PNHP

Why Do We Pay So Much for Health Care – But Get Such Poor Results?

Why Do We Pay So Much for Health Care – But Get Such Poor Results?

By N.F. Hanna, M.D.
New York Observer, April 5, 2016

As a primary care physician practicing for three decades in the same location, I have had the privilege of seeing patients regularly across a span of many years. I have celebrated my patients’ joys and triumphs, but also mourned with them in their deepest tragedies and sorrows. I have shared and continue to share in their trials and vulnerabilities, and often as more than their doctor; patients sometimes confide in me things they do not even share with their families.

The result: I have encountered far too many heartbreaking stories, more than enough to be certain that our health care system is deeply broken. Too many patients watching their savings disappear overnight in the face of staggering medical bills, even those resulting from low-quality care. Too many people working tirelessly for the false promise that health insurance equals financial security. Too many families living in fear of slipping into poverty because of one illness. The physical, financial, and emotional pain is often unbearable, creating a bitterly vicious cycle that continues to spiral downward.

These stories are sobering reminders that as nationwide debates about health care in America amplify again during this election season, real-life casualties of our broken system suffer quietly. The mainstream conversation is often frustratingly complex and politically-driven. Meanwhile, in the midst of a fray of political demagoguery and confusion, countless American families are struggling at the hands of a system they may not fully understand.

The heart of the problem with the American health care system can be boiled down to one troubling question: why are Americans paying much more per person for health care than those in other developed nations, but getting much less in terms of quality? As a physician with over 40 years of experience practicing medicine in the United States and the United Kingdom, I naturally view this tragic “pay more, get less” paradox through a clinician’s eyes. As is taught in medical school, it all starts with carefully diagnosing the problem.

Let us start with diagnosing the “pay more” element of the paradox. First, the facts: we are paying far more for health care than any other Western industrial nation. Consider that in 2012 the U.S. paid $8,745 per person on health care. This was double what was paid on health care per person in most developed countries in the world, including France and the U.K. Spending growth has continued, and the U.S. today spends about $10,000 per person annually. As a direct consequence, many sources site medical bills as the number one cause of personal bankruptcies (which are akin to financial “death”) across the U.S. A study in The American Journal of Medicine found that 62 percent of all 2007 bankruptcies, using a conservative definition, were medical bankruptcies. Sadly insurance is not enough to offer protection; over three-quarters (78 percent) of medical debtors were insured at the onset of their illness.  And this is a crisis not only on the personal and family level, but also on the national level. Health care spending in the U.S. has increased dramatically over the years and continues to grow.

What is behind these staggering costs? I explore several primary factors that are discussed in depth in my book, “Dying of Health Care.” The first four of these factors are caused by doctors and the latter five are caused by other players in the system, leaving doctors and patients alike as victims: excessive testing, overprescribing, direct-to-specialist referrals and consultations, doctors not assessing costs to the system overall, health insurance and medical billing industry waste, overpriced pharmaceuticals and medical devices, direct-to-consumer pharmaceutical advertising, increasing administrative costs for medical practices, and a fragmented hospital system.

One of these factors that is a particularly tough pill to swallow is the cost of health insurance and medical billing. Health insurance companies are like a middleman between providers and patients, so their costs should be kept as low as possible since the money is not being used to care for patients directly. Unfortunately, the costs are astronomical and far greater than in other nations. Because of how difficult insurance companies have made it for providers to get paid for their services (their incentive is to maximize their profits), they have in effect created their own menace: medical billing companies. Fifteen years ago, I had never heard of the medical billing business, but today it is one of the most thriving components in the health care industry. If insurance companies are like the middleman between providers and patients, medical billing companies are like the middleman to the middleman; both of them take a significant cut of your health care dollars. As a poignant example of the heavy burden that medical billing codes and processes create, Duke University Hospital at one point had 900 beds for patients … compared to its 1,300 billing clerks.

Another important factor to highlight briefly is excessive testing, which has multiple causes. Unfortunately, testing begets more testing, as one test often leads to a desire to order other follow-up testing due to coincidental findings. And these tests sometimes lead to unnecessary invasive procedures, which can harm or even kill a patient. Excessive testing, of course, also costs a great deal of money at the same time, thus contributing to both sides of the “pay more, get less” paradox.

Now, on to the “get less” half of the paradox. It would seem reasonable that the U.S. spends far more on health care than any other nation in the world, so long as our health results are the best in the world as well. Unfortunately, this is very far from the truth. That American patients are “getting less” in terms of quality is not a question to debate. To evaluate this, there are several studies that consider a variety of health metrics and rank the health care systems of nations around the world. The common conclusion across all of them: the U.S. is not delivering the quality that the price tag would suggest. And, truthfully, it is not even close. As just one example, a 2014 study ranked the health care systems of 11 developed nations, considering factors such as quality of care and access to doctors. It found that the U.S. ranked last overall. Within particular subcategories, studies have shown that the U.S. ranks 25th out of the 34 developed countries in the Organization for Economic Cooperation and Development (OECD) in terms of hospital beds per 1,000 people, and it ranks 28th in doctors per 1,000 people.

In my opinion, life expectancy is the best metric to consider in evaluating a health care system because it is the cumulative effect of all aspects of health. Sadly, our life expectancy ranks 27th among the 34 OECD nations. So, let us bring together our analysis of the “pay more” and “get less” components. The U.S. spent $8,745 per person in total health expenditures in 2012, as discussed, and its total population life expectancy at birth was 78.7 years.  Compare this to Spain, which spent $2,998 per person and achieved a life expectancy of 82.5 years. Take a look at the chart below, which plots the life expectancy of several countries against per-person health care spending. In reading the chart, the most efficient and effective systems fall in the upper left area. From our conversation thus far, you would expect the U.S. to be an outlier in that its system is so expensive and not as effective. But saying it is an outlier is a major understatement.

Life expectancy at birth and health spending per capita (Source: OECD Health Statistics, World Bank for non-OECD countries)

Life expectancy at birth and health spending per capita (Source: OECD Health Statistics, World Bank for non-OECD countries)

Note particularly how far the U.S.’s life expectancy mark falls below the trend curve, which is where you would expect it to fall based on its amount of spending. Clearly, something is seriously amiss.

Perhaps the saddest element of “getting less”: iatrogenic diseases, or diseases caused by medical or surgical intervention, are a major issue in the U.S. In her commentary in The Journal of the American Medical Association, Dr. Barbara Starfield of Johns Hopkins University, citing three previous studies, estimated the number of American deaths due to iatrogenic causes to be 225,000 per year. In other words, about 225,000 American deaths per year are actually caused by medical care. If classified as such, this would make iatrogenic causes the third most common cause of death in the United States, after heart disease and cancer. To make matters worse, as Dr. Starfield points out, these numbers may actually be on the lower end of comparable estimations, and they only include iatrogenic diseases that directly lead to death. Indeed, iatrogenic diseases are a contributor to our disappointingly low life expectancy numbers as well as the high cost of our health care.

The consequences of our painful paradox – the heartbreaking stories I mentioned at the beginning – are real and they are tragic. Over the years, I have seen that the physical, emotional, and financial health of a patient are closely tied together. All three aspects are crucially and inseparably intertwined; any one of the three can adversely, or positively, affect the other two. Too many times I have seen serious, unexpected illnesses – in addition to physically threatening my patients’ health – eliminating their financial security. Of course, when these patients find themselves without the means to support their families or sometimes to even survive, there is an unbearable psychological impact and that, in turn, affects their physical health.

The urgency to act has never been greater. We have traveled through 100 years of band-aid health care reform attempts, leading up to a confusing mix of mostly private and some public care. The most recent and perhaps the most controversial reform, the Affordable Care Act, is not a viable solution to mend our system. We are still on a path of financial un-sustainability, and people’s premiums, co-payments, co-insurances, and deductibles have only risen. As author of the best-selling “America’s Bitter Pill,” Steven Brill, explained, “Put simply, with Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay.”

The reality is that there are solutions that can work to heal our ailing system that both improve the quality and reduce the cost of our health care. These include implementing a more standardized system of medical decision-making that takes into account cost and empirically proven effectiveness, which would smooth out the wide divergences that come from the subjectivity of medical decision-making. A single-payer system for all, in my view, is a critical solution that will rein in our costs and improve our care by eliminating the waste surrounding insurance and medical billing companies, creating negotiating power for cheaper pharmaceuticals and medical devices (these are far more expensive in the U.S. than abroad), uniting electronic health records to reduce inefficiencies, changing the way doctors are paid away from the fee-for-service system (which rewards for quantity of care, regardless of effectiveness), and overseeing the standardization discussed previously. The truth, in fact, is that the United States is almost totally alone among developed nations in lacking universal health care.

Regardless of your perspective on the appropriate treatment for our health care woes, we as a nation must be knowledgeable and engaged about the subject. We must be aware of the distressful, painful stories of Americans (including, I am sure, many of the people reading this article) who have been victims of a broken system. We must boldly look through the cloud of political posturing and journalistic sensationalism and stand up for the health of our children, our parents, our brothers, and our sisters.

The diagnosis is daunting, but clear. We must together rise above politics and treat this cancer inside us.

N.F. Hanna, M.D. is a primary care physician with nearly 40 years of experience practicing medicine in the U.S. and U.K. He is the author of the newly released book, Dying of Health Care: How the System Harms Americans Physically and Financially, and How to Change It.

http://observer.com/2016/04/why-do-we-pay-so-much-for-healthcare-but-get-such-poor-results/

The Salt Lake Tribune editors make case for Medicare for all

High costs of hepatitis medicine make a good case for universal Medicare

Editorial
The Salt Lake Tribune, April 4, 2016

Those who continue to argue that there is a “free market solution” to the unconscionable costs and gaps in the American health care system have to explain away the train wreck surrounding new cures for hepatitis C.

The good news is that there is a cure for hepatitis C, a blood disease that can lead to a slow and painful death as it destroys a victim’s liver. In fact, now there are a few. Gilead Sciences markets concoctions called Sovaldi and Harvoni. Janssen Research offers a drug called Olysio.

The bad news is that the cost of the full treatment regimen for a single patient can run from $83,000 to $189,000. That, obviously, is well beyond the reach of nearly every household and understandably enough to scare off both private insurance carriers and government-funded Medicaid.

The worse news is that, because the United States clings to the idea that wellness is a commodity subject to rational market forces, nobody is trying to limit these awful costs.

The drug companies charge so much for these medications for one reason: Because they can.

Functioning free markets do not — and never will — exist in health care because the sellers so often hold all the cards.

Civilized nations — a term that excludes the United States when discussing health care — either regulate the prices of drugs or use their concentrated purchasing power to negotiate a reasonable cost.

Drug makers argue that even the staggering cost of Sovaldi or related drugs is a bargain compared to avoided costs of more treatment, surgeries, disability, early death, etc.

It is notable that single-payer systems, such as in the United Kingdom, have done the math and agreed to pay high — though less than in the U.S. — prices for these drugs. That’s because, in those nations, the single payer does, indeed, come out ahead by paying a lot now but saving many multiples of that later.

In other words, the case made by the drug companies for allowing them to charge such high prices is also an argument for Medicare for all.

http://www.sltrib.com/opinion/3738478-155/editorial-high-costs-of-hepatitis-medicine

***

Comment:

By Don McCanne, M.D.

If there is any good in the fact that drug companies are gouging patients and payers it is that the citizenry may finally awaken to the fact that we need the government involved to straighten out this crisis, and, by extension, that we can finally get past the anti-government hangup preventing us from enacting a single payer system. We can thank the editors of The Salt Lake Tribune for reminding us that the solution we need is a single payer Medicare for all.

The Salt Lake Tribune editors make case for Medicare for all

High costs of hepatitis medicine make a good case for universal Medicare

Editorial
The Salt Lake Tribune, April 4, 2016

Those who continue to argue that there is a “free market solution” to the unconscionable costs and gaps in the American health care system have to explain away the train wreck surrounding new cures for hepatitis C.

The good news is that there is a cure for hepatitis C, a blood disease that can lead to a slow and painful death as it destroys a victim’s liver. In fact, now there are a few. Gilead Sciences markets concoctions called Sovaldi and Harvoni. Janssen Research offers a drug called Olysio.

The bad news is that the cost of the full treatment regimen for a single patient can run from $83,000 to $189,000. That, obviously, is well beyond the reach of nearly every household and understandably enough to scare off both private insurance carriers and government-funded Medicaid.

The worse news is that, because the United States clings to the idea that wellness is a commodity subject to rational market forces, nobody is trying to limit these awful costs.

The drug companies charge so much for these medications for one reason: Because they can.

Functioning free markets do not — and never will — exist in health care because the sellers so often hold all the cards.

Civilized nations — a term that excludes the United States when discussing health care — either regulate the prices of drugs or use their concentrated purchasing power to negotiate a reasonable cost.

Drug makers argue that even the staggering cost of Sovaldi or related drugs is a bargain compared to avoided costs of more treatment, surgeries, disability, early death, etc.

It is notable that single-payer systems, such as in the United Kingdom, have done the math and agreed to pay high — though less than in the U.S. — prices for these drugs. That’s because, in those nations, the single payer does, indeed, come out ahead by paying a lot now but saving many multiples of that later.

In other words, the case made by the drug companies for allowing them to charge such high prices is also an argument for Medicare for all.

http://www.sltrib.com/opinion/3738478-155/editorial-high-costs-of-hepatitis-medicine

If there is any good in the fact that drug companies are gouging patients and payers it is that the citizenry may finally awaken to the fact that we need the government involved to straighten out this crisis, and, by extension, that we can finally get past the anti-government hangup preventing us from enacting a single payer system. We can thank the editors of The Salt Lake Tribune for reminding us that the solution we need is a single payer Medicare for all.

Anthem and Dignity collude with employers, shafting employees

Anthem Blue Cross, Dignity Health Partner to Improve Health, Lower Employer Costs

Business Wire, March 31, 2016

Anthem Blue Cross and Dignity Health, one of the largest hospital systems in the country, have collaborated to introduce a new tiered EPO/PPO plan designed to improve employee health and lower costs through an integrated care management system.

The Premier Tiered EPO/PPO product is designed for self-insured large groups, or employers with more than 101 employees and will launch on May 1, 2016 in Ventura County.

The plans are designed to offer choice and flexibility for employees who are members. They can select from either the Exclusive Provider Organization (EPO) that provides the best price with a pre-determined network of high value Dignity Health providers, or a Preferred Provider Organization (PPO) which provides access to a wider range of providers to choose from at varying copay and cost share levels. The new product combines the managed care capabilities and expertise of both organizations, with a focus on clinical quality, access and efficiency of health care services.

“As health care providers, we understand the challenges employers face in managing health care access and cost of care,” said Duncan Ross, Dignity Health Vice President, Employer Relations. “This collaboration with Anthem creates a care management model that will help employers reduce costs and provide a better patient experience for their employees, and reflects our mission of service and commitment to our communities.”

http://www.businesswire.com/news/home/20160331006282/en/Anthem-Blue-Cross-Dignity-Health-Partner-Improve

***

Comment:

By Don McCanne, M.D.

In announcing their new program that will “improve health and lower employer costs,” Anthem Blue Cross and Dignity Health show us once again that by relying on the private sector to control health care financing, we will continue to see innovations that serve their industries well, but at a cost to patients.

In this case Anthem and Dignity are providing a competitively priced product that will be cheaper for employers, but it will cause employees to choose between either an exclusive provider organization with severe restrictions in choice of providers or a preferred provider organization with moderate restrictions in provider choice but greater exposure to out-of-pocket spending. Either choice is worse for the employees than under more typical employer-sponsored plans of the past.

Under a well-designed single payer system, patients would have choice of their health care professionals and hospitals, and financial barriers would be removed by providing first dollar coverage. Many other features of a single payer system would control costs in a patient-friendly manner.

Anthem and Dignity collude with employers, shafting employees

Anthem Blue Cross, Dignity Health Partner to Improve Health, Lower Employer Costs

Business Wire, March 31, 2016

Anthem Blue Cross and Dignity Health, one of the largest hospital systems in the country, have collaborated to introduce a new tiered EPO/PPO plan designed to improve employee health and lower costs through an integrated care management system.

The Premier Tiered EPO/PPO product is designed for self-insured large groups, or employers with more than 101 employees and will launch on May 1, 2016 in Ventura County.

The plans are designed to offer choice and flexibility for employees who are members. They can select from either the Exclusive Provider Organization (EPO) that provides the best price with a pre-determined network of high value Dignity Health providers, or a Preferred Provider Organization (PPO) which provides access to a wider range of providers to choose from at varying copay and cost share levels. The new product combines the managed care capabilities and expertise of both organizations, with a focus on clinical quality, access and efficiency of health care services.

“As health care providers, we understand the challenges employers face in managing health care access and cost of care,” said Duncan Ross, Dignity Health Vice President, Employer Relations. “This collaboration with Anthem creates a care management model that will help employers reduce costs and provide a better patient experience for their employees, and reflects our mission of service and commitment to our communities.”

http://www.businesswire.com/news/home/20160331006282/en/Anthem-Blue-Cross-Dignity-Health-Partner-Improve

In announcing their new program that will “improve health and lower employer costs,” Anthem Blue Cross and Dignity Health show us once again that by relying on the private sector to control health care financing, we will continue to see innovations that serve their industries well, but at a cost to patients.

In this case Anthem and Dignity are providing a competitively priced product that will be cheaper for employers, but it will cause employees to choose between either an exclusive provider organization with severe restrictions in choice of providers or a preferred provider organization with moderate restrictions in provider choice but greater exposure to out-of-pocket spending. Either choice is worse for the employees than under more typical employer-sponsored plans of the past.

Under a well-designed single payer system, patients would have choice of their health care professionals and hospitals, and financial barriers would be removed by providing first dollar coverage. Many other features of a single payer system would control costs in a patient-friendly manner.

Medical Students Call for Single-Payer Health Insurance

By Mark Chee, Rebecca Gieseker and Rachel Stones
Chicago Maroon, March 31, 2016

As medical students, we have chosen a profession dedicated to treating illness and helping people live healthy lives.

Yet, early on during our training, we learn about the unequal access to care, unaffordable treatments, and medical debt that patients face because of our current private, for-profit health insurance system. We hear about physicians who are increasingly burdened with paperwork and frustrated by a system that does not serve their patients. We discover that despite spending more per capita on health care than other developed countries, the U.S. population has a shorter life expectancy, higher infant mortality, and worse overall health.

While the implementation of the Affordable Care Act (ACA) has expanded coverage, it fails to sufficiently address the problems our health care system faces. Around 33 million Americans remain uninsured, some indefinitely. These individuals are immigrants, who still cannot afford health insurance or live in states that have blocked Medicaid expansion. In addition to this remaining lack of coverage, increasing deductibles and cost sharing are also being used to shift the financial burden from insurers to patients. Over 50 percent of bankruptcy filings in the U.S. are due to illness and medical debt, even though the majority of individuals in this group has some form of coverage when they file for bankruptcy. Expanding insurance coverage that leaves patients vulnerable to the financial burden of illness is not the answer. Furthermore, narrow network health plans prevent patients from having continuity of care with their physicians and expose them to exorbitant (and often unexpected) out-of-network costs.

Medical students often ask what can be done about this. The clear solution is a single-payer health care reform. In a single-payer system, Medicare would be expanded to cover all U.S. residents, but care would continue to be delivered by private institutions. This would guarantee access to health care for the 33 million Americans who remain uninsured under the ACA, cover necessary services without co-pays, coinsurance, or deductibles, and contain health care costs by reducing the high administrative costs of for-profit insurers. While a single-payer wouldn’t solve all the problems that our health care system faces, it would be an important first step to make our health system more equitable, affordable, and efficient.

Implementing single-payer, or Improved Medicare for All, is far from revolutionary, and it can work in the U.S. We already spend more money than other countries that have implemented universal coverage. Furthermore, public opinion favors this approach. Recent polls have found that 58 percent of the U.S. population supports the idea of Medicare-for-all. Here at the Pritzker School of Medicine, a fall 2015 survey distributed by the school’s chapter of Physicians for a National Health Program (PNHP) identified 108 medical students and 119 physicians/faculty (including at least seven deans and six third-year clerkship directors) who publically supported single-payer. While many argue that single-payer would be too expensive for patients and the government, an economic analysis of the single-payer bill HR 676 in the U.S. House of Representatives showed that 95 percent of Americans would actually save money.

As a key hospital on the South Side of Chicago, single-payer could benefit rather than harm the bottom line for the University of Chicago Medicine. During the discussions around the Level I trauma center, a main argument brought forth against the expansion of the University’s emergency department involved the need to have a financially viable patient mix. Since Medicare and Medicaid reimbursement often do not cover the full cost of treating a patient, privately insured patients are needed to subsidize this uncompensated care. A trauma center would likely be used by patients in the surrounding communities who are insured by Medicare or Medicaid or are otherwise uninsured. Under a single-payer health care system, varying rates of reimbursements would not be an issue, and there would no longer be a financial incentive to serve the wealthy over the underinsured and vulnerable.

As doctors-in-training, we are excited to devote our futures to serving others, but we have already seen the struggles and burnout faced by providers and patients under our fragmented, expensive, and inefficient system. We want to practice medicine in a system that serves all Americans and guarantees health care as a basic human right for all. Those who stand to lose from single-payer in the U.S. have significant voices in the political sphere and include the for-profit insurance companies and their stakeholders, Big Pharma, and political leaders who benefit from the current status quo. However, as the next generation of physicians, if we stand together and make our voices heard, single-payer will be achieved in our lifetime.

Mark Chee, Rebecca Gieseker, and Rachel Stones are medical students at the Pritzker School of Medicine at the University of Chicago.

http://chicagomaroon.com/2016/03/31/paying-less-with-single-payer/

Oklahoma physician leaders vote to abandon Medicaid patients

Oklahoma State Medical Association urges doctors to mull leaving Medicaid over 25 percent rate cut

By Barbara Hoberock
Tulsa World, April 1, 2016

Oklahoma State Medical Association leaders have voted unanimously to urge members to consider dropping out of Medicaid.

The association’s executive committee took the unanimous vote on Wednesday following an announcement earlier in the week by the Oklahoma Health Care Authority that Medicaid rates could be cut by as much as 25 percent effective June 1.

For the current fiscal year, the state has seen a deepening revenue failure requiring state-appropriated agencies to make cuts.

“We are fully aware this will create an access-to-care crisis for rural residents, vulnerable seniors, the disabled and the nearly 60 percent of Oklahoma babies born under Medicaid,” said OSMA President Woody Jenkins. “But a 25 percent rate cut, combined with previous cuts that had already been made in recent years, will leave many of our members with little choice.”

He said the association in coming days will be offering guidance on its website for doctors on how to opt out of the Medicaid program.

http://www.tulsaworld.com/homepagelatest/oklahoma-state-medical-association-urges-doctors-to-mull-leaving-medicaid/article_8f6feba5-dd9f-56eb-9c74-ff3eac146838.html

***

KGOU Update:

The third part of the plan would restore the Medicaid reimbursement rate to 86.5 percent of Medicare. Earlier this week, the Oklahoma Health Care Authority proposed reducing the reimbursement rate to providers by 25 percent as a result of the estimated $1.3 billion general revenue shortfall in the upcoming fiscal year.

http://kgou.org/post/oklahoma-health-care-authority-proposes-plan-insure-more-oklahomans#stream/0

***

Comment:

By Don McCanne, M.D.

One of the flaws in our fragmented, multi-payer system of financing health care is that low-income patients tend to be lumped into the Medicaid program. Since it is a welfare program serving individuals who do not command much political capital, politicians are more willing to use cuts in Medicaid to balance their budgets than cuts for programs designed to serve the general population such as Medicare and Social Security. What lessons can Oklahoma’s proposed 25 percent cut in Medicaid rates provide for us?

As a welfare program, Medicaid does remain chronically underfunded. As such, access problems occur because of a lack of willing providers since there is reluctance on the part of others to accept the lower Medicaid rates. But should the less fortunate members of society be relegated to a lower standard of health care, or should everyone have the equivalent access to essential health care services? That question has been answered by our politicians even if it was never asked.

That said, what response should organized medicine have to these cuts in Medicaid? Perhaps we should ask whom they perceive as being victimized here. The Oklahoma State Medical Association (OSMA) has recommended that all physicians drop out of the Medicaid program in order to protect themselves from underpayment for their services.

What about the patients otherwise qualified for Medicaid who need health care? OSMA has provided no recommendation. Do the physicians simply refuse to see those patients if they cannot pay cash for their services? Would some physicians agree to see them on a charitable basis at the risk of having their schedules swamped because too many others would continue to boycott the patients until their fee demands were met?

Although we can sympathize with physicians who are being requested to practice in a toxic environment because of unreasonable policy decisions made by the politicians, we can also be troubled by their abandonment of the needy patients who seem to be the real victims here. This is not unlike some members of Congress who have repeatedly voted to repeal the Affordable Care Act yet have offered no replacement to ensure that people can get the health care that they need.

We could replace the politicians who have refused to enact policies that would ensure health care for everyone. Physicians could also replace their medical association delegates with those who follow modern Hippocratic traditions: “I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.”

What was it the OSMA president said? “We are fully aware this will create an access-to-care crisis for rural residents, vulnerable seniors, the disabled and the nearly 60 percent of Oklahoma babies born under Medicaid,” but they are left with little other choice than to abandon them. Really?

Update:

It appears that they may receive a reprieve with a new proposal from the state Medicaid agency, but that does not excuse them from the fact that they were willing to abandon their Medicaid patients.

Oklahoma physician leaders vote to abandon Medicaid patients

Oklahoma State Medical Association urges doctors to mull leaving Medicaid over 25 percent rate cut

By Barbara Hoberock
Tulsa World, April 1, 2016

Oklahoma State Medical Association leaders have voted unanimously to urge members to consider dropping out of Medicaid.

The association’s executive committee took the unanimous vote on Wednesday following an announcement earlier in the week by the Oklahoma Health Care Authority that Medicaid rates could be cut by as much as 25 percent effective June 1.

For the current fiscal year, the state has seen a deepening revenue failure requiring state-appropriated agencies to make cuts.

“We are fully aware this will create an access-to-care crisis for rural residents, vulnerable seniors, the disabled and the nearly 60 percent of Oklahoma babies born under Medicaid,” said OSMA President Woody Jenkins. “But a 25 percent rate cut, combined with previous cuts that had already been made in recent years, will leave many of our members with little choice.”

He said the association in coming days will be offering guidance on its website for doctors on how to opt out of the Medicaid program.

http://www.tulsaworld.com/homepagelatest/oklahoma-state-medical-association-urges-doctors-to-mull-leaving-medicaid/article_8f6feba5-dd9f-56eb-9c74-ff3eac146838.html

***

KGOU Update:

The third part of the plan would restore the Medicaid reimbursement rate to 86.5 percent of Medicare. Earlier this week, the Oklahoma Health Care Authority proposed reducing the reimbursement rate to providers by 25 percent as a result of the estimated $1.3 billion general revenue shortfall in the upcoming fiscal year.

http://kgou.org/post/oklahoma-health-care-authority-proposes-plan-insure-more-oklahomans#stream/0

One of the flaws in our fragmented, multi-payer system of financing health care is that low-income patients tend to be lumped into the Medicaid program. Since it is a welfare program serving individuals who do not command much political capital, politicians are more willing to use cuts in Medicaid to balance their budgets than cuts for programs designed to serve the general population such as Medicare and Social Security. What lessons can Oklahoma’s proposed 25 percent cut in Medicaid rates provide for us?

As a welfare program, Medicaid does remain chronically underfunded. As such, access problems occur because of a lack of willing providers since there is reluctance on the part of others to accept the lower Medicaid rates. But should the less fortunate members of society be relegated to a lower standard of health care, or should everyone have the equivalent access to essential health care services? That question has been answered by our politicians even if it was never asked.

That said, what response should organized medicine have to these cuts in Medicaid? Perhaps we should ask whom they perceive as being victimized here. The Oklahoma State Medical Association (OSMA) has recommended that all physicians drop out of the Medicaid program in order to protect themselves from underpayment for their services.

What about the patients otherwise qualified for Medicaid who need health care? OSMA has provided no recommendation. Do the physicians simply refuse to see those patients if they cannot pay cash for their services? Would some physicians agree to see them on a charitable basis at the risk of having their schedules swamped because too many others would continue to boycott the patients until their fee demands were met?

Although we can sympathize with physicians who are being requested to practice in a toxic environment because of unreasonable policy decisions made by the politicians, we can also be troubled by their abandonment of the needy patients who seem to be the real victims here. This is not unlike some members of Congress who have repeatedly voted to repeal the Affordable Care Act yet have offered no replacement to ensure that people can get the health care that they need.

We could replace the politicians who have refused to enact policies that would ensure health care for everyone. Physicians could also replace their medical association delegates with those who follow modern Hippocratic traditions: “I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.”

What was it the OSMA president said? “We are fully aware this will create an access-to-care crisis for rural residents, vulnerable seniors, the disabled and the nearly 60 percent of Oklahoma babies born under Medicaid,” but they are left with little other choice than to abandon them. Really?

Update:

It appears that they may receive a reprieve with a new proposal from the state Medicaid agency, but that does not excuse them from the fact that they were willing to abandon their Medicaid patients.

Who isn’t insured, and how can we change that?

Who Are the Remaining Uninsured, and What Do Their Characteristics Tell Us About How to Reach Them?

By Linda J. Blumberg, Michael Karpman, Matthew Buettgens, and Patricia Solleveld
Robert Wood Johnson Foundation
Urban Institute, March 2016

From the Introduction

Although the ACA was not designed to eliminate uninsurance, a detailed assessment of those remaining uninsured after reform can provide insight into the potential to increase coverage further.

Main Findings

*  According to the CPS-ASEC, 32.9 million nonelderly residents of the United States remained uninsured as of March 2015, constituting 12.2 percent of the total non-elderly, civilian, non-institutionalized population of the country.

*  The rate of uninsurance is significantly higher in (Medicaid) nonexpansion states, where 15.4 percent of the nonelderly are uninsured compared with only 10.1 percent in expansion states, a relative difference of over 50 percent.

*  About 28 percent of the uninsured are eligible for Medicaid or the Children’s Health Insurance Program (Medicaid/CHIP), and 21 percent are eligible for marketplace tax credits.

*  Fully 66.5 percent of uninsured children are eligible for Medicaid/CHIP compared with only 20.6 percent of uninsured adults.

*  We posit that the uninsured who are eligible for the greatest amount of financial assistance under the ACA — 12.4 million uninsured in total — are those for whom additional outreach and enrollment efforts are likely to be most successful.

*  Absent further policy changes (e.g., more states expanding Medicaid, increased financial assistance, and expanded eligibility for assistance), we do not expect that a substantial share of the other uninsured — who constitute 20.6 million of the total — will gain coverage.

*  Targeting of resources to those 12.4 million uninsured with the greatest potential to enroll in either Medicaid/CHIP or marketplace coverage can be improved by understanding their characteristics.

From the Conclusion

Our analysis of the CPS-ASEC combined with past work on program participation rates and case studies on insurance enrollment behavior under the ACA suggests that two subpopulations of the uninsured have the most promise in further expanding coverage: the Medicaid eligible and the low-income marketplace tax credit eligible. These are the uninsured eligible for the most comprehensive coverage at the lowest direct cost under current law, and those eligible for this level of assistance have relatively high rates of participation in health insurance programs. Together, these subgroups account for 37.5 percent of the remaining uninsured, or approximately 12.4 million people.

Under current law, however, expectations of increasing coverage substantially among the other 62.5 percent of the remaining uninsured should be tempered. Although some additional coverage within these groups is likely as the individual mandate penalties increase and information on available coverage alternatives spread further, gains are likely to be quite modest unless further financial assistance is provided.

http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2016/rwjf427898

***

Comment:

By Don McCanne, M.D.

Perhaps the most important statement in this report on the remaining uninsured is the following: “The ACA was not designed to eliminate uninsurance.” It should be no surprise that we are left with trying to figure out why so many are uninsured and who they are when the architects of the Affordable Care Act abandoned, in advance, any effort to make health care insurance truly universal.

If there is good news in this report it is that there are two groups in which, with concerted effort, we can increase rates of enrollment: the uninsured eligible for Medicaid/CHIP, and the lower-income uninsured eligible for government subsidies for ACA exchange plans. These eligible individuals are more likely to accept coverage because government subsidies make it free or very low cost to them. But those eligible are still a minority of the uninsured – 12.4 million individuals.

The majority of the uninsured – 62.5 percent, 20.6 million individuals – have no publicly-supported programs available for them and are likely to remain uninsured. It has been suggested that we can expand coverage through incremental changes in ACA, but, because of political, logistical and financial barriers, it would be very difficult to design add-on programs that would be effective in bringing these individuals under the coverage umbrella.

Another problem is that a static picture at one point in time does not lead to policies that would address the instability in coverage due to changes in income, employment, age, residency, and other requirements that determine the type of coverage for which an individual may or may not be eligible. As we work on the front end to expand coverage to the currently uninsured, people are falling off of the back end as they lose their coverage and may face new barriers to transitioning to other programs. This instability makes it virtually impossible to ever cover everyone simultaneously under our fragmented system that has been perpetuated by ACA.

So do we want everyone insured? I would say absolutely yes, but it is not going to happen under a system that was clearly not designed to do that. In contrast, an Improved Medicare for All would be designed to actually cover everyone, permanently, not to mention the multitude of other social and health benefits that it would bring to all of us.

Who isn’t insured, and how can we change that?

Who Are the Remaining Uninsured, and What Do Their Characteristics Tell Us About How to Reach Them?

By Linda J. Blumberg, Michael Karpman, Matthew Buettgens, and Patricia Solleveld
Robert Wood Johnson Foundation
Urban Institute, March 2016

From the Introduction

Although the ACA was not designed to eliminate uninsurance, a detailed assessment of those remaining uninsured after reform can provide insight into the potential to increase coverage further.

Main Findings

*  According to the CPS-ASEC, 32.9 million nonelderly residents of the United States remained uninsured as of March 2015, constituting 12.2 percent of the total non-elderly, civilian, non-institutionalized population of the country.

*  The rate of uninsurance is significantly higher in (Medicaid) nonexpansion states, where 15.4 percent of the nonelderly are uninsured compared with only 10.1 percent in expansion states, a relative difference of over 50 percent.

*  About 28 percent of the uninsured are eligible for Medicaid or the Children’s Health Insurance Program (Medicaid/CHIP), and 21 percent are eligible for marketplace tax credits.

*  Fully 66.5 percent of uninsured children are eligible for Medicaid/CHIP compared with only 20.6 percent of uninsured adults.

*  We posit that the uninsured who are eligible for the greatest amount of financial assistance under the ACA — 12.4 million uninsured in total — are those for whom additional outreach and enrollment efforts are likely to be most successful.

*  Absent further policy changes (e.g., more states expanding Medicaid, increased financial assistance, and expanded eligibility for assistance), we do not expect that a substantial share of the other uninsured — who constitute 20.6 million of the total — will gain coverage.

*  Targeting of resources to those 12.4 million uninsured with the greatest potential to enroll in either Medicaid/CHIP or marketplace coverage can be improved by understanding their characteristics.

From the Conclusion

Our analysis of the CPS-ASEC combined with past work on program participation rates and case studies on insurance enrollment behavior under the ACA suggests that two subpopulations of the uninsured have the most promise in further expanding coverage: the Medicaid eligible and the low-income marketplace tax credit eligible. These are the uninsured eligible for the most comprehensive coverage at the lowest direct cost under current law, and those eligible for this level of assistance have relatively high rates of participation in health insurance programs. Together, these subgroups account for 37.5 percent of the remaining uninsured, or approximately 12.4 million people.

Under current law, however, expectations of increasing coverage substantially among the other 62.5 percent of the remaining uninsured should be tempered. Although some additional coverage within these groups is likely as the individual mandate penalties increase and information on available coverage alternatives spread further, gains are likely to be quite modest unless further financial assistance is provided.

http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2016/rwjf427898

Perhaps the most important statement in this report on the remaining uninsured is the following: “The ACA was not designed to eliminate uninsurance.” It should be no surprise that we are left with trying to figure out why so many are uninsured and who they are when the architects of the Affordable Care Act abandoned, in advance, any effort to make health care insurance truly universal.

If there is good news in this report it is that there are two groups in which, with concerted effort, we can increase rates of enrollment: the uninsured eligible for Medicaid/CHIP, and the lower-income uninsured eligible for government subsidies for ACA exchange plans. These eligible individuals are more likely to accept coverage because government subsidies make it free or very low cost to them. But those eligible are still a minority of the uninsured – 12.4 million individuals.

The majority of the uninsured – 62.5 percent, 20.6 million individuals – have no publicly-supported programs available for them and are likely to remain uninsured. It has been suggested that we can expand coverage through incremental changes in ACA, but, because of political, logistical and financial barriers, it would be very difficult to design add-on programs that would be effective in bringing these individuals under the coverage umbrella.

Another problem is that a static picture at one point in time does not lead to policies that would address the instability in coverage due to changes in income, employment, age, residency, and other requirements that determine the type of coverage for which an individual may or may not be eligible. As we work on the front end to expand coverage to the currently uninsured, people are falling off of the back end as they lose their coverage and may face new barriers to transitioning to other programs. This instability makes it virtually impossible to ever cover everyone simultaneously under our fragmented system that has been perpetuated by ACA.

So do we want everyone insured? I would say absolutely yes, but it is not going to happen under a system that was clearly not designed to do that. In contrast, an Improved Medicare for All would be designed to actually cover everyone, permanently, not to mention the multitude of other social and health benefits that it would bring to all of us.

Better Care for the Poor, More Return on Cost

By Jack Bernard
The Wall Street Journal, Letters, March 29, 2016

Re: Dr. Scott Atlas’s “How to Fix the Scandal of Medicaid and the Poor” (op-ed, March 16):

Dr. Atlas is correct about many of the problems faced by Medicaid, but his cure is worse than the disease. The fact is the poor can’t afford to go the high-deductible or health-savings-account route. Yes, they will ask for less care, as Dr. Atlas states, but he seems to forget that people don’t go to doctors for the joy of the experience. They go because they are ill.

A more effective direction would be to expand the Medicare program by moving these individuals into it. In fact, if you examine per capita health expenditures of the U.S. versus other developed nations, our costs are much higher because we do not have national universal health insurance — Medicare for all.

Jack Bernard is a former head of health planning for Georgia. He resides in Peachtree City, Ga.

http://www.wsj.com/articles/better-care-for-the-poor-more-return-on-cost-1459176633

IMPORTANT: ACA-compliant plans have been subjected to adverse selection

Newly Enrolled Members in the Individual Health Insurance Market After Health Care Reform: The Experience from 2014 and 2015

BlueCross BlueShield, March 2016

This report is a comprehensive, in-depth study of medical claims among those enrolled in BCBS individual coverage before and after the ACA took effect.

Comparing the health status and use of medical services among those who enrolled in individual coverage before and after the ACA took effect, as well as those with employer-based health insurance, the study finds that:

•  Members who newly enrolled in BCBS individual health plans in 2014 and 2015 have higher rates of certain diseases such as hypertension, diabetes, depression, coronary artery disease, human immunodeficiency virus (HIV) and Hepatitis C than individuals who already had BCBS individual coverage.

•  Consumers who newly enrolled in BCBS individual health plans in 2014 and 2015 received significantly more medical services in their first year of coverage, on average, than those with BCBS individual plans prior to 2014 who maintained BCBS individual health coverage into 2015, as well as those with BCBS employer-based group health coverage.

•  The new enrollees used more medical services across all sites of care—including inpatient hospital admissions, outpatient visits, medical professional services, prescriptions filled and emergency room visits.

•  Medical costs associated with caring for the new individual market enrollees were, on average, 19 percent higher than employer-based group members in 2014 and 22 percent higher in 2015. For example, the average monthly medical spending was $559 for individual enrollees versus $457 for employer-based group members in 2015.

http://www.bcbs.com/healthofamerica/newly_enrolled_individuals_after_aca.pdf

***

Comment:

By Don McCanne, M.D.

Compared with members previously enrolled in BlueCross BlueShield plans, those enrolling after the Affordable Care Act (ACA) took effect have higher rates of certain diseases, use more medical services across all sites of care, and have higher medical costs associated with care – 22 percent higher in 2015. Adverse selection – concentrating more costly patients in the ACA-compliant plans – was a consequence of the design selected for expanding health care coverage in the United States.

Although required benefits were increased by ACA, to keep premiums affordable patients were leveraged into lower actuarial value plans, especially plans like the silver plans that pay 70 percent of allowable charges. Outside of the exchanges, the other 30 percent is paid by patients, especially through much higher deductibles. Also some income is forgone by providers who contract for lower fees to serve in narrow networks that take away patients’ choices in health care.

It was obvious that many people with modest incomes would not be able to afford their share of the costs of these plans so the politicians included income-based federal subsidies for both the premiums and the cost sharing of the silver plans purchased through the ACA insurance exchanges (marketplaces).

Fine, but what about the hard working middle-income individuals and families who have just enough income that they are disqualified from receiving the subsidies? They are hurting. The higher premiums, the higher deductibles, and the decrease in choices through narrower networks are a greater burden that has been placed on these individuals and families.

This new BCBS report is further bad news for middle-income Americans. It shows that the ACA-compliant plans, both within and outside of the exchanges, have been subjected to adverse selection – the individuals pooled in these plans have greater medical needs and thus are more expensive – driving up premiums and increasing deductibles, with the full brunt borne by middle-income families that do not qualify for subsidies.

It does not have to be this way. We could improve Medicare, expand it to include everyone, and pay for it with equitable taxes based on ability to pay, wherein nobody suffers a financial hardship because of health care. Adverse selection would no longer exist because everyone would be included in the same universal risk pool.