Business Roundtable, January 2013

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies with more than $7.3 trillion in annual revenues and nearly 16 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market.

“Medicare and Social Security were not designed to cope with America’s new demographic realities. CEOs are calling for gradual changes that will modernize these programs and preserve the safety net for future generations of retirees.”
– Gary W. Loveman, Ph.D., Chairman, CEO & President, Caesars Entertainment Corporation, and Chair of BRT’s Health and Retirement Committee

Essential Elements of a Medicare Modernization Proposal

• Protect Medicare for Those Approaching Retirement: Medicare’s age of eligibility should be moved to age 70. However, this will not affect those age 55 or older today.

• Expand Competitive Models of Care: By 2015, Medicare should offer seniors the opportunity to choose among competing and comprehensive private plans and traditional Medicare. The private plans would offer a benefit similar to the existing Medicare program with the flexibility to innovate, sell across state lines, and create greater value strategies. Plans would be required to accept all applicants and would risk adjust the premium to take into account age and health status. The traditional fee-for-service program would compete for enrollment with private plans on cost, quality and a more innovative benefit structure. We believe that competition in the provision of health care to America’s seniors will bring substantial benefits, as it has to most all other categories of personal expenditure. The recent experience of competition in the Medicare Part D program serves as a persuasive indication of the potential savings and improvement in care available through the provision of choice to well-informed seniors.

• Reduce Taxpayer Costs for Upper-Income Beneficiaries: Today, the Part B premium (physician services) and the Part D premium are means-tested and other types of means testing should be explored. By 2015, additional means testing for Medicare services should be considered.

• Protect the Safety Net for Low-Income Americans: Low-income beneficiaries should retain the existing financial support received today. Improvements should be made in care-coordination and a focus on wellness and chronic care management.

(Social Security recommendations available at this link.)

http://businessroundtable.org/studies-and-reports/social-security-reform-and-medicare-modernization-proposals/

And…

Doctoring Health Care, I

By Barbara Dreyfuss
The American Prospect, December 17, 2006

In early 2006, Glen Barton, the retired CEO of Caterpillar and former head of the Business Roundtable’s health-care task force, said the solution to the health-care crisis is a single-payer system, citing Medicare as a model.

http://prospect.org/article/doctoring-health-care-i

Comment:

By Don McCanne, M.D.

Although the slick brochure from these wizards of industry at the Business Roundtable might make it look like these gentlemen are doing us a great favor by showing us how to save Medicare and Social Security from bankruptcy, their recommendations are, in fact, taking a supercilious approach to diminishing the effectiveness of America’s highly regarded social insurance programs.

This cavalier attitude is expressed in a comment by Caesars’ Gary Loveman, chairman of Business Roundtable’s Health and Retirement Committee that released this report. “Those of us who are in the BRT are paid to try to solve very difficult problems effectively. I would tell you that most of them are a lot harder than this, frankly” (Politico Pulse, Jan. 17).

What do they have in mind for Medicare? They would increase eligibility age to 70 – a disaster for future retirees. They would privatize the traditional Medicare program by throwing it into a market of private plans – a devious scheme to shift health care costs onto the backs of those with greater health care needs. They would also means-test benefits, losing the support of the wealthier individuals who have the strongest political voice, threatening to convert Medicare into a welfare program.

And Social Security? They would also increase Social Security retirement age to 70. And in a stroke of genius, they recommend that Americans simply save more for their retirement. Why didn’t we think of that before?

A word needs to be said about their recommendation to reduce future Social Security cost of living adjustments by converting to the chained-CPI. When individuals are forced into a frugal existence they learn to cut back and do without just so that they will have enough money for basic food and housing at the end of the month, if that. Under chained-CPI, the government assumes that this frugality represents the new, lower consumer price index for this sector, and so they adjust out the savings that the Social Security beneficiaries have accrued merely for the purpose of getting them all of the way through to the end of the month. Pretty cruel.

A decade ago, Glen Barton, Chairman and President of Caterpillar, led the BRT Health and Retirement Committee, currently headed by Gary Loveman. What a contrast. Glen Barton’s experience motivated him to become an advocate of “a single-payer system, citing Medicare as a model.” Lovemen? Well, you read it above. What a difference a decade made.

Class warfare? Ugly label, but…

Social Security Reform and Medicare Modernization Proposals

Business Roundtable, January 2013
Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies with more than $7.3 trillion in annual revenues and nearly 16 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market.
“Medicare and Social Security were not designed to cope with America’s new demographic realities. CEOs are calling for gradual changes that will modernize these programs and preserve the safety net for future generations of retirees.”
– Gary W. Loveman, Ph.D., Chairman, CEO & President, Caesars Entertainment Corporation, and Chair of BRT’s Health and Retirement Committee
Essential Elements of a Medicare Modernization Proposal
• Protect Medicare for Those Approaching Retirement: Medicare’s age of eligibility should be moved to age 70. However, this will not affect those age 55 or older today.
• Expand Competitive Models of Care: By 2015, Medicare should offer seniors the opportunity to choose among competing and comprehensive private plans and traditional Medicare. The private plans would offer a benefit similar to the existing Medicare program with the flexibility to innovate, sell across state lines, and create greater value strategies. Plans would be required to accept all applicants and would risk adjust the premium to take into account age and health status. The traditional fee-for-service program would compete for enrollment with private plans on cost, quality and a more innovative benefit structure. We believe that competition in the provision of health care to America’s seniors will bring substantial benefits, as it has to most all other categories of personal expenditure. The recent experience of competition in the Medicare Part D program serves as a persuasive indication of the potential savings and improvement in care available through the provision of choice to well-informed seniors.
• Reduce Taxpayer Costs for Upper-Income Beneficiaries: Today, the Part B premium (physician services) and the Part D premium are means-tested and other types of means testing should be explored. By 2015, additional means testing for Medicare services should be considered.
• Protect the Safety Net for Low-Income Americans: Low-income beneficiaries should retain the existing financial support received today. Improvements should be made in care-coordination and a focus on wellness and chronic care management.
(Social Security recommendations available at this link.)
http://businessroundtable.org/studies-and-reports/social-security-reform…
And…

Doctoring Health Care, I

By Barbara Dreyfuss
The American Prospect, December 17, 2006
In early 2006, Glen Barton, the retired CEO of Caterpillar and former head of the Business Roundtable’s health-care task force, said the solution to the health-care crisis is a single-payer system, citing Medicare as a model.
http://prospect.org/article/doctoring-health-care-i

Although the slick brochure from these wizards of industry at the Business Roundtable might make it look like these gentlemen are doing us a great favor by showing us how to save Medicare and Social Security from bankruptcy, their recommendations are, in fact, taking a supercilious approach to diminishing the effectiveness of America’s highly regarded social insurance programs.
This cavalier attitude is expressed in a comment by Caesars’ Gary Loveman, chairman of Business Roundtable’s Health and Retirement Committee that released this report. “Those of us who are in the BRT are paid to try to solve very difficult problems effectively. I would tell you that most of them are a lot harder than this, frankly” (Politico Pulse, Jan. 17).
What do they have in mind for Medicare? They would increase eligibility age to 70 – a disaster for future retirees. They would privatize the traditional Medicare program by throwing it into a market of private plans – a devious scheme to shift health care costs onto the backs of those with greater health care needs. They would also means-test benefits, losing the support of the wealthier individuals who have the strongest political voice, threatening to convert Medicare into a welfare program.
And Social Security? They would also increase Social Security retirement age to 70. And in a stroke of genius, they recommend that Americans simply save more for their retirement. Why didn’t we think of that before?
A word needs to be said about their recommendation to reduce future Social Security cost of living adjustments by converting to the chained-CPI. When individuals are forced into a frugal existence they learn to cut back and do without just so that they will have enough money for basic food and housing at the end of the month, if that. Under chained-CPI, the government assumes that this frugality represents the new, lower consumer price index for this sector, and so they adjust out the savings that the Social Security beneficiaries have accrued merely for the purpose of getting them all of the way through to the end of the month. Pretty cruel.
A decade ago, Glen Barton, Chairman and President of Caterpillar, led the BRT Health and Retirement Committee, currently headed by Gary Loveman. What a contrast. Glen Barton’s experience motivated him to become an advocate of “a single-payer system, citing Medicare as a model.” Lovemen? Well, you read it above. What a difference a decade made.
Class warfare? Ugly label, but…

By Allan V. Prochazka, MD, MSc; Tanner Caverly, MD
JAMA Internal Medicine, January 14, 2013

The concept of general health checkups to identify disease at a stage at which early intervention could be effective has been promoted for nearly 100 years. Both patients and primary care physicians are interested in such examinations, which can include detailed history taking, physical examination, extensive laboratory testing, and imaging.

General health checks do not improve important outcomes and are unlikely to ever do so based on the pooled results of this meta-analysis spanning decades of experience. We should be clear about what a general health check is. A general health check is a visit dedicated solely to preventive counseling and screening tests. Other names, such as annual physical, preventive health examination, or periodic health evaluation, are often used. These terms exclude preventive care that occurs during visits for other reasons, such as during chronic care or acute care visits. In other words, we are talking about screening and counseling in addition to the prevention measures that occur during routine medical care.

General health checks are one of the most common reasons adults seek medical care, with an estimated 44 million seeing a physician for this reason each year from 2002 through 2004. During these health checks, an estimated $322 million is spent annually on laboratory tests that no guideline groups recommend. The costs of downstream testing and overtreatment are likely to be much larger. For example, the costs of mammography might be $4 billion a year assuming biennial screening. The cost of follow-up biopsies of normal breasts triggered by false-positive mammogram results alone is probably in the range of $14 to $70 billion annually. It is likely that follow-up testing from general health checks substantially contributes to the estimated $210 billion in annual spending on unnecessary medical services.

http://archinte.jamanetwork.com/article.aspx?articleid=1556801

And…

Is It Time To Re-Examine Workplace Wellness ‘Get Well Quick’ Schemes?

By Al Lewis and Vik Khanna
Health Affairs Blog, January 16, 2013

Virtually unheard of thirty years ago, workplace wellness is now embedded in large self-insured companies. These firms pay their workers an average of $460/year to participate in worksite wellness programs. Further, wellness is deeply enough engrained in the public policy consciousness to have earned a prominent place in the Affordable Care Act, which allows large employers to tie a significant percentage of health spending to employee health behavior and provides direct subsidies for small businesses to undertake these workplace wellness programs.

Yet the implausible, disproven, and often mathematically impossible claims of success underlying the “get well quick” programs promoted by the wellness industry raise many questions about the wisdom of these decisions and policies. In this post, we lay out the evidence demonstrating that the industry consistently mis-measures and overstates the direct healthcare cost savings. We suggest several strategies to prevent this and to re-allocate wellness dollars from “get well quick” schemes to the much more challenging, but ultimately more rewarding, task of truly creating a culture of wellness, a workplace that can attract and retain healthier, presumably more productive, people than competitors do. There is no guarantee that strategy would work and no easy way to implement it, but clearly the easy approach isn’t working.

While we do not believe that employers need to adopt military-style standards, we do propose that it is illogical to expect sustainable reductions in medical care spending if corporate leaders treat their environments, personnel policies, practices, and procedures with the insouciance of people who believe that they can just wish something into existence.

HR departments need to reconfigure their benefits consulting relationships, since with few exceptions the latter have not provided critical thinking about wellness (and other “value-added” programs) on a par with that of insurers, who have universally shunned these programs for their fully insured members. (Most insurers will happily sell them to self-insured employers even so, because they clearly understand that “invalid” is not the same as “unprofitable,” especially when you do not bear risk for the outcomes and the customer’s consultants are demanding the service.)

http://healthaffairs.org/blog/2013/01/16/is-it-time-to-re-examine-workplace-wellness-get-well-quick-schemes/

Comment:

By Don McCanne, M.D.

In discussions of our exorbitant health care spending, we frequently hear that we need to change from a system that treats disease to a system that promotes prevention and wellness, as if prevention and wellness programs would displace disease and injury.

First, let’s be clear that the benefits of effective prevention programs are undeniable. But much of prevention is out in the community at large and not so much within the health care delivery system. Examples are public health services, community planning for safety and to promote physical activity, the promotion of healthy food choices, industry design of safer products such as automobiles, public policies to reduce hazards such as the ubiquitous accessibility of firearms, and innumerable other measures that are or should be promoted through both public and private efforts.

So what about routine preventive health checkups? The comprehensive meta-analysis published in the current JAMA Internal Medicine reveals that “general health checks do not improve important outcomes and are unlikely to ever do so,” but “it is likely that follow-up testing from general health checks substantially contributes to the estimated $210 billion in annual spending on unnecessary medical services.”

However, specific examples of preventive care that are a part of and integrated within the provision of care for acute and chronic disorders have been shown to be of some benefit and should not be abandoned  until new evidence demonstrates that there are compelling reasons to do so. Nevertheless, we cannot look to the medical practice environment to find the health care paradise that will displace sick care with well care.

Which brings us to employer-sponsored wellness programs. Simply stated, they fall into the spectrum between naivete and outright fraud. As stated in the Health Affairs Blog article briefly excerpted above, “Even the iconic Safeway story of achieving a zero medical cost trend through wellness – the inspiration for the wellness provisions in the Affordable Care Act – turns out to be made up.”

If you wish to know the shocking truth on wellness programs (yes, shocking), you should read the entire article available at the link above. The fact that insurers promote these programs, but only for their non-risk bearing contracts with self-insured employers, certainly is revealing.

Pretending that we can control health care spending with checkups and wellness programs no longer cuts it. We need to tackle costs with proven methods that would ensure quality care for everyone. We should begin by enacting an improved Medicare for all.

General Health Checks in Adults for Reducing Morbidity and Mortality From Disease

By Allan V. Prochazka, MD, MSc; Tanner Caverly, MD
JAMA Internal Medicine, January 14, 2013
The concept of general health checkups to identify disease at a stage at which early intervention could be effective has been promoted for nearly 100 years. Both patients and primary care physicians are interested in such examinations, which can include detailed history taking, physical examination, extensive laboratory testing, and imaging.
General health checks do not improve important outcomes and are unlikely to ever do so based on the pooled results of this meta-analysis spanning decades of experience. We should be clear about what a general health check is. A general health check is a visit dedicated solely to preventive counseling and screening tests. Other names, such as annual physical, preventive health examination, or periodic health evaluation, are often used. These terms exclude preventive care that occurs during visits for other reasons, such as during chronic care or acute care visits. In other words, we are talking about screening and counseling in addition to the prevention measures that occur during routine medical care.
General health checks are one of the most common reasons adults seek medical care, with an estimated 44 million seeing a physician for this reason each year from 2002 through 2004. During these health checks, an estimated $322 million is spent annually on laboratory tests that no guideline groups recommend. The costs of downstream testing and overtreatment are likely to be much larger. For example, the costs of mammography might be $4 billion a year assuming biennial screening. The cost of follow-up biopsies of normal breasts triggered by false-positive mammogram results alone is probably in the range of $14 to $70 billion annually. It is likely that follow-up testing from general health checks substantially contributes to the estimated $210 billion in annual spending on unnecessary medical services.
http://archinte.jamanetwork.com/article.aspx?articleid=1556801
And…

Is It Time To Re-Examine Workplace Wellness ‘Get Well Quick’ Schemes?

By Al Lewis and Vik Khanna
Health Affairs Blog, January 16, 2013
Virtually unheard of thirty years ago, workplace wellness is now embedded in large self-insured companies. These firms pay their workers an average of $460/year to participate in worksite wellness programs. Further, wellness is deeply enough engrained in the public policy consciousness to have earned a prominent place in the Affordable Care Act, which allows large employers to tie a significant percentage of health spending to employee health behavior and provides direct subsidies for small businesses to undertake these workplace wellness programs.
Yet the implausible, disproven, and often mathematically impossible claims of success underlying the “get well quick” programs promoted by the wellness industry raise many questions about the wisdom of these decisions and policies. In this post, we lay out the evidence demonstrating that the industry consistently mis-measures and overstates the direct healthcare cost savings. We suggest several strategies to prevent this and to re-allocate wellness dollars from “get well quick” schemes to the much more challenging, but ultimately more rewarding, task of truly creating a culture of wellness, a workplace that can attract and retain healthier, presumably more productive, people than competitors do. There is no guarantee that strategy would work and no easy way to implement it, but clearly the easy approach isn’t working.
While we do not believe that employers need to adopt military-style standards, we do propose that it is illogical to expect sustainable reductions in medical care spending if corporate leaders treat their environments, personnel policies, practices, and procedures with the insouciance of people who believe that they can just wish something into existence.
HR departments need to reconfigure their benefits consulting relationships, since with few exceptions the latter have not provided critical thinking about wellness (and other “value-added” programs) on a par with that of insurers, who have universally shunned these programs for their fully insured members. (Most insurers will happily sell them to self-insured employers even so, because they clearly understand that “invalid” is not the same as “unprofitable,” especially when you do not bear risk for the outcomes and the customer’s consultants are demanding the service.)
http://healthaffairs.org/blog/2013/01/16/is-it-time-to-re-examine-workpl…

In discussions of our exorbitant health care spending, we frequently hear that we need to change from a system that treats disease to a system that promotes prevention and wellness, as if prevention and wellness programs would displace disease and injury.
First, let’s be clear that the benefits of effective prevention programs are undeniable. But much of prevention is out in the community at large and not so much within the health care delivery system. Examples are public health services, community planning for safety and to promote physical activity, the promotion of healthy food choices, industry design of safer products such as automobiles, public policies to reduce hazards such as the ubiquitous accessibility of firearms, and innumerable other measures that are or should be promoted through both public and private efforts.
So what about routine preventive health checkups? The comprehensive meta-analysis published in the current JAMA Internal Medicine reveals that “general health checks do not improve important outcomes and are unlikely to ever do so,” but “it is likely that follow-up testing from general health checks substantially contributes to the estimated $210 billion in annual spending on unnecessary medical services.”
However, specific examples of preventive care that are a part of and integrated within the provision of care for acute and chronic disorders have been shown to be of some benefit and should not be abandoned  until new evidence demonstrates that there are compelling reasons to do so. Nevertheless, we cannot look to the medical practice environment to find the health care paradise that will displace sick care with well care.
Which brings us to employer-sponsored wellness programs. Simply stated, they fall into the spectrum between naivete and outright fraud. As stated in the Health Affairs Blog article briefly excerpted above, “Even the iconic Safeway story of achieving a zero medical cost trend through wellness – the inspiration for the wellness provisions in the Affordable Care Act – turns out to be made up.”
If you wish to know the shocking truth on wellness programs (yes, shocking), you should read the entire article available at the link above. The fact that insurers promote these programs, but only for their non-risk bearing contracts with self-insured employers, certainly is revealing.
Pretending that we can control health care spending with checkups and wellness programs no longer cuts it. We need to tackle costs with proven methods that would ensure quality care for everyone. We should begin by enacting an improved Medicare for all.

By David Grande, MD, MPA, Frances K. Barg, PhD, Sarah Johnson, BA and Carolyn C. Cannuscio, ScD
Annals of Family Medicine, January/February 2013

ABSTRACT

PURPOSE  Out-of-pocket cost sharing for health care expenses is a growing burden. Prior research has emphasized the medical consequences of cost sharing. This study investigates the range of social, medical, financial, and sometimes legal disruptions from high out-of-pocket health expenses.

METHODS  We conducted open-ended, semistructured interviews with 33 insured patients (two-thirds covered by Medicare). All had chronic illnesses and sought philanthropic financial assistance.

RESULTS  We found that high levels of cost sharing precipitated considerable anxiety and substantial debt problems, as well as disruptions of medical care. Participants described various borrowing strategies (eg, credit cards), legal problems (eg, debt collections), and threats to their nonmedical household budgets (eg, food, housing). Participants described explicit and rank-ordered strategies for coping with new medical expenses. Participants understood their health benefits with exceptional detail but described considerable anxiety about changes to those benefits that could easily disrupt carefully managed household budgets. Benefit designs that resulted in large variations in financial liability from month to month (eg, large deductibles or coverage gaps) imposed considerable financial challenges.

CONCLUSIONS  As health care cost sharing grows, policy makers will need to consider the consequences of high cost sharing for families facing strained household budgets. Although the generosity of health insurance is important, continuity of benefits and month-to-month stability of financial liability are also important and may be undervalued in policy discussions.

And..

From the Results:

Four issues figured prominently. First, the structure of health insurance—especially gaps in coverage, such as the Medicare Part D “doughnut hole” — powerfully affected financial well-being. Second, financial stress and debt from medical expenditures had a strong influence on day-to-day personal, financial, and medical decision making. Third, participants turned to family and other sources to help manage the costs of their illnesses, which resulted in financial, emotional, and social challenges for all family members. Fourth, participants managed high out-of-pocket health care costs using a range of strategies that were potentially disruptive to their medical care.

http://annfammed.org/content/11/1/37.full.pdf+html

Comment:

By Don McCanne, M.D.

We have plenty of studies which demonstrate that out-of-pocket cost sharing for health care can expose patients to significant financial burdens and impair their access to care. This study provides a valuable addition to our knowledge base because it demonstrates just how disruptive these expanding innovations in cost sharing can be.

This study does not quantify the problem, nor was it intended to. Rather it provides us with a qualitative assessment of those who do face insurance-induced financial barriers to care, including, significantly, cost sharing in the Medicare program (part of the reason we want an improved Medicare).

Read the last paragraph in the excerpts above, under “From the Results.” These insurance innovations that supposedly are designed to make patients better shoppers of health care are causing severe financial stresses, unwise but unavoidable choices in forging health care, while fostering “financial, emotional, and social challenges for all family members.”

How well will the Affordable Care Act address these problems? First, the design of the essential health benefits required of the plans, although fairly broad, allows important benefits to be excluded as long as there is token representation of each general category of benefits. Also most exchange plans will penalize patients for obtaining care outside of their networks – again impairing affordability and access to important services that may be available only outside of the networks.

Probably the most significant disruptive element in the exchange plans is that most people will be enrolled in plans with either 60 or 70 percent actuarial value. Most of the plans will achieve these low actuarial values by requiring high deductibles and perhaps co-payments or coinsurance – some of the very tools that result in the disruptions described in today’s article. Although the Affordable Care Act does provide subsidies for both premiums and out-of-pocket expenses, for many individuals these subsidies will not be adequate to prevent the disruptions described.

Many nations with far lower total health care costs than ours are able to provide comprehensive health care for everyone – with first dollar coverage! They do not need to use disruptive out-of-pocket cost sharing to keep their level of spending sustainable. It is no secret how they do it. So why do our policy makers seem to want to keep it a secret here in the Unites States?

Life Disruptions for Midlife and Older Adults With High Out-of-Pocket Health Expenditures

By David Grande, MD, MPA, Frances K. Barg, PhD, Sarah Johnson, BA and Carolyn C. Cannuscio, ScD
Annals of Family Medicine, January/February 2013
ABSTRACT
PURPOSE  Out-of-pocket cost sharing for health care expenses is a growing burden. Prior research has emphasized the medical consequences of cost sharing. This study investigates the range of social, medical, financial, and sometimes legal disruptions from high out-of-pocket health expenses.
METHODS  We conducted open-ended, semistructured interviews with 33 insured patients (two-thirds covered by Medicare). All had chronic illnesses and sought philanthropic financial assistance.
RESULTS  We found that high levels of cost sharing precipitated considerable anxiety and substantial debt problems, as well as disruptions of medical care. Participants described various borrowing strategies (eg, credit cards), legal problems (eg, debt collections), and threats to their nonmedical household budgets (eg, food, housing). Participants described explicit and rank-ordered strategies for coping with new medical expenses. Participants understood their health benefits with exceptional detail but described considerable anxiety about changes to those benefits that could easily disrupt carefully managed household budgets. Benefit designs that resulted in large variations in financial liability from month to month (eg, large deductibles or coverage gaps) imposed considerable financial challenges.
CONCLUSIONS  As health care cost sharing grows, policy makers will need to consider the consequences of high cost sharing for families facing strained household budgets. Although the generosity of health insurance is important, continuity of benefits and month-to-month stability of financial liability are also important and may be undervalued in policy discussions.
And..
From the Results:
Four issues figured prominently. First, the structure of health insurance—especially gaps in coverage, such as the Medicare Part D “doughnut hole” — powerfully affected financial well-being. Second, financial stress and debt from medical expenditures had a strong influence on day-to-day personal, financial, and medical decision making. Third, participants turned to family and other sources to help manage the costs of their illnesses, which resulted in financial, emotional, and social challenges for all family members. Fourth, participants managed high out-of-pocket health care costs using a range of strategies that were potentially disruptive to their medical care.
http://annfammed.org/content/11/1/37.full.pdf+html

We have plenty of studies which demonstrate that out-of-pocket cost sharing for health care can expose patients to significant financial burdens and impair their access to care. This study provides a valuable addition to our knowledge base because it demonstrates just how disruptive these expanding innovations in cost sharing can be.
This study does not quantify the problem, nor was it intended to. Rather it provides us with a qualitative assessment of those who do face insurance-induced financial barriers to care, including, significantly, cost sharing in the Medicare program (part of the reason we want an improved Medicare).
Read the last paragraph in the excerpts above, under “From the Results.” These insurance innovations that supposedly are designed to make patients better shoppers of health care are causing severe financial stresses, unwise but unavoidable choices in forging health care, while fostering “financial, emotional, and social challenges for all family members.”
How well will the Affordable Care Act address these problems? First, the design of the essential health benefits required of the plans, although fairly broad, allows important benefits to be excluded as long as there is token representation of each general category of benefits. Also most exchange plans will penalize patients for obtaining care outside of their networks – again impairing affordability and access to important services that may be available only outside of the networks.
Probably the most significant disruptive element in the exchange plans is that most people will be enrolled in plans with either 60 or 70 percent actuarial value. Most of the plans will achieve these low actuarial values by requiring high deductibles and perhaps co-payments or coinsurance – some of the very tools that result in the disruptions described in today’s article. Although the Affordable Care Act does provide subsidies for both premiums and out-of-pocket expenses, for many individuals these subsidies will not be adequate to prevent the disruptions described.
Many nations with far lower total health care costs than ours are able to provide comprehensive health care for everyone – with first dollar coverage! They do not need to use disruptive out-of-pocket cost sharing to keep their level of spending sustainable. It is no secret how they do it. So why do our policy makers seem to want to keep it a secret here in the Unites States?

By Eduardo Porter
The New York Times, January 8, 2013

Our reliance on private enterprise to provide the most essential services stems, in part, from a more narrow understanding of our collective responsibility to provide social goods. Private American health care has stood out for decades among industrial nations, where public universal coverage has long been considered a right of citizenship. But our faith in private solutions also draws on an ingrained belief that big government serves too many disparate objectives and must cater to too many conflicting interests to deliver services fairly and effectively.

Our trust appears undeserved, however. Our track record suggests that handing over responsibility for social goals to private enterprise is providing us with social goods of lower quality, distributed more inequitably and at a higher cost than if government delivered or paid for them directly.

From the high administrative costs incurred by health insurers to screen out sick patients to the array of expensive treatments prescribed by doctors who earn more money for every treatment they provide, our private health care industry provides perhaps the clearest illustration of how the profit motive can send incentives astray.

By many objective measures, the mostly private American system delivers worse value for money than every other in the developed world. We spend nearly 18 percent of the nation’s economic output on health care and still manage to leave tens of millions of Americans without adequate access to care.

Today, again, entitlements are at the center of the national debate. Our elected officials are consumed by slashing a budget deficit that is expected to balloon over coming decades. With both Democrats and Republicans unwilling to raise taxes on the middle class, the discussion is quickly boiling down to how deeply entitlements must be cut.

We may want to broaden the debate. The relevant question is how best we can serve our social needs at the lowest possible cost. One answer is that we have a lot of room to do better. Improving the delivery of social services like health care and pensions may be possible without increasing the burden on American families, simply by removing the profit motive from the equation.

http://www.nytimes.com/2013/01/09/business/health-care-and-pursuit-of-profit-make-a-poor-mix.html?ref=business&_r=0

Comment:

By Don McCanne, M.D.

Eduardo Porter’s NYT article on the poor mix of health care and profits resonated with PNHP members, and appropriately so. It reminds us that our mission is not only to provide an efficient health care financing system that would cover everyone equitably, but also to ensure that health care be provided as “a public service rather than bought and sold as a commodity” (from PNHP Mission Statement). Including passive investors in health care has moved the bottom line up as the top priority while relegating patient service to a footnote.

Health Care and Profits, a Poor Mix

By Eduardo Porter
The New York Times, January 8, 2013
Our reliance on private enterprise to provide the most essential services stems, in part, from a more narrow understanding of our collective responsibility to provide social goods. Private American health care has stood out for decades among industrial nations, where public universal coverage has long been considered a right of citizenship. But our faith in private solutions also draws on an ingrained belief that big government serves too many disparate objectives and must cater to too many conflicting interests to deliver services fairly and effectively.
Our trust appears undeserved, however. Our track record suggests that handing over responsibility for social goals to private enterprise is providing us with social goods of lower quality, distributed more inequitably and at a higher cost than if government delivered or paid for them directly.
From the high administrative costs incurred by health insurers to screen out sick patients to the array of expensive treatments prescribed by doctors who earn more money for every treatment they provide, our private health care industry provides perhaps the clearest illustration of how the profit motive can send incentives astray.
By many objective measures, the mostly private American system delivers worse value for money than every other in the developed world. We spend nearly 18 percent of the nation’s economic output on health care and still manage to leave tens of millions of Americans without adequate access to care.
Today, again, entitlements are at the center of the national debate. Our elected officials are consumed by slashing a budget deficit that is expected to balloon over coming decades. With both Democrats and Republicans unwilling to raise taxes on the middle class, the discussion is quickly boiling down to how deeply entitlements must be cut.
We may want to broaden the debate. The relevant question is how best we can serve our social needs at the lowest possible cost. One answer is that we have a lot of room to do better. Improving the delivery of social services like health care and pensions may be possible without increasing the burden on American families, simply by removing the profit motive from the equation.
http://www.nytimes.com/2013/01/09/business/health-care-and-pursuit-of-pr…

Eduardo Porter’s NYT article on the poor mix of health care and profits resonated with PNHP members, and appropriately so. It reminds us that our mission is not only to provide an efficient health care financing system that would cover everyone equitably, but also to ensure that health care be provided as “a public service rather than bought and sold as a commodity” (from PNHP Mission Statement). Including passive investors in health care has moved the bottom line up as the top priority while relegating patient service to a footnote.

By Richard Kronick and Rosa Po
U.S. Department of Health and Human Services, January 7, 2013

Medicare spending per beneficiary grew just 0.4% per capita in fiscal year 2012, continuing a pattern of very low growth in 2010 and 2011. Together with historically low projections of per capita growth from both the Congressional Budget Office and the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary, these statistics show that the Affordable Care Act has helped to set Medicare on a more sustainable path to keep its commitment to seniors and persons with disabilities today and well into the future. The success in reducing the rate of spending growth has been achieved without any reduction in benefits for beneficiaries. To the contrary, Medicare beneficiaries have gained access to additional benefits, such as increased coverage of preventive services and lower cost-sharing for prescription drugs.

http://aspe.hhs.gov/health/reports/2013/medicarespendinggrowth/ib.cfm

Comment:

By Don McCanne, M.D.

At a time when politicians are ready to attack Medicare spending, this report on the projected slow growth in Medicare spending per beneficiary might seem to be useful in helping to keep the wolves away. But there are some very serious concerns behind these projections.

There has been some debate about whether the slowing is due to the recession and slow recovery, or if it is due to the implementation of some of the features of the Affordable Care Act, or if it simply due to changes in practice patterns related to evolving efforts of health care professionals to improve the practice of medicine. It is likely that all play some role.

Beyond dispute, however, is the fact that Medicare has been very effective in slowing the growth in spending though various forms of administered pricing, such as DRGs. The S&P Healthcare Economic Indices have shown that Medicare has been far more effective than the private commercial insurers in slowing the rate of growth in health care spending.

As this and other reports have shown, spending controls have not been at the cost of a reduction in benefits to Medicare beneficiaries; in fact benefits have expanded, though only modestly. Spending controls have been limited to slower payment growth for health care professionals and institutions. Although the Affordable Care Act has introduced measures to allegedly improve quality while controlling spending, the current efforts at implementation indicate that the emphasis is on spending restraint, with only token attention to quality measures – measures which are of dubious effectiveness anyway.

Thus there are two major fronts of attack over which we should be acutely concerned:

1) The  government, under the banner of the Affordable Care Act, will continue to selectively ratchet down growth in Medicare spending while largely leaving the private sector plans alone. The expanding differential between lower public payment through the Medicare and Medicaid programs and higher private payments through the private insurance plans will cause more health care providers to abandon the public programs, with a consequent threat of impaired access for the beneficiaries of the public programs. As long as private insurers are there to provide a relief valve, there is a very real risk that the public programs will be underfunded. If private plans were eliminated, as a single payer the government would be obligated to ensure the solvency of the health care delivery system.

2) The current political push for austerity measures has made these public programs vulnerable to the “we-have-a-spending-problem-not-revenue-problem” cranks that populate our nation’s capitol. There is a genuine fear that some of the critical thinkers negotiating with the cranks will plea pragmatism as they trade away important features of our social programs.

We need the opposite approach. We need to reinforce Medicare and then expand it to cover everyone. Complacency with the current politically-expedient implementation of Affordable Care Act will lead us further down the path of no return, that is unless we’re ready for a revolution.