Indiana Will Allow Entry to Medicaid for a Price

By Abby Goodnough
The New York Times, January 27, 2015

After a lengthy back-and-forth, the Obama administration has agreed to let Gov. Mike Pence of Indiana, a Republican, expand Medicaid on his own terms, including some that have not been allowed before under federal rules.

The plan will extend coverage to an additional 350,000 Indiana residents with incomes of up to 138 percent of the federal poverty level — about $16,100 for a single person and $27,310 for a family of three — starting next month.

Mr. Pence, like several Republican governors before him, insisted on adding a conservative twist to the expansion, mostly by requiring beneficiaries to pay something toward their coverage. Under his plan, most people will have to pay monthly premiums equaling 2 percent of their household income — between about $3 and $25 a month for a single childless adult — for coverage that includes dental and vision benefits.

At the Obama administration’s insistence, people who earn less than the poverty level will not have to pay premiums. But if they do not, their coverage will be downgraded to exclude dental and vision benefits. And they will owe co-payments for medical care, including $4 for a doctor’s visit and $75 for a hospitalization.

In another unusual concession, the Obama administration will let Indiana lock some people out of coverage for six months if they stop paying monthly premiums.

Joan Alker, executive director of the Georgetown University Center for Children and Families, called the Indiana plan “enormously complicated” and questioned the fairness of withholding dental and vision coverage from those who cannot come up with premium payments.

“It’s just common sense that when people take greater ownership of their health care,” Mr. Pence said, “they make better choices.”

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Gov. Pence gets federal OK for Medicaid alternative

By Shari Rudavsky and Maureen Groppe
Indystar, January 27, 2015

Those who are eligible for the plan already live at the poverty level, said Timothy Jost, a law professor at Washington and Lee University and a healthcare reform expert. People who by definition are already having trouble covering basic costs such as food and rent will struggle to make an addition payment. Instead, they may opt not to participate in the program or avoid getting care.

“The question is how far is CMS willing to go in accommodating governors or states that want to work their own policy agenda into the Medicaid program,” Jost said. “This is pretty much pushing the limits of how far they should go if it’s not beyond it.”

Throughout the months of back and forth with federal health officials, Pence had said he was not willing to compromise on the personal responsibility piece.

http://www.indystar.com/story/news/politics/2015/01/27/gov-pence-gets-federal-ok-medicaid-alternative/22396503/

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Comment:

By Don McCanne, MD

This is insane! In an age when we are supposed to be a society that cares enough to see that all of us receive the health care that we need, we still have amongst us those who insist that people with no assets, often homeless, frequently missing meals, are supposed to exercise “personal responsibility” by paying funds that they don’t have as a condition for receiving much needed medical care.

And, oh, if they don’t come up with those funds, let their teeth rot out. That will show them! And sentence some of them to six months without any medical care at all.

We have covered extensively the irrationality and inhumanity of the consumer-directed, moral hazard-based policies that erect financial barriers to care for the four-fifths of us with minimal or modest resources. But this exposes the colors of these “skin in the game “ advocates. What kind go people are we that we elect individuals like this to take charge of our federal and state governments. What is government all about? This!? It can’t be. Tell me it isn’t.

Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health Care

By Sylvia M. Burwell, U.S. Secretary of Health and Human Services
The New England Journal of Medicine, January 26, 2015

Now that the Affordable Care Act (ACA) has expanded health care coverage and made it affordable to many more Americans, we have the opportunity to shape the way care is delivered and improve the quality of care systemwide, while helping to reduce the growth of health care costs. Many efforts have already been initiated on these fronts, leveraging the ACA’s new tools. The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways: using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models; changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and harnessing the power of information to improve care for patients.

As we work to build a health care system that delivers better care, that is smarter about how dollars are spent, and that makes people healthier, we are identifying metrics for managing and tracking our progress. A majority of Medicare fee-for-service payments already have a link to quality or value. Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018. Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients. This is the first time in the history of the program that explicit goals for alternative payment models and value-based payments have been set for Medicare. Changes assessed by these metrics will mark our progress in the near term, and we are engaging state Medicaid programs and private payers in efforts to make further progress toward value-based payment throughout the health care system.

Although we have much to celebrate regarding increased access and quality and reduced cost growth, much of the hard work of improving our health care system lies ahead of us.

http://www.nejm.org/doi/full/10.1056/NEJMp1500445

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Early Evidence On Medicare ACOs And Next Steps For The Medicare ACO Program (Updated)

By Mark McClellan, S. Lawrence Kocot, and Ross White
Health Affairs Blog, January 22, 2015

On December 1, CMS released a Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program (MSSP), which requests feedback for changes CMS is considering for the Medicare accountable care organization (ACO) programs in 2016 and beyond. The proposal suggests significant potential alterations to the program, many of which we recently reviewed, that would address major issues that ACOs and others have raised: uncertainty and inexperience at transitioning to increasing levels of risk, lack of timely and accurate data, changes in attributed patient populations from year-to-year, and financial benchmarks that fail to account for regional variations and continue to reward high ACO performance over time.

Ideally, big changes in key features in a major program like the MSSP would be based on extensive empirical evidence on what determines success in the program. Unfortunately, only limited evidence, including case studies and some comparative data, is available on the determinants of success for Medicare ACOs, and thus on the MSSP.

http://healthaffairs.org/blog/2015/01/22/early-evidence-on-medicare-acos-and-next-steps-for-the-medicare-aco-program/

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Unpacking The Medicare Shared Savings Proposed Rule: Geography And Policy

By Scott Heiser, Carrie Colla, and Elliott Fisher
Health Affairs Blog, January 22, 2015

The Centers for Medicare and Medicaid Services (CMS) recently announced a Notice of Proposed Rulemaking (NPRM) for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs).

Of the 220 ACOs in the program that participated in the first performance year, 53 earned shared savings, 52 saved money but not enough to meet the required “minimum savings rates,” and the other 115 did not accrue savings (spending on patients assigned to the ACO was greater than projected).

Depending on one’s perspective, the early results of the MSSP are either promising or disappointing. On the one hand, nearly a quarter of qualifying ACOs achieved shared savings in the first year of performance; on the other, three-quarters either did not lower spending or did so but failed to exceed the minimum savings rate.

Improvements in the benchmarking formula, the risk adjustment methodology, and perhaps additional incentives to sustain high performance over a longer period are worth exploring.

http://healthaffairs.org/blog/2015/01/22/unpacking-the-medicare-shared-savings-proposed-rule-geography-and-policy/

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Measuring Success in Health Care Value-Based Purchasing Programs

By Cheryl L. Damberg, Melony E. Sorbero, Susan L. Lovejoy Grant Martsolf, Laura Raaen, Daniel Mandel
RAND Corporation

Value-based purchasing (VBP) refers to a broad set of performance-based payment strategies that link financial incentives to providers’ performance on a set of defined measures in an effort to achieve better value by driving improvements in quality and slowing the growth in health care spending. Policymakers are grappling with many policy decisions about how best to design and implement VBP programs so that they are successful in achieving stated goals.

Although the past decade has witnessed a fair amount of experimentation with performance- based payment models, primarily P4P programs, we still know very little about how best to design and implement VBP programs to achieve stated goals and what constitutes a successful program.

http://www.rand.org/content/dam/rand/pubs/research_reports/RR300/RR306/RAND_RR306.pdf

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Medicare’s payment reform push draws praise and fears

By Melanie Evans and Paul Demko
Modern Healthcare, January 26, 2015

“I think we can all agree that moving away from fee-for-service and moving toward more value-based payment is a really good idea,” said Dr. Ashish Jha, a health policy professor at Harvard University who studies healthcare quality. “The challenge is, how do you measure value? If you don’t do that well, then these models can end up being not only not all that helpful, but even hurtful.”

With weak incentives, Medicare’s shift to alternative contracts could amount to little actual change, said Mark Pauly, an economist and health policy professor at the University of Pennsylvania. “It’s not a sledgehammer. If the penalty or reward is relatively modest, then a cynic could say what’s the big deal?”

http://www.modernhealthcare.com/article/20150126/NEWS/301269813/medicares-payment-reform-push-draws-praise-and-fears

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Comment:

By Don McCanne, MD

Since the beginning of the reform process we have been inundated with rhetoric about how health reform is going to improve quality and slow spending, but the mechanisms proposed were more “wish lists” than being proven mechanisms based on sound policy science. Now we have an announcement from HHS Secretary Sylvia Burwell that, even though we have not progressed much beyond the rhetoric, these mechanisms will be put into place by the end of 2018.

An extensive RAND report confirms that we still don’t know how to do this. Advocates such as Elliott Fisher and Mark McClellan report that, although we need extensive empirical evidence, only limited evidence is available. Harvard policy professor Ashish Jha says that “these models can end up being not only not all that helpful, but even hurtful.” And University of Pennsylvania policy professor Mark Pauly, of “moral hazard” fame, even says “what’s the big deal?”

Primum non nocere…

… and, second, let’s put into place policies that really would benefit everyone – a single payer national health program, aka an improved Medicare for all.

Costs derail Vermont’s dream of a single-payer health plan

By Jay Fitzgerald
The Boston Globe, January 25, 2015

For decades, liberal activists yearned for a European-style, single-payer health system that they argued would lead to more affordable, efficient, and comprehensive medical coverage for all citizens. When Vermont four years ago enacted a landmark bill to establish the nation’s first single-payer health care system, they saw their long-sought dream about to be fulfilled.

But reality hit last month.

(Henry Aaron)

“The idea of single-payer, or a Medicare-for-all type program, has always been a cherished dream for many in the Democratic Party,” said Henry J. Aaron, a senior fellow at the Brookings Institution, a liberal-leaning Washington think tank. “In truth, there had never been a hard, developed plan to implement such a dream. In Vermont, they finally developed a plan, and look what happened.”

In Europe, many countries built their universal health care systems from scratch, with some starting early last century when most citizens had no medical coverage and any services provided by governments were welcome, the Brooking Institution’s Aaron said. That allowed those countries to slowly build and expand health care systems over decades.

But in the United States private insurance arrangements between employees and employers have expanded and matured over the decades, with many people with insurance expecting a high level of medical service. So, switching to a single-payer system would need to meet those higher expectations — and higher costs — all at once, Aaron said.

“It’s easier to build from scratch than when a system is already up and running,” he said. “We could have maybe created a single-payer system 60 or so years ago, when insurance wasn’t as complete and widespread. But it would be very disruptive and costly today.”

(Ron Pollack)

Ron Pollack, executive director of Families USA, a national organization representing health care consumers, said he has long believed in the benefits of a single-payer system. But he also remembered his talks with Kennedy. The late senator, Pollack said, expressed regrets he didn’t earlier embrace insurance-based universal care, rather than holding out for a single-payer system that never materialized.

Pollack said activists might be better off pushing to improve provisions of the Affordable Care Act. “It may change in time and single-payer might become reality,” Pollack said. “But the political reality and the fiscal realities make it a very tough sell.”

http://www.bostonglobe.com/business/2015/01/25/costs-derail-vermont-single-payer-health-plan/VTAEZFGpWvTen0QFahW0pO/story.html

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Comment:

By Don McCanne, MD

I have greatly admired Ron Pollack and Henry Aaron through the decades. They share with us our desire to expand health care justice to all. So why do I feel tormented when I hear comments from them?

Perhaps it’s because we chose different paths at the intersection of policy and politics. Ron Pollack says that he has long believed in the benefits of a single-payer system. Henry Aaron says that we could have created a single payer system sixty or so years ago. Yet Pollack says, “the political reality and the fiscal realities make it a very tough sell.” And Aaron says, “it would be very disruptive and costly today.”

Early on, Pollack decided to join forces with the neoliberal Democrats in supporting reform that would gain the support of the insurance and pharmaceutical industries – a political path with realistic potential. Aaron’s views have been more perplexing, such as when he attempted to refute a meticulous landmark study on the profound administrative waste in health care by using back-of-the-envelope numbers. We were not alone in our amazement when another very prominent health care economist said that he didn’t understand why Aaron did that.

At any rate, they both clearly understand the policy superiority of single payer. More importantly, they understand what that means when it comes to reducing suffering and financial hardship – fundamental principles in health care justice.

It wasn’t the policies that needed to be changed. It was the politics. Maybe someday Aaron and Pollack, and the multitude of others who bailed on single payer, will have an epiphany and join the effort to change the politics. How much more suffering and hardship do they have to witness before they are ready? We cannot change the errors of the past, but we can do the right thing going forward.

Americans See Healthcare, Low Wages as Top Financial Problems

By Art Swift
Gallup, January 21, 2015

Healthcare costs and lack of money or low wages rank as the most important financial problems facing American families, each mentioned by 14% of U.S. adults.

Gallup has been asking Americans about the most important financial problem facing their family in an open-ended format for the past 10 years. Healthcare this year has returned to the top of the list for the first time since early 2010, when the Affordable Care Act, or “Obamacare,” was signed into law. Still, Americans viewed it as an even bigger financial problem in 2007, when a range of 16% to 19% said it was most important.

For Americans earning $75,000 or more a year, retirement savings, college expenses and healthcare costs rank as the most important financial problems. Among lower-income Americans, retirement savings and college expenses are less important. Healthcare costs, however, have double-digit-percentage support across the board.

Bottom Line

The American economy continues to recover. With Gallup’s Economic Confidence Index in positive territory for the first time since the Great Recession, and with President Barack Obama stating that the U.S. last year had its best year for job growth since 1999, certain financial problems have receded from the nation’s memory, while others have persisted in the forefront. Americans have consistently cited healthcare, a topic of fierce debate this decade, as one of the most important financial problems, and it remains so.

http://www.gallup.com/poll/181217/americans-healthcare-low-wages-top-financial-problems.aspx

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Comment:

By Don McCanne, MD

The recent slowing in the rate of increases in health care costs has been good news for those supervising budgets of government health programs and for employers providing employee health benefits, but how has it impacted patients? This new Gallup poll shows that health care costs remain one of the most important financial problems facing American families. The Affordable Care Act has not provided the level of financial relief from medical bills that Americans want and need.

Under the current financing model, there is virtually no prospect for future relief. In fact, the trend of placing an ever greater financial burden on “health care consumers” will likely compound medical debt problems for patients. We need a new model. We need a single payer national health program.

Poll of Likely 2016 Voters
Progressive Change Institute, Conducted by GBA Strategies, January 9-15, 2015

SINGLE PAYER HEALTHCARE VIA MEDICARE

“Enact a national health plan in which all Americans would get their insurance through an expanded, universal form of Medicare.”

51%  Support
36%  Oppose
12%  Neutral

Percent supporting by party

79%  Democrat
23%  Republican
45%  Independent

MEDICARE BUY-IN FOR ALL

“Give all Americans the choice of buying health insurance through Medicare or private insurers, which would provide competition for insurance companies and more options for consumers.”

71%  Support
13%  Oppose
14%  Neutral

Percent supporting by party

77%  Democrat
63%  Republican
71%  Independent

https://s3.amazonaws.com/s3.boldprogressives.org/images/Big_Ideas-Polling_PDF-1.pdf

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Comment:

By Don McCanne, MD

This poll shows that the nation’s attitude towards single payer remains essentially unchanged. About four-fifths of Democrats support single payer, three-fifths of Republicans are opposed, and Independents remain evenly split. But what about the attitude towards the “public option” – allowing all Americans the choice of purchasing Medicare instead of private insurance?

Support for the option of a Medicare buy-in is strong across the political spectrum. What can we make of this?

The debate in Congress during the reform process was highly partisan, the public option having been defeated by the defection of just one senator – Joseph Lieberman. The support that we now see amongst Republican voters is probably genuine. The opposition of the Republican members of Congress at that time was probably more related to the decision to defeat the Affordable Care Act (ACA) regardless of any benefits in it, just to “make Obama a one-term president.”

If the Republicans in Congress can forget about their prior opposition and decide that they want to move forward with constructive policies, those who want changes in Medicare may decide that placing it in competition with private insurance plans may bring market concepts to the traditional Medicare program. They can conveniently ignore the fact that the current market experiment with private Medicare Advantage plans has been unsuccessful in providing comparable benefits at a lower cost.

The Democrats in Congress are likely to support a renewed effort to enact a public option, especially since many still regret that it was not included in ACA.

We have to keep in mind that the insurance industry was successful in changing the public option from a Medicare plan to a public plan that had most of the unfavorable features of private health plans along with restrictions on how it could compete with private plans. This was to prevent it from having an “unfair advantage” in the marketplace – by giving the private plans an unfair advantage over the public option.

During the implementation of ACA we have seen that the private insurers still control the puppet strings. Should the political environment become more favorable for a public option, we can be sure that the insurance industry will once again write the legislation, creating a flawed public option that will surely invoke the wrath of those enrolling in the program, “proving” once again the meme that “the government can’t do anything right.”

These comments bring back memories of how the reform debate was hijacked by histrionics over the public option, which played into the hands of the insurance industry. The debate should have been over single payer, but remember we were emphatically and ungraciously denied a seat at the table from very early on in the process (back when the Democratic strategists in control wanted us to sell “CHOICE” to the public – choice of private health plans – and single payer was banned from the strategy sessions).

Little attention was given to the fact that adding another option – the public option – would still leave in place our inefficient, costly and highly dysfunctional system. We would have gained virtually none of the other benefits of single payer. And that would still be true if we abandon our quest for single payer and head off towards the Medicare buy-in. We would still have an outrageously expensive system with profound administrative waste, and intolerable inequities in affordability and access.

At least more Democrats favor single payer (79%) than favor the Medicare buy-in (71%). We need to start tailoring our message to appeal to the Republicans and Independents as well.

Tax Preparers Brace To Be Bearers Of Bad Health Law News

By April Dembosky, KQED and Jeff Cohen, WNPR
Kaiser Health News, January 21, 2015

IRS Commissioner John Koskinen declared this tax season one of the most complicated ever, and tax preparers from coast to coast are trying to get ready for the first year that the Affordable Care Act will show up on your tax form.

The penalty for being uninsured in 2014 is $95 or 1 percent of income, whichever is greater. Next year, it’s 2 percent. (Sue Ellen Smith of H&R Block in San Francisco) says the smartest move for people to avoid those penalties is to sign up for insurance before Feb. 15, the end of the health law’s open enrollment period.

But a lot of people may not think about this until they file their taxes in April. For them, it will be too late to sign up for health insurance and too late to do anything about next year’s penalty too, says Mark Steber, chief tax officer for Jackson Hewitt Tax Services.

http://kaiserhealthnews.org/news/tax-preparers-brace-to-be-bearers-of-bad-health-law-news/

HealthCare.gov: Fees and Exemptions: https://www.healthcare.gov/fees-exemptions/fees-exemptions-overview/

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Comment:

By Don McCanne, MD

Many of those who decided to pay the $95 penalty instead of being insured in 2014 may be surprised to learn at tax time that the penalty at their income level is 1 percent of income over the tax filing threshold – roughly $300 for an individual with a $40,000 income. If they wait until April to file their taxes and still don’t have insurance, open enrollment for 2015 will have already ended and their penalty increases to 2 percent. A double surprise.

Actually it is much more complex than this. The link for “Fees and Exemptions,” above, describes other considerations such as what constitutes minimum essential coverage, numerous exemptions from the requirement to pay the penalty, specific hardship exemptions, the various application processes for exemptions, instructions on paying the “shared responsibility” penalty, and so forth.

This is only one of the multitude of unnecessary administrative complexities introduced by the Affordable Care Act, layered on top of the most administratively complex system in the world. Had we enacted a single payer national health program, we would have had a dramatic reduction in this administrative waste, with a recent study demonstrating that we could save about $375 billion simply by addressing our excessive billing and insurance-related functions. This doesn’t include the savings that we would realize by eliminating much of the other administrative excesses such as the one described here.

It’s never too late. We can still make the change to single payer.