans will unfairly shift costs to others when they do not adequately cover expensive diseases and injuries. Also many politicians want to ensure that people will be able to “buy only the insurance they need” through gimmicks such as private insurance exchanges offering the choice of low benefit plans, purchases out of state to avoid regulatory oversight of insurers, reliance on health savings accounts — usually underfunded, etc.
As a group, those individuals who want to take care of themselves include many individuals who will have high medical expenses. Whatever way they set funds aside – spartan insurance plans, health savings accounts, personal savings – collectively they will not have enough funds set aside to pay for the expensive care some members of their group will need. Besides, they have fragmented much of their funds such that only a limited amount would be available for others, largely through catastrophic plans that have intolerably high deductibles. Whereas those of us who support universal pooling of risk would cover our costs equitably, those who are on their own will dump costs onto the rest of us through taxes we pay for public programs or through higher medical bills due to shifting to us the costs of care provided to those who do not pay their bills.
When people sign up for Medicare, they do not ask for only the Medicare that they need. They expect that they will get essentially the same Medicare that everyone else has (though some may receive similar benefits through the private Medicare Advantage plans). It should be that way not for just Medicare beneficiaries, but for everyone. We should improve Medicare and then make it universal. That will satisfy the majority of us who believe that we are all in this together, and for those who want to be on their own, they will accept the benefits of a Medicare for all program just as they now accept Medicare in their retirement years. Also, they will have paid in their equitable share, based on ability, just like the rest of us.
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.
Covered California Health Plan Rates To Jump 13.2 Percent In 2017
By Chad Terhune and Pauline Bartolone
Kaiser Health News, July 19, 2016
California’s Obamacare premiums will jump 13.2 percent on average next year, a sharp increase that is likely to reverberate nationwide in an election year.
The Covered California exchange had won plaudits by negotiating 4 percent average rate increases in its first two years. But that feat couldn’t be repeated for 2017, as overall medical costs continue to climb and two federal programs that help insurers with expensive claims are set to expire this year.
Some health-policy experts were surprised by the magnitude of the increase in California. Others said it was inevitable the rates would catch up to the rest of the country after insurers determined their coverage had been priced too low.
Blue Shield of California said its premiums were going up 19.9 percent, the highest statewide increase. Anthem Inc., the nation’s second largest health insurer, said it had an average increase of 17.2 percent in its Covered California plans. HMO giant Kaiser Permanente, in contrast, posted an average increase of 6 percent.
“While these rates hikes aren’t as bad as the annual double-digit increases before the Affordable Care Act, that’s not much comfort to consumers who don’t see their paychecks increase by the same percentage,” said Anthony Wright, executive director of Health Access, a consumer advocacy group.
These rate increases apply to people who purchase their own coverage in the individual market, not the majority of Americans who get their health insurance through work or government programs such as Medicare and Medicaid.
California has been a leader in establishing and implementing the health insurance exchanges authorized by the Affordable Care Act. Although they did hold down premium rate increases in the first two years to 4 percent (still above the rate of inflation), the higher costs of health care have caught up with them. That requires an average of a 13.2 percent premium increase for the next year (though other regulatory and market factors cause greater year to year fluctuation in the premiums). What does this mean for those enrolled in those plans and for the rest of us who obtain our health care coverage elsewhere?
Some of those enrolled in the Covered California plans will find the premium increases to be beyond their means. Many of them will be able to shop for plans with lower premiums, but they will likely have to pay higher deductibles, though those who are eligible for government subsidies may find that the burden is not too great. In changing plans, many will have to disrupt their current care since their new plans will have different provider networks. The effort to make the insurance premiums more affordable clearly has detrimental effects in physician choice and affordability of actual access to health care.
In California those people purchasing plans in the individual market will have very similar experiences except that they are not eligible for government subsidies that could reduce the impact of the premium increases.
The employee contribution to employer-sponsored plans has been more stable, although that is beginning to change. Starbucks is the latest of employers who are using private insurance exchanges in which the employees use a voucher or equivalent to purchase their plans. The impact will be very similar to the ACA exchanges – less choice in health care providers and greater out-of-pocket costs merely because eventually the voucher will not be enough to cover plans with wider networks and less cost sharing.
Even Medicare may eventually be impacted. The push to private Medicare Advantage plans is succeeding because of government overpayment to these plans. The conservative and neoliberal coalition is advocating for the establishment of a voucher program for private Medicare plans (premium support), crowding out the traditional Medicare program.
Politicians will likely respond to inevitable protests of intolerable increases in the beneficiaries’ portion of the Medicare premium by allowing insurer innovations in coverage that will reduce the premiums. We already know what some of these will be: larger deductibles and other cost sharing, narrower provider networks, or intrusive prior authorization designed to limit access to expensive drug products and procedures. But this will be nothing compared to what the insurance industry will likely do once it is granted a free rein to innovate. It’s in the DNA of this industry.
ACA supporters are assuring us that we don’t have to worry about these high premium increases in the exchange plans because patients are free to shop for cheaper plans. But they have left out the rest of the story.
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.
2016 Republican Platform
Restoring Patient Control and Preserving Quality in Healthcare
Any honest agenda for improving healthcare must start with repeal of the dishonestly named Affordable Care Act of 2010: Obamacare. It weighs like the dead hand of the past upon American medicine. It imposed a Euro-style bureaucracy to manage its unworkable, budget-busting, conflicting provisions. It has driven up prices for all consumers. Their insurance premiums have dramatically increased while their deductibles have risen about eight times faster than wages in the last ten years.
Preserving Medicare and Medicaid
More than 100 million Americans depend on Medicare or Medicaid for their healthcare; with our population aging, that number will increase. To preserve Medicare and Medicaid, the financing of these important programs must be brought under control before they consume most of the federal budget, including national defense. We intend to save Medicare by modernizing it, empowering its participants, and putting it on a secure financial footing. We will preserve the promise of Medicaid as well by making that program, designed for 1965 medicine, a vehicle for good health in an entirely new era.
Medicare’s long-term debt is in the trillions, and it is funded by a workforce that is shrinking relative to the size of future beneficiaries. When a vital program is so clearly headed for a train wreck, it’s time to put it on a more secure track. That is why we propose these reforms: Impose no changes for persons 55 or older. Give others the option of traditional Medicare or transition to a premium-support model designed to strengthen patient choice, promote cost-saving competition among providers, and better guard against the fraud and abuse that now diverts billions of dollars every year away from patient care. Guarantee to every enrollee an income-adjusted contribution toward a plan of their choice, with catastrophic protection. Without disadvantaging present retirees or those nearing retirement, set a more realistic age for eligibility in light of today’s longer life span.
Medicaid presents related, but somewhat different challenges. As the dominant force in the health market with regard to long-term care, births, and persons with mental illness, it is the next frontier of welfare reform. It is simply too big and too flawed to be administered from Washington. Most of the vaunted expansion of health insurance coverage under Obamacare actually has been an unprecedented expansion of the Medicaid rolls in many states. We applaud the Republican governors and state legislators who have undertaken the hard work of modernizing Medicaid. We will give them a free hand to do so by block-granting the program without strings. Their initiatives — whether premium supports for purchasing insurance, refundable tax credits, alternatives to hospitalization for chronic patients, disease prevention activities, and other innovations — are the best strategy for preserving Medicaid for those who need it the most.
2008 Democratic Party Platform
Covering All Americans and Providing Real Choices of Affordable Health Insurance Options
Families and individuals should have the option of keeping the coverage they have or choosing from a wide array of health insurance plans, including many private health insurance options and a public plan. Coverage should be made affordable for all Americans with subsidies provided through tax credits and other means.
2016 Democratic Party Platform (DRAFT)
Universal Health Care
We believe as Democrats that health care is a right, not a privilege, and our health care system should put people before profits. Thanks to the hard work of President Obama and Democrats in Congress we took a critically important step towards the goal of universal health care by passing the Affordable Care Act (ACA), which has offered coverage to 20 million more Americans and ensured millions more will never be denied coverage on account of a pre-existing condition.
We will keep costs down by making premiums more affordable, reducing out-of-pocket expenses, and capping prescription drug costs. Democrats will also work to end surprise billing and other practices associated with out-of-control medical debt that lead to unconscionable economic strain on American households. We will offer relief so Americans do not face high costs, and we will fight back against insurers trying to impose excessive premium increases.
Political party platforms are typically loaded with rhetoric designed to fire up the political base, and, as such, are often not taken seriously. But piercing through the rhetoric there are often concepts of substance, good or bad. Take health care.
The Democratic platform of 2008 promised us a market of private health plans with government subsidies. That, in essence, is what we got as a major feature of the Affordable care Act. The Democrats rejected single payer and instead delivered on their comparatively feeble platform promises.
For the preliminary draft of their 2016 platform, the Democrats again voted to reject single payer and substituted it with a “health care is a right” statement void of any meaningful policy. They support instead mere tweaks to the Affordable Car Act.
Reading past the Republican’s rhetoric, they are now promising in their platform changes to two of our most important government health programs. They would convert Medicare to a premium support program, shifting costs away from the federal government and onto the backs of Medicare beneficiaries. They would also establish block grants to the states for the Medicaid program, shifting costs from the federal government and onto the states, many of which which would likely respond with a reduction in essential health care benefits for the needy.
One party wants to coast along with a grossly deficient system, leaving millions uninsured and underinsured, and the other would begin to dismantle what protection the government does provide. Wish they would dump the rhetoric and start working on real policy that would ensure adequate, affordable health care for everyone.
Of course, several readers would remind us that the Green Party supports single payer reform. Yes… Hmm…
Physicians for a National Health Program is a nonpartisan educational organization. It neither supports nor opposes any political party or candidate for public office.
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.
NHS – on life support
By Alex Scott-Samuel
Politics of Health Group POHG Blog, July 17, 2016
I want to give a broad political overview of what’s happening in the NHS in England and of the background to the current situation.
As you’ll know, the English NHS is in a bad way, with practically every part of the country in financial deficit. Many hospitals and many services are being closed down, cut back or rationed. At the same time, many long term contracts for the provision of NHS services are being awarded to private sector companies – though often people are unaware of this because the likes of Virgin, Carillion and SpecSavers are allowed to operate under the NHS logo.
By definition, these arrangements are wasteful, because private companies have a duty to make profits and to give those profits to their shareholders. That means that public money is haemorrhaging out of the NHS – whereas when a public provider of NHS services makes a surplus it is reinvested in the NHS.
There is also a substantial legacy of (mainly Labour initiated) private finance initiative (PFI) funded hospitals, whose exorbitant loan interest payments have to be made before NHS funds can be spent on routine services. And it’s no coincidence that people’s inboxes are filling up with adverts for health insurance, with their invitations to jump the NHS queues. Everything I’ve described forms part of what in my view is an intentional strategy by the Conservative government to create financial, managerial, professional and public chaos throughout the NHS, so that private provision of NHS services, alternative private health services, health insurance, and NHS co-payments and ultimately charges will be seen as inevitable.
This ‘cultural revolution’ takes many different and apparently unrelated forms whose destructive nature is denied by the government – which continues to assert that it has the public interest at heart and that it is factors like the ongoing impact of the credit crash, the increasing costs of drugs and medical equipment, the ageing population and our unhealthy lifestyles which are the true problems facing the NHS. The building blocks for privatisation to which I have referred currently include: the aforementioned awarding of NHS contracts to private bidders – often asset strippers who provide poor quality services, fragment and undermine the cohesive public ethos of the NHS; the creation by the Treasury of NHS deficits and of regulations which forbid them; enforced rationing of services to extend waiting lists and encourage patients to seek private alternatives; manufactured confrontations with doctors and other members of the NHS workforce; the imposition of ‘new models of care’ which undermine NHS hospitals and create community based healthcare structures ripe for privatisation; personal health budgets, designed to link with health insurance. There are many more and I can provide documented evidence for all of them. It is a national scandal.
What is to be done? Until we have a government committed to tackling and reversing this appalling onslaught on our beloved NHS, we must continue to expose what is happening, to challenge it and to campaign loudly and widely in order to increase public awareness and action.
The phased privatization of England’s National Health Service is taking a toll in undermining “the cohesive public ethos of the NHS.” This brief description by Dr. Alex Scott-Samuel will give you a hint of the disaster that is taking place. Their political leaders apparently have learned nothing from the dysfunction that characterizes our system in the U.S., nor are we learning anything from them.
At a time that we need to be converting our fragmented public and private insurance system into a single public program, we are going in the opposite direction. Our public Medicare program is being privatized through similar cognitive processes as are taking place in England.
Just as the Conservative and Labor parties have conspired in these changes, here in the U.S. the Republicans and Democrats, the latter now dominated by the neoliberals, are damaging the traditional Medicare program through neglect while pushing on with fiscal and regulatory policies that have expanded enrollment in the private Medicare Advantage plans. When you read the paragraph above on the “cultural revolution” you cannot help but note the similar ethic of the two nations driving this insane march to rent-seekers nirvana at a cost of compromising patient care.
We can learn something from this, can’t we?
Evaluation of the Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration, Second Annual Report
For the Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration, the Centers for Medicare and Medicaid Services (CMS) joined state-sponsored initiatives to promote the principles characterizing patient-centered medical home (PCMH) practices. After a competitive solicitation, eight states were selected for the MAPCP Demonstration: Maine, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Rhode Island, and Vermont. [p. 1-1]
In 2011, CMS selected RTI International and its subcontractors, the Urban Institute and the National Academy for State Health Policy, to evaluate the MAPCP Demonstration. The goal of the evaluation is to identify features of the state initiatives or the participating PCMH practices that are positively associated with improved outcomes. [p. 1-2]
Overall, Year Two of the MAPCP Demonstration found state initiatives still attempting to hit their stride. … All states agreed that the benefits of the MAPCP Demonstration were not likely to be strongly visible at this time. Our quantitative analysis supported this contention by finding very few consistent, favorable changes associated with the MAPCP Demonstration across the eight states. [p. 11-6]
In early 2015, I posted two comments here stating it will be impossible for anyone to explain the results of CMS’s “patient-centered medical home” (PCMH) experiments. In those comments (one on CMS’s Comprehensive Primary Care Initiative and the other on CMS’s Multi-Payer Advanced Primary Care Practice Demonstration), I argued that CMS’s PCMH demonstrations will fail to produce useful results because they test variables so poorly defined they cannot be measured. How do evaluators measure the effects of wobbly notions like “patient-centeredness,” “whole-person focus,” “culture of improvement,” “coordination of care across the medical neighborhood,” and “patient engagement”? How do evaluators test those notions one at a time, never mind simultaneously?
The latest reports on the Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration, one of three PCMH pilots CMS has conducted, confirm my prediction. On May 11, 2016, CMS released both the second- and third-year evaluations of the MAPCP demo. The second-year evaluation (the one quoted above) focuses on Medicare expenditures and quality data while the third-year evaluation presents data on the Medicare beneficiaries involved in the demo. (Neither CMS nor the authors of the evaluations, RTI International and two subcontractors, explained why the evaluations were released together.) Because the second-year evaluation is the one that contains data on the demo’s effect on cost and quality, I focus my remarks on that report.
As they did in the first-year evaluation, RTI reported mind-boggling variation in the definition of the PCMH, both between and within states.  Here is RTI’s description of what it was CMS and the states thought they were testing: “While the expectations established by all eight state initiatives varied, states were likely to establish requirements addressing three aspects of performance: practice transformation, quality improvement, and data reporting.” (p. 2-4) I italicized words in that sentence that convey maximum abstractness and imprecision. Half that sentence is italicized. Given the elusive definition of “medical home,” is it any wonder that states “varied” in their “expectations” of PCMHs?
RTI’s report concluded that the PCMHs have not saved money for Medicare during the demo’s first two years and are having almost no effect on quality. Not surprisingly, RTI was unable to explain why the demo is failing (“failing” is my word, not RTI’s).
Here are the main findings from the second-year evaluation:
(1) Medicare costs incurred by PCMHs (as measured by claims submitted to CMS) did not differ from non-PCMH clinics by a statistically significant amount in any state except Vermont (see Table 2-9, p. 2-38);
(2) with a few exceptions, PCMHs failed to outscore non-PCMHs on the very, very few quality measures RTI chose (diabetes, cholesterol and hospital admissions measures) (see Tables 2-6 p. 29 and 2-10, p. 2-40), and when they did, the differences were tiny.
For reasons RTI declined to discuss, RTI made no attempt to determine net savings, that is, whether PCMH costs were higher than non-PCMH costs when CMS’s subsidies to the PCMHs were taken into account. 
If you were RTI, how would you make sense of these findings? You stated in both your first- and second-year reports that PCMHs “are expected” to lower costs and improve quality. Moreover, you have promised CMS and your readers you would “identify features of the state initiatives or the participating PCMH practices that are positively associated with improved outcomes” (see excerpt above and identical language at p. 2 of the first-year report). 
But you have also reported that PCMHs vary on every dimension imaginable, which means the PCMHs have no uniform “features” for you to analyze. How, then, do you fulfill your promise to “identify features” of PCMHs that explain the PCMHs’ performance?
If I were in RTI’s shoes, I would not have promised to “identify features” of PCMHs for any purpose under the sun. Instead I would have stated upfront that PCMHs are maddeningly non-uniform – as a class, they are featureless – because they are defined so vaguely. Because they are defined so vaguely, the employees of PCMHs do not feel constrained to focus on any particular service or type of patient. I would have said the vague definition of “PCMH” and the glorious heterogeneity of activity that goes on in PCMHs guarantees “homes” cannot be tested. Finally, I would have said that a reasonable explanation for why “homes” are failing is that “homes” are not focusing on any particular treatment or type of patient. They are spending their limited resources on all services and patients rather than a small and uniformly defined subset of services or patients.
But RTI did not say that. RTI’s solution so far has been to avoid discussing the bind it has created for itself. To date RTI has not identified the features or concrete characteristics of PCMHs (the independent variables) that might have some influence over the dependent variables (cost and quality).
RTI comes close to identifying factors that might conceivably be considered independent variables in the course of making several excuses for the PCMHs’ poor performance. RTI clearly identifies one excuse and implies several others. The one alleged problem RTI clearly offers as an excuse is insufficient time and money for PCMHs to demonstrate their true potential. Other excuses that are only implied include (1) inaccurate data and impediments to data sharing caused by glitches in health information technology, (2) poor integration of mental health services with other medical services, and (3) insufficient use of patient “portals.”
RTI’s justifications for the PCMHs’ unimpressive performance appear primarily in two sections in the second-year evaluation: A half-page section entitled “Lessons learned” in Chapter 2 (pp. 2-9 and 2-10) and the last three pages of the final chapter, Chapter 11 (pp. 11-3 through 11-6). Here is how RTI articulated the insufficient-time-and-money and health IT excuses:
Finally, a common lesson in all states was the need for ample time and resources to bring about practice transformation, including adequate resources for program administration and oversight. [M]any interviewees believed that three years was not enough time for the MAPCP Demonstration to show positive results. … [pp. 2-9/10] The most frequent lesson, mentioned by five states … was that the demonstration was not long enough. [p. 11-5]
All eight states reported challenges with health information technology (health IT) and the quality and timeliness of data, which was associated with challenges with patient attribution and payment. [p. 2-7] Health information technology … infrastructure is an integral component of most states’ PCMH demonstrations; in fact, it was the most common challenge that MAPCP Demonstration programs faced during Year Two. Unfortunately, many states had problems operationalizing their health IT plans. [p. 11-3] 
I characterize RTI’s justifications for the PCMHs’ poor performance as “excuses” because RTI’s reasoning is circular. The justifications rely on assumptions that RTI does not spell out and which are not evidence-based. For example, neither RTI nor anyone else has the foggiest idea how much money and time “homes” need to demonstrate their magic.
But let us set aside the circular reasoning problem and ask whether any of the problems RTI discusses can be converted into measurable variables. Obviously money, time, health IT and other variables could have been precisely defined prior to the onset of the demo, and in that event those variables could have been measured and examined to see how well they correlated with cost and quality outcomes. But that didn’t happen. At this late date, there is nothing RTI can do to make those variables more concrete and more uniform and, therefore, measurable. The only solution in the future is for CMS and RTI to insist on a radically slimmed down and more precise definition of the services “homes” are supposed to deliver.
I want to stress that RTI’s inability to draw lessons from the MAPCP demo will not hinge on the demo’s outcomes – on whether the demo ultimately shows that PCMHs have negative or positive outcomes or no impact at all. The problem is the nebulous definition of the entity being tested – the “medical home.” We can see this problem in RTI’s chapter on Vermont, the only one of the eight participating states in which PCMHs lowered costs (not counting fees paid by CMS to the PCMHs) compared with non-PCMHs. RTI makes no attempt to explain what it was about Vermont’s PCMHs that made them effective cost-cutters while PCMHs in the other seven states were not.
In my view, the most plausible explanation for Vermont’s performance is that Vermont PCMHs received more money and in-kind help than PCMHs in other states, those additional resources did good things for patients, and those additional resources weren’t counted as a form of spending. But even if my explanation is correct, it still wouldn’t tell us what we want to know, which is what it was PCMHs did with the extra resources that resulted in less use of traditional medical services.
I hope it is clear to readers why we can predict with certainty that the final report on the MAPCP demo (which is due in 2017 according to one of the contractors I exchanged emails with) will fail to “identify features” of PCMHs “that are positively associated with improved outcomes.” It is conceivable RTI will report some “positive outcomes” although that looks unlikely now. What is inconceivable is that RTI will be able to link “features” of PCMHs to those outcomes. If RTI makes any link or connection between any variable and any outcome, it will be based on more circular reasoning. It will be based on pure speculation.
1. For a discussion of the factors that vary within the MAPCP demo, see my comment on the first-year evaluation here.
2. Screw your thinking cap on tightly, because I’m going to take you down a rabbit hole RTI created but did not justify. The rabbit hole has several sub-holes, so watch your step.
For reasons RTI did not explain, RTI created not one but two control groups against which to compare the performance of MAPCP PCMHs. The two comparison groups were non-PCMH clinics and PCMH clinics not in the MAPCP demo. This would make little sense even if the “medical home” notion were well defined.
To add to the mystery, RTI did this for all expenditure and quality measures but with one exception: Its “budget neutrality” or “net savings” measure. That measure asks the question, Did CMS save any money on the MAPCP PCMHs after taking into consideration the “care coordination fees” CMS paid out to the MAPCP PCMHs? For reasons known only to RTI and presumably CMS, RTI calculated the “budget neutrality” measure using only the non-MAPCP PCMH comparison group. By this strange methodology, RTI found no statistically significant increase or decrease in Medicare net spending. By this strange method, RTI concluded the “budget neutrality” requirement of the demo had been met as of year two.
The mystery doesn’t end there. RTI reported that in two states, New York and Michigan, the PCMHs in the MAPCP demo reduced total Medicare gross spending (that is, Medicare costs as measured only by claims) by statistically significant amounts compared with non-MAPCP PCMHs, but not compared with non-PCMHs. Meanwhile, the opposite outcome occurred in Vermont. In Vermont, MAPCP PCMHs lowered Medicare gross spending by a statistically significant amount when the control group was non-PCMHs, but not when the control group was PCMHs not in the MAPCP demo. RTI made no attempt to explain these baffling outcomes.
I apologize, but our tour of the rabbit hole is not over yet. I have one last tunnel to show you. RTI allowed Minnesota to be an exception to its two-comparison-group rule. For Minnesota, RTI derived its estimates for all cost and quality measures, including its “budget neutrality” or “net savings” measure, using only non-PCMHs as a control group. RTI did offer an explanation of sorts for this exception. RTI said so many PCMHs in Minnesota were in the MAPCP demo it was impossible to construct a control group of PCMHs not in the demo.
Our tour of the rabbit hole is now over. Please ascend back to the real world slowly to prevent severe disorientation.
3. Note the bias in this articulation of RTI’s goal: The outcomes will consist of only “improved outcomes.” “Worse outcomes” cannot possibly occur.
4. The third-year evaluation sets forth the same problems that RTI describes in the second-year evaluation. For example, RTI states: “In Year Three, almost all [eight state] initiatives continued to report significant challenges related to the timeliness and quality of the data provided by the initiatives to practices. Interviewees in most states also reported payment challenges persisting from earlier years.” [p. 2-7]
Kip Sullivan, J.D. is a health policy expert and frequent blogger, and is a member of PNHP Minnesota’s legislative committee. 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.
Holy MACRA! Half of docs have never heard of Medicare payment reform
By Dave Barkholz
Modern Healthcare, July 14, 2016
Half of non-pediatric physicians have never heard of the Medicare Access and CHIP Reauthorization Act of 2015—a new CMS payment plan that will put 4% or more of their Medicare reimbursement at risk beginning in 2019, according to a new survey by Deloitte & Touche.
With CMS preparing final rules this autumn, just 21% of self-employed or small-group physicians and 9% of physicians employed by hospitals or larger groups were even somewhat familiar with the pending reimbursement changes, the survey showed.
Physicians with a high share of Medicare payments were just as clueless about MACRA as those with lesser exposures, Deloitte found.
MACRA has two payment tracks. Clinicians in advanced alternative payment models can earn bonuses annually of 5%.
The majority of physicians, though, will participate in the Merit-based Incentive Payment System. On that track, physicians can earn plus or minus 4% of reimbursement in 2019, 5% in 2020, 7% in 2021 and 9% in 2022.
Medicare’s own MACRA projections show the vast majority of physicians in groups of less than 10 suffering penalties.
That includes 87% of solo practitioners who can expect their reimbursement to fall and 70% of physicians in groups of two to nine, Medicare data show.
Quote of the Day: MACRA and the ethics of physician burnout (4/22/16):
(WARNING: Reading the Table of Contents of the following document has been known to cause acute bouts of depression)
Federal Register: Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models:
Physicians celebrated the passage of MACRA because it brought the end to the despised SGR method of making adjustments to Medicare payment rates. The legislation was not simply a repeal of SGR, but it was repeal and replace legislation. Most physicians are not “even somewhat familiar with the pending reimbursement changes.”
Physicians complain about Medicare’s low payment rates, but are they in for a surprise. Most solo and small group physicians will have rate cuts of up to 9 percent under MACRA.
Those interested in more information may want to read the Federal Register entry on MACRA’s MIPS and APM (link above), or maybe not, since it could take you the better part of a week. Just reading the very long Table of Contents may be enough.
In a fairly recent Quote of the Day we described how MACRA will likely compound the current epidemic of physician burnout (link above). It’s depressing.
We can do something about it. We can enact and implement a well designed single payer national health program. For those who think that the current system is better, it is probably time to make an appointment with your mental health professional.
This has been the mantra of market advocates for many years under the theory of consumer-directed health care (CDHC), which posits that patients will be more judicious in their use of health care if they have “more skin in the game” (ie. through more cost-sharing). It has been repeated so often and for so long as to become a meme: a self-replicating myth or slogan that by constant repetition becomes part of everyday language, without regard to its merit.
Here is a classic quote in 2006 by senior fellows at the Hoover Institution, a conservative think tank, putting the blame and responsibility on patients for the control of health care costs:
Greater reliance on individual choice and free markets are the solutions to what ails our health care system . . . A handful of policy changes that harness the power of markets for health services have the potential to give patients and their physicians more control over health-care choices, create more health insurance options, lower health care costs, reduce the number of uninsured persons—and give workers a pay increase to boot. (1)
A Rebuttal of This Meme
The last three decades have demonstrated how false this claim is in terms of cost containment. Over utilization by patients is not the root cause of health care inflation, as these findings show:
Despite some 30 years’ failed expectations that more cost-sharing by patients will contain costs of health care, why do we continue with this policy that increasingly makes health care inaccessible and unaffordable to a growing part of our population? The big reason, of course, is the economic and political power of the corporate stakeholders in our present multi-payer financing system, such as the insurance, drug, and medical device industries. Their power in the political process supports the status quo and resists real health care reform. After six years, the Affordable Care Act (ACA) has failed to adequately rein in costs or prices. Cost-sharing is a central part of the ACA, supported by Hillary Clinton, and will be in whatever ”plan” the Republicans will come up with if they gain enough political control to repeal and replace the ACA. We must abandon the meme that patients can contain health care costs and move to a single-payer, not-for-profit financing system, or the health care crisis will get steadily worse until the system implodes.
John Geyman, M.D. is the author of The Human Face of ObamaCare: Promises vs. Reality and What Comes Next and How Obamacare is Unsustainable: Why We Need a Single-Payer Solution For All Americans
National Health Expenditure Projections, 2015–25: Economy, Prices, And Aging Expected To Shape Spending And Enrollment
By Sean P. Keehan, John A. Poisal, Gigi A. Cuckler, Andrea M. Sisko, Sheila D. Smith, Andrew J. Madison, Devin A. Stone, Christian J. Wolfe and Joseph M. Lizonitz (all from CMS Office of the Actuary)
Health Affairs, July 13, 2016 (Online before print)
Health spending growth in the United States for 2015–25 is projected to average 5.8 percent — 1.3 percentage points faster than growth in the gross domestic product — and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act’s coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.
National Health Expenditures (NHE) 2016
NHE $3.3507 trillion
NHE as percent of GDP 18.1%
Government proportion of NHE 46%
NHE per capita $10,345.5
The health sector is in the midst of a unique period, in which various forces are exerting differential pressures on health spending growth. Economywide and medical-specific price growth have been very low, helping restrain inflation’s impact on health spending, and the Medicare program is experimenting with various alternative payment approaches. Meanwhile, many Americans are gaining access to health coverage for the first time, aging into Medicare, or finding that a greater share of their health expenses needs to be paid out of pocket. And the Medicaid program is evolving: Its population mix is increasingly likely to be covered through private plans.
For the period 2015–25, growth in health spending is projected to average 5.8 percent, influenced in part by an expectation of higher economywide and medical prices. By 2025, as economic, legislative, and demographic influences play out, the health spending share of the economy is projected to reach 20.1 percent, up from 17.5 percent in 2014, and governments are anticipated to sponsor 47 percent of health spending, up from 45 percent in 2014. The percentage of the US population that is uninsured is expected to be 8 percent in 2025, down from about 11 percent in 2014.
CMS National Health Expenditure Projections 2015-2025:
The Great Recession has contributed to slowing of the growth in health care spending in recent years, but the future changes are predicted to be more closely related to various demographic related coverage changes plus certain payment trends including the increase in cost sharing in private insurance plans. Also the increase in the government contribution to our national health expenditures deserves special mention.
Regarding increases in patient cost sharing, it is no secret that this has been a blunt instrument to control spending, resulting in a decline in use of beneficial health care services. As has been stated repeatedly, we need more patient-friendly methods of slowing the increase in spending such as fairer publicly-administered pricing through a single payer national health program.
The government contribution to our national health expenditures has increased to 46 percent, but that does not include two large components of taxpayer-funded government spending on health care: 1) The government contribution to employee health insurance on the federal, state and local levels, and 2) the massive tax expenditures for employer-sponsored health plans (i.e., the health insurance component of the employee benefit package is not subject to income taxes, reducing revenue for the government which must be made up by other taxpayers).
The irony is that we already pay in taxes devoted to health care alone more than almost every other nation pays in public and private health care spending combined. Without increasing our current level of spending we could pay for a comprehensive, government-financed, single payer national health program. Yet we continue to support our dysfunctional financing system that wastes so much on administrative excesses while perpetuating injustices by misallocating distribution of our health care resources.
We can and must do better.
By The Times Editorial Board
Los Angeles Times, July 12, 2016
California lawmakers have been trying for more than a decade to protect hospital patients from being hit with huge bills from doctors who aren’t part of their health insurer’s network. They have another opportunity to do so this year, and they should seize it.
The problem arises when patients go to an in-network hospital or clinic to be treated by an in-network surgeon or other physician, but wind up receiving care (often without their knowledge) from an anesthesiologist, pathologist, radiologist or other specialist who’s not in the network. A nasty surprise arrives weeks later, when the out-of-network specialists bill them for the portion of their fee that the insurer wouldn’t cover — an amount that can be in the thousands of dollars. According to a survey by the Kaiser Family Foundation, 70% of the patients struggling to pay out-of-network doctors had not known they were going to be treated by someone who didn’t accept their insurance.
Physicians’ trade groups insist that they don’t like surprise medical bills either. The challenge has been figuring out how to create a system that encourages insurers, hospitals and doctors to avoid these situations while still providing a fair payment to the out-of-network physicians who provide treatment.
Congress provided a measure of help in the Affordable Care Act for patients receiving emergency care from out-of-network doctors by requiring insurers to cover the same percentage of the costs as they would have if the doctors had been in network. California law goes further, barring out-of-network doctors who deliver emergency care from billing patients for the amount the insurer doesn’t cover. But that still leaves patients vulnerable for non-emergency care.
Having hospitals and clinics make sure that each patient is treated only by specialists in the patient’s provider network would be one way to end surprise bills, but it would require them to manage doctors more directly than they do today. And there’s no guarantee today that the necessary specialists would be available in a patient’s network.
Assemblyman Rob Bonta (D-Alameda) and a bipartisan group of cosponsors have taken a more pragmatic approach. Their bill, AB 72, would require out-of-network doctors to obtain a patient’s permission at least a day before providing non-emergency treatment at an in-network hospital or clinic. If the patient doesn’t voluntarily agree to be treated by a specific out-of-network doctor and pay the extra charges, he or she couldn’t be billed for more than an in-network provider would have cost — even if out-of-network doctors are brought in. Any participating out-of-network doctor, meanwhile, would have to accept the average amount paid to in-network doctors or go to arbitration with the insurer.
The risk here is that too many of the physicians that don’t want to join insurance networks will simply refuse to see patients who won’t pay their full rate. The bill takes a reasonable approach to the core problem, which is the fact that patients are being hit with huge bills they hadn’t anticipated and had no say in. Lawmakers still have to iron out some details, however, to make sure the system works fairly for everyone. For example, the bill needs to give insurers an incentive to bring into their networks a full complement of specialists at every in-network hospital, rather than counting on out-of-network doctors being willing to treat patients at a discount.
There will always be tension between what insurers want to pay and what providers want to be paid for their services, especially in regions where one or the other faces limited competition. So there will inevitably be fights over how much a provider’s service is worth to an insurer, and vice versa. But there’s no reason patients should be caught by surprise in the middle of that fight.
There are many injustices inherent in our dysfunctional, fragmented system of financing health care, and surprise medical bills from out-of-network physicians is one of them. Patients who have health insurance should not have to face these bills that otherwise would have been covered by their insurance. So what is the solution?
First we have to understand the problem. Surprise medical bills pop up because the insurer has not contracted with all of the members of the team that provides care for the patient. In-network physicians have their fees set by the contract they have signed with the insurer. Out-of-network physicians have no such contract and thus feel free to set their own fees.
The patient has selected an insurance plan – a contract – which provides coverage for in-network physicians. Some plans may provide partial coverage for out-of-network physicians but usually only at rates that are even lower than in-network physicians would be paid. Because the insurer has no contract with the out-of-network physician, the patient must pay not only the difference between the contracted rate and the lower out-of-network rate but also must pay the entire balance of the full fee charged by the out-of-network physician.
Various legislative solutions have been considered to protect the patient from these charges that most consider to be unfair when the patients have fulfilled their responsibility of obtaining adequate insurance coverage. Some have suggested that the insurers should be required to pay the full fee of the out-of-network physician. But then why would any physician sign a contract with the insurer if by remaining out-of-network they can receive their full list fee instead of the discounted contract fee? That would destroy the concept behind the contracted physician networks and result in intolerable fee inflation.
Most legislative solutions then turn to the physicians to demand that they accept the fee determined by the insurer even though no contract exists with these out-of-network physicians. In this instance, why would the insurer make an effort to be sure that they have a full complement of physicians available so that patients would not be inadvertently provided care by an out-of-network physician. Under such a requirement, if the insurer establishes only a narrow network of physicians then they could limit payments to the level of their contracted rates for all other out-of-network physicians without contracts. This gives private insurers the right to set rates outside of their plans, even if unreasonably low – hardly a free market solution.
So who is to blame? The patient for not selecting a plan that contracts with all physicians that might be needed in the future, even if that is impossible to know? The physician who the insurer has not included in their deliberately restricted networks? The insurer who has created restricted networks to control fees at the cost of limiting coverage for often unavoidable services provided by out-of-network physicians?
By now it should be obvious that the real problem is with the defective design of our dysfunctional health care financing infrastructure. Solutions should be directed at correcting the defects in the infrastructure.
In a single payer system that prohibits private insurance coverage for benefits provided by the public system, essentially all physicians are covered – the equivalent of all physicians being “in-network.” Fees are fair since they are publicly administered, paying enough to support the system and provide fair margins, yet not paying so much that it would be an excessive burden on the taxpayers who finance the system. An ideal single payer system provides first dollar coverage for all essential benefits, thus the patient is not exposed to surprise bills, whether in- or out-of-network, nor to deductibles and coinsurance which can be unaffordable under our current financing system.
Private insurers are providing us services that we do not want: costly, excessive administrative services that serve the insurers rather than the patients, excessive patient cost-sharing that can make health care access unaffordable, and narrow provider networks that take health care choices away from patients. Instead of narrowly confining their considerations to surprise bills, our legislators should get to the root of the problem and eliminate the private insurer intermediaries who are screwing up the system.
It is long past time to enact a just system that works: a single payer national program, aka an improved Medicare for all.
United States Health Care Reform: Progress to Date and Next Steps
By Barack Obama, JD
JAMA, July 11, 2016 (Online)
Importance: The Affordable Care Act is the most important health care legislation enacted in the United States since the creation of Medicare and Medicaid in 1965. The law implemented comprehensive reforms designed to improve the accessibility, affordability, and quality of health care.
Objectives: To review the factors influencing the decision to pursue health reform, summarize evidence on the effects of the law to date, recommend actions that could improve the health care system, and identify general lessons for public policy from the Affordable Care Act.
Evidence: Analysis of publicly available data, data obtained from government agencies, and published research findings. The period examined extends from 1963 to early 2016.
Findings: The Affordable Care Act has made significant progress toward solving long-standing challenges facing the US health care system related to access, affordability, and quality of care. Since the Affordable Care Act became law, the uninsured rate has declined by 43%, from 16.0% in 2010 to 9.1% in 2015, primarily because of the law’s reforms. Research has documented accompanying improvements in access to care (for example, an estimated reduction in the share of nonelderly adults unable to afford care of 5.5 percentage points), financial security (for example, an estimated reduction in debts sent to collection of $600-$1000 per person gaining Medicaid coverage), and health (for example, an estimated reduction in the share of nonelderly adults reporting fair or poor health of 3.4 percentage points). The law has also begun the process of transforming health care payment systems, with an estimated 30% of traditional Medicare payments now flowing through alternative payment models like bundled payments or accountable care organizations. These and related reforms have contributed to a sustained period of slow growth in per-enrollee health care spending and improvements in health care quality. Despite this progress, major opportunities to improve the health care system remain.
Conclusions and Relevance: Policy makers should build on progress made by the Affordable Care Act by continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees, introducing a public plan option in areas lacking individual market competition, and taking actions to reduce prescription drug costs. Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.
Building on Progress to Date (excerpt)
Third, more can and should be done to enhance competition in the Marketplaces. For most Americans in most places, the Marketplaces are working. The ACA supports competition and has encouraged the entry of hospital-based plans, Medicaid managed care plans, and other plans into new areas. As a result, the majority of the country has benefited from competition in the Marketplaces, with 88% of enrollees living in counties with at least 3 issuers in 2016, which helps keep costs in these areas low. However, the remaining 12% of enrollees live in areas with only 1 or 2 issuers. Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan. Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers. The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited. Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.
Lessons for Future Policy Makers (excerpt)
The third lesson is the importance of pragmatism in both legislation and implementation. Simpler approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all. Yet the nation typically reaches its greatest heights when we find common ground between the public and private good and adjust along the way. That was my approach with the ACA. We engaged with Congress to identify the combination of proven health reform ideas that could pass and have continued to adapt them since.
As this progress with health care reform in the United States demonstrates, faith in responsibility, belief in opportunity, and ability to unite around common values are what makes this nation great.
The full article can be downloaded for free at the JAMA website:
In this JAMA article, President Obama understandably touts the benefits of his Affordable Care Act (ACA) and describes some of the problems that remain that need to be addressed. Two serious deficiencies of his article are that he fails to acknowledge the fact that some of the changes taking place are actually detrimental, and his proposals for the way forward are grossly inadequate when considering the need.
A few examples of where changes have been detrimental include the expansion of intolerably high deductibles creating financial barriers to care, increased use of narrow provider networks impairing access to care, and expansion of administrative excesses including the Marketplaces (ACA insurance exchanges) and the new models of paying for care (APMs, ACOs, and MACRA models).
The President touts enhanced competition in the Marketplaces as a way forward when the prevailing evidence indicates that competition in private insurance markets is ineffective in improving quality and reducing costs. It is predicted that insurance premium increases for 2017 will confirm that the ACA exchanges have not been effective in controlling costs. Not only are insurance premiums going up, but more costs are being shifted to patients in the form of higher out-of-pocket spending.
The media are reporting the President’s recommendation for a “Medicare-like public plan,” yet the hope that a public option will open the door for single payer cannot be realized when it is offered only as another option in our fragmented system of financing health care. The failure of the co-ops should signal to us the deficiencies of a public or quasi-public option which is designed to protect the markets of the private insurers. The private Medicare Advantage plans are continuing to displace the traditional Medicare program because the politicians have provided the private plans with extra funds and regulatory freedom that allow them to “compete” unfairly with Medicare.
Finally, the President presents single payer and government vouchers for private plans as being the two extremes of health care financing reform, whereas ACA represents the “common ground between the public and private good.” Placing ideologically-driven health care reform policies along a linear political spectrum and then choosing the middle is an extremely simplistic and highly flawed approach to health policy. Health policies should be placed along a spectrum of effectiveness of those policies in achieving health reform goals of universality, efficiency, equity, comprehensiveness, accessibility, and affordability. Then the extreme that achieves those goals should be accepted as the ideal model for reform while rejecting those policies at the other end. To no surprise, using a spectrum based on optimal health policy leads us logically to single payer.
The President ends with the statement, “As this progress with health care reform in the United States demonstrates, faith in responsibility, belief in opportunity, and ability to unite around common values are what makes this nation great.” With the majority of the nation now supporting a federally funded health care system, isn’t that a call for uniting around health care reform that really works: a single payer national health program?
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