PNHP

Kuttner on Medicare shifting costs to patients

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.

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.