PNHP

For-profit health care in Alberta a dud

For-profit health care in Alberta a dud

Delivery Matters: the high costs of for-profit health services in Alberta

By Diana Gibson
Parkland Institute, April 2012

In Alberta and across Canada, the private for-profit healthcare sector is being positioned as a solution to wait times and the financial challenges facing the health care system. Consequently, for-profit delivery of healthcare is increasing.

(T)his report explores the delivery of clinical services, specifically arthroplasty or total hip and knee replacements, through private, for-profit clinics. It includes a case study of Calgary’s Health Resource Centre (HRC) that specifically examines the cost, quality, access and other implications of expanding this form of provision and places it in the context of national and international research. (The Health Resource Centre, based in Calgary and owned by Networc Health Inc., was Alberta’s flagship private surgical facility until it went bankrupt in 2010.) It also examines a wait-list reduction pilot project, the Alberta Hip and Knee Replacement Project, which includes for-profit and not-for-profit providers, allowing for a comparison of the two models.

The Alberta Hip and Knee Replacement Project

In 2004 the provincial government initiated a pilot project to address a myriad of challenges within the arthroplasty field. One of the key elements of this pilot project was to address wait times as directed by the Premier’s Advisory Council on Health and its Framework for Reform. A partnership was carved out between Alberta Health – which contributed $20 million in funding – three regional health authorities (and their clinical partners including HRC), the Alberta Orthopedic Society, the Alberta Bone and Joint Institute and physicians from across the province.

The trial illustrated that with improved management practices (such as centralized intake and assessment), realignment of resources, and collaboration and cooperation across the delivery path, costs can be reduced, wait times can be decreased and benefits to patients enhanced within the public, not-for-profit system. Specifically, the trial reduced overall wait times from family doctor through to surgery by 90 per cent (from 19 months to approximately 11 weeks).

Risks and Opportunities of HRC

The surgeries were more expensive, but came with significant risk in other areas as well: the dependency between the parties became detrimental to both; the relationship created expensive duplication of capital and lack of control over infrastructure planning; and the private contract meant a serious lack of accountability and transparency. Additional risks identified in international studies include lower quality of services and poorer articulation with the broader health community.

Comparing For-Profit to Non-Profit

The Alberta government acknowledged that the for-profit surgeries would cost more but justified this with the wait-time reductions were worth the cost. The examination of the performance of HRC in contrast with the public non-profit elements of the pilot project helps to illuminate the wait-list issue. The analysis above reveals that the public partners in the Alberta Hip and Knee pilot are still working well, with wait-time advances at lower cost than the HRC and without the risks.

The wait-list reduction achievements of this project were attained despite, not because of, for-profit involvement in the trial. It was the specialized or focused nature of the clinic, not the investor-owned nature, which increased patient access and enabled innovation. This is consistent with international evidence from Canada and abroad demonstrating that wait lists are actually lengthened as a result of the existence of for-profit entities delivering clinical health care services.

What advocates of for-profit delivery suggest is that the removal of patients from the public queue will shorten the queue. What they fail to note is that the removal of health professionals from the public delivery system will slow down the system and result in the queue growing even longer.

The Alberta Hip and Knee pilot project demonstrates the capacity of the public health system to evolve and innovate in such a way that costs are maximized, wait lists are reduced, and patient outcomes are improved. The pilot set the stage for province-wide learning and provided a platform for a revolution in hip and knee surgical practices. Gains from the pilot continue to be made through the Transformational Improvement Program (TIP), which specifically addresses wait lists. Results to date show improvements in length of stay at almost every site, as well as gains in other key indicators of quality such as patient satisfaction and early mobilization after surgery. The rewards are substantial. They include higher volumes of surgeries as more bed days become available, greater satisfaction as patients move more quickly from referral to surgery, and reinvestment of the efficiency savings in ways that can further improve care quality and safety. Our public health system is more than able to meet the needs of our citizens when the political will exists and resources are allocated.

Conclusion

It matters who delivers clinical services. The spectacular fall from grace of HRC is a fascinating study in the ills of health care privatization, the risks to patient care, and the need to reiterate the importance of our publicly financed and delivered health care system. The case study of HRC is very consistent with international studies, validating the conclusion that for-profit incursions into the health care system are risky, costly and lack the accountability Canadians expect, demand and deserve.

The success of the public partners in the pilot project on wait-time reductions in Alberta clearly shows that public solutions can achieve the same wait-list targets at less cost and much less risk to the public.

http://parklandinstitute.ca/downloads/reports/HRC-Report.pdf

And…

Neat, Plausible, and Wrong: The Myth of Health Care Unsustainability

Canadian Doctors for Medicare
February 2011

Which Costs Are Rising?

While the cost of Medicare has not grown as a percent of GDP over the last 35 years, there have been significant increases in total health care system costs over the same period, and those increases have accelerated in the last decade. Overall health spending in Canada has risen from about 7% of GDP in 1975 to about 10.7% in 2008. In 2010, heath care spending was estimated to be about 12% of GDP.

If Medicare costs are stable, and public sector costs are rising slowly, why are total health care costs increasing rapidly? The real cost driver is precisely the thing that critics of Medicare tout as the solution: private health care.

Currently 30% of all health care spending is in the private sector, up from 24% in 1975. That growth is the result of significant increases in costs in the private health care sector, including out-of-pocket spending and the costs of private insurance.

http://www.canadiandoctorsformedicare.ca/images/stories/Neat_Plausible_and_Wrong.pdf

Comment: 

By Don McCanne, MD

In spite of the overwhelming body of evidence to the contrary we still hear over and over again that the private sector always produces higher quality at lower costs – whether in health care financing through private insurers, or in health care delivery through investor-owned facilities. Canada has provided us with yet another real
-life experiment that confirms, once again, that the opposite is true.

The Alberta government understood that private care would cost more than in the public sector, but they agreed to it in an effort to reduce wait times. However, not only did the private sector provide care at higher costs, they had intruded into the loosely-integrated public system, creating the potential of increasing wait times in the public sector (explained above).

Fortunately, with a coordinated effort to attack this problem – coordination that only happens in the public sector – Alberta was able to reduce its wait times for orthopedic procedures from 19 months down to 11 weeks – in spite of, rather than due to, involvement of the private sector.

Also, quite ironic but very instructive, not only did care cost more when delivered by the private, for-profit Health Resource Centre, the extra costs were not enough and the business model failed – ending in bankruptcy.

In health care financing and delivery, public and non-profit institutions can always provide greater value and efficiency than the for-profit private sector, but it requires a government that is supportive of their public financing system.

In 2005, Conservative Premier Ralph Klein of Alberta wrote in the Calgary Herald, “Let me be blunt. We have unacceptable waiting lists in our publicly funded, rationed health-care system, and all the money in the world is not going to eliminate them… In simple terms it means that if you are in pain or suffering and cannot wait in line, you should be able to buy the health care you need.”

The Calgary Herald published my response which stated, “Ralph Klein states that ‘all the money in the world’ is not going to eliminate waiting lists, unless the source of the funds is private instead of public. What nonsense. Excessive queues are eliminated by making minor, selective adjustments in the system’s capacity. Responsible stewards of any health-care system, public or private, will make these adjustments. The difference is the public system would be adapted to accommodate everyone, whereas private systems accommodate only those who can pay.”

Of course, Alberta didn’t listen to me and continued on with its efforts to privatize. However, they did involve the public sector in queue reduction, with considerable success. But by including the private sector, the experiment was much more expensive, and resulted in further losses through the HRC bankruptcy.

Although these reports are about Canada’s Medicare system, the conclusions could apply to our Medicare as well, if we expanded it into a single payer national health program. It would be less expensive and more effective than what we have, provided we also elect stewards who believe in and support public systems.

Where is Marcus Welby when you need him?

By Philip Caper, M.D.
Bangor Daily News (Maine), April 19, 2012

Marcus Welby, M.D., the iconic general practitioner of 1970s TV, will probably never make a comeback. As I described last month, the overwhelming preference of young doctors is to go into medical specialties rather than primary care, mostly due to the much greater earning power of specialists.

But there is another reason for this trend. During the past few decades, medical knowledge has dramatically expanded and many doctors decided that to keep up in their fields, they had to specialize.

This has led to a proliferation of specialists and subspecialists, resulting in growing fragmentation of medical care from a patient’s perspective and creating a medical maze that many have trouble negotiating. It has also created gaps in the continuity of care.

The federal health care reform law creates many programs designed to deal with this problem. They may not be enough. But even without them, changes in the way medical care is delivered are taking place at an accelerating pace.

Hospitals are consolidating and buying up doctors’ practices and other health care providers such as home health agencies, nursing homes and laboratories. Four systems are emerging in Maine centered around Bangor, Augusta, Lewiston-Auburn and Portland, and around 80 percent of Maine’s doctors are employed by one of them.

As a result, solo practitioners such as Dr. Welby will mostly be replaced by teams of health care workers who will function under the umbrella of these emerging health care systems, no longer earning money solely by directly providing services. They will earn their increased incomes by saving money through better management of more expensive technology.

Spurred on by the federal government, doctors and hospitals are adopting electronic systems for financial, administrative and clinical records to help control costs and improve quality or efficiency. But they will succeed if, and only if, the financial incentives that drive so much of our behavior in health care are reformed.

Already under way is a movement away from fee-for-service and toward so-called bundled payments. Rather than paying for each individual service, payers such as health insurers and government will pay a flat rate to a health care system for all services for a group of beneficiaries.

Health care systems, no longer constrained by a specific list of reimbursable services, will be able to expand the range of benefits they provide, as long as they don’t exceed their budget. They can do this by substituting low-cost services that are not now reimbursable but may be more appropriate, such as nursing home or home care, for more expensive high-tech services such as hospital care.

But just as fee-for-service can be abused by encouraging too many services, bundled payments can be abused by creating incentives to provide too little care. Most health care professionals would fight energetically against this temptation. The majority of us are committed to doing what’s right for our patients and are not businessmen at heart.

The culture of health care must change, and return to one driven by a nonprofit mission of healing, not the bottom line.

Rising health care costs are crippling our ability as communities, states and as a nation to address other needs. They are eating into our wages and our ability to fund education, infrastructure, public safety, economic security and other priorities.

In almost all other wealthy countries, the level of public satisfaction with health care is much higher than it is in the U.S. despite much lower spending. In those countries, everybody is in the same nonprofit system, and people feel they are being treated fairly.

Compare that with the endless bickering, disinformation, class and age conflict and fear-mongering that permeates the debate about health care in the U.S. Much of that conflict is driven by arguments about money — who pays, who benefits and how much.

A single, nonprofit health care system in Maine and the U.S. would go a long way toward fixing that problem.

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

http://bangordailynews.com/2012/04/19/health/where-is-marcus-welby-when-you-need-him/

Single-Payer Health Care For the Win?

By Suzanne Lindgren
Utne Reader, April 19, 2012

It’s been awhile since Obama’s proposal for universal health care was replaced by a compromise known as the Affordable Care Act. Despite detractors from the right and left, Obamacare’s sell – that the Act would give millions of uninsured Americans coverage – appeased many. But now, as we wait to hear the Supreme Court’s decision on the constitutionality of the Affordable Care Act, some have begun to whisper of a second chance for a single-payer system.

If the Supreme Court declares the Affordable Care Act’s individual mandate unconstitutional, single-payer will almost certainly be back on the table, writes Yes! Magazine’s Sarah van Gelder (citing Labor Secretary Robert Reich and columnist Rick Ungar of Forbes Magazine). Van Gelder argues that single-payer is what Americans want. “In poll after poll, a majority of Americans have expressed support for single-payer health care or national health insurance.”

This may be the chance to get it, but proponents will have to make their voices heard. “[I]t would be a long and difficult process,” reasons Arnold Relman in The American Prospect, “that would be bitterly opposed by the private insurance industry and its friends […] Nevertheless, there are reasons I believe this transformation has at least a chance of becoming reality.” With an informed, engaged public and strong support from doctors, Relman writes, single-payer advocates stand a fighting chance to win the attention of legislators and outweigh the influence of lobbyists.

The stakes may be higher than ever, since a single-payer system would save Americans $570 billion, reports economist Gerald Friedman in Dollars & Sense. Though a single-payer system “would raise some costs by providing access to care for those currently uninsured or under-insured, it would save much larger sums by eliminating insurance middlemen and radically simplifying payment to doctors and hospitals. While providing superior health care, a single-payer system would save as much as $570 billion now wasted on administrative overhead and monopoly profits.” In the midst of a recession, with great need to invest in renewable energy sources, education, sustainable transportation, and local food systems, Americans may have a chance to do more with their money than line the pockets of insurance company shareholders.

http://www.utne.com/politics/single-payer-health-care-for-the-win.aspx

For-profit health care in Alberta a dud

Delivery Matters: the high costs of for-profit health services in Alberta

By Diana Gibson
Parkland Institute, April 2012
In Alberta and across Canada, the private for-profit healthcare sector is being positioned as a solution to wait times and the financial challenges facing the health care system. Consequently, for-profit delivery of healthcare is increasing.
(T)his report explores the delivery of clinical services, specifically arthroplasty or total hip and knee replacements, through private, for-profit clinics. It includes a case study of Calgary’s Health Resource Centre (HRC) that specifically examines the cost, quality, access and other implications of expanding this form of provision and places it in the context of national and international research. (The Health Resource Centre, based in Calgary and owned by Networc Health Inc., was Alberta’s flagship private surgical facility until it went bankrupt in 2010.) It also examines a wait-list reduction pilot project, the Alberta Hip and Knee Replacement Project, which includes for-profit and not-for-profit providers, allowing for a comparison of the two models.
The Alberta Hip and Knee Replacement Project
In 2004 the provincial government initiated a pilot project to address a myriad of challenges within the arthroplasty field. One of the key elements of this pilot project was to address wait times as directed by the Premier’s Advisory Council on Health and its Framework for Reform. A partnership was carved out between Alberta Health – which contributed $20 million in funding – three regional health authorities (and their clinical partners including HRC), the Alberta Orthopedic Society, the Alberta Bone and Joint Institute and physicians from across the province.
The trial illustrated that with improved management practices (such as centralized intake and assessment), realignment of resources, and collaboration and cooperation across the delivery path, costs can be reduced, wait times can be decreased and benefits to patients enhanced within the public, not-for-profit system. Specifically, the trial reduced overall wait times from family doctor through to surgery by 90 per cent (from 19 months to approximately 11 weeks).
Risks and Opportunities of HRC
The surgeries were more expensive, but came with significant risk in other areas as well: the dependency between the parties became detrimental to both; the relationship created expensive duplication of capital and lack of control over infrastructure planning; and the private contract meant a serious lack of accountability and transparency. Additional risks identified in international studies include lower quality of services and poorer articulation with the broader health community.
Comparing For-Profit to Non-Profit
The Alberta government acknowledged that the for-profit surgeries would cost more but justified this with the wait-time reductions were worth the cost. The examination of the performance of HRC in contrast with the public non-profit elements of the pilot project helps to illuminate the wait-list issue. The analysis above reveals that the public partners in the Alberta Hip and Knee pilot are still working well, with wait-time advances at lower cost than the HRC and without the risks.
The wait-list reduction achievements of this project were attained despite, not because of, for-profit involvement in the trial. It was the specialized or focused nature of the clinic, not the investor-owned nature, which increased patient access and enabled innovation. This is consistent with international evidence from Canada and abroad demonstrating that wait lists are actually lengthened as a result of the existence of for-profit entities delivering clinical health care services.
What advocates of for-profit delivery suggest is that the removal of patients from the public queue will shorten the queue. What they fail to note is that the removal of health professionals from the public delivery system will slow down the system and result in the queue growing even longer.
The Alberta Hip and Knee pilot project demonstrates the capacity of the public health system to evolve and innovate in such a way that costs are maximized, wait lists are reduced, and patient outcomes are improved. The pilot set the stage for province-wide learning and provided a platform for a revolution in hip and knee surgical practices. Gains from the pilot continue to be made through the Transformational Improvement Program (TIP), which specifically addresses wait lists. Results to date show improvements in length of stay at almost every site, as well as gains in other key indicators of quality such as patient satisfaction and early mobilization after surgery. The rewards are substantial. They include higher volumes of surgeries as more bed days become available, greater satisfaction as patients move more quickly from referral to surgery, and reinvestment of the efficiency savings in ways that can further improve care quality and safety. Our public health system is more than able to meet the needs of our citizens when the political will exists and resources are allocated.
Conclusion
It matters who delivers clinical services. The spectacular fall from grace of HRC is a fascinating study in the ills of health care privatization, the risks to patient care, and the need to reiterate the importance of our publicly financed and delivered health care system. The case study of HRC is very consistent with international studies, validating the conclusion that for-profit incursions into the health care system are risky, costly and lack the accountability Canadians expect, demand and deserve.
The success of the public partners in the pilot project on wait-time reductions in Alberta clearly shows that public solutions can achieve the same wait-list targets at less cost and much less risk to the public.
http://parklandinstitute.ca/downloads/reports/HRC-Report.pdf

And…

Neat, Plausible, and Wrong: The Myth of Health Care Unsustainability

Canadian Doctors for Medicare
February 2011
Which Costs Are Rising?
While the cost of Medicare has not grown as a percent of GDP over the last 35 years, there have been significant increases in total health care system costs over the same period, and those increases have accelerated in the last decade. Overall health spending in Canada has risen from about 7% of GDP in 1975 to about 10.7% in 2008. In 2010, heath care spending was estimated to be about 12% of GDP.
If Medicare costs are stable, and public sector costs are rising slowly, why are total health care costs increasing rapidly? The real cost driver is precisely the thing that critics of Medicare tout as the solution: private health care.
Currently 30% of all health care spending is in the private sector, up from 24% in 1975. That growth is the result of significant increases in costs in the private health care sector, including out-of-pocket spending and the costs of private insurance.
http://www.canadiandoctorsformedicare.ca/images/stories/Neat_Plausible_and_Wrong.pdf

In spite of the overwhelming body of evidence to the contrary we still hear over and over again that the private sector always produces higher quality at lower costs – whether in health care financing through private insurers, or in health care delivery through investor-owned facilities. Canada has provided us with yet another real-life experiment that confirms, once again, that the opposite is true.
The Alberta government understood that private care would cost more than in the public sector, but they agreed to it in an effort to reduce wait times. However, not only did the private sector provide care at higher costs, they had intruded into the loosely-integrated public system, creating the potential of increasing wait times in the public sector (explained above).
Fortunately, with a coordinated effort to attack this problem – coordination that only happens in the public sector – Alberta was able to reduce its wait times for orthopedic procedures from 19 months down to 11 weeks – in spite of, rather than due to, involvement of the private sector.
Also, quite ironic but very instructive, not only did care cost more when delivered by the private, for-profit Health Resource Centre, the extra costs were not enough and the business model failed – ending in bankruptcy.
In health care financing and delivery, public and non-profit institutions can always provide greater value and efficiency than the for-profit private sector, but it requires a government that is supportive of their public financing system.
In 2005, Conservative Premier Ralph Klein of Alberta wrote in the Calgary Herald, “Let me be blunt. We have unacceptable waiting lists in our publicly funded, rationed health-care system, and all the money in the world is not going to eliminate them… In simple terms it means that if you are in pain or suffering and cannot wait in line, you should be able to buy the health care you need.”
The Calgary Herald published my response which stated, “Ralph Klein states that ‘all the money in the world’ is not going to eliminate waiting lists, unless the source of the funds is private instead of public. What nonsense. Excessive queues are eliminated by making minor, selective adjustments in the system’s capacity. Responsible stewards of any health-care system, public or private, will make these adjustments. The difference is the public system would be adapted to accommodate everyone, whereas private systems accommodate only those who can pay.”
Of course, Alberta didn’t listen to me and continued on with its efforts to privatize. However, they did involve the public sector in queue reduction, with considerable success. But by including the private sector, the experiment was much more expensive, and resulted in further losses through the HRC bankruptcy.
Although these reports are about Canada’s Medicare system, the conclusions could apply to our Medicare as well, if we expanded it into a single payer national health program. It would be less expensive and more effective than what we have, provided we also elect stewards who believe in and support public systems.

The power of universal health care

By Winthrop C. Dillaway III, M.D.
The Star-Ledger (N.J.), April 18, 2012

In 2009, when President Obama began his term of office, the U.S. health care system was painfully dysfunctional. He announced an initiative for health care reform. Early on, “universal health care” garnered thought and attention. Unfortunately, with the ensuing debate and politics, the concept of universal health care faded and disappeared.

On March 23, 2010, the health care reform bill was signed into law with considerable fanfare. Genuine goodwill and effort contributed to the final product and many aspects of the law are laudable. Nevertheless, two years later, the health care system in the United States remains painfully dysfunctional. Why? What is right? What is wrong? And whatever happened to universal health care?

T.R. Reid, Pulitzer Prize-winning journalist and author of the best-selling book “The Healing of America,” makes three powerful observations: First, all other leading countries provide universal health care at half the cost and higher quality than the United States does. Second, he points to the remarkable variety of health care systems in those successful countries. Third, and most important, what those successful systems have in common is universal health care. Reid states, “Every developed country except the United States has reached the same conclusion: Everyone should have access to medical care.”

The questions about universal health care jump out. Is it a fluke? Why and how do 100 percent of those societies achieve universal health care while America doesn’t come close? Or, perhaps, does universal health care intrinsically offer leverage over management of cost and quality?

Two major obstacles prevent serious comparison of U.S. health care to that of other countries. First is the sheer enormity of the U.S. system; size, cost, complexity, competing expectations, history, politics and, especially, vested interests. Second, that success elsewhere comes with so many different systems. It is nearly impossible to imagine how or what could be captured to improve the U.S. system. Nevertheless, the key to simplifying, clarifying and moving toward a functional, cost-effective and fair health care system is hidden in a paradigm shift to the concept of universal health care.

Here’s how: All health care systems face the triple challenges of access, cost and quality. With universal health care, access is fixed, leaving only two variables: cost and quality. Furthermore, policy makers who want to provide health care to all would naturally be forced to focus on cost and temporarily set aside the third variable, quality.

To focus on cost, all successful health care systems (in fact, all successful businesses) must and do have overall budgeting, accounting, overhead control and insurance risk-pooling. The U.S. system fails and ignores all four areas. No wonder the U.S. system, even reformed, is so dysfunctional. Of course, the vested interests would lobby fiercely against change in these four areas. Nevertheless, this exposure would finally allow Americans to understand what is wrong and what is right, and to see a clear path to legitimate reform.

And what about that third variable, quality, that was temporarily set aside to focus on cost? It’s no fluke that essentially all successful health care systems boast higher quality than that of the United States. (It’s a fallacy that the United States has superior quality health care.) With budgeting, accounting, overhead control and reasonable risk-pooling in place, patients are going to demand the most for their money. Quality becomes the ultimate and lasting focus for any decent health care system.

Society and policy makers need not be overwhelmed by the complexities of health care systems.

Reid points to an invaluable paradigm: simply determining, first, that access to health care be available to all leads to solutions for cost and quality. Confounded by deep experiences and the complexities of life, it is human nature to overlook the obvious.

Imagine the profound benefits to all with the discovery and implementation of this simple paradigm shift to the power of universal health care.

Winthrop C. Dillaway III, M.D., of Morris Plains is president of the New Jersey chapter of Physicians for a National Health Program.

http://blog.nj.com/njv_guest_blog/2012/04/the_power_of_universal_health.html

Is the Basic Health Program option a good idea?

The Role of the Basic Health Program in the Coverage Continuum: Opportunities, Risks and Considerations for States

By Deborah Bachrach, Melinda Dutton, Jennifer Tolbert and Julia Harris
Kaiser Family Foundation, March 2012

The Basic Health Program (BHP) is an optional coverage program under the Patient Protection and Affordable Care Act (ACA) that allows states to use federal tax subsidy dollars to offer subsidized coverage for individuals with incomes between 139-200% of the federal poverty level (FPL) who would otherwise be eligible to purchase coverage through state Health Insurance Exchanges. States can use the BHP to reduce the cost of health insurance coverage for these low-income consumers, a highly price-sensitive population with high rates of uninsurance. Depending on how it is designed, the BHP also can help consumers to maintain continuity among plans and providers as their income fluctuates above and below Medicaid levels. 
 
As states weigh whether to implement a BHP, they face significant questions and challenges. Critical among these are how to design the BHP to enhance continuity of coverage as people move among Medicaid, the BHP, and coverage through qualified health plans (QHPs) in the Exchange; how to assess the BHP’s impact on the viability and effectiveness of state Exchanges; and how to estimate revenues and costs to evaluate the financial feasibility of the BHP.

Conclusion

Federal officials have yet to provide details about how the program will be financed, administered and certified, and states are struggling to evaluate the BHP’s impact on the viability and effectiveness of state Exchanges. Federal regulations will inform state deliberations, but are unlikely to fully resolve the complexity or eliminate the risk. Ultimately, states that opt for a BHP will want to design BHP programs so as to minimize the state’s financial exposure and address any negative impacts on the Exchange. States in which a BHP is not a viable option may want to consider alternative strategies to advance affordability and continuity goals.

http://www.kff.org/healthreform/upload/8283.pdf

Comment: 

By Don McCanne, MD

The Basic Health Program is designed for individuals with incomes between 139-200% of the federal poverty level – a population that otherwise would be very vulnerable to cost sharing provisions of purchasing and using plans in the state insurance exchanges.

This report explains the moving levers that are required to construct such plans while being sure that benefits are adequate while costs are controlled for both the beneficiaries and the state and federal governments. With eligibility frequently shifting between Medicaid, the Basic Health Program, and the state exchange plans, it is clear that stability cannot be achieved. It is highly unlikely that plans can even be constructed that would meet the various goals for the patients, providers and state and federal governments, and, regardless, they would create an administrative nightmare.

Since the purpose of the Basic Health Program is to remove financial barriers to care for this vulnerable group, it only seems logical that this highly flawed plan should be discarded and replaced with an administratively simplified plan that removes access barriers not just for them, but for everyone – an improved Medicare for all.

Is the Basic Health Program option a good idea?

The Role of the Basic Health Program in the Coverage Continuum: Opportunities, Risks and Considerations for States

By Deborah Bachrach, Melinda Dutton, Jennifer Tolbert and Julia Harris
Kaiser Family Foundation, March 2012
The Basic Health Program (BHP) is an optional coverage program under the Patient Protection and Affordable Care Act (ACA) that allows states to use federal tax subsidy dollars to offer subsidized coverage for individuals with incomes between 139-200% of the federal poverty level (FPL) who would otherwise be eligible to purchase coverage through state Health Insurance Exchanges. States can use the BHP to reduce the cost of health insurance coverage for these low-income consumers, a highly price-sensitive population with high rates of uninsurance. Depending on how it is designed, the BHP also can help consumers to maintain continuity among plans and providers as their income fluctuates above and below Medicaid levels.
As states weigh whether to implement a BHP, they face significant questions and challenges. Critical among these are how to design the BHP to enhance continuity of coverage as people move among Medicaid, the BHP, and coverage through qualified health plans (QHPs) in the Exchange; how to assess the BHP’s impact on the viability and effectiveness of state Exchanges; and how to estimate revenues and costs to evaluate the financial feasibility of the BHP.
Conclusion
Federal officials have yet to provide details about how the program will be financed, administered and certified, and states are struggling to evaluate the BHP’s impact on the viability and effectiveness of state Exchanges. Federal regulations will inform state deliberations, but are unlikely to fully resolve the complexity or eliminate the risk. Ultimately, states that opt for a BHP will want to design BHP programs so as to minimize the state’s financial exposure and address any negative impacts on the Exchange. States in which a BHP is not a viable option may want to consider alternative strategies to advance affordability and continuity goals.
http://www.kff.org/healthreform/upload/8283.pdf

The Basic Health Program is designed for individuals with incomes between 139-200% of the federal poverty level – a population that otherwise would be very vulnerable to cost sharing provisions of purchasing and using plans in the state insurance exchanges.
This report explains the moving levers that are required to construct such plans while being sure that benefits are adequate while costs are controlled for both the beneficiaries and the state and federal governments. With eligibility frequently shifting between Medicaid, the Basic Health Program, and the state exchange plans, it is clear that stability cannot be achieved. It is highly unlikely that plans can even be constructed that would meet the various goals for the patients, providers and state and federal governments, and, regardless, they would create an administrative nightmare.
Since the purpose of the Basic Health Program is to remove financial barriers to care for this vulnerable group, it only seems logical that this highly flawed plan should be discarded and replaced with an administratively simplified plan that removes access barriers not just for them, but for everyone – an improved Medicare for all.

Kucinich: Single-payer the only 'obviously constitutional' health care plan

By Sam Baker
The Hill, April 16, 2012

Rep. Dennis Kucinich (D-Ohio) is continuing to argue for a single-payer health care system, saying it would not raise the same constitutional questions that have dogged President Obama’s health care law.

Kucinich on Monday highlighted a recent report that said a single-payer system would save the state of Minnesota nearly $190 billion over 10 years.

“Single-payer health care is inevitable in the U.S. and the states are the first to recognize it,” Kucinich said in a statement.

The study, prepared by The Lewin Group, said a single-payer system in Minnesota would bring savings to the state as well as employees and their families.

Kucinich also noted that single-payer — because it would be funded through taxes, similar to Medicare — wouldn’t raise the same kind of legal questions as Obama’s health care overhaul. The Supreme Court is expected to rule by June on whether the law’s individual mandate is constitutional.

“Regardless of the Supreme Court ruling on the Affordable Care Act, health care costs continue to rise, jeopardizing budgets and preventing people from getting the health care they need,” Kucinich said. “Single-payer is the only solution that is obviously constitutional and can meet our nation’s needs.”

http://thehill.com/blogs/healthwatch/other/221723-kucinich-single-payer-the-only-obviously-constitutional-healthcare-plan

PNHP note: The full text of Rep. Kucinich’s news release follows:

Nearly $200 Billion in Savings if Minnesotans Demand Single-Payer Solution for Families, Businesses

Constitutional Approach Cuts Costs, Provides Universal Coverage

WASHINGTON (April 16, 2012) – Congressman Dennis Kucinich (D-OH), coauthor of H.R. 676, Medicare for All, today released the following statement highlighting a report by respected health care analytical group, The Lewin Group, showing the State of Minnesota would save $189.5 billion over ten years by providing universal, single-payer health care for all residents.

“Single-payer health care is inevitable in the U.S. and the states are the first to recognize it.  Single-payer would cover all residents, reduce costs, increase the quality of care, lower costs to businesses, lower costs to families, increase worker pay, and relieve the state governments of enormous financial burdens that come with our health care system,” said Kucinich.

“Regardless of the Supreme Court ruling on the Affordable Care Act, health care costs continue to rise, jeopardizing budgets and preventing people from getting the health care they need. Single-payer is the only solution that is obviously constitutional and can meet our nation’s needs.”

The report from The Lewin Group showed that enacting a single-payer system in Minnesota would reduce health spending for the State by $4.1 billion (8.8%) in 2014. State and local governments would save an addition $35.7 million. Employers would save $1,214 per worker (“for employers offering health insurance coverage prior to the ACA”). Families would save an average $1,362 and the statewide savings would be $189.5 billion between 2014 and 2023.

“Insurance companies make money by NOT providing health care,” said Kucinich. “Americans are now mandated to pay massive subsidies to bail out the for-profit health insurance industry.

“One out of every three of our health care dollars goes to activities OTHER than providing care, like a massive lobbying effort to protect their profits.  Your total comes to 900 billion dollars every year.

“We have been mandating that the American people pay this much more for health care because Congress and the President have refused for decades to take on health insurance companies. This report is a wake up call for states, businesses and families struggling to deal with the rising costs of health care.

Congressman Kucinich introduced an amendment to the Affordable Care Act in 2009 in the Education and Labor Committee. The amendment, passed on a bipartisan vote but stripped from the bill, would have helped states pursue single-payer if that is what their residents wanted.

Fourteen studies by expert health care consulting firms have modeled the expected financial results if a state enacted a single-payer health care system to cover its residents.

State Annual Single-payer Savings Year
New Mexico1 $151,800,000 1994
Delaware2 $229,000,000 1995
Minnesota1 $718,000,000 1995
Massachusetts3 $1,800,000,000 – $3,600,000,000 1998
Maryland1 $345,000,000 2000
Vermont1 $118,000,000 2001
California1 $7,500,000,000 2002
Maine4 $0 2002
Rhode Island5 $270,000,000 2002
Missouri6 $1,700,000,000 2003
Georgia1 $716,000,000 2004
California1 $8,000,000,000 2005
Colorado1 $1,400,000,000 2007
Kansas1 $869,000,000 2007
Minnesota1 $19,000,000,000 2012

1.         Lewin Group
2.         Solutions for Progress
3.         Lewin Group, Solutions for Progress/Boston University School of Public Health
4.         Mathemetica Policy
5.         Solutions for Progress/Boston University School of Public Health
6.         Missouri Foundation for Health

Fourteen of the fifteen studies showed very significant savings in health care costs while at the same time insuring everyone. Maine was the exception, showing no increase/decrease in state health spending under single-payer but providing health care to an additional 150,000 residents. 

http://kucinich.house.gov/news/email/show.aspx?ID=L6KLEKV7RO3HSGKNESSI2RAXJA

Kucinich: Single-payer the only ‘obviously constitutional’ health care plan

By Sam Baker
The Hill, April 16, 2012

Rep. Dennis Kucinich (D-Ohio) is continuing to argue for a single-payer health care system, saying it would not raise the same constitutional questions that have dogged President Obama’s health care law.

Kucinich on Monday highlighted a recent report that said a single-payer system would save the state of Minnesota nearly $190 billion over 10 years.

“Single-payer health care is inevitable in the U.S. and the states are the first to recognize it,” Kucinich said in a statement.

The study, prepared by The Lewin Group, said a single-payer system in Minnesota would bring savings to the state as well as employees and their families.

Kucinich also noted that single-payer — because it would be funded through taxes, similar to Medicare — wouldn’t raise the same kind of legal questions as Obama’s health care overhaul. The Supreme Court is expected to rule by June on whether the law’s individual mandate is constitutional.

“Regardless of the Supreme Court ruling on the Affordable Care Act, health care costs continue to rise, jeopardizing budgets and preventing people from getting the health care they need,” Kucinich said. “Single-payer is the only solution that is obviously constitutional and can meet our nation’s needs.”

http://thehill.com/blogs/healthwatch/other/221723-kucinich-single-payer-the-only-obviously-constitutional-healthcare-plan

PNHP note: The full text of Rep. Kucinich’s news release follows:

Nearly $200 Billion in Savings if Minnesotans Demand Single-Payer Solution for Families, Businesses

Constitutional Approach Cuts Costs, Provides Universal Coverage

WASHINGTON (April 16, 2012) – Congressman Dennis Kucinich (D-OH), coauthor of H.R. 676, Medicare for All, today released the following statement highlighting a report by respected health care analytical group, The Lewin Group, showing the State of Minnesota would save $189.5 billion over ten years by providing universal, single-payer health care for all residents.

“Single-payer health care is inevitable in the U.S. and the states are the first to recognize it.  Single-payer would cover all residents, reduce costs, increase the quality of care, lower costs to businesses, lower costs to families, increase worker pay, and relieve the state governments of enormous financial burdens that come with our health care system,” said Kucinich.

“Regardless of the Supreme Court ruling on the Affordable Care Act, health care costs continue to rise, jeopardizing budgets and preventing people from getting the health care they need. Single-payer is the only solution that is obviously constitutional and can meet our nation’s needs.”

The report from The Lewin Group showed that enacting a single-payer system in Minnesota would reduce health spending for the State by $4.1 billion (8.8%) in 2014. State and local governments would save an addition $35.7 million. Employers would save $1,214 per worker (“for employers offering health insurance coverage prior to the ACA”). Families would save an average $1,362 and the statewide savings would be $189.5 billion between 2014 and 2023.

“Insurance companies make money by NOT providing health care,” said Kucinich. “Americans are now mandated to pay massive subsidies to bail out the for-profit health insurance industry.

“One out of every three of our health care dollars goes to activities OTHER than providing care, like a massive lobbying effort to protect their profits.  Your total comes to 900 billion dollars every year.

“We have been mandating that the American people pay this much more for health care because Congress and the President have refused for decades to take on health insurance companies. This report is a wake up call for states, businesses and families struggling to deal with the rising costs of health care.

Congressman Kucinich introduced an amendment to the Affordable Care Act in 2009 in the Education and Labor Committee. The amendment, passed on a bipartisan vote but stripped from the bill, would have helped states pursue single-payer if that is what their residents wanted.

Fourteen studies by expert health care consulting firms have modeled the expected financial results if a state enacted a single-payer health care system to cover its residents.

State Annual Single-payer Savings Year
New Mexico1 $151,800,000 1994
Delaware2 $229,000,000 1995
Minnesota1 $718,000,000 1995
Massachusetts3 $1,800,000,000 – $3,600,000,000 1998
Maryland1 $345,000,000 2000
Vermont1 $118,000,000 2001
California1 $7,500,000,000 2002
Maine4 $0 2002
Rhode Island5 $270,000,000 2002
Missouri6 $1,700,000,000 2003
Georgia1 $716,000,000 2004
California1 $8,000,000,000 2005
Colorado1 $1,400,000,000 2007
Kansas1 $869,000,000 2007
Minnesota1 $19,000,000,000 2012

1.         Lewin Group
2.         Solutions for Progress
3.         Lewin Group, Solutions for Progress/Boston University School of Public Health
4.         Mathemetica Policy
5.         Solutions for Progress/Boston University School of Public Health
6.         Missouri Foundation for Health

Fourteen of the fifteen studies showed very significant savings in health care costs while at the same time insuring everyone. Maine was the exception, showing no increase/decrease in state health spending under single-payer but providing health care to an additional 150,000 residents. 

http://kucinich.house.gov/news/email/show.aspx?ID=L6KLEKV7RO3HSGKNESSI2RAXJA

Dr. David Ansell on lessons from Chicago

By Ellen R. Hale
Louisville (Ky.) Medicine, April 2012

David A. Ansell, MD, MPH, visited Louisville in January to offer evidence from his long career as an internist in Chicago for a one-card national health program. Author of the recently published book “County: Life, Death and Politics at Chicago’s Public Hospital,” Dr. Ansell delivered a lecture to University of Louisville medical students and another to the general public. He also spoke at Grand Rounds for the Department of Family and Geriatric Medicine and the Annual Meeting of Physicians for a National Health Program-Kentucky.

Dr. Ansell criticized what he called the “death gap” in the United States – the difference in life expectancy of the insured versus the uninsured. “You can’t explain this by biological differences. The death gap is an issue of poverty, race and lack of insurance,” he said. “As a doctor, it’s completely unacceptable that people should die early simply because they’re poor.”

Dr. Ansell arrived at Cook County Hospital in 1978 for training and worked there 17 years. He then worked at Mount Sinai Hospital, a private safety-net hospital, before his current position as chief medical officer at Rush University Medical Center.

In 1986, he and several colleagues published an article in The New England Journal of Medicine titled “Transfers to a Public Hospital” documenting that 87 percent of patients transferred to County from other emergency departments lacked insurance. Many were unstable at the time of transfer. The article on “patient dumping” drew national media attention and led to Dr. Ansell’s testimony before Congress.

“We were doctors by day learning medicine but at nighttime saying, ‘OK, what are we going to do to keep the hospital open?’” he said. “It’s one thing to be all high and mighty about policy, but when you have a patient in front of you who needs something and you need to overcome the hurdles to get that patient treated, you can’t help but be moved.”

Through a breast cancer screening program he started, Dr. Ansell has found that mortality rates have decreased for white women while staying the same for black women. The Metropolitan Chicago Breast Cancer Task Force is seeking to decrease the disparity by improving the quality of breast cancer screening and care for minority women.

“We have a system that’s completely dependent on whether you have a card or not and what your card says,” Dr. Ansell said. His solution is a one-card “Medicare for all” system, which would be completely private with low administrative costs. He was critical of the Affordable Care Act for expanding Medicaid, which “doesn’t pay doctors,” while failing to address the inequalities in health care coverage that affect the ability to access services.

Asked about the debate in Louisville surrounding University Hospital, Dr. Ansell said that without a national solution, there will need to be a state or local solution. He suggested a hospital tax based on the amount of charity care performed, with revenues going to providers of indigent care. “Many hospitals that serve poor people are struggling to stay open not because of the capability of the administrators, the doctors or the nurses, but because of the design of our health care system and the way that it’s funded,” he said.

Dr. Ansell recognizes that the right to health care remains a political issue among the American people. Until it’s a right, and not a mandate and not a privilege, he said, inequality will persist.

Ellen R. Hale is the communications associate for the Greater Louisville Medical Society. Louisville Medicine is one of the society’s publications.

https://www.glms.org/Content/User/Documents/Louisville%20Medicine/LM%202012/GLMS%20Mag_April%202012-Lo.pdf

Medicare for all

By Jack Bernard
Modern Healthcare, Letters, April 14, 2012

Assuming it is not overturned by a very highly politicized Supreme Court (“In the balance,” April 2, p. 6), millions of the uninsured will eventually receive coverage under the Patient Protection and Affordable Care Act. It is a first step. But the reforms did not go nearly far enough in cost containment. Or, we believe, in coverage. We are building on a shaky foundation: expansion of private insurance companies.

Political opponents warn that the ACA’s health care reforms will result in rationing. There is already tremendous rationing of care in America despite the fact that our nation has by far the world’s highest per capita health care expenditures.

Why? Because we have chosen to administer our system through private insurance companies. Their goal is to benefit shareholders and employees—particularly top executives, many of whom have seven-figure incomes. To turn a profit, they must exclude those individuals who are the most likely to require expensive care.

This is the way that the health care free-market works, maximizing returns for shareholders, not helping patients. If you don’t believe we have rationing, talk to the demoralized doctors who spend so much of their time trying to persuade insurance companies to provide their recommended care to sick patients.

A majority, or 58 percent, of physician respondents in a survey published in the New England Journal of Medicine support an expansion of Medicare to Americans ages 55 to 64. This route was proposed, but then quickly dropped during the debates over health reform. At a minimum, Congress should have made this interim move toward universal coverage. Then, we could have expanded Medicare each year to cover more of the population until truly universal coverage was achieved and costs contained.

Along these lines, the organization Physicians for a National Health Program has determined that the most cost-effective route is Medicare for all. Medicare’s administrative costs are 3 percent, whereas private insurance runs 31 percent. The additional funds could be utilized to cover the uninsured.

Yes, there are some waiting lines in Canada for elective procedures, but Canada spends about half what we do per capita on health care. With our current spending level, we need not have lines here. In any case, under universal Medicare, any rationing that might someday be required would be based on medical need as determined by your physician, not by insurance companies.

The only way to get a handle on both costs and access is universal Medicare. That is the solution, not privatization and placing the burden directly on a powerless consumer/patient with little information and even less clout relative to providers. Because of the meekness shown by Congress in its reform efforts, we suspect that the situation will be much worse in another 15 or 20 years when it is next addressed by our children.

Jack Bernard is a retired health care executive who lives in Monticello, Ga.

http://www.modernhealthcare.com/section/articles?tagID=144

Insurer and hospital fight while children suffer

CT Children’s, Anthem provider pact expires

By Greg Bordonaro
Hartford Business Journal Online, April 16, 2012

Anthem Blue Cross and Blue Shield in Connecticut confirmed Monday morning that its provider contract with the Connecticut Children’s Medical Center has expired.

The two sides have been in contract talks for more than a year but failed to come to an agreement on new terms.

Children’s Medical Center is asking for higher reimbursement rates than Anthem is willing to offer. As a result, Anthem customers will be forced to pay higher, out of network rates or be forced to choose a different hospital.

http://www.hartfordbusiness.com/news23523.html

Comment: 

By Don McCanne, MD

Anthem Blue Cross and Blue Shield and Connecticut Children’s Medical Center have a hissy fit, Anthem walks away, and the children suffer.

What is the policy flaw that led to this? Simply that we allow a private, administratively wasteful, intrusive intermediary to create an artificial  product that serves its own business interests by taking away our choices of health care professionals and institutions. We have granted them the right to selectively contract with the health care delivery system as providers of health care, and with the patients as consumers of health care.

Wouldn’t it be far better for us to dump the wasteful, intrusive private insurers and fund Children’s with a global budget administered by a single payer national health program? We can still do that.