Health insurer Centene’s profit beats as medical costs fall

By Amrutha Penumudi
Reuters, April 26, 2016

U.S. health insurer Centene Corp (CNC.N) reported a better-than-expected quarterly profit, helped by lower medical costs in certain patient populations and the acquisition of rival Health Net.

The company’s health benefits ratio, or the amount it spends on medical claims compared with its income from premiums, improved to 88.7 percent in the first quarter from 89.9 percent a year earlier.

http://www.reuters.com/article/us-centene-results-idUSKCN0XN14E

***

Anthem Falls As Medicaid, Obamacare Results Pressure Margins

By Zachary Tracer
Bloomberg, April 27, 2016

Anthem Inc., the No. 2 U.S. health insurer, fell in New York trading as costs tied to its Medicaid and Affordable Care Act businesses pressured margins.

The shares fell 2.8 percent to $142.91 at 11:24 a.m. Wednesday. Anthem spent 81.8 cents of every premium dollar on medical claims in the first quarter, up from a medical-loss ratio of 80.2 percent a year earlier, according to a statement.

http://www.bloomberg.com/news/articles/2016-04-27/anthem-profit-beats-estimates-as-insurer-s-enrollment-increases

***

Comment:

By Don McCanne, M.D.

Today’s message is just a reminder of one of our problems that the Affordable Care Act (ACA) did not fix. A well-functioning health care financing system should be designed to obtain maximum value by spending our funds on health care and not wasting them on excessive administrative services and on profits that add no value to health care. Yet ACA perpetuates policies that turn these priorities upside down, to the pleasure of Wall Street.

Centene is reporting greater profits attributed to a lower percentage of revenues spent on health care compared to the year before – the medical loss ratio decreased from 89.9 percent to 88.7 percent. A comparable medical loss ratio for Medicare would be about 98 percent – only 2 percent is used for administrative services, and there are no profits. Spending less on patient care and retaining more for Centene’s own administrative services and for profits, Wall Street deems to be an improvement.

In contrast, the percent of revenues that Anthem spent on health care increased – the medical loss ratio increased from 80.2 percent to 81.8 percent. For insurers to spend more on health care is considered to be bad news on Wall Street, and thus they punished Anthem by bidding down the price of their shares.

Since these insurers are giving us the opposite of what we want, why are we leaving them in charge of our health care dollars? Let’s fix Medicare and expand it to cover everyone. Yes, we would have a very high medical loss ratio – with 98 percent of our Medicare tax revenues spent on patient care – but it would be a much better deal for all of us – except for the insurance executives and Wall Street rent-seekers.

Health insurer Centene’s profit beats as medical costs fall

By Amrutha Penumudi
Reuters, April 26, 2016

U.S. health insurer Centene Corp (CNC.N) reported a better-than-expected quarterly profit, helped by lower medical costs in certain patient populations and the acquisition of rival Health Net.

The company’s health benefits ratio, or the amount it spends on medical claims compared with its income from premiums, improved to 88.7 percent in the first quarter from 89.9 percent a year earlier.

http://www.reuters.com/article/us-centene-results-idUSKCN0XN14E

***

Anthem Falls As Medicaid, Obamacare Results Pressure Margins

By Zachary Tracer
Bloomberg, April 27, 2016

Anthem Inc., the No. 2 U.S. health insurer, fell in New York trading as costs tied to its Medicaid and Affordable Care Act businesses pressured margins.

The shares fell 2.8 percent to $142.91 at 11:24 a.m. Wednesday. Anthem spent 81.8 cents of every premium dollar on medical claims in the first quarter, up from a medical-loss ratio of 80.2 percent a year earlier, according to a statement.

http://www.bloomberg.com/news/articles/2016-04-27/anthem-profit-beats-estimates-as-insurer-s-enrollment-increases

Today’s message is just a reminder of one of our problems that the Affordable Care Act (ACA) did not fix. A well-functioning health care financing system should be designed to obtain maximum value by spending our funds on health care and not wasting them on excessive administrative services and on profits that add no value to health care. Yet ACA perpetuates policies that turn these priorities upside down, to the pleasure of Wall Street.

Centene is reporting greater profits attributed to a lower percentage of revenues spent on health care compared to the year before – the medical loss ratio decreased from 89.9 percent to 88.7 percent. A comparable medical loss ratio for Medicare would be about 98 percent – only 2 percent is used for administrative services, and there are no profits. Spending less on patient care and retaining more for Centene’s own administrative services and for profits, Wall Street deems to be an improvement.

In contrast, the percent of revenues that Anthem spent on health care increased – the medical loss ratio increased from 80.2 percent to 81.8 percent. For insurers to spend more on health care is considered to be bad news on Wall Street, and thus they punished Anthem by bidding down the price of their shares.

Since these insurers are giving us the opposite of what we want, why are we leaving them in charge of our health care dollars? Let’s fix Medicare and expand it to cover everyone. Yes, we would have a very high medical loss ratio – with 98 percent of our Medicare tax revenues spent on patient care – but it would be a much better deal for all of us – except for the insurance executives and Wall Street rent-seekers.

Decision Theoretic Approaches to Experiment Design and External Validity (Working Paper 22167)

By Abhijit Banerjee, Sylvain Chassang, and Erik Snowberg
National Bureau of Economic Research, April 2016

Abstract

A modern, decision-theoretic framework can help clarify important practical questions of experimental design. Building on our recent work, this chapter begins by summarizing our framework for understanding the goals of experimenters, and applying this to re-randomization. We then use this framework to shed light on questions related to experimental registries, pre-analysis plans, and most importantly, external validity. Our framework implies that even when large samples can be collected, external decision-making remains inherently subjective. We embrace this conclusion, and argue that in order to improve external validity, experimental research needs to create a space for structured speculation.

Formats for structured speculation

In all external decision making problems, inference is unavoidably subjective. In structural modeling, the source of subjectivity is the model itself.

http://www.nber.org/papers/w22167

***

Comment:

By Don McCanne, M.D.

This highly technical paper is a difficult read, but it provides important lessons for design and application of health policy research. The subjective design of the research model and subjectivity of the resulting decision making impacts the external validity of the experiment. That is, can the results of the experiment be applied generally outside of the experimental model?

Perhaps the most famous example is the RAND Health Insurance Experiment. It demonstrated that employees and their families who had to pay part of the costs of their health care used less health care than did those who had no out-of-pocket spending, yet both groups had equally good health care outcomes (except for hypertensives). This conclusion was internally valid for this group, and it has been applied to the population at large. But is it really externally valid?

Employees and their families are a comparatively healthy sector of society, and in the RAND HIE they were studied during a healthy period of their lives. These results would not apply to the population at large that includes less healthy individuals who help run up our three trillion dollar national health care bill. Yet we have accepted the results of the RAND HIE as gospel even though other studies have confirmed that cost sharing does cause individuals to forgo beneficial health care services.

In the Oregon Experiment individuals with no insurance were compared with individuals who received Medicaid benefits by lottery. The conclusions published in the NEJM were that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years,” and this has been interpreted widely to mean that Medicaid does not improve health. The internal validity was regarding three measurements – BP, cholesterol and HbA1c during only two years. How could that possibly have external validity for the low-income population at large with innumerable infirmities that we know respond to beneficial health care services?

The subjectivity of sectors of the policy community is at question here. Model design is subjective and inference is subjective. Studies can be designed and interpreted to obtain the results desired. Cost sharing can be shown to reduce spending without having any adverse effect on health. Medicaid can be shown to have no benefit on health outcomes.

And what do we have now? Apparently policy science is so advanced that we are putting in place measures that do not require research to confirm their effectiveness. Narrow provider networks can reduce spending by deterring patients who, after all, really do not need care, they say. High deductibles can reduce spending without adversely affecting health, except for those who deferred the health care that they should have had. They say accountable care organizations will improve quality and significantly reduce spending, even though experience to date has largely failed to confirm that. The Merit-Based Incentive Payment System (MIPS) will convert the volume of health care delivery to the elusive concept of value, they hope, though the limited evidence indicates otherwise.

What is the purpose of health policy research? To improve quality? Isn’t quality determined by studying the diagnostic, therapeutic and preventive interventions in heath care – i.e, medical research? Is the purpose of policy research to control spending? Except by creating detrimental financial and logistical (network) barriers to beneficial care, policy studies have been remarkably ineffective. Public policies such as establishing a single payer system have been far more effective in controlling spending.

The authors of this NBER paper state, “in order to improve external validity, experimental research needs to create a space for structured speculation.” Haven’t we had enough of this structured speculation of the health policy community? Isn’t it time to adopt public policies that have been proven to be effective?

Decision Theoretic Approaches to Experiment Design and External Validity (Working Paper 22167)

By Abhijit Banerjee, Sylvain Chassang, and Erik Snowberg
National Bureau of Economic Research, April 2016

Abstract

A modern, decision-theoretic framework can help clarify important practical questions of experimental design. Building on our recent work, this chapter begins by summarizing our framework for understanding the goals of experimenters, and applying this to re-randomization. We then use this framework to shed light on questions related to experimental registries, pre-analysis plans, and most importantly, external validity. Our framework implies that even when large samples can be collected, external decision-making remains inherently subjective. We embrace this conclusion, and argue that in order to improve external validity, experimental research needs to create a space for structured speculation.

Formats for structured speculation

In all external decision making problems, inference is unavoidably subjective. In structural modeling, the source of subjectivity is the model itself.

http://www.nber.org/papers/w22167

This highly technical paper is a difficult read, but it provides important lessons for design and application of health policy research. The subjective design of the research model and subjectivity of the resulting decision making impacts the external validity of the experiment. That is, can the results of the experiment be applied generally outside of the experimental model?

Perhaps the most famous example is the RAND Health Insurance Experiment. It demonstrated that employees and their families who had to pay part of the costs of their health care used less health care than did those who had no out-of-pocket spending, yet both groups had equally good health care outcomes (except for hypertensives). This conclusion was internally valid for this group, and it has been applied to the population at large. But is it really externally valid?

Employees and their families are a comparatively healthy sector of society, and in the RAND HIE they were studied during a healthy period of their lives. These results would not apply to the population at large that includes less healthy individuals who help run up our three trillion dollar national health care bill. Yet we have accepted the results of the RAND HIE as gospel even though other studies have confirmed that cost sharing does cause individuals to forgo beneficial health care services.

In the Oregon Experiment individuals with no insurance were compared with individuals who received Medicaid benefits by lottery. The conclusions published in the NEJM were that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years,” and this has been interpreted widely to mean that Medicaid does not improve health. The internal validity was regarding three measurements – BP, cholesterol and HbA1c during only two years. How could that possibly have external validity for the low-income population at large with innumerable infirmities that we know respond to beneficial health care services?

The subjectivity of sectors of the policy community is at question here. Model design is subjective and inference is subjective. Studies can be designed and interpreted to obtain the results desired. Cost sharing can be shown to reduce spending without having any adverse effect on health. Medicaid can be shown to have no benefit on health outcomes.

And what do we have now? Apparently policy science is so advanced that we are putting in place measures that do not require research to confirm their effectiveness. Narrow provider networks can reduce spending by deterring patients who, after all, really do not need care, they say. High deductibles can reduce spending without adversely affecting health, except for those who deferred the health care that they should have had. They say accountable care organizations will improve quality and significantly reduce spending, even though experience to date has largely failed to confirm that. The Merit-Based Incentive Payment System (MIPS) will convert the volume of health care delivery to the elusive concept of value, they hope, though the limited evidence indicates otherwise.

What is the purpose of health policy research? To improve quality? Isn’t quality determined by studying the diagnostic, therapeutic and preventive interventions in heath care – i.e, medical research? Is the purpose of policy research to control spending? Except by creating detrimental financial and logistical (network) barriers to beneficial care, policy studies have been remarkably ineffective. Public policies such as establishing a single payer system have been far more effective in controlling spending.

The authors of this NBER paper state, “in order to improve external validity, experimental research needs to create a space for structured speculation.” Haven’t we had enough of this structured speculation of the health policy community? Isn’t it time to adopt public policies that have been proven to be effective?

Health Care Industry Moves Swiftly to Stop Colorado’s “Single Payer” Ballot Measure

By Lee Fang
The Intercept, April 22, 2016

The campaign in Colorado to create the nation’s first state-based “single payer” health insurance system, providing universal coverage and replacing insurance premiums with higher taxes, has barely begun.

But business interests in Colorado are not taking anything for granted, and many of the largest lobbying groups around the country and in the state are raising funds to defeat Amendment 69, the single-payer ballot question going before voters this November.

The Council of Insurance Agents & Brokers, a national trade group, is mobilizing its member companies to defeat single payer in Colorado. “The council urges Coloradans to protect employer-provided insurance and oppose Proposition 69,” the CIAB warns. The group dispatched Steptoe & Johnson, a lobbying firm it retains, to analyze the bill.

Lobby groups that represent major for-profit health care interests in Colorado, including hospitals and insurance brokers, are similarly mobilizing against Amendment 69. The Colorado Association of Commerce & Industry — a trade group led in part by HCA HealthOne, a subsidiary of HCA, one of the largest private hospital chains in the country — is soliciting funds to defeat single payer. The business coalition to defeat the measure also includes the state’s largest association of health insurance brokers.

I asked Sean Duffy, a spokesperson for “Coloradans for Coloradans,” an ad hoc coalition against the single-payer ballot measure, how the state should address high health care costs and those struggling to afford health insurance premiums.

“We are focused on sharing with Coloradans the numerous questions, ambiguities, and concerns with Amendment 69,” said Duffy. He noted that “motivations for universal coverage are shared by many in Colorado” but that making Colorado a “one-state experiment, and the cost of doubling our state budget, potentially diminishing the accessibility and quality of care and creating an unaccountable, massive bureaucracy is just not a good idea for Colorado.”

As other states consider proposals to lower costs and expand coverage, health care interests keen to protect some of the largest profit margins in the economy will be sure to mobilize quickly to snuff them out.

https://theintercept.com/2016/04/22/colorad-single-payer/

***

MSNBC’s Chris Hayes interviews reporter Lee Fang (4 minutes)

http://www.msnbc.com/all-in/watch/co-could-be-first-state-with-single-payer-care-672121411514

***

Email message

From T. R. Reid, author of The Healing of America
April 21, 2016

(excerpts)

As you know, there’s a citizens’ initiative on the ballot in Colorado this November to create a state-specific plan that will cover everybody, eliminate deductibles, and let the patient, not the insurance company, choose the doctor, chiropractor, hospital, etc. If “ColoradoCare” passes, it can be a model and an incentive for other states where people like you are working to get health care for all.

I’m happy to report that our early polls show us ahead statewide.  I’m unhappy to tell you that our lead is not big enough to withstand the expected onslaught from our opponents. The insurance companies have funded a huge “No” campaign. The Koch Brothers are already running TV ads that say for-profit insurance is the ideal way to pay for health care.

So we need help. We need money…

http://coloradocareyes.co

***

Comment:

By Don McCanne, M.D.

Without additional enabling federal legislation, Colorado is not able to enact a bona fide single payer system. However, their ballot measure – Amendment 69, ColoradoCare – would improve efficiency, equity and coverage through the health care financing system in their state. Strong opposition is expected since ColoradoCare could be disruptive to some of the well-financed stakeholders, especially the private insurance industry.

The advocates of ColoradoCare are now seeking support for their effort (link above). It will be difficult to educate the public on the facts behind their reform proposal. Even when saturated with facts, the public often remains dubious because of the prevailing anti-government and anti-tax rhetoric. It is a massive project to convert the majority of the voters into passionate supporters of such a cause.

In the meantime, the opponents know that their task does not involve educating the public on the facts. They do not have to engage the other side in a information battle over the truth. They merely have to appeal to the passion of the voters. Simple rhetorical soundbites are usually enough to convince the voters that they do not have to waste their time studying some complicated government scheme in order to know how to vote on it. Just look at some of the rhetoric of the opposition group, Coloradans for Coloradans: “doubling the state budget,” “diminishing accessibility and quality,” and “creating an unaccountable, massive bureaucracy.” Who would support that? No need to try to find out the truth.

This is not just theoretical, as single payer activists supporting ballot measures in California and Oregon can attest to. In both cases, early polling was favorable, as it is now in Colorado. But closer to election time, intensive campaigns were launched by the opponents using simplistic sound bites and slogans, and the results were a disaster. California’s Proposition 186 lost by a 3 to 1 margin and Oregon’s Measure 23 lost by 4 to 1.

So what should we do? I have three suggestions.

1.  Contribute to their effort in any way you can. (Today I made a donation through their website.)

2.  If the effort should fail (and I hate to say that), then be sure that everyone understands that this was not a failure of single payer, especially since it is not even a bona fide single payer proposal. Rather it will have been a failure in mobilizing a social movement.

3.  Above all, do not let up in the least in your advocacy for a single payer national health program – an improved Medicare for all. That is the ultimate goal, and it could be accomplished in a single step without having to first enact compromised systems in several states. Difficult? Of course. But, in spite of many attempts, how many states have enacted single payer? In this age of advanced communications, mobilizing a social movement on a national basis makes more sense than trying to do it in selected individual states.

(ColoradoCare is not a project of PNHP since we are a single issue organization supporting a single payer national health program. But most members are individually very supportive of the Colorado effort as a beneficial interim measure to fill in until we can enact a national Medicare for all program.)

Health Care Industry Moves Swiftly to Stop Colorado’s “Single Payer” Ballot Measure

By Lee Fang
The Intercept, April 22, 2016

The campaign in Colorado to create the nation’s first state-based “single payer” health insurance system, providing universal coverage and replacing insurance premiums with higher taxes, has barely begun.

But business interests in Colorado are not taking anything for granted, and many of the largest lobbying groups around the country and in the state are raising funds to defeat Amendment 69, the single-payer ballot question going before voters this November.

The Council of Insurance Agents & Brokers, a national trade group, is mobilizing its member companies to defeat single payer in Colorado. “The council urges Coloradans to protect employer-provided insurance and oppose Proposition 69,” the CIAB warns. The group dispatched Steptoe & Johnson, a lobbying firm it retains, to analyze the bill.

Lobby groups that represent major for-profit health care interests in Colorado, including hospitals and insurance brokers, are similarly mobilizing against Amendment 69. The Colorado Association of Commerce & Industry — a trade group led in part by HCA HealthOne, a subsidiary of HCA, one of the largest private hospital chains in the country — is soliciting funds to defeat single payer. The business coalition to defeat the measure also includes the state’s largest association of health insurance brokers.

I asked Sean Duffy, a spokesperson for “Coloradans for Coloradans,” an ad hoc coalition against the single-payer ballot measure, how the state should address high health care costs and those struggling to afford health insurance premiums.

“We are focused on sharing with Coloradans the numerous questions, ambiguities, and concerns with Amendment 69,” said Duffy. He noted that “motivations for universal coverage are shared by many in Colorado” but that making Colorado a “one-state experiment, and the cost of doubling our state budget, potentially diminishing the accessibility and quality of care and creating an unaccountable, massive bureaucracy is just not a good idea for Colorado.”

As other states consider proposals to lower costs and expand coverage, health care interests keen to protect some of the largest profit margins in the economy will be sure to mobilize quickly to snuff them out.

https://theintercept.com/2016/04/22/colorad-single-payer/

***

MSNBC’s Chris Hayes interviews reporter Lee Fang (4 minutes)

http://www.msnbc.com/all-in/watch/co-could-be-first-state-with-single-payer-care-672121411514

***

Email message

From T. R. Reid, author of The Healing of America
April 21, 2016

(excerpts)

As you know, there’s a citizens’ initiative on the ballot in Colorado this November to create a state-specific plan that will cover everybody, eliminate deductibles, and let the patient, not the insurance company, choose the doctor, chiropractor, hospital, etc. If “ColoradoCare” passes, it can be a model and an incentive for other states where people like you are working to get health care for all.

I’m happy to report that our early polls show us ahead statewide.  I’m unhappy to tell you that our lead is not big enough to withstand the expected onslaught from our opponents. The insurance companies have funded a huge “No” campaign. The Koch Brothers are already running TV ads that say for-profit insurance is the ideal way to pay for health care.

So we need help. We need money…

http://coloradocareyes.co

Without additional enabling federal legislation, Colorado is not able to enact a bona fide single payer system. However, their ballot measure – Amendment 69, ColoradoCare – would improve efficiency, equity and coverage through the health care financing system in their state. Strong opposition is expected since ColoradoCare could be disruptive to some of the well-financed stakeholders, especially the private insurance industry.

The advocates of ColoradoCare are now seeking support for their effort (link above). It will be difficult to educate the public on the facts behind their reform proposal. Even when saturated with facts, the public often remains dubious because of the prevailing anti-government and anti-tax rhetoric. It is a massive project to convert the majority of the voters into passionate supporters of such a cause.

In the meantime, the opponents know that their task does not involve educating the public on the facts. They do not have to engage the other side in a information battle over the truth. They merely have to appeal to the passion of the voters. Simple rhetorical soundbites are usually enough to convince the voters that they do not have to waste their time studying some complicated government scheme in order to know how to vote on it. Just look at some of the rhetoric of the opposition group, Coloradans for Coloradans: “doubling the state budget,” “diminishing accessibility and quality,” and “creating an unaccountable, massive bureaucracy.” Who would support that? No need to try to find out the truth.

This is not just theoretical, as single payer activists supporting ballot measures in California and Oregon can attest to. In both cases, early polling was favorable, as it is now in Colorado. But closer to election time, intensive campaigns were launched by the opponents using simplistic sound bites and slogans, and the results were a disaster. California’s Proposition 186 lost by a 3 to 1 margin and Oregon’s Measure 23 lost by 4 to 1.

So what should we do? I have three suggestions.

1.  Contribute to their effort in any way you can. (Today I made a donation through their website.)

2.  If the effort should fail (and I hate to say that), then be sure that everyone understands that this was not a failure of single payer, especially since it is not even a bona fide single payer proposal. Rather it will have been a failure in mobilizing a social movement.

3.  Above all, do not let up in the least in your advocacy for a single payer national health program – an improved Medicare for all. That is the ultimate goal, and it could be accomplished in a single step without having to first enact compromised systems in several states. Difficult? Of course. But, in spite of many attempts, how many states have enacted single payer? In this age of advanced communications, mobilizing a social movement on a national basis makes more sense than trying to do it in selected individual states.

(ColoradoCare is not a project of PNHP since we are a single issue organization supporting a single payer national health program. But most members are individually very supportive of the Colorado effort as a beneficial interim measure to fill in until we can enact a national Medicare for all program.)

Medicare’s New Physician Payment System

Health Affairs, Health Policy Briefs, April 21, 2016

An overwhelming body of research in recent years found that medical care in the United States was neither efficient nor as effective as it could be. Inappropriate and excessive care is common even as rising health care costs burden government, business, and families.

Against this backdrop, government and private-sector leaders have resolved to transform how physicians are paid in a way that holds them more accountable for the care they deliver. The latest salvo in this effort was the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, signed into law April 16, 2015.

What’s in the law?

Initially, physicians can choose a program called the Merit-Based Incentive Payment System (MIPS) or join an alternative payment model such as an accountable care organization or patient-centered medical home. If they make no choice or are deemed to be ineligible for an alternative payment model incentive payment, they will be assigned to MIPS.

At the same time, three existing payment incentive and quality improvement initiatives will be dissolved as separate programs and melded into MIPS. They are the Physician Quality Reporting System, Meaningful Use, and the Physician Value-Based Payment Modifier.

Physicians in MIPS must report performance measures to CMS. They’ll then be graded on four factors: quality of care (30 percent); resource use (30 percent); meaningful use of EHRs (25 percent); and clinical practice improvement activities (15 percent).

High-scoring physicians will get a bonus, and low-scoring physicians will see their fees reduced.

Physicians choosing the alternative payment model path will have to join an accountable care organization or an approved patient-centered medical home, or otherwise be in an alternative payment model entity where payment is at least partly based on quality performance and on total spending. Payment tied to performance must be 25 percent of a doctor’s or group practice’s Medicare revenue in 2019, increasing to 75 percent in 2022.

‘Volume to value’–slogan or sound policy?

Some critics argue that the volume-to-value movement is, for now, based more on faith than on strong evidence. For example, they cite the experience of countries in Europe that control spending primarily through regulating prices and fees in fee-for-service systems, instead of through performance measurement and payment incentives.

Critics also argue that “value” in medicine is an elusive concept and not one likely to be pinned down through a single composite score. As yet, these critics further allege, value has not been clearly pegged or produced by accountable care organizations, patient-centered medical homes, or integrated health care systems.

http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=156

***

The Mess That is MACRA

By Kip Sullivan
The Health Care Blog, April 21, 2016

MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.

The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA’s defects. The transcripts of MedPAC’s October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won’t tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as “principles” and wait for MACRA’s inevitable failure before offering more useful advice.

MIPS: Measuring the unmeasurable

The MIPS program was designed for doctors who can’t or won’t join the ACO-medical-home bandwagon. MIPS inflicts huge rewards and penalties (up to 9 percent of the average annual Part B payout per physician) based on a single “value” score (a score derived by the capricious jamming of crude quality and cost measures into one number) for each doctor. As commissioner Gradison put it, MIPS was designed for “the laggards, the people who stand for the status quo,” the knuckle-draggers who just won’t get with the Managed Care 2.0 program.

Sand castles on top of sand castles: The APM program

I suspect the reason Congress did not populate the APM compartment with clearly defined entities is that Boehner et al. knew full well that the first iteration of “value-based” entities – the ACOs and “medical homes” authorized by the Affordable Care Act – have not panned out. We know that MedPAC understands that. In its reports to Congress, and in statements by staff and members, MedPAC has clearly indicated they understand that ACOs and “homes” are saving little or no money and are having at best minor and mixed effects on quality.

It is fair to say, then, that MedPAC understands that Congress has essentially instructed CMS to build a new layer of undefined, unproven APMs on top of the existing layer of poorly defined and unproven ACOs and “homes,” in other words, a second layer of sand castles over an existing layer of sand castles.

Congress and CMS don’t need to hear any more abstract and wishful remarks about MACRA. They need to hear useful feedback. MedPAC should tell Congress MACRA is an unworkable mess and must be repealed or amended.

http://thehealthcareblog.com/blog/2016/04/21/the-mess-that-is-macra/

***

Physician Burnout Is a Public Health Crisis, Ethicist Says

By Arthur L. Caplan, PhD
Medscape, March 4, 2016

We’ve got a problem in this country with doctors. It’s kind of an epidemic, but no one is talking about it. It is burnout. A recent study from the Mayo Clinic showed that in 2011, 45.5% of doctors reported that they felt burned out, and that number has now risen to 54.4% in 2014.

This is really trouble. It’s trouble because a doctor who feels this way can commit more errors. They suffer from compassion fatigue, or just not being able to empathize with others because they have their own emotional issues. They may retire early, thereby reducing the workforce. They may have problems managing their own lives; 400 doctors committed suicide last year, which is double the rate of the population average. There’s trouble for patients in having a workforce that’s burned out. There’s trouble for doctors in terms of their own health and well-being.

When we institute new software or when we have new bureaucratic regulations, I think somebody ought to ask what this does to the workforce. If one more doctor complains to me about Epic and other types of electronic record keeping and billing forms, it’ll be one doctor too many. It takes a lot of energy. It makes people unhappy. A lot of the software and computer assistance that’s out there doesn’t seem to help the doctor; it makes more work or makes them frustrated. It also seems to me that if you look at what’s going on with respect to regulations and administrative or bureaucratic requirements, nobody is saying, “Hey, is this user-friendly? What’s the burden that it’s putting on the doctor?” It’s just done to save money or allow people to collect bills more reliably, but it’s not asking what it’s taking out of our workforce.

Arthur L. Caplan, PhD is from the Division of Medical Ethics at the New York University Langone Medical Center.

***

Comment:

By Don McCanne, M.D.

We now have an epidemic of physician burnout. It has become a crisis not only because of what it does to physicians’ well-being but also because of a deterioration in the all-important physician-patient relationship and in the medical practice environment.

A major contributor to burnout is the subversion of physician independence to the massive misdirected oversight interposed by public and private insurance bureaucracies. Little need be said about the private insurance bureaucracies that waste tremendous resources while creating havoc in our health care delivery system. We merely need to eliminate the private insurers and replace them with a single payer national health program.

Our government has established policies that result in Medicare gradually being shifted to the private Medicare Advantage insurers and Medicaid being shifted to private managed care organizations. In the past we’ve covered the reasons why privatization is a terrible idea, and we won’t go into that now. We’ll merely say that moving on to single payer should eliminate the privatization schemes.

Today’s message is more narrowly targeted to the problem that the public bureaucracies are creating, especially Medicare. MACRA with its MIPS (merit-based incentive payment system) and its APMs (alternative payment models) epitomize the bureaucratic interference of the federal government in our public programs. For more details, you should read the full articles cited today. These are concepts thought up by the policy community working with our government bureaucrats. They are relying on intuition since there is little in policy science to support MIPS and APMs. Initial results have been quite disappointing yet they are moving full steam ahead with these programs.

The burden on physicians and other health professionals will be great and can only exacerbate current trends leading to burnout. Public policies that make health care worse are unethical policies – the gist of today’s message.

We need to expand policies that serve the public in their need to have affordable access to health care. On May 5 we will be releasing an update of the Physicians’ Proposal which describes the policies we need to ensure comprehensive health care for everyone, in a pleasant environment that optimizes the health care experience. Watch for it.

Once we have that system in place it will be imperative for us to exercise continuing due diligence in ensuring that our political and policy stewards support the ideology of health care justice for all through public policies, while dismissing would-be stewards who support Randian you’re-on-your-own ideology that dominates the private arena.

Medicare’s New Physician Payment System

Health Affairs, Health Policy Briefs, April 21, 2016

An overwhelming body of research in recent years found that medical care in the United States was neither efficient nor as effective as it could be. Inappropriate and excessive care is common even as rising health care costs burden government, business, and families.

Against this backdrop, government and private-sector leaders have resolved to transform how physicians are paid in a way that holds them more accountable for the care they deliver. The latest salvo in this effort was the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, signed into law April 16, 2015.

What’s in the law?

Initially, physicians can choose a program called the Merit-Based Incentive Payment System (MIPS) or join an alternative payment model such as an accountable care organization or patient-centered medical home. If they make no choice or are deemed to be ineligible for an alternative payment model incentive payment, they will be assigned to MIPS.

At the same time, three existing payment incentive and quality improvement initiatives will be dissolved as separate programs and melded into MIPS. They are the Physician Quality Reporting System, Meaningful Use, and the Physician Value-Based Payment Modifier.

Physicians in MIPS must report performance measures to CMS. They’ll then be graded on four factors: quality of care (30 percent); resource use (30 percent); meaningful use of EHRs (25 percent); and clinical practice improvement activities (15 percent).

High-scoring physicians will get a bonus, and low-scoring physicians will see their fees reduced.

Physicians choosing the alternative payment model path will have to join an accountable care organization or an approved patient-centered medical home, or otherwise be in an alternative payment model entity where payment is at least partly based on quality performance and on total spending. Payment tied to performance must be 25 percent of a doctor’s or group practice’s Medicare revenue in 2019, increasing to 75 percent in 2022.

‘Volume to value’–slogan or sound policy?

Some critics argue that the volume-to-value movement is, for now, based more on faith than on strong evidence. For example, they cite the experience of countries in Europe that control spending primarily through regulating prices and fees in fee-for-service systems, instead of through performance measurement and payment incentives.

Critics also argue that “value” in medicine is an elusive concept and not one likely to be pinned down through a single composite score. As yet, these critics further allege, value has not been clearly pegged or produced by accountable care organizations, patient-centered medical homes, or integrated health care systems.

http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=156

***

The Mess That is MACRA

By Kip Sullivan
The Health Care Blog, April 21, 2016

MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.

The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA’s defects. The transcripts of MedPAC’s October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won’t tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as “principles” and wait for MACRA’s inevitable failure before offering more useful advice.

MIPS: Measuring the unmeasurable

The MIPS program was designed for doctors who can’t or won’t join the ACO-medical-home bandwagon. MIPS inflicts huge rewards and penalties (up to 9 percent of the average annual Part B payout per physician) based on a single “value” score (a score derived by the capricious jamming of crude quality and cost measures into one number) for each doctor. As commissioner Gradison put it, MIPS was designed for “the laggards, the people who stand for the status quo,” the knuckle-draggers who just won’t get with the Managed Care 2.0 program.

Sand castles on top of sand castles: The APM program

I suspect the reason Congress did not populate the APM compartment with clearly defined entities is that Boehner et al. knew full well that the first iteration of “value-based” entities – the ACOs and “medical homes” authorized by the Affordable Care Act – have not panned out. We know that MedPAC understands that. In its reports to Congress, and in statements by staff and members, MedPAC has clearly indicated they understand that ACOs and “homes” are saving little or no money and are having at best minor and mixed effects on quality.

It is fair to say, then, that MedPAC understands that Congress has essentially instructed CMS to build a new layer of undefined, unproven APMs on top of the existing layer of poorly defined and unproven ACOs and “homes,” in other words, a second layer of sand castles over an existing layer of sand castles.

Congress and CMS don’t need to hear any more abstract and wishful remarks about MACRA. They need to hear useful feedback. MedPAC should tell Congress MACRA is an unworkable mess and must be repealed or amended.

http://thehealthcareblog.com/blog/2016/04/21/the-mess-that-is-macra/

***

Physician Burnout Is a Public Health Crisis, Ethicist Says

By Arthur L. Caplan, PhD
Medscape, March 4, 2016

We’ve got a problem in this country with doctors. It’s kind of an epidemic, but no one is talking about it. It is burnout. A recent study from the Mayo Clinic showed that in 2011, 45.5% of doctors reported that they felt burned out, and that number has now risen to 54.4% in 2014.

This is really trouble. It’s trouble because a doctor who feels this way can commit more errors. They suffer from compassion fatigue, or just not being able to empathize with others because they have their own emotional issues. They may retire early, thereby reducing the workforce. They may have problems managing their own lives; 400 doctors committed suicide last year, which is double the rate of the population average. There’s trouble for patients in having a workforce that’s burned out. There’s trouble for doctors in terms of their own health and well-being.

When we institute new software or when we have new bureaucratic regulations, I think somebody ought to ask what this does to the workforce. If one more doctor complains to me about Epic and other types of electronic record keeping and billing forms, it’ll be one doctor too many. It takes a lot of energy. It makes people unhappy. A lot of the software and computer assistance that’s out there doesn’t seem to help the doctor; it makes more work or makes them frustrated. It also seems to me that if you look at what’s going on with respect to regulations and administrative or bureaucratic requirements, nobody is saying, “Hey, is this user-friendly? What’s the burden that it’s putting on the doctor?” It’s just done to save money or allow people to collect bills more reliably, but it’s not asking what it’s taking out of our workforce.

Arthur L. Caplan, PhD is from the Division of Medical Ethics at the New York University Langone Medical Center.

We now have an epidemic of physician burnout. It has become a crisis not only because of what it does to physicians’ well-being but also because of a deterioration in the all-important physician-patient relationship and in the medical practice environment.

A major contributor to burnout is the subversion of physician independence to the massive misdirected oversight interposed by public and private insurance bureaucracies. Little need be said about the private insurance bureaucracies that waste tremendous resources while creating havoc in our health care delivery system. We merely need to eliminate the private insurers and replace them with a single payer national health program.

Our government has established policies that result in Medicare gradually being shifted to the private Medicare Advantage insurers and Medicaid being shifted to private managed care organizations. In the past we’ve covered the reasons why privatization is a terrible idea, and we won’t go into that now. We’ll merely say that moving on to single payer should eliminate the privatization schemes.

Today’s message is more narrowly targeted to the problem that the public bureaucracies are creating, especially Medicare. MACRA with its MIPS (merit-based incentive payment system) and its APMs (alternative payment models) epitomize the bureaucratic interference of the federal government in our public programs. For more details, you should read the full articles cited today. These are concepts thought up by the policy community working with our government bureaucrats. They are relying on intuition since there is little in policy science to support MIPS and APMs. Initial results have been quite disappointing yet they are moving full steam ahead with these programs.

The burden on physicians and other health professionals will be great and can only exacerbate current trends leading to burnout. Public policies that make health care worse are unethical policies – the gist of today’s message.

We need to expand policies that serve the public in their need to have affordable access to health care. On May 5 we will be releasing an update of the Physicians’ Proposal which describes the policies we need to ensure comprehensive health care for everyone, in a pleasant environment that optimizes the health care experience. Watch for it.

Once we have that system in place it will be imperative for us to exercise continuing due diligence in ensuring that our political and policy stewards support the ideology of health care justice for all through public policies, while dismissing would-be stewards who support Randian you’re-on-your-own ideology that dominates the private arena.

Robin Wright King on Consumer Reactions to HDHPs

AJMC.com, April 17, 2016

Robin Wright King, MBA, of Blue Cross Blue Shield of Massachusetts, discusses consumer reactions to high-deductible health plans, which ask them to shoulder more of the burden of the cost of their healthcare.

How do consumers react to the new health plans that ask them to shoulder more costs?

“I don’t believe members are excited, generally, about the concept of having to shoulder more of the cost, but these high-deductible health plans are here to stay. And employers are trending towards engaging in these higher deductible health plans more and more. As a matter of fact, many employers are moving to these plans as full replacement plans. Again, we really have the responsibility – and many employers want us as a health plan to be more involved – to help their members understand their plans.”

http://www.ajmc.com/interviews/robin-wright-king-on-consumer-reactions-to-hdhps

***

Comment:

By Don McCanne, M.D.

Blue Cross Blue Shield members are not excited about having to shoulder more of the cost through high-deductible health plans, but these plans are here to stay. So much for consumer choice.

Chutzpah!

Robin Wright King on Consumer Reactions to HDHPs

AJMC.com, April 17, 2016

Robin Wright King, MBA, of Blue Cross Blue Shield of Massachusetts, discusses consumer reactions to high-deductible health plans, which ask them to shoulder more of the burden of the cost of their healthcare.

How do consumers react to the new health plans that ask them to shoulder more costs?

“I don’t believe members are excited, generally, about the concept of having to shoulder more of the cost, but these high-deductible health plans are here to stay. And employers are trending towards engaging in these higher deductible health plans more and more. As a matter of fact, many employers are moving to these plans as full replacement plans. Again, we really have the responsibility – and many employers want us as a health plan to be more involved – to help their members understand their plans.”

http://www.ajmc.com/interviews/robin-wright-king-on-consumer-reactions-to-hdhps

Blue Cross Blue Shield members are not excited about having to shoulder more of the cost through high-deductible health plans, but these plans are here to stay. So much for consumer choice.

Chutzpah!

What Can US Single-Payer Supporters Learn From the Swiss Rejection of Single Payer?

By Claudia Chaufan
International Journal of Health Services, 2016, Vol. 46(2) 331–345

Abstract

On September 27, 2014, Swiss voters rejected a proposal to replace their system of about 60 health insurance companies offering mandatory basic health coverage with a single public insurer, the state, which would offer taxpayer-funded coverage of all medically necessary care. The Swiss and the U.S. media, academia, and business sectors, from conservative and liberal camps, interpreted the results to mean a rejection of single payer and a preference for a privately run system, with important implications for health reform in the United States. While on the surface mainstream interpretations appear reasonable, I argue that they have little basis on fact because they rely on assumptions that, while untrue, are repeated as mantras that conveniently justify the continuation of a model of health insurance that is unraveling, less conspicuously in Switzerland, dramatically in the United States. To make my case, I describe the dominant narrative about Swiss health care and mainstream interpretations of the latest referendum on health reform, unpack the problem within these interpretations, and conclude by identifying what lessons the Swiss referendum contains for single payer advocates in the United States in particular and for those who struggle for social and economic rights more generally.

Lessons to be Learned

Why, then, was single payer defeated? What, if anything, can single payer supporters learn from this defeat? First, we must grant that the state of Swiss health care may be of concern for the Swiss (who seem to have lower tolerance for being deprived of health care than Americans), but is still not bad enough. People who experience the greatest barriers to care, in Switzerland as elsewhere, are the most politically disenfranchised—young, poor, women, and immigrants, much like they are in the United States—so the problem has yet to strike the so- called middle classes badly enough.

Yet the Swiss case can help single payer supporters, and other social justice advocates, experience and gauge the extraordinary power of propaganda of the corporate class, in health care matters as in others. The scare tactics against single payer displayed by corporate interests in Switzerland have been extraordinary, in both 2007 and this latest referendum. As the BBC timidly suggested, one reason for the failure “may be the power of the insurance sector and of the big pharmaceutical companies in Switzerland […] Both have strong lobby groups.” And yet, none of the single payer or other relevant referenda indicate that love of private health insurance is increasing. If anything, they lay bare the reality that even in the land of direct democracy, as in Switzerland, the attempt to achieve health care justice through a system of “competing private insurers” is a delusion. They also indicate that more political education is necessary to achieve single payer. This, I believe, is as true for the Swiss as it is for the American people.

The Swiss referendum also teaches activists that corporate propaganda is vicious not only when it comes to portraying the presumed evils of single payer or beauty of private health insurance. It is also vicious when it comes to interpreting, and communicating to the public, voting patterns and preferences in health care matters.

The power of corporate propaganda matters because its self-serving interpretation can operate like a self-fulfilling prophecy. The narrative that “the people” prefer the status quo, and the dubious assumption that the people’s will is the key driver of policy, especially in America, can lead public health care advocates to conclude that those who struggle for greater social justice are more alone than they really are, rather than interpreting the resilience of current power structures as indicating that the corporate class owns, and controls, the means of communication as much or more than it owns and controls the means of production, and is thus able to shape the public debate to suit their interests. As a result of this, advocates may give up the fight too soon, or worse, retreat and accommodate to the boundaries of change as set by this corporate class.

In concluding, I propose that the Swiss referendum teaches us that: 1) We need to sharpen our analytic tools, i.e., to improve our understanding of what the ACA is really about, what the real challenges (and enemies!) are, and what our alternatives could and should be; 2) We must increase our outreach to those sectors of society who do not have a voice, or whose voices are suppressed, or who do not think that their voices make a difference; and finally 3) We must work on improving the political education of those we wish to reach, rather than investing in “improving the message” (as many political “experts” recommend). This is usually a message of sound bites without substance which more often than not leads to attempts to fit social change within the boundaries of the “politically feasible” as defined by that same corporate class.

As Americans celebrate this year the 50th anniversary of Medicare, and many, even insured, continue to forgo needed care, they are being told that “Medicare was enacted in a very different environment than we live today” and that some privatization is inevitable and even desirable. However, the results of the Swiss referendum teach us that we need more, not less — nor more accommodating — struggle for single payer and health care justice, in the words, albeit not in the spirit, of Milton Friedman, until the “politically impossible becomes politically inevitable.”*

* “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
— Milton Friedman

Claudia Chaufan, MD, PhD, is an associate professor at the University of California San Francisco and a member of Physicians for a National Health Program.

http://joh.sagepub.com/content/46/2/331.abstract

OECD/WHO report on the Swiss health system

Comment by Don McCanne, M.D.
Quote of the Day, October 24, 2011

“It is not clear why so many in the U.S. are enamored of the Swiss health insurance system when this OECD/WHO report confirms that it is highly inefficient and fragmented, with profound administrative waste, inequitably funded, with regressive financing and with wide variations in premiums, has the highest out-of-pocket costs, has an increasing prevalence of managed care intrusions, and is controlled by a private insurance industry that has learned how to game risk selection at significant cost to those on the losing end.”

https://www.pnhp.org/news/2011/october/oecdwho-report-on-the-swiss-health-system

***

Comment:

By Don McCanne, M.D.

At a time of renewed interest in single payer reform in the United States, it might be helpful to look again at why the voters of Switzerland rejected single payer reform in September, 2014. Although their financing system is superior to ours, it does have several serious deficiencies that would be addressed by converting to a single payer system. In this article, Claudia Chaufan discusses lessons that we can learn from the Swiss that may help us in our advocacy for reform.