PNHP

Universal health care and economic freedom go hand-in-hand

Universal health care and economic freedom go hand-in-hand

By David Callahan
Demos, June 19, 2013

One of the most pernicious myths of the past half century is that guaranteeing health care for all Americans would strike a mortal blow against this country’s system of free enterprise.

That claim has been made endlessly in the context of the Affordable Care Act, and Obamacare critics are now ramping up their predictions of doom as implementation of the law grows near.

But as Robert Frank explained this weekend in the New York Times, the lived experience of other countries like Sweden with national health care systems doesn’t bear out the fears.

In fact, you don’t need to take the word of a progressive economist like Frank on this point. The Heritage Foundation’s research indicates the same thing.

Consider Heritage’s “Index of Economic Freedom,” which measures how friendly countries are to business, investors, and property rights.

The countries that rank the highest on the list are: Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, Denmark, and the United States.

Of those ten countries, nearly every one has a universal health care system or mandates that individuals pay into medical savings accounts. Australia and Canada both have single-payer systems. Denmark’s system is pretty much government controlled. Switzerland’s system is similar in many ways to Obamacare. Among the top twenty nations on the list are Ireland, the U.K., Germany, Sweden, and Finland — other countries that also have universal health care systems.

There are some good reasons why such systems might go hand-in-hand with economic freedom. For one thing, as Robert Frank noted, these systems help keep down healthcare costs: “The United States spends more than $8,000 a person per year on health care, well more than twice what Sweden spends. Yet health outcomes are far better in Sweden along virtually every dimension.”

Lower health care costs mean that business and individuals can channel more money into productive uses that foster a vibrant and globally competitive market economy.

Universal health care systems also make it easier for people to be entrepreneurs or self-employed. While we think of the United States as a place where people are uniquely likely to strike out on their own, this is largely a myth. The U.S. actually has a much lower self-employment rate than most developed countries. Australians, Brits, Germans, Swedes, and so on all are more likely to work for themselves than Americans.

It’s hard to say how much universal health care insurance determines self-employment rates, but common sense suggests you’re more likely to go out on your own if you’re not worried about losing your health insurance.

Now, does all this mean that Obamacare will produce more economic freedom in America? Not necessarily. Ironically, government-run health care systems are better for free enterprise than those — like the ACA — which impose mandates on employers.

I say ironically because, of course, such a truly “socialized” system was off the table during the health care debate thanks opposition by supposed defenders of economic freedom.

David Callahan is a co-founder of Demos, a public policy group based in New York City, and now edits the Demos blog PolicyShop. David is the author of eight books and his many articles have been published in such places as The New York Times, The Washington Post, The Nation, and The American Prospect.

http://www.demos.org/blog/universal-healthcare-and-economic-freedom-go-hand-hand?key=21901560

In-network providers are often not available

Out-of-Network Physicians: How Prevalent Are Involuntary Use and Cost Transparency?

By Kelly A. Kyanko M.D., M.H.S., Leslie A. Curry Ph.D., M.P.H., Susan H. Busch Ph.D.
HSR, June 2013

Objective

To determine the proportion of privately insured adults using an out-of-network physician, the prevalence of involuntary out-of-network use, and whether patients experienced problems with cost transparency using out-of-network physicians.

Data Sources

Nationally representative internet panel survey conducted in February 2011.

Study Design

Screener questions identified a sample of 7,812 individuals in private health insurance plans with provider networks who utilized health services within the prior 12 months. Participants reported details of their inpatient and outpatient contacts with out-of-network physicians. An inpatient out-of-network contact was defined as involuntary if: (1) it was due to a medical emergency; (2) the physician’s out-of-network status was unknown at the time of the contact; or (3) an attempt was made to find an in-network physician in the hospital but none was available. Outpatient contacts were only defined as involuntary if the physician’s out-of-network status was unknown at the time of the contact.

Principal Findings

Eight percent of respondents used an out-of-network physician. Approximately 40 percent of individuals using out-of-network physicians experienced involuntary out-of-network care. Among out-of-network physician contacts, 58 percent of inpatient contacts and 15 percent of outpatient contacts were involuntary. The majority of inpatient involuntary contacts were due to medical emergencies (68 percent). In an additional 31 percent, the physician’s out-of-network status was unknown at the time of the contact. Half (52 percent) of individuals using out-of-network services experienced at least one contact with an out-of-network physician where cost was not transparent at the time of care.

Conclusions

The frequency of involuntary out-of-network care is not inconsequential. Policy interventions can increase receipt of cost information prior to using out-of-network physician services, but they may be less helpful when patients have constrained physician choice due to emergent problems or limited in-hospital physician networks.

http://onlinelibrary.wiley.com/doi/10.1111/1475-6773.12007/abstract

Comment:

By Don McCanne, M.D.

An important role of private health insurers is to control prices through provider contracting. The current trend is to narrow their networks of providers even more. This allows them to further squeeze payments to the providers, in exchange for reducing the numbers of their competitors. If that will slow the increase in insurance premiums, then shouldn’t patients be supportive? No, and here’s why.

When patients obtain their care outside of provider networks, they are inflicted with severe financial penalties, sometimes receiving no coverage at all, plus losing the controlled rates that the insurers have negotiated. This study shows that using out-of-network providers is frequently unavoidable. The problem is particularly severe with in-hospital care, adding to the already burdensome expenditures for high-deductibles and coinsurance.

This is a direct result of placing private insurers in the role of financial intermediaries for our health care. They profit by selling us an inordinate amount of administrative services that we don’t want and shouldn’t need, while penalizing us for obtaining care that we need when we are unable to access providers within their narrow networks.

The model is all wrong. We need to dump the intrusive and wasteful private insurers who are forcing on us services that we don’t want but have to pay for – like taking away our choice under threat of financial penalty. We need to replace them with our own public program that is designed to ensure that we get the care we need, without penalizing us for doing so.

Nation should learn from mine workers

By Ian Swenson
St. Louis Beacon, June 19, 2013

The United Mine Workers of America were back in St. Louis Monday, rallying against Peabody Energy. The UMWA claims that Peabody created a spinoff company, Patriot Coal, that was designed to fail and saddled it with expenses including workers’ health insurance and pensions. When Patriot did in fact file for bankruptcy five years after its creation, 22,000 workers and retirees whose benefits had been reattributed to Patriot Coal lost those earned and negotiated benefits and joined the nearly 50 million Americans without health insurance.

But what do uninsured Americans have to do with you?

Health care is everyone’s problem. Caring for the desperately ill who cannot pay means that everyone who can must pay more. Once you reach age 65, society pays for much of your health care through Medicare. When people such as the Peabody workers are denied coverage and thus the care each of us needs, medical costs go up. No yearly checkups to monitor blood pressure, or diet, or activity level. No colonoscopy to check for colon cancer. No women’s health visits. You get the picture.

Not that private insurance has any interest in your health either. They understand that most Americans will move between multiple insurers before they reach Medicare age. Their interest is not to keep you healthy, it’s to keep you out of a doctor’s office, so that they don’t have to spend money on your case. Why would they invest in you, when you will eventually be someone else’s problem?

But wasn’t Obamacare supposed to fix everything? Well, some things are better, but by handing control of the insurance exchanges over to the states, legislatures such as the one in Missouri can needlessly complicate the process of registering for state insurance, preventing people from signing up. Or with minimums on coverage, employers can lower the standard on their plans from an industry average 80 percent of costs to the minimum 60 percent.

The ACA was a step forward, but in many ways it complicates health care as much as it alleviates problems. It is not the solution.

Long term, we must move to a universal comprehensive system for all Americans, an “Improved Medicare for All” system. One insurer, the government, funded by our progressive taxes, overseen by elected officials rather than profit-driven insurance companies, covering every citizen every day, or what some refer to as “single payer.”

The proof of efficacy exists. Medicare runs at 2-3 percent overhead costs. That’s unheard of in most businesses. Even if you like non-profit insurers, it’s hard to ignore CEOs making salaries of more than a million dollars.

In 2010, the average per-capita cost of health care in the European Union was $2,888. Every European nation handles health cost a bit differently, but each has universal comprehensive care administered by the national government. That same year, the USA spent $8,289 a person, and we didn’t cover everybody.

Those same nations also got better results than we did. When ranked against 16 other developed countries in nine major categories of a nation’s health, the USA was at the bottom or near the bottom in each category. American men: last in life expectancy. American women: next to last. We have the worst infant mortality rate, the highest rate of teen pregnancy and teen STDs, and these health disadvantages exist across all socio-economic groups from birth to 75.

But back to Peabody Energy. The reason companies drop workers’ health care is because the cost of that care is so large and rapidly increasing. Between 2009 and 2011, the cost of health care grew at a rate of 3.9 percent annually, and that was considered slow for the industry. Companies are expecting premiums to increase by about double that next year.

If businesses are having trouble paying for health benefits now, the forecast is absolutely terrifying for their profit margin. But, if the USA were to move to a single-payer health system, the cost of health care would not only be taken off of their hands, but could actually be solved rather than passed around.

A change has to be made and the right choice is clear, logical and proven. America must move to single-payer health care or be prepared to continue suffering the physical and economic consequences.

Ian Swenson is a member of the St. Louis chapter of Physicians for a National Health Program and a senior undergraduate student in biology at Washington University.

http://www.stlbeacon.org/?_escaped_fragment_=/content/31475/voices_swenson_coal_061813

ACOs and liability for institutional malfeasance

The Looming Threat of Liability for Accountable Care Organizations and What to Do About It

By H. Benjamin Harvey, MD, JD; I. Glenn Cohen, JD
JAMA, June 17, 2013

Hundreds of health systems across the country have already adopted the ACO model (accountable care organization) and in so doing have taken on a new role of cost containment. What may be less clear to them is that they are taking on new liability risks.

Unlike MCOs (managed care organizations), ACOs will generally not have the benefit of ERISA, which does not cover them; nor are they slated to get comparable federal liability protections. As a result, ACO cost-containment efforts may be scrutinized by the court when poor patient outcomes result in malpractice litigation. For example, if a poor outcome occurs in a patient with congestive heart failure (CHF), a plaintiff could challenge an ACO’s more stringent CHF hospital admissions criteria, asserting a prioritization of cost savings over patient care. In the absence of a federal law that could offer protection, this medical liability claim would be judged by state-based standards, which do not consider federal cost containment goals when determining whether a medical decision was appropriate. Based on MCO liability case law, state courts may hold ACOs liable in this situation.

Under “agency theory” in tort law, a plaintiff in a malpractice suit is permitted to hold a health system liable for the negligent actions of its employee, ie, the treating clinician. A patient may also sue a health system directly, claiming that policies or actions of the health system are negligent. Thus, whether ACOs or not, health systems are exposed to institutional liability related to medical malpractice. How big of a divergence is ACO liability from the existing forms of institutional liability common to health systems? The key difference is the introduction of a new dimension of medical malpractice liability that goes hand in hand with the cost containment charge: the claim that the ACO’s actions or policies prioritized cost savings over patient safety, contributing to the plaintiff’s harm.

Allegations of institutional malfeasance related to cost-saving efforts could increase liability costs and create a chilling effect on ACOs. Moreover, these suits need not progress to trial to threaten ACOs. The assertion of institutional malfeasance alone adds strength to a lawsuit and introduces the potential for punitive damages. This could increase jury awards and settlement amounts. In addition, the broader nature of the claims will enable more robust discovery beyond the care received by the patient. Discovery could now reach into the corporate boardroom as a plaintiff attempts to show that institutional policies regarding resource utilization or physician compensation stifled appropriate treatment. For the ACO, this increased complexity means greater defense costs and increased pressure to settle. Beyond cost increases from more garden-variety medical malpractice cases, ACOs also could be exposed to new theories of liability. It is possible to envision a class action suit seeking injunctive relief or damages against institutional policies felt to be potentially harmful to patients, such as physician incentives payments.

http://jama.jamanetwork.com/article.aspx?articleID=1697985

Comment:

By Don McCanne, M.D.

The primary purpose of accountable care organizations is to reduce health care spending. By participating in these schemes – accepting financial rewards for reducing care – physicians are exposing themselves not only to malpractice claims for negligence through failure to provide adequate health care services, but they are also exposing themselves to punitive damages for participating in institutional malfeasance related to cost-saving efforts. Surely during the trials the plaintiffs’ attorneys will let slip out the “G” word – GREED!

Greed: The secret word a la Groucho Marx (15 seconds): http://www.youtube.com/watch?v=ECQ-HuArv3s

Single payer saves money by reducing waste and improving resource allocation. It does not do it by paying physicians incentives for reducing health care. Most physicians surely would want to avoid even the least semblance of greed.

Trans-Pacific Partnership undermines health system

Medical corporations seek tools to protect their profits despite harmful effects on public health

By Margaret Flowers, M.D.
Al-Jazeera, June 17, 2013

The Trans-Pacific Partnership (TPP) is a deal that is being secretly negotiated by the White House, with the help of more than 600 corporate advisers and Pacific Rim nations, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. While the TPP is being called a trade agreement, the U.S. already has trade agreements covering 90 percent of the GDP of the countries involved in the talks. Instead, the TPP is a major power grab by large corporations.

The text of the TPP includes 29 chapters, only five of which are about trade. The remaining chapters are focused on changes that multinational corporations have not been able to pass in Congress such as restrictions on internet privacy, increased patent protections, greater access to litigation and further financial deregulation.

So far, all that is known about the contents of the TPP is from documents that have been leaked and reports from NGOs and industry meetings. Unlike other trade deals, the White House refuses to make the text available to the public. In fact, the negotiators refuse to publish the text until four years after it is signed into law. Why are they being so secretive? Former U.S. Trade Representative Ron Kirk said he opposed making the text public because doing so would raise such opposition that it could make the deal impossible to sign.

From the information available, one thing is clear about the impacts of the TPP on health care: the intention of the TPP is to enhance and protect the profits of medical and pharmaceutical corporations without considering the harmful effects their policies will have on human health.

We know that the TPP will extend pharmaceutical and medical device patents and provide other tools to keep the prices of these necessities high. This will make medications and treatments unaffordable for millions of people and raise the costs of national health programs. At its worst, the TPP will provide a pathway to infect the world’s health systems with the deadly parasite of for-profit health corporations that plague the U.S.

Patents keep prices high

Through the TPP, pharmaceutical and medical device corporations are seeking extensive patent protections using a process known as “Evergreening.” The TPP gives 20 years of patent protection for pharmaceuticals and medical devices; however, patents can be renewed for another 20 years each time there is a change in an indication or delivery. For instance, if a drug is indicated for headaches, but then the pharmaceutical company finds that it is also helpful for stomach cramps or makes it a capsule instead of a tablet, a new patent may be issued. In reality, patents can be extended indefinitely under the TPP.

Doctors Without Borders criticized this practice, stating that patent protections in previous trade agreements raised the price of life-saving medications and made them unavailable to people in poorer countries. Patents prevent the production of low cost generic forms of medications. Yet it was the availability of generic medicines to treat HIV and other infectious diseases that allowed advances to be made in decreasing their impact in developing countries.

Because of the negative impact on public health from patent protections in previous trade agreements, such as the Korea Free Trade Agreement, former President Bush rolled some of these practices back. Unfortunately, the TPP will move them forward again.

In fact, the TPP goes farther than previous agreements by also requiring that surgical techniques, medical tests and treatments be patented. This will restrict the availability of these treatments, especially in health systems that have limited resources.

Doctors Without Borders also expressed concern that patent protections encourage innovation based on profit instead of the needs of people, particularly those in poor nations. Corporations do not see it as in their financial interest to address health conditions more prevalent in poor nations which do not have the financial resources to buy their products. But it is often in these situations treatments can have the greatest impact on quality of life.

Attacking public health systems

An area of great concern is language within the TPP concerning State-Owned Enterprises (SOEs). These are institutions that are fully or partially owned by governments. SOEs are very common in countries such as Vietnam, Malaysia and Singapore.

Corporate lobbyists are concerned that SOEs have “unfair advantages” over private industry. These advantages include government subsidies, preferred tax status, low finance rates and access to capital. According to a leaked chapter, corporate lobbyists believe that there is a conflict of interest because SOEs have political considerations such as functioning to provide basic goods and services for their population and believe that instead SOEs should operate strictly as commercial entities seeking profit.

The TPP requires SOEs to disclose any special advantages they receive and the government to give the same advantages to corporations. It also provides methods for corporations to sue governments if they believe that they are not being treated fairly. The text outlines punishments such as increased tariffs on exports from the country found in violation and suspension of any “tariff concessions” made to the country in violation on imports.

Text from a section of the TPP called “Annex on Transparency and Procedural Fairness for Healthcare Technologies” was leaked in June 2011. It reveals this conflict between medical industries that have strictly commercial interests and public health systems that are concerned about the health of the population. Medical industries are pushing on all fronts to keep their prices high while public health systems must negotiate to keep prices affordable and maximize what they can cover within their budgets.

To the medical industries, such price negotiation is one of the “unfair advantages” of public health systems. When a public health system negotiates a lower price, it is said to be exerting its market power. On the flip side, when a government extends patent protections to medical industries to keep prices high, this is not considered to be an unfair advantage granted by the government.

Medical industries are pushing for other concessions within the TPP to “level the playing field,” also known as forcing public entities to operate as market-based entities, such as factoring the cost of not just research, development and production of drugs and medical devices, but also the cost of marketing them into what is considered to be a fair market price. And they only view prices negotiated without any government influence as fair. These provisions are significant because the TPP allows pharmaceutical corporations and others to challenge the legitimacy of any reimbursement decisions made by public health systems through the courts.

Patent and price protections for multinational pharmaceutical and medical device corporations based in the U.S. will benefit their bottom line and their investor’s pockets, but may bounce back and undermine public health systems in the U.S. The leaked text indicates that the above provisions only apply to health authorities under the jurisdiction of the federal government. However, the loopholes are large enough that all of the U.S. public health systems, which include Medicare, Medicaid, Tricare and the Veterans Health Administration, can arguably be considered to be federal.

These systems already struggle within the market-based U.S. health system that is most expensive in the world. The U.S. health system wastes one-third of health dollars on a bloated bureaucracy due
to thousands of different health insurance plans, each with different rules. And people in the U.S. pay the most for prescriptions and health services because there is no rational system for setting prices. High prices in the private health sector drive up prices in the public health sector too. For example, at present Medicare is prohibited from negotiating a bulk price for pharmaceuticals.

Over the past four years, there has been an increase in self-rationing in the U.S., patients avoiding or delaying necessary medical care and medications, due to health costs. At the same time, CEOs of health industries are the highest-paid in the nation. For the good of public health, we must reverse this trend towards greater privatization and lower the cost of care. But the TPP will protect the medical industries and give them greater power to use their wealth and the rigged trade tribunal court system to protect their profits.

This will undermine health systems in the U.S. and abroad. High prices could bankrupt public health systems like those in Japan and Australia (ranked among the top in the world). Under the TPP, it is also possible that Japan’s regulation of health insurance which includes controlling coverage, prices and profits would qualify it as an SOE that has unfair advantages. This could open the door for private multinational health insurance corporations to enter TPP signatory countries and demand access and that regulations are loosened.

As medical corporations gain greater wealth and power, we can expect to see further abuses to the detriment of human health. The TPP takes global health in the wrong direction. The losers in this negotiation will be the patients if the profits of corporations are permitted to come before the health of people.

Margaret Flowers, M.D., served as congressional fellow for Physicians for a National Health Program and is on the board of Healthcare-Now. She is co-director of It’s Our Economy and co-host of Clearing the FOG Radio Show. Follow her on Twitter: @MFlowers8

http://www.aljazeera.com/indepth/opinion/2013/06/201361711230432720.html

Replace volume with quality?

Should Physician Pay Be Tied to Performance? No: The System Is Too Easy to Game—and Too Hard to Set Up

By Steffie Woolhandler
The Wall Street Journal, June 16, 2013

Paying doctors for better care—not just more of it—seems like a no-brainer. Yet rigorous studies of pay-for-performance bonuses have found no health benefits and some unintended harms.

An exhaustive analysis of pay-for-performance research by the Cochrane Collaborative, an international group that reviews medical evidence, unearthed “no evidence that financial incentives can improve patient outcomes.”

Consider these cases. In Britain’s massive pay-for-performance program, family doctors earned almost perfect scores (and big bonuses) for hypertension treatment, but population surveys found no decrease in blood pressure or its main complication, strokes. Meanwhile, aspects of quality that didn’t bring bonuses deteriorated.

The largest U.S. pay-for-performance experiment—Medicare’s Premier Demonstration—also flopped. The 200 hospitals that offered bonuses scored slightly worse on patient death rates than other hospitals.

Proponents argue that programs like these were flawed in one way or another, and that the next trial—or the one after—will certainly do better. They also claim successes with other programs. But none of these claims rest on rigorous science, and all those that have subsequently been subjected to rigorous tests have failed.

No Easy Measurement

Why do these programs consistently fall short? Measurement is distorted once you pay doctors based on the data they themselves create. High scores may reflect real excellence, but can just as easily reflect cherry-picking or gaming the measurement system.

One Boston-area hospital we observed improved its quality score 40% just by getting doctors to change the words they wrote in patients’ charts. Medicare gives hospitals more credit for saving patients with “acute respiratory decompensation” than those with “COPD exacerbations,” although these terms are synonyms. That kind of practice is neither illegal nor unusual.

Beyond that, it’s devilishly difficult to quantify doctors’ performance in the first place. Hospital death rates seem, at first glance, an ideal measure of medical quality. Yet, four widely used algorithms yield completely different mortality rankings; a hospital rated outstanding in one often looks downright dangerous in another.

Even if—as some proponents argue—we find performance measures that work for one group of doctors, it’s unlikely that they’ll work for all providers in all patient populations. Moreover, many providers interact in providing care, and influence each other and patients’ outcomes in complex ways. It’s hard to imagine that incentives could optimize this as a system.

Ignoring Psychology

There’s also psychology at work. Rewarding performance ignores the complexity of human drive, particularly the role of intrinsic motivation—the desire to perform an activity for its own inherent rewards. Offering your dinner-party host a $10 reward for cooking a wonderful meal isn’t likely to motivate future invitations.

Studies have found that financial incentives often crowd out intrinsic motivation. For instance, college students will spontaneously play with interesting puzzles, but once they’re paid to solve them, they lose interest in playing for nothing. When day-care centers in Israel imposed fines on parents for picking up children late, tardiness increased. Promptness transformed from a moral duty to a market transaction.

Pay for performance undermines the mindset required for good doctoring—the drive to do good work even when no one is looking. Moreover, it forces doctors to shift their attention from patients to computer screens—documenting trivial details useless for patient care but essential for compliance.

None can doubt medicine’s grave quality problems. As a remedy, pay for performance suggests manipulating greed. This can certainly change medicine, but not necessarily in the ways that we would plan, much less hope for.

(Dr. Woolhandler is a physician and professor at the City University of New York School of Public Health. David U. Himmelstein, also a physician and professor at the School of Public Health, and Dan Ariely, the James B. Duke professor of behavioral economics at Duke University’s Fuqua School of Business, contributed to this article.)

http://online.wsj.com/article/SB10001424127887323528404578454432476458370.html

Comment:

By Don McCanne, M.D.

We keep hearing over and over that we are going to have to quit paying physicians based on the volume of their services and pay on the quality of those services instead. There are two problems with this.

The first problem is that there is a certain volume of health care that needs to be delivered. If the physician is told that quality counts but volume doesn’t, then wouldn’t that physician be motivated to cut back on work done? Does anyone seriously suggest that sloth is fine – payment would be the same regardless of the volume of work? Of course not. Whether fee-for-service or salaried, the physician is going to have to produce.

The second problem is that the abstract concept that physician pay should be tied to quality does not translate into a practical model of measuring and rewarding quality. Physicians already attempt to provide the best quality they can under the given clinical circumstances. Typical measures selected are only a infinitesimal sampling of the entire work product of the physician. Today’s article explains the deficiencies of trying to come to any conclusion about quality based on this process.

The counter opinion to the article above was written by François de Brantes, executive director of the Health Care Incentives Improvement Institute, and is available at the same link above. Some of his comments are instructive: “show poor outcomes in some pay-for-performance trials,” “design flaws,” “doctors were rewarded for results that were actually poor,” “it has worked, if not always as well as it should,” and, “problems can be fixed by not letting providers set benchmarks.” If physicians, with their conflicts of interest, don’t define quality, then who does? The MBAs? Is that really better?

We definitely must address medicine’s many quality problems, ideally through beneficent public policies, but manipulating greed through pay for performance schemes is not the way to get there.

Should Physician Pay Be Tied to Performance?

No: The System Is Too Easy to Game — and Too Hard to Set Up

By Steffie Woolhandler, M.D.
The Wall Street Journal, June 16, 2013

Paying doctors for better care — not just more of it — seems like a no-brainer. Yet rigorous studies of pay-for-performance bonuses have found no health benefits and some unintended harms.

An exhaustive analysis of pay-for-performance research by the Cochrane Collaborative, an international group that reviews medical evidence, unearthed “no evidence that financial incentives can improve patient outcomes.”

Consider these cases. In Britain’s massive pay-for-performance program, family doctors earned almost perfect scores (and big bonuses) for hypertension treatment, but population surveys found no decrease in blood pressure or its main complication, strokes. Meanwhile, aspects of quality that didn’t bring bonuses deteriorated.

The largest U.S. pay-for-performance experiment — Medicare’s Premier Demonstration — also flopped. The 200 hospitals that offered bonuses scored slightly worse on patient death rates than other hospitals.

Proponents argue that programs like these were flawed in one way or another, and that the next trial — or the one after — will certainly do better. They also claim successes with other programs. But none of these claims rest on rigorous science, and all those that have subsequently been subjected to rigorous tests have failed.

No Easy Measurement

Why do these programs consistently fall short? Measurement is distorted once you pay doctors based on the data they themselves create. High scores may reflect real excellence, but can just as easily reflect cherry-picking or gaming the measurement system.

One Boston-area hospital we observed improved its quality score 40 percent just by getting doctors to change the words they wrote in patients’ charts. Medicare gives hospitals more credit for saving patients with “acute respiratory decompensation” than those with “COPD exacerbations,” although these terms are synonyms. That kind of practice is neither illegal nor unusual.

Beyond that, it’s devilishly difficult to quantify doctors’ performance in the first place. Hospital death rates seem, at first glance, an ideal measure of medical quality. Yet, four widely used algorithms yield completely different mortality rankings; a hospital rated outstanding in one often looks downright dangerous in another.

Even if — as some proponents argue — we find performance measures that work for one group of doctors, it’s unlikely that they’ll work for all providers in all patient populations. Moreover, many providers interact in providing care, and influence each other and patients’ outcomes in complex ways. It’s hard to imagine that incentives could optimize this as a system.

Ignoring Psychology

There’s also psychology at work. Rewarding performance ignores the complexity of human drive, particularly the role of intrinsic motivation — the desire to perform an activity for its own inherent rewards. Offering your dinner-party host a $10 reward for cooking a wonderful meal isn’t likely to motivate future invitations.

Studies have found that financial incentives often crowd out intrinsic motivation. For instance, college students will spontaneously play with interesting puzzles, but once they’re paid to solve them, they lose interest in playing for nothing. When day-care centers in Israel imposed fines on parents for picking up children late, tardiness increased. Promptness transformed from a moral duty to a market transaction.

Pay for performance undermines the mindset required for good doctoring — the drive to do good work even when no one is looking. Moreover, it forces doctors to shift their attention from patients to computer screens — documenting trivial details useless for patient care but essential for compliance.

None can doubt medicine’s grave quality problems. As a remedy, pay for performance suggests manipulating greed. This can certainly change medicine, but not necessarily in the ways that we would plan, much less hope for.

Dr. Woolhandler is a physician and professor at the City University of New York School of Public Health. David U. Himmelstein, also a physician and professor at the School of Public Health, and Dan Ariely, the James B. Duke professor of behavioral economics at Duke University’s Fuqua School of Business, contributed to this article. They can be reached at reports@wsj.com.

http://online.wsj.com/article/SB10001424127887323528404578454432476458370.html?mod=hp_jrmodule

Underinsured in the Age of Obamacare

The Affordable Care Act does not make health care a right

By A.W. Gaffney
In These Times, July 2013

During the second presidential debate of 2008, Tom Brokaw asked Barack Obama and John McCain: “Is health care in America a privilege, a right or a responsibility?”

Obama, unlike McCain, did not hesitate to respond plainly that health care “should be a right for every American.” He proceeded to make health care reform a major goal of his presidency.

Sadly, though, whatever its merits (and they are substantial), the Affordable Care Act (ACA) will not create a right to health care in America. Nor will it lead to a system of universal health care. Not because it will leave millions uninsured — though it will do that — for if uninsurance were the law’s only flaw, with some combination of an expansion of subsidies and of Medicaid, the ACA could be transformed into a truly universal system. The law has a more fundamental flaw: It fails to reverse a peculiarly American trend toward what is euphemistically called “underinsurance.” We may have health insurance, in other words, but we cannot afford to become ill.

The ACA may actually exacerbate a practice that many of us face, in a limited and innocuous way, in our encounters with the health care system — a practice known as “cost-sharing.”

Cost-sharing takes the form of co-pays, deductibles and other payments that are not covered by insurance and are often exacted at the point of service. In theory, cost-sharing decreases medical spending by giving us “skin in the game,” as commentators frequently (and oddly) put it. The theory is that by forcing us to pay something out-of-pocket every time we “consume” health care, we are disincentived to utilize in excess, hence medical spending is controlled.

Many would ask whether the average person really needs to be disincentived from an invasive procedure or an unnecessary afternoon in the doctor’s office. But in any event, it is clear that as cost-sharing eats up larger portions of our disposable income, we become “underinsured,” forced to go broke or ration our health care.

Evidence suggests that underinsurance has been on the rise for years. A study published in the journal Health Affairs in 2008 found that in 2007, about 20 percent of Americans with insurance age 19-64 — about 25 million individuals — could be classified as underinsured (defined as having an exposure to out-of-pocket expenses above a certain threshold). This represents a striking 60 percent increase since 2003. Along similar lines, according to a report from the Kaiser Family Foundation, the percentage of insured workers with a deductible of $1,000 or more increased from 10 percent in 2006 to 34 percent in 2012, while the percent with a deductible of $2,000 or more increased from 3 percent to 14 percent.

But more telling than these figures is what underinsurance means to those who must live with it day after day. In milder cases, it might simply mean another bill to be paid out of a paycheck stretched thinner and thinner. Or it might mean deciding to sacrifice certain medical services — deferring appointments, not filling prescriptions, or forgoing diagnostic tests. During my years of training in internal and pulmonary medicine, I have seen entirely reasonable patients of mine make exactly these sorts of decisions.

But underinsurance can also translate into financial ruin. One study from 2009 found that 62 percent of all bankruptcies filed in 2007 had a medical cause. Particularly alarming, however, is the fact that three-quarters of these “medical debtors” had health insurance at the time of the illness that led to their bankruptcy. If health insurance does not prevent us from going bankrupt when we get sick, can we really call it “insurance”?

The ACA will reform the insurance industry to some extent, for instance by expanding Medicaid, eliminating lifetime limits on coverage, and preventing insurers from excluding us for pre-existing conditions. But the base model, so-called bronze plans on the ACA exchange, will only cover 60 percent of an individual or a family’s health care expenses. Although there are out-of-pocket limits as well as subsidies for the poor, families will be susceptible to as much as an estimated $12,500 in annual out-of-pocket expenses — after their premiums have been paid. Similarly, the administration has moved to allow state officials to charge Medicaid patients higher co-payments for such necessities as doctor’s visits and prescriptions, though these individuals are less able than any to afford such fees. The ACA, in short, will clearly not reverse — and in some cases, will worsen — the trend toward low-value health insurance that is increasingly relied upon — both by individuals and employers — in an age of soaring premiums and now, the required purchase of insurance.

As we peer into the future of health care in America, let’s look at how the system on which the ACA was modeled — Mitt Romney’s Massachusetts health plan — has fared. A 2012 report by the state’s Division of Health Care Finance and Policy found that Massachusetts employers increasingly choose insurance plans with fewer benefits, higher cost-sharing and lesser value. Between the years 2008 and 2010, the percentage of small group enrollees in the most risky, highest cost-sharing and seemingly least attractive plans (the bronze plans) increased from 2 percent to 27 percent, while those in the most comprehensive plans with less cost-sharing declined from 34 percent to 11 percent.

It may appear to make perfect sense for a healthy individual — or an employer — to favor low-premium, high-deductible plans. Why throw away thousands of dollars of much needed money every year for insurance premiums when using very little health care? Of course this is a gamble, but for those with significant competing expenses, choices have to be made.

The unfortunate reality, meanwhile, is that we all get sick, often when we least expect it. Insurance designed for the healthy is laughably absurd. And so underinsured individuals and families struck by unexpected illness constantly face choices between health care and other necessities. In a poll conducted last year, 40 percent of sick Massachusetts adults reported problematic out-of-pocket medical costs, while 36 percent reported that the cost of medical care caused financial problems for their family, and 14 percent said there was a time during the previous year when they were unable to get needed care, usually for financial reasons. This is in spite of the fact that the Massachusetts health care system — like the ACA — requires insurance policies to offer certain minimum coverage. It is also supposed to be an example of universal health care.

It is bad enough to be sick; forcing the sick to be sick with worry over their medical bills is neither a rational nor humane approach toward health care in the 21st century. The idea that we need to force the sick — or the future sick, a category we all belong to — into categories of bronze, silver, gold and platinum benefits, as the ACA does, is simply unnecessary.

For the great irony of the situation is that what we in the United States call platinum care — health insurance in which 90 percent of our expenses are covered — is actually something more akin to bronze care in much of the developed world, where truly universal systems offer health care free (or nearly free) at the point of care. A single-payer system could accomplish the same here in the United States.

Let us turn back briefly to Brokaw’s question in 2008. Obama went further than to merely declare health care a right in the abstract. “In a country as wealthy as ours,” Obama argued, “for us to have people who are going bankrupt because they can’t pay their medical bills — for my mother to die of cancer at the age of 53 and have to spend the last mo
nths of her life in the hospital room arguing with insurance companies because they’re saying that this may be a pre-existing condition and they don’t have to pay her treatment — there’s something fundamentally wrong about that.”

There is, of course, something very wrong with that. But the “pre-existing condition” is only one barrier to care. We will not have a “right” to health care until the other hazardous injustices of our system — persistent uninsurance and inadequate insurance among them — are also safely behind us, with a truly universal and comprehensive system in their place.

A.W. Gaffney is a physician and a writer on issues of health care policy, politics and history.

http://inthesetimes.com/article/15091/underinsured_in_the_age_of_obamacare/

Support for a single-payer system

By Christopher Stack, M.D.
Orthopedics Today, Letters, June 2013

In his commentary in the April issue of Orthopedics Today, Dr. Jackson makes several valid points. He correctly cites the many confusing facets of the Affordable Care Act (ACA), certainly a wishful title given that there is little in the bill that will control costs. In the long run, the legislation will not be affordable for the nation, and the people will be the ultimate payers. No one I am aware of, who follows health care policy, is pleased with the ACA.

Dr. Jackson suggests the possibility that the ACA was a conspiracy to speed the way to a single-payer system. Given the increased role of private insurers with millions of new customers and federal subsidies, this seems highly unlikely. The probability of a single-payer system should be celebrated not feared. The enormous benefits that have been projected far outweigh the alleged deficiencies of a more “socialized” system.

“Financial chaos” has been with us for decades. What will bring order to that chaos is the adoption of a single-payer system, namely the expansion of Medicare to bring all citizens into the fold as beneficiaries and premium paying members. By enlarging the risk pool to 300,000,000, including large numbers of the young and healthy, the actuarial experience will be improved, administrative efficiency will be improved and enormous overhead savings will accrue, which can be used to deliver quality care privately through our current delivery system to all Americans.

Support for a single-payer system, both in the general public and in the health care professions, has been growing. A single-payer system remains this country’s best option for solving our long-term fiscal problems while providing the best care for our citizens. Single-payer systems, or their fiscal equivalents, have been proven to be successful in every other industrialized nation in the world.

Dr. Christopher Stack resides in Indianapolis.

Would Syria benefit from a single payer system?

Syria: An overview of MSF programmes in and around the country

MEDECINS SANS FRONTIERES, May 23, 2013

The conflict in Syria is extremely intense. Frontlines continue to shift. The medical system is reduced to tatters. An estimated 6.8 million people are in urgent need of humanitarian assistance inside Syria and in the neighbouring countries. And people in enclaves are cut off from assistance.

Despite the very real challenges of operating in the country, MSF is now running five hospitals inside Syria and is increasing mobile clinic activities around some of these hospitals. Simultaneously, MSF is actively seeking to open new projects where it is safe to do so.

MSF is using only private donations for its work in Syria in order to remain entirely independent of all political positioning around the crisis.

MSF is also working in the neighbouring countries: Iraq, Jordan, Lebanon and Turkey where some 1.5 million Syrians have fled. These countries have been overwhelmed by the influx of refugees and the humanitarian response has so far been unable to meet their needs.

http://www.msf.org/article/syria-overview-msf-programmes-and-around-country

And…

U.S. Is Said to Plan to Send Weapons to Syrian Rebels

By Mark Mazzetti, Michael R. Gordon and Mark Landler
The New York Times, June 13, 2013

The Obama administration, concluding that the troops of President Bashar al-Assad of Syria have used chemical weapons against rebel forces in his country’s civil war, has decided to begin supplying the rebels for the first time with small arms and ammunition, according to American officials.

Supplying weapons to the rebels has been a long-sought goal of advocates of a more aggressive American response to the Syrian civil war.

But even with the decision to supply lethal aid, the Obama administration remains deeply divided about whether to take more forceful action to try to quell the fighting, which has killed more than 90,000 people over more than two years.

http://www.nytimes.com/2013/06/14/world/middleeast/syria-chemical-weapons.html

New York Times Reader Comment:

Don McCanne
San Juan Capistrano, CA

They have a tragic conflagration over there and we’re helping by pouring more gasoline on it?

Is “Peace on Earth” only for Christmas cards?

http://www.nytimes.com/2013/06/14/world/middleeast/syria-chemical-weapons.html?comments#permid=425

Comment:

By Don McCanne, M.D.

Syria needs their Mahatma Gandhi – someone who will be an inspiration for non-violence and civil rights.

And single payer for Syria? We can’t even get single payer in the United States. Perhaps we need our own Mahatma Gandhi.

Celebrating our nurse colleagues

By Andrew D. Coates, M.D., F.A.C.P.
WAMC Northeast Public Radio, June 14, 2013

I practice hospital medicine.

Recently the nurses at our hospital voted to give me an award. They told me about it, discreetly, one by one, ahead of the official notice from the administration. These caregiving colleagues, upon whom our patients in the hospital depend every day, took the time to let me know that they also depend upon me. Wow. A true honor.

We doctors organize and order plans of care, diagnostic tests and specific therapies, adapted to individual needs and immediate circumstances. Physicians, in hospital medicine and in every specialty, have a very challenging role.

To do a good job it often seems that we have be more thorough than smart, for thoroughness combined with insight is what can best protect patients from unexpected events. Being thorough also means counting upon our colleagues in nursing and every allied caregiving discipline.

This intellectual dimension is central to a physician’s life, constantly learning and teaching, ever struggling to confront what it is we don’t know. When we say that physicians embrace lifelong learning we sometimes forget that true learning comes with facing our self-doubts.

Yet shouldering this responsibility is compensated with the privileges of professional autonomy and collaboration in an atmosphere of mutual respect from our colleagues. That is the life of doctors.

Nurses have a different life. Our patients who come to the hospital sick, depend upon nurses in the most crucial, personal ways.

We might paraphrase what the great American writer Zora Neale Hurston once said of woman’s relationship to the world. In comparison to doctors, nurses are “the mule” of the hospital.

Nurses shoulder the burden of caregiving physically, in the moment, when it comes to serious illness. In human life, in sickness like in health, things do not always go as planned. No matter how things go, nurses are there to respond, minute by minute, at the bedside.

In turn, participating in the multidisciplinary effort to help our patients brings its own reward. Our shared efforts, the human relationships among caregivers, adds meaning to our lives as well as those of our patients, for ultimately there is no mind-body duality, but our best human effort, combined. Patients and physicians, for different reasons, depend upon nurses in a profound way, at every step.

The hospital can be such an awful, frightening place, yet when we’re joined in common cause, helping another human being, we find ourselves compelled to be there, loving our role. Seeing hospital care this way helps explain why we need to protect the relationships and efforts of the caregivers in order to protect the patient’s health.

This is an important reason why we need a national health program that will provide for every patient. So many private interests, each with perverse financial incentives, presently invade, warp, thwart, and even poison our caregiving relationships.

But let’s save that for another day.

For today, let’s savor the mutual recognition of caregivers, doing the best we can, together, under the circumstances.

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-celebrating-our-nurse-colleagues

Competition in Medicare programs: Boon or boondoggle?

By Carole Carson
The Union (Nevada City, Calif.), June 11, 2013

Does competition to provide insurance for Medicare recipients reduce costs? Or does competition simply increase the tab picked up by taxpayers?

Dr. Ida Hellander, policy director for Physicians for a National Health Program, a nonprofit research and advocacy group, thought taxpayers should know the answers to these questions.

In her research study published in the International Journal of Health Services, Hellander found that competing insurance programs, called Medicare Advantage plans, did not save money. In fact, since their introduction, the private (mostly for-profit) insurance programs have cost taxpayers an extra $282.6 billion.

Hellander adds, “In 2012 alone, private insurers are being overpaid $34.1 billion.” This money, Hellander believes, should have been used to reduce the federal deficit, shore up Medicare’s trust fund or improve patient care — not to enrich private insurance companies.

In 1985, Medicare contracted with private (mostly for-profit) insurance plans such as UnitedHealth and Humana for coverage of Medicare enrollees in a plan called Medicare Advantage. The idea was that Medicare Advantage plans would compete with the traditional fee-for-service Medicare insurance.

Ironically, part of the argument for introducing the Advantage plans was that the competition would lower Medicare costs. Indeed, since their inception, the Advantage plans have become increasingly popular because they offer enrollees additional benefits at reduced premiums. But because of the added benefits, the lower premiums and the need to make a profit, the Advantage programs cost Medicare about 25 percent more than the traditional Medicare program.

Medicare currently pays these privately run plans a set premium per enrollee (about $10,123). This amount is $2,526 more than the premium paid for enrollees covered under the standard Medicare plan.

About 27 percent of Medicare beneficiaries are currently covered under Medicare Advantage plans. Given how profitable the Advantage plans are for private insurers and how attractive the expanded benefits and lower premiums are for enrollees, this number is expected to grow at a fast clip.

Just how profitable are these programs for the private insurers?

UnitedHealth Group could afford to bump the annual compensation of its chief executive officer, Stephen J. Hemsley, to $13.9 million from $13.4 million in the prior year. The increase was based in part on his leadership in solidifying the company’s position as “the biggest provider of the privately run, subsidized versions of the government’s Medicare program for the elderly and disabled people.”

Guess who’s subsidizing Mr. Hemsley’s salary? Look around. It’s you, me and other taxpayers.

Dr. Steffie Woolhandler, coauthor of the study, concludes, “It’s clear that having Medicare Advantage programs compete with Medicare doesn’t save us money. In fact, the opposite is the case. The private plans only add waste, and the aggregate waste is staggering — enough to be a significant drag on the economy.”

Can taxpayers afford the extra cost to help private insurers make a profit from Medicare? Given the intent of Medicare to provide basic healthcare coverage to all enrollees, should all enrollees receive the same benefits? Or are some recipients entitled to expanded benefits at reduced premiums? If so, should taxpayers cover the cost of paying for these extra benefits and lowered premiums?

Or does a single-payer, not-for-profit model with universal benefits and premiums make more financial sense?

What do you think?

Carole Carson lives in Nevada City.

PNHP note: The study referred to above can be found here.

http://www.theunion.com/opinion/columns/6891332-113/medicare-advantage-plans-benefits