PNHP

U.S. hospitals not prepared for Ebola threat

U.S. hospitals not prepared for Ebola threat

By RoseAnn DeMoro
The Washington Post, Oct. 13, 2014

With reports that a nurse who treated Ebola patient Thomas Eric Duncan in Dallas has been infected, one thing urgently needs to be made clear: Our hospitals are not prepared to confront the deadly virus.

It is long past time to stop relying on a business-as-usual approach to a virus that has killed thousands in West Africa and has such a frighteningly high mortality rate. There is no margin for error. That means there can be no standard short of optimal in the protective equipment, such as hazmat suits, given to nurses and others who are the first to engage patients with Ebola-like symptoms. All nurses must have access to the same state-of-the-art equipment used by Emory University Hospital staff when they transported Ebola patients from Africa, but too many hospitals are trying to get by on the cheap.

In addition, hospitals and other frontline providers should immediately conduct hands-on training and drills so that personnel can practice, in teams, vital safety procedures such as the proper way to put on and remove protective equipment. Hospitals must also maintain properly equipped isolation rooms to ensure the safety of patients, visitors and staff and harden their procedures for disposal of medical waste and linens.

We all count on nurses to be there for us when we’re at our sickest and most vulnerable, and it’s everyone’s problem if nurses are not protected. But according to an overwhelming majority of nurses surveyed by National Nurses United at facilities across the United States, many hospitals remain unprepared.

And Ebola is exposing a broader problem: the sober reality of our fragmented, uncoordinated private health-care system. We have enormous health-care resources in the United States. What we lack is a national, integrated system needed to respond effectively to a severe national threat such as Ebola.

The Centers for Disease Control and Prevention issues guidelines but has no authority to enforce them. Hospitals have wide latitude to pick and choose what protocols they will follow; too often in a corporate medical system those decisions are based on budget priorities, not what is best for the health and safety of patients and caregivers. Congress and state lawmakers put few mandates on what hospitals must do in the face of pandemics or other emergencies, and local health officials do not have the authority to direct procedures and protocols at hospitals.

Where other countries — notably Canada, which took action after its vulnerabilities were exposed by the 2003 SARS epidemic — have empowered their public health agencies to coordinate local, state and federal detection and response efforts for pandemics, the United States cut funding for its already-weak system. Federal funding for public health preparedness and response activities was $1 billion less in fiscal 2013 than 2002.

As one CDC official recently admitted to The Post: “We let our guard down a little bit. . . . Now that we’ve seen this happen, we know now that we need to do more to make people feel prepared.”

We should have seen this coming. As recently as August, an inspector general’s report evaluating the Department of Homeland Security’s pandemic preparedness concluded that “the Department has no assurance it has sufficient personal protective equipment and antiviral medical countermeasures for a pandemic response.”

We know what works: a federal agency with the authority to ensure local, state and national coordination in response to outbreaks. In such an empowered public health system, local health officials are assured of having the resources to identify the source of an outbreak, isolate and treat the sick, and follow up with those who have had close contact with the sick. Only greater integration and the authority of a public health system with national, uniform standards can protect Americans.

It’s time to listen to our nurses. Let’s stop Ebola now and be better prepared for the next pandemic.

RoseAnn DeMoro is executive director of National Nurses United.

http://www.washingtonpost.com/opinions/roseann-demoro-us-hospitals-not-prepared-for-ebola-threat/2014/10/13/4351ffc2-52cf-11e4-892e-602188e70e9c_story.html

Status of higher payment for primary care under Medicaid

Medicaid in an Era of Health & Delivery System Reform: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015

By Vernon K. Smith, Kathleen Gifford, Eileen Ellis, Robin Rudowitz and Laura Snyder
Kaiser Family Foundation, October 14, 2014

Primary Care Payments

The ACA included a provision to increase Medicaid payment rates for primary care services to Medicare rates from January 1, 2013 through December 31, 2014. The federal government funded 100 percent of the difference between Medicaid rates that were in effect as of July 1, 2009 and the full Medicare rates for these two years. States were asked about their plans to extend this provision beyond December 31, 2014 (at regular FMAP rates). For states that have Medicaid rates for physician services that were already at or close to 100 percent of Medicare rates, this issue was not significant.

  • Twenty-two states indicated that they would not be continuing the primary care rate increase.
  • Fifteen states (Alaska, Alabama, Colorado, Connecticut, Delaware, Hawaii, Iowa, Maryland, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, and South Carolina) indicated that they will continue the higher rates at least partially if not fully. For example one state will provide a proportionate increase for all primary care physicians (half of the ACA rate increase); others plan to continue temporarily or target it to certain types of primary care.
  • Fourteen states indicated they had not yet made a decision on this policy and were still evaluating whether the enhanced rates had any impact on provider participation. Given the delayed implementation of the rate enhancement and the difficulty of attributing changes in provider enrollment and access to the enhanced payments, the impact of the increased rates is difficult to determine.

Medicaid in an Era of Health & Delivery System Reform: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015 – Provider Rates and Taxes or Fees

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Primary Care Services under Managed Care Delivery Systems

Medicaid.gov

Qs &As on the Increased Medicaid Payment for Primary Care CMS 2370-F – MANAGED CARE

The requirements under 42 CFR 438.804 specify that the states submit two methodologies to the Centers for Medicare & Medicaid Services (CMS) for review and approval to implement this rule. How does approval of these methodologies impact the approval process for managed care contracts and rate packages for 2013?

Implementing regulations at 42 CFR 438.804 require states to submit to CMS a methodology for calculating the July 1, 2009, baseline rate for eligible primary care services and a methodology for calculating the rate differential eligible for 100 percent of Federal Financial Participation (FFP) by March 31, 2013. Further, 42 CFR 438.6 (c)(5)(vi) establishes Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PHIP) or Prepaid Ambulatory Health Plan (PAHP) contract requirements to comply with this provision. It is CMS’s expectation that as soon as practicable after the State submits the required methodologies in 42 CFR 438.804 and receives CMS approval, the State will:

  1. submit revised actuarial certification documents reflecting the Medicare rate for eligible primary care services in their MCO, PIHP or PAHP capitation rates; and
  2. submit amendment(s) to this contract to ensure compliance with 42 CFR 438.6 (c)(5)(vi).

After CMS approval of the revised contract and rates, the MCO, PIHP or PAHP must direct the full amount of the enhanced payment to the eligible provider to reflect the enhanced payment effective January 1, 2013. Federal financial participation (FFP) is available at a rate of 100 percent for the portion of capitation rates attributable to these enhanced payments; however, receipt of the enhanced FFP is contingent upon the state’s successful completion of this process.

http://www.medicaid.gov/AffordableCareAct/Provisions/Downloads/Q-and-A-on-Increased-Medicaid-Payments-for-PCPs-managed-care.pdf

CMS 2370-F – MANAGED CARE (Set II)

The final rule specified that states will need to recoup the enhanced payments made to non- eligible providers identified through the annual statistically valid sample. Must health plans follow the same procedure for non-eligible providers?

States must require health plans to recoup erroneous payments found through the sampled pools of providers, and in a number of states, this sample will include both FFS and managed care providers.

Are MCOs permitted to include amounts sufficient to account for the payment differential on expected utilization while still holding the sub-capitated primary care physicians at risk for some level of increase in utilization due to the higher rates? Or must MCOs remove the risk to primary care physicians for utilization to ensure that these physicians receive the increased amount for actual experience?

The purpose of section 1202 of the Affordable Care Act and the final rule is to ensure access to and utilization of beneficial primary care services. Towards that goal, eligible primary care physicians must receive the full benefit of the enhanced payment at the Medicare rate for eligible services rendered. If a Medicaid managed care health plan retains sub-capitation arrangements, the health plan would be obligated to provide additional payments to providers to ensure that every unit of primary care services provided is reimbursed at the Medicare rate.

http://www.medicaid.gov/AffordableCareAct/Provisions/Downloads/Qs-andAs-on-the-Increased-Medicaid-Payment-for-Primary-Care-MANAGED-CARE-Set-II.pdf

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Comment:

By Don McCanne, MD

As the Affordable Care Act (ACA) was being crafted, it was recognized that the expansion of coverage under Medicaid could result in greater access problems because of the low Medicaid payment rates and the lack of willing providers. In order to improve access, at least to primary care, it was decided to increase Medicaid primary care payment rates to the same level as Medicare for the years 2013 and 2014. As with so many of the ACA provisions, this seemingly simple solution has proven to be more complex.

Before and during this transition most states were moving many or all of their Medicaid patients into managed care programs. So the government had to issue guidelines on how to move enhanced Medicaid primary care payments into managed care organizations receiving capitation payments, and to be sure that these enhanced payments were directed to the eligible primary care providers (more administrative excesses). Although we are near the end of the two year period in which primary care payments are enhanced, news reports suggest that confusion and delays have not been entirely resolved.

Although these enhanced payments were considered to be crucial in ensuring adequate participation of primary care providers, twenty-two states have indicated that they would not be continuing the primary care rate increases. Fifteen states have decided to continue, though many at lower rates and perhaps only temporarily. Fourteen states are undecided. “Given the delayed implementation of the rate enhancement and the difficulty of attributing changes in provider enrollment and access to the enhanced payments, the impact of the increased rates is difficult to determine.”

Medicaid is a welfare program, and, as such, will continue to be chronically underfunded. Medicaid patients frequently have difficulties accessing primary care services, and the continued underfunding will perpetuate that problem. Access to specialized services is even more limited because of the very low participation rates of specialists.

Single payer would eliminate these injustices since we would all have the same high-quality program – an improved Medicare for all.

Dr. Martin Luther King on health care injustice

PNHP note: The Associated Press wire story below, dated March 26, 1966, contains the first known published reference to Dr. King’s famous quotation regarding injustice in health care, namely, “Of all the forms of inequality, injustice in health is the most shocking and inhuman.”

According to this AP account, Dr. King’s remarks were made at a Chicago press conference held on March 25, 1966, in connection with the annual meeting of Medical Committee for Human Rights. The AP story, which carries no byline, was published the next day in newspapers around the country.

PNHP’s Dr. Quentin Young, who was present at the press conference in his capacity as a leader of MCHR, has frequently attested to the accuracy of the quotation, but until recently he and other PNHP staff were unaware of any published accounts of the proceedings that corroborated his memory.

A slightly different version of Dr. King’s remarks was published in a Cleveland newspaper, the Call and Post, about three weeks later, on April 16, 1966. In that account, produced by the NPI news service, Dr. King is quoted as saying, “Of all forms of discrimination and inequalities, injustice in health is the most shocking and inhuman.” It’s reasonable to assume that the AP story, published the day after the press conference, is the more accurate of the two.

Both stories are reproduced below.

King Berates Medical Care Given Negroes

Oshkosh Daily Northwestern (Oshkosh, Wis.), March 26, 1966

CHICAGO (AP) – Massive direct-action is needed to “raise the conscience of the nation” to the segregated and inferior medical care received by Negroes, Dr. Martin Luther King Jr. said Friday night.

Calling for court suits to force doctors and hospitals to comply with the Civil Rights Act, King and officers of the Medical Committee for Human Rights accused the American Medical Association of a “conspiracy of inaction” in civil rights.

At a press conference before his speech to the committee’s annual meeting. King said: “We are concerned about the constant use of federal funds to support this most notorious expression of segregation. Of all the forms of inequality, injustice in health is the most shocking and the most inhuman because it often results in physical death.

“I see no alternative to direct action and creative nonviolence to raise the conscience of the nation.”

Dr. John L. S. Holloman, a New York City physician who heads the interracial committee, told reporters: “There is scarcely a hospital North or South that does not overtly or covertly discriminate against Negroes. County medical societies, especially in the South, have discriminated in admitting qualified Negro doctors.” he said. “We put the blame right on their (the AMA’s) doorstep.” The AMA had no immediate comment.

http://www.newspapers.com/newspage/21451804/

The same Associated Press wire story appeared in the Fresno Bee (Fresno, Calif.), the Ironwood Daily Globe (Ironwood, Mich.), and the Mt. Vernon Register News (Mt. Vernon, Ill.), among other outlets.

Three-Pronged Assault Planned for Hospitals

Call and Post (Cleveland), April 16, 1966

CHICAGO (NPI) – Hospitals that discriminate against Negroes face a triple assault – from both private and government sources.

An official of the U.S. Department of Health, Education, and Welfare said HEW plans to cut off federal aid to hospitals found guilty of practicing discrimination.

Meanwhile, Dr. Martin Luther King, Jr., said that civil rights leaders are planning “direct action” against Chicago hospitals that fail to give Negroes equal treatment.

Also, Dr. John L.S. Holloman, Jr., chairman, Medical Committee for Human Rights, revealed that his organization will soon assist in federal suits against hospitals that practice discrimination.

The HEW action was announced by Philip R. Lee, the department’s secretary for health and scientific affairs. Lee said his department is fully prepared to stop funds to hospitals in order to bring about compliance with Title VI of the 1965 Civil Rights Act.

That section of the law forbids the federal government to aid any activity which discriminates on grounds of race or national origin.

Lee said 220 discrimination complaints are on file with HEW.

In announcing his “direct action campaign” against Chicago hospital discrimination, Dr. King noted that the Negro infant mortality rate in the city’s poverty-stricken Woodlawn area is as bad as Mississippi’s rate.

“Of all forms of discrimination and inequalities, injustice in health is the most shocking and inhuman,” Dr. King said.

The rights leader said federal officials have promised to look into hospital discrimination, but have done nothing.

“We must move beyond sending complaints to Washington and act directly,” he asserted.

He said he had not decided what form is “direct action” program will take.

Dr. King also charged that the American Medical Association has not taken needed steps to end racial discrimination in the treatment received by Negroes and within the AMA itself.

Meanwhile, Dr. John L.S. Holloman, Jr., national chairman of the Medical Committee for Human Rights, announced a program of lawsuits against discrimination-practicing Southern hospitals that will “cover every hospital that is guilty.”

He said his committee would gather data and advise and assist people in the South who would formal open the legal campaign.

The first cases, he said, would be brought in Mississippi, where almost every hospital, he pointed out, discriminates.

Dr. Holloman – like Dr. King – scathingly denounced hospital discrimination in Northern hospitals.

“There is scarcely a Northern hospital that does not discriminate against Negro patients either in commission or omission,” said Dr. Holloman, president-elect of the predominantly Negro National Medical Association.

The hospital discrimination found by the three leaders would not be hard to prove.

Only a week before, a government survey of health and welfare service desegregation in the South revealed widespread non-compliance with the law in federally supported programs, some of them run by state and local governments.

A survey sponsored by the U.S. Commission on Civil Rights found that almost all Southern state hospitals remained segregated, with the exception of mental hospitals.

Meanwhile, a nurse who has spent eight months in Holmes County, Miss., revealed that hospitals in the South continue to discriminate – “but these days they’re subtle about it.”

According to Helen Richardson, 31, who served as a nurse and health counselor at a clinic in the Mississippi city, the hospitals have taken down their “Negro Entrance” signs, but they try to avoid admitting Negro patients.

“They’re sneaky about it,” she said.

Private health plans no longer assure adequate protection

Privately Insured in America: Opinions on Health Care Costs and Coverage

The Associated Press-NORC Center for Public Affairs Research, October 2014

A significant minority of those with private health insurance, including those covered by high-deductible health plans (HDHPs), are greatly impacted by the out-of-pocket cost of health care—they are concerned with the uncertainty of major expenses, skip necessary medical treatment, and experience real financial burden when obtaining health care. All told, about 1 in 8 privately insured Americans—or more than 16 million people—face major financial hardships like going without food or using up all of their savings as a result of medical bills.

When asked about nine specific behaviors to reduce personal health care expenses, about half of privately insured adults age 18-64 experienced at least one of them.

  • As a result of health care costs, significant minorities of privately insured individuals don’t go to the doctor when they are sick (19 percent), go without preventive and recommended care (18 percent), use up all or most of their savings (18 percent), and go without basic needs (13 percent).
  • A quarter of privately insured adults age 18-64 lack confidence in their ability to pay for a major unexpected medical expense.
  • The privately insured who report having a HDHP are more likely than those who do not to decrease their contributions to savings (41 percent vs. 26 percent) and retirement plans (28 percent vs. 15 percent) as a result of health care costs.
  • Nearly 1 in 4 adults age 18-64 covered by a HDHP reports that paying for health care expenses caused them to use up their savings.
  • Thirty-five percent of those surveyed indicate that when enrolling in a health insurance plan, their current plan was the only option available.
  • With out-of-pocket costs emerging as a major source of uncertainty among the privately insured, more privately insured Americans choose a health care plan with a relatively high monthly premium but lower out-of-pocket costs (52 percent) over a plan with relatively low premiums and higher out-of-pocket costs (40 percent), when presented with the tradeoff.
  • But, there isn’t overwhelming support for plans with select networks5 designed to keep out-of-pocket costs low. Twenty percent say they are extremely or very willing to participate in this type of plan, 38 percent are somewhat willing, and 40 percent are not too or not at all willing.

Of those who indicate they have used health care services since enrolling in their current health insurance plan, 39 percent say the out-of-pocket costs being higher than expected has been a major (14 percent) or a minor (24 percent) problem.

As the health care marketplace is evolving with the advent of new exchanges, those who purchase their health insurance plans directly or through exchanges are more likely to express difficulty finding health care providers covered under their plans.

Those who have changed health insurance plans and say they have HDHPs are especially likely to cite increased costs without a corresponding increase in quality.

http://www.apnorc.org/PDFs/Coverage/AP-NORC-Opinions%20on%20Health%20Care%20Costs%20and%20Coverage_FINAL%20web%20(1).pdf

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Comment:

By Don McCanne, MD

This new survey conducted by the Associated Press-NORC Center for Public Affairs Research confirms, once again, that private health insurance in the United States often is not providing adequate financial protection for those with health care needs. More than 16 million people who have private insurance “face major financial hardships like going without food or using up all of their savings as a result of medical bills.” The one-half of Americans who use hardly any health care at all likely do not realize that they are one major illness away from similar financial hardship.

When something is not working, we should fix it. The inadequacies of private plans cannot be repaired without intolerable increases in health insurance premiums. Yet a well designed single payer national health program could remove the financial barriers to care – for everyone – without any increase in our current national health expenditures. Without action, 30 million will remain without any insurance at all, and many of the rest of us could remain vulnerable to high out-of-pocket medical costs in spite of our private insurance coverage.

American households are getting wrecked by medical debt

By Mandi Woodruff
Yahoo Finance, Oct. 9, 2014

When Deanne Overvold’s husband, Lee, started complaining of back pain late last year, she thought the painkillers his doctor prescribed would be the end of it. Five months later, a round of lab tests would reveal that Lee, 60, wasn’t just suffering from a backache — he was diagnosed with acute myeloid leukemia, a fast-moving bone marrow cancer.

“You never realize the cost of catastrophic illness until you’re in it,” says Deanne, 60. “It’s rather devastating to go from being able to pay the bills to wondering how you’re going to take care of the next month.”

In their 30 years of marriage, the Overvolds had each taken on traditional household duties — Lee worked and managed the finances, while she cared for their two sons at home.  At the time of his diagnosis, Lee earned $120,000 a year working in sales for an energy company in their hometown, Fontana, Calif. The rigor of his treatment regimen forced him to leave his job on disability, which cut the family’s income by 40%. Very quickly, his hospital bills consumed their emergency savings and the couple began drawing on his retirement benefits much earlier than expected.

“At least five of his cancer specialists weren’t covered by our insurance,” Deanne says. “And one day the hospital would charge $300 for one drug and the next day it would cost $750. It’s like it just keeps coming and you can’t stop it.”

Lee died in August, less than six months after his diagnosis. Deanne was left with more than $100,000 in hospital and physicians’ bills, she estimates — an amount far too inadequate for her savings to cover. Six years away from reaching full retirement age herself, she’s begun looking for full-time work for the first time in more than two decades. On the recommendation of a friend, she enlisted the help of a financial advisor who specializes in helping widows and widowers. 

“We had planned to retire at 67 and we had everything planned out,” Deanne says. “Now, there is no plan.”

Spiraling medical debt

Like so many Americans who’ve been financially crushed by medical bills, Deanne’s expenses became an unmanageable burden.

A report by financial education website Nerdwallet.com released today shines new light on medical debt’s crippling effect on American households. Between 2010 and 2013, American households lost $2,300 in median income, but their healthcare expenses rose by $1,814, according to Nerdwallet. Out-of-pocket healthcare costs are expected to accelerate to a 5.5% annual growth rate by 2023 – more than twice as fast as the national economy, which grew by 1.9% last year.

“We found that one in three dollars that are currently in debt collections are actually medical, which we found quite shocking,” says Christina LaMontagne, general manager of NerdWallet Health and author of the report.

Medical debt  triggers more than 60% of bankruptcy filings in the U.S. According to a September Bankrate survey, 44% of consumers making less than $30,000 a year say they have more medical debt than emergency savings.

Further complicating matters is America’s notoriously confounding medical billing system. A widely cited May 2013 study by the Centers for Medicare and Medicaid Services found that hospitals sometimes charge 10 to 20 times what Medicare typically reimburses for a service (Medicare estimates are often used as a baseline for medical service pricing). According to Nerdwallet’s study, two-thirds of adults said they have received medical bills that cost more than they were initially quoted, and hospital billing errors resulted in overcharges of up to 26%.

“As consumers have increasing amounts of out-of-pocket responsibilities, it’s very unsettling to think the bills you receive might be wrong and you might be overpaying,” LaMontagne says.

Retirement at risk

Healthcare is among the greatest costs retirees will face when they leave the workforce, surpassing $220,000 for those who live into their 80s. And retirement healthcare costs are expected to rise from from 69% of Social Security benefits for a couple retiring in 2015 to 98% of Social Security benefits for a healthy couple retiring in 2025 and 127% for couples retiring in 2045.

When workers are faced with costly health issues during their working years, future retirement plans can easily be derailed.

Kathy Penton, 58, was the breadwinner in her family when she was diagnosed with Fibromyalgia, a syndrome that causes chronic nerve and joint pain, in 2002. She was in her early 40s, a time when both men and women should be reaching their peak earning years. Instead, the constant pain drove her to leave her management position at the telecommunications company she had worked at for more than 10 years.

Kathy and her husband, Lonnie, 63, who live in Savannah, Ga. went from a dual-income household to relying solely on Lonny’s $50,000-a-year job at an auto repair shop. It took more than two years for Penton to successfully qualify for disability benefits, and by that time the couple had been regularly dipping into her 401(k) account and using credit to make ends meet.

“I know I could have planned better but before I even had a chance think about it, it was gone,” she says.

After paying taxes on early 401(k) withdrawals and sustaining a painful 25% loss during the 2008 financial crisis, Penton says her $100,000 nest egg is practically nonexistent today. When their bank threatened to foreclose on their home after two missed mortgage payments in 2008, it was a major tipping point. More than $20,000 in credit debt, the couple decided to file for bankruptcy.

Penton’s health needs were covered by the benefits she received in her severance package, but she wasn’t prepared to support her son, who, in 2009 at age 22, was diagnosed with chronic pancreatitis, an incurable but treatable condition that requires regular care. When her son’s frequent hospital stays interfered with his work, he was let go from his job at a shipping dock and moved back home. Penton paid for his COBRA benefits but when they ran out, no insurance company would touch him (this was pre-Affordable Care Act, when insurers could deny coverage based on pre-existing conditions). It would cost $300 a month to enroll him in a health plan in the new federal marketplace, an expense she says neither he nor she could afford.

“What bothers me most is the shame I feel, because I know there are others who are worse off than me and I knew that I needed to be prepared for my retirement beyond Social Security benefits,” she says. “But when your only child is sick and you’re sick, what are you going to do?”

http://finance.yahoo.com/news/american-households-are-getting-wrecked-by-medical-debt-143119252.html

Poll: Many insured struggle with medical bills

By Ricardo Alonso-Zaldiver and Jennifer Agiesta
The Associated Press, Oct. 13, 2014

WASHINGTON (AP) — Having health insurance is no panacea for high medical costs. Overall, 1 in 4 privately insured U.S. adults say they don’t have much confidence in their ability to pay for a major, unexpected medical expense.

A new poll from The Associated Press-NORC Center for Public Affairs Research may help explain why President Barack Obama faces such strong headwinds in trying to persuade the public that his health care law is working to hold costs down.

The poll found the biggest financial concerns were among people with so-called high-deductible plans that require patients to pay a significant share of their medical bills each year before insurance kicks in.

Such plans already represented a growing share of employer-sponsored coverage. And now, they’re also the mainstay of the new health insurance exchanges created by Obama’s law.

Edward Frank of Reynoldsville, Pennsylvania, said he bought a plan with a $6,000 deductible last year through HealthCare.gov. That’s in the high range, since deductibles for popular silver plans on the insurance exchanges average about $3,100- still a lot.

“Unless you get desperately ill and in the hospital for weeks, it’s going to cost you more to have this plan and pay the premiums than to pay the bill just outright,” said Frank, who ended up paying $4,000 of his own money this spring for treatment of shoulder pain.

“The deductibles are so high, you don’t get much of anything out of it,” said Frank, who is in 50s and looking for a new job.

The poll found that people are responding to the hit on their wallets in ways that may not help their health:

  • Nineteen percent of all privately insured adults said they did not go to the doctor when they were sick or injured, because of costs. Among those with high-deductible plans, the figure was 29 percent.
  • Seventeen percent skipped a recommended test or treatment; it was 23 percent among those with high-deductible plans.
  • Eighteen percent of all adults went without a physical exam or other preventive care, 24 percent among those with high-deductible plans.

Sandra Chapman, a warehouse worker from Memphis, said she had to go without cholesterol medication last year because of issues with her prescription coverage. Instead of taking pills, she changed her diet.

“They only cover certain stuff and, I don’t know, the rules change all the time,” said Chapman, in her early 30s.

Health and Human Services Secretary Sylvia Mathews Burwell said last week that part of the problem is that many consumers don’t understand what they are buying when they purchase health insurance, or how to use their plan once they get their cards in the mail.

For example, there should be no reason to skip routine preventive care, since the health care law requires insurers to provide it at no charge to the patient.

“People need to understand how to use their health care,” said Burwell. “We need to spend time educating people.”

Only about half of those surveyed said they had a strong understanding of what their plans cover.

Consumers sometimes pick health insurance based on the monthly premium alone. But low-premium plans have higher deductibles and other out-of-pocket costs. People who expect to be going to the doctor can come out ahead financially by paying higher premiums for a plan that features lower out-of-pocket costs.

Indeed, the poll showed that a majority of those with private insurance, 52 percent, would rather pay a higher premium and limit out-of-pocket costs than lower their premiums and potentially face higher out-of-pocket charges.

Many consumers said they are making financial trade-offs to pay medical bills:

  • Overall, 33 percent said they cut back on entertainment; it was 43 percent among those with high-deductible plans.
  • 18 percent said they used up all or most of their savings, 24 percent among those with high-deductible plans.
  • 19 percent said they dialed down their contributions for retirement savings, 28 percent for people with high-deductible plans.

One government definition sets the threshold for a high-deductible plan at $1,300 for individual coverage, but in practice annual deductibles of $2,000 and even much higher are common.

Some people pair a high-deductible plan with a tax-sheltered savings account to pay their out-of-pocket costs – the poll found 40 percent who say they have high-deductible plans also have such an account. On the insurance exchanges, low-income people can receive additional help from the government for their cost-sharing expenses.

In another potentially troublesome finding for the White House, the poll found signs of dissatisfaction among people who changed plans in the last year, as the president’s health overhaul went into full effect.

Plan-switchers who said they are paying more outnumbered those who are paying less by 45 percent to 29 percent. Of those paying more, 11 percent said they are getting higher-quality care for their dollar.

The AP-NORC Center survey was conducted with financial support from the Robert Wood Johnson Foundation.

The telephone poll conducted between July 22 and September 3 included interviews with a random national sample of 1,004 privately insured adults aged 18 to 64. Results for the full survey have a margin of sampling error of plus or minus 4.1 percentage points. It is larger for subgroups.

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Associated Press writer Stacy A. Anderson and AP News Survey Specialist Emily Swanson contributed to this report.

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Online:AP-NORC Center for Public Affairs Research: http://www.apnorc.org

http://hosted.ap.org/dynamic/stories/U/US_AP_POLL_HEALTH_CARE_INSECURITY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-10-13-03-27-28

“Reference pricing” is yet another intrusive diversion from real reform

Reference Pricing: A Small Piece of the Health Care Price and Quality Puzzle

By Chapin White, Megan Eguchi
National Institute for Health Care Reform, NIHCR Research Brief No. 18, October 2014

As purchasers seek strategies to reduce high health care provider prices, interest in reference pricing—or capping payment for a particular medical service—has grown significantly. However, potential savings to health plans and purchasers from reference pricing for medical services are modest, according to a new analysis by researchers at the former Center for Studying Health System Change (HSC) using 2011 private insurance claims data for about 528,000 active and retired nonelderly autoworkers and their dependents. In 2011, the California Public Employees’ Retirement System (CalPERS) adopted reference pricing for inpatient knee and hip replacements. Using quality and price information, CalPERS set an upper limit of $30,000—the reference price—for hospital facility services for a knee or hip replacement. CalPERS designated certain in-network hospitals as meeting the reference price, and patients using designated hospitals are responsible only for the health plan’s usual cost-sharing amounts. However, if patients use a non-designated hospital, they are responsible for both usual cost sharing and any amount beyond the $30,000 reference price. While reference pricing for inpatient services has some potential to steer patients to hospitals with better quality metrics, only limited savings—a few tenths of a percent of total spending—are possible from applying a similarly narrow reference pricing to other privately insured populations. The potential savings from reference pricing are modest for two reasons: Shoppable services only account for about a third of total spending, and reference pricing only directly affects prices at the high end of the price distribution. When considering reference pricing, employers and health plans need to weigh potential savings against increased plan complexity and financial risk to enrollees, along with the analytical and financial resources needed to create and manage the program.

From the Implications

The CalPERS reference pricing experience tells two different but equally true stories—a dramatic percentage decline in prices and spending on knee and hip replacements and an extremely small percentage decline in total spending. To significantly impact spending among the privately insured, reference pricing would have to be applied quite broadly. And, even using a very inclusive list of shoppable services, the potential savings are relatively modest.

Both conventional network-based plans—preferred provider organizations and health maintenance organizations—and reference pricing suffer some of the same limitations. Both types of plans rely on patient cost-sharing differentials to steer patients to certain providers, but the higher cost sharing cannot reasonably be applied in emergencies when patients can’t choose their provider. Also, both types of plans are vulnerable to the demands of dominant “must-have” providers, either to be in network or to be both in network and designated.

Compared to a limited-network plan, reference pricing faces at least three additional logistical hurdles. First, the health plan must have reliable price data for specific providers for specific services so that it can set the reference price and designate providers. Even very large plans will lack the historical data to accurately measure the prices they typically pay to smaller hospitals. Second, the plan would ideally have provider-specific quality metrics on hand that can be used to assure patients that they are not being steered to low-quality providers. Although hospital quality metrics and rankings abound, the methodologies behind those rankings are still under development. Third, reference pricing requires new customer-service tools to support shopping by patients and to deal with inevitable member complaints. Implementation would require commitment of significant resources by the plan, potentially offsetting some or all of the savings from reductions in payments to high-price providers.

The main disadvantage of reference pricing is that it adds a new layer of complexity for plan administrators and enrollees. Rather than facilities simply either being in or out of the network, there are now three types of facilities: in-network designated, in-network non-designated and out of network. Even more confusingly, a single facility might be designated for one type of service—for example, an inpatient hospital providing a knee replacement—but not designated for another—that same hospital providing a colonoscopy in an outpatient department. Additional complexity raises significant concerns, given that the basic elements of conventional benefit design are already beyond the grasp of many consumers.

One question is whether a reference pricing program can steer patients to lower-price, adequate-quality providers. The answer, based on the CalPERS experience, appears to be yes. But, that may not be the right question. A better question may be why private health plans would ever pay negotiated prices over $30,000 for inpatient knee and hip replacements. The CalPERS reference pricing program seemingly took a hard line against hospitals charging unreasonably high prices—$30,000 or more—for knee and hip replacements. But, is $30,000 really a reasonable price for an inpatient knee or hip replacement? To put that amount in perspective, the Medicare program on average paid $14,324 for inpatient knee and hip replacements in 2011.

http://www.nihcr.org/Reference-Pricing2

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Comment:

By Don McCanne, MD

Our policy wonks continue to look for methods of controlling health care costs that will protect the role of private insurers, and, above all, prevent us from drawing the inevitable conclusion that we desperately need a single payer national health program. Reference pricing is one more supposed cost-saving tool that has garnered much interest. What is it and will it work?

Reference pricing is a process in which a maximum price is set for a given medical service. The patient then either goes to a designated provider who has agreed to accept that amount, along with contracted patient cost sharing, as payment in full, or, if the patient chooses a provider with higher prices, the patient must pay the full difference.

California Public Employees’ Retirement System (CalPERS) experimented with reference pricing by establishing $30,000 as a reference price for the hospital services for a knee or hip replacement. The experiment was considered to be a success based on the fact that 15 to 30 percent of patients who would have gone to a non-designated hospital switched and went to a designated hospital instead. But how do you define success?

The package fee that the private market was able to negotiate was $30,000. Medicare on average paid $14,324 for the same services. Is it a success when private insurers are paying double the fees set by a public insurer?

Some might consider it to be a success when the patient did not have to pay the difference between the reference price and the price that would have been charged in a non-designated hospital, though what is the patient giving up?

Consider how a decision is usually made to have a joint replacement. The patient typically goes to his or her primary care professional where initial evaluation indicates that a joint replacement may be indicated. A referral is made to a specialist qualified to do joint replacements. If the decision is made to go ahead with the procedure, arrangements are made with the hospital the specialist is associated with. But then the insurer intervenes and threatens the patient with severe financial penalties (all costs above the reference price) unless the patient agrees to give up the specialist and hospital that is part of the team of her primary care professional, either as a formal integrated health system or as an informal team of community professionals working together. To escape the financial penalty, the patient pays the penalty of disruption in care.

So what did this successful experiment that everyone wants to emulate actually accomplish? Care of 15 to 30 percent of patients was disrupted in exchange for establishing a cap on payment that was twice what Medicare pays, and yet netting only “an extremely small percentage decline in total spending.”

Another important consideration discussed in this report is that reference pricing significantly increases administrative complexity – just what we need in a system that is unique in the world for all of its profound administrative waste. But very telling is the comment in this report that some of this administrative increase will be in the form of new customer-service tools “to deal with inevitable member complaints.”

Great – a disruptive program that doesn’t work very well but ticks everyone off! We’ll say it again – single payer.

Do opinions of Medicaid patients matter?

Low-Income Residents In Three States View Medicaid As Equal To Or Better Than Private Coverage, Support Expansion

By Arnold M. Epstein, Benjamin D. Sommers, Yelena Kuznetsov and Robert J. Blendon
Health Affairs, October 8, 2014 (online)

Abstract

Expansion of Medicaid under the Affordable Care Act to millions of low-income adults has been controversial, yet little is known about what these Americans themselves think about Medicaid. We conducted a telephone survey in late 2013 of nearly 3,000 low-income adults in three Southern states—Arkansas, Kentucky, and Texas—that have adopted different approaches to the options for expansion. Nearly 80 percent of our sample in all three states favored Medicaid expansion, and approximately two-thirds of uninsured respondents said that they planned to apply for either Medicaid or subsidized private coverage in 2014. Yet awareness of their state’s actual expansion plans was low. Most viewed having Medicaid as better than being uninsured and at least as good as private insurance in overall quality and affordability. While the debate over Medicaid expansion continues, support for expansion is strong among low-income adults, and the perceived quality of Medicaid coverage is high.

From the Discussion

In our survey of nearly 3,000 low-income adults in three states, we found strong and consistent enthusiasm—among nearly 80 percent of respondents—for expanding Medicaid under the ACA and a more nuanced picture of whether it would be preferable to gain coverage via traditional Medicaid or subsidized private insurance.

Support for expansion by the population who would most likely be eligible for it may provide further impetus for expansion, although low-income adults and the uninsured may lack the clout to bring about this policy change in many states where the ACA remains unpopular among the political leadership.

Quality and affordability of care were generally rated as better with Medicaid coverage, while private coverage was seen as offering better access to and more respect from providers. These views represent a nuanced but reasonable comparison of Medicaid versus private health insurance and are consistent with some of the empirical evidence in this area. Recent studies indicate that Medicaid provides low-income adults with better financial protection than does private coverage, while lower reimbursement rates in Medicaid have been linked to lower physician participation rates in that program compared to private coverage. Favorable views toward Medicaid were most common among racial and ethnic minorities, people with lower education and income, and those in worse health.

http://content.healthaffairs.org/content/early/2014/10/02/hlthaff.2014.0747

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Medicaid, Often Criticized, Is Quite Popular With Its Customers

By Margot Sanger-Katz
The New York Times, October 9, 2014

A study published in the journal Health Affairs found that poor residents of Arkansas, Kentucky and Texas, when asked to compare Medicaid with private coverage, said that Medicaid offered better “quality of health care” and made them better able to “afford the health care” they needed.

Medicaid, the federal-state program for poor and disabled Americans, is a frequent political target, often described as substandard because of its restricted list of doctors and the red tape — sometimes even worse than no insurance at all.

But repeated surveys show that the program is quite popular among the people who use it.

When asked to consider it alongside other big, popular government programs, Medicaid compares favorably, said Robert Blendon, a public health professor at Harvard who studies public opinion on health care issues and was a co-author on the recent study. “It’s only when you compare it to Medicare, which is so much more popular than 96 percent of what the federal government does, that it looks unimpressive,” Mr. Blendon said.

The people surveyed by the Harvard researchers didn’t prefer Medicaid to private insurance in every respect. They gave private coverage the edge when it came to seeing “doctors you want, without having to wait too long” and “to have doctors treat you with care and respect.” But Medicaid came out ahead on the question of whether it enabled them to “be able to afford the health care you need,” and on the overall question of “quality of health care.”

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Comment:

By Don McCanne

Low-income patients strongly support the Medicaid program. It provides better financial protection than does private insurance, and they perceive the care to be of high quality. Their primary concern is that “private coverage was seen as offering better access to and more respect from providers” than does Medicaid.

When asked whether it was better to have Medicaid or to be uninsured, there was strong agreement that Medicaid patients have higher quality of care, have greater access to doctors, are treated with better respect, and, especially, are better able to afford the health care that they need, than are the uninsured.

In fact, according to Harvard’s Robert Blendon, Medicaid compares quite favorably to other popular government programs, though the support is “unimpressive” when compared to the support for Medicare.

Unfortunately, the politicians in many states do not seem to care. Even though the federal government would provide most of the funds, they would rather leave these people uninsured. Obviously, they could care less about the opinions of this low-income population that lacks political clout.

Why would Medicare be more popular than Medicaid? Medicare that is supplemented with Medigap, retiree plans, or Part C plans removes financial barriers to care, thus providing a similar level of financial protection as Medicaid – with the exception that Medicaid covers long term care as well. Medicaid does have the stigma of a welfare program whereas Medicare is considered to be an earned right available to all qualified by age or disability. The greatest reason that Medicare is preferred is that the patients have free choice of their physicians, including specialists.

Under what system would a low-income patient fare best? One in which the welfare stigma is removed, and everyone is treated equal. One in which financial barriers such as large deductibles and coinsurance are removed. One in which patients have free choice of their health care professionals and hospitals. One in which a high standard of quality is the norm for all. In other words, low-income patients would fare best is a system that would work well for all of us – a single-payer, improved Medicare for all.

The single-payer model: a foundation for professionalism

By Randall White, M.D.
Canadian Healthcare Network (Toronto), Oct. 8, 2014

Obtaining orthopedic services in British Columbia is harder than it needs to be. People sometimes wait for months, but successful programs to expedite access exist, such as the Osteoarthritis Service Integration System, operated by Vancouver Coastal Health. Although the government should create more such programs, such efforts are diverted in the defence of our single-payer, not-for-profit universal healthcare system from a group that hopes to break the “government monopoly” on healthcare funding in Canada.

Dr. Brian Day, founder of Vancouver’s Cambie Surgery Centre, and other commercial specialty clinics are suing B.C. to allow private funding of medical care. This would facilitate expansion of private diagnostic and surgical procedures and undermine the single-payer model. The integrity of Canada’s entire health system could be at risk.

Advocates for commercialized healthcare funding, now prohibited by the Canada Health Act, often promote a “hybrid model.” In 2012, Dr. Day wrote in a newspaper column that European countries successfully combine universal care with a public-private system, but he failed to address the different contexts of North America and Europe.

European insurance and healthcare sectors are highly regulated. For instance, in France, even supplemental health-insurance funds are not-for-profit, unlike in Canada, where supplemental insurance, now limited to pharmacueticals, dental, vision and complementary care, is offered by for-profit corporations.

Canada has extensive commercial ties to the United States, not to Europe, and were the “hybrid” advocates to prevail, U.S. insurers could invoke NAFTA to gain access to an expanding Canadian health-insurance market.

U.S. insurance companies are unlikely to submit to a European-style model in Canada, where regulation in most sectors is already more American than European because of harmonization under NAFTA.

Furthermore, these insurance companies have the resources to get what they want. In 2013 the leading U.S. health insurers reported $12.7 billion in profit on $313.7 billion in revenue (U.S. dollars). According to OpenSecrets.org, that same year health insurers spent $154 million on lobbying U.S. lawmakers.

Using their financial clout, they could quickly change the landscape in Canadian healthcare funding for not only procedural medicine but primary care, mental-health care and other specialties.

Private-insurance-inspired managed care, capitation, pre-authorizations, routine refusals of reimbursement, restrictions on hospital admissions, onerous and costly paperwork, and loss of autonomy, which plague U.S. physicians (I know because I practised there) could follow.

Investor-owned healthcare delivery goes hand-in-hand with commercial insurance, which is why private-clinic owners are so eager to eliminate the single-payer model. They can benefit handsomely from purchase by larger entities.

For instance, in 2012, the Canadian corporation Centric Health bought Vancouver’s False Creek Healthcare Centre, founded by Dr. Mark Godley, for $24 million. Of course, this is small potatoes for U.S. hospital chains, which might invoke NAFTA to gain access to private Canadian clinics and hospitals were they to grow in size and value.

The potential for fraud also looms, as witnessed In the United States. In 2007, the company PacifiCare overbilled Medicare, the U.S. healthcare program for seniors, for an estimated $423 million. B.C.’s healthcare budget, $16 billion and growing, could become a big target for corporate scammers.

As a psychiatrist, I was especially offended by the scandal in U.S. for-profit psychiatric hospitals that investigative reporter Joe Sharkey detailed in his 1994 book “Bedlam: Greed, Profiteering, and Fraud in a Mental Health System Gone Crazy.” Psychiatrists and administrators colluded to hospitalize well-insured adults and children, some of whom had minor disorders, against their will. If we veer away from our single-payer model, are we in jeopardy of creating a similar culture here?

The question for Canadian physicians is whether the guiding principle for organizing healthcare should be the public interest or the generation of profits. For me the choice is clear.

Randall White is a psychiatrist in Vancouver. This article was written expressly for CanadianHealthcareNetwork.ca, an online site associated with the publications Medical Post and Pharmacy Practice.

Psychiatrist appointments hard to get, even for insured: study

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Availability of Outpatient Care from Psychiatrists: A Simulated-Patient Study in Three Cities


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Why Americans Are Drowning in Medical Debt

Healthcare is the number-one cause of personal bankruptcy and is responsible for more collections than credit cards.

By Olga Khazan
The Atlantic, October 8, 2014

After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her greatNew York Times piece, he wasn’t quite prepared for a $117,000 bill from an “assistant surgeon”—an out-of-network doctor that the hospital tacked on at the last minute.

It’s practices like these that contribute to Americans’ widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.

Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.

Americans pay three times more for medical debt than they do for bank and credit-card debt combined, the report found. Nearly a fifth of us will hear from medical-debt collectors this year, and they’ll gather $21 billion from us, collectively.

The company also found that 63 percent of Americans have received a medical bill that was more than they expected to pay. Some of that is a result of hospital errors: Nearly half of the Medicare insurance claims NerdWallet examined contained billing mistakes.

Another contributing factor is that hospitals charge wildly different amounts for the same procedures. In the most extreme example NerdWallet analyzed, the highest charge for an inpatient stay for severe intestinal bleeding was 54 times higher than the lowest charge. At most, California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.

It’s worth noting that the Affordable Care Act’s individual mandate and Medicaid expansion might alleviate some of this debt strain over the coming years. But otherwise, patients have few options beyond attempting to research hospital charges ahead of time—which is probably the furthest thing from a person’s mind when they are most in need of a hospital.

http://www.theatlantic.com/health/archive/2014/10/why-americans-are-drowning-in-medical-debt/381163/

Conservatives say health costs drive income inequality

Income Inequality and Rising Health-Care Costs

By Mark J. Warshawsky and Andrew G. Biggs
The Wall Street Journal, October 6, 2014

A new Kaiser Family Foundation survey reports that health-insurance premiums rose by a “modest” 3% in 2013. Even more modest, however, was the 2.3% growth of workers’ earnings last year. These figures merely illustrate a long-term trend of rising health costs eating away at wages. The real story is even more dramatic: Government data show that health costs are the biggest driver of income inequality in America today.

Most employers pay workers a combination of wages and benefits, the most important of which is health coverage. Economic theory says that when employers’ costs for benefits like health coverage rise, they will hold back on salary increases to keep total compensation costs in check. That’s exactly what seems to have happened: Bureau of Labor Statistics data show that from June 2004 to June 2014 compensation increased by 28% while employer health-insurance costs rose by 51%. Consequently, average wages grew by just 24%.

But here’s what the news headlines miss: Rising health costs don’t affect every employee the same. An average family health policy today costs employers nearly $12,000 per year, up from only $4,200 in 1999. Had employer premiums not risen, average salaries today would be around $7,800 higher. For a lower-income worker who today makes $30,000, that could have meant a 26% salary increase. By contrast, a “one percenter” making $250,000 today would have seen his earnings rise only by 3.1%. Health costs are a bigger share of total compensation for lower-wage workers, and so rising health costs hit their salaries the most. The result is higher income inequality.

These data give us a different perspective on the inequality debate. Most people think of income inequality as money “redistributed” from the poor to the rich. In reality, much of what we’re seeing is more of low-income workers’ compensation going toward their health benefits and less ending up in their pockets. That’s a different problem and points toward different solutions.

http://online.wsj.com/articles/mark-warshawsky-and-andrew-biggs-income-inequality-and-rising-health-care-costs-1412568847

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Comment:

By Don McCanne, MD

This WSJ opinion article is from the conservative American Enterprise Institute (AEI). When they say that “health costs are the biggest driver of income inequality in America today,” this should provide us with common ground to simultaneously address both income inequality and the health care crisis.

Unfortunately, in this article the authors further define the problem as over-insurance and a need for high-deductible health plans. Reducing benefits and increasing cost sharing would make the problems even worse for low- and moderate-income individuals and families.

Nevertheless we can agree that the current inequities in health care financing – which were inadequately addressed through the Affordable Care Act – are a significant contributor to income inequality. The most effective solution to address both would be to enact a progressively-financed single payer national health program (though further public policies would be required to temper the extremes of income and wealth inequality).

There is a glimmer of hope when the opponents of single payer recognize the problems, but that hope is dashed when they revert to ideological approaches that place an even greater burden on those more vulnerable.