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.
YouTube, March 12, 2014
On March 11, 2014, several authorities on single payer health care systems of other nations testified before a committee of the United States Senate, chaired by Sen. Bernie Sanders. The hearing was not only the topic of a recent Quote of the Day (March 12), it also has been covered extensively in the media and on the Internet throughout the United States and Canada.
It was the responses of Dr. Danielle Martin of Canada to the questions from Committee Ranking Member Sen. Richard Burr, that caused this story to go viral. For those who missed it, the 7 minute segment that includes the exchange between Dr. Martin and Sen. Burr can be viewed at this YouTube link: http://www.youtube.com/watch?v=iYOf6hXGx6M
You can read more about this exchange by Googling “Danielle Martin.” Some of the other coverage:
National Post: “Toronto doctor smacks down U.S. Senate question on Canadian waitlist deaths”: http://news.nationalpost.com/2014/03/12/toronto-doctor-smacks-down-u-s-senate-question-on-canadian-waitlist-deaths/
Los Angeles Times: “Watch an expert teach a smug U.S. senator about Canadian healthcare”:http://www.latimes.com/business/hiltzik/la-fi-mh-watch-a-canadian-20140312,0,2995139.story
Huffington Post: “Watch This Doctor Totally School An Anti-Obamacare Senator On Health Care”: http://www.huffingtonpost.com/2014/03/13/danielle-martin-richard-burr_n_4958164.html
Huffington Post Canada: “Canadian Doctor Gives U.S. Senator A Clinic On Public Health Care”: http://www.huffingtonpost.ca/2014/03/13/canadian-doctor-us-senator-health-care_n_4956468.html
CBC.ca (audio): “Canadian doctor schools U.S. Senator on public health care”:http://www.cbc.ca/asithappens/features/2014/03/12/canadian-doctor-schools-us-senator-on-public-health-care/
MSNBC: The Rachel Maddow Show (3/14/14, Ari Melber, guest host):http://www.msnbc.com/rachel-maddow-show
The Maddow Blog: “Martin 1, Burr 0″: http://www.msnbc.com/rachel-maddow-show/martin-1-burr-0#break
Salon: “Canadian doctor makes anti-Obamacare senator look like a buffoon”:http://www.salon.com/2014/03/13/canadian_doctor_makes_anti_obamacare_senator_look_like_a_buffoon/
Toronto Star: “Toronto doctor smacks down U.S. senators’ myths about Canadian health care”:http://www.thestar.com/life/health_wellness/2014/03/13/toronto_doctor_smacks_down_us_senators_myths_about_canadian_health_care.html
Canada.com: “Watch: Canadian doctor schools American senator on health care”:http://o.canada.com/health/danielle-martin-richard-burr-health-care-410599/
Huffington Post Canada: “Republicans Ruin Health Care By Ignoring Jesus (And Canada)”:http://www.huffingtonpost.ca/michael-bolen/canada-america-health-care-christian-nation_b_4957509.html
Well, you get the point.
For those interested in viewing the entire hearing (1 hour, 45 minutes), or wish to download witness statements: http://www.help.senate.gov/hearings/hearing/?id=8acab996-5056-a032-522e-e39ca45fcfbe
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Medicaid And Marketplace Eligibility Changes Will Occur Often In All States; Policy Options Can Ease Impact
By Benjamin D. Sommers, John A. Graves, Katherine Swartz and Sara Rosenbaum
Health Affairs, April 2014 (online March 12, 2014)
Beginning January 1, 2014, the Affordable Care Act (ACA) established two pathways to health insurance for nonelderly US citizens and legal residents. The first was an expansion of Medicaid coverage for people with annual incomes of up to 138 percent of the federal poverty level in states that elected to expand their programs. The second pathway was subsidizing private coverage purchased via health insurance Marketplaces for people with incomes of 138–400 percent of poverty who do not have an offer of affordable coverage through an employer. The pathways are designed to work in tandem, but a major challenge is how to promote continuity of coverage and health care for people when their incomes and life circumstances cause them to transition between Medicaid and subsidized private coverage.
In states that opt out of the ACA’s Medicaid expansion, changes in income or family circumstance will lead many people to lose coverage entirely unless they qualify for coverage under one of the traditional categories of Medicaid eligibility: pregnancy, disability, or being the impoverished parent of a minor child. A less stark problem that presents a different set of challenges will occur in states that do expand Medicaid: the potential for moving between Medicaid and Marketplace coverage.
Both of these types of “churning”—loss of coverage and frequent transitions in the source of coverage—can cause difficulties. The total loss of coverage raises the most serious problems in terms of access to care, but frequent transitions across coverage pathways also raise important issues for beneficiaries, health plans, providers, and policy makers. From one year to the next or during any given year, many individuals and families will experience changes in eligibility either for Medicaid or for Marketplace coverage. These eligibility changes could lead to both gaps in coverage and disruptions in the continuity of care, because people might have to find new providers or change their existing health treatments if their new insurance plan uses a different provider network or covers different services than their old plan did.
Previous research has estimated that approximately half of low-income adults might experience a change in income or family circumstances leading them to transition from Medicaid to Marketplace coverage (or vice versa) each year.
From the Discussion
We estimated that approximately half (plus or minus 5 percentage points) of adults likely to be eligible for Medicaid or subsidized Marketplace coverage will experience an eligibility change within twelve months.
It is important to recognize that the eligibility changes we have analyzed are the result of an effort to expand pathways to affordable coverage for all Americans. Churning has often been used to describe the negative outcome of moving into and out of insurance coverage and becoming uninsured. In contrast, we are discussing changes that are a by-product of a system that allows for transitions among insurance pathways. These transitions increase the risks of disrupting care continuity and of having short gaps in coverage. But they represent a different (and less problematic) form of churning than that between having Medicaid or Marketplace coverage and being uninsured.
However, when low-income adults in states that opt not to expand their Medicaid programs experience a loss of income that drops them below 100 percent of poverty, most will not be eligible for subsidized coverage in the Marketplace or for Medicaid. Most nonexpansion states restrict Medicaid eligibility for adults to pregnant women, certain low-income adults with disabilities, and parents of minor children with incomes of no more than 35 percent of poverty on average. In other words, most adults who lose Marketplace subsidies in nonexpanding states will become uninsured, as has traditionally happened to adults who lose Medicaid eligibility.
A number of policies have recently been proposed to mitigate the effects of churning between Medicaid and Marketplace coverage, and state policy makers should consider them in the light of our findings.
One option is for states to adopt twelve-month continuous eligibility periods in Medicaid as a means of overcoming the churning effects of periodic income fluctuations
A second, more incremental option offered in CMS’s 2012 regulations allows states to assess people’s ongoing eligibility for Medicaid using projected annual income instead of current monthly income.
A third option for states is to use Medicaid funds to purchase coverage in qualified health plans in the Marketplace for people with incomes below 138 percent of poverty.
A fourth approach is the Basic Health Program, an option under the ACA that enables states to combine their Medicaid expansions with Marketplace subsidies into a single program for individuals and families with incomes of up to 200 percent of poverty.
A fifth option relates to how and when income changes are verified.
Finally, a state option that combines enrollment and marketing strategies is to encourage certified Medicaid managed care plans to enter state Marketplaces.
The Affordable Care Act (ACA) compounded and locked into place our highly fragmented, multi-payer method of financing health care. It is a system that makes churning inevitable – moving in and out of various plans or having no coverage at all, simply because program eligibility varies depending on each individual’s circumstances which often are in an intermittent state of flux.
As if there was not already enough instability with employer-sponsored and individual market plans, this study shows that under the two major expansions of ACA, “approximately half of adults likely to be eligible for Medicaid or subsidized Marketplace coverage will experience an eligibility change within twelve months.” Half in just the first year alone. What after that?
Eligibility change is highly disruptive to care. It changes the amounts that the individual or family will have to pay for premiums, cost sharing, and non-covered services. It changes the provider networks that vary under different plans. It can disrupt treatment programs. It can result in gaps in coverage or no coverage at all. As is typical with Medicaid, it can even change the willingness of physicians to accept the individual or family as patients.
And that line about keeping the coverage you have if you want it? Within one year, half will have a change in their eligibility. And the recommendations of the authors will only tweak the instability, but the fundamental problem will not be corrected. It is the ACA model that is irreparably flawed.
Unless we change our model of financing, instability and disruption will be the norm, not only because of shifting eligibility but also because plans obtained through employment or in the market are undergoing dramatic changes – even if less transparent – that will impact all of us with greater cost sharing, narrower networks, and other changes that none of us want. Do Americans really accept this mess as our preferred option for health care financing?
Change to a single payer national health program and this all goes away.
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 Great Debate – Single Payer or Private Insurance
By Katie Britton
WAMC, March 13, 2014
Students for a National Health Program at Albany Medical College presented The Great Debate at WAMC’s The Linda on the evening of February 21st. Moderated by Dr. Kimberly Kilby, the debate featured Dr. Paul Song of the Physicians for a National Health Program (PNHP) from California and Dr. Mitchell Heller of the Benjamin Rush Society from New York City as they argued for and against single payer vs. private insurance.
For an audio of the debate (55 minutes): http://wamc.org/post/great-debate-single-payer-or-private-insurance
Resolved: The United States should switch to a single payer health care system
Speaking in favor is Paul Song, MD, representing Physicians for a National Health Program – an organization of physicians and others who advocate for “a universal, comprehensive single-payer national health program.”
Speaking in opposition is Mitchell Heller, MD, representing the Benjamin Rush Society – an organization of physicians and others “who believe that the profession of medicine calls its practitioners to serve their patients, rather than the government.”
“We as a society are defined by how we take care of the least amongst us.” – Dr. Song
“It’s hard to understand how command and control models like single payer still gain intellectual traction at all.” – Dr. Heller
Although you should listen to the debate before hearing the results, many of you do not have the extra 55 minutes. So here is the vote:
Before the debate:
66% – For
5% – Against
29% – Undecided
After the debate:
80% – For
2% – Against
18% – Undecided
Subcommittee Hearing – Access and Cost: What the US Health Care System Can Learn from Other Countries
Committee on Health, Education, Labor and Pensions (HELP) , Subcommittee on Primary Health and Aging
United States Senate, March 11, 2014
Tsung-Mei Cheng, LL.B., M.A.
Health Policy Research Analyst
Woodrow Wilson School of Public and International Affairs, Princeton University
Today’s hearing is focused on “international single payer health system models that provide universal coverage of health care.” I will tailor my remarks according to the three sub-themes the Committee wishes to explore, namely:
* Primary care access in single payer systems
* Health care costs in single payer systems, and
* Cross-country comparisons of health outcomes
Before proceeding with the Committee’s agenda in more detail, however, I would like to provide the Committee with a summary of my main points:
1. If equity and social solidarity in access to health care and financing health care were fundamental goals of a health care system, the single payer system provides an ideal platform for achieving these goals.
2. Single-payer systems typically are financed by general- or payroll taxes in a way that tailors the individual’s or family’s contribution to health-care financing to their ability to pay, rather than to their health status, which until this year has long been the practice in the individual health insurance market in the U.S.
3. These systems protect individual households from financial ruin due to medical bills.
4. Single-payer health systems typically afford patients free choice of health-care provider, albeit at the expense of not having a freedom of choice among different health insurers. Remarkably, in the U.S. households have some freedom of choice of health insurers – to the extent their employer offers them choice – but most Americans are confined to networks of providers for their insurance policy. In other words, Americans appear to have traded freedom of choice among providers for the sake of choice among insurers.
5. In single-payer systems “money follows the patient.” Therefore providers of health care must and do compete for patients on the basis of quality and patient satisfaction, but not price.
6. In a single payer health insurance system, health insurance is fully portable from job to job and into unemployment status and retirement. The “job-lock” phenomenon prevalent in the US is unknown in those systems, contributing to labor-market efficiency.
7. Because all funds to providers of health care in a single-payer system flow from one payer, it is relatively easy to control total health spending in such systems. Indeed, total national health spending as a percent of GDP in countries with single-payer systems is lower than it tends to be in non-single-payer health systems. This does not mean providers are left without a voice. Provider inputs are part of the formal negotiations over health-care budgets.
8. For the most part, single-payer systems achieve their cost control by virtue of the monopsonistic market power they enjoy vis a vis providers of health care. It is a countervailing power that the highly fragmented U.S. health-insurance system lacks vis a vis providers.
9. As part of their effort to control total health spending, however, and to avoid the waste of excess capacity that easily develops in health care, some single-payer systems (the UK and Canada) put constraints on the physical capacity of their health system (number of inpatients beds, MRI scanners, etc). That approach can lead to rationing by the queue. The alternative to rationing by such administrative devices, of course, is rationing by price and ability to pay, an approach used by design or by default in the United States. Rationing by price or by non-price mechanism are just alternative forms of rationing.
10. A single-payer system is an ideal platform for a uniform electronic health information system of the sort, for example, used by our Veterans Administration health system (a single-payer system in its own right). There is a common nomenclature which enables 100% electronic billing and claims processing, thus yielding significant savings in administrative costs.
11. Because they conveniently capture information on all health-care transactions, single-payer systems provide a data base that can be used for quality measurement, monitoring and improvement, and also for more basic research on what drives health spending and what clinical treatments works and does not work in health care. It enables evidence based medicine and the tracking of efficacy and safety of new drugs and devices once they are introduced after approval by government based on results of clinical trials.
Statement of Tsung-Mei Cheng (28 pages):http://www.help.senate.gov/imo/media/doc/Cheng.pdf
Video of the hearing and links to statements of all participants:http://www.help.senate.gov//hearings/hearing/?id=8acab996-5056-a032-522e…
Sen. Bernie Sanders chaired a Senate committee hearing on what the health care system in the United States can learn from other countries. Tsung-Mei Cheng provided an excellent overview of single payer and of the sharp contrasts between the United States and other nations. Her 28 page statement is well worth downloading to use as an information resource in educating others about single payer.
Other informative presentations included those of Victor Rodwin on France, Ching-Chuan Yeh on Taiwan, Danielle Martin on Canada, and Jakob Kjellberg on Denmark. Even the presentations from the other side by Sally Pipes and David Hogberg were helpful in that they showed how silly (sadly) their views were when contrasted with a group of experts who understand well how systems based on solidarity work. If you can find the time, viewing the entire video (1 hour & 46 minutes) and reading the statements would be well worth the effort (link above).
If you don’t have the time, at least view this 4 minute YouTube video of clips from the hearing: https://www.youtube.com/watch?v=9WdqtPLRc1A
The Irony of ObamaCare: Making Inequality Worse
UNITE HERE, March 7, 2014
The promise of Obamacare was the right one and the hope for extending healthcare coverage to the un- and under-insured a step in the right direction. Yet the unintended consequences will hit the average, hard-working American where it hurts: in the wallet. Currently a national dialogue is emerging by all political parties on the issue of income inequality. That is a debate worth having. The White House and Congressional Democrats are “resetting” the domestic agenda following the negative fallout from the rollout of the ACA. They plan to shift focus from health care to bread and butter issues of income inequality that have eroded the American paycheck for decades.
Ironically, the Administration’s own signature healthcare victory poses one of the most immediate challenges to redressing inequality. Yes, the Affordable Care Act will help many more Americans gain some health insurance coverage, a significant step forward for equality. At the same time, without smart fixes, the ACA threatens the middle class with higher premiums, loss of hours, and a shift to part-time work and less comprehensive coverage.
* Transferring A Trillion Dollars in Wealth: Most of the ACA’s $965 billion in subsidies will go directly to commercial insurance companies, one of the largest transfers of public wealth to private hands ever. Since the ACA passed, the average stock price of the big for-profit health insurers doubled, their top executives were paid more than a half billion dollars in cash and stock options, and in the past 2 years, the top 10 insurers have spent $25 billion on mergers and acquisitions.
* Strangling Fair Competition: Before reform, different types of health plans were regulated under different bodies of law. The Obama Administration has blocked many non-profit health funds from competing for the law’s proposed trillion dollars in subsidies by refusing to set fair regulations for different types of plans. The unbalanced playing field will give employers of people covered by these plans powerful incentives to drop coverage.
* Moving to Part Time Work: The Administration’s experts say employers won’t follow the incentives and drop coverage. But they also told the nation that employers would not cut workers’ hours to get below the 30-hour per week threshold for “full time” work, even as 388 employers announced hours cuts since early 2012.
* Cutting People’s Pay: If employers follow the incentives in the law, they will push families onto the exchanges to buy coverage. This will force low-wage service industry employees to spend $2.00, $3.00 or even $5.00 an hour of their pay to buy similar coverage.
For two years, labor unions and employer partners have patiently explained to the Obama Administration and Congress the potential damage that the ACA poses to these unique, successful non-profit health plans.
Having already made efforts to accommodate businesses, churches and congressional staff, it is ironic that the Administration is now highlighting issues of economic inequality without acting to preserve health plans that have been achieving the goals of the ACA for decades. Without a smart fix, the ACA will heighten the inequality that the Administration seeks to reduce.
We take seriously the promise that “if you like your health plan, you can keep it. Period.” UNITE HERE members like their health plans. UNITE HERE’s plans are ready to compete with the corporate giants of the health insurance industry if Washington will simply create a level playing field.
UNITE HERE is a union of service workers in hotels and other industries. Many of their members are insured through non-profit Taft-Hartley plans with joint union-management governance structures. This report shows how the Affordable Care Act can have a negative impact on the health care coverage and hours of employment of union members, in effect making inequality worse.
Some of their legitimate complaints:
* Employers are not required to make available health insurance to employees who work less than 30 hours per week. Although the Obama administration denies that this will cause employers to reduce the hours that many of their employees work, it is already happening. Obviously that reduces the employees’ net incomes and may disqualify them from receiving insurance coverage.
* Employers do not have to provide any health coverage at all if they do not have more than 50 employees. Many employers are taking measures to stay below the 50 full-time employee threshold.
* Employer penalties for not providing coverage are far smaller than the employer costs of their health benefit programs. It is likely that many employers will elect to pay the penalties rather than support a health plan. Yet it is unlikely that employers will increase wages enough to compensate for the lack of an employee health benefit program.
* Most UNITE HERE union members have wages low enough to qualify for subsidies to help pay for plans obtained through the state or federal insurance exchanges. Yet those subsidies cannot be used for employees in the UNITE HERE Taft-Hartley plans. (They do indirectly receive the tax benefit of deductibility for employer-sponsored plans, but at their income levels, this benefit may be negligible.)
* More expensive plans will be subject to a 40 percent excise tax. The UNITE HERE Taft-Hartley plans may be subject to this tax, not because the benefits are too generous, but rather because health care costs are so high and because many of the employees in the service industry union are older with greater health care costs. This excise tax is borne by the employee through higher premiums and forgone wage increases.
* All plans, including Taft-Hartley plans, pay taxes that are used to ease the financial transition of private plans offered on the exchanges. Though the union members ultimately pay these taxes, they receive none of the benefits since Taft-Hartley plans do not qualify for transitional financial support.
* Self-funded plans, such as these Taft-Hartley plans, are prohibited from being offered to the public and thus cannot benefit from market competition as the exchange plans can.
* ACA generously subsidizes private health plans with some of those funds going to overpaid executives and wealthy shareholders, thereby contributing to worsening inequality.
Although UNITE HERE calls for Congress and the president to level the playing field through legislation and rule making, a far better solution would be to establish a single payer national health program.
Under an improved Medicare for all, UNITE HERE union members would receive more generous benefits, with first dollar coverage, and with a net cost to them in taxes that would be significantly less than what they are currently paying in premiums and forgone wages. A single payer system would be more effective in reducing inequality than would tweaking the Taft-Hartley plans.
When Health Costs Harm Your Credit
By Elisabeth Rosenthal
The New York Times, March 8, 2014
Mounting evidence shows that chaos in medical billing is not just affecting our health care but dinging the financial reputation of many Americans: While the bills themselves frequently take months to sort out, medical debts can be reported rapidly to credit agencies, and often without notification. And even small unpaid bills can severely damage credit ratings.
A mortgage initiator in Texas, Rodney Anderson of Supreme Lending, recently looked at the credit records of 5,000 applicants and found that 40 percent had medical debt in collection, with the average around $400; even worse, most applicants were unaware of their debt. Richard Cordray, director of the federal Consumer Financial Protection Bureau, has noted that half of all accounts reported by collection agencies now come from medical bills, and the credit record of one in five Americans is affected.
The problem is accelerating for several reasons. Charges are rising. Insurance policies are requiring more patient outlays in the form of higher deductibles and co-payments. More important, perhaps, is that while doctors’ practices traditionally worked out deals for patients who had trouble paying, today many doctors work for large professionally managed groups and hospital systems whose bills are generated far away, by computer.
Our fragmented, dysfunctional system of paying medical bills is having a major impact on personal credit ratings. Half of all accounts reported by collection agencies now come from medical bills. The credit record of one-fifth of Americans is affected, and many of us are unaware of it. Are people so broke that they can’t pay their medical bills, or is something else going on here?
There are two major factors at play here. One is that with flat wages and increasing household costs, many people do have problems paying all of their essential bills, and medical bills are moved to the bottom of the stack. When payment of medical bills is postponed, or perhaps not paid at all, they are commonly sent to collection agencies, eventually appearing on the debtor’s credit report. Now that high deductibles are being used more to shift costs from payers (employers or government) to patients, this phenomenon is much more common.
The other factor is how people with good incomes who are meticulous with management of their personal finances end up with dinged credit reports because of medical bills. It is often due to the administrative complexity of the system we have of paying medical bills through private insurers who make payments based on whether the providers are in or out of network, on whether or not the products or services being billed are even covered by the plans, and on how much the deductible and coinsurance are and what charges can be credited against the deductible.
Typically the individual receives an explanation of benefits which is difficult to decipher often because some of these questions still remain unanswered. Billings may start to come in from various health care providers but without adequate explanation. When the patient inquires as to why the amount was not applied to the deductible, or why the amount seems to be for out-of-network providers when this provider is in-network, or for whatever reason, the patient is often given a temporizing response. When more statements are received that failed to address concerns such as the deductible, further efforts to correct the problem are often met with reassurance. When nothing further is heard, the patient assumes the matter was cleared up. Only later when a collection agency begins to harass them or when they find their credit report includes unpaid medical bills do they discover that the matter never was resolved.
Add in further complexities such as when a person has primary coverage perhaps through Medicare and secondary coverage through a Medigap plan, or a person had a change in coverage coinciding with the medical services provided, straightening out who is responsible for which portions of the charges can be a monumental task.
These highly responsible individuals with previously excellent credit records are understandably angry. They tend to look elsewhere for blame – the physician’s office or billing service, the hospital’s billing department, the insurer’s claim processors, the credit agency’s disregard of registered protests, or perhaps the employer who provided such a screwed up health plan.
Single payer advocates know where most of the blame really lies. It is with our political leaders who insist on perpetuating this highly inefficient, fragmented system of financing health care instead of enacting a single payer national health program. This botched up system of medical billing is only one manifestation of the profound administrative excesses that permeate our system. Ironically, all of this extra administrative detail in handling medical billings doesn’t even work well. You would think that if we are going to be paying much more in administrative costs so that the insurers could do a “better” job than a single government payer in handling our claims, we would be demanding much better performance from them. But no, keep the government out and blame everyone else.
In typical D.C. fashion, our legislators continue to look for solutions that would increase regulatory oversight to prevent unfair damage to the credit ratings of conscientious individuals, though the legislators are receiving expected push back from the credit industry. What we do not need is more administrative oversight piled on top of an administrative boondoggle. Instead we need to replace it with an efficient improved Medicare, with first dollar coverage, that covers everyone. Credit scores dinged by medical bills then would become a quaint historical oddity.
HHS Notice of Benefit and Payment Parameters for 2015 under the Patient Protection and Affordable Care Act: Final Rule
Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS), March 11, 2014
This final rule sets forth payment parameters and oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost- sharing reductions; and user fees for Federally-facilitated Exchanges. It also provides additional standards with respect to composite premiums, privacy and security of personally identifiable information, the annual open enrollment period for 2015, the actuarial value calculator, the annual limitation in cost sharing for stand-alone dental plans, the meaningful difference standard for qualified health plans offered through a Federally-facilitated Exchange, patient safety standards for issuers of qualified health plans, and the Small Business Health Options Program.
Final rule (335 pages): http://www.ofr.gov/OFRUpload/OFRData/2014-05052_PI.pdf
Any major legislation, once enacted, must then be subjected to a rule making process to have guidelines by which to administer the law. Legislation as complex as the Affordable Care Act (ACA) is expected to have an extensive set of rules, but this 335 page final rule on just a few aspects of the legislation demonstrates how unnecessarily complex ACA is.
The rule on risk adjustment, reinsurance, and risk corridors is a good example. Risk adjustment transfers funds from insurers who enrolled lower-cost, healthier individuals to insurers who had higher expenses because their enrollees had greater health problems (an almost impossible task to do fairly). Reinsurance is paying insurers a portion of their losses if they had higher than expected expenses for their enrollees. Risk corridors establish two levels of spending – one below which profits are excessive and the other above which losses are excessive – levels used to protect against inaccurate initial rate setting by the insurers.
The final rule is highly complex, which is not surprising since it is difficult to adjust for fairness after health care losses have occurred. It should be obvious that this administrative complexity is not to protect patients, but rather it is to protect the insurers. In fact, much of the profound complexity of ACA was based on making reform work for the insurers while sacrificing policy improvements that would be designed to work best for patients.
Under a single payer system, risk adjustment, reinsurance, and risk corridors would not even be necessary since you would not have competing private insurers that are each trying to game the system.
If you really want to understand better how our politicians selected the wrong model for reform, read the 335 pages of this final rule. Then read the thousands of other pages of final rules that also apply to ACA.
Yes, there would be rules under Improved Medicare for All, but they would be administratively efficient rules selected to make the system work better for patients, not for private insurers.
Survey for the National Business Group on Health
Towers Watson, March 6, 2014
The cost of providing employer-sponsored health care benefits is expected to increase 4.4% this year, a slight uptick from last year, when cost increases fell to a 15-year low, according to an annual survey by global professional services company Towers Watson and the National Business Group on Health (NBGH), an association of large employers.
The 19th Annual Towers Watson/NBGH Employer Survey on Purchasing Value in Health Care found that employer costs are expected to reach $9,560 per employee in 2014, an increase of 4.4% from $9,157 in 2013 (DM – but it would have been a 7.0% increase had employers not made changes to their plans that shifted more costs to their employees). The survey found the employees’ share of premiums increased nearly 7%, to $2,975, this year. Out-of-pocket costs also increased. The total employee cost share has climbed from 34.4% in 2011 to 37% in 2014. Employees now pay over $100 more each month for health care compared with just three years ago.
“Despite the moderation, health care costs continue to outpace inflation and remain a major concern for U.S. employers given the challenging macroeconomic environment,” said Ron Fontanetta, senior health care consultant for Towers Watson. “To find more effective ways to manage health costs, many employers are focusing on reshaping their health strategy for the next three to five years.”
Indeed, while the vast majority (95%) of respondents indicate that subsidizing health care coverage for active employees is a very important part of their rewards package, almost as many (92%) expect to make moderate to significant changes to their programs by 2018.
Contribution strategy for spouses changing: Nearly half (49%) of employers have increased employee contributions for dependent tiers at higher rates than for individuals. Another 19% expect to make this move next year. Only 56% of companies believe that subsidized health care for spouses will be very important for 2015 and beyond — down from over 70% today, an indication that the trend toward increased cost sharing for spouses will likely continue.
More employers embracing account-based health plans (e.g., HSAs): Nearly three-quarters of respondents currently offer these plans, with another 9% expecting to add one for the first time in 2015. Nearly one-third of all companies could offer ABHPs as their only option by 2015 if they follow through with current plans.
Employers looking at exchange options: Two-thirds of companies believe that private exchanges will offer a viable alternative to employer-sponsored coverage for active employees as early as 2015.
Retiree health: Nearly two-thirds of employers that offer access to a sponsored plan today say they are likely to eliminate those programs in the next few years and steer their pre-Medicare-age population to public exchanges.
Health and financial subsidies: Twenty-two percent of companies adopted outcomes-based incentives (other than for tobacco), and that figure could reach 46% by 2015 if companies follow through with their plans.
Value purchasing: The best-performing respondents are addressing key drivers of performance including pharmacy management, network delivery options and enhanced wellness strategies.
The most important reason that a more effective model of social insurance, such as single payer, was rejected in favor of a fragmented model of reform based on private health plans and public programs was that a majority of Americans were receiving their coverage through their employment and that was perceived as a segment of the market that was working well and should not be disrupted. “If you like the insurance you have, you can keep it.”
Not only was three-fifths of the population already covered by employer-sponsored plans, if this coverage were abandoned, the policy community working on reform would have had to devise a way of replacing the funds paying for this coverage – decisions that would likely provoke even greater public hostility than we saw with the enactment of the Affordable Care Act.
In the last half century, the best coverage has been provided mostly through large employers – those represented by the National Business Group on Health (employers with over 1,000 employees each and 55 million employees in total). These employers have been very concerned about rising health care costs, and now they know that they will have to live with our highly flawed version of comprehensive reform – the Affordable Care Act. They see very little in this Act that will provide them relief, so they are moving forward with their own measures.
We can now see where employers have been, where they have taken us, and where they are headed – on a downward spiral of ever inferior employer-sponsored health plans.
Some of the changes we are seeing, according to this and other reports:
* Higher deductibles (shifting costs to those with health care needs)
* Health savings accounts (not much help when they are underfunded or empty)
* Increasing employees’ share of premiums
* Reducing dependent coverage, especially spouses
* Sending employees to private insurance exchanges (shifting to defined contribution)
* Using narrower provider networks (taking away health care choices)
* Using outcome-based incentives that effectively penalize those with health problems
* Dumping retirees into public exchanges
* Using value purchasing – a code term for managed care
How could employers be so crass as to dump on their employees like this? Quite simple. They now have a new standard to point to – the low actuarial value private plans that are being offered through the government exchanges – plans that are using many of of the same strategies that will be harming the physical and financial health of plan enrollees. In fact, two-thirds of employers believe that “private exchanges will offer a viable alternative to employer-sponsored coverage for active employees as early as 2015” – next year! These private exchanges will offer plans using the same devious measures that will shift more costs to patients, thereby impairing access.
Our observation of this rapid deterioration in plans offered by the nation’s largest employers should cause us to sound the alarms. We need to begin immediately preparation for transition into a single payer national health program – an improved Medicare that covers all of us. The Fortune 500 employers are not going to do it for us.
Associations between palliative chemotherapy and adult cancer patients’ end of life care and place of death: prospective cohort study
By Alexi A Wright, Baohui Zhang, Nancy L Keating, Jane C Weeks, Holly G Prigerson
BMJ, March 4, 2014
The use of chemotherapy in terminally ill cancer patients in the last months of life was associated with an increased risk of undergoing cardiopulmonary resuscitation, mechanical ventilation or both and of dying in an intensive care unit. Future research should determine the mechanisms by which palliative chemotherapy affects end of life outcomes and patients’ attainment of their goals.
Bayer HealthCare and Onyx Pharmaceuticals
Nexavar is now indicated for the treatment of patients with locally recurrent or metastatic, progressive, differentiated thyroid carcinoma (DTC) that is refractory to radioactive iodine treatment.
Median progression-free survival
10.8 months Nexavar
5.8 months Placebo
Number of deaths
32% (66) Nexavar
34% (72) Placebo
Important safety considerations:
Most common adverse reactions reported for NEXAVAR-treated patients vs placebo-treated patients in DTC, respectively, were: Palmar-plantar erythrodysesthesia syndrome (PPES) (69% vs 8%), diarrhea (68% vs 15%), alopecia (67% vs 8%), weight loss (49% vs 14%), fatigue (41% vs 20%), hypertension (41% vs 12%), rash (35% vs 7%), decreased appetite (30% vs 5%), stomatitis (24% vs 3%), nausea (21% vs 12%), pruritus (20% vs 11%), and abdominal pain (20% vs 7%). Grade 3/4 adverse reactions were 65% vs 30%
(15 other important safety considerations are listed – available at the link)
Oncology “Top Five” List Identifies Opportunities to Improve Quality and Value in Cancer Care
American Society of Clinical Oncology, April 3, 2012
The Oncology Top Five List
1. For patients with advanced solid-tumor cancers who are unlikely to benefit, do not provide unnecessary anticancer therapy, such as chemotherapy, but instead focus on symptom relief and palliative care.
For those whose lives are dedicated to the science and art of healing, this discussion on cancer chemotherapy at the end of life is one that we shouldn’t have to have. But apparently we do need to discuss it.
The new study on this topic published by BMJ confirms what we already knew. Those patients who receive often futile chemotherapy late in the course of their malignancies seemed to be programmed for a course that increases the risk of being subjected to CPR, to being placed on a ventilator, and to dying in an intensive care unit. Most in their rational moments would prefer the more humane approach of hospice care in their final days. Yet the fact that this study was done is further evidence that mostly inappropriate, aggressive, and quality-of-life reducing interventions are still being pursued.
Nexavar is a $96,000 cancer chemotherapeutic agent that was recently approved for certain progressive thyroid carcinomas. It had been previously approved for selected cases of liver and kidney cancer, though NICE (UK’s National Institute for Health and Care Excellence) did not recommend it since “available evidence does not indicate that it delays symptom progression or improves quality of life.” Regular readers may recall that Marijn Dekkers, Chairman of Bayer, said that this product was not developed for poor people in the Indian market but rather for Western patients who could afford it.
What is the evidence for its use in “locally recurrent or metastatic, progressive, differentiated thyroid carcinoma (DTC) that is refractory to radioactive iodine treatment”? Simply stated, when radiologists followed the tumors by measuring them, there was no progression for six months for those given a placebo, whereas those receiving Nexavar did not demonstrate progression until eleven months. This is a demonstration that successfully treating a test, but not the patient, is considered by some to be of therapeutic value.
But what about the overall death rates? They were the same with Nexavar and placebo. Okay, what about the quality of life? Looking at the list above, the incidence of several miserable side effects was much greater in the Nexavar treated group than it was in the placebo group. They experienced poorer quality of life and did not postpone death. If you extend the findings described in the article in this week’s BMJ, by being treated with palliative chemotherapy, they had greater odds of being subjected to CPR, to being place on a ventilator, and to dying in an intensive care unit rather than in hospice.
The American Society of Clinical Oncology certainly recognizes what is happening here. As one of the top five opportunities to improve quality and value in cancer care, they recommend that “for patients with advanced solid-tumor cancers who are unlikely to benefit, do not provide unnecessary anticancer therapy, such as chemotherapy, but instead focus on symptom relief and palliative care.”
We desperately need NICE care in the United States. We would have that under a well designed single payer national health program.
An extra: Roberta Flack – Killing Me Softly (Imagine the oncologist “singing my life with his words”) : http://www.youtube.com/watch?v=O1eOsMc2Fgg
The Calculus of Cures
By Robert Kocher, M.D., and Bryan Roberts, Ph.D.
The New England Journal of Medicine, February 26, 2014
Bringing a drug from bench to bedside is a risky and expensive proposition. The development of a new drug is estimated to cost many hundreds of millions of dollars; as a result, decisions about funding a drug-development program are based as much on economics as on science and medicine. Decisions to invest and reinvest at all stages of development are driven by the imperative to generate an attractive return on the capital invested, whether by venture-capital and public investors or by pharmaceutical companies.
It is not mysterious why projects get funded. As venture-capital investors, we evaluate projects along four primary dimensions: development costs, selling costs, differentiation of the drug relative to current treatments, and incidence and prevalence of the targeted disease.
Fortunately, much can be done to bring more drugs and a more diverse set of drugs to market. The two economic dimensions — development costs and selling costs — can be most easily improved. The most expensive step in creating a new drug is conducting clinical trials. Conducting a trial costs $25,000 or more per patient studied, and phase 3 trial programs consume more than 40% of a sponsoring company’s expenditures. Unfortunately, every patient is not equally valuable when it comes to clinical trials, and many clinical development programs are economically inefficient in that they are excessively large relative to the amount of information they yield, especially in light of the information-technology breakthroughs that have lowered the cost of data acquisition and analysis over the past 20 years.
High-frequency, material information about clinical efficacy and safety comes from the first few hundred patients studied in a trial. Unfortunately, most clinical development programs go far past the point of diminishing returns for frequent safety events, but they do not go far enough to permit detection of rare events. Statistically, it is only in the long tail of patient data that reliable signals of rare adverse effects can emerge and comprehensive safety can be established. Safety is critical, but studying the long tail of adverse events is not feasible from either a time or a capital perspective until after a new drug enters the market, especially if the drug is for a chronic condition.
Redesigning trials to include fewer patients, providing conditional approval of drugs, and requiring postmarketing surveillance could have a profound effect, allowing smaller development programs to achieve greater success. We estimate that development costs for drugs could be reduced by as much as 90%, and the time required by 50%, if the threshold for initial approval were defined in terms of efficacy and fundamental safety. Cutting costs and time, while requiring high-quality and transparent patient registries for independent safety monitoring, would be a more informative and cost-effective approach. With the widespread adoption of electronic health records and the introduction of many low-cost data-analysis tools, it is now feasible to develop mandatory postmarketing surveillance programs that make thousand-patient trials obsolete.
This approach to reducing drug-development costs would have the greatest effect on drugs for chronic conditions such as cardiovascular disease and type 2 diabetes, since such drugs currently require the largest trials. Moreover, our ability to identify rare side effects and take action to protect patients would be substantially improved when many more patients are being followed, albeit in the absence of a control group. We believe this approach would have no adverse effect on the trend in the development of drugs for orphan diseases and cancers, since those drugs will continue to have low development and selling costs and substantial differentiation from existing treatments. Yet, this approach would make it attractive to pursue drug candidates for many more disease conditions and would lower the threshold for financing a drug’s development so that more drugs would be brought forward.
Another major factor is selling costs. It is far more cost-effective to sell a drug when it is either prescribed by specialty physicians or commonly used in hospitals, both of which effectively aggregate patients. Moreover, it is easier to predict the level of adoption by these customers on the basis of the drug’s clinical differentiation and pharmacoeconomics. Sales of drugs prescribed by primary care doctors depend on a mixture of expensive sales representatives and advertising and can cost hundreds of millions of dollars annually.
While scientists work hard to increase the rate of scientific discovery, the rest of us should do our part to improve the other variables that figure into the calculus of which cures are brought to market. Such improvement would be good for patients and would represent good economic policy, since drug prices could be lowered even as investors generated the returns necessary to finance more discoveries.
PNHP Data Update
September 29, 2000
The new editor of the New England Journal of Medicine, Jeffrey Drazen, M.D. was cited by the FDA last year for making “false and misleading” statements about the asthma drug, levalbuterol. Drazen received $7,000 from the drug’s maker, and has ties to another 20 drug firms (USA Today, 5/31/00). “Academic researchers should be able to own substantial stock in a company or accept sizeable consultant fees and still accept research support,” according to Drazen. (California Healthline, 5/26/00).
(Note: Though this was written in 2000, Jeffrey Drazen is still the editor of NEJM.)
One of the most serious defects of the U.S. health care system is that we not only allow but we encourage the participation of passive investors. For those who believe that the free market is what makes America so great, the opportunity to glom onto some of the $3 trillion that we spend each year on health care cannot pass the attention of the entrepreneurial mind. Venture capitalists in the pharmaceutical industry are a case in point.
The venture capitalists who authored this article in The New England Journal of Medicine have diagnosed a major problem with the U.S. pharmaceutical industry and are providing a solution – a solution for investors that is.
They have decided that clinical trials of new drugs are too expensive. They note that you can determine clinical efficacy from the first few hundred patients in the study and that adding many more patients goes far past the point of diminishing returns. As far as determining drug safety, we can use the computerization of health records to detect adverse events, taking advantage of the very large number of patients receiving the drug after it has been released for marketing. By reducing these research costs, and by moving products to the market earlier so they can begin providing returns, the venture capitalists then would have more funds to invest in even more new products. See, the market really works.
We have seen the tragedies of products rushed to the market, with the inadequacies of post-marketing surveillance, resulting in great harm to patients, even death, while the pharmaceutical industry pays massive fines that they pass off as simply a cost of business. When passive investors are involved, the investors must be taken care of first, certainly before the patients, and these guys writing this article want a greater piece of the action.
Why would one of the world’s most prestigious medical journals publish an article promoting the interests of venture capitalists in the pharmaceutical industry? The answer might be found in the views of the editor of NEJM, Jeffrey Drazen, MD, who in the past expressed the opinion, “Academic researchers should be able to own substantial stock in a company or accept sizeable consultant fees and still accept research support.”
It is sad when the pursuit of money contaminates even the paragons of health care, and yet those involved seem to be totally insensitive to the fact that there is even an issue here.
What does this have to do with single payer? When our own public purchasers of health care products and services enter the marketplace on our behalf to negotiate the acquisition of our health care, they can refuse to pay the money lenders who personally provide no value to our health care. If research funds are needed we can provide them ourselves though our own National Institutes of Health. Such an investment would have the goal of determining efficacy and safety – benefitting patients – and not on how fast you can turn a buck.
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