PNHP

Insurers will continue to skirt regulations

Insurers will continue to skirt regulations

Insurers Seek Right Balance of Risk, Reward

By Anna Wilde Mathews
The Wall Street Journal, July 14, 2013

In the insurance business, some customers are more desirable than others—and insurers will be seeking to woo them in preparation for the health law’s new marketplaces.

Customers not only bring revenue in the form of the premiums they pay. They also come with costs, since the insurer will be on the hook for medical expenses. Traditionally, that has made healthier people the best insurance risk. Insurers often could decline to sell plans to people with health problems, or charge them more.

Now, the health law is changing the rules of the game. Under its requirements, insurers must sell plans to all comers, and the rates can’t be tied to customers’ health. Less obviously, the law includes mechanisms that are designed to ensure that individual companies aren’t punished if they draw a mix of sicker consumers.

Young and healthy people will still be needed to help balance out the costs of sicker customers. But, in addition, some people who weren’t sought after in the past may become profitable because of the law’s payment structure. Among them: people who have chronic conditions such as diabetes, but who can keep their diseases managed and avoid big costs such as hospital visits, said Shubham Singhal, a director at consulting firm McKinsey & Co. That is because insurers can be paid more to cover consumers based on their diagnoses.

Since insurers can no longer pick and choose their customers, they will employ a range of subtler tools, including marketing campaigns and carefully designed plans aimed at the customers the insurers most want.

“They want to attract the right risk,” said Siva Namasivayam, chief executive of SCIO Health Analytics Inc. His firm helps insurers identify customer types, such as “entry-level singles” and “healthy baby boomers,” each with projections on likely costs. The firm pinpoints, by ZIP Code, where the different types tend to live, so the insurer can target its marketing geographically.

Highmark Inc., a Pittsburgh, insurer, said it has around 100 targeted campaigns aimed at particular types of consumers, including recent college graduates and retirees not yet eligible for Medicare. It sends walk-in tractor-trailers to college campuses and sets up booths at community events such as charity walks. “We have to be more one-to-one than we were historically,” said Steven Nelson, a senior vice president at Highmark.

Blue Cross & Blue Shield of Rhode Island also plans to aim at certain populations, including young men. Last year, the insurer promoted one of its low-cost plans with a campaign that included posters on the walls of men’s bathrooms in bars. “You don’t need beer goggles to fall in love with this health plan,” one slogan said.

http://online.wsj.com/article/SB10001424127887323300004578559371986794206.html

Comment:

By Don McCanne, M.D.

One of the great advantages of the Affordable Care Act was that it would finally bring an end to insurance company chicanery in which they were able to selectively insure more profitable healthy individuals while keeping the more costly sick individuals out of their plans.  At least, that’s what the new requirements for guaranteed issue (they must sell the plans to everyone, not only the healthy) and community rating (they cannot charge higher rates for the sick) were supposed to do. But insurers have a much larger bag of tricks.

Although insurers can no longer reject applicants who fail medical underwriting standards, they have learned to selectively market their plans to healthier populations, and they will continue to do so. They intensify their targeting to younger, healthier individuals while avoiding marketing to higher cost individuals. As this article indicates, an industry has arisen to help insurers select their targets for marketing, based on the health of selected groups or on the average health in geographical regions (ZIP Codes). This adds yet more administrative costs to our system already tremendously overburdened with administrative waste.

Not only do insurers market selectively to the healthier, they also are taking advantage of risk adjustment. Since insurers who take on clients with greater medical problems are paid more through these adjustments, it is to their advantage to include individuals with unfavorable diagnoses but whose health care needs are actually quite minimal. An individual might technically be diagnosed as a diabetic but require very little care, and yet the insurer can receive adjustments that are designed for a more severe diabetic with multiple complications. So it is to their advantage to enroll patients with just a touch of bad disease. They are already doing this in the private Medicare Advantage plans.

If an insurer misjudges and ends up with higher cost risk pools, they can no longer dump only those with greater needs, but they can pull their plans from the regions where they are experiencing high spending.

Insurers are masters at innovation. No matter how many laws and regulations they face, they will always find other ways to work the system. That’s just plain old good business. And that is the problem. We don’t want our health care defined by what is good for the industry; we want it defined by what is good for patients. We won’t get that until we establish our own public system dedicated to the primacy of patients.

And about that Blue Cross & Blue Shield of Rhode Island campaign that included posters on the walls of men’s bathrooms in bars with the slogan, “You don’t need beer goggles to fall in love with this health plan.” Although there are ten categories of essential health benefits, insurers are allowed flexibility within each category. Those young men would be well advised to read their plans carefully to see if they exclude sexually transmitted diseases and injuries while intoxicated. Insurers know no boundaries.

Make Medicare available to all

By Laurence S. Jacobs, M.D.
Democrat and Chronicle (Rochester, N.Y.), July 15, 2013

On July 30, Medicare will be 48 years old. It covers over 50 million Americans — those over 65 and the disabled.

Medicare has improved financial security for the elderly and disabled, and reduced health disparities related to race and socioeconomic status. Medicare recipients go to doctors and hospitals of their choice, not to a restricted panel of caregivers. Medicare has overhead costs of about 2 percent, compared with private insurers’ overheads from 12 percent to over 20 percent.

Medicare does have its flaws; it doesn’t cover vision or hearing problems, and the drug program (Part D) has the insane congressional restriction that it cannot negotiate with pharmaceutical manufacturers over medication costs, the way the Veterans Administration can. That’s why the VA spends 40 percent less for the same drugs.

An improved Medicare for all would make terrific sense. Low overhead, a single set of approved forms (not a separate one for each insurer, as is now the case), no outrageous CEO salaries, no marketing costs, first dollar coverage without co-payments or deductibles, no restrictions on choice of doctor or hospital. All medically approved treatments would be covered, and there would be no issue of physicians refusing to see certain classes of patients because of poorly paying insurance coverage.

Funding, from progressive taxes, would cost people less than they now pay in premium, co-pay, deductible, and out-of-pocket expenses. Further, employers would be rid of health care costs, which impair their global competitiveness. Finally, Medicare as the only payer would be able to negotiate robustly over prices of drugs, medical devices, and hospital bills.

Medicare recipients are happier with their health insurance, have fewer problems with access to care, delays in payment, and the like, and are more likely to have a medical home with a primary care provider who knows them well than are people with private health insurance.

So, why don’t we already have Medicare for all? Because of intense lobbying by those who profit from the status quo, and because of lies by ideologues about government intrusion into health care. It’s the private insurance companies that intrude into medical decision-making, deny expensive care to maximize profits, and restrict access to care.

Medicare for all would simply be a payment mechanism. Ask current Medicare recipients whether the program interferes with their care in any way. Like other developed nations, we need to find a way to offer comprehensive health insurance to all residents. The best way to do this is to improve and expand our Medicare program by making its coverage truly comprehensive, and by enrolling everyone. That would make the birthday of Medicare a truly happy one for all.

Dr. Jacobs is a retired professor of medicine at the University of Rochester School of Medicine and Dentistry.

http://www.democratandchronicle.com/article/20130714/OPINION02/307140021/Guest-essay-Make-Medicare-available-to-all-Jacobs

Pause in honor of Medicare

By Richard Propp, M.D.
Times Union (Albany, N.Y.), July 12, 2013

At this time of year I usually start thinking about the passage of Medicare in July of 1965. How in the world did President Johnson decide to take on Congress to approve such a huge program for seniors? To sum it up, it was just the right thing to do. Why?

A personal story may help. In 1965 I was chief medical resident at Albany Hospital under Professor Richard Beebe. He allowed us to moonlight. I worked in Ravena in the practice of Drs. Mosher and LeFevre. Our elderly patients often had no money for their office visits or medicines. Sometimes they might leave a chicken on Mrs. Mosher’s back door. These folks were forced to rely on charity but had no real access to quality care. It just wasn’t right.

After Medicare was implemented in 1966, there were changes in medicine. Medicare Part A paid for hospital stays and also paid medical residents a better wage. Part B reimbursed outpatient care at 80 cents on the dollar and physicians flourished.

Later on, the disabled and those with kidney failure and ALS were covered as was Hospice care. Why? It was the right thing to do.

Some conservatives have always hated this government program for the elderly along with the program for the poor, Medicaid, that was enacted at the same time. They say that government should not be responsible for any health care. And even now they would privatize Medicare by turning it over to insurance companies through vouchers. You and I, through our Congress and our President, have so far beaten back these efforts. Why did we organize to fight for Medicare? Because it was the right thing to do.

And so, as July 30 approaches, it is proper that we pause to remember the signing of the Medicare Act, which took place at the Truman Library in Independence, Mo., on that day. Here is what Lyndon Johnson said: “No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings they have so carefully put away over a lifetime so that they might enjoy dignity in their later years.”

We honor Presidents Truman, Kennedy and Johnson and their staffs for their foresight and work that sustains our grandparents, parents, children, and generations yet unborn. Harry Truman proposed a national health plan in 1945. John Kennedy had health care on his agenda when he was assassinated in 1963. Lyndon Johnson carried their causes to fruition. And we will celebrate this historic achievement with a Medicare 48th birthday party at noon in West Capitol Park in Albany on Wednesday, July 31. Join us! It’s the right thing to do.

Then we will continue the struggle to improve and expand Medicare for all, as a right. We will do this to obey the ethics of all faiths that instruct us to “love your neighbor as yourself.” It’s the right thing to do.

Dr. Richard Propp lives in Albany and is chair of Capital District Alliance for Universal Healthcare, which he co-founded.

http://www.timesunion.com/local/article/Pause-in-honor-of-Medicare-4662918.php

How human resilience reveals an unnecessarily cruel system

By Andrew D. Coates, M.D., F.A.C.P.
WAMC Northeast Public Radio, July 12, 2013

Recently one of my patients, someone in a very frail state, insisted upon discharge the next day, over my objections. The patient’s spouse was facing cancer and now was the time to be at home, not in the hospital.

But the next day, to my surprise, the patient requested continued hospitalization, not discharge. I probed, thinking that my patient had begun to grapple with the limits upon daily function that illness had imposed.

No, I learned, time together as a couple remained paramount to my patient, no matter what the personal risks. Something else had intervened.

The cancer treatment drugs prescribed for the patient’s partner, I learned, were too expensive. A mail order arrangement made the drugs more affordable, but now a problem with the delivery had delayed the treatment.

My patient’s spouse needed to be home to wait for the delivery, or perhaps to find out where the drugs might be, in hopes of keeping on the treatment schedule.

Instead, the patient’s spouse arrived at the hospital to insist upon the discharge plan.The patient’s partner had decided to delay resolving the problem with the cancer medications.

My patient in turn told the spouse that a rehab stay after the hospital had begun to sound like a better idea. The patient idea was not to burden their spouse, with cancer, with further tasks of bodily care at home.

As I spoke with each of them I further learned that they were afraid they would not be able to afford of the costs of transfer and treatment for post-hospital rehabilitation. As much as they feared being separated, they also feared financial ruin, and had just had the bitter experience of unaffordable costs of cancer drugs.

The stress and anxiety upon this couple was enormous. Yet I was awed by their love, their drive to see things through together as partners.

I was reminded of O. Henry’s classic story “The Gift of the Magi,” in which he sells his watch to buy her a comb for her beautiful hair and she sells her hair to buy him a chain for his magnificent watch.

But in this modern, real-life moment, all sentimentality was dashed, for the situation was not a redeeming tragedy, but a cruel farce, in which all of us seemed trapped.

Here were two people, each with serious, life threatening illness, each sacrificing themselves for the other — needlessly. The cruelty of this system is underscored by our knowledge that the stress of advanced illness can increase the risk of death in the spouse.

We could so easily afford to provide in-home therapies that would preserve and restore personal dignity, in addition to help heal. In reality, home therapies are not affordable or often don’t even exist.

We have state-of-the-art cancer treatments, but the costs of all drugs have been pushed onto individuals relentlessly. In reality, patients delay and forgo necessary care because of the costs of drugs.

We should all find a deep sense of shame and outrage to think that we live in a society where our seniors, people whose lifelong personal sacrifices won the description the “Greatest Generation,” are forced to make these kinds of choices.

Our society has plenty of resources to provide all necessary medical care to this couple. But we have not organized our health system to do it.

Where are the doctors? Where is the spirit of caregiving? We may be awed and inspired by the human resilience of our patients, but we work in a system that fails to serve them, fails us in our own mission.

Our profession has an obligation to change the entire culture and system of caregiving. Our heroic patients and our caregiving colleagues are counting upon us to do it.

Dr. Andrew Coates practices internal medicine in upstate New York. He is president of Physicians for a National Health Program.

You can listen to Dr. Coates’ radio broadcast here: http://www.wamc.org/post/andrew-coates-how-human-resilience-reveals-unnecessarily-cruel-system

What is best health care coverage for part-time workers?

Wegmans cuts health benefits for part-time workers

By Samantha Maziarz Christmann
The Buffalo News, July 10, 2013

Et tu, Wegmans?

The Rochester-based grocer that has been continually lauded for providing health insurance to its part-time workers will no longer offer that benefit.

Until recently, the company voluntarily offered health insurance to employees who worked 20 hours per week or more. Companies are required by law to offer health insurance only to full-time employees who work 30 hours or more per week.

Wegmans employs roughly 1,433 full-time employees and 4,304 part-time employees in the Buffalo Niagara region.

Several Wegmans employees confirmed part-time health benefits had been cut and said the company said the decision was related to changes brought about by the Affordable Care Act.

However, part-time employees may actually benefit from Wegmans’ decision, according to Brian Murphy, a partner at Lawley Benefits Group, an insurance brokerage firm in Buffalo.

“If you have an employee that qualifies for subsidized coverage, they might be better off going with that than a limited part-time benefit,” Murphy said.

That’s because subsidized coverage can have a lower out-of-pocket cost for the insured employee while also providing better benefits than an employer-paid plan.

Under the Affordable Care Act, part-time employees are not eligible for health insurance subsidies if their employer offers insurance.

“It’s a win-win. The employee gets subsidized coverage, and the employer gets to lower costs,” Murphy said.

“As a private company, we don’t share specifics of our employee benefits programs. It’s a given that health care reform will result in some changes to our benefits program, but it will not change our commitment to meeting the needs of our employees,” Wegmans said in a statement.

http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20130710/BUSINESS/130719892/1003

Comment:

By Don McCanne, M.D.

The best coverage for part-time workers? Well, for part-time workers and for everyone else, it would be a single payer national health program. But we don’t have that. So, before we can enact an improved Medicare for everyone, what would be the best way to cover part-time workers under the Affordable Care Act?

During the reform process, the plight of the part-time worker remained an important consideration in trying to design a near-universal system (which it didn’t turn out to be). Part-time workers tend to have very low wages making it impossible to purchase decent insurance on their own, and yet their family incomes are often just barely high enough that they do not qualify for Medicaid.

Congress decided to continue to rely heavily on employer-sponsored health plans for coverage. The problem with part-time workers is that most employers either provided them with no coverage at all, or, if they did, the coverage was often so spartan that it was almost worthless. Although it was decided to require all but the smallest employers to provide employee coverage or face financial penalties, legislators yielded to larger employers who wanted part-time employees to be exempt. The threshold qualifying as part-time was set at 30 hours.

Think of all of the occupations in which flexible, part-time positions are ideal. Large retail sellers, supermarket chains, restaurant and fast food chains, hospitality services, and so forth, serve as examples. Labor costs are a great concern for these employers, and they have struggled with the concept of trying to meet the high costs of adequate health benefit programs.

But look at the opportunity they have with the 30 hour threshold. They no longer have to feel guilty about providing only worthless plans or no plans at all. Under the Affordable Care Act, the government is going to provide part-time employees subsidies inversely related to income, supposedly allowing these people to buy more comprehensive coverage through the exchanges. Employers can walk away, and these employees will get a better deal from the government.

Although it may be a better deal, it’s still not such a hot prospect. Even with subsidies for both premiums and out-of-pocket expenses, these low income individuals will still not be able to afford their portion of the costs and will face financial hardship as a result.

So these employers will be relieved of their responsibility of paying for health care coverage for their part-time employees, and the taxpayers will pick up the tab. Although there are important reasons for bringing an end to employer-sponsored coverage, it is unfair to give these employers special breaks, especially when considering that several members of the Walton family are near the top of the billionaires list. We should pay more taxes so that they can collect more billions?

No. This “win-win,” wherein “the employee gets subsidized coverage, and the employer gets to lower costs,” is a loser for health care equity and justice. As said at the start, we need a single payer national health program.

Problems with Affordable Care Act show need for single-payer system

By Toni Vafi
St. Louis Post-Dispatch, July 11, 2013

As promises of the Affordable Care Act continue to wither, the delay of the employer mandate is cause for more disappointment. Initially there was promise of average savings of $2,500 per family annually and visions of a public option. Universal coverage was assured and the oft-stated “if you like your employer based insurance, you can keep it” was evidence that we weren’t going socialist. These were a few of the goodies we expected under the Patient Protection and Affordable Care Act.

What happened? Gone are the $2,500 savings and the public option. Cost control wasn’t part of the ACA. The public option bothered insurance companies, so it was out. Of 60 million uninsured, the ACA will leave at least 30 million still without coverage, and the employer mandate delay will now surely increase the implementation burden on the exchanges, which might not be ready to go by Oct. 1.

Not to worry. Employers that have been unable to come up with a plan over the past four years are mainly employers of lower wage and temporary workers. These workers might receive subsidized plans on the exchanges. According to the Post-Dispatch (“Delay in health care law raises questions,” July 4), some employers expect to save millions during this one-year delay, millions to be picked up by the taxpayers. Most of the 30 million newly insured will be exchange or Medicaid clients, also to be funded in full or subsidized by the federal government. While I never begrudge the use of federal funds for health care, I do begrudge this elaborate plan giving insurance companies a third of those federal funds to shuffle paper and deny care, while earning huge profits for themselves.

If medical care is to be funded by tax dollars, let’s skip the hogwash and go directly to a single-payer system, which saves billions and provides equitable care for all.

http://www.stltoday.com/news/opinion/mailbag/letters-to-the-editor/problems-with-affordable-care-act-show-need-for-single-payer/article_8265fb30-b93e-5235-b7a4-4eab45811972.html

The State of US Health: Older but Sicker

The State of US Health, 1990-2010

By US Burden of Disease Collaborators
JAMA, July 10, 2013

Objectives

To measure the burden of diseases, injuries, and leading risk factors in the United States from 1990 to 2010 and to compare these measurements with those of the 34 countries in the Organisation for Economic Co-operation and Development (OECD) countries.

Design

We used the systematic analysis of descriptive epidemiology of 291 diseases and injuries, 1160 sequelae of these diseases and injuries, and 67 risk factors or clusters of risk factors from 1990 to 2010 for 187 countries developed for the Global Burden of Disease 2010 Study to describe the health status of the United States and to compare US health outcomes with those of 34 OECD countries.

Results

US life expectancy for both sexes combined increased from 75.2 years in 1990 to 78.2 years in 2010; during the same period, HALE (healthy life expectancy) increased from 65.8 years to 68.1 years. The diseases and injuries with the largest number of YLLs (years of life lost due to premature mortality) in 2010 were ischemic heart disease, lung cancer, stroke, chronic obstructive pulmonary disease, and road injury. Age-standardized YLL rates increased for Alzheimer disease, drug use disorders, chronic kidney disease, kidney cancer, and falls. The diseases with the largest number of YLDs (years lived with disability) in 2010 were low back pain, major depressive disorder, other musculoskeletal disorders, neck pain, and anxiety disorders. As the US population has aged, YLDs have comprised a larger share of DALYs (disability-adjusted life-years) than have YLLs. The leading risk factors related to DALYs were dietary risks, tobacco smoking, high body mass index, high blood pressure, high fasting plasma glucose, physical inactivity, and alcohol use. Among 34 OECD countries between 1990 and 2010, the US rank for the age-standardized death rate changed from 18th to 27th, for the age-standardized YLL rate from 23rd to 28th, for the age-standardized YLD rate from 5th to 6th, for life expectancy at birth from 20th to 27th, and for HALE from 14th to 26th.

Conclusions and Relevance

From 1990 to 2010, the United States made substantial progress in improving health. Life expectancy at birth and HALE increased, all-cause death rates at all ages decreased, and age-specific rates of years lived with disability remained stable. However, morbidity and chronic disability now account for nearly half of the US health burden, and improvements in population health in the United States have not kept pace with advances in population health in other wealthy nations.

http://jama.jamanetwork.com/article.aspx?articleid=1710486

Comment:

By Don McCanne, M.D.

According to The Washington Post (July 10), Thomas R. Frieden, director of the Centers for Disease Control and Prevention “noted that the United States is among the last of its economic peers in offering universal health care, and it is late in making societal changes to address the risks that needlessly shorten lives.” He said, “The good news is these are things we can do something about. If you look at the county-by-county charts, it shows in communities where they took improvements in health seriously, they were able to see dramatic improvements.”

With our great wealth, we can do both. We can offer universal health care, and we can expand public health programs, including fostering societal changes that address our health risks. But first we need to elect legislators and administrators who support these goals. It’s really up to us.

Public Citizen's 'Road Map to State Single Payer'

By Healthcare-NOW’s national staff
Healthcare-NOW, July 10, 2013

This year, some of our movement’s most inspirational organizing has focused on state-level single-payer healthcare legislation. Consequently, our ally Public Citizen released a report today titled “A Road Map to ‘Single Payer’: How States Can Escape the Clutches of the Private Health Insurance System.” The report aims to help state legislators and activists navigate the legal and legislative hurdles facing state-level single-payer efforts.

If you are active in a state single-payer campaign, we encourage you to download the report and share it with allies in your legislature.

Inspired by Vermont’s law designed to move the state through a series of phases culminating in a single-payer system, many other states have impressed us this year. Oregon activists organized a 1,000-person rally that resulted in passing a bill that compares the costs of single-payer with other healthcare financing systems. New York activists delivered over 10,000 signatures for single payer to legislators that resulted in securing a majority of the state Assembly supporting their state single-payer bill. Colorado activists launched a statewide ballot initiative to make access to healthcare a constitutional right, and is in the process of collecting 100,000 signatures.

Many states, however, do not enjoy the luxury of a state legislature that offers hope for single-payer legislation. We hope state-level victories will inspire national activism for achieving a right to healthcare for all, regardless of geography, income, or other social identities.

We hope that this Road Map will serve as a helpful tool in states’ organizing toolbox, and that you will share it with your network.

Sincerely,
Ben, Zoraida, and Jeff
Healthcare-NOW! National Staff

Healthcare-NOW! is a grassroots organization that addresses the health insurance crisis in the U.S. by educating and advocating for the passage of expanded and improved Medicare-for-all legislation, such as HR 676. Healthcare-NOW! – (800) 453-1305 – 1315 Spruce Street, Philadelphia, PA 19107.

PNHP note: For additional analysis of Public Citizen’s report, see “How states can get close to a single-payer system” by PNHP’s senior health policy fellow, Dr. Don McCanne.

Medicare for all

By Jack Bernard
Modern Healthcare, Letters, July 6, 2013

Hospital board members make decisions based on the mission of their organizations, not solely on how to increase the bottom line. Similarly, we can’t just let our fellow citizens suffer, expecting the free market to magically take care of the problem of the uninsured and underinsured. The market has not done so; the percentage of uninsured has risen drastically nationwide. The Affordable Care Act will not eliminate the problem, only slow it down.

It is up to us to choose what sort of a country we really are, a nation of compassion or a Darwinian society in which the strong ruthlessly trample the weak. If we view ourselves as the moral beacon of the world, then we must take care of the less fortunate here. And that means national health insurance for all, not only those over 65. I have witnessed the fatuous arguments about expanding Medicare, about it being “too expensive.” Countries with single payer have better healthcare outcomes than we do and spend much less per capita. Healthcare should be a right for all Americans, not a privilege. The best way to achieve that goal is Medicare for all.

Jack Bernard is a retired healthcare executive in Monticello, Ga.

http://www.modernhealthcare.com/article/20130706/MAGAZINE/307069980/medicare-for-all-and-other-letters&template=mobile

PNHP note: An archive of opinion pieces by Jack Bernard can be found here.

How States Can Get Close to a Single-Payer System

Public Citizen Releases Road Map for States to Achieve Unified, Universal Health Care; Distributes to State Lawmakers Throughout U.S.

Public Citizen, July 10, 2013

WASHINGTON, D.C. – The steps a state would need to take to move toward creating a single-payer health care system are somewhat complicated but are doable, according to a new Public Citizen report that provides states with a road map of how to achieve unified, universal health coverage.

A state could not hope to achieve a pure single-payer system, such as exists in Canada, because of federal programs, such as Medicare and Medicaid. But many of the ambitions of a single-payer system can be realized at the state level, the report explains. A state can accomplish much that the Affordable Care Act (ACA), or Obamacare, does not: provide universal care, greatly increase administrative efficiency and control costs.

Public Citizen distributed the report to state lawmakers throughout the country through the state affiliates of Health Care NOW. The report is available (at the link below).

“The facts are simple: We pay far more for health care than any developed country, yet we cover fewer people and get worse results,” said Dave Sterrett, health care counsel for Public Citizen’s Congress Watch division. “It’s time for real change.”

Calling for a universal care system in the United States is often painted as a quixotic pursuit because of incessant fear-mongering by conservatives about the supposed evils of a “government takeover” of health care.

But the report, A Road Map to “Single-Payer”: How States Can Escape the Clutches of the Private Health Insurance System, points out that Americans polled in 2012 were nearly evenly divided when asked if they favored a single-payer system, and this was amid the relentless drumbeat of opposition to the ACA. Evidence suggesting support for the single-payer concept also can be found in Americans’ widespread approval of Medicare, the government-run program that provides nearly universal care to those over 65 at far less cost than care that is reimbursed by private insurance companies.

The first step on a state’s road to a quasi-single payer system is to obtain a waiver from the ACA. This is well within reach because the act includes language that permits a state to receive a waiver from the ACA’s strictures, beginning in 2017. A state can be granted this waiver if it demonstrates that its alternative would provide coverage at least as good, for at least as many people, as the ACA would, and not add costs to the federal budget. For states that receive waivers, the federal government must provide funds to the state that equal what it would spend pursuant to the ACA. A state promising to provide comprehensive, universal care would easily clear this hurdle.

Achieving integration between a state system and Medicare and Medicaid would be more difficult because the law does not permit a broad waiver from these programs. But the law does provide ample room for the administration of these programs within a state to be altered to align billing systems and prices. This would allow Medicare and Medicaid to appear to providers and patients to be almost seamlessly integrated with a state system, although this strategy would require a state to dedicate resources to reconcile claims with the federal government.

The other major legal hurdle for a state to overcome is posed by the 1974 Employee Retirement Income Security Act (ERISA), which forbids states from regulating employer benefits plans. But a small body of case law provides grounds for cautious optimism that the hurdles of ERISA can be overcome. A state could insulate its system from being struck down on ERISA grounds by legislating alternative funding options, such as payroll, income or sales taxes.

The final major hurdle is determining how to pay for a universal care system. Transitioning from a system largely financed by employer and employee-paid insurance premiums to one likely financed by some combination of taxes would be challenging.

But the transition should not hurt employers or residents in the long run, the report concludes. A proposed system in Vermont, for instance, would significantly expand both the quality of benefits and the number of people covered. Yet Vermont’s plan would cost slightly less than the state’s current system, according to analysis commissioned by the state.

“Single-payer in the United States has been scorned but never tested,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “We’re looking for a few pioneering states with the courage and fortitude to let common sense prevail over the insanity of our current patchwork system. Once they succeed, we expect most opposition to single-payer and our reliance on privately insured health care to become historical relics.”

http://www.citizen.org/road-map-to-single-payer-health-care-report

Report – “A Road Map to ‘Single-Payer'” (21 pages): http://www.citizen.org/documents/road-map-to-single-payer-health-care-report.pdf

Comment:

By Don McCanne, M.D.

This very useful Public Citizen report on steps toward single payer at the state level serves two important functions:

1)  Although the Affordable Care Act is providing a few beneficial tweaks to the financing of our health care system, by now it is obvious that, by building on our dysfunctional, fragmented system, intolerable health care injustices will be perpetuated. Yet Congress itself is currently so dysfunctional that it is impossible to get them to consider a vastly superior alternative – a single payer Improved Medicare for All.

For those who cannot wait until we are able to elect a sane supermajority in Congress, this report provides suggestions on how some single payer principles could be applied at the state level. Although that pathway is rugged and cannot lead all the way to single payer, at least it would provide more improvement than we are seeing with the Affordable Care Act. There is plenty in this report to keep health justice activists very busy on the state level.

2)  The far more important conclusion to be drawn from this report is that states acting alone cannot establish a bona fide single payer system. There are too many major barriers that would prevent states from totally replacing their fragmented financing infrastructure. Under current federal laws, limitations imposed on states would not allow them to capture many of the more effective benefits of the single payer model.

Although states could come much closer to universal coverage, their systems would still perpetuate many of the inefficiencies and inequities that exist today. Without the power of a public, single payer monopsony (a single buyer), improving allocation of our resources would be much more difficult. Although states could improve billing functions, that captures only a very small portion of the profound administrative waste in our system. Any savings on a state level would be very modest and would not be enough to pay for the elimination of uninsurance and underinsurance. Total health care costs would increase even more, when costs are already intolerable.

The lesson? We cannot let up in the least in our efforts to educate the nation on the imperative of a single payer national health program. To be unequivocally clear, that’s NATIONAL.

We cannot use the example of Saskatchewan and pretend that a state can set up a single payer system that could serve as an example for the nation – a model that could be expanded to all states. No. Saskatchewan began with a tabula rasa. They were able to create a de novo single payer system. The Public Citizen report shows us that our existing federal laws create complexities that would prevent states from enacting a financing model that could be held up to the rest of the
nation as an example of the benefits of single payer, even though that is a noble intent of the report. In fact, there is a risk that such an effort would allow opponents to claim, “See, single payer doesn’t work.”

Vermont is currently implementing legislation that originally was intended to bring it a single payer financing system. But they found that a bona fide single payer system is not possible, so they have abandoned the term, “single payer.” That might be wise advice for other state activists.

We cannot allow enthusiasm for state efforts to diminish in the least the exhaustive effort that will be required to reach the threshold of political feasibility that will be a requisite to motivate Congress to take action.

Reasons for Outrage on Health Care

By Laura S. Boylan, M.D.
The New York Times, Letters, July 9, 2013

Re “Diagnosis: Insufficient Outrage,” by H. Gilbert Welch (Op-Ed, July 5):

As medical “cost sharing” (read: “cost shifting”) grows, hidden costs will be revealed, and outrage, already simmering, can be counted on coming to a boil. We need to stop pretending that the rules of the market will provide us with high-quality, high-value health care and join the rest of the developed world with universal health insurance.

Medicare’s 48th birthday is coming up this month. Let’s expand and improve on this most successful and popular of American institutions with publicly financed and privately delivered single-payer health care for all.

The writer is a clinical associate professor of neurology at New York University School of Medicine.

Burdened by insurance paperwork

By Melvin W. Young, M.D.

 We doctors should “rage” against a system so perverse that on any given day a physician may treat 15 patients with as many insurance plans requiring unproductive paperwork. It is a system so perverse that it forces us to hire clerks whose only role is to seek authorization for needed procedures.

It is a system so skewed against us that a letter from a lawyer sets our hearts racing. A system so out of control that chief executives of major insurance companies make salaries in the millions of dollars as we doctors struggle to meet payroll and pay the rent.

The excesses in the system may justifiably lead to outrage, but we doctors are likewise outraged at the blame heaped upon us for a failed system not of our creation.

The writer is a cardiologist. He lives in Dover, Vt.

http://www.nytimes.com/2013/07/10/opinion/reasons-for-outrage-on-health-care.html?_r=0

First do no financial harm

First, Do No (Financial) Harm

By Christopher Moriates, MD; Neel T. Shah, MD, MPP; Vineet M. Arora, MD, MAPP
JAMA, July 8, 2013

“First, do no harm” is a well-established mantra of the medical profession, but it may need to be reconceptualized in an era of unsustainable health care spending. Medical bills are now a leading cause of financial harm and physicians decide what goes on the bill. The possible consequential harm is substantial, often leading to lost homes and depleted savings. While the Affordable Care Act will ensure expanded coverage, newly insured Americans will not necessarily be immune from increased costs of their care. More Americans than ever before are enrolled in high-deductible insurance plans, meaning that seemingly simple decisions that physicians make about testing could directly lead to thousands of dollars in out-of-pocket costs. This strain on household budgets can cause further erosion of personal health.

Just as physicians play an important role in preventing serious infections, physicians can also help patients avoid experiencing financial harm as a result of medical care.

SCREEN FOR FINANCIAL HARM

First, physicians can help patients avoid financial harm by screening each patient to determine financial risk and preferences.

ADOPT A UNIVERSAL APPROACH

In 2007, the majority of medical debtors had health insurance at the beginning of their illness, and an estimated 25 million Americans were underinsured. Hence, it is increasingly difficult to know which patients will be faced with insurmountable medical bills in the near future. Since physicians cannot be sure which patients will ultimately have unaffordable medical bills, they should treat all patients as if they could be.

This approach applies to both inpatient and outpatient encounters because patients often face significant financial obligations in both settings. Although physicians may assume that hospitalizations for insured patients are automatically covered by health plans, in reality these patients may still face large co-payments. Thus, in some instances whether hospitalization can be avoided should be discussed. In addition, the payer may refute the appropriateness of admission or leave coverage gaps due to high deductibles, caps, or other cost-sharing mechanisms. In the ambulatory care setting, patients may pay a percentage of the fees for services.

UNDERSTAND FINANCIAL RAMIFICATIONS AND VALUE OF RECOMMENDATIONS

Many studies demonstrate that physicians are unaware of the cost of routinely ordered tests, let alone the potential financial risks for patients seeking care. To explain potential options and their fiscal implications to patients, physicians will need to take responsibility for knowing the financial ramifications of the care they are providing.

OPTIMIZE CARE PLANS FOR INDIVIDUAL PATIENTS

Physicians also should learn how to optimize personalized health care decisions for patients’ financial health.

CONCLUSIONS

Financial concerns are important to patients and physicians need to be prepared to address this aspect of their care. Although these financial discussions may present some challenges, physicians already participate in difficult discussions with patients about opiate abuse, domestic violence, and end-of-life decisions. To provide truly patient-centered care, physicians can live up to the mantra of “First, do no harm” by not only caring for their patients’ health, but also for their financial well-being.

For the full JAMA article (free access):
http://jama.jamanetwork.com/article.aspx?articleID=1709839

Comment:

By Don McCanne, M.D.

In these days of outrageous health care costs physicians now have not only the obligation to provide care as close to optimal as the circumstances will allow, they also have an obligation to prevent personal financial harm to the patient that could result from their medical decisions. But should the latter really be the physicians’ obligation?

The authors of this JAMA article list steps to be followed during patient encounters designed to prevent financial harm to patients. Doesn’t the physician already have enough to do without having to become the keeper of the patients’ pocketbooks? Unfortunately, under our current dysfunctional system of financing health care, too many patients face significant financial barriers to care. The physician remains the person in charge of determining the magnitude of those barriers, simply based on the medical management selected.

The Affordable Care Act will not help much since the new standard for private insurance is low actuarial value, high-deductible plans. In fact, the financial barriers will become more commonplace as employers are now greatly expanding the use of consumer-driven, high-deductible plans.

Patients who previously weren’t concerned much about their out-of-pocket costs are now going to want more information from physicians about what their own plans will or will not cover, how much they will have to pay out-of-pocket, whether the specialists or diagnostic facilities are in or out of their networks, which prescriptions are covered and under what tier, and many other spending issues for which the physicians frequently do not have the answers. Yet knowing the answers is now becoming the responsibility of physicians?

Why do we have a system with so much financial exposure to patients when other nations have much lower national health expenditures with cost sharing usually at negligible levels? It is because of the nutty idea that only patients can control costs when they have to pay out-of-pocket (consumer-driven health care), when we know that is absolutely untrue. Other nations have proven that there are far more effective methods of controlling costs that not only provide financial security for the patients, but also improve the allocation of health care dollars, providing higher quality and greater value.

Physicians should be leading the bandwagon in first doing no financial harm by supporting a system that totally separates financing from the clinical environment. If they could convince the nation that we need a single payer national health program then they could proceed with tending to patients’ health care needs while letting our own public administrators deal with the financing of the system.

Financial barriers harm patients. It is our obligation to first do no harm by removing those barriers – for everyone. Then we can get on with simply taking care of the patients.