PNHP

The Motley Fool on Medicare for All

The Motley Fool on Medicare for All

How Much Could Medicare for All Save You?

By Rich Smith
The Motley Fool, July 21, 2013

But could it be that the ACA isn’t really needed at all? Could an alternative idea — “Medicare for all” — actually do a better job of controlling medical costs, and making health care affordable for Americans?

Harvard Medical School visiting professors David Himmelstein and Steffie Woolhandler recently noted on the pages of The New York Times that a Medicare-for-all health care system — known commonly as “single-payer” — is an incredibly efficient operation, in terms of costs.

On average, only 2% of the revenues that flow through Medicare are needed to cover overhead costs. In contrast, patients who subscribe to private health insurance spend 14% of their money — seven times as much — just paying for the overhead costs doctors incur from juggling the multitude of insurance procedures required for different patients subscribing to insurance plans.

In contrast, the U.S. government itself agrees that the ACA — the system we’ve settled upon instead of offering Medicare for all — costs more than a move to a cheaper, more efficient, and better single-payer system. The U.S. Government Accountability Office calculates that a switch to single-payer would shave $400 billion a year off the national health-care bill.

Little wonder, then, that a 2008 survey published in the Annals of Internal Medicine found that 59% of physicians polled support Medicare for all.

If an individual consumers think they’re better off with a private health insurance plan from WellPoint — or from UnitedHealth Group, Aetna, or Cigna — then fine. They could still sign up for one of those, either as a supplement to Medicare-for-all or, if they prefer, as an exclusive plan, and choose not to participate in Medicare at all. For that matter, there should be no need to require anyone to buy any insurance whatsoever.

Excerpts from representative Comments:

“Well, of course! But isn’t the ACA a step in the right direction?”

“Medicare for all would be far superior to any other plan, which was why it was killed before it could get out of committee.”

“ahh, if only the Republicans had not fought the entire idea so hard, that would have been the ideal solution.”

“A big concern, that not a lot of people know about-more and more doctors are refusing to take on new Medicare patients.”

“Medicare is an existing program that could simply be expanded and fixed a bit where necessary. This seem like a much much more common sense approach than a whole new bureaucracy.”

“Authors often site Medicare’s discount rate and admin cost. Both are a mirage. The Medicare discount rate is so low that it does not pay lights on costs.”

“It’s true that Medicare is already set up very well and that a minor legislative action could make it available to all…ObamaCare puts more power into the hands of private insurance companies and BigPharma, and how do you think those will use it?”

“Of course “single payer” would be better, but was not proposed in anticipation of Republican opposition to “socialized medicine” and their insistence on the primacy of a role for the private health insurance companies. As to Medicare for all on a voluntary basis, it still does not answer what to do about the uninsured who get sick. Who pays for them?”

“DUH! How soon could America deal Rich Smith and “Medicare for All” for Ovomit and OvomitCare?”

“Of course Medicare for all makes sense.”

“Regarding hospital charges vs. what insurers pay ($24,000 vs. $4000). . .that is a HUGE problem in healthcare that in a way, single payer WOULD correct.”

“You are dreaming in theory. The Complete Lives System that withholds medical care from infants, special needs children and reduces the amount of medical care available each year by a dollar amount to anyone over 50.”

“the money saving answer is to repeal the ACA and start over with insurance pools and letting those who could afford insurance and don’t have it suffer for their sin”

“PS: don’t forget that Obamacare expands IRS and gives IRS much control over your healthcare”

“Physicians often limit total Medicare patients, and broadening the program will just further stratify medical care from those who have the money to pay and those who do not.”

“Medicare for all would work but only if the discounts were renegotiated.”

“Obamacare will be the destruction of America !! Obama wouldn’t have it any other way !!! Hail to ol RACE BAITER IN CHIEF !!!”

“More and more doctors are refusing new Medicare patients since the pay is too low and it takes too long to get reimbursed. If we moved to a Medicare-based system, what would happen? We would all have insurance, but it would be next to impossible to find a doctor that accepts the insurance. Yeah, that’s smart. Real smart.”

“You don’t have the right to infringe on someone else’s liberties and that is exactly what happens when the government taxes one person to give it to another. Freedom is the answer. God Bless America.”

“This is exactly what Dr. Ben Carson has been proposing the past two years. EACH and every American citizen would have a medicare spending plan and credits to that fund would start immediately upon birth.”

“i think eveyone knows that single-payer is the only efficient answer, but the scum in washington d.c. won’t allow it – they their souls to big pharma”

“Great article. This is so straightforward anyone could understand it. Maybe even congresspeople?”

“Of course this is a step in the right direction, and someday a single payer system will prevail.”

http://www.fool.com/investing/general/2013/07/21/how-much-could-medicare-for-all-save-you.aspx#.UevtGUalfbA.email

About The Motley Fool

The Motley Fool is a multimedia financial-services company dedicated to building the world’s greatest investment community. Reaching millions of people each month through its website, books, newspaper column, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company’s name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king — without getting their heads lopped off.

http://www.fool.com/press/about.htm?source=ifltnvsnv0000001

Comment:

By Don McCanne, M.D.

This article is truly remarkable because of its source. The Motley Fool “champions shareholder values and advocates tirelessly for the individual investor.” Although they didn’t get everything right (they would include private insurance options and would have no requirement to even be insured), nevertheless this is a particularly strong statement for Medicare for All from a Wall Street source that is just now joining the parade.

Perhaps even more remarkable are the comments posted in response to this article. Considering that these comments are from the investment community, there is strong support for Medicare for All. Inevitably, as with most comment sections, there is a representation of ill-informed, ideologically-driven and sometimes belligerent comments, but those can be ignored.

We should take home from this the lesson that many in the investment community understand that Medicare for All really does make sense from the business perspective. We should tailor our message accordingly.

New York City Labor Council endorses H.R. 676

By Kay Tillow
Single Payer News, July 21, 2013

The Executive Board of the New York City Central Labor Council, AFL-CIO, unanimously approved a resolution supporting H.R. 676, national single-payer health care legislation, sponsored by Congressman John Conyers Jr., D-Mich.

NYC CLC President Vincent Alvarez calls this resolution “Labor’s way of standing up for the health and well-being of working men and women and their families,” noting “The national legislation is a true means of controlling ever-increasing health care costs, while ensuring that Americans get the medical care they so desperately need.”

In the resolution, the Council notes that almost every union is forced to battle and sacrifice to sustain health care benefits for members. The Council also notes that while the United States spends twice as much of our GDP on health care as other developed nations, we remain the only industrialized country without universal health care coverage.

Robert Score, recording-corresponding secretary of IATSE (Theatrical & Stage Employees) Local One, said, “As we all know, nobody in the United States should have to choose between health care and keeping a roof over their heads, food on their table or clothing on their children. H.R. 676 will prevent such calamities. I am thankful to President Alvarez for guiding the NYC CLC to endorse H.R. 676.” IATSE Local One submitted the resolution that was passed.

The NYC CLC, the 146th CLC to endorse H.R. 676, represents 300 local unions with a total membership of 1.3 million.

In other news, on July 19 Congresswoman Loretta Sanchez of California’s 46th district became the 44th co-sponsor of H.R. 676.

*

H.R. 676 would institute a single-payer health care system by expanding a greatly improved Medicare to everyone residing in the U.S.

H.R. 676 would cover every person for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental (including oral surgery, periodontics, endodontics), mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care and correction, hearing services including hearing aids, chiropractic, durable medical equipment, palliative care, podiatric care, and long-term care.

H.R. 676 ends deductibles and co-payments. H.R. 676 would save hundreds of billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs.

In the current Congress, H.R. 676 has 44 co-sponsors in addition to Conyers.

H.R. 676 has been endorsed by 605 union organizations including 146 Central Labor Councils/Area Labor Federations and 43 state AFL-CIO’s (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, NE, NJ, NY, NV, MA, RI, NH, & ID).

For further information, a list of union endorsers, or a sample endorsement resolution, contact: Kay Tillow, All Unions Committee for Single Payer Health Care–HR 676 c/o Nurses Professional Organization (NPO), 1169 Eastern Parkway, Suite 2218, Louisville, KY 40217. Phone: (502) 636-1551. E-mail: nursenpo@aol.com. Website: unionsforsinglepayer.org.

Medicare ‘cost-savings’ rules pushing costs onto patients

By Robert Kuttner
The Boston Globe, July 18, 2013

The cost of Medicare, the top driver of runaway entitlement outlays, seems to be stabilizing at last. For the past three years, Medicare inflation has moderated to an annual average of 3.9 percent. But if you look more deeply, a lot of these supposed savings are actually a shift in costs to patients. As Congress and the administration devise new ways to restrain Medicare, this disguised form of rationing is likely to worsen.

I had a vivid glimpse of this trend in my own family this past winter. In late February, my mother, age 99, had a bad fall. She was taken by ambulance to the closest hospital, Mass. General. Miraculously, she broke no bones, but her face was so badly swollen and bruised that she was unrecognizable and in severe pain.

My mother ended up staying four days. A couple of days in, we got an unpleasant financial surprise. Even though she was placed in the MGH’s maxillofacial inpatient unit, where she got excellent care, my mother was classified as being there “for observation” – meaning that she was considered an outpatient for billing purposes.

This meant that the bill – over $20,000 – was coded under the Medicare outpatient category (Part B) with a 20 percent patient co-pay. Being classed as an outpatient also disqualified my mother from any Medicare benefits in a rehab facility or skilled nursing home after she was discharged.

How could a 99-year-old badly injured woman on an inpatient unit be an “outpatient?” And why would Mass. General, one of our most distinguished community resources, do such a thing?

The culprit, it turns out, is Medicare cost containment.

In order to cut costs – actually shift them, partly to hospitals and partly to patients – Medicare applies extreme financial pressure on hospitals to book admissions as outpatients whenever possible. This shifts them from Medicare Part A (the hospital program) to Medicare Part B, which is designed to cover only doctor bills. The hospital gets paid a lot less and the patient gets stuck for a lot more.

Medicare does this through outside, for-profit vendors known as “recovery audit contractors,” who are paid based on how much they save Medicare. They achieve savings by punishing hospitals after the fact if a patient who might have been booked as an outpatient is classified by the admitting doctor as an inpatient. The contractor only gets paid when it overturns a medical decision – which sure seems like a gross conflict of interest.

So if the emergency room doctors make the medical judgment that a patient needs to be admitted, and the audit later concludes that the condition turned out to be not serious enough and the patient should have been considered an outpatient, the hospital not only doesn’t paid at the inpatient rate, it doesn’t get reimbursed at all.

The hospital can appeal, but appeals are often more expensive than just eating the cost. They typically take three or four years before they get to an administrative law judge. The patient can also appeal, but this is so unusual that the quality organization that supposedly monitors the process did not know how to handle my mother’s appeal. Mass. General reviewed my mother’s case and concluded that given Medicare rules, the “outpatient” classification was appropriate even though my mother was not discharged for four days.

A recent study by the journal Modern Healthcare reported that Medicare reimbursements for complex “outpatient” procedures, such as pulmonary treatments and ultrasounds, paid the hospital as little as two cents on the dollar for its charges.

Hospitals, needless to say, hate this system, and for good reason. “It makes no sense medically,” says John Belknap, Mass. General’s director of corporate compliance. “We deliver the same care to patients whether the classification is inpatient or observation. There is the presumption that the case is different, but it’s the same bed and the same nurse.”

The American Hospital Association has a lawsuit pending against Medicare to overturn the whole concept. Medicare, in an effort to settle the suit, partly modified its policy last March and hospitals denied claims by auditors will now be permitted to rebill in a less expensive category. But the suit is going forward. An official of the American Hospital Association told me that as hospitals have responded defensively to avoid getting punished, doctors end up getting second-guessed.

This system was the result of two George W. Bush-era laws aimed at reducing Medicare costs using “market incentives.” In 2003, the Medicare Modernization Act directed Medicare to conduct a demonstration project to use outside auditors to recover excessive hospital costs after the fact. After the three-year demonstration, held in five states including Massachusetts, recovered $900 million, Congress made it national and mandatory in the Tax Relief and Health Care Act of 2006, to take effect in 2010.

Today, hospital resources are wasted in complying with these arbitrary rules, and a lot of money goes into the pockets of the Medicare contractors or is absorbed by patients. The system doesn’t deter patients from seeking unnecessary treatment, since the process is one of bewildering complexity and patients typically learn about it only when they get the bill.

Though Medicare administers these rules, Medicare officials don’t necessarily consider them a sensible way to balance good medical care with cost containment. Don Berwick, an expert on cost-effective medicine, was interim national head of the Medicare program in 2010 and 2011 until Republicans blocked his confirmation as the permanent appointee. Berwick, who is now a candidate for governor of Massachusetts, is a critic of the current use of the categories of observation and inpatient to contain costs. “It’s a blunt instrument,” he told me. “The way it often nets out is that the patient pays more. The patient has far less sophistication and power in the system than the hospitals and the medical specialty societies.”

The big players in the system – hospitals, doctors, insurers – spend a small fortune working to game it, while patients remain in the dark. Thirty years of cost containment efforts using market incentives, beginning with the creation of health maintenance organizations in the Nixon era, have not altered the fundamental inefficiencies in the system. The more complications the forces of cost containment add, the more money the big players spend working the rules.

In addition to imposing gimmicks to shift costs to patients, Congress works with the health industrial complex to deny Medicare far more consequential savings. The privatized Medicare drug benefit, enacted in 2003, explicitly prohibits Medicare from negotiating bulk discounts with pharmaceutical companies. Medicare Part C allows commercial HMOs to target healthy seniors and reap big profits. These two gifts to big commercial players cost Medicare hundreds of billions of dollars.

The latest fad in the ideology of using commercial incentives and intermediaries to contain costs goes under the name of consumer-directed care. The idea is to combine tax-favored “health savings accounts” with high-deductible health insurance plans and to rely on the consumer’s capacity to shop around for the most suitable plan. But as the system becomes ever-more convoluted, the idea of consumers having the knowledge or market power to intelligently navigate it is laughable.

Converting Medicare to a voucher, as proposed by many Republicans, would make the cost-shifting trend explicit. People would get a fixed sum to buy private health insurance. But the fixed sum would likely cover only a bare-bones plan, and many seniors would have to bear more of the expense of getting sick – or forgo necessary care. The affluent could pay out o
f pocket or buy more expensive policies. Unless Congress devises more sensible and fundamental reforms, cost cutting by cost shifting is our likely future.

Happily, my mother has fully recovered, and celebrated her 100th birthday last week. Happily, too, she avoided the out-of-pocket costs associated with her “observation” status, because she is one of a minority of seniors with supplemental insurance that covers bills that Medicare shifts to patients. But that policy costs over $3,000 a year, and most elderly people can’t afford such extra insurance.

Medicare has been one of the crown jewels of American social policy. Historically, it has been far more cost effective than the commercial parts of the system because it has far fewer middlemen. Today, however, instead of being a model of a comprehensive national system that provides Medicare for all, Medicare is at risk of being pushed into the commercialized model that has made the rest of America’s health system such a costly and inefficient mess.

The risk is that as Congress seeks Medicare savings, it will require the Centers for Medicare and Medicaid Services to come up with more such self-defeating cost-containment tricks. Gimmicks that take money out of Medicare are the wrong means to address the federal deficit. The reform of Medicare is properly part of the larger project of getting a comprehensive and universal health coverage system.

Robert Kuttner’s new book is “Debtors’ Prison: The Politics of Austerity Versus Possibility.’’ He is co-editor of The American Prospect and a senior fellow at Demos.

http://www.bostonglobe.com/opinion/2013/07/18/medicare-disguised-form-rationing/W6sF7dkTW08oGOlSekzlFI/story.html

How Much Could Medicare for All Save You?

By Rich Smith
The Motley Fool, July 21, 2013

The government put a key piece of Obamacare back on the shelf last week, when it announced that companies employing more than 50 workers will have an extra year to begin offering health insurance without facing fines.

Whether you consider this good news or bad news probably depends on whether you were a fan or a foe of the Affordable Care Act in the first place.
But could it be that the ACA isn’t really needed at all? Could an alternative idea — “Medicare for all” — actually do a better job of controlling medical costs, and making health care affordable for Americans?

Obamacare — but cheaper

A new survey released by the number-crunching technocrats at NerdWallet last month clearly illustrates how extending Medicare coverage to all Americans might cut costs for everyone. According to NerdWallet, Medicare generally pays out no more than $0.27 for every dollar that hospitals bill it for medical services — a savings of 73%. Put another way, an uninsured patient receiving the same care as is provided to a patient covered by Medicare can expect to pay nearly four times as much.

And that’s just the average. Echoing the findings of a Time magazine report earlier this year, NerdWallet’s health-care survey noted that the prices charged by various hospitals offering the same procedure can vary widely. As you can see in the far-right column of the pricing chart, you could easily end up paying 30 to 40 times as much for a stay at one hospital than at a hospital down the road, for the same treatment.

Obamacare — but more efficient

How does a 73% discount on medical bills compare to what’s promised under the ACA?

Well, under the current structure, Obamacare works as a plan to require patients to sign up for private health insurance plans. Yet according to Forbes, many of these private insurers offer their members discounts of as little as 20% off hospitals’ ordinary pricing.

One of the standouts, Blue Cross plans from WellPoint  (NYSE: WLP  ) , is sometimes able to negotiate discounts as large as 60% — still far short of the average discount of 73% with Medicare.

Obamacare — but better

Harvard Medical School visiting professors David Himmelstein and Steffie Woolhandler recently noted on the pages of The New York Times that a Medicare-for-all health care system — known commonly as “single-payer” — is an incredibly efficient operation, in terms of costs.

On average, only 2% of the revenues that flow through Medicare are needed to cover overhead costs. In contrast, patients who subscribe to private health insurance spend 14% of their money — seven times as much — just paying for the overhead costs doctors incur from juggling the multitude of insurance procedures required for different patients subscribing to insurance plans.

Other commenters, such as Dr. Dave Dvorak, writing in the April 2013 issue of Minnesota Medicine, put the cost of Obamacare even higher, arguing that “a staggering 31% of U.S. health care spending goes toward administrative costs, rather than care itself.” As Dr. Dvorak notes, while “Obamacare … is expected to extend coverage to 32 million more Americans,” it does so by “expanding the current fragmented, inefficient system” and is likely to “do little to rein in health-care spending.”

In contrast, the U.S. government itself agrees that the ACA — the system we’ve settled upon instead of offering Medicare for all — costs more than a move to a cheaper, more efficient, and better single-payer system. The U.S. Government Accountability Office calculates that a switch to single-payer would shave $400 billion a year off the national health-care bill.

Little wonder, then, that a 2008 survey published in the Annals of Internal Medicine found that 59% of physicians polled support Medicare for all.

A government takeover?

So Medicare for all is cheaper, more efficient, and better than Obamacare — but isn’t it a “government takeover” of health care?

It needn’t be.

If an individual consumers think they’re better off with a private health insurance plan from WellPoint — or from UnitedHealth Group, Aetna, or Cigna — then fine. They could still sign up for one of those, either as a supplement to Medicare-for-all or, if they prefer, as an exclusive plan, and choose not to participate in Medicare at all. For that matter, there should be no need to require anyone to buy any insurance whatsoever.

All that’s really required for Americans to begin reaping the 73% savings of a Medicare-for-all plan is to open up Medicare enrollment to everybody. Give everyone the right to sign up for Medicare, rather than requiring us all to sign up for a private insurance plan under the ACA. And then let the marketplace decide if Medicare for all is really as good an idea as NerdWallet’s survey makes it sound.

PNHP note: The arrangements described above, namely, the proposed co-existence of private health insurance plans with a Medicare-for-all system, clearly indicate that the author is speaking of a “public option” rather than a single-payer system. Nonetheless, we offer it as further evidence that wide swaths of the U.S. public, including those associated with the financial-services company The Motley Fool, are aware of the compelling evidence in favor of an improved Medicare for all.

http://www.fool.com/investing/general/2013/07/21/how-much-could-medicare-for-all-save-you.aspx#.UevtGUalfbA.email

The end of Obamacare? Think again

By Philip Caper, M.D.
Bangor (Maine) Daily News, July 18, 2013

Earlier this month, the Obama administration announced a delay in the requirement that many employers offer health insurance to their employees or pay a hefty fine, a key part of Obamacare, the federal health care reform legislation. This was greeted (with glee) by many who oppose the law as a sign that it is beginning to unravel.

I disagree. Unless we are able to do something much simpler and more effective sooner, implementation of this incredibly complex and imperfect law will continue, in fits and starts, for many years.

Given the law’s complexity and reliance on so many unpredictable factors, I am not surprised that its implementation is encountering glitches. But I am surprised that there haven’t been more, due both to technical problems and efforts by opponents of universal health care to sabotage it.

The objectives of any effective health care system are to provide access to health care of high quality and reasonable cost to everybody. By international standards, the current U.S. system fails miserably. Even if Obamacare were to work perfectly, it would leave tens of millions of our people uninsured and do little to control overall costs or improve quality, although it does attempt to make some moves in that direction.

Obamacare tinkers with our existing system of private, employment-based, for-profit health insurance, with its thousands of different and unequal programs. Not only is this approach unfair, but it creates almost insurmountable barriers to achieving those three cardinal objectives.

Equality, expressed as equal de jure and de facto rights, is a strong theme in American politics. Since the Civil War, we have seen fitful but unmistakable progression toward a more equal society. Women’s suffrage was passed through a constitutional amendment in 1920, after a 70 year struggle. The Civil Rights and Voting Rights Acts were passed by the Congress in the mid-1960s after a struggle of well over 100 years. The marriage equality movement has made steady progress, initially through the courts and more recently by legislative actions and by popular vote, after many years contentious struggle.

Each of these human rights incubated for a very long time, and were characterized by fitful progress, as last month’s Supreme Court decision gutting an important part of the Voting Rights Act has recently demonstrated.

The Affordable Care Act represents a major lurch (although a belated and imperfect one) toward health care as a human right in the U.S. We still have a long way to go. But as the sea change in attitudes toward gay rights in recent years demonstrates, progress can accelerate when conditions are favorable.

Despite its serious flaws, Obamacare has benefits, some intended and others not. One major barrier to reform of our health care system has been apathy on the part of people who already have good health care coverage (“I’ve got mine”) or who have been lucky enough not to need health care (the young and healthy), and are therefore unaware of our system’s many problems.

That’s about to change. Due to its requirement that as many people as possible have health insurance (the individual and employer mandates) the apathetic population is about to become dramatically reduced. Like it or not, many more people in the U.S. are about to become engaged in the health care system.

Additionally, once the government has gotten into the business of requiring that people buy private insurance, a product that is costly, unpopular and may be of poor quality, the federal government’s exclusive focus on Medicare and Medicaid will have to broaden to include the newly mandated private insurance products.

Control of overall health care costs has been an elusive goal in every country. Because of our private health care system’s massive wastefulness, the problem is much worse in the U.S. Our system costs almost twice the international per-capita average.

This situation persists largely because of the reluctance of our politicians to directly control the prices of health care, the extreme fragmentation of the way we finance care, and our ill-advised and ill-fated obsessions with health care as a business and “letting markets work.” As is becoming increasingly clear (and as I have written before), markets don’t work in health care.

How much easier our lives would be and better our health care would be if we, like every other wealthy country, had a unified and universal system that would benefit everybody, and provide us with a means to budget our system’s overall costs. That would go a long way toward elimination of the intrusive micromanagement of health care decisions and denials of care that doctors suffer under and patients suffer from.

Such restrictive micromanagement of health care by the private sector would not be tolerated by doctors or patients in any other country and should not be tolerated in the U.S.

Over the long arc of policy evolution in the U.S., we are actually approaching the goal of health care as a human right. Health care was overwhelmingly privately funded until the passage of Medicare and Medicaid in 1965. More than 60 percent of health care costs in the U.S. are now publicly funded. Obamacare will increase that percentage.

Let’s do all we can to continue and accelerate that trajectory. Let’s realize we’re all in this together and finish the job.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com.

http://bangordailynews.com/2013/07/18/health/the-end-of-obamacare-think-again/

Kuttner on Medicare shifting costs to patients

Medicare ‘cost-savings’ rules pushing costs onto patients

By Robert Kuttner
The Boston Globe, July 18, 2013

The cost of Medicare, the top driver of runaway entitlement outlays, seems to be stabilizing at last. For the past three years, Medicare inflation has moderated to an annual average of 3.9 percent. But if you look more deeply, a lot of these supposed savings are actually a shift in costs to patients. As Congress and the administration devise new ways to restrain Medicare, this disguised form of rationing is likely to worsen.

In order to cut costs — actually shift them, partly to hospitals and partly to patients — Medicare applies extreme financial pressure on hospitals to book admissions as outpatients whenever possible. This shifts them from Medicare Part A (the hospital program) to Medicare Part B, which is designed to cover only doctor bills. The hospital gets paid a lot less and the patient gets stuck for a lot more.

Medicare does this through outside, for-profit vendors known as “recovery audit contractors,” who are paid based on how much they save Medicare. They achieve savings by punishing hospitals after the fact if a patient who might have been booked as an outpatient is classified by the admitting doctor as an inpatient. The contractor only gets paid when it overturns a medical decision — which sure seems like a gross conflict of interest. The hospital not only doesn’t paid at the inpatient rate, it doesn’t get reimbursed at all.

The big players in the system — hospitals, doctors, insurers — spend a small fortune working to game it, while patients remain in the dark. Thirty years of cost containment efforts using market incentives, beginning with the creation of health maintenance organizations in the Nixon era, have not altered the fundamental inefficiencies in the system. The more complications the forces of cost containment add, the more money the big players spend working the rules.

The latest fad in the ideology of using commercial incentives and intermediaries to contain costs goes under the name of consumer-directed care. The idea is to combine tax-favored “health savings accounts” with high-deductible health insurance plans and to rely on the consumer’s capacity to shop around for the most suitable plan. But as the system becomes ever-more convoluted, the idea of consumers having the knowledge or market power to intelligently navigate it is laughable.

Medicare has been one of the crown jewels of American social policy. Historically, it has been far more cost effective than the commercial parts of the system because it has far fewer middlemen. Today, however, instead of being a model of a comprehensive national system that provides Medicare for all, Medicare is at risk of being pushed into the commercialized model that has made the rest of America’s health system such a costly and inefficient mess.

The risk is that as Congress seeks Medicare savings, it will require the Centers for Medicare and Medicaid Services to come up with more such self-defeating cost-containment tricks. Gimmicks that take money out of Medicare are the wrong means to address the federal deficit. The reform of Medicare is properly part of the larger project of getting a comprehensive and universal health coverage system.

If you have time, you should read the full article: http://www.bostonglobe.com/opinion/2013/07/18/medicare-disguised-form-rationing/W6sF7dkTW08oGOlSekzlFI/story.html

Comment:

By Don McCanne, M.D.

A prevailing meme is that patients are going to have to bear more of the costs of health care if we ever expect to bring costs under control. Although there are far more equitable and effective methods of controlling costs, this dangerous concept of the need of the patient to become financially engaged is now pervasive.

The private insurance industry has been quite innovative in developing both direct and indirect methods of shifting more health care costs to patients, thereby slowing the increases in premiums, which in turn keeps their insurance products more competitive. This places the health and the finances of patients at risk.

Employers are now adopting changes to their benefit programs with the same goal of shifting more costs to patients. Employers, of course, are interested in controlling the costs of their health benefit programs. This also places the health and the finances of patients at risk.

What is revolting is that this alarming trend has now extended to Medicare, presumably with the intent of shifting costs from the government to the patients. This too places the health and finances of patients at risk. This is totally unnecessary since the government has the power to pay the right amount for the right care – a power that insurers, employers and individual patients do not have.

Is health policy in the United States to be driven by a highly flawed meme? A meme that harms patients’ health and finances? As Robert Kuttner says, “the reform of Medicare is properly part of the larger project of getting a comprehensive and universal health coverage system.” Patients should really care about this. Your health should not depend on how much green stuff you have in your pockets.

Forty Hours Is Full Time Act of 2013

S.1188 -- Forty Hours Is Full Time Act of 2013

113th Congress, First Session
The Library of Congress

To amend the Internal Revenue Code of 1986 to modify the definition of full-time employee for purposes of the individual mandate in the Patient Protection and Affordable Care Act.

IN THE SENATE OF THE UNITED STATES
June 19, 2013

Ms. COLLINS (for herself and Mr. DONNELLY) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL
To amend the Internal Revenue Code of 1986 to modify the definition of full-time employee for purposes of the individual mandate in the Patient Protection and Affordable Care Act.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the `Forty Hours Is Full Time Act of 2013′.

SEC. 2. DEFINITION OF FULL-TIME EMPLOYEE.
Section 4980H(c) of the Internal Revenue Code of 1986 is amended–
(1) in paragraph (2)(E), by striking `by 120′ and inserting `by 174′; and
(2) in paragraph (4)(A) by striking `30 hours’ and inserting `40 hours’.

http://thomas.loc.gov

And…

ObamaCare’s Definition of a Full-Time Job Needs Revising

By Sen. Joe Donnelly (D-Indiana) and Sen. Susan Collins (R-Maine)
The Wall Street Journal, July 18, 2013

In Lafayette, Ind., a school district cut the hours of 200 support staff to no more than 29 per week. In Bangor, Maine, the school system is preparing to track and cap the number of hours worked by substitute teachers to ensure that they don’t work more than 29 hours a week. Elsewhere, in Portland, Maine, a small business reduced a part-time employee’s hours from 35 to 29.

We are hearing reports like this from across the country. Why is this happening?

It’s happening because under the Affordable Care Act a “full-time employee” is defined as anyone working an average of 30 hours a week, rather than the traditionally accepted 40-hour work week. Employers with more than 50 full-time employees or full-time equivalents will be required to provide their employees with health insurance or potentially face a financial penalty, essentially a fine.

This rule is causing a growing number of employers to cut the hours of their workers, and according to one study by the UC Berkeley Labor Center, at least 2.3 million workers are at risk. This provision of the health law is not in the best interests of the country, and it needs to change.

As the economy shows modest signs of recovery, we should be working with employers to encourage additional job growth. Yet we are hearing from small businesses, public school systems and nonprofit organizations, that they are cutting employee hours and forgoing additional hiring in an effort to ensure that they are in compliance with the law.

To address this problem, we have introduced the “Forty Hours is Full Time Act of 2013.” It defines a full-time employee for the purposes of complying with the Affordable Care Act as someone who works an average of 40 hours per week, or 174 hours per month for full-time equivalents.

http://online.wsj.com/article/SB10001424127887323309404578611490682767344.html?

Comment:

By Don McCanne, M.D.

Many employers are in the process of reducing employees’ hours to under 30 per week in order to avoid the requirement to either provide health insurance for their workers or pay a penalty. Not only do these employees end up with no health insurance, they also have their paychecks reduced by about 25 percent. Since most already have modest incomes, this reduction in pay can create severe financial hardship. What can be done?

Senators Collins and Donnelly seem to define the primary problem as the reduction in income that these employees face. By changing the definition of full time work to 40 hours per week for purposes of the Affordable Care Act (ACA), employers will be able to preserve most of their workers’ incomes by employing them for 39 hours, while being relieved of the responsibility of providing health insurance. The employees will still be able to have health insurance since they can then purchase individual plans in the state insurance exchanges. Little does it matter that these are low-actuarial value plans with high-deductibles, and inadequate subsidies to protect family budgets. Oh. Maybe that won’t work so well.

It is not simply the definition of a work week that is wrong. It is the fundamental ACA financing model that is terribly flawed. Trying to fix it with patches such as redefining the work week will never get us where we need to be. We have to change the financing model. (Yes, we need single payer.)

Union leaders: Taft-Hartley plans at risk under ACA

Union Letter: Obamacare Will ‘Destroy The Very Health and Wellbeing’ of Workers

By Tom Gara
The Wall Street Journal, July 12, 2013

The leaders of three major U.S. unions, including the highly influential Teamsters, have sent a scathing letter to Democratic leaders in Congress, warning that unless changes are made, President Obama’s health care reform plan will “destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”

The full letter, below:

———————-

Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.
Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans.

And finally, even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.

We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President
UFCW

D. Taylor
President
UNITE-HERE

http://blogs.wsj.com/corporate-intelligence/2013/07/12/union-letter-obamacare-will-destroy-the-very-health-and-wellbeing-of-workers/

Comment:

By Don McCanne, M.D.

The Affordable Care Act (ACA) was intended to keep insurance obtained through employment intact, while adding coverage for the uninsured through new state insurance exchanges and through an expansion of Medicaid. Among the programs to be protected were the multi-employer Taft-Hartley plans that were collectively bargained between unions and employers. Yet an unintended consequence of ACA seems to have put these plans at risk.

Why? The provision of ACA that exempts employers from a requirement of providing coverage for part-time workers – those working less than 30 hours per week – has provided an opportunity for employers to escape the burden of their health benefit programs by merely rearranging the work schedules of their employees. It is already happening even though the employer requirement does not go into effect for another one and a half years.

Employers can assuage their guilt to some extent since they know that the government will subsidize the plans when their newly part-time employees switch to the insurance exchanges. These subsidies are not available for the Taft-Hartley plans (though employers are able to deduct from taxable revenues the cost of these plans – a tax expenditure).

Another motivation for employers to attempt to reduce the Taft-Hartley plans is that ACA includes a tax to be assessed against so-called Cadillac plans. Little does it matter that these are not plans with some kind of gilded benefits. These are merely standard health plans that have not had benefits stripped out nor have they shifted excessive costs to patients through higher deductibles and other forms of cost sharing. Yet health care costs are now so high that the cost of the standard benefits offered exceed the Cadillac threshold.

Union members gave up major wage increases in order to have secure health care coverage. If they lose their Taft-Hartley plans, it is unlikely that employers would grant the wage increases that they would have received had they not had to spend so much on the health plans, even though economists consider these plans to be paid for by forgone wage increases. The reality is that the economic model we have today transfers much of the productivity of the workers to the wealthiest one percent of our society.

Taft-Hartley was designed as anti-union legislation, though allowing collectively-bargained health benefit programs. Now even those programs are at risk. The anti-union one-percenters are winning the war.

We should remove responsibility of providing health benefits from the employers, but not in a way that shafts their employees. We need to replace our current dysfunctional health care financing system with one that works for everyone, while sharing the costs equitably – a single payer national health program. The solution is so obvious. Why isn’t it catching on?

Healthcare is a Human Right Campaign comes to Calvert, Md.

By Amanda Scott
Southern Maryland Newspapers Online, July 17, 2013

In an effort to bring a universal health care system to Maryland, local chapters throughout the state have been following the footsteps of a successful grassroots campaign by the same name in Vermont.

On Saturday, the Healthcare is a Human Right (HCHR)-Maryland Calvert County Chapter held its inaugural “Healthcare Speakout” at the Calvert Library Prince Frederick to share the movement’s grassroots efforts to achieve universal health care for all Marylanders.

“We’re pushing to start seeing health care as a right — not a commodity,” said Sergio Espana, the state HCHR organizer.

The statewide campaign for universal health care began in December and has since gained traction in several counties where local chapters have been initiated, including Frederick, Howard, Baltimore, Montgomery, Calvert and Carroll counties. According to Healthcare-Now of Maryland’s website, the Maryland chapter of Physicians for a National Health Program and Healthcare-Now of Maryland partnered to create a “Health Care is a Human Right” campaign in Maryland.

In 2011, Vermont was the first state to adopt a universal health care system after the Vermont Workers’ Center launched the grassroots Healthcare is a Human Right Campaign in 2008 in the state. According to the HCHR Vermont website, citizens in Maryland, California, Oregon, New York and Maine are using strategies from Vermont’s campaign.

Stephen Wallace, a member of the Calvert County chapter, said Saturday the campaign is not political.

“It’s not a left or right thing. It’s about people. It’s about people’s health,” Wallace said, adding that people’s concerns about health care “just shouldn’t be there.” Those anxieties, he said, demonstrate that “the [health care] system isn’t working.”

According to Healthcare-Now of Maryland, a universal health care system would create a single-payer, publicly-financed, privately-delivered system that covers all Marylanders.

During Saturday’s “Healthcare Speakout,” four members of the Calvert County chapter shared stories of their experiences with the “broken” system and their hope for a new, universal, single-payer system.

Calvert County chapter member Brandon Johnson of Lusby said that after he and other members of his family had several medical issues, the medical bills “stacked up,” and his parents had to file for bankruptcy.

“That’s flawed. There’s no reason anybody should have that problem,” Johnson said.

Fellow chapter member Liam Fletcher of Prince Frederick said the stories he hears from other people about health care “just makes me sad.”

Fletcher said the movement is about “not putting profit above people,” like he said insurance companies will do.

Robert Wells, another chapter member from Prince Frederick, said, “We have to get rid of the profit-driven system” and the greed, so that everyone can get basic medical care.

“No one deserves to make a profit off of other people’s suffering,” Bobby Morrison, a chapter member from Huntingtown, said.

A universal system, member Cory Johnson said during Saturday’s presentation, would eliminate co-pays, deductibles and insurance hassles.

Cory Johnson also explained that there are many myths about such a system, such as: it can’t happen; it will never work; publicly-funded health care is too expensive and less effective; the government will choose doctors and make medical decisions; and it’s a “socialized” system.

“So, it’s not just the point that the system is bad for those who don’t have [insurance]. It’s also bad for those who do have it,” Cory Johnson said.

According to HCHR-Maryland, under the Affordable Care Act, there will still be more than 436,000 Maryland residents without health care. In 2012, according to Saturday’s presentation, there were 802,000 uninsured Maryland residents, accounting for 13.8 percent of the total population.

In 2010 in Maryland, there were an estimated 15,000 medical bankruptcy claims, according to the presentation. In its first year, a universal health care system in Maryland would save the state an estimated $7 billion, or 15 percent of existing health care spending, by reducing administrative costs and anti-competitive marketing practices, according to the presentation.

In addition, HCHR-Maryland claims the U.S. spends more money on health care than any other country and is less effective. A universal health care system could save the country more than $570 billion annually if implemented nationally, according to the presentation.

To increase awareness of the campaign in Calvert County, the chapter plans to host more “Healthcare Speakouts” and go door-to-door to meet with residents.

http://www.somdnews.com/article/20130717/NEWS/130719299/1074/healthcare-is-a-human-right-campaign-comes-to-calvert&template=southernMaryland

TIAA-CREF shareholders meeting hears call to divest from ‘unethical’ private health insurers

Shareholder’s comments provoke response from company’s president

News release, Healthcare-NOW!, July 17, 2013

CHARLOTTE, N.C. – Having suffered an earlier rejection by the leadership of TIAA-CREF of a shareholders resolution calling on the huge, nonprofit investment company to divest its funds from private health insurance firms because of the latter’s “unethical behavior,” a spokesperson for the divestment group took the microphone at the organization’s annual meeting Tuesday and urged just such a course of action.

Shareholder Sandra Fox, speaking on behalf of herself and others who have appealed to TIAA-CREF to divest its holdings in WellPoint and other giant health insurers, said such firms are not managed in an “exemplary and ethical manner” – a criterion for inclusion in the company’s portfolio – and therefore should be scrapped.

Going into to the meeting, Fox said: “The practices of these companies are anything but socially responsible. They make money by denying coverage, raising premiums, and increasing co-pays and deductibles, deterring patients from seeking care. Their everyday operations result in high overhead expenses, spiraling health care costs, worsening health, premature loss of life, and bankruptcy of countless Americans.”

Speaking from the floor to her fellow shareholders, she reiterated those points and stressed that the big health insurers have been repeatedly cited and fined by regulatory bodies and the courts for improper, unethical conduct.

Roger Ferguson, president and CEO of TIAA-CREF, who chaired the meeting, acknowledged Fox’s comments and said her group’s efforts had already made an impact. Ferguson said MSCI, its vendor for rating companies, had downgraded the stock of two health insurance companies based on the information her group had provided. He did not name which two companies they were.

Ferguson also said the dialogue on this issue would continue.

TIAA-CREF is one of the nation’s top financial services companies. It manages retirement, life insurance and other funds for people in academic, medical, faith-based and cultural fields. Its annual meeting was held Tuesday at its gated office complex in Charlotte.

Fox, a longtime social worker who lives in Pittsburgh, cited the findings of Harvard Medical School research and the congressional testimony of insurance industry whistleblowers to support her charge that private health insurers are not serving the public interest, but in fact are doing serious harm.

She is part of a larger national movement, the Divestment Campaign for Health Care, which is supported by Healthcare-NOW!, the national single-payer health care advocacy organization, and whose website is HealthCareNotWealthfare.us.

On their website, the group says the private companies should be replaced by a single-payer, improved-Medicare-for-all system, which “would provide excellent coverage to all by taking the private health insurance companies out of the equation and putting the needs of patients before profit.”

Pioneer Accountable Care Organizations disappoint

Pioneer Accountable Care Organizations succeed in improving care, lowering costs

Centers for Medicare and Medicaid Services, July 16, 2013

Today, the Centers for Medicare & Medicaid Services (CMS) announced positive and promising results from the first performance year of the Pioneer Accountable Care Organization (ACO) Model, including both higher quality care and lower Medicare expenditures.  Made possible by the Affordable Care Act, the Pioneer ACO Model encourages providers and caregivers to deliver more coordinated care for Medicare beneficiaries. This model, launched by the CMS Innovation Center, is part of the Affordable Care Act’s efforts to realign payment incentives, promoting high quality, efficient care for Medicare beneficiaries.  ACOs, including the Pioneer ACO Model and the Medicare Shared Savings Program, are one way CMS is providing options to providers looking to better coordinate care for patients and use health care dollars more wisely.

“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” said CMS Administrator Marilyn Tavenner.  “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.”

http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-Releases/2013-Press-Releases-Items/2013-07-16.html

And…

A Pillar of Obamacare’s Cost-Saving Effort Falls Short

By Devin Leonard
Bloomberg Businessweek, July 16, 2013

It’s no secret that the Obama administration’s effort to roll out health-insurance exchanges in every state is turning out to be more challenging than expected. Its campaign to lower health costs isn’t faring any better. On Tuesday, the Centers for Medicare and Medicare Services announced middling first-year results for the administration’s highest profile cost-control effort: the Pioneer Accountable Care Organization Model.

Obamacare supporters have long promised that Accountable Care Organizations — groups of hospitals and doctors that tend to large flocks of Medicare patients, with an eye toward keeping them out of the hospital — would be integral to bringing down the nation’s health-care costs. ACOs are supposed to come up with innovative ways of keeping patients in better shape by focusing on preventive measures while saving money in the process. Under the plan, the ACOs themselves are to be rewarded with the share of the savings they generate.

Thirty-two health care provider groups signed up for the pioneer program intended to promote the new model, but the Centers for Medicare and Medicare Services said Tuesday that only 13 of them generated enough savings to qualify for a cut. Two participants actually lost money instead.

The news wasn’t all bad. The pioneers produced better-than-average results on cholesterol control for diabetes patients. “Overall, we are very excited about the results,” Patrick Conway, chief medical officer for the Centers for Medicare and Medicare Services, told the Wall Street Journal. But a significant percentage of the pioneers weren’t so thrilled, and nine are slated to exit the program.

It’s much too soon to call the pioneer program a failure. It’s also premature to say the ACO model is one that will save vast amounts sums of money. That hasn’t stopped some of the law’s staunchest supporters, who might want to temper their rhetoric after Tuesday’s report.

http://www.businessweek.com/articles/2013-07-16/a-pillar-of-obamacares-cost-saving-effort-falls-short

And…

Pioneer ACOs Year One: On The Path To A Learning Health Care System

By Douglas Hastings
Health Affairs Blog, July 17, 2013

The Pioneer Model should be seen as part of a crucial phase of testing alternative payment and delivery models in an effort to achieve greater value in health care.  One year’s results should not be seen as a definitive outcome or leading to a dispositive conclusion, but rather as a valuable source for learning.

The participating providers are required to be both financially and clinically integrated.  The ACOs must, among other core attributes, have an effective governance and leadership structure, have the ability to apply evidence-based medicine and care coordination processes, meet quality measures, have a savings distribution formula, develop a robust electronic health record infrastructure, and, importantly, be able to effectively engage patients in their care and their health.

ACO skeptics clearly remain.  Among the doubts and cautions that have been raised are that ACOs will drive insufficient change in physician behavior and patient engagement, result in insufficient savings, create a specialist (and thus patient) backlash, suffer from lack of agreement over measures and metrics, and drive up prices due to consolidation.  These are legitimate concerns.  But such concerns should not mean that the testing should slow down.  Rather, in my view, it should accelerate, given some early positive results and the ongoing cost and quality challenges faced by our health care system.

http://healthaffairs.org/blog/2013/07/17/pioneer-acos-year-one-on-the-path-to-a-learning-health-care-system/

Comment:

By Don McCanne, M.D.

The Pioneer Accountable Care Organizations (ACOs) were already existing health care organizations that were selected as potentially exemplary models that could show the rest of the nation how well ACOs can work to achieve higher quality at lower costs. We now have a report from CMS of the initial “successes” of this model. Although the rhetoric from CMS is quite rosy, most reporters were not impressed, as the Bloomberg Businessweek response demonstrates.

Considering the added administrative hassle, the savings were negligible, with only 13 of the 32 organizations saving enough to receive “shared savings” from CMS, and 2 actually lost money.

Even the supposed quality gains were unimpressive since they represented only 15 measurements which the organizations were told in advance would be used to determine whether or not they met quality standards. These teach-to-the-test gains can hardly represent the overall quality status of each organization.

It is time for our policy makers to stop wishing that the ACO model is the nirvana of health policy and get on with endorsing a proven model of enhancing quality while controlling costs – a single payer national health program – a model that would have the additional benefit of actually covering everyone.

Tempering P4P expectations

An Examination of Pay-for-Performance in General Practice in Australia

By Jessica Greene Ph.D.
Health Services Research (HSR), August 2013

This study examines the impact of Australia’s pay-for-performance (P4P) program for general practitioners (GPs).

There was a short-term increase in diabetes testing and cervical cancer screens after program implementation. The increase, however, was for all GPs. Neither signing onto the program nor claiming incentive payments was associated with increased diabetes testing or cervical cancer screening.

http://onlinelibrary.wiley.com/doi/10.1111/1475-6773.12033/abstract

And…

The Effect of Pay-for-Performance in Nursing Homes: Evidence from State Medicaid Programs

By Rachel M. Werner M.D., Ph.D., R. Tamara Konetzka Ph.D., Daniel Polsky Ph.D.

Medicaid-based P4P in nursing homes did not result in consistent improvements in nursing home quality. Expectations for improvement in nursing home care under P4P should be tempered.

http://onlinelibrary.wiley.com/doi/10.1111/1475-6773.12035/abstract

Comment:

By Don McCanne, M.D.

More evidence that pay-for-performance (P4P) does not improve quality nor reduce costs.

Single payer does.