PNHP

Private insurers blame health care prices

Private insurers blame health care prices

Health Care Cost and Utilization Report: 2010

Health Care Cost Institute
May 2012
The Health Care Cost Institute (HCCI) was created in September 2011 to provide comprehensive data on health care costs and promote independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending.
HCCI’s research activities are based on de-identified data voluntarily provided by Aetna, Humana, Kaiser Permanente, and UnitedHealthcare, four of the nation’s largest insurers.
The 2010 HCCI Health Care Cost and Utilization Report is the first report of its kind to track changes in expenditures and utilization of health care services by those younger than 65 covered by employer sponsored, private health insurance (ESI).
$4,255 –
Average annual per capita health care spending for beneficiaries younger than 65 and covered by employer-sponsored group insurance in 2010.
1.6% & 3.3% –
The consumer price index (CPI-U), a measure of price inflation, and the growth rate of average per capita spending on group ESI beneficiaries younger than 65 (2009-2010). Per capita spending outpaced overall price inflation in 2010.
2.6% & 7.1% –
Growth rate of estimated per capita health care spending by insurers and beneficiaries, respectively, between 2009 and 2010.
Summary of the Executive Summary
We find continued growth in per capita and estimated aggregate health care spending in this population, although that growth is less than 4 percent. This is consistent with the Centers for Medicare & Medicaid Services’ findings regarding national health expenditures. Patients’ out-of-pocket share of prices paid went up, although the cost-sharing rate on a per capita basis (including beneficiaries who did not use services) did not change much. Prices increased across all categories of service, with outpatient services experiencing the fastest growth. Unlike other recent reports on health care spending, we find that the increased spending is mostly due to unit price increases rather than changes in the quantity or intensity of services.
http://www.healthcostinstitute.org/files/HCCI_HCCUR2010.pdf

And…

S&P Healthcare Economic Indices

March 2012 Update
7.84% – S&P Healthcare Economic Commercial Index
2.41% – S&P Healthcare Economic Medicare Index
http://www.standardandpoors.com/indices/sp-healthcare-economic-indices/en/us/?indexId=sp-healthcare-economic-indices

Until now, much of our information on health care costs has been obtained from government sources – especially Medicare and Census data. The Health Care Cost Institute is an effort on the part of the private insurance industry to share their data in an effort to improve research and analysis on the causes of the rise in U.S. health care spending.
Cooperating in this effort are Aetna, Humana, Kaiser Permanente, and UnitedHealthcare. Conspicuously absent are Cigna, and especially WellPoint.
Many reasons are given for our very high health care costs, but this study adds to the evidence that price increases are the most important factor (except, of course, for the administrative waste that is usually ignored in studies like this). The excess increase in prices is a particularly relevant observation since this study was limited to individuals under 65 with employer-sponsored, private health insurance.
This report establishes beyond any doubt that the nation’s largest private insurers have been ineffective in controlling health care prices (not to mention generating more administrative waste). In spite of the contracts that the private insurers have with health care providers, health care price increases continue to greatly exceed the rate of inflation. Also, the most recent S&P Healthcare Indices confirm, once again, that our government Medicare program has been far more effective in controlling per capita health care costs than have the private commercial insurers.
All other nations control health care prices. Medicare controls health care prices. Only our private insurers have been incompetent in slowing price escalation. This is yet more evidence that private insurer intermediaries functioning relatively autonomously in the health care marketplace are ineffective in bringing us better pricing of health care products and services. This is a job for government, not the marketplace.
We are often accused of being unfairly critical of the private insurers since it is not their fault that health care prices are so high. Do we really care whether or not it is their fault? Prices are high, and they haven’t helped. They are a profoundly expensive administrative industry. We should continue to waste our vast sums on their ineffective model of price containment?
Look at the growth rates of per capita health spending that they report in this study of their own industry. The spending by the insurers increased at a rate of 2.6%, a feat that they were able to accomplish partly by increasing beneficiaries costs by 7.1%! Is that the kind of assistance that we need from this industry?
It’s time to throw them out of the Temple (a biblical proxy for all religious and secular moralists).

Smiley and West – "The Rich and the Rest of Us"

A Poverty Manifesto: The Rich and the Rest of Us

By Tavis Smiley and Cornel West

With history as our guide, we can chart the moment Americans got addicted to credit cards and the quest for the American Dream became a shopping-mall like adventure. Spending a cold night camped out in a parking lot to be the first in line when a store opens and getting trampled by a crowd competing  for “the sale of the day” doesn’t even seem to matter. But deep down we knew we’d never attain the lifestyles we saw on television. As brainwashed, robotic consumers armed with unending credit, we sought to transform our living-large fantasies into reality. Now, our supersized ambitions have been downsized.

The “new poor” find themselves standing shoulder to shoulder at the welfare office, food pantry, or thrift store with people they used to disregard. As the politicians they elected predict a doomed “entitlement nation” and boast of shredding the poor’s safety nets, the former middle class tries to reconcile these contradictions by clinging to the belief that this is a temporary destination, that somehow “they” are still better than “those people.”

How do we get folk to understand that there is no “they,” there is no “them”? Too many American are falling through gaping holes scissored out of America’s safety net. Income inequality is real. There is an institutionalized divide between the wealthy and the poor, so that what we now have are the rich and the rest of us.

*****

The new poverty numbers are forcing middle class families to rely on services that traditionally impoverished Americans have depended on for years.

According to the U.S. Department of Agriculture’s 2012 figures, over 46 million Americans (14 percent of the population) are now living on food stamps with the average recipient receiving $150 worth per month. Actually, “food stamps” have had a makeover in America. During the late 1990s, the government phased out the facsimile printed money for a specialized swipe-as-you-go debit-card system that can be processed for purchases in grocery stores and major retailers just like any other consumer.

For most of us, 46 million people poor enough to qualify for food-stamp debit cards is a depressing thought. But for banking and investment giant JPMorgan Chase, every time a new welfare debit card is issued, profits tick up a notch. The company is the largest, first, and only contracted processor of food-stamp benefit cards in America. In 2009, two years after the recession officially began, the company posted profits of $11.7 billion on revenues of $115.6 billion – a 109 percent jump and a 14 percent increase over the previous year. Christopher Paton, manager with JPMorgan’s public-sector benefit payments division, described how the welfare card division contributed to company profits:

“Right now, volumes have gone through the roof in the past couple of years. The good news, from JPMorgan’s perspective, is the infrastructure that we built has been able to cope with that increase in volume.”

*****

We recognize that the President’s health care reform bill will make health care more available to millions of Americans in 2014, but we are also cognizant of the aggressive efforts, particularly from the Right, to overturn the bill. Regardless of partisan political machinations, no American should die because they lack health insurance or access to quality health care. Medical insurance with the single-payer option should become a reality for all Americans, and we must invest in publicly funded community health centers and hospitals. Then the poor and uninsured will have other options than emergency rooms as their only source for primary care or early death.

http://www.hayhouse.com/details.php?id=6150

Comment:  

By Don McCanne, MD

Much has been written about the social justice topics addressed in this book by Tavis Smiley and Cornel West. “The Rich and the Rest of Us” is of particular value because it is written in a style that all of us, not just policy wonks, can easily understand and resonate with. It includes “The Poverty Manifesto” which hopefully will re-prioritize our thinking, moving us forward with an action plan to achieve social justice for all.

Single payer activists who are frustrated with the lack of progress in advancing a model of health care financing that is a moral imperative, will recognize a major hurdle touched upon in their book. There is no “they,” and there is no “them.” There’s only “us,” and that includes the 1 percent. We’re going to have to do this together.

Smiley and West – “The Rich and the Rest of Us”

A Poverty Manifesto: The Rich and the Rest of Us

By Tavis Smiley and Cornel West

With history as our guide, we can chart the moment Americans got addicted to credit cards and the quest for the American Dream became a shopping-mall like adventure. Spending a cold night camped out in a parking lot to be the first in line when a store opens and getting trampled by a crowd competing  for “the sale of the day” doesn’t even seem to matter. But deep down we knew we’d never attain the lifestyles we saw on television. As brainwashed, robotic consumers armed with unending credit, we sought to transform our living-large fantasies into reality. Now, our supersized ambitions have been downsized.

The “new poor” find themselves standing shoulder to shoulder at the welfare office, food pantry, or thrift store with people they used to disregard. As the politicians they elected predict a doomed “entitlement nation” and boast of shredding the poor’s safety nets, the former middle class tries to reconcile these contradictions by clinging to the belief that this is a temporary destination, that somehow “they” are still better than “those people.”

How do we get folk to understand that there is no “they,” there is no “them”? Too many American are falling through gaping holes scissored out of America’s safety net. Income inequality is real. There is an institutionalized divide between the wealthy and the poor, so that what we now have are the rich and the rest of us.

*****

The new poverty numbers are forcing middle class families to rely on services that traditionally impoverished Americans have depended on for years.

According to the U.S. Department of Agriculture’s 2012 figures, over 46 million Americans (14 percent of the population) are now living on food stamps with the average recipient receiving $150 worth per month. Actually, “food stamps” have had a makeover in America. During the late 1990s, the government phased out the facsimile printed money for a specialized swipe-as-you-go debit-card system that can be processed for purchases in grocery stores and major retailers just like any other consumer.

For most of us, 46 million people poor enough to qualify for food-stamp debit cards is a depressing thought. But for banking and investment giant JPMorgan Chase, every time a new welfare debit card is issued, profits tick up a notch. The company is the largest, first, and only contracted processor of food-stamp benefit cards in America. In 2009, two years after the recession officially began, the company posted profits of $11.7 billion on revenues of $115.6 billion – a 109 percent jump and a 14 percent increase over the previous year. Christopher Paton, manager with JPMorgan’s public-sector benefit payments division, described how the welfare card division contributed to company profits:

“Right now, volumes have gone through the roof in the past couple of years. The good news, from JPMorgan’s perspective, is the infrastructure that we built has been able to cope with that increase in volume.”

*****

We recognize that the President’s health care reform bill will make health care more available to millions of Americans in 2014, but we are also cognizant of the aggressive efforts, particularly from the Right, to overturn the bill. Regardless of partisan political machinations, no American should die because they lack health insurance or access to quality health care. Medical insurance with the single-payer option should become a reality for all Americans, and we must invest in publicly funded community health centers and hospitals. Then the poor and uninsured will have other options than emergency rooms as their only source for primary care or early death.

http://www.hayhouse.com/details.php?id=6150

Comment:  

By Don McCanne, MD

Much has been written about the social justice topics addressed in this book by Tavis Smiley and Cornel West. “The Rich and the Rest of Us” is of particular value because it is written in a style that all of us, not just policy wonks, can easily understand and resonate with. It includes “The Poverty Manifesto” which hopefully will re-prioritize our thinking, moving us forward with an action plan to achieve social justice for all.

Single payer activists who are frustrated with the lack of progress in advancing a model of health care financing that is a moral imperative, will recognize a major hurdle touched upon in their book. There is no “they,” and there is no “them.” There’s only “us,” and that includes the 1 percent. We’re going to have to do this together.

Smiley and West – "The Rich and the Rest of Us"

A Poverty Manifesto: The Rich and the Rest of Us

By Tavis Smiley and Cornel West
With history as our guide, we can chart the moment Americans got addicted to credit cards and the quest for the American Dream became a shopping-mall like adventure. Spending a cold night camped out in a parking lot to be the first in line when a store opens and getting trampled by a crowd competing  for “the sale of the day” doesn’t even seem to matter. But deep down we knew we’d never attain the lifestyles we saw on television. As brainwashed, robotic consumers armed with unending credit, we sought to transform our living-large fantasies into reality. Now, our supersized ambitions have been downsized.
The “new poor” find themselves standing shoulder to shoulder at the welfare office, food pantry, or thrift store with people they used to disregard. As the politicians they elected predict a doomed “entitlement nation” and boast of shredding the poor’s safety nets, the former middle class tries to reconcile these contradictions by clinging to the belief that this is a temporary destination, that somehow “they” are still better than “those people.”
How do we get folk to understand that there is no “they,” there is no “them”? Too many American are falling through gaping holes scissored out of America’s safety net. Income inequality is real. There is an institutionalized divide between the wealthy and the poor, so that what we now have are the rich and the rest of us.
*****
The new poverty numbers are forcing middle class families to rely on services that traditionally impoverished Americans have depended on for years.
According to the U.S. Department of Agriculture’s 2012 figures, over 46 million Americans (14 percent of the population) are now living on food stamps with the average recipient receiving $150 worth per month. Actually, “food stamps” have had a makeover in America. During the late 1990s, the government phased out the facsimile printed money for a specialized swipe-as-you-go debit-card system that can be processed for purchases in grocery stores and major retailers just like any other consumer.
For most of us, 46 million people poor enough to qualify for food-stamp debit cards is a depressing thought. But for banking and investment giant JPMorgan Chase, every time a new welfare debit card is issued, profits tick up a notch. The company is the largest, first, and only contracted processor of food-stamp benefit cards in America. In 2009, two years after the recession officially began, the company posted profits of $11.7 billion on revenues of $115.6 billion – a 109 percent jump and a 14 percent increase over the previous year. Christopher Paton, manager with JPMorgan’s public-sector benefit payments division, described how the welfare card division contributed to company profits:
“Right now, volumes have gone through the roof in the past couple of years. The good news, from JPMorgan’s perspective, is the infrastructure that we built has been able to cope with that increase in volume.”
*****
We recognize that the President’s health care reform bill will make health care more available to millions of Americans in 2014, but we are also cognizant of the aggressive efforts, particularly from the Right, to overturn the bill. Regardless of partisan political machinations, no American should die because they lack health insurance or access to quality health care. Medical insurance with the single-payer option should become a reality for all Americans, and we must invest in publicly funded community health centers and hospitals. Then the poor and uninsured will have other options than emergency rooms as their only source for primary care or early death.
http://www.hayhouse.com/details.php?id=6150

Much has been written about the social justice topics addressed in this book by Tavis Smiley and Cornel West. “The Rich and the Rest of Us” is of particular value because it is written in a style that all of us, not just policy wonks, can easily understand and resonate with. It includes “The Poverty Manifesto” which hopefully will re-prioritize our thinking, moving us forward with an action plan to achieve social justice for all.
Single payer activists who are frustrated with the lack of progress in advancing a model of health care financing that is a moral imperative, will recognize a major hurdle touched upon in their book. There is no “they,” and there is no “them.” There’s only “us,” and that includes the 1 percent. We’re going to have to do this together.

Private equity investors moving into dentistry

Dental Abuse Seen Driven by Private Equity Investments

By Sydney P. Freedberg
Bloomberg, May 16, 2012

Isaac Gagnon stepped off the school bus sobbing last October and opened his mouth to show his mother where it hurt. She saw steel crowns on two of the 4-year-old’s back teeth.

“The dentist man got me,” Gagnon remembers her son saying.

Isaac’s dentist was dispatched to his school by ReachOut Healthcare America, a dental management services company that’s in the portfolio of Morgan Stanley Private Equity, operates in 22 states and has dealt with 1.5 million patients. Management companies are at the center of a U.S. Senate inquiry, and audits, investigations and civil actions in six states over allegations of unnecessary procedures, low-quality treatment and the unlicensed practice of dentistry.

ReachOut is one of at least 25 dental management-services companies bought or backed by private-equity firms in the last decade. Dentists contract with the companies for marketing, scheduling, staff recruitment, supplies and other services. The companies account for about 12,000, or 8 percent, of U.S. dentists, according to Thomas A. Climo, a Las Vegas dental consultant.

Some of them have been riding a boom in Medicaid outlays on dentistry, which rose 63 percent to $7.4 billion between 2007 and 2010, outstripping the 4.9 percent growth in other dental spending. ReachOut and several of its private equity-backed rivals seek patients like Isaac Gagnon, who are covered by Medicaid, the federal-state insurance program for the poor and disabled.

On May 2, All Smiles Dental Center Inc., a management company owned by Chicago-based Valor Equity Partners, filed for bankruptcy protection. Its hand was forced in part by a Texas Medicaid action cutting off payment to some of its clinics because of allegedly “excessive” and “inappropriate” orthodontic care, according to an All Smiles executive’s affidavit included in the filing. All Smiles was part of a state audit in which 90 percent of Medicaid claims for orthodontic braces were found to be invalid because they weren’t medically needed, according to Christine Ellis, one of the auditors.

The All Smiles collapse followed another bankruptcy filing in February by Nashville-based Church Street Health Management LLC, which cited the costs of defending itself against lawsuits and investigations. Church Street is owned by Arcapita Inc., Carlyle Group LP (CG) and other private equity firms and affiliated with the Small Smiles network of dental clinics.

Dentistry is a fragmented, “cottage” industry ripe for management services, said Robert Fontana, chief executive officer of Aspen Dental Management, owned by Leonard Green & Partners, a Los Angeles private equity concern.

Management companies have “moved from being vendors of services,” such as patient billing, “into increasingly complex arrangements under which some — not all — have embedded themselves deeply into every aspect of the dental practice,” said Ken Burgess, an attorney for the North Carolina dental board.

http://www.bloomberg.com/news/2012-05-17/dental-abuse-seen-driven-by-private-equity-investments.html

Comment: 

By Don McCanne, MD

Although Isaac reported to his mother, “The dentist man got me,” we should be concerned not only about the fate of Isaac and patients like him, but also about the fate of professionalism in dentistry and the fate of our tax dollars in this government-financed Medicaid program, now that private equity firms are moving “into increasingly complex arrangements under which some have embedded themselves deeply into every aspect of the dental practice.”

This fairly long Bloomberg article (link above) provides many more details that should make us question the wisdom of passively allowing private equity firms to take control, when their mission is profit, and low-income children with dental problems are merely their means to profit.

Dentistry is not alone here. We are seeing a massive transfer of Medicaid patients, including dual-eligibles, from traditional fee-for-service physicians to managed care organizations. States are shifting from an emphasis on trying to obtain decent care for these low-income patients, to an emphasis on trying to control the Medicaid component of the state budgets.

The managed care organizations continue to promise higher quality at lower costs, though the historical record is certainly not particularly supportive of these alleged outcomes. Patient advocates have expressed concern about the disruption in care and questionable access to future care, especially for specialized services. State authorities seem to be ignoring access and quality issues and focusing on spending, as they move forward with a let’s-try-this-and-we’ll-see-if-it-works attitude, and if it doesn’t, at least we’ve saved money.

A well designed single payer system would eliminate Medicaid – an underfunded program tainted with a welfare mentality – and would include everyone in a comprehensive program which would cover all appropriate dental services.

Under such a program Isaac would not have had to suffer torture and indignity “while several adults held him on the dental table,” as he received an “excessive” number of x-rays and “unnecessary” root canals. He would have been treated like any other child would be in an uptown dental practice, even if in a downtown clinic.

We can do this.

WellPoint shareholders say no to political spending proposal

By Jeff Swiatek
The Indianapolis Star, May 17, 2012

At an annual meeting marked by shouts and a street protest, WellPoint shareholders on Wednesday rejected a proposal pushed by labor unions and liberal health advocacy groups to change the way the company discloses its political spending.

Union representatives and other protesters repeatedly interrupted Chairwoman and CEO Angela Braly after she opened the meeting and introduced proposals for shareholder voting.

One person presented a petition she said was signed by 15,000 people asking the Indianapolis company for more disclosure.

Outside, a group of about 60 protesters heavy with labor union representatives marched and chanted anti-WellPoint slogans outside the meeting at a Downtown hotel and later outside of WellPoint’s headquarters on Monument Circle.

Dr. Rob Stone, director of Hoosiers for a Commonsense Health Plan, criticized WellPoint, one of the nation’s largest health-benefits companies, for donating to the American Legislative Exchange Council, which has backed legislation at state levels to limit collective bargaining by labor unions.

WellPoint also has indirectly given money “to fund attack ads against the congressional bill that eventually became the Affordable Care Act,” the group said.

The health-care overhaul expands federally funded national health care, though private insurers such as WellPoint still play a major role in the new system.

The company recommended to shareholders in its annual proxy that they vote against the disclosure proposal. Braly said her company complies with all legal disclosure requirements and also publishes an extensive report on its contributions and lobbying.

WellPoint later said a total of 84 percent of shareholders voting rejected the proposal calling for greater disclosure. Company officials also said a similar measure was rejected a couple of years ago.

Security tossed one shareholder, Michael Pryce-Jones, senior analyst of CTW Investment Group of Washington, D.C., out of the meeting for speaking out of turn. Pryce-Jones said he wanted to ask about political donations.

“It’s not the way you conduct a meeting,” Pryce-Jones said, standing outside the Hilton after he was escorted outside by three security guards.

Security barred Pryce-Jones from re-entering the hotel lobby, even though he said he had rented a room there. After about 20 minutes, he was allowed back in.

http://www.indystar.com/article/20120517/BUSINESS/205170389/WellPoint-shareholders-say-no-political-spending-proposal

Single-payer amendment falls short in Mass. Senate

By GateHouse News Service
The Times and Courier (Clinton, Mass.), May 15, 2012

BOSTON — Several senators made a concerted push on Tuesday to put Massachusetts on a track toward single-payer health care, and though their plan failed it generated a level of debate on the topic unseen in recent years.

The Senate voted 15-22 against studying whether a single-payer, government model of health care could be more effective in reducing costs, but not before a bevy of Democratic lawmakers made the case that it would be a mistake to ignore a possible opportunity to make health care more affordable.

Rather than try to supplant the cost-control bill before the Senate with a proposal for a single-payer system, Sen. Jamie Eldridge filed an amendment that would seek to benchmark a single-payer system against the current model.

Though Eldridge said he believes single payer is the best way to reduce costs, he said his amendment allowed for the possibility that that may not be the case.

Sens. Sonia Chang-Diaz, Daniel Wolf, Marc Pacheco, William Brownsberger, Patricia Jehlen and Mark Montigby spoke at length in favor of Eldridge’s amendment, which would enable Massachusetts to follow a path being trod by Vermont and transition to a single payer universal health care system in 2015 if certain benchmarks are met.

Under the plan, implementation of a single payer system would be triggered in Massachusetts only if a state Institute of Health Care Finance and Policy determined at the start of fiscal 2015 that a single payer health care benchmark has outperformed the proposed cost growth benchmark included in cost containment legislation.

Brownsberger called the amendment “entirely consistent” with the thrust of the underlying bill that aims to shave $150 billion in health care costs over 15 years. Pacheco suggested the amendment represented a warning to the industry that he said has failed to control its costs by showing them that lawmakers were serious about alternatives.

Sen. Stephen Brewer, the Senate chair of Ways and Means, however, said he was “very nervous” by what the amendment proposed to do, warning that it could jeopardize an industry vital to employment in Massachusetts, and cast aside years of work aimed at reforming the private model. He noted that 84-year-olds from Canada come to Massachusetts for health care, rather than use the single-payer system in that country.

Sen. Richard Moore, the Senate co-chair of the Health Care Financing Committee, also panned the idea, predicting that most doctors would not work for the reimbursements he anticipated under a single payer system.

“There will be no cost control,” said Moore, warning of an “endless spiral of increasing costs.” Moore concluded, “It sounds great on paper but it isn’t realistic.”

But Moore left the door open a crack to return to this debate. After suggesting that Vermont will be unsuccessful in its efforts to control costs because older people from New York and New Hampshire will move to the Green Mountain state to take advantage of the system, he said if it does work it might be time then to revisit the subject.

 Sen. Daniel Wolf, a Harwich Democrat and owner of Cape Air, suggested the proposal was a “pro-business” initiative, calling it worthwhile to look into single-payer as an option if it held the promise of reducing premiums for employers and families.

And Chang-Diaz called the bill “humble” because it did not pretend to know whether single-payer was an affordable and viable option. “Even though I think the evidence is that single-payer is our best bet, this amendment does not presuppose that’s right,” she said.

Chang-Diaz called it “foolish and stubborn” to refuse to study the possibilities, drawing on her recent trip to Florida for her father’s induction into the astronaut hall of fame for inspiration about what’s possible.

Though Montigny described himself as “skeptical” that single-payer would work on the state level, he lamented that the status quo has also failed and that special interests are too powerful to allow for a serious debate about alternatives.

“The first thing we have to do is admit right now in this climate the employer can’t pay their premiums and the insured cannot,” Montigny said.

Eldridge’s amendment drew support from more than a third of the 39 members of the Senate, with supportive votes coming from Sens. Brownsberger (D-Belmont), Chang-Diaz (D-Boston), Katherine Clark (D-Melrose), Cynthia Creem (D-Newton), Sal DiDomenico (D-Everett), Kenneth Donnelly (D-Arlington), Benjamin Downing (D-Pittsfield), Eldridge (D-Acton), Susan Fargo (D-Lincoln), Jehlen (D-Somerville), Thomas McGee (D-Lynn), Montigny (D-New Bedford), Pacheco (D-Taunton), Stanley Rosenberg (D-Amherst), and Wolf (D-Harwich).

http://www.wickedlocal.com/clinton/news/x2047353473/Single-payer-amendment-falls-short-in-Senate#ixzz1v2sZwW6e

Private equity investors moving into dentistry

Dental Abuse Seen Driven by Private Equity Investments

By Sydney P. Freedberg
Bloomberg, May 16, 2012
Isaac Gagnon stepped off the school bus sobbing last October and opened his mouth to show his mother where it hurt. She saw steel crowns on two of the 4-year-old’s back teeth.
“The dentist man got me,” Gagnon remembers her son saying.
Isaac’s dentist was dispatched to his school by ReachOut Healthcare America, a dental management services company that’s in the portfolio of Morgan Stanley Private Equity, operates in 22 states and has dealt with 1.5 million patients. Management companies are at the center of a U.S. Senate inquiry, and audits, investigations and civil actions in six states over allegations of unnecessary procedures, low-quality treatment and the unlicensed practice of dentistry.
ReachOut is one of at least 25 dental management-services companies bought or backed by private-equity firms in the last decade. Dentists contract with the companies for marketing, scheduling, staff recruitment, supplies and other services. The companies account for about 12,000, or 8 percent, of U.S. dentists, according to Thomas A. Climo, a Las Vegas dental consultant.
Some of them have been riding a boom in Medicaid outlays on dentistry, which rose 63 percent to $7.4 billion between 2007 and 2010, outstripping the 4.9 percent growth in other dental spending. ReachOut and several of its private equity-backed rivals seek patients like Isaac Gagnon, who are covered by Medicaid, the federal-state insurance program for the poor and disabled.
On May 2, All Smiles Dental Center Inc., a management company owned by Chicago-based Valor Equity Partners, filed for bankruptcy protection. Its hand was forced in part by a Texas Medicaid action cutting off payment to some of its clinics because of allegedly “excessive” and “inappropriate” orthodontic care, according to an All Smiles executive’s affidavit included in the filing. All Smiles was part of a state audit in which 90 percent of Medicaid claims for orthodontic braces were found to be invalid because they weren’t medically needed, according to Christine Ellis, one of the auditors.
The All Smiles collapse followed another bankruptcy filing in February by Nashville-based Church Street Health Management LLC, which cited the costs of defending itself against lawsuits and investigations. Church Street is owned by Arcapita Inc., Carlyle Group LP (CG) and other private equity firms and affiliated with the Small Smiles network of dental clinics.
Dentistry is a fragmented, “cottage” industry ripe for management services, said Robert Fontana, chief executive officer of Aspen Dental Management, owned by Leonard Green & Partners, a Los Angeles private equity concern.
Management companies have “moved from being vendors of services,” such as patient billing, “into increasingly complex arrangements under which some — not all — have embedded themselves deeply into every aspect of the dental practice,” said Ken Burgess, an attorney for the North Carolina dental board.
http://www.bloomberg.com/news/2012-05-17/dental-abuse-seen-driven-by-private-equity-investments.html

Although Isaac reported to his mother, “The dentist man got me,” we should be concerned not only about the fate of Isaac and patients like him, but also about the fate of professionalism in dentistry and the fate of our tax dollars in this government-financed Medicaid program, now that private equity firms are moving “into increasingly complex arrangements under which some have embedded themselves deeply into every aspect of the dental practice.”
This fairly long Bloomberg article (link above) provides many more details that should make us question the wisdom of passively allowing private equity firms to take control, when their mission is profit, and low-income children with dental problems are merely their means to profit.
Dentistry is not alone here. We are seeing a massive transfer of Medicaid patients, including dual-eligibles, from traditional fee-for-service physicians to managed care organizations. States are shifting from an emphasis on trying to obtain decent care for these low-income patients, to an emphasis on trying to control the Medicaid component of the state budgets.
The managed care organizations continue to promise higher quality at lower costs, though the historical record is certainly not particularly supportive of these alleged outcomes. Patient advocates have expressed concern about the disruption in care and questionable access to future care, especially for specialized services. State authorities seem to be ignoring access and quality issues and focusing on spending, as they move forward with a let’s-try-this-and-we’ll-see-if-it-works attitude, and if it doesn’t, at least we’ve saved money.
A well designed single payer system would eliminate Medicaid – an underfunded program tainted with a welfare mentality – and would include everyone in a comprehensive program which would cover all appropriate dental services.
Under such a program Isaac would not have had to suffer torture and indignity “while several adults held him on the dental table,” as he received an “excessive” number of x-rays and “unnecessary” root canals. He would have been treated like any other child would be in an uptown dental practice, even if in a downtown clinic.
We can do this.

Family health costs now over $20,000 (MMI)

2012 Milliman Medical Index

Milliman Research Report
May 2012

The annual Milliman Medical Index (MMI) measures the total cost of healthcare for a typical family of four covered by a preferred provider plan (PPO). The 2012 MMI cost is $20,728, an increase of $1,335, or 6.9% over 2011. This is the first year the average cost of healthcare for the typical American family of four has surpassed $20,000.

Of the $20,728 medical cost for a family of four, the employer pays about $12,144 in employer subsidy while the employee pays the remaining $8,584, consisting of $5,114 in employee contributions and $3,470 in employee out-of-pocket costs.

Out-of-pocket costs are of particular significance given PPACA’s focus on actuarial value, a concept predicated on the percentage of a plan’s costs that is paid out of pocket by the insured. Figure 8 (link below) indicates how, as was the case last year, the MMI’s plan remains slightly better than a gold plan as defined by PPACA. The MMI plan has maintained a relatively stable actuarial value over time because employers typically adjust their plan designs on an annual basis to keep pace with increases in the underlying medical trend. If no such adjustments were made and deductibles and copays remained static, the plan would become richer and would eventually exceed the platinum threshold.

In addition to a typical PPO plan, many employers are providing employees an option that includes higher out-of-pocket cost sharing in exchange for employer contributions to a health savings account and lower payroll deductions. Along these lines, some plans that may become available through the state insurance exchanges may contain lower actuarial values than the type of plan exemplified by the MMI.

In the past year, the MMI plan did not undergo significant design changes. Long-term, employers may be looking for new design concepts that tackle the ongoing cost-control challenge. Design concepts under consideration may include a possible move toward increased use of defined contribution concepts and continued momentum toward high-deductible plans or plans leveraging accountable care organizations (ACOs).

Impact on MMI Family of Four

While several aspects of healthcare reform would have meaningful impact on the cost of insurance coverage, the effect on the total cost of care is very limited for our family of four. For example, medical loss ratio rules and stringent review of health insurance increases may reduce insurer profits and also put pressure on insurers to be as efficient and low-cost as possible. But the cost of care for this family of four is still $20,728, which excludes insurer profits and administrative expenses.

While efforts to be more administratively efficient may lead to lower premiums, they do not directly affect the cost of delivering healthcare to the MMI family of four.

http://publications.milliman.com/periodicals/mmi/pdfs/milliman-medical-index-2012.pdf

Comment: 

By Don McCanne, MD

The 2012 Milliman Medical Index (MMI) shows that the average cost of health care for a family of four is now over $20,000 – actually pushing $21,000 ($20,728).

The MMI measures the average spending on health care for a family of four that is insured through an employer-sponsored PPO plan. It does not include the administrative costs or profits of the insurers nor the administrative costs of the employers to manage their health benefit programs. It includes only what is actually spent on health care.

Keep in mind that this represents spending on a relatively healthy component of our society – the healthy workforce and their young healthy families. It does not include those unable to work because of chronic disabilities, nor older, retired individuals who generally have greater health care needs. Thus if you pool everyone together in a universal risk pool, it can be anticipated that average costs would be even higher.

Median household income in 2010 was $49,445. This is not a family unit that is identical to an individual and his family of four with employer-sponsored insurance. Also this does not include the employer’s contribution to the health insurance premium which most economists consider to be paid by foregone wage increases. Nevertheless, it does provide a rough perspective showing that health care costs are placing an unbearable strain on household budgets.

Current proposals are aimed at reducing the financial burden on employers, but, as this report indicates, actual health care costs are not reduced by these measures. Thus the financial burden is being shifted more to workers and their families. Since these plans are, on average, slightly better than the gold plans in the exchanges (80 percent medical loss ratio) and most participants in the exchanges will have lower-valued bronze or silver plans, the burden will be even greater for those in the PPACA state exchanges.

We desperately need a more efficient and more equitable health care financing system. It is only as far away as the enactment of an improved Medicare for all.

Medical students embrace Medicare for all

By Ed Weisbart, M.D.
St. Louis Post-Dispatch, May 16, 2012

If you ever want to rekindle your hope for American medicine, spend time with medical students. These bright, energetic minds are going into medicine for all the right reasons — to help people, relieve suffering and find new ways to cure illness and eradicate disease.

Their idealism is a pleasure to behold, particularly to a veteran physician like me. Yet I’m painfully aware of how our current health care “system” can undermine students’ idealism, especially if they see no alternative.

Fortunately, a better alternative is waiting in the wings: a single-payer, improved Medicare-for-all program. Most Americans, including 59 percent of physicians, want access to an improved Medicare. I’m pleased to report that our physicians-in-training are strong supporters of this truly universal, comprehensive and affordable alternative.

Why? Even before they graduate, today’s medical students learn how our Byzantine, antiquated system of patchwork private insurance undermines medical care. They recognize an imperative to correct social injustice, for both moral and pragmatic reasons.

Medical students learn that as practicing doctors they’ll be dealing with dozens of different insurance schemes, each with its own rules, paperwork and bureaucratic headaches.

As physicians-in-training, they encounter patients who have delayed surgery until they qualified for Medicare at age 65 — often with more difficult and sometimes fatal complications as a result. They meet grandmothers who have had to decide between paying for medications for their hypertension and paying the rent.

They see patients with employer-sponsored health insurance get sick, lose their job, lose their insurance and declare bankruptcy. In fact, medical expenses are the most common cause of bankruptcy.

Like everyone else, medical students are shocked when they see these inequities and inefficiencies. They believe your wealth should not determine your health and that poor health should not be able to destroy your wealth. And, of course, they’re right.

I recently had a chance to discuss these issues with students at both of the major medical schools in town. Just last month the new St. Louis chapter of Physicians for a National Health Program brought in Dr. Garrett Adams, PNHP’s national president, and Dr. Carol Paris, a single-payer advocate from Maryland, to speak with students at those schools.

The sessions were co-sponsored by the American Medical Student Association, a long-standing supporter of a single-payer system that has about 30,000 members nationwide.

It was clear from our local meetings that growing numbers of our medical students reject our dysfunctional, insurance-based system. They want something better. Many understand there is a breathtakingly simple solution: fix the limitations in Medicare and provide it to every American. More than 30 percent of the health care dollar today is wasted on the administrative costs associated with the private health insurance industry; Medicare spent only 1.5 percent on administrative costs during 2011.

A landmark study in the New England Journal of Medicine (2003) showed that by replacing our fragmented, inefficient patchwork of multiple insurers with a single, streamlined, nonprofit agency like Medicare that pays all medical bills, our nation would save about $400 billion annually in reduced administrative costs — enough money to provide comprehensive, high-quality coverage to every American for no more than our nation spends now.

According to Gerald Friedman, professor of economics at the University of Massachusetts-Amherst in the March/April 2012 issue of Dollars and Sense, “a single-payer system would save as much as $570 billion now wasted on administrative overhead and monopoly profits.” Spending would increase by $326 billion from expanding coverage and adjusting Medicaid rates. Americans would net a savings of $244 billion, enjoy universal coverage and eliminate the dreadful scenarios described above. Disposable income would increase for 95 percent of Americans.

Because a single-payer system would possess enormous bargaining clout, it also would be able to rein in costs for pharmaceutical drugs and other medical supplies over the long haul.

I believe that adopting an “improved and expanded Medicare for all” is the best way for students and physicians to return to their mission of caring for our patients, rather than squandering our time navigating administrative barriers erected by insurance companies. And make no mistake — these are barriers to care, with dire consequences.

Although we spend more on health care per capita than any other country in the world, American life expectancy ranks 38th.

My colleagues and I came away from our student meetings confident that the future of medicine is in good hands. The medical students we met didn’t get lost in jaded political quagmires.

They know it’s inevitable. They just want it to happen now.

Me too.

Dr. Ed Weisbart is chairman of Physicians for a National Health Program—St. Louis.

http://www.stltoday.com/news/opinion/guest-commentary-medical-students-embrace-medicare-for-all/article_dc5f1135-4169-599b-b0c1-eeeb244bd9eb.html#ixzz1v2cuXkrg

Activists plan to protest WellPoint political giving at meeting

By J.K. Wall
Indianapolis Business Journal, May 15, 2012

A mix of union groups, activist investors and single-payer advocates plan to harangue WellPoint Inc.’s directors Wednesday during and after the company’s annual shareholders meeting.

The groups claim that the Indianapolis-based health insurer has used its corporate funds secretly to finance public policy positions they don’t like, such as the 2011 rollback of collective bargaining rights for public employees in Indiana, Ohio and Wisconsin, as well as advertisements opposing the health care reform law as it was being debated in 2009.

Activists are calling for increased disclosure from WellPoint, and some investment funds have promised to vote against WellPoint board members who they say have failed to exercise proper oversight of WellPoint’s political spending.

“Health care dollars should be spent on patients, not political campaigns,” said Dr. Rob Stone, a Bloomington emergency physician who will present the shareholder resolution for greater disclosure during the annual meeting.

Stone, an advocate of having the U.S. government insure all Americans, has presented a variety of resolutions at WellPoint annual meetings for the past five years. Dr. Quentin Young, the national coordinator for Physicians for National Health Care, will help Stone present the resolution.

As Stone and Young speak, a variety of protestors will be outside the Hilton hotel in downtown Indianapolis, chanting criticisms of WellPoint. The protest is being organized by union-related groups Health Care for America Now, The 99% Power Campaign, Central Indiana Jobs with Justice and the Indiana AFL-CIO.

The shareholder proposal, advanced initially by California-based Harrington Investments Inc., is unlikely to pass. A similar proposal put forth at WellPoint’s annual shareholders meeting two years ago was voted down by 82 percent of the company’s shareholders.

And the proposal does not have the backing of key corporate governance groups, such as ISS and Glass Lewis.

WellPoint spokesman Tony Felts noted that the company already publishes an annual report titled “Political Contributions and Related Activity Report.”

“Some of this reporting … goes above and beyond what others in our industry disclose,” Felts said. “We take positions, and make political contributions, solely on health care and health insurance-related issues. With over 70 years of experience in the health benefits field, we have good ideas to contribute to the discussion of improving the nation’s health care delivery system. Furthermore, we have a responsibility to our customers to remain engaged in health care policy discussions.”

However, Stone noted, WellPoint’s report does not include details on its contributions in 2009 to a television advertising campaign launched by the U.S. Chamber of Commerce against the health care reform bill. That campaign was funded in part by an $86 million contribution from America’s Health Insurance Plans, of which WellPoint is a member.

The secret campaign was revealed in a 2009 report from Bloomberg News.

“WellPoint has been kind of coy about answering questions about it, so we’re going to ask more questions at the meeting,” Stone said. He added, “If WellPoint is going to have a part in the long run, I think they need to be open and honest and cooperative, and work in a more straightforward way with the government regulations.”

Family health costs now over $20,000 (MMI)

2012 Milliman Medical Index

Milliman Research Report
May 2012
The annual Milliman Medical Index (MMI) measures the total cost of healthcare for a typical family of four covered by a preferred provider plan (PPO). The 2012 MMI cost is $20,728, an increase of $1,335, or 6.9% over 2011. This is the first year the average cost of healthcare for the typical American family of four has surpassed $20,000.
Of the $20,728 medical cost for a family of four, the employer pays about $12,144 in employer subsidy while the employee pays the remaining $8,584, consisting of $5,114 in employee contributions and $3,470 in employee out-of-pocket costs.
Out-of-pocket costs are of particular significance given PPACA’s focus on actuarial value, a concept predicated on the percentage of a plan’s costs that is paid out of pocket by the insured. Figure 8 (link below) indicates how, as was the case last year, the MMI’s plan remains slightly better than a gold plan as defined by PPACA. The MMI plan has maintained a relatively stable actuarial value over time because employers typically adjust their plan designs on an annual basis to keep pace with increases in the underlying medical trend. If no such adjustments were made and deductibles and copays remained static, the plan would become richer and would eventually exceed the platinum threshold.
In addition to a typical PPO plan, many employers are providing employees an option that includes higher out-of-pocket cost sharing in exchange for employer contributions to a health savings account and lower payroll deductions. Along these lines, some plans that may become available through the state insurance exchanges may contain lower actuarial values than the type of plan exemplified by the MMI.
In the past year, the MMI plan did not undergo significant design changes. Long-term, employers may be looking for new design concepts that tackle the ongoing cost-control challenge. Design concepts under consideration may include a possible move toward increased use of defined contribution concepts and continued momentum toward high-deductible plans or plans leveraging accountable care organizations (ACOs).
Impact on MMI Family of Four
While several aspects of healthcare reform would have meaningful impact on the cost of insurance coverage, the effect on the total cost of care is very limited for our family of four. For example, medical loss ratio rules and stringent review of health insurance increases may reduce insurer profits and also put pressure on insurers to be as efficient and low-cost as possible. But the cost of care for this family of four is still $20,728, which excludes insurer profits and administrative expenses.
While efforts to be more administratively efficient may lead to lower premiums, they do not directly affect the cost of delivering healthcare to the MMI family of four.
http://publications.milliman.com/periodicals/mmi/pdfs/milliman-medical-index-2012.pdf

The 2012 Milliman Medical Index (MMI) shows that the average cost of health care for a family of four is now over $20,000 – actually pushing $21,000 ($20,728).
The MMI measures the average spending on health care for a family of four that is insured through an employer-sponsored PPO plan. It does not include the administrative costs or profits of the insurers nor the administrative costs of the employers to manage their health benefit programs. It includes only what is actually spent on health care.
Keep in mind that this represents spending on a relatively healthy component of our society – the healthy workforce and their young healthy families. It does not include those unable to work because of chronic disabilities, nor older, retired individuals who generally have greater health care needs. Thus if you pool everyone together in a universal risk pool, it can be anticipated that average costs would be even higher.
Median household income in 2010 was $49,445. This is not a family unit that is identical to an individual and his family of four with employer-sponsored insurance. Also this does not include the employer’s contribution to the health insurance premium which most economists consider to be paid by foregone wage increases. Nevertheless, it does provide a rough perspective showing that health care costs are placing an unbearable strain on household budgets.
Current proposals are aimed at reducing the financial burden on employers, but, as this report indicates, actual health care costs are not reduced by these measures. Thus the financial burden is being shifted more to workers and their families. Since these plans are, on average, slightly better than the gold plans in the exchanges (80 percent medical loss ratio) and most participants in the exchanges will have lower-valued bronze or silver plans, the burden will be even greater for those in the PPACA state exchanges.
We desperately need a more efficient and more equitable health care financing system. It is only as far away as the enactment of an improved Medicare for all.