PNHP

Government evidence of Medicare Advantage cheating

Government evidence of Medicare Advantage cheating

How Medicare Advantage plans code for cash

By Fred Schulte
The Center for Public Integrity, August 7, 2014

A new federal study shows that many Medicare Advantage health plans routinely overbill the government for treating elderly patients — and have gotten away with doing it for years.

Analyzing government data never before made public, Department of Health and Human Services researchers found that many plans exaggerate how sick their patients are and how much they cost to treat. Medicare expects to pay the privately run plans — an alternative to traditional Medicare — some $160 billion this year.

The HHS study does not directly accuse any insurers of wrongdoing or name specific plans that were scrutinized. But the researchers offer the most comprehensive evidence to date that suspect billing practices have been common across much of the Medicare Advantage industry and are likely to get worse unless officials crack down.

Medicare pays the Advantage health plans higher rates for sicker patients and less for healthy people using a complex formula called a “risk score.” But the HHS study spells out several ways health plans have inflated those scores, from reporting implausibly high levels of medical conditions such as alcohol or drug dependence to billing for an inordinately high number of patients with complications of diabetes.

Despite its broad implications for Medicare spending, the study by HHS researchers Richard Kronick and W. Pete Welch has attracted scant notice in Washington. It was quietly posted late last month on an online research site run by the Centers for Medicare and Medicaid Services, part of HHS.

Kronick directs the HHS Agency for Healthcare Research and Quality, whose mission is to improve health care delivery. Welch works for the HHS Office of the Assistant Secretary for Planning and Evaluation.

http://www.publicintegrity.org/2014/08/07/15216/how-medicare-advantage-plans-code-cash

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Measuring Coding Intensity in the Medicare Advantage Program

By Richard Kronick and W. Pete Welch
Medicare and Medicaid Research Review (MMRR), A publication of the Centers for Medicare & Medicaid Services, 2014: Volume 4, Number 2

In 2004, Medicare implemented a system of paying Medicare Advantage (MA) plans that gave them greater incentive than fee-for-service (FFS) providers to report diagnoses.

The increase in relative MA scores appears to largely reflect changes in diagnostic coding, not real increases in the morbidity of MA enrollees.

Concerns about overpayment as a result of favorable risk selection have confronted the Medicare program throughout the history of Medicare contracting with health maintenance organizations and other private plans. In the late 1980s, Medicare paid health plans using a system that adjusted for demographic factors such as age and gender, but plan enrollees were healthier than fee-for-service beneficiaries with the same demographic characteristics, and, as a result, health plans were estimated to be overpaid by approximately 11%.

In order to reward health plans for attracting sicker-than-average enrollees, and to discourage plans from constructing business models designed to avoid risk, Medicare and other payers have increasingly turned to diagnosis-based risk- adjusted payment systems in which health plans are paid more for enrollees expected to need more care. While mitigating the incentive to enroll only healthy people, diagnosis-based risk adjustment creates another set of incentives: to find and report as many diagnoses as possible.

The MA payment system uses diagnostic information to assign a risk score to each beneficiary.

This payment system creates incentives for MA plans to find and report as many diagnoses as can be supported by the medical record.

In addition to the incentives to report more completely, the method of collecting diagnostic information also provides MA plans additional opportunities to increase risk scores. FFS diagnoses are drawn only from health care claims submitted for payment. MA plans may also review medical records and can report all diagnoses that are supported in the record, including those that were not reported by physicians on any health care claim or encounter record. MA plans can also employ nurses to visit enrollees in their homes to conduct health assessments and report diagnoses that are found.

From the Discussion

It appears that most of the reason that MA risk scores increased more quickly than FFS scores is due to increases in relative coding intensity—measured as increases in risk scores for stayers—with little of it accounted for by changes in enrollment mix. There is little sign of coding intensity slowing; in fact, Exhibit 2 shows that it may be increasing.

CMS and the Congress have responded to the increase in risk scores over time in several ways. First, starting in 2010, CMS lowered payment by 3.41% by applying an across-the-board coding adjustment. The coding intensity adjustment will increase to 4.91% in 2014 and to at least 5.91% in 2018. Second, starting in 2013, CMS set the four most severe diabetes HCCs (Hierarchical Condition Category) to have the same payment coefficient (Department of Health and Human Services, 2012). As a result, recording diagnoses that move enrollees from HCC18 (diabetes with ophthalmologic or unspecified manifestation) into HCC15 (diabetes with renal or peripheral circulatory manifestation) will no longer increase revenue for MA plans. Third, CMS made further changes to the model in 2014, removing some of the HCCs that were the subject of MA efforts at increasing coding intensity.

Relative MA risk scores have been increasing at least 1% per year and are likely to continue to do so, even though MCBS-based risk scores have been roughly constant.8

Footnote 8:  Some would expect that MA plans will react to the 2013 and 2014 model changes by finding other HCCs on which to focus their efforts, and the success of coding intensity efforts may well increase in the future.

http://www.cms.gov/mmrr/Downloads/MMRR2014_004_02_a06.pdf

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Comment:

By Don McCanne, MD

We have discussed before the ways in which the private Medicare Advantage (MA) plans have been cheating the taxpayers, including cheating the beneficiaries in the traditional Medicare program who are paying higher premiums to support these private MA plans. Today’s message is especially significant since it cites a detailed 19 page report from the director of AHRQ and his colleague – a report which further confirms the private insurers’ distortion of Hierarchical Condition Categories (HCC) to receive extra risk adjustment payments based on upcoding that reports their patients as being more ill than they actually are (i.e., they pad the diagnoses).

The history of Medicare Advantage is that of a steady string of abuses. The program began with overpayments of about 14 percent over the cost of caring for Medicare patients in the traditional program. That overpayment was a deliberate ploy of Congress to give the private plans a competitive market advantage in an effort to privatize Medicare. The plans then selectively enrolled healthier, less expensive patients through deceptive marketing practices. When an effort to correct this favorable selection was made through risk adjustment using Hierarchical Condition Categories, the insurers then padded the diagnoses, as mentioned above. Further, since the Affordable Care Act included adjustments to correct the overpayments, the insurance industry heavily lobbied Congress and the Obama Administration to use three years of accounting gimmicks to reduce the impact of these adjustments. Cheat, cheat, cheat.

What can we expect now? Richard Kronick and W. Pete Welch are reserved in their language when they state, in a footnote, “Some would expect that MA plans will react to the 2013 and 2014 model changes by finding other HCCs on which to focus their efforts, and the success of coding intensity efforts may well increase in the future.”

I’ll be more frank. These crooks will continue to cheat the American taxpayers. They will surely use other HCCs to upcode their patients, until that door is finally slammed shut. What then? The private insurers continually tout to their shareholders the importance of “innovation” in health care coverage. They will always be able to find new and more effective ways to cheat us.

One of the more important improvements in an Improved Medicare for All would be to get rid of these crooks once and for all. The sooner the better.

Vermont Is ‘Single-Payer’ Trailblazer

By Michael Ollove
Stateline, The Pew Charitable Trusts, Aug. 7, 2014

BERLIN, Vt. – Dr. Marvin Malek has been yearning and advocating for a publicly financed, single-payer health care system for at least two decades. Now, as Vermont stands on the threshold of being the first state to launch such a plan, he’s confessing to trepidation.

“I am pretty damn nervous,” he confided before bounding off for rounds at the Vermont Central Medical Center, still clutching the bicycle helmet he wore on his ride to work.

It’s not that Malek has reservations about the desirability of a single-payer system. He and other supporters in Vermont point out that it is already in place in many developed countries that produce better health outcomes at lower cost than the U.S.

It’s that getting there seems so fraught with complexity. “The problem is that the tentacles of our completely dysfunctional U.S. health system reach so deeply into every state,” he said. “How do you disentangle from that abysmal structure to create single-payer?”

That explains why Malek and many others here believe the Vermont legislature’s landmark vote in 2011 to move the state to a single-payer system by 2017 was the easy part of the process. Devising how to actually do it, a process the state is enmeshed in now, will be much more grueling.

The outcome couldn’t be more consequential, not only for Democratic Gov. Peter Shumlin, who put single-payer health care at the center of his first gubernatorial campaign in 2010, but for many others who have long cherished the idea of universal health care built on the foundation of a single-payer system.

Some believe that if the Vermont experiment is successful, other states could follow. In Canada, they note, single-payer started in one province and then spread across the country.

“We could be the Saskatchewan of America,” said Bram Kleppner, CEO of Danforth, a pewter manufacturer in Middlebury with roots tracing back to colonial America. He is among a group of business executives in Vermont Businesses for Social Responsibility, which actively promotes single-payer. He also sits on a board advising the governor on the financing of the plan.

Maverick State

A single-payer system is one in which the government, rather than private insurance companies, pays all health care costs. Some on the left have long harbored hopes for a national single-payer system, but the odds that Congress would ever extinguish the private insurance industry have never been anything but long.

Vermont is different. Vermonters proudly bring up the state’s maverick, progressive past: first state to mandate public financing for universal education in its constitution, first to partially outlaw slavery in its constitution, first to introduce civil unions for same-sex couples, and first to allow gay marriages by legislation, rather than through a court order. Many Vermonters hope a single-payer health system will be the latest addition to that list.

But it’s way too early to predict that other states will fall like dominoes for single-payer. Vermont’s unusual characteristics helped make that legislative vote possible. It is tiny and it has Democratic super-majorities in both legislative chambers. Its seven hospitals (eight if you count Dartmouth-Hitchcock Medical Center just across the border in New Hampshire), are spread out and tend not to think of themselves as competitors.

Nevertheless, other states will be watching closely to see if Vermont can successfully build the elements of its single-payer plan, including a unified data and claims system, a method for measuring the delivery of quality health care and a pay-for-performance scheme to replace the traditional “fee-for-service” model.

“Even for states that are keeping it ‘old school,’ watching a state create a unified health budget and seeing how it benefits them and the process they use, that will be enlightening to everybody,” said Hilary Heishman, a program analyst at the Robert Wood Johnson Foundation.

Medicare, Medicaid, and health benefit plans for both veterans and active duty military personnel will continue to operate in Vermont after 2017. Other plans would also continue, including those serving employees and retirees of out-of-state companies, and tourists and other visitors. Plus, there are major businesses in the state that could continue to self-insure if they are exempted from the new taxes. (Some countries with single-payer systems also have separate health plans for some constituencies, such as veterans.)

Despite those caveats, Act 48, as it is called, represents the first time a state has guaranteed all its citizens health care simply on the basis of their residency. Instead of premiums, Vermonters and businesses would pay for health care through yet-to-be determined taxes. Benefits and formularies (the prescription medicines that are covered in a plan) would be uniform, excluding Medicare and Medicaid, although both programs, through waivers, would be folded into a unified claims administration and payment system run under a new, independent agency called Green Mountain Care.

Billions in Savings?

The Vermont plan largely derives from Harvard economist William Hsiao, who described it in a 2011 Health Affairs paper. He estimated that single-payer would save 25.3 percent over current state health spending, cut employer and household health care spending by $200 million, create 3,800 jobs and raise the state’s economic output by $100 million.

The savings, according to Hsiao, would come from the consolidation of insurance functions, reduced administrative costs for providers, better mechanisms for detecting fraud and abuse and shifting to a no-fault medical malpractice model.

Hsiao said the savings, an estimated $4.3 billion over five years, could be used to pay for coverage of the uninsured and improved benefits, reducing the overall savings to a still healthy $2.3 billion.

Those numbers quickly proved overly optimistic. The legislature didn’t adopt the malpractice reforms Hsiao recommended, and the multiple payers still active in the state could reduce the expected administrative savings. Meanwhile, a University of Massachusetts study commissioned by the state estimated Vermont would have to raise $1.6 billion in new revenues each year to support the plan. A later report by Avalere Health, a consulting firm, estimated the annual cost to be $1.9 billion to $2.2 billion.

Robin Lunge, director of Health Care Reform for the Shumlin administration, said last week the state is assuming it will need between $1.7 billion and $2.2 billion in additional annual revenue. Right now, Vermont collects about $2.85 billion in annual revenue from state sources, mainly through taxes, so raising that amount would be a huge lift for the state. But Lunge thinks a fairer comparison is the amount of new revenue that would have to be raised versus the $1.9 billion in private health insurance premiums that Vermonters pay now.

Mixed Feelings

Shumlin missed a 2013 deadline for revealing exactly how he planned to finance the reforms. Now he is promising to do so in January, in time for the next legislative session. Some critics say he purposely withheld the details to not imperil his re-election in November.

Lunge said the state will raise most of the revenue through some combination of income and payroll taxes on both employers and employees. People will not be asked to pay premiums, although Lunge said she expects there will be some kind of cost-sharing (as in co-pays or co-insurance) to discourage overuse of medical services.

“You can say it will be the biggest tax increase in Vermont’s history,” Lunge said, “but you could also say it’ll be the biggest premium decrease in our history, too.” She also pointed out that the tax increase will be based on household income, while under the current system people pay the same premiums no matter how much they earn.

The Vermont public seems to have mixed feelings about single-payer. A VTDigger/Castleton Polling Institute survey in April found Vermonters equally divided. Another poll by Vermont Leads, a pro-single-payer organization, found 55 percent of Vermonters in favor of single-payer once the upcoming changes had been explained to them.

Too Radical?

Detractors, though, aren’t hard to find. Cynthia Browning, a House Democrat from Bennington who voted against Act 48, said that while she supported universal coverage, she can’t fathom why the state would risk so radical an approach. “I thought we should see where we were after the Affordable Care Act had been in effect.”

She has filed suit against the Shumlin administration to force it to be more transparent in its decision-making.

Another critic is Dan McCauliffe, a 59-year old dermatologist in Rutland, who said he fears that creating a finite state budget for health care will inevitably lead to long waiting times for patients and the rationing of medical care. “If I was younger, I would probably leave the state,” he said.

Ted Adler, owner of Union Street Media, a Burlington web design firm, predicted that for him and his employees, the new taxes will exceed any premium savings by more than $150,000 a year. The cost of the company’s current insurance plan reflects the relative youth and health of its 40-person workforce.

Adler believes single-payer will accelerate the departure of young people from Vermont, which already has the country’s second-oldest population. “If we already have a lot of problems keeping young people, do we want to penalize a business that employs a lot of young people?” he asked.

Darcie Johnston, a Republican political consultant, created Vermonters for Health Care Freedom to rally opposition to the plan. She was handed her best weapon when the Vermont health exchange website, like the federal website and sites in many other states, performed disastrously after its launch last year. “If they can’t even build a website, how are they going to build government-run health care for 600,000 people?” she asked last week in her Montpelier office.

Still, many others are excited about the plan. When Shumlin proclaimed during his first gubernatorial run that the Affordable Care Act didn’t go far enough, he energized Deb Richter, a doctor practicing addiction medicine in Berlin and a leader in Vermont Health Care for All.

Many of Richter’s patients experience abrupt changes in their incomes, frequently forcing them to switch from one insurance plan to another, or to none at all. With single-payer, that will never happen. Richter also expects single-payer to vastly reduce the time she has to spend dealing with insurance matters.

“All my patients will have the same insurance and the same benefits,” said Richter. “There will be one set of rules, one set of regulations, one set rate of reimbursement and one formulary.”

‘The Price of My Life’

Walt Carpenter, a 59-year-old with a sandy-colored walrus mustache who is a jack-of-all-trades at a ski resort, is covered by Medicaid now, but he has often been uninsured or underinsured. In the 2000s, he suffered from a liver disease that turned his skin yellow. During a bad spell in 2006, he said could hardly sleep at all, lost 90 pounds in a matter of weeks and was tortured by merciless itchiness. His doctors said he needed endoscopic surgeries, but his insurance plan resisted. “I’d wake up in the morning everyday wondering, ‘Okay, which plan denial do I fight today?’”

Three procedures were eventually covered. By the time he needed a fourth, however, the company he had joined six months earlier because of its health insurance, decided it could no longer afford an employee health plan. The hospital told him the cost of his procedure would be $20,000. When he replied that he was without insurance, a hospital employee told him the “uninsured rate” was $14,000.

“We went back and forth negotiating what the price of my life was worth to save,” Carpenter said. They eventually arrived at $8,000.

Not surprisingly, Carpenter is an ardent backer of single-payer. “Health care is a human right. It shouldn’t be treated like a commodity that’s based on your income or employment,” he said.

Don Mayer, the 65-year old owner of Small Dog Electronics, an Apple retailer and service supplier, serves on Shumlin’s health care advisory board. True to its name, six or seven little dogs wander around the firm’s Waitsfield offices. Mayer said providing health insurance to his 60 employees is 22 percent of his overall personnel costs, and he finds it difficult to compete against companies that don’t cover their workers.

“If you were designing the system now and put 20 people in a room and said, ‘How are you going to pay for health care?’ not one of them would pick the ludicrous, Rube Goldberg system we have now,” he said. 

http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2014/08/07/vermont-is-single-payer-trailblazer?

Free Medicaid? Gotcha!

You Qualify for Medicaid: Don’t Sign Up

By Christopher Flavelle
Bloomberg View, August 4, 2014

The debate over Obamacare’s Medicaid expansion divides states into two broad categories — those that expand their program and those that don’t. New research suggests we should talk more about a third group: States that agree to expand Medicaid, then impose premiums whose only purpose seems to be keeping people out of the program.

A paper released today in the journal Health Affairs, written by researchers from the federal government’s Agency for Healthcare Research and Quality, seeks to quantify the effect of premium increases on children’s enrollment in Medicaid or its sister plan, the Children’s Health Insurance Program. They found that even small premiums lead to big drops in sign-ups.

Using data from 1999-2010, the researchers — Salam Abdus, Julie Hudson, Steven C. Hill and Thomas M. Selden — found that for children in families making from 101 percent to 150 percent of the federal poverty line, a $10 increase in monthly premiums was associated with a 6.7 percent reduction in enrollment. For the subset of families not eligible for health coverage through their jobs, that grew to 7.3 percent.

The authors of the Health Affairs study don’t examine the effect of premium increases on adults. But Laura Dague, a professor at Texas A&M University, has. In an article published in the Journal of Health Economics in May, Dague looked at three years of data from the Wisconsin BadgerCare Plus program, which offers subsidized health coverage to families with low incomes. She found that moving from $0 to $10 a month reduced enrollment among children and adults by 12 percent to 15 percent.

What struck Dague about those results was that it’s not just the magnitude of the premium that matters, but the existence of a premium.

“The biggest effects in my data were at the margin where folks start having to pay premiums at all,” she told me by phone last week. She wasn’t sure why that was — perhaps the difficulty of paying another monthly bill or the psychology of having to pay in the first place.

What makes these papers relevant is that at least four states — Indiana, Iowa, Michigan and Pennsylvania — have expanded or are trying to expand Medicaid access in a way that imposes premiums on those making from 101 percent to 138 percent of poverty. Those premiums aren’t high: $25 a month in Indiana, $10 in Iowa, $25 in Pennsylvania ($35 for a household) and 2 percent of income in Michigan. But these new studies show that even those small amounts can significantly reduce the number of people who sign up.

That seems to be the point. After all, Medicaid spending per beneficiary will reach almost $6,400 in 2014, against which $120 in premiums each year generates additional revenue that’s barely significant. And as Dague notes, imposing a premium at all means spending money to obtain and process those payments.

“If the administrative costs of collecting premiums are high relative to revenue collected,” she wrote, “small premiums seem difficult to justify as anything other than a measure to discourage enrollment.”

If the states that have already imposed premiums were the outliers, then this would be a frustrating story but a limited one. However, 24 states still refuse to expand their Medicaid programs, and there’s a strong chance that some of those will change their minds on the condition that they can impose premiums, too. There’s an equally good chance that the Centers for Medicare and Medicaid Services, which faces pressure to bring those states into the fold, will go along with it.

Unquestionably, access to Medicaid for a small premium is better than no access at all. But this new research says we shouldn’t mince words about the point of those premiums. They’re designed to get fewer people to sign up.

http://www.bloombergview.com/articles/2014-08-04/you-qualify-for-medicaid-don-t-sign-up

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Children’s Health Insurance Program Premiums Adversely Affect Enrollment, Especially Among Lower-Income Children

By Salam Abdus, Julie Hudson, Steven C. Hill and Thomas M. Seedless
Health Affairs, August 2014

In this article we have examined the effects of public premiums on insurance coverage of children who were eligible for Medicaid or CHIP and whose family incomes were above 100 percent of the federal poverty level in 1999–2010. Higher public premiums are associated with lower public coverage and with increases in private coverage and uninsurance. The magnitudes of these premium effects vary considerably by poverty level and by parental coverage offers.

Among lower-income children, premium increases are associated with larger reductions in enrollment in public coverage, and a larger share of the decline in enrollment takes the form of increased uninsurance. The association between premiums and uninsurance is particularly strong among lower-income children who lack access to employer-sponsored insurance through parental offers.

http://content.healthaffairs.org/content/33/8/1353.abstract

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The effect of Medicaid premiums on enrollment: A regression discontinuity approach

By Laura Dague
Journal of Health Economics, September 2014

This paper estimates the effect that premiums in Medicaid have on the length of enrollment of program beneficiaries. Whether and how low income-families will participate in the exchanges and in states’ Medicaid programs depends crucially on the structure and amounts of the premiums they will face.

http://www.sciencedirect.com/science/article/pii/S0167629614000642

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Comment:

By Don McCanne, MD

The obsession of the policy and political communities with requiring even low income families to experience consumer sensitivity to costs has crossed the bounds into blatant psychopathology, as these studies confirm.

The Medicaid and CHIP programs were specifically designed to provide health care coverage for low income families – a goal with which most caring individuals agree. The very modest Medicaid and CHIP premiums extracted from these families are so small that they have no impact on the overall financing of the programs. Yet they are enough that these families with no discretionary income find these programs to be unaffordable, and so they remain uninsured.

The screwball idea that these premiums somehow make these low income families better consumers is totally void of reason. These premiums merely defeat the purpose of the programs – getting these people the coverage that they need. The psychopathology rests with those who insist that cash payments, no matter how small, are absolutely essential for these families to appreciate the benefits of actively participating in markets rather than passively accepting a government handout. This is ideology gone mad!

Under a well designed single payer system, premiums and cost sharing are eliminated. People simply get the heath care they need when they need it. Paying for the system is totally removed from the delivery of care since it is financed through progressive taxes that everyone can afford.

Staying Covered: How Immigrants Have Prolonged the Solvency of One of Medicare’s Key Trust Funds and Subsidized Care for U.S. Seniors

Partnership for a New American Economy, August 5, 2014

The Partnership for a New American Economy’s new report, Staying Covered: How Immigrants Have Prolonged the Solvency of One of Medicare’s Key Trust Funds and Subsidized Care for U.S. Seniors, shows that immigrants are key contributors to Medicare’s Hospital Insurance Trust Fund, a pool of money covering hospital and home health care for 50 million Americans.

Key report findings include:

  • Immigrants are subsidizing Medicare’s core trust fund. In the period from 1996 to 2011, immigrants contributed $182.4 billion more to Medicare’s Hospital Insurance Trust Fund than was expended on their benefits. Immigrants generated multibillion-dollar surpluses in the trust fund during every year examined in our study. In the average year between 1996 and 2011, they contributed $11.4 billion more to the trust fund than was expended on their care.
  • Immigrants played a critical role subsidizing Medicare’s Hospital Insurance Trust Fund during the recent recession. From 2008 to 2011, a period when the great recession and its after effects eroded trust fund contributions, Medicare’s Hospital Insurance Trust Fund operated at a deficit, failing to bring in enough contributions to fully cover costs each year. Immigrants, however, continued to generate surpluses in the program during this time, including a $16.3 billion surplus during the height of the recession in 2008.
  • Medicare’s Hospital Insurance Trust Fund would be nearing insolvency if not for the contributions of immigrants in recent years. If immigrants had not participated in the Medicare program from 1996 to 2011, Medicare’s core trust fund would be expected to become insolvent by the end of 2027. This is roughly three years earlier than currently predicted by the Medicare Trustees.
  • The role immigrants play subsidizing Medicare’s Hospital Insurance Trust Fund distinguishes them from the broader population. While immigrants contributed a net of $182.4 billion from 1996 to 2011, the U.S.-born population generated a deficit of $68.7 billion during the same period.

This report was prepared for the Partnership for a New American Economy by Leah Zallman of the Institute for Community Health and Cambridge Health Alliance at the Harvard Medical School. It builds on a study the author previously published in the peer-reviewed journal Health Affairs.

Download the full report.

Read the press release.

http://www.renewoureconomy.org/news/updates/press-release-new-report-finds-immigrants-contributed-net-182-4-billion-medicares-core-trust-fund-1996-2011/

Medicare shows that public, universal health coverage is superior to private insurance

By Pamella Gronemeyer, M.D.
St. Louis Post-Dispatch, Letters, Aug. 1, 2014

We are thrilled to help celebrate Medicare’s 49th anniversary this week. Medicare, which was passed into law in 1965 under President Lyndon B. Johnson, provides the elderly and disabled health care benefits that would not be available to them in our profit-driven (and -ridden) fragmented insurance market.

In contrast to the ongoing, never-ending partisan disputes over the Affordable Care Act, Medicare has been for 49 years and still is the living proof that public, universal health coverage is superior to private insurance in every way. Medicare is more efficient than private health insurance and is administered at a cost of 3 percent to 4 percent, as opposed to private health insurance, which has administrative costs above 15 percent. Medicare’s costs have risen more slowly than those of private health insurance. Medicare provides better access to care, better financial protection and higher patient satisfaction.

The current Medicare system is not perfect, but should be expanded and enhanced to provide universal coverage. We are an exceptional country, and we need to provide exceptional health care to all Americans.

Dr. Pamella Gronemeyer resides in Glen Carbon, Ill.

http://www.stltoday.com/news/opinion/mailbag/letters-to-the-editor/medicare-shows-that-public-universal-health-coverage-is-superior-to/article_89b3cb2d-00da-5f5e-9055-d42fd4bf75cd.html#.U-C94jE_6Qw.email

Higher costs and lower quality in for-profit Medicare home health agencies

For-Profit Medicare Home Health Agencies’ Costs Appear Higher And Quality Appears Lower Compared To Nonprofit Agencies

By William Cabin, David U. Himmelstein, Michael L. Siman and Steffie Woolhandler
Health Affairs, August 2014

Abstract

For-profit, or proprietary, home health agencies were banned from Medicare until 1980 but now account for a majority of the agencies that provide such services. Medicare home health costs have grown rapidly since the implementation of a risk-based prospective payment system in 2000. We analyzed recent national cost and case-mix-adjusted quality outcomes to assess the performance of for-profit and nonprofit home health agencies. For-profit agencies scored slightly but significantly worse on overall quality indicators compared to nonprofits (77.18 percent and 78.71 percent, respectively). Notably, for-profit agencies scored lower than nonprofits on the clinically important outcome “avoidance of hospitalization” (71.64 percent versus 73.53 percent). Scores on quality measures were lowest in the South, where for-profits predominate. Compared to nonprofits, proprietary agencies also had higher costs per patient ($4,827 versus $4,075), were more profitable, and had higher administrative costs. Our findings raise concerns about whether for-profit agencies should continue to be eligible for Medicare payments and about the efficiency of Medicare’s market-oriented, risk-based home care payment system.

Conclusion

Medicare’s home health payment system aims to harness market-oriented incentives for efficiency. CMS seeks to upgrade care through a quality monitoring program that imposes substantial documentation burdens on clinicians. Our findings suggest that this program may not fully insulate patients from profit-incentivized quality compromises.

Meanwhile, the payment incentives have nourished the growth of proprietary agencies whose costs (and profits) are far higher than those of their nonprofit counterparts. Overall, it appears that proprietary home care agencies deliver slightly lower-quality care at a substantially higher cost, belying claims that for-profit incentives increase efficiency.

Further analysis of the impact of proprietary ownership (and other factors associated with poor home health agency performance) is sorely needed. If our findings are confirmed, Medicare should consider returning to the pre-1980 prohibition on investor ownership of home health agencies and simplifying the current complex payment system, which has neither contained costs nor maximized quality.

http://content.healthaffairs.org/content/33/8/1460.abstract

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H.R. 676, Expanded & Improved Medicare For All Act

Sponsored by Rep. John Conyers, Jr and 60 cosponsors

Sec. 103.

(a) Requirement To Be Public or Non-Profit.–

  1. In general.–No institution may be a participating provider unless it is a public or not-for-profit institution. Private physicians, private clinics, and private health care providers shall continue to operate as private entities, but are prohibited from being investor owned.
  2. Conversion of investor-owned providers.–For-profit providers of care opting to participate shall be required to convert to not-for-profit status.

https://beta.congress.gov/bill/113th-congress/house-bill/676

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Comment:

By Don McCanne, MD

Markets, competition, investor ownership, and profits are touted incessantly as being key to higher quality and lower costs in health care, even though Noble laureate Kenneth Arrow showed us decades ago why markets do not work in health care. Previously studies of hospitals, HMOs, nursing homes, hospices, and dialysis centers have show us that investor ownership is associated with lower quality and higher costs. We can now add Medicare home health agencies to that list wherein proprietary, for-profit investor ownership is detrimental.

H.R. 676, the Expanded & Improved Medicare For All Act, sponsored by Rep. John Conyers, Jr, is a single payer bill that includes provisions that would eliminate investor-owned, for-profit providers. Today’s article adds to the evidence as to why the leadership of Physicians for a National Health Program supports the elimination of passive investors and profit diversion from our health care system. Health systems must be designed to benefit patients, not market exploiters that sacrifice quality while draining resources from health care. The primary missions are different. One is to take care of patients and the other is to make money.

For-profit home health agencies blasted in new analysis

By Steven Ross Johnson
Modern Healthcare, Aug. 4, 2014

For-profit home health agencies had higher Medicare costs per patient while scoring lower in quality performance when compared with not-for-profit firms, a new analysis finds.

For-profit home healthcare agencies had an average cost-per patient of $4,827 compared with not-for-profit firms that had an average cost per patient of $4,075, according to the report, published Monday in the journal Health Affairs.

The report analyzed cost reports filed by more than 7,000 home health agencies to Medicare in 2010-2011 and data for 22 quality measures from Medicare’s Home Health Compare database.

Operating costs at for-profits were found to be 18% higher than at not-for-profit agencies. Administrative costs accounted for $476 more toward the overall cost per patient, while profits represented $463 in cost difference.

At the same time, the article concludes that for-profit home health agencies scored slightly lower than not-for-profits in meeting various care-quality measures, reaching each standard around 77% of the time compared with 78% for not-for-profit firms.

For-profit home health firms also were found to have a higher frequency of hospital readmissions among their patients at 28% compared with not-for-profits whose rate was 24%.

“Overall, it appears that proprietary (for-profit) home care agencies deliver slightly lower-quality care at a substantially higher cost, belying claims that for-profit incentives increase efficiency,” the analysis concluded.

The article goes further in its view of for-profit home health agencies by posing the question as to whether such firms should be allowed to continue receiving payments under Medicare, from which they were prohibited before 1980.

Medicare spent more than $18 billion on home healthcare services in 2011, serving around 3.4 million beneficiaries. according to a 2103 report by the Medicare Payment Advisory Commission (PDF).

There were more than 12,000 home health agencies in 2011, according to MedPAC, a number that rose by 62% compared with 7,528 agencies in 2000. Before that year, the industry was actually in the midst of a steady decline, with the number of home health companies falling by 31% between 1997 and 2000. The total number of agencies participating in Medicare has increased by an average of more than 500 a year since 2002, according to MedPAC.

Experts believe the growth of the for-profit industry, which makes up about 62% of all home-health care, came about after the implementation in 2000 of the currently used, risk-based prospective payment reimbursement model.

“Home health margins for freestanding HHAs (home health agencies) have been very high since the PPS (prospective payment) system) was implemented, as Medicare margins averaged 17.7% between 2001 and 2010,” according to the MedPac study.

“For-profit home care agencies are bleeding Medicare; they raise costs by $3.3 billion each year and lower the quality of care for frail seniors,” said Dr. Steffie Woolhandler, professor of public health at City University of New York’s Hunter College and senior author of the Health Affairs analysis. “Letting for-profit companies into Medicare was a huge mistake that Congress needs to correct.”

William Dombi, vice president for Law with the National Association for Home Care and Hospice, and industry group that represents 6,000 not-for-profit, for-profit, hospital-based, and government-controlled home health agencies across the U.S., disputed the validity of the analysis, stating the cost report data used to justify its findings was not reliable, adding that neither MedPAC nor CMS used that information in the manner it was used in the analysis.

“Its (the article’s) suggestion that Medicare should consider a return to a ban on proprietary home health agencies would deprive millions of Medicare beneficiaries access to home care as most cities, towns, and rural areas have few, if any, nonprofit agencies,” Dombi wrote in an email response. “We have found that the tax status of a home health agency is not the determinant of its quality of care or cost of operation.”

http://www.modernhealthcare.com/article/20140804/BLOG/308049994/&template=emailart&template=emailart

Safety Concerns About New Drugs Revealed

Study Compared Warning and Withdrawal Rates for Drugs Released Before and After the Drug Industry Increased Funding to the FDA to Expedite Drug Approvals

Press release
Public Citizen, Aug. 4, 2014

What’s safer: a newly approved drug or one that has been on the market much longer? Newer drugs have a one in three chance of acquiring a black box warning or being withdrawn for safety reasons within 25 years of their approval, according to a new study by researchers from Cambridge Health Alliance/Harvard Medical School, Boston Medical Center (BMC)/Boston University School of Medicine (BUSM), City University of New York School of Public Health, and Public Citizen. The study, published today in the August issue of Health Affairs, is the largest on this topic, encompassing all of the drugs approved by the U.S. Food and Drug Administration (FDA) over a 35-year period.

Black box warnings are part of the prescription medication label intended to alert consumers and health care professionals about important safety concerns, such as serious side effects or life-threatening risks. They are the most serious medication warnings required by the FDA.

The study compared warning and withdrawal rates for drugs released before and after 1992. The approval process for medications changed in 1992 with the Prescription Drug User Fee Act (PDUFA), which allowed the FDA to collect fees to expedite drug approvals. Congress passed PDUFA after heavy lobbying by the pharmaceutical industry, and PDUFA has been reauthorized by Congress several times. Since the law’s enactment, the average drug approval time for all drugs has fallen from 34 months to 16 months.

Very few of the 32 drugs withdrawn for safety reasons had clearly unique benefits at the time of approval, but all had unique risks that eventually led to their withdrawal.

The researchers discovered that drugs released after the PDUFA passed were more likely to be withdrawn or have a black box warning, with 26.7 percent of these drugs receiving such a warning compared to 21.2 percent in the pre-PDUFA drugs that underwent the longer approval process. Half of all black box warnings appeared after a drug had been on the market for 12 years, and safety withdrawals have occurred as late as 30 years after a drug’s initial release.

The authors suggest that the expedited process may have led to the release of drugs before they could be adequately evaluated for safety issues.

“The FDA is under constant pressure to rush new drugs through the pipeline to approval. In its hurry, the FDA is apparently failing to distinguish useful drugs from toxic ones, and more dangerous drugs are slipping through,” said study lead author Cassie Frank, MD, a physician at Cambridge Health Alliance and an instructor in medicine at Harvard Medical School. “By the time many drugs receive serious safety warnings, millions of Americans have already been exposed to their side effects, which can sometimes be fatal. As a doctor, I try to keep my patients safe by avoiding new drugs, when there are similar, older ones available.”

 “Our findings raise concern that the FDA is rushing its review of new drugs and allowing potentiallyunsafe medicines onto the market. As a primary care doctor, I’m wary of prescribing brand new drugs unless they’re really a breakthrough, since their full risks are often unknown. And patients should be wary too,” said senior author Karen Lasser, MD, MPH, associate professor of medicine at BUSM who practices  internal medicine at BMC.

“The FDA’s resources for reviewing drugs have increased dramatically since the passage of PDUFA, amounting to $760 million this fiscal year from pharmaceutical companies, about two-thirds of the agency’s drug review budget,” said study co-author Sidney Wolfe, MD, founder of Public Citizen’s Health Research Group and author of “Worst Pills, Best Pills.” “Since PDUFA, the review times for the drugs that are eventually banned have decreased enormously. From an average, prior to PDUFA, of about three years from receipt of the drug application to FDA approval, the interval has dropped sharply to about one year, following PDUFA. These shorter review times, combined with increased FDA authority to require further studies after approval – rather than settling safety issues before approval – possibly contributes to the increased rate of withdrawals and black box warnings.”

View the study.

“Era Of Faster FDA Drug Approval Has Also Seen Increased Black-Box Warnings And Market Withdrawals,” By Cassie Frank, David U. Himmelstein, Steffie Woolhandler, David H. Bor, Sidney M. Wolfe, Orlaith Heymann, Leah Zallman and Karen E. Lasser. Health Affairs, August 2014.

For-profit home care agencies cost Medicare billions extra, yet provide worse care: Health Affairs study

FOR IMMEDIATE RELEASE, Aug. 4, 2014
Contact: Mark Almberg, PNHP communications director, (312) 782-6006, mark@pnhp.org

For-profit home health agencies are far costlier for Medicare than nonprofit agencies, according to a nationwide study published today [Monday, Aug. 4] in the August issue of the journal Health Affairs. Overall cost per patient was $1,215 higher at for-profits, with operating costs accounting for $752 of the difference and excess profits for $463. Yet the quality of care was actually worse at for-profit agencies, and more of their patients required repeat hospitalizations.

Researchers at the City University of New York School of Public Health analyzed detailed Cost Reports filed with Medicare by 7,165 home health agencies in 2010-2011, as well as data for 22 quality measures from Medicare’s Home Health Compare database covering 9,128 agencies.

Compared to nonprofits, operating costs at for-profit agencies were 18 percent higher, with excess administration (at $476 per patient) accounting for nearly two-thirds of the $752 difference in operating costs. For-profits also did many more speech, physical and occupational therapy visits, which are often highly profitable under the complex Medicare payment formula. In addition, profits at for-profit agencies added 15 percent on top of operating costs vs. a 6.4 percent surplus at nonprofit agencies.

Despite their higher costs, for-profit agencies delivered slightly lower-quality care. On average, for-profits met each quality standard only 77.2 percent of the time, vs. 78.7 percent for nonprofits. Rehospitalizations, widely viewed as an important quality measure, were more frequent among for-profit agencies’ patients: 28.4 percent vs. 26.5 percent at nonprofit agencies.

Quality of care was worst in the South, where for-profit firms provide the overwhelming majority of care, the authors said.

Medicare spent $18 billion on home care in 2012, the most recent year for which figures are available. Until 1980 Medicare barred for-profit agencies from its home care program, which covers homebound seniors who need skilled nursing care, or occupational, physical or speech therapy. At present, 88 percent of agencies are for-profit and they care for 81 percent of Medicare home care patients.

“For-profit home care agencies are bleeding Medicare; they raise costs by $3.3 billion each year and lower the quality of  care for frail seniors,” said Dr. Steffie Woolhandler, professor of public health at CUNY’s Hunter College, lecturer at Harvard Medical School and senior author of the study. “Letting for-profit companies into Medicare was a huge mistake that Congress needs to correct.”

Lead author William Cabin, assistant professor of social work at Temple University, said: “While our study is the first to show that profit-making has trumped patient care in Medicare’s home health program, that’s no surprise. A large body of research on hospitals, nursing homes, dialysis facilities, and HMOs has shown that for-profits deliver inferior care at inflated prices.”

Cabin continued: “Our findings show once again that the free-market, private-sector managed care model has failed.”

Professor Cabin, who has decades of experience in the home care industry, undertook the research as part of his doctoral studies at the CUNY School of Public Health.

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“For-Profit Medicare Home Health Agencies’ Costs Appear Higher And Quality Lower When Compared To Nonprofit Agencies,” William Cabin, J.D., Ph.D., David U. Himmelstein, M.D., Michael L. Siman, Ph.D., Steffie Woolhandler, M.D., M.P.H. Health Affairs, August 2014.

A link to the abstract of the article is available at the Health Affairs website: http://content.healthaffairs.org/content/33/8/1460.abstract

The full text is available to media professionals upon request from Mark Almberg at PNHP (mark@pnhp.org) or Sue Ducat at Health Affairs (sducat@projecthope.org).

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Physicians for a National Health Program, www.pnhp.org, is a nonprofit educational and research organization of 19,000 doctors who support single-payer national health insurance. PNHP played no role in funding or otherwise supporting this study.

Adventures in ‘Prior Authorization’

By Danielle Ofri, M.D.
The New York Times, Aug. 3, 2014

“Dear Doctor,” the letter from the insurance company began. “We are writing to inform you that a prior authorization is required for the medication you prescribed.”

That’s usually where I stop reading. Thousands of these letters arrive daily in doctors’ offices across the country. They are attempts by insurance companies to prod doctors away from more expensive treatments and toward less expensive alternatives. To use the pricier option, you need to provide a compelling clinical reason.

In theory, this is a reasonable way to control costs by making it harder to prescribe costlier medications. In practice, it is a wasteful administrative nightmare, a cavalcade of recurring paperwork, lengthy phone calls and bureaucratic battles.

One study estimated that on average, prior authorization requests consumed about 20 hours a week per medical practice: one hour of the doctor’s time, nearly six hours of clerical time, plus 13 hours of nurses’ time. Other studies have suggested that prior authorizations could cost individual practices tens of thousands of dollars a year.

The letter in my hand concerned one of my patients, Mr. V., who suffers from stubborn hypertension. His chart is a veritable tome, documenting the years of effort it took to find the combination of four different blood-pressure medications that controls his hypertension without upsetting his diabetes, kidney disease and valvular heart disease or making his life miserable from side effects. We’ve been on stable ground for a few years now, a state neither of us takes for granted.

But Mr. V. had changed insurance companies, and now one of his medications required a prior authorization. The last thing I wanted was for him to be turned away at his pharmacy and have his blood pressure spiral out of control, so I called right away to sort things out.

Twenty minutes of phone tree later, I discovered that the problem was that I had exceeded a pill limit for one of his medications. Mr. V. needed to take 90 of those pills each month for the high dosage that his blood pressure required. I patiently explained this to the customer-care representative.

Equally patiently, she told me that 45 pills a month was the maximum allowed for this particular medication.

Three more phone trees and three more customer-care representatives later, my patience was flagging. Apparently a request for 90 pills was flummoxing the system. Representative No. 4 asked me to list all the blood-pressure medications that Mr. V. had been on in the past, including dates of initiation and relevant lab values, a request of epic proportions in his case.

The representative went down her checklist. “Would taking 45 pills per month instead of 90 pills adversely affect Mr. V.’s health?” she asked.

At first I thought she was joking. “Well,” I replied, “it would probably make his blood pressure shoot up in the second half of the month.”

She paused, then asked her next question with the encouraging uplift of suggestion. “Has Mr. V. ever tried 45 pills per month instead of 90 pills?”

Then I realized that she was not joking. “Are you out of your mind?” I hollered into the phone. “It’s taken years — years! — to find the right combination of meds to control his blood pressure without killing his kidneys or making him dizzy or nauseated or depressed or ruining his libido or running his potassium off the charts or breaking his bank account. Do you really think I’m going to randomly jiggle the dosages just for the hell of it?”

“A simple yes or no will suffice, doctor.”

Prior authorization clearly saves money for the insurance companies, at least up front. Many physicians simply give in, because the process is just too arduous.

But prior authorization ultimately ends up costing the health care system. The time and money that medical practices devote to prior authorizations could surely be put to better use for patient care. And it’s not even clear that insurance companies save money in the long run. One study examined the records of more than 4,000 patients with Type 2 diabetes who were prescribed medications requiring prior authorizations. Those who were denied the medications had higher overall medical costs during the following year; not getting the medications probably worsened their conditions.

I bit my tongue for the remainder of my conversation with the insurance company, holding back long enough to obtain the prior authorization that would allow Mr. V. the 90 pills he needed each month. I tried not to break the phone when I finally slammed down the receiver.

I’m all for controlling medical costs and trying to apply rational rules to our use of expensive medications and procedures. But in the current system, everything seems to be in service of the corporate side of medicine, not the patient. The clinical rationale and the actual patient — not to mention the doctors and nurses involved in the care — are at best secondary concerns.

In the end, we were able to keep Mr. V.’s blood pressure under control. My blood pressure, however, was a different story.

Danielle Ofri, an associate professor at New York University School of Medicine, is the author of “What Doctors Feel: How Emotions Affect the Practice of Medicine.”

http://www.nytimes.com/2014/08/04/opinion/adventures-in-prior-authorization.html

America needs improved Medicare for all

By Anne Scheetz, M.D.
State Journal-Register (Springfield, Ill.), Aug. 2, 2014

Forty-nine years ago, on July 30, 1965, President Lyndon Johnson signed Medicare and Medicaid into law.

Together, the two programs have made health care accessible to millions of people who otherwise couldn’t afford it. The legislation ended racial segregation in hospitals and decreased poverty among the elderly, thereby improving the financial security of generations of their families. And it strengthened local economies by creating health-care jobs that can’t be outsourced abroad.

Transformative though it was, this legislation left a great deal undone. Millions of Americans still do not have access to the care they need, millions more suffer financial devastation in paying for care, and our system is the most inefficient and bureaucratic in the industrialized world.

The contrast between the ways in which people become eligible for Medicare and Medicaid is instructive for the next transformation that American health care needs so urgently: expanded and improved Medicare for all.

For the majority of Medicare enrollees, eligibility is simple. You become eligible on your 65th birthday, and once enrolled you are in for life.

This simplicity allowed the Medicare rollout in the pre-computer era to be more than 90 percent complete within one year. It is also part of the reason for Medicare’s low overhead – less than 3 percent compared to more than 15 percent for private insurance.

Medicaid is another matter. It’s a program for the poor – or rather for certain classes of the poor – but it’s not even as simple as that.

“Poor” is not a single number such as 65. A person’s eligibility for Medicaid rests on a complex, document-based assessment of their income and other changeable factors; hence, the requirement that a Medicaid “redetermination” takes place yearly.

The 2012 Illinois Medicaid reform called the SMART Act resulted in a costly and time-consuming controversy over whether redeterminations should be done by state workers or be outsourced to a private company. The state workers’ union AFSCME ultimately prevailed over those who wanted to privatize this function. Meanwhile, an unknown number of enrollees erroneously lost their Medicaid cards – and therefore lost access to health care – until the mistakes were corrected.

Rarely did reports on the controversy note that every person needs health care throughout their lives, regardless of changes in their income. From that standpoint, every dollar spent on determining eligibility for any coverage (eligibility for subsidies on the Affordable Care Act’s insurance exchanges is also subject to yearly redetermination) is a dollar wasted on a useless function.

What we need then to get maximum value out of every health-care dollar is simplicity. That brings us back to Medicare.

Why shouldn’t everyone in the country, regardless of age, have an improved version of Medicare? It would pay for 100 percent of all necessary care and would be financed entirely by taxes based on ability to pay. (Almost all of us will pay less in taxes than we now pay in premiums plus out-of-pocket costs.) You’d choose your own doctor, dentist, hospital, pharmacy – every provider – and no longer be locked into a restrictive network.

By eliminating useless bureaucracy, we would take better care of everybody and still save money. That’s a description of Medicare for all, and it really is that simple – if we have the will to do it.

Dr. Anne Scheetz is a founding member of the Illinois Single-Payer Coalition and a leader of the Illinois chapter of Physicians for a National Health Program. She lives in Chicago.

http://www.sj-r.com/article/20140802/Opinion/140809884#ixzz39KzJWDLc

Now just try to make the plans work

Newly Insured, Many Now Face Learning Curve

By Abby Goodnough
The New York Times, August 2, 2014

Advocates of the Affordable Care Act, focused until now on persuading people to buy health insurance, have moved to a crucial new phase: making sure the eight million Americans who did so understand their often complicated policies and use them properly.

The political stakes are high, as support for the health care law will hinge at least partly on whether people have good experiences with their new coverage.

Many people who signed up for private coverage through the new marketplaces had never had health insurance, and even the basics — like what a premium is and why getting a primary care doctor is better than relying on the emergency room — are beyond their experience. Others have a sense of how insurance works but find the details of the marketplace plans confusing, especially if they signed up without the help of someone who understood them.

Insurers, too, are trying to help ease their new members’ confusion. Independence Blue Cross, which enrolled 165,000 people in its marketplace plans, has representatives traveling the Philadelphia region this summer in a tractor-trailer, the Independence Express, and offering educational seminars. Independence also has tried to reach all of the new members by phone to welcome them and “make sure they understand what they bought,” said Paula Sunshine, the company’s vice president of consumer sales and marketing.

The company knew going in that the learning curve would be steep. It held focus groups last year with nearly 2,000 people and found, for example, that virtually none knew what coinsurance was.

In one sign of widespread confusion, a recent Kaiser Family Foundation survey of programs that helped people apply for marketplace coverage found that 90 percent had already been re-contacted by consumers with post-enrollment questions.

http://www.nytimes.com/2014/08/03/us/newly-insured-by-health-law-millions-face-a-learning-curve.html

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Comment:

By Don McCanne, M.D.

If health care reform had worked the way it should have, today anyone could get the health care that he or she needed without having to worry about how to pay for it. What are we seeing instead? Just trying to enroll in health care coverage has been a very difficult process for many, and tens of millions will still remain uninsured. And today’s article shows how problematic the next step is – trying to put your coverage to use.

Some of the problems have already been widely publicized. Newer plans, especially those in the exchanges, have low actuarial values (i.e., very high deductibles and other excessive cost sharing). Cost sharing can make care unaffordable for those with modest incomes. Plans are now using narrow- and ultra-narrow networks of hospitals and health care professionals which limit patients’ choices in their health care, often preventing access to the most appropriate physicians and hospitals. We are now seeing tiered levels of specialized services and pharmaceuticals in which patients are financially penalized if they use specialists or drugs in the higher, more expensive tiers even if they are clearly preferred for medical reasons. The penalty is assessed by the insurers strictly to dissuade patients from using more expensive care even though it may be better care. Patients are also having difficulties determining not only whether specific providers are in or out of their networks, but also which tier they are in and what that means. Furthermore, the provider enrollment in these networks is quite unstable, not to mention the instability that arises when the patient must change plans and therefore change networks. This says nothing about the problems patients face when they try to get an appointment and find that there are no openings, or find that the distances are too far – directly due to the insurance innovation that promises a higher volume of patients to fewer physicians so that insurers can get greater discounts, even though overloading their practices. The list goes on and on with administrative excesses that are designed to enhance the business performance of the insurance products at a cost to the patients that they should be serving.

It should not have been this way. A single payer national health program would have automatically enrolled everyone; it would have included all providers, and it would have been financed through equitable taxes, making it affordable for everyone.

Although this New York Times article presents the problem as a need to teach individuals the complexities of using these newer insurance products, the problem is actually the complexities themselves and the tremendous injustices that ensue.

The remainder of this comment is composed of more excerpts from the NYT article. The experience of Salwa Shabazz should enrage us and drive us to demand health care justice for all. Her case shows us the compelling need for comprehensive structural reform of our health care financing system.

The following are excerpts from the NYT article (link above):

Last week, Salwa Shabazz arrived at the office of a public health network here with a bag full of paperwork about her new health insurance — and an unhappy look on her face. She had chosen her plan by phone in March, speaking to a customer service representative at the federal insurance marketplace. Now she had problems and questions, so many questions.

“I’ve had one doctor appointment since I got this insurance, and I had to pay $60,” Ms. Shabazz told Daniel Flynn, a counselor with the health network, the Health Federation of Philadelphia. “I don’t have $60.”

Mr. Flynn spent almost two hours going over her Independence Blue Cross plan, which he explained had a “very complicated” network that grouped doctors and hospitals into three tiers. Ms. Shabazz, who has epilepsy, had not understood when she chose the plan that her doctors were in the most expensive tier.

“None of that was explained when I signed up,” she said. “This is the first I’m hearing it.”

Independence Blue Cross has focused on making sure people understand the tiered-network plan that Ms. Shabazz chose, which was popular because of its relatively low price but also particularly hard to understand. Ms. Shabazz, 38, paid only about $32 a month in premiums, with federal subsidies of $218 covering the rest. But she could not afford the $60 co-payments to see her specialists on her annual income of $19,000.

Her financial situation worsened when she had to quit her job at the Pennsylvania Liquor Control Board in June because of the epilepsy, she said. She had called the federal marketplace to report her change in income, and had received a letter that she handed to Mr. Flynn, hoping he could explain it. The news, he said, was not good: With no more paychecks, she had fallen into the so-called coverage gap, earning too little to keep qualifying for the subsidies that made her premiums affordable, but likely still not qualifying for Medicaid because Pennsylvania has not expanded that program, as 26 states have under the Affordable Care Act.

“You’ll probably have to cancel your plan,” he said.

Ms. Shabazz’s mother, Waheedah Shabazz-El, who had accompanied her to the appointment, shook her head as her daughter wiped away tears. “There are so many layers to this,” Ms. Shabazz-El said.

Closing comment by Don McCanne:  We are not powerless. Let’s demand single payer, and not let up until we get it.