PNHP

Medicare Advantage plans padded charges on home visits, whistleblower says

Medicare Advantage plans padded charges on home visits, whistleblower says

Texas case latest in series of allegations against privately-run health plans

By Fred Schulte
Center for Public Integrity, August 12, 2015

A new whistleblower case accuses a Texas medical consulting firm and more than two dozen health plans for the elderly of ripping off Medicare by conducting in-home patient exams that allegedly overstated how much the plans should be paid.

The Texas litigation is just the latest of at least a half dozen whistleblower cases that have been filed in the past five years alleging billing fraud and lax government oversight of privately-run Medicare Advantage plans that have proven increasingly popular with senior citizens.    

The latest lawsuit was filed in federal court in Dallas by Becky Ramsey-Ledesma, a medical billing coder, against her former employer, CenseoHealth, LLC. The Dallas-based firm has contracted with  thousands of doctors who visit elderly people in their homes and evaluate their health on behalf of Medicare Advantage plans.

But the health assessments exaggerated how ill patients were, which in turn inflated Medicare payments to the health plans, according to the allegations in the suit. The suit names 30 Medicare Advantage plans in 15 states, including several Blue Cross plans and other industry stalwarts, such as Humana Inc. Humana has more than three million Medicare members.

The private insurance plans offer seniors an alternative to standard Medicare, which pays doctors for each service they render. Medicare Advantage plans receive a set fee monthly for each patient based on a risk score that pays higher rates for sicker people and less for those in good health. Medicare essentially trusts health plans to report these risk scores accurately. The Medicare Advantage plans have grown rapidly in recent years, and now cover almost 17 million people.

The Texas suit was filed last year, but stayed under court seal until mid-June. It is the second whistleblower action to target Medicare Advantage home visits, which account for billions of dollars in annual revenues for health plans.

A 2014 Center for Public Integrity investigation found that home visits skyrocketed as federal officials struggled to prevent health plans from overcharging Medicare by tens of billions of dollars every year. Federal officials as early as 2013 were concerned the home visits could be a factor in jacking up risk scores improperly and wasting tax dollars. But they backed off a proposal to limit their use when the industry objected, the investigation found.

CenseoHealth’s home visits collect data on the health status of patients, which the private health plans then use to bill Medicare. The company had no comment on the lawsuit.

The Centers for Medicare and Medicaid Services press office declined to answer written questions seeking comment on its home visit policy. The agency instead issued a statement that said the home exams can have “significant value.” That opinion is shared by the health insurance industry trade group, America’s Health Insurance Plans. A spokesperson for AHIP called the visits “an important component of disease management activities.”

Medicare Advantage is enjoying robust growth and firm political support in Congress. The industry has beaten back several attempts by the Obama administration to cut its rates as enrollment has grown to encompass about one in three people on Medicare. In June, the House passed a bill sponsored by Rep. Vern Buchanan, R-Florida,  that appears to prevent federal officials from halting the home health assessments.

At the same time, the Centers for Medicare and Medicaid Services is drawing scrutiny over top manager Andy Slavitt’s former ties to UnitedHealth Group, which runs the nation’s biggest Medicare Advantage plan. Senate Finance Chairman Orrin Hatch criticized Slavitt’s “conflicted history” in a statement issued after President Obama nominated him for the top CMS job in July.

Bringing Back House Calls

CenseoHealth has emerged as a leader in a growing market for in-home health assessments.

Formed in 2009 by two Texans, CenseoHealth grew from four employees to 325 workers by 2013, according to its website. It has built a network of nearly 5,000 doctors whom it says are “uniquely qualified to identify and diagnose health conditions.” CenseoHealth-affiliated doctors have done more than a million home visits, and in 2013 forecast revenue would reach $120 million, according to its website.

CenseoHealth’s investors include private equity firm Health Evolution Partners, headed by David Brailer, a physician and former health information technology czar under President George W. Bush. In March, Brailer was named chairman of CenseoHealth’s board of directors. Brailer could not be reached for comment.

According to the suit, CenseoHealth used an algorithm to identify patients who might have undetected medical conditions that could raise their risk scores. The company uses marketers to contact patients and schedule doctor visits to their homes.

The suit alleges that the doctors don’t provide any medical treatment. Other than taking vital signs and weight, listening to heart and lungs and checking reflexes, no physical exam in involved and no lab tests are performed, according to the suit. The doctors ask the patient a series of questions on a checklist during the visit, which takes about an hour.

“In other words, the conditions reflected on the evaluation forms are not medical diagnoses derived from a medical examination, but instead, are self-reported conditions captured from the medical history and verbally confirmed” by the patient, according to the suit.

Some of the doctors lacked medical licenses, according to the suit, and others were assigned as many as ten visits a day for a flat fee of $100 each. Some faked results, according to the suit. The suit cited a test for Alzheimer’s disease in which each patient was asked to draw hands on a clock to indicate the correct time of day. “In some cases it was obvious that the same person had drawn the clock on multiple forms,” according to the suit.

Some of the diagnoses could not be made reliably through a home visit, according to the suit. Others were based on medications patients took, even when those medications could be taken for more than one condition, according to the suit.

These practices inflated risk scores, according to the suit, triggering “substantial overpayments” to the health plans.

Ramsey-Ledesma claims she was fired in August 2013, the day after she objected to the practices. According to the suit, her manager told her, “we can no longer trust you.”

The other whistleblower case that targeted home visits was unsealed in 2014. It was filed by Anita Silingo, a former compliance officer for Mobile Medical Examination Services, Inc., or MedXM.  The company, based in Santa Ana, Ca., has denied the allegations. The case is pending.

The Department of Justice declined to join either case, which may make it more difficult for the whistleblowers to proceed with their cases and collect a large award. However, lawyers who handle these cases say more of them are moving ahead without the government.

Other whistleblower cases involving Medicare Advantage have been filed in the past five years in California, Florida and South Carolina, among other locales. These cases also allege that Medicare Advantage plans inflated risk scores and as a result were overpaid by Medicare.

Friends in High Places

As early as 2013, CMS officials said they suspected home visits improperly raise risk scores and waste tax dollars. But as the visits became standard procedure for more and more health plans, CMS lost its appetite for tightening oversight.

CMS officials wrote in February 2013 that they were concerned that the primary objective of the visits was to raise risk scores and revenues “without follow up care or treatment being provided.”

In April 2013 though, officials bowed to industry pressure and backed off their proposal to collect data on the home visits with an eye to excluding their use in setting rates.

The following year, CMS again backed down from a proposal to exclude the visits after meeting with the industry. That decision came even though CMS said “there appears to be little evidence” that the visits led to any improvement in patient care. The insurance industry estimated that cutting out the visits would have cost Medicare Advantage plans nearly $3 billion a year.

Earlier this year, CMS handed the industry a major victory and ruled out excluding the home visits. Instead, CMS urged the industry to adopt a set of “best practices” for the visits. The new policy “enhances the value of in-home assessments so they are used to support care planning and care coordination and improve enrollee health outcomes.”

The press release quoted then-CMS deputy administrator Slavitt saying the proposals “would reward providers of high quality, consumer-friendly care” for Medicare Advantage.

Slavitt is a former executive of  Optum, a subsidiary of UnitedHealth Group. In July, President Obama nominated him to take over CMS permanently.

CMS officials declined to answer questions about Slavitt’s role in the decision making process for home assessments, but said:

 “CMS believes that in-home assessments can have significant value as care planning and care coordination tools. In the home setting, the provider has access to more information than is available in a clinical setting.” 

http://www.publicintegrity.org/2015/08/12/17815/medicare-advantage-plans-padded-charges-home-visits-whistleblower-says

‘End the devastating austerity drive against Greece’: U.S. doctors group

Troika-imposed policies causing widespread suffering and death, physicians say

FOR IMMEDIATE RELEASE
August 12, 2015

Contact:
Physicians for a National Health Program, (312) 782-6006, info@pnhp.org

The following statement was released today by Physicians for a National Health Program.

The 19,000 members of Physicians for a National Health Program call upon the European Union, European Central Bank and International Monetary Fund – the so-called troika – to cease imposing harsh austerity policies on the Greek people that have gravely damaged the Greek health care system and have caused unnecessary death and suffering.

Our Greek colleagues in medicine and public health have documented a tragic deterioration in the quality and availability of care.

In the past, Greece’s national health system provided universal access to care. Now, millions of people are unable to obtain the services they need. The barriers to care in Greece increasingly resemble the barriers our patients face in the United States, where tens of millions remain uninsured despite the Affordable Care Act.

Today in Greece, vital health institutions are being starved of resources or privatized, and despite the heroic efforts of many Greek physicians and nurses, care is increasingly reserved for the wealthy few.

A convincing body of research, including some by our own members, has demonstrated the ill effects of these policies. Even before the latest round of austerity imposed by the Eurozone, a study in the American Journal of Public Health found that key public health indicators deteriorated as austerity policies reduced public services:

  • Suicides and homicides increased.
  • Rates of mental disorders, substance abuse, and infectious diseases rose.
  • Despite deteriorating health conditions, austerity policies forced cutbacks in public health services.
  • Already overstretched public inpatient and primary care services were inundated with additional patients who were unable to afford private facilities because of unemployment and income loss.

Other important research also has found devastating health effects of austerity policies in Greece and elsewhere, leading to the conclusion that “Austerity Kills.”

Although the economic justifications for austerity policies are weak, the devastating health effects of these policies are well documented.

The troika’s continued pursuit of policies that inflict mass punishment on the people of Greece cannot be justified.

IG report on problems with eligibility determinations in exchange plans

Not All of the Federally Facilitated Marketplace’s Internal Controls Were Effective in Ensuring That Individuals Were Properly Determined Eligible for Qualified Health Plans and Insurance Affordability Programs

Department of Health and Human Services, Office of the Inspector General, August 2015

Our objective was to determine whether the Federal marketplace’s internal controls were effective in ensuring that individuals were determined eligible for enrollment in QHPs (qualified health plans) and eligible for insurance affordability programs according to Federal requirements.

DEFICIENCIES RELATED TO VERIFYING APPLICANTS’ ELIGIBILITY

Social Security Numbers Were Not Always Validated Through the Social Security Administration

Citizenship Was Not Always Verified Properly

Annual Household Income Was Not Always Verified Properly

Family Size Was Not Always Determined Correctly

DEFICIENCIES RELATED TO RESOLVING AND EXPIRING INCONSISTENCIES

Inconsistencies Related to Certain Eligibility Requirements Were Not Always Resolved Properly

Inconsistencies Related to Certain Eligibility Requirements Were Not Always Expired Properly

Applicant Data and Documentation Related to Resolving Inconsistencies Were Not Always Maintained Properly

https://oig.hhs.gov/oas/reports/region9/91401011.pdf

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Comment:

By Don McCanne, MD

Considering the administrative complexities of the Federally Facilitated Marketplace (insurance exchanges) established by the Affordable Care Act, these deficiencies in determining eligibility for the exchange health plans and for the premium tax credits and cost-sharing reductions do not really demonstrate bureaucratic incompetence but rather would be expected based on the complex program design authorized by the legislation.

This was totally unnecessary. By design, in a single payer system everyone is eligible and automatically enrolled. There is no need for premium tax credits since there are no premiums. The program is funded through equitable taxes instead. There also is no need for cost-sharing reductions since there are no deductibles or coinsurance. It is a prepaid program.

Instead of reading the news reports and merely tisk-tisking the incompetence of the administration, we need to give more thought as to why the administrative boondoggles exist and redirect the blame to the fact that we are implementing a highly flawed model of health care financing. That should then lead us to advocating for a model that really does work well – a single payer national health program.

Can we celebrate the decline in the numbers of uninsured?

In U.S., Uninsured Rates Continue to Drop in Most States

By Dan Witters
Gallup, August 10, 2015

The marketplace exchanges opened on Oct. 1, 2013, with new insurance plans purchased during the last quarter of that year typically starting on Jan. 1, 2014. Medicaid expansion among initially participating states also began with the onset of 2014. As such, 2013 serves as a benchmark year for uninsured rates as they existed prior to the enactment of the two major mechanisms of the healthcare law.

Nationwide, the uninsured rate fell from 17.3% in full-year 2013 to 11.7% in the first half of 2015.

Collectively, the uninsured rate in states that have chosen to expand Medicaid and set up their own state exchanges or partnerships in the health insurance marketplace has declined significantly more since 2013 than the rate in states that did not take these steps. The uninsured rate declined 7.1 points in the 22 states that implemented both of these measures by Dec. 31, 2014, compared with a 5.3-point drop across the 28 states that had implemented only one or neither of these actions.

Although the 22 states that implemented both mechanisms before Jan. 1, 2015, had a lower uninsured rate to begin with, the 7.1-point drop is larger than what is reported among the other 28 states, and represents a 44% decline since 2013 in the uninsured rate among adults residing there. The 5.3-point drop in the 28 states that have implemented one or neither of the mechanisms represents a 28% decline in uninsured rates. Still, the difference in the rate of decline in uninsured rates between the two groups of states has now leveled off, and is unchanged relative to the same 1.8-point gap in the rate of decline measured in midyear 2014.

http://www.gallup.com/poll/184514/uninsured-rates-continue-drop-states.aspx

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Comment:

By Don McCanne, MD

Although supporters of the Affordable Care Act (ACA) celebrate the reductions in the numbers of uninsured into the second year of plan enrollment, those of us who believe that everyone should be covered certainly do not have cause to celebrate.

Nationally, the rate of uninsured fell from 17.3% before ACA expansions were implemented to 11.7% after the second annual enrollment period. That is a decline in the uninsured of only 32%. Two-thirds of the numbers previously uninsured still remain uninsured.

Even in those states that cooperated with ACA by both expanding Medicaid and by establishing exchanges themselves or partnering with the federal government to establish exchanges still saw reductions in the uninsured of only 44% – less than half (a decline from 16.0% to 8.9%). Thus even the optimal results are disappointing. States that failed to cooperate saw even less of a decline in the uninsured – 28% (from 18.7% to 13.4%).

With two seasons of ACA implementation, the low fruit has been picked. With increasing penalties for remaining uninsured, a few more enrollees should trickle into the exchanges. Also some states missing in action will likely reluctantly expand their Medicaid programs. But even with optimistic estimates of the increases in participation, it is quite clear that far too many will remain uninsured.

The defect is in the design of the Affordable Care Act – an administratively complex, fragmented system that could never result in truly universal coverage, not to mention all of the inequities that it perpetuates. In contrast, a single payer system automatically enrolls everyone, while reducing inequities. That’s the design that we need.

Many confused by tax filing requirements could lose their ACA tax credits

Tax Filing Problems Could Jeopardize Health Law Aid for 1.8M

By Ricardo Alonso-Zaldivar
Associated Press, August 4, 2015

About 1.8 million households that got financial help for health insurance under President Barack Obama’s law now have issues with their tax returns that could jeopardize their subsidies next year.

Consumers who got health care tax credits are required to file tax returns that properly account for them, even if they are unaccustomed to filing because their incomes are low. Unless they follow through, “they will not be able to receive tax credits to help lower the cost of their health insurance for 2016,” Lodes explained (Lori Lodes, communications director for the Centers for Medicare and Medicaid Services).

Treasury officials said 1.8 million households are at risk of losing subsidies for next year, and that number breaks down as follows:

  • About 710,000 households that have not filed a 2014 tax return, although they were legally required to account for health insurance tax credits that they received.
  • Some 360,000 households that got tax credits and requested an extension to file their returns. They have until Oct. 15.
  • About 760,000 households that got tax credits and filed their tax returns omitted a new form that is the key to accounting for the subsidies. Called Form 8962, it was new for this year’s tax filing season.

The 1.8 million households with tax issues represent 40 percent of 4.5 million households that had tax credits provided on their behalf and must account for them.

“What the IRS is doing here is sending these people a not-so-gentle reminder that they need to file or they will put their subsidy at risk,” said Mark Ciaramitaro, vice president for tax and health care at H&R Block, the tax preparation company. He cautioned that many consumers will find the process cumbersome, so they should waste no time getting started.

http://hosted.ap.org/dynamic/stories/U/US_HEALTH_OVERHAUL_TAX_CONFUSION

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Comment:

By Don McCanne, MD

Forty percent of the 4.5 million households that received tax credits in 2014 for the health plans offered in the ACA exchanges have failed to complete the tax filing requirements for these credits and thus will be ineligible for tax credits for 2016, unless they follow through with their delayed filings.

In a health care system already heavily burdened with administrative excesses, it is unfortunate that the Affordable Care Act significantly increases the administrative burden. In this instance, the additional hassle of the tax filing requirements for those receiving subsidies under ACA may be confusing enough that many may fail to file correctly, and thus they may become disqualified for tax credits to which they are entitled and which many need just to be able to afford the premiums for the exchange plans.

Many of ACA’s provisions and regulations apply specifically to individuals and families, creating sometimes complex administrative requirements in each individual case. In contrast, a single payer system requires simple registration only once in a lifetime, and the financing requires nothing more than compliance with the existing tax system, with rates set based on ability to pay.

For the individual, a single payer system is hassle-free, whereas for the entire nation, single payer frees up enough administrative waste to pay for the care that people are not currently receiving but should be.

When we have a financing system requiring IRS rules that can threaten individuals with loss of their health care, we know that the system needs to be changed. Time for an improved Medicare for all.

Medicare at 50 works: enhance it, expand it to all

By Christine Adams
Health Care for All Texas, July 30, 2015

Thanks to Medicare, about 3 million Texans receive guaranteed health care benefits regardless of their medical condition or income.

The 50-year-old Medicare program currently provides health coverage for 55 million Americans – seniors and younger people with disabilities or end-stage renal disease. Medicare also pays for most physician residencies.

Before Medicare’s enactment in 1965, about 50 percent of seniors had health insurance. More than a third of the elderly lived in poverty. Then, even a minor illness or injury could bankrupt older Americans and their families.

Medicare changed all that. Suddenly millions of the elderly had access to care, easing their pain and suffering and reducing the prospect of their premature death.  Additionally it lessened their risk of impoverishment from high medical bills, reducing the financial strain on their families, too.

When President Lyndon Johnson signed the law authorizing Medicare in 1965, former President Harry Truman was by his side. Truman became the first Medicare beneficiary in honor of his steadfast commitment to universal national health care.

Promoting health care for all fit Truman’s sense of “moral” priorities. It also fit his understanding of the economic benefits of covering everybody for necessary medical care in an efficient yet equitable way.

Truman was a visionary leader who often risked his political career by supporting policies that protected the majority of Americans from exploitation by powerful vested interests. He desegregated the military and federal agencies and pushed for civil rights, voting rights, and fair employment.

Today the goal of universal, national health care is still in keeping with core American values of equal opportunity, fairness, compassion, and liberty.

It also fits with American priorities of getting the “best bang for the buck” by eliminating unnecessary costs while providing health care to the greatest number of people.

But while other industrialized nations in the postwar era moved toward some type of universal, national health program, the U.S. has moved increasingly away from it. We are paying a heavy price in lives and money for this uniquely American system of for-profit, private, employer-based health insurance.

Comparison research has long established that other industrialized nations cover their entire population and get as good or better medical outcomes as we do while spending only half as much money. Why should we continue to pay more for medical care but get less?

Texans do care deeply about health care not only for themselves and their families but also for others.  A recent Nielsen survey of Texans showed that 70 percent favor a national health system and 42 percent favor a Medicare-for-All system.

Our biggest challenge now is the steadily rising cost of health care. While the ACA was a baby step in the right direction, it will fail to provide affordable, much less universal, health care.

Why? Because it leaves the private health insurance industry, Big Pharma, the for-profit hospital chains and the medical supply companies in a position to dictate prices to us.

Medicare has been a sustainable program because it has had the market clout of a high volume buyer. It has been free of unnecessary and expensive private-insurance middlemen draining scarce health care dollars, free of the need to make profits, free to concentrate on the health of patients.

Truman said, “I trust the people, because when they know the facts, they do the right thing.”

Fifty years after Medicare’s passage, the right thing to do is to create a “gold standard” version of Medicare and extend it to everyone. More of us would live healthier lives. All would spend less on health care.

Christine Adams, Ph.D., is a licensed psychologist and board member of Health Care for All Texas. She resides in Houston.

www.healthcareforalltexas.org

What single payer advocates can learn from Australia

Australian Health Care — The Challenge of Reform in a Fragmented System

By Jane Hall, Ph.D.
The New England Journal of Medicine, August 6, 2015

The Australian health care system appears remarkably successful in delivering good health outcomes with reasonable cost control. Australians enjoy one of the longest life expectancies and a long healthy life expectancy, while costs as a proportion of the gross domestic product remain around the median among countries in the Organization for Economic Cooperation and Development (OECD). Universal, tax-financed comprehensive health insurance, Australian Medicare, has been largely stable for three decades. Yet this performance has been achieved through, or despite, the interplay of public and private financing, public and private service provision, and a division of responsibilities between the federal and state governments. The main political parties clash over the role of government and whether national health insurance in its current form should continue.

Australian Medicare was established in 1984, after a period of tumultuous change. Australia has moved through numerous approaches to health care financing: private insurance with public subsidies (pre-1974), publicly financed national universal health insurance (Medibank, 1974–1976), predominantly private insurance with public subsidies (1976–1984), publicly financed national universal health insurance (Medicare, 1984–1996), publicly financed national universal health insurance with publicly subsidized private health insurance (1996–2013), and publicly financed national universal health insurance with means testing for private insurance subsidies (2013 to present). The rationale for government subsidies for private insurers alongside a public universal insurance scheme has never seemed clear; perhaps it is best seen as the compromise between the “strife of interests masquerading as a conflict of principles” that, according to health planner Sidney Sax, characterizes the Australian system.

Another strife of interests afflicts intergovernment relationships. There are six states and two territories (hereafter all referred to as states), each of which retains its own government and the responsibility for public health and health care. The national government, the Commonwealth of Australia, holds the major revenue-raising powers, so states rely on financial transfers to provide services. The states operate public hospitals (which account for about two thirds of all hospitalizations and provide emergency department visits without charge), though funding them is a joint responsibility of both levels of government. The Commonwealth has responsibility for paying benefits through Medicare (for out-of-hospital medical care and in-hospital private medical services) and for the Pharmaceutical Benefits Scheme (covering most prescribed drugs), but funding arrangements for other services often involve both levels of government. The result is a complex set of overlapping and fragmented responsibilities.

A recent review concluded that “the complex split of government roles means no single level of government has all the policy levers needed to ensure a cohesive health system” and that the people who suffer the most from the lack of coordination are “patients with chronic and complex conditions, such as diabetes, cancer and mental illness, who regularly move from one health service to another.”

A change in national government in 2013 prompted substantial revision of many aspects of reform. In primary care, Medicare Locals were disbanded, and on July 1, 2015, they were replaced by 31 Primary Health Networks. The call for applications to establish these networks emphasized the eligibility of various organizations, including private health insurance funds, as contractors. The successful bids came mainly from consortia of Medicare Locals, some of them including insurers as partners. The networks may yet develop the potential to become purchasers and thereby provide impetus for integrated care, but given the challenge of setting up new entities, that transformation remains aspirational.

The new government has also reversed the agreement that provided additional Commonwealth funding to public hospitals on the basis of efficient cost increases and volume growth. Beginning in July 2017, the Commonwealth’s additional contributions will be based only on population growth and inflation. This change presents a major challenge for states, whose public-hospital expenditure is a major budgetary commitment that isn’t matched by revenue-raising capability. It will therefore severely limit states’ flexibility in funding other programs, such as education and transportation, and in developing innovative health programs that might improve care integration and coordination.

An underlying concern is the extent to which the Commonwealth government intends to reduce its share of health care expenditure. In 2014, it attempted to reduce its outlays on Medicare by imposing patient copayments for GP visits — a tactic that was eventually dropped in the face of concerted opposition. But other cost-reduction avenues remain open, and recent announcements have, for example, targeted the cost of pharmaceuticals. Since 2002, the Commonwealth has produced a series of Intergenerational Reports predicting what government expenditures will be over the next 40 years if current policies remain in place. These reports show significant increases in health care spending, but they focus on the Commonwealth budget rather than the entire health sector. If reducing Commonwealth expenditures remains the primary objective for the health portfolio, it could lead to further fragmentation of care and missed opportunities for developing a coherent and efficient health system.

http://www.nejm.org/doi/full/10.1056/NEJMp1410737

Australian Government White Paper on Health Reforrm, December 2014: https://federation.dpmc.gov.au/sites/default/files/issues-paper/Health_Issues_Paper.pdf

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Medibank

Wikpedia

The company began business as an Australian government-owned private health insurer, established by the Whitlam Government in 1975 through the Health Insurance Commission (now known as Medicare Australia). It is Australia’s largest health insurance provider with 3.6 million members, 30% of the market, under two brands.

Medibank was set up to provide competition to private “for-profit” health funds. Although government owned, the fund has operated as a government business enterprise since 2009, operating as a fully commercialised business paying tax and dividends under the same regulatory regime as do all other registered private health funds. Highly regulated regarding the premiums it can set, the fund was designed to put pressure on other health funds to keep premiums at a reasonable level. In 2006, the Coalition Howard Government announced that Medibank would be sold in a public float if it won the 2007 election, however they were defeated by the Australian Labor Party under Kevin Rudd which had already pledged that it would remain in government ownership. Liberal leader Tony Abbott made the same pledge to privatize Medibank if it won the 2010 election but was again defeated by Labor. Privatisation was again Liberal party policy at the 2013 election, which the Coalition won. On 26 March 2014 Minister for Finance Mathias Cormann announced that Medibank would be sold through an initial public offering in the 2014-2015 financial year. The sale was completed with 100% of the company sold, listing on the Australian Stock Exchange under the code MPL on 25 November 2014, with 440,000 individual owners with a market capitalisation of A$5.921 billion.

https://en.wikipedia.org/wiki/Medibank

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Comment:

By Don McCanne, MD

Probably the greatest problem with government financed and government administered health care systems is that, whenever conservatives gain control of the government, they attempt to privatize the systems, believing that markets work better than the government. Currently we are seeing such efforts in England, Canada and Australia.

As today’s message demonstrates, Australia serves as a prime example of how the health care systems suffer under continuing shifts in political ideology, with the most damage being done under conservative rule. As their government leadership changes periodically, “Australia has moved through numerous approaches to health care financing.” 

Jane Hall, the author of the NEJM article above, writes, “The rationale for government subsidies for private insurers alongside a public universal insurance scheme has never seemed clear; perhaps it is best seen as the compromise between the ‘strife of interests masquerading as a conflict of principles’ that, according to health planner Sidney Sax, characterizes the Australian system.”

Thus Australia has ended up with a highly fragmented system, though shifting political winds make it likely that they have not seen the last change. (More information is available in the white paper produced by the current conservative Australian government – link above.)

One interesting observation in the NEJM article (which is available for free at the link above) is the contrast between the public and private sectors in delivering health care. An example is that “42% of private deliveries (unadjusted for risk factors) are caesareans, versus 29% of public deliveries.” Their private sector seems to have much in common with our medical-industrial complex.

Many single payer supporters in the United States continue to advocate for a “public option” – a government-run insurance that competes with the private plans – as an incremental step towards a universal single payer system. Australia’s Medibank began as such a program in 1975. The Wikipedia chronicle (above) of the history of Medibank reveals that it has transformed into the largest, private, shareholder owned insurance company in their nation. Although our efforts at establishing a public option never got off the ground, before the effort was abandoned, the concept had already evolved away from an expansion of Medicare into simply another player in the private insurance market, government in name only.

Our health care politics have much in common with Australia, and we both have fragmented health systems as a result. Our public Medicare program has already been partially privatized by using overpayments of taxpayer dollars to lure Medicare beneficiaries into the private Medicare Advantage plans. The conservatives are not through in that they want to shift the entire program into the private sector by use of “premium support” vouchers. Of course, the expansion of private insurance plans also perpetuates fragmentation, though currently efforts are being made to convert the insurers into private oligopolies – perhaps the worst model of health care reform that we could have.

So who ultimately controls the ideological complexion of the government? The voters, of course. That is why it is crucial that we continue to educate the public on single payer – an improved Medicare for all – contrasting it with the more dysfunctional models, with our present system being a prime example of dysfunction. The people can have a much better health care system, but they are going to have to understand what that is so that they will demand it of our politicians.

Medicare moves into its second half-century more important than ever

By Patsy Ouellette
The Bakersfield Californian, Aug. 6, 2015

According to my friend, Bernice Bonillas, it’s only warm bodies that drive movements. And so it was that I found myself returning from Los Angeles July 30 on a bus filled with other Bakersfield citizen activists, returning from a rally celebrating the 50th anniversary of Medicare.

First, a little history. During the Great Depression in 1935, President Franklin D. Roosevelt signed the Social Security Act. As remarkable as that was considering the economic difficulties the country was experiencing, the SSA did not complete his vision. As he noted, “This law, too, represents a cornerstone in a structure which is being built, but it is by no means complete.” He originally wanted to include health insurance coverage.

Subsequently, in 1945 President Harry S. Truman proposed the idea of National Health Care Insurance. Defeated by the American Medical Association and insurance industry opposition, he instead introduced the idea of expanding Social Security to include health care coverage for the elderly. This, too, was defeated.

Twenty years later, on July 30, 1965, President Lyndon Johnson signed Medicare and Medicaid into law. What has this landmark law meant to U.S. citizens? Rally speaker Mike Farrell, an actor and social justice advocate, reminded us that Medicare has lifted millions of people out of poverty. Since medical costs are the number one reason for personal bankruptcy claims, reducing such risks, the older population have been able to hang on to whatever family wealth they were able to accumulate over their working lives in the forms of home equity and savings.

These small nest eggs not only assisted the recipients themselves, but also could be passed down to the next generation, providing a step up via home ownership or education, opening every door across the nation to increased opportunities and a higher standard of living.

We also learned that though the Civil Rights Act of 1964 made discrimination in federally funded programs illegal, it wasn’t until 1965’s Medicare law that some of those civil rights were realized. In order to receive Medicare reimbursement, hospitals needed to be integrated. Consequently, more than 1,000 hospitals began to admit black patients and extended physician privileges to black doctors.

Another speaker, Sheila Kuehl, a Los Angeles County Supervisor, introduced the overriding theme for the day, that Medicare must be protected, improved, and expanded. Protected from those who want to weaken or even dismantle it, and improved by adding broader coverage. But she left it to the next speaker to explain the last, most controversial component, expanding it.

Yes, Medicare for All was the rallying cry from Dr. Paul Song. Referencing the Hippocratic Oath he took 25 years ago, he explained that though he promised to “refrain from being part of a system that was deleterious to a patient’s health, he has felt many times that he is part of just such a system,” sharing that “35,000 people in this country die every year because of a lack of health insurance.”

In fact, I learned there are two bills pending in Congress that would dramatically expand access to health care in the United States, HR 1200, The American Health Security Act of 2015, introduced by U.S. Rep. Jim McDermott, D- Wash., and HR 676, a bill to expand Medicare for All, introduced by U.S. Rep. John Conyers, D-Mich. Both bills would guarantee a full range of medical services, including primary care, dental, prescription drugs, mental health, long-term care, and place no restrictions on choice of physician or healthcare provider.

In President Truman’s message to Congress, Sept. 6, 1945, he proposed an Economic Bill of Rights, one of them was: “The right to adequate medical care and the opportunity to achieve and enjoy good health.” Another was the “right to adequate protection from the economic fears of … sickness…” Seventy years later, it’s time that we Americans fully acknowledge those rights.

Patsy Ouellette of Bakersfield is a retired teacher.

http://www.bakersfield.com/news/opinion/2015/08/06/happy-birthday-medicare.html

Let’s expand Medicare to everyone

By Meghan Geary, M.D.
The Providence (R.I.) Journal, Aug. 6, 2015

William Butler Years wrote: “From our birthday until we die, is but the winking of an eye.”

As in Yeats’s rhyme, I barely blinked and a year has gone by. In the time between the last two Julys, I completed my first year of residency training as an internal medicine physician at Brown University.

When I think back over the past year, one impression that stands out is this: What a difference the Medicare Program and Rhode Island’s expansion of Medicaid has made for my patients!

Medicare is observing its 50th birthday. In July 1965, President Lyndon B. Johnson signed legislation to implement Medicare. From its inception, Medicare experienced a rapid enrollment and the program gained widespread popularity.

Today, Medicare insures 55 million Americans, nearly everyone over age 65. We might take a moment to contrast Medicare’s rapid, relatively untroubled rollout — accomplished before the existence of the Internet — with the hassle and glitches of purchasing health insurance through the Affordable Care Act.

Since birthdays are a time for shared celebration, it is worthwhile to acknowledge that all of us have benefited from Medicare.

Medicare has added five additional years of life expectancy to those who reach 65. Many of them were my patients this past year. They were the retired baseball coaches, former businessmen, lifelong homemakers and loving grandparents.

I met them on the wards, in the Intensive Care Unit and in the Medical Clinic at Rhode Island Hospital.

However, those under age 65 continue to face serious financial barriers to care. In spite of expanded coverage through the Affordable Care Act, out-of-pocket costs remain high and many people continue to have insufficient coverage or, worse yet, remain uninsured.

Individuals without health insurance were also my patients. They included the father who suffered a stroke and the mother who had trouble obtaining the blood pressure medications she needed to prevent damage to her kidneys, brain, eyes and heart.

For these parents, timely access to health care depended upon their having insurance. Convincing, peer-reviewed research has shown that over 42,000 deaths would have been prevented in 2014 if everyone in America had health insurance.

Tragically, this means there are 42,000 individual stories of Americans who did not celebrate their birthdays this year in large part because they lacked coverage.

We could change this picture in the blink of an eye by expanding Medicare to cover all Americans. As we celebrate Medicare’s 50th birthday, we should resolve to establish a system that provides access to all medically necessary health care for everyone, from birth to death.

The Expanded and Improved Medicare for All Act, H.R. 676, a bill in Congress sponsored by U.S. Rep. John Conyers, D-Mich., and co-sponsored by 49 others lawmakers, would do just that. Under this legislation, all Americans would be covered for all medically necessary services, including doctor’s visits, hospital care, prevention programs, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs.

Skeptics may believe the cost of such a program would be prohibitive, but the administrative cost savings that we would obtain from having a streamlined, nonprofit, single payer of all medical bills — savings reliably estimated to be more than $375 billion annually — would not only allow us to cover everyone, but to eliminate all co-pays and deductibles.

In addition, the new system’s bargaining clout would let us reduce and control the cost of medications and other supplies. We would also be better positioned to prevent or provide early treatment for chronic conditions that, left untreated, require more costly and complex medical care.

An improved Medicare for all is not socialism. As with Medicare presently, the government would not own hospitals or clinics. Patients would go to the doctor of their choice. Only the means of payment would change.

Enacting an improved version of Medicare for all would enable each and every one of us to have access to the medical care we need, and by extension to celebrate as many birthdays as our lives allow. That would truly be a cause for a celebration.

Meghan Geary, M.D., of Providence, is a second-year resident in internal medicine.

http://www.providencejournal.com/article/20150806/OPINION/150809604/2011

‘Superbug’ threat pales in comparison to going uninsured

By Robert Vinetz, M.D.
Los Angeles Times, Letters, Aug. 4, 2015

This article is a beautifully written, dramatically gripping presentation of the risks of lifesaving technologies available in the complex world of healthcare, and of the expert and passionate efforts to identify and control those risks and to prevent harm. (“A killer on the loose: UCLA doctors race to stop superbug outbreak and save patients,” Aug. 1)

Still, it is important to note that this front-page story focused on a single issue that caused the deaths, tragically, of fewer than five patients at UCLA (more nationally).

My hope is that similar reporting, focus and resources will be directed to another, much larger deadly epidemic: that of the more than 30 million people in our nation still uninsured, even with Obamacare, and the Harvard Medical School’s report in the American Journal of Public Health that 45,000 of them unnecessarily die every year for lack of insurance and access to high-quality healthcare.

Dr. Robert Vinetz resides in Los Angeles.

http://www.latimes.com/opinion/readersreact/la-le-0804-tuesday-ucla-superbug-20150804-story.html

In defense of single-payer: How it would reduce administrative waste

By Adam Gaffney, M.D.
KevinMD blog, Aug. 4, 2015

Would a single-payer national health program, at the end of the day, truly be sleeker and slimmer than our bloated and fragmented semi-private system?  Not according to Dr. Michel Accad, who takes on this important single-payer talking point in his post: “Will single-payer really reduce administrative waste?”

Given that savings from reduced expenditures on billing and overhead are a core argument that single-payer advocates (myself among them) employ to advance our cause, the piece caught my eye. To quote the proposal of the Physicians’ Working Group for Single-Payer Insurance (of note, I’m active in the organization Physicians for a National Health Program [PNHP], which was behind the proposal), published in JAMA in 2003:

“Our multiplicity of insurers forces US hospitals to spend more than twice as much as Canadian hospitals on billing and administration; forces US physicians to spend vast amounts on billing; and nourishes a panoply of business consultants, coding software vendors, and other satellite business.”

Had a new study been published demonstrating, contrary to all existing data, that private insurers somehow had lower administrative costs than Medicare?  Had Canadian expenditures on health care administration somehow suddenly vaulted ahead of that of the United States? No, neither had come to pass (not surprisingly).  In fact, Dr. Accad doesn’t really deal with any of the literature about the administrative efficiency of different types of health care systems.  Instead, he employs a “Hayekian perspective” to make the argument that central economic planning is inherently inferior to an atomized free market where individual economic actors buy and sell, rationally relying on their intimate knowledge of local market circumstances.  “Only in a decentralized system,” he argues, “of decision making, where price fluctuations can adjust to the reality of needs and provisions, are major gluts and shortages avoided.”  (For instance, no one knows the business of bread making better than the bread maker.)

Now on the one hand, it’s a bit quixotic to invoke the political philosophy of a neoliberal economist to argue against what is essentially empirical point: that the United States spends more on health care administration than nations that have a single-payer system.

For it clearly does.  One study found that the U.S. spent about three-times as much as Canada on health administration ($1,059 vs. $307 per capita, in 1999).  More recently, anotherstudy found that the U.S. had the highest hospital administrative costs among eight high-income nations (an astronomical 1.43 percent of GDP spent annually on hospital administration in the U.S., as compared to 0.41 percent in Canada).

Closer to home, Medicare — a single-payer-like system for older Americans — has an administrative overhead around 2 percent, as compared to the 13.6 percent in overhead and profits of privatized Medicare Advantage, which is run by private insurers.

I could quote my favored political philosophers here to counter Accad’s quotes from Hayek, but it’s really all beside the point.  As the Princeton health care economist Uwe E. Reinhardt wrote in the New York Times: “The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.”

To be fair, Dr. Accad makes a good point ridiculing the extraordinarily complex and “byzantine scheme of codification” used by Medicare (and followed by private insurers) for billing purposes.  “[A] CPT code 99204-21 (new patient visit, E/M coding level 4, prolonged service) associated with ICD-9 code 786.50 (chest pain, unspecified),” he notes, “hardly conveys any real knowledge and cannot possibly be a basis on which relevant decisions can be made or value established.”

No, it can’t, but that’s not what such codes are used for: They’re used to determine reimbursement.  But they don’t have to be — and that’s where the administrative savings come in.

Under a single-payer system (as PNHP’s proposals describe), hospitals would receive a global lump sum budget to pay for all operating costs; there would be no need to monitor services used by individual patients, tabulate costs, or hire debt collectors.  Indeed, hospital billing could largely be eliminated from the ledgers of hospital operating expenses.

Simplified fee schedules, capitation, or salaries — without bonuses or penalties for more or less health care use — would be used to reimburse providers in the outpatient sector.  The name of the game would be “[s]implicity, simplicity, simplicity!” as one prominent New Englander put it in his important defense of a national single-payer system, Walden.

I share what I sense is Dr. Accad’s bitterness at onerous documentation obligations.  But a universal system would make much of that documentation irrelevant, and, therefore, unnecessary.  It would therefore be a win both for practitioners and for the public. (Though it would admittedly be a loss for many others, including those who profit from the system’s inefficiency, like the health insurance industry.)

“Reducing administrative waste” may not be the heady revolutionary slogan today’s millennial physician-activists are looking for, but it’s no less true for that — whatever the opinion of Hayek, Hegel, or Henry David Thoreau.

Adam Gaffney is a physician who blogs at the progressive physician, where a version of this article originally appeared.

http://www.kevinmd.com/blog/2015/08/in-defense-of-single-payer-how-it-would-reduce-administrative-waste.html

To fix what ails U.S. health care, expand Medicare — for all

By Chess Yellot, M.D.
Spirit of Jefferson (Charles Town, W.Va.), Aug. 5, 2015

Isn’t it time to have a serious conversation on the question: why aren’t we all covered by Medicare, regardless of age? 

More than 50 people, young and old, from the Eastern Panhandle turned out to publicly celebrate Medicare’s 50th birthday. Medicare is a popular program. The local celebrators joined others throughout the country to show their gratitude and to spread the message: “Medicare: As American as Apple Pie – Protect, Improve, Expand!”

Let me start the conversation by describing my experiences at an area community health center where I practiced for 14 years, until my recent retirement. I saw many working people without insurance. Tragically, some died because they could not afford the specialists or procedures they needed. Others suffered needless pain, discomfort, and disability. 

The Affordable Care Act, or Obamacare, enabled many of my West Virginia patients to obtain Medicaid. I saw a lot of new patients who had delayed care for years. They had gone months and years feeling fatigued, short of breath, depressed, in pain. Many times their problems would have cost the system much less if their conditions had been treated when symptoms began. 

Now, some middle-class families can obtain health insurance under the Affordable Care Act, but many are finding the co-pays and high deductibles unaffordable. Out-of-pocket costs continue to be a barrier to getting care. Still other patients find that insurance companies limit their choice of physician. The preferred provider might not be in the insurance company’s network. 

If we had improved and expanded Medicare for all, I would not have had patients who died and suffered needlessly. My patients would never have gone without needed care because they could not afford the deductibles and co-pays, or because the best specialist for them was out of network. 

Let’s look at a solution: A bill in Congress, HR 676, “The Expanded and Improved Medicare for All Act.” Under the simple, 30-page bill, every person in the U.S. would receive prescription drugs, vision, dental, and hearing services, long-term care, and all other medically necessary care. There would be no co-payments, no deductibles, no premiums, and no insurance companies. Funding would come from current federal financing for health care, increasing personal income taxes on the top 5 percent, a modest tax on some unearned income, a modest payroll tax, and a small tax on stock and bond transactions.

The great thing is that for 95 percent of households, these taxes would be less than what they now pay for premiums and out-of-pocket medical expenses. 

HR 676 also would mandate that drug prices be negotiated, resulting in huge savings. Currently, federal law prohibits Medicare from negotiating lower prices.

All practitioners providing medically necessary care would be in this one system, and their fees would be negotiated. This would again save money and everyone could choose their own provider. There would be no networks. As is the case now, most providers would be in private practice. We would have private providers and public financing.

A significant study indicates that because of the simplicity of the system described by HR 676, the health care funds currently diverted from our insurance premiums to company profits, high executive compensation, stockholder dividends, advertising, lobbying, and campaign donations would be spent on health care. Medicare’s overhead is around 2 percent. Compare this to private insurance overhead which runs 15 to 20 percent. Add in the amount hospitals and medical practices spend on billing, and this comes to a total of 30 percent. The savings made possible by a simple, single payment system would now go toward Medicare for all. And patients won’t be wasting time trying to figure out their medical bills!

No system is perfect. But if HR 676 became law, no one would suffer or die or go bankrupt due to lack of money to pay for the health care they need. HR 676 is affordable and the savings it provides would protect, improve and expand Medicare for all of us.

Dr. Chess Yellott writes from Shepherdstown.

http://www.spiritofjefferson.com/news/opinion/article_12adb3ca-3aff-11e5-8f79-4b271fb2140b.html