PNHP

Hawaii should end Medicaid managed-care model

Hawaii should end Medicaid managed-care model

By Stephen Kemble, M.D.
Honolulu Star-Advertiser, April 21, 2013

Hawaii was recently awarded a $937,691 State Innovation Model grant to plan health care reform for Medicare and Medicaid.

However, no reforms can be effective without good physician participation and good access to care for patients, and we have serious problems with both in our Medicaid managed care program. If we don’t fix these problems, Hawaii will waste almost a million dollars and several years on ineffective reforms.

Hawaii converted our state-run, fee-for-service Medicaid program to managed care via competing private plans, in stages, in 1994 and 2009. This conversion has demonstrably increased the cost of the Medicaid program while reducing patient access to care and quality of care.

Hawaii’s Medicaid costs have been rising around 3 percent faster than the national average since Medicaid managed care was introduced here in the mid-1990s, according to Kaiser Family Foundation State Health Facts. Regardless of what the managed care companies will tell the state, privatization of Medicaid has led to increased cost and declining access and quality of care wherever it has been studied.

The managed-care model relies on restriction and denial of care. Escalating administrative burdens imposed by managed care plans are literally driving doctors out of treating Medicaid patients, and it has become almost impossible to find a private-sector doctor who will accept new Medicaid patients. Access to outpatient care is getting worse, undoubtedly leading to increased preventable hospitalizations.

Competing managed-care plans add substantially higher administrative costs, much of which are misleadingly counted as “health care” for reporting purposes, adding to the total cost that the state must pay for Medicaid.

Failures in care coordination are largely due to fragmentation of Medicaid and excessive managed-care restrictions. Each plan has its own restricted network of doctors and its own formulary and prior authorization policies. This means increased administrative hassles for doctors, fragmentation of the data needed for health information technology and care coordination, declining physician participation, and disruption in care when patients switch plans.

The Medicaid managed-care plans talk about “integrated, coordinated care,” but in practice this is true only for Kaiser, where Medicaid patients have the same access to care as any other Kaiser member, and to some degree for HMSA, which has better acceptance among doctors than the other Medicaid plans.

Payment and delivery system reforms cannot be effective without access to cost-effective care. There is nothing in the governor’s Health Transformation Initiative that addresses the reasons doctors are refusing Medicaid patients. The managed-care policies that obstruct and deter care and associated administrative hassles for doctors are being left in place. Doctors may complain about low fees, but that is not the reason they have been fleeing Medicaid. Medicaid fees relative to commercial rates have not changed significantly in the past 20-30 years, but physician acceptance of Medicaid patients declined only after Medicaid was broken into competing private plans.

The state actually ran Medicaid much more cost-effectively than the private plans do now, but a consolidated Medicaid program could use a single third-party administrator to run the program in lieu of re-creating the administrative structures that were in place before conversion to Medicaid managed care.

Hawaii could markedly reduce Medicaid administrative costs while increasing physician participation and access to care simply by terminating our Medicaid managed-care program when the contracts expire at the end of this year, and go back to fee-for-service Medicaid. Then we could add care coordination programs funded with the State Innovation Model planning grant, including patient-centered medical homes and community care teams, and see if they help improve the cost-effectiveness of care.

Dr. Stephen Kemble is president of the Hawaii Medical Association; he also serves on the Hawaii Health Authority and was on the executive committee of the Hawaii Health Project.

Labor council, plumbers local in Alabama endorse H.R. 676

Actions bring total labor organization endorsements to 600 nationwide

By Kay Tillow

On April 15, the Northeast Alabama Labor Council in Gadsden endorsed H.R. 676, national single-payer health care legislation sponsored by Congressman John Conyers.

President Garry “Gabby” Frost brought the resolution before the council in response to an appeal from the All Unions Committee for Single Payer Health Care – H.R. 676 and from Pippa Abston, M.D., Ph.D., a board member of Physicians for a National Health Program and a Huntsville, Ala., pediatrician.

“Health care is a necessity not a privilege,” said President Frost after the adoption of the resolution for H.R. 676. “Everybody’s got to have it. This is the only industrialized nation that does not have it.”

The Northeast Alabama Labor Council is the 145th Central Labor Council to endorse H.R. 676. The council represents workers in nine counties: Calhoun, Chambers, Cherokee, Cleburne, DeKalb, Etowah, Marshall, Randolph, and St. Clair. The Southwest Alabama Labor Council in Mobile and the Alabama State AFL-CIO had previously endorsed H.R. 676.

President Frost, who is the business manager of Local 498, United Association of Plumbers and Pipefitters, reports that Local 498 has also endorsed H.R. 676. That brings the total of union organizations that have endorsed H.R. 676 to 600.

Dr. Pippa Abston commented on the importance of these union endorsements of H.R. 676. She said, “As an Alabama physician and Physicians for a National Health Program board member, I am thrilled to hear this news! Medicare for All is an achievable, practical way to address our health care needs and would go a long way towards relieving our state’s constant budget struggles. Thank you to our friends in Labor for helping bring H.R. 676 a step closer to success.”

****

H.R. 676, the Expanded and Improved Medicare for All Act, would institute a single-payer health care system by expanding a greatly improved Medicare to everyone residing in the U.S.

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

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

In the current Congress, H.R. 676 has 41 co-sponsors in addition to Conyers.

H.R. 676 has been endorsed by 600 union organizations including 145 Central Labor Councils/Area Labor Federations and 41 state AFL-CIO’s (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, NE, NJ, NY, NV, MA & RI).

For further information, a list of union endorsers, or a sample endorsement resolution, contact:

Kay Tillow, All Unions Committee for Single Payer Health Care—H.R. 676, c/o Nurses Professional Organization (NPO), 1169 Eastern Parkway, Suite 2218, Louisville KY 40217. Phone: (502) 636 1551; e-mail: nursenpo@aol.com; website: http://unionsforsinglepayer.org

Hospital Head Warns of Racism in U.S. Health Care System

By Jeffrey Hess
Mississippi Public Broadcasting News, April 19, 2013

JACKSON, Miss. — The head of a major U.S. hospital is warning that the health care industry in the U.S. is ignoring embedded racism.
 
Dr. Claudia Fegan is the chief medical officer of a major Chicago hospital.  She talks about what she views as a major problem in the current health care system.
 
“The reality is, in the delivery of health care in this country racism still plays an important role,” says Fegan.
 
She says evidence shows that minority patients have worse health care outcomes in most situations, a disparity that transcends class and education level.
 
“Black women with college degrees whose birth do not have as good an outcome as white women who do not have a high school diploma. It is not as simple as socio-economic status or the notion that you can earn or educate yourself out of these problems,” continues Fegan.
 
For example, In Mississippi black babies are twice as likely to die as infants compared to white babies.
 
Fegan says doctors and patients often have very different perceptions of the quality of a doctor’s visit, which she says contributes to doctors not understanding how race impacts health care.
 
She says doctors and hospitals need to do more to recognize the cultural differences and acknowledge the worse outcomes to begin fixing the issue.

http://mpbonline.org/News/article/hospital_head_warns_of_racism_in_u.s._healthcare_system

Uwe Reinhardt on "one size fits all"

Author Interview

JAMA, April 16, 2013

Uwe E. Reinhardt, PhD, economics professor at Princeton:  On this point, I’m very disappointed that we Americans couldn’t even get the exchanges right. As Atul said, an exchange is really just like the personnel benefit department at General Motors. It’s just an electronic market to buy health insurance. I could show you the Swiss or the German exchanges. We have now made a horrendous mess of these exchanges. It cost close to a billion dollars to implement the California exchange, and heaven knows what’s happening in the other states. I was thinking if this generation of Americans had to plan the Normandy invasion, I think they would never have gotten there, or by the time they got there, the Russians would have been there. It is just unbelievable what an administrative nightmare the Affordable Care Act has become. Americans always tell me – I’m just an immigrant trying to learn about this country – they always tell me, oh, one size doesn’t fit all. Well, tell that to McDonald’s or to the Holiday Inn. In fact, Americans invented the idea that one size fits all, and built great industries on it – the auto companies, the food services, the hotels, the department stores – they’re all one size fits all.

Ed Livingston, deputy editor of JAMA:  You mentioned that companies like McDonald’s and Holiday Inn have been very successful in building large industries with uniformities, but those are private industries. Is the problem that when the government tries to take on something this complex they just can’t seem to get it done?

Uwe Reinhardt:  Well, it’s for the reason that Atul mentioned, that somehow we give enormous respect to regional variations, and, because we do, we make everything enormously complex. Imagine if you ran the U.S. Army that way. Soldiers from every state could pick their own rifles, and so on and so forth. Sometimes you have to do national things. I recently wrote a Health Affairs piece and said, every American is a dual citizen. He has citizenship in the state that they live in and citizens in America. And it really depends when you draft federal legislation, which citizenship do you make supreme. Typically you find Democrats put American citizenship up on top. The idea being that a baby in Mississippi should have the same rights to access to health care as a baby in Massachusetts, because they are both Americans. I think more on the Republican side they would say, no, what happens to a Mississippi baby is up to the people down there, and you can do what you want to a Massachusetts baby up there in Massachusetts. Now, that’s a different conception, neither right or wrong, but I’m saying on some issues we really, in my view, should have national policies because it would be much more easy to administer. After all, that’s what we said in Medicare. We said no matter where the elderly live, they should have the same deal in health care, and we created Medicare. Has Medicare been that much of a disaster?

Audio (April 16,2013): http://jama.jamanetwork.com/multimedia.aspx#AuthorInterviews

Comment:

By Don McCanne, M.D.

Hmmm.

“It is just unbelievable what an administrative nightmare the Affordable Care Act has become.”

“…they always tell me, oh, one size doesn’t fit all. Well, tell that to McDonald’s or to the Holiday Inn.”

“…but I’m saying on some issues we really, in my view, should have national policies because it would be much more easy to administer.”

“We said no matter where the elderly live, they should have the same deal in health care, and we created Medicare. Has Medicare been that much of a disaster?”

So can we draw the conclusion that we should adopt the administrative simplicity of a national, one-size-fits-all Medicare that gives everyone the same deal in health care? Seems like a really good idea.

Upstate New York Greece

By Andrew D. Coates, MD, FACP
WAMC Northeast Public Radio, April 19, 2013

I live in upstate New York. If you’re hearing this, chances are you do too.

One of my great friends at the university once casually remarked that it seemed the whole world came through our community. “Look deeply enough into anyone’s family history and you will find a connection,” she said. “Some part of everyone has been here one way or another.”

Her consciousness about the connectedness of one community to the whole world reminded me of a fragment by Franz Kafka:

“You do not need to leave your room. Remain sitting at your table and listen. Do not even listen, simply wait, be quiet, still and solitary. The world will freely offer itself to you to be unmasked, it has no choice, it will roll in ecstasy at your feet.”

When the world is busy rolling up at our feet it reveals that upstate New York, like anywhere, has its own distinct and proud culture. From it, our own William Kennedy, Richard Russo, Lauren Groff and many others have spun great literature. Just think, for example, of the extraordinary catalogue of people who have come through Yaddo or Caffe Lena, both in Saratoga, or Bard College, just down the Hudson, and all that these people have shown us, collectively, about life and our world.

In other words, knowing one’s community well can be, as my friend was pointing out, a way to understand the whole world.

We physicians have earned great scientific insight into health and illness in our patients. But we also gain great human insight — how the conditions of everyday life impact the fate of our patients. Ultimately an understanding the culture and the economy of our community is inescapable if we are to serve our patients and our profession. This leads to a sense of connectedness with the whole world.

Lately I’ve been struggling to overcome a sense of shock as I learn about the living conditions and the daily life distress faced by my patients.

I feel a bit like Rip Van Winkle, for after several years away from hospital medicine I returned to full time. In the hospital an entire slice of life, a cross section of all cultures and classes and ages, streams into the building, for we all face a risk of acute medical illness. It has opened my eyes.

The ravages of drug addiction — how it can tear families asunder; the weight of a serious illness upon a spouse — how people forfeit their homes and their jobs because of a family health crisis; how temporary and part-time jobs, always with no sick time, force the postponement of necessary medical care, not only for the person with the difficult job, but for their children, their parents, anyone who depends upon them. These issues arise again and again and in the most personal way. Things have gotten worse in our community over recent decades — and I am a frontline witness.

To illustrate our connectedness to the world, a study published this week in the American Journal of Public Health looked at the adverse health consequences of the economic recession and subsequent austerity measures in Greece over recent years. The team of Greek and American researchers found, for example, that between 2007 and 2009, suicide rates among men rose 22.7 percent.  Homicide mortality rates among men increased by 27.6 percent.

Mental disorders, substance abuse, and infectious diseases showed worsening trends. In turn, the government cut public health spending dramatically.

In short, government austerity is bad for our health.

Meanwhile UNICEF published a study of child well-being in the 29 wealthiest nations. My friend Dr. Don McCanne pointed out that out of 29 nations, Greece was ranked number 25. The United States was behind Greece at 26.

As I read these studies the tears and sobs of my patients and their loved ones leapt to mind. The human stress of illness in the context of difficult economic times has been worsened by austerity here, just like Greece.

The same schemes of privatization, deregulation and cuts to public programs that have happened in Greece can be found in every community in upstate New York.

The people who make the decisions don’t seem to understand the human consequences of austerity policies on top of the difficult economy.  But for those of us who know and love our home communities and our local culture — whether upstate New York or Greece or anywhere — the tragic health effects tear a hole in our hearts and our future.

Andrew D. Coates, M.D., F.A.C.P., 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, which was titled “The Human Consequences of Austerity” by WAMC, here:
http://www.wamc.org/post/andrew-coates-human-consequences-austerity

Suicides, murders rise as Greek austerity takes health toll

By Kerry Sheridan
Agence France-Presse, April 18, 2013

When Greece’s economy took a plunge, murders and disease rates soared, according to a study published Thursday that suggests the impact of the European nation’s austerity cuts may be worse than expected.

Suicide and murder rates climbed from 2007 to 2009 particularly among men, and unusual outbreaks of malaria, West Nile virus and HIV took clinicians by surprise, said the findings in the American Journal of Public Health.

The decline in health came as Greece’s once robust economy collapsed into recession following the global economic crisis of 2007, with unemployment rising from 7.2 percent in 2008 to 22.6 percent in early 2012.

Greece took out billions in loans to stave off financial collapse and implemented austerity measures that included a major downsizing of the Ministry of Health, where spending fell nearly 24 percent from 2009 to 2011.

For patients, the cuts meant many services that were once free now cost money out of pocket, including higher prices for hospitalization. There were salary freezes and layoffs in the health sector, and many preventive programs were halted.

With debates raging in political and economic circles over the true costs and merits of austerity, a team of Greek clinicians and US researchers set out to document the effects of the policies on the health of people in Greece.

“We were expecting that these austerity policies would negatively affect health services and health outcomes, but the results were much worse than we imagined,” said lead author Elias Kondilis, a researcher at Aristotle University.

Among the general population of some 11 million people on the Mediterranean island, suicide rates rose 16 percent and murders climbed nearly 26 percent from 2007 to 2009, said the findings, which draw on Greek government data.

Meanwhile, deaths in the general population from infectious disease increased 13 percent in those two years.

Among men under 65 who were more likely to face the perils of unemployment, the numbers were higher — a 23 percent higher suicide rate, a 25 percent rise in murder rate and a 27.6 percent rise in deaths from infectious diseases.

Normally, preventive measures in developed nations like Greece are successful at keeping diseases such as malaria and HIV to a relatively low incidence, co-author Howard Waitzkin of the University of New Mexico told AFP.

But when programs like needle-exchanges for drug users and condoms for at-risk groups were slashed, the disease rates ballooned.

Researchers were surprised to see three infectious disease outbreaks in a span of 18 months from July 2010 to December 2011, he said.

They included an spate of West Nile virus that infected 197 and killed 35 people and an outbreak of malaria in southern Greece.

Also, there was a 57 percent spike in newly diagnosed cases of HIV infection, from 607 new HIV cases in 2010 to 954 in 2011.

Among injection drug users, the impact was more dramatic — 15 new cases of HIV documented in 2010 compared to 241 cases in 2011, or a 1,506 percent increase.

“These aren’t small percentage changes,” said Waitzkin, distinguished professor emeritus of sociology and medicine at the University of New Mexico.

The study said Greece initially attributed the outbreaks to environmental risk factors but the fact that public health measures had to be deployed after the fact implies that “the risks of transmission had not been addressed through prevention.”

Mental disorders and substance abuse also climbed.

Waitzkin said similar problems were seen in Argentina a decade ago, and the same issues could loom on the US horizon as the American government implements across-the-board spending cuts known as the sequester.

“The concerns are much broader than simply Greece and these kinds of policies in our view are very dangerous for public health,” he said.

http://www.globalpost.com/dispatch/news/afp/130418/suicides-murders-rise-greek-austerity-takes-health-toll

Austerity in Greece linked to serious mental, physical health decline

Psychiatric Annals, April 19, 2013

The economic recession and subsequent austerity measures in Greece were associated with a significant deterioration in public health services and mental and physical health outcomes, according to a new report by Greek and US researchers.

“We were expecting that these austerity policies would negatively affect health services and health outcomes, but the results were much worse than we imagined,” study researcher Elias Kondilis, PhD, of Aristotle University of Thessaloniki in Greece, said in a press release.

Kondilis and colleagues examined data on economic and social conditions, the utilization of health services, and health outcomes in Greece during the 2008-2012 recession. Between 2009 and 2011, there was a 23.7% reduction in the Ministry of Health’s expenditures, and the overall expenses of public hospitals fell by 12.5% during the same period. To address the growing economic crisis, the government deregulated private health services.

A number of adverse health outcomes coincided with these events, according to the researchers.

The all-cause mortality rate continued to decline during the economic crisis, but suicide, homicide and infectious disease rates increased by 16.2%, 25.5% and 13.2%, respectively.

Specifically, the suicide and homicide rates among men increased by 22.7% and 27.6%, respectively, between 2007 and 2009. The 1-month prevalence of major depression doubled between 2008 and 2009 from 3.3% to 6.8%, and the number of people with problematic drug use — primarily heroin — increased 11.6% from 2008 to 2010. Among those aged 35 to 64 years, the increase in the prevalence of drug use was even more significant, at 88.2% in 2010.

Greece experienced three outbreaks of infectious disease in a period of less than 18 months. There were 197 reported cases of neuroinvasive disease and 35 related deaths in October 2010; 63 cases of malaria between May and October 2011; and a 57.2% increase in newly diagnosed cases of HIV-1 infection from 2010 to 2011. Among injection drug users, there was a 1,506.7% increase in newly diagnosed HIV-1 infections.

Although the increased prevalence of infectious disease in Greece was initially attributed to environmental risk factors and migrant populations, the researchers said cutbacks in public health services were to blame, as well. Preventive services such as mosquito- and vector-control programs and the distribution of condoms and clean needles had been dismantled.

The recession in Greece and its economic policies to address the crisis also had an effect on the utilization of health care services, the researchers said. The use of private medical facilities decreased, and the use of public inpatient and primary care services increased by 6.2% and 21.9%, respectively, between 2010 and 2011.

Study researcher Howard Waitzkin, PhD, MD, of the University of New Mexico, said severe economic cutbacks in the United States could lead to health outcomes similar to those in Greece.

“Instead of austerity policies, we need increased public health sector spending to stimulate our failing economy and to protect the health of our people,” he said in the press release.

Disclosure: The researchers report no relevant financial disclosures.

Kondilis E. Am J Public Health. 2013;doi:10.2105/AJPH.2012.301126.

http://www.healio.com/psychiatry/suicide/news/online/%7B69483171-C5EB-4FE8-8DF2-D4BA6B5DB576%7D/Austerity-in-Greece-linked-to-serious-mental-physical-health-decline

Deteriorating Public Health Policies? What Greece, U.S. May Have in Common

By Bob Herman
Becker’s Hospital Review, April 18, 2013

For the past several years, the United States has not been the only country to face a recession. Many parts of Europe have also undergone an economic crisis, especially Greece, and an article in today’s American Journal of Public Health said there are lessons to be learned from how Greece has handled its public healthcare over the past several years.

Since 2007, Greece has faced high rates of unemployment, little economic growth and higher risks of poverty, most of which have been mirrored in the United States to varying degrees. To curtail the fiscal spiral, the Greek government implemented several austerity measures, including massive cuts of government-sponsored health programs, which led to worsening layoffs and stagnant wages, according to the article.

Several authors — including four Greek public health experts and Howard Waitzkin, MD, PhD, of the University of New Mexico — compared the situation in Greece to what is occurring in the United States, as the country considers further cuts to Medicare, the largest health program in the country and the biggest payor for hospitals.

The authors found that after Greece made sweeping cuts to public health programs and services, suicide and homicide mortality rates increased by 22.7 percent and 27.6 percent, respectively. In addition, patients decreased use of private medical facilities, such as private outpatient clinics and hospitals, by 18.5 percent, while healthcare drastically increased at public hospitals and health centers.

As U.S. healthcare reform continues to focus on population health management, researchers said reducing the public safety net, which the United States is considering to do further, could be contradictory with that goal.

“Historical evidence suggests that in times of economic downturn, policies of cutbacks and privatization can further jeopardize populations’ health and health services,” the authors wrote. “On the other hand, sustained public spending or creative reorganization and expansion of public sector health services can protect populations’ health status.”

http://www.beckershospitalreview.com/hospital-management-administration/deteriorating-public-health-polices-what-greece-us-may-have-in-common.html

Greece's crucial lessons on austerity and health

Economic Crisis, Restrictive Policies, and the Population’s Health and Health Care: The Greek Case

By Elias Kondilis, MD, PhD, Stathis Giannakopoulos, MD, PhD, Magda Gavana, MD, PhD, Ioanna Ierodiakonou, MD, PhD, Howard Waitzkin, MD, PhD, and Alexis Benos, MD, PhD
American Journal of Public Health, Published online April 18, 2013

The global economic crisis has affected the Greek economy with unprecedented severity, making Greece an important test of the relationship between socioeconomic determinants and a population’s well-being.
 
Suicide and homicide mortality rates among men increased by 22.7% and 27.6%, respectively, between 2007 and 2009, and mental disorders, substance abuse, and infectious disease morbidity showed deteriorating trends during 2010 and 2011. Utilization of public inpatient and primary care services rose by 6.2% and 21.9%, respectively, between 2010 and 2011, while the Ministry of Health’s total expenditures fell by 23.7% between 2009 and 2011.

What to Learn from the Greek Case

It is tragic that Greece has become an important test regarding the impact of economic and social determinants on a population’s health and well-being. Evidence presented indicates that economic recession and its consequences (unemployment, poverty and social exclusion, homelessness, and insecurity) exert important effects on Greece’s population health and health care services. Several causes of mortality and morbidity related to mental health, substance abuse, and infectious disease already show clear rising trends. Heightened needs and increased demand on public services collide with austerity and privatization policies.

http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2012.301126

And…

More Children in Greece Are Going Hungry

By Liz Alderman
The New York Times, April 17, 2013

Last year, an estimated 10 percent of Greek elementary- and middle-school students suffered from what public health professionals call “food insecurity,” meaning they faced hunger or the risk of it, said Dr. Athena Linos, a professor at the University of Athens Medical School.

(Principal Leonidas) Nikas has taken matters into his own hands and is organizing food drives at (his) school. He is angry at what he sees as broader neglect of Greece’s troubles by Europe.

“I’m not saying we should just wait for others to help us,” he said. “But unless the European Union acts like this school, where families help other families because we’re one big family, we’re done for.”

http://www.nytimes.com/2013/04/18/world/europe/more-children-in-greece-start-to-go-hungry.html?hp&pagewanted=all

And…

Child Well-Being in Rich Countries

UNICEF, April 2013

Rank of child well-being in 29 nations of the industrialized world

25th – Greece
26th – United States

http://www.unicef-irc.org/Report-Card-11/

And…

Growth in a Time of Debt

By Carmen M. Reinhart, Kenneth S. Rogoff
National Bureau of Economic Research (NBER), January 2010

Our main findings are: First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more.

http://www.nber.org/papers/w15639

And…

Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff

By Thomas Herndon, Michael Ash, Robert Pollin
Political Economy Research Institute, University of Massachusetts Amherst, April 15, 2013

Herndon, Ash and Pollin replicate Reinhart and Rogoff and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. They find that when properly calculated, the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0:1 percent as published in Reinhart and Rogo ff. That is, contrary to RR, average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower.

Overall, the evidence we review contradicts Reinhart and Rogoff ‘s claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.

http://www.peri.umass.edu/236/hash/31e2ff374b6377b2ddec04deaa6388b1/publication/566/

Comment:

By Don McCanne, M.D.

Greece’s austerity program, accompanied with privatization of public health services, is having tragic consequences, reflected in the health of the people. Not only is health care impaired, the children are going hungry! It is particularly tragic when you consider that there are solutions to their economic crisis, other than austerity, that would keep their children fed and in good health.

The world-wide austerity movement received a big boost with the publication three years ago of the paper by Carmen Reinhart and Kenneth Rogoff supposedly showing that public debt to GDP ratios over 90 percent resulted in considerable declines in the growth rate of the economy. The “austerians” were off and running. Paul Ryan even included the concept in the budget passed this year by the Republican-controlled House of Representatives.

The problem with the Reinhart/Rogoff thesis is that it is flat-out wrong. The paper by Thomas Herndon and his colleagues proved to be a bombshell that refuted the R/R doctrine and demonstrated that “average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower.” Economists and policy makers are in a frenzy, and let’s hope that it results in a conclusion that transitional resolutions to economic crises require the use of debt to prevent austerity measures that negatively impact the most basic of needs for the people.

So when we look at the UNICEF rankings of child well-being in industrialized nations, we are saddened by the fact that Greece ranks 25th amongst 29 nations. If the European Union had a little heart, they would be helping their sister country pull out of the crisis without extracting a requirement that Greece raises its misery index.

(Excuse the deliberate deception, but it is to make a point. The misery index is a combination of high unemployment and high rates of inflation. Yet inflation is very low, but the austerians are convinced that it should be high even if it isn’t, and so they are acting accordingly – more austerity!)

At least in the United States we are smart enough to not let our budget deficits shift us into an austerity mode. Or are we? President Obama is now negotiating with Republicans to cut back on two of our most successful social programs – Social Security and Medicare, as part of an austerity program.

Where do we stand now? The UNICEF ranking of child well-being has placed the United States in the 26th position, below Greece! More austerity is the very last thing we need!

For those who have been feeling so smug as we look at Greece’s tragic circumstance, think again! Then fire the austerians! It’s a matter of social justice.

Study reveals austerity’s harmful impact on health in Greece

FOR IMMEDIATE RELEASE
April 18, 2013

Contact:
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

Findings are ‘much worse than we imagined,’ researcher says

In one of the most detailed studies of its kind, a team of Greek and U.S. researchers have vividly chronicled the harmful public health impacts of the economic austerity measures imposed on Greece’s population in the wake of the global economic crisis.

Writing in today’s American Journal of Public Health, the researchers cite data showing the economic recession and subsequent austerity policies in Greece have led to a sharp deterioration of health services and health outcomes.

Researchers at the Aristotle University of Thessaloniki in Greece and the University of New Mexico in the United States studied current data on economic and social conditions, utilization of health services, and health outcomes.

They found that key public health indicators declined in tandem with the recession and austerity policies that reduced public services.

For example, between 2007 and 2009, suicide and homicide mortality rates among men increased by 22.7 percent and 27.6 percent, respectively. Mental disorders, substance abuse, and infectious diseases showed worsening trends.

Despite deteriorating health conditions, cutbacks occurred in government financing of public services, as the Ministry of Health’s total expenditures fell by 23.7 percent between 2009 and 2011.

Meanwhile, due to unemployment and loss of personal income, patients decreased their use of private medical facilities, and utilization of already-stressed public inpatient and primary care services rose by 6.2 percent and 21.9 percent, respectively, over a two-year period.

Dr. Elias Kondilis, lead author of the study and a researcher at Aristotle University, commented from London, “We were expecting that these austerity policies would negatively affect health services and health outcomes, but the results were much worse than we imagined.”

Based on their findings, the authors criticize austerity policies that are likely to cause deteriorating health conditions in other European countries and in the United States.

The U.S.-based researcher on the team, Dr. Howard Waitzkin, distinguished professor emeritus of sociology and medicine at the University of New Mexico, said: “The policies of cutbacks currently proposed in the United States for Medicare and Social Security will lead to similar devastating effects on health services and outcomes. Instead of austerity policies, we need increased public sector spending to stimulate our failing economy and to protect the health of our people.”

In contrast to the Greek experience, the authors point to several Latin American countries that have resisted demands to reduce public investments in health services. Such policies, they argue, have led to improved economic and health indicators.

The senior researchers of the study were Dr. Howard Waitzkin on the U.S. side and Dr. Alexis Benos in Greece. Both are readily available for comment.

*****

“Economic crisis, restrictive policies, and the population’s health and health care: The Greek case,” Elias Kondilis, M.D., Ph.D., Stathis Giannakopoulos, M.D., Ph.D., Magda Gavana, M.D., Ph.D., Ioanna Ierodiakonou, M.D., Ph.D., Howard Waitzkin, M.D., Ph.D., and Alexis Benos, M.D., Ph.D., American Journal of Public Health, April 18, 2013 (online ahead of print). For AJPH reprint and subscription information, visit www.ajph.org.

A copy of the study is available at www.pnhp.org/kondilis.

*****

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 18,000 doctors who advocate for single-payer national health insurance, an improved Medicare for all. Dr. Howard Waitzkin is a founding member of PNHP; Dr. Alexis Benos spoke to PNHP’s Annual Meeting in San Francisco in October. PNHP had no role in funding or otherwise supporting the study described above. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Greed, fear and other barriers to health care as a human right

By Philip Caper, M.D.
Bangor Daily News, April 18, 2013

Of all the wealthy countries, only the United States has so far failed to treat health care as a human right. A human right to health care means that everybody receives the same health care whatever their age, gender, health or employment status, racial or religious background, sexual orientation, or wealth and income level.

One reason I often hear cited for our failure to join all other wealthy nations in making health care a human right is that we can’t afford it. Some argue, “We’re already spending too much on health care and cannot afford to expand coverage to everybody.”

They have it backwards. Our failure to expand health care to everybody is a major cause for our high costs, not a reason for not doing more. Slicing and dicing our population into “risk categories” (the fundamental business of the commercial insurance industry), having thousands of different insurance companies (all with their own rules), then arguing about who pays what is very expensive.

The Institute of Medicine recently reported that around 25 percent of the approximately $3 trillion we spend as a nation annually on health care is wasted. Much of this waste is traceable back to the way we pay for that care, segmenting the population into categories and paying for them separately: the elderly, the poor or near-poor, the employed, the unemployed, young people, sick people, well people, veterans, Native Americans, and so on.

Each category and its attached financing pool receives its own treatment — range of benefits, prices, utilization review programs, amounts of co-pays and deductibles and more. This complexity is very costly, not only for the private insurers and public programs, but also for doctors, hospitals and health care systems to administer.

I recently heard the CEO of a large Medicare Advantage plan in Maine say that he could cut his overhead by 50 to 60 percent if we reduced the number of payment plans he had to deal with to one. He then went on for the first time publicly to endorse a universal plan for Maine — everybody in, nobody out of the same plan.

Our system of financing health care in the U.S. leaves many people without coverage (about 35 million in the case of Obamacare, even in the unlikely event everything works perfectly), leading to high rates of avoidable human suffering and personal bankruptcy. Obamacare is far too complicated, as was Maine’s ill-fated Dirigo program. Both made the mistake of trying to build on our current, badly flawed employment-based health insurance system.

Obamacare’s rollout is already over budget and behind schedule, mostly because of its complexity. Maine’s Dirigo program is on life support and slated to be phased out. I’m afraid their problems are only going to get worse.

Other countries figured out long ago that simplicity works and as a result have health care systems that cover everybody, get better results than we do for most health outcomes, are far more popular with both their publics and politicians, and cost about half of what ours does.

As a physician, I have always thought that health care should be a human right. I believe there is a strong moral argument for health care systems that cover everybody. There is now a strong economic argument as well. Overwhelming evidence exists from all other wealthy countries that a simpler and therefore more efficient system is much less expensive and more humane than ours.

So why don’t we just go ahead and simplify our system by expanding Medicare, a program that is overwhelmingly popular with the U.S. public, to everybody?

When I’m asked this question, I think of “A-FIG:”

— Apathy on the part of the protected classes. Those of us employed by large businesses, highly paid executives and some union workers who enjoy good (and heavily tax-subsidized) health insurance. “I’ve got mine.”

— Fear of losing what we already have, if we are consumers of health care, and of losing our (sometimes excessively high) incomes, if we are individual or corporate providers of health care.

— Ignorance on the part of most Americans about how our health care system now works, that other nations have better health care systems than ours by almost all measurable outcome criteria, and that our health care system could be much better here, if we had the political will to change it.

— Greed on the part of lots of people (most of them corporate “people”) who are enjoying windfall profits and would like to continue doing so from our present disorganized, poorly regulated and opaque system.

We could do much better. As more of us question the status quo and understand how health care as a human right can become a reality, reasons for not doing so will dwindle to nothing.

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

http://bangordailynews.com/2013/04/18/health/greed-fear-and-other-barriers-to-health-care-as-a-human-right/

Public and private payment of hospital complications

Relationship Between Occurrence of Surgical Complications and Hospital Finances

By Sunil Eappen, MD; Bennett H. Lane, MS; Barry Rosenberg, MD, MBA; Stuart A. Lipsitz, ScD; David Sadoff, BA; Dave Matheson, JD, MBA; William R. Berry, MD, MPA, MPH; Mark Lester, MD, MBA; Atul A. Gawande, MD, MPH
JAMA, April 17, 2013

We found that under private insurance and Medicare, which cover the majority of US patients, the occurrence of surgical complications was associated with higher hospital contribution margins. Depending on payer mix, efforts to reduce surgical complications may result in worsened near-term financial performance.

The financial effects of surgical complications varied considerably by payer type. Complications were associated with more than $30 000 greater contribution margin per privately insured patient ($16 936 vs $55 953) compared with less than $2000 per Medicare patient ($1880 vs $3629). In contrast, for Medicaid and self-pay procedures, those with complications were associated with significantly lower contribution margins than those without complications.

http://jama.jamanetwork.com/article.aspx?articleid=1679400

And…

Making Surgical Complications Pay

By Uwe E. Reinhardt, PhD
Editorial, April 17, 2013, JAMA

In this issue of JAMA, Eappen et al reach the troublesome but not surprising conclusion that hospitals in the United States can profit handsomely from postsurgical complications, even if the hospitals could avoid them.

Under the federal Medicare program, payment for all of the services involved in hospital inpatient treatment has been bundled since the mid-1980s into 1 payment per inpatient case categorized into 1 of 745 distinct diagnosis related groups (DRGs) of cases, which are categorized by adjustments for complications and comorbidities. This approach has made Medicare a pioneer in payment reform that has since been copied worldwide.

According to the authors’ propensity-adjusted estimates, a patient with 1 or more complications results in a $39 017 (95% CI, $20 069-$50 394) greater contribution margin than a patient without complications if the care is reimbursed by a private payer. In contrast, for Medicare, the gain in complication-related contribution margins is only $1749 (95% CI, $976-$3287). This observation contradicts the prevailing perspective that private insurers are axiomatically assumed to be smarter payers than government-run Medicare. However, if, as the authors imply, many of the observed postsurgical complications were avoidable, then perhaps Medicare should more appropriately be considered a smarter payer than private insurers. By having moved to the bundled DRG payments for inpatient care as early as the mid-1980s, Medicare appears to have largely avoided rewarding hospitals financially for avoidable mistakes.

However, the data reported by the authors appear different for the state-run Medicaid programs. Essentially, Medicaid did not even cover the hospital’s variable costs of treating Medicaid patients. Suggesting to the public that fellow citizens receiving Medicaid have adequate health insurance but then not covering even the clinicians’ and hospitals’ variable costs of treating those patients might warrant the label of “government-initiated Medicaid fraud.”

http://jama.jamanetwork.com/article.aspx?articleid=1679384

Comment:

By Don McCanne, M.D.

In reporting this JAMA article on surgical complications and hospital finances, headlines throughout the nation are stating that hospitals profit from surgical errors. The story that should be reported is that private insurers have been richly rewarding hospitals for surgical complications, whereas Medicare has largely avoided paying these rewards.

Specifically, private insurers pay an average of $39,000 more for surgical complications whereas Medicare pays only $1,700 extra. Obviously the government has done a much better job than the private sector in ensuring value in our health care purchasing, not to mention providing incentives to improve performance.

The government isn’t always right, as the Medicaid program demonstrates. Being chronically underfunded, Uwe Reinhardt suggests that the resulting underpayments “might warrant the label of ‘government-initiated Medicaid fraud.'”

Medicare’s prospective payment system using DRGs (745 diagnosis-related groups) has improved payment levels, but it still provides an incentive for the provision of excess care. There is a better way. Hospitals should receive global budgets based on legitimate costs, just as our fire and police departments are budgeted. Periodic re-budgeting will compensate for changing medical and community requirements. Of course, incentives catering to passive investors should be removed by converting all hospitals to nonprofit status.

Global budgeting for hospitals is just one of the features of the single payer model of reform as advocated by Physicians for a National Health Program, all of which together would result in an affordable system of high-quality care for everyone. We should go for it.