PNHP

Hospitals: All-payer or global budgets?

Hospitals: All-payer or global budgets?

Maryland's Hospital Cost Review Commission at 40

By John A. Kastor, MD; Eli Y. Adashi, MD, MS
JAMA, September 14, 2011

In 1971, the state of Maryland established the Health Services Cost Review Commission (HSCRC) to regulate the rates that hospitals in the state could receive from Medicare, Medicaid, and private insurers. Although other states once regulated hospital rates, only in Maryland does the practice continue. In this Commentary, we describe the Maryland system, discuss why regulation in other states failed, and suggest that other states should consider regulating hospital rates.

In 1976, when the system began full operation, the adjusted costs per admission in Maryland hospitals were approximately 26% higher than the national average. Between 1977 and 2009, Maryland hospitals experienced the lowest cumulative increase in cost per adjusted admission of any state in the nation. For fiscal year 2009, the average cost per admission at Maryland hospitals increased by only 2% compared with an estimated 4.5% increase for the rest of the nation.​ Because the HSCRC regulates the amount hospitals can increase (“mark up”) their charges, Maryland also has the lowest absolute charges of any state.

Why has regulation succeeded in Maryland? First and foremost, there is the HSCRC’s enlightened design with its legislated independence, broad enforcement powers, and discretion to chart its own course. Accordingly, changes the HSCRC sees as advantageous can be instituted without additional legislative action. Most stakeholders—hospitals, payers, and patients—favor the system. Hospitals appreciate the transparency and equity of the rate-setting process, the enhanced compensation by public payers, and the elimination of protracted rate negotiations with each payer. Payers value the clarity and parity of the HSCRC-approved hospital rates, the absence of hospital-driven cost-shifting, and the containment of continually increasing costs. Patients welcome the unfettered access to care.

Although as many as 30 states once regulated hospital costs, by 1991, only Maryland continues to use an all-payer rate-setting system. While the reasons varied state by state, fundamental to the decrease in the rate-setting system was federal policy, beginning in the 1980s, that replaced the regulatory model with deregulatory market-driven schemes. Managed care, capitation, and diagnosis related groups, not rate regulation, became the mantra to control increases in health spending.

The Maryland experience demonstrates that an enlightened independent public utility can be empowered to successfully stem inflationary growth in hospital spending. Is this the time for other states to consider or reconsider using rate regulation to control hospital costs?

http://jama.ama-assn.org/content/306/10/1137.full?etoc

And…

A National Health Program for the United States: A Physicians’ Proposal

By The Writing Committee (PNHP’s proposal)
The New England Journal of Medicine, January 12, 1989

Payment for Hospital Services

Each hospital would receive an annual lump-sum payment to cover all operating expenses – a “global” budget. The amount of this payment would be negotiated with the state national health program payment board and would be based on past expenditures, previous financial and clinical performance, projected changes in levels of services, wages and other costs, and proposed new and innovative programs. Hospitals would not bill for services covered by the national health program. No part of the operating budget could be used for hospital expansion, profit, marketing, or major capital purchases or leases. These expenditures would also come from the national health program fund, but monies for them would be appropriated separately.

Global prospective budgeting would simplify hospital administration and virtually eliminate billing, thus freeing up substantial resources for increased clinical care. Before the nationwide implementation of the national health program, hospitals in the states with demonstration programs could bill out-of-state patients on a simple per diem basis. Prohibiting the use of operating funds for capital purchases or profit would eliminate the main financial incentive for both excessive intervention (under fee-for-service payment) and skimping on care (under DRG-type prospective-payment systems), since neither inflating revenues nor limiting care could result in gain for the institution. The separate appropriation of funds explicitly designated for capital expenditures would facilitate rational health planning. In Canada, this method of hospital payment has been successful in containing costs, minimizing bureaucracy, improving the distribution of health resources, and maintaining the quality of care. It shifts the focus of hospital administration away from the bottom line and toward the provision of optimal clinical services.

https://pnhp.org/publications/a-national-health-program-for-the-united-states

And…

Hospital Payment Policy in Canada: Options for the future

By Jason Sutherland
Canadian Health Services Research Foundation, March 15, 2011

Canada’s publicly funded healthcare system is facing increasing cost control pressures. Hospitals alone represent a substantial burden on provincial health budgets, accounting for 28% of total costs. Presently, in the Canadian system, the primary source of funding for hospitals is through a global budget. Under this model, a fixed (global) amount of funding is distributed to each hospital to pay for all hospital-based services for a fixed period of time (commonly one year). Global budgets:

* Are based on historical spending, inflation, negotiations and politics in many provinces, rather than on the type and volume of services provided.
* Constrain hospital spending growth and create budgetary predictability; however, its consequences may be decreased services and increases in waiting times.
* Do not provide incentives to improve access, quality or efficiency of hospital care.

Funding hospitals on the basis of the type and volume of services they provide has become the international norm. Known as activity-based funding (ABF), these systems have been systematically supplementing global budgets in public and private insurance-based health systems around the world. ABF:

* Provides powerful financial incentives to stimulate productivity and efficiency: efficient hospitals retain the difference between the payment amount and the hospital’s actual cost of production.
* Is associated with higher volumes of hospital care, shorter lengths of stay, and yet has not been linked to poorer quality of care.
* Is linked to higher overall spending, due to higher volumes of patients being treated, and evidence of lower cost per admission is mixed.

Combining properties of ABF and global budgets may optimize the strengths of both global budgets and ABF. Many countries that have ABF to fund their hospital systems utilize a blend of global budgets to control spending, while instituting an ABF mechanism to create incentives for hospitals to provide timely and equitable access, appropriate volume of care, and efficient care.

http://www.chsrf.ca/PublicationsAndResources/ResearchReports/CommissionedResearch/11-03-15/88814df8-66e9-4db0-9cd6-b48370af5f66.aspx

Comment:

By Don McCanne, MD

Much attention is being directed to Maryland’s all-payer system of rate setti
ng for hospitals since it has been effective in shifting Maryland from a state with amongst the highest hospital costs to a state with the lowest absolute charges. Should we ignore these findings and merely proceed with the relatively ineffectual tweaks of the Affordable Care Act? Or should we adopt an all-payer system for all hospitals? Or should we change to a system of global budgeting for hospitals?

Unfortunately, the Affordable Care Act provides only illusions of cost control for hospitals. As an example, the early experiences with accountable care organizations have failed to demonstrate any significant cost savings. If we really do want to improve value in our hospital spending, we are going to have to look beyond the Affordable Care Act.

What makes Maryland’s approach unique is that hospital rates are set by a commission that has the power to regulate the rates paid by all private and public payers, including Medicare and Medicaid. They have been able to get the pricing right, to the satisfaction of hospitals, payers and patients.

So why hasn’t their all-payer approach been adopted by more states or by the federal government? It is because those that support deregulated, market-driven schemes are in control of the political process. We are being guided by the philosophy that government is always bad, even when it’s good!

In  contrast to all-payer, a single payer approach establishes global budgets for hospitals, much like global budgets for police and fire departments, schools, public libraries, and other institutions serving the public interest. Negotiated global budgets are the most effective model of ensuring adequate hospital services and resources while preventing waste on superfluous services such as the large bureaucratic monoliths within their institutions. Global budgets provide the best value in hospital care purchasing.

If we can succeed in reestablishing a public service role for government, then wouldn’t it be reasonable to simply enact an all-payer system for hospitals? The problem is that it only makes one change in our fragmented, dysfunctional system of financing care, and not a complete change at that. Under all-payer, only the rates are controlled, but each service still must be accounted for and paid for independently, and the hospitals would still have multiple public and private payers with which they would have to interact.

Canada has had tremendous success with its program of global budgeting for hospitals. As the article from the Canadian Health Services Research Foundation indicates, even the best of processes can benefit from refinement, though decisions will have to be made as to whether “activity-based funding” is a beneficial refinement.

We can applaud the efforts of Maryland which has proven for us that the health care system works better when the government is involved. Now we can go Maryland one better by establishing global budgeting for hospitals as part of a single payer national health program. Then we would have it all.

Uninsurance, poverty figures up — we need your help

Sept. 15, 2011

Dear PNHP colleague,

Our health care crisis continues to deepen. On Tuesday the Census Bureau announced that 50 million people lacked health insurance in 2010, about 1 million more than in 2009, according to the bureau’s new calculation method. It also said the number of people living in poverty in the United States had increased to 46.2 million, the highest number in the 52 years the bureau has been tracking it.

We need your support to bring about the only effective remedy for our nation’s health care woes: a publicly financed, single-payer national health insurance system, an improved Medicare for all.

Please help us build up single-payer activism by sponsoring a medical student’s participation in PNHP’s Annual Meeting on Oct. 29 in Washington. You can take action today that will help ensure that physicians will continue to be a strong force in our nation’s movement for single payer tomorrow.

We must raise $15,000 for our Nicholas Skala Health Activist Scholarship Fund to provide financial assistance to dozens of young leaders from throughout the United States, and can’t do it without the generosity of members like you.

Student PNHP members from across the country have submitted passionate essays on why the Annual Meeting would assist their development as physician-activists. Richard Bruno, a second-year medical student at Oregon Health and Science University and local student PNHP chapter leader, writes:

“For the past two PNHP annual sessions I have been inspired and challenged to lead efforts at my school and in my community. I am hoping to take the fight to more specialty societies and know that attending the Annual Meeting will help give me more resources to engage my colleagues.”

Your contribution of $100 will allow two additional students to register for the meeting. A contribution of $250 will allow a student from across the country to travel to our meeting to listen and learn from physicians and activists from around the world.

Please make a donation today. We want to bring as many student leaders to our Annual Meeting as possible to hear speakers such as Robert Evans, internationally esteemed Canadian health economist; the U.K.’s Jacqueline Davis, M.D., co-founder of Keep our NHS Public; Phillip Longman, an expert on the VA system; and the leaders of PNHP.

Please give generously to the Nick Skala Scholarship Fund. With 50 million uninsured and counting, our mission is more important than ever. Together we will hasten the day of achieving true health care justice.

Cordially,

Quetin Young Signature

Quentin Young, M.D., M.A.C.P.
National Coordinator

P.S. If you haven’t done so already, we cordially invite you to attend PNHP’s Annual Meeting on Oct. 29 in Washington, D.C., to help us strategize about the next steps forward for the single-payer movement. Register today! You’re also invited to register for our popular Leadership Training Institute the day before. For PNHP’s statement on the new Census figures, click here.

Is Poverty a Death Sentence?

By Bernie Sanders
CommonDreams.org, Sept. 13, 2011

The crisis of poverty in America is one of the great moral and economic issues facing our country. It is very rarely talked about in the mainstream media. It gets even less attention in Congress. Why should people care? Many poor people don’t vote. They certainly don’t make large campaign contributions, and they don’t have powerful lobbyists representing their interests.

Here’s why we all should care. There are 46 million Americans — about one in six — living below the poverty line. That’s the largest number on record, according to a new report released Tuesday by the Census Bureau. About 49.9 million Americans lacked health insurance, the report also said. That number has soared by 13.3 million since 2000.

Moreover, according to the Organization for Economic Cooperation and Development, the United States has both the highest overall poverty rate and the highest childhood poverty rate of any major industrialized country on earth. This comes at a time when the U.S. also has the most unequal distribution of wealth and income of any major country on earth with the top 1 percent earning more than the bottom 50 percent.

According to the latest figures from the OECD, 21.6 percent of American children live in poverty. This compares to 3.7 percent in Denmark, 5 percent in Finland, 5.5 percent in Norway 6.9 percent in Slovenia, 7 percent in Sweden, 7.2 percent Hungary, 8.3 percent in Germany, 8.8 percent in the Czech Republic, 9.3 percent in France, 9.4 percent in Switzerland. I suppose we can take some comfort in that our numbers are not quite as bad as Turkey (23.5 percent), Chile (24 percent) and Mexico (25.8 percent).

When we talk about poverty in America, we think about people who may be living in substandard and overcrowded homes or may be homeless. We think about people who live with food insecurity, who may not know how they are going to feed themselves or their kids tomorrow. We think about people who, in cold states like Vermont, may not have enough money to purchase the fuel they need to keep warm in the winter. We think about people who cannot afford health insurance or access to medical care. We think about people who cannot afford an automobile or transportation, and can’t get to their job or the grocery store. We think about senior citizens who may have to make a choice between buying the prescription drugs he or she needs, or purchasing an adequate supply of food.

I want to focus on an enormously important point. And that is that poverty in America today leads not only to anxiety, unhappiness, discomfort and a lack of material goods. It leads to death. Poverty in America today is a death sentence for tens and tens of thousands of our people which is why the high childhood poverty rate in our country is such an outrage.

Some facts:

• At a time when we are seeing major medical breakthroughs in cancer and other terrible diseases for the people who can afford those treatments, the reality is that life expectancy for low-income women has declined over the past 20 years in 313 counties in our country. In other words, in some areas of America, women are now dying at a younger age than they used to.

• In America today, people in the highest income group level, the top 20 percent, live, on average, at least 6.5 years longer than those in the lowest income group. Let me repeat that. If you are poor in America you will live 6.5 years less than if you are wealthy or upper-middle class.

• In America today, adult men and women who have graduated from college can expect to live at least 5 years longer than people who have not finished high school.

• In America today tens of thousands of our fellow citizens die unnecessarily because they cannot get the medical care they need. According to Reuters (September 17, 2009), nearly 45,000 people die in the United States each year — one every 12 minutes — in large part because they lack health insurance and cannot get good care. Harvard Medical School researchers found in an analysis released on Thursday.”

• In 2009, the infant mortality rate for African American infants was twice that of white infants.

I recite these facts because I believe that as bad as the current situation is with regard to poverty, it will likely get worse in the immediate future. As a result of the greed, recklessness and illegal behavior of Wall Street we are now in the midst of the worst economic downturn since the 1930s. Millions of workers have lost their jobs and have slipped out of the middle class and into poverty. Poverty is increasing.

Further, despite the reality that our deficit problem has been caused by the recession and declining revenue, two unpaid for wars and tax breaks for the wealthy, there are some in Congress who wish to decimate the existing safety net which provides a modicum of security for the elderly, the sick, the children and lower income people. Despite an increase in poverty, some of these people would like to cut or end Social Security, Medicare, Medicaid, food stamps, home heating assistance, nutrition programs and help for the disabled and the homeless.

To the degree that they are successful, there is no question in my mind that many more thousands of men, women and children will die.

From a moral perspective, it is not acceptable that we allow so much unnecessary suffering and preventable death to continue. From an economic perspective and as we try to fight our way out of this terrible recession, it makes no sense that we push to the fringe so many people who could be of such great help to us.

Bernie Sanders (I-Vt.) was elected to the U.S. Senate in 2006 after serving 16 years in the House of Representatives. He is the longest serving independent member of Congress in American history. Elected Mayor of Burlington, Vt., by 10 votes in 1981, he served four terms.

PNHP note: Sen. Sanders held a hearing on Sept. 13 on this topic where Dr. Garrett Adams, president of PNHP, was among those giving testimony. You can read Dr. Adams’ testimony here.

https://www.commondreams.org/view/2011/09/14-6

Hospitals: All-payer or global budgets?

Maryland’s Hospital Cost Review Commission at 40

By John A. Kastor, MD; Eli Y. Adashi, MD, MS
JAMA, September 14, 2011

In 1971, the state of Maryland established the Health Services Cost Review Commission (HSCRC) to regulate the rates that hospitals in the state could receive from Medicare, Medicaid, and private insurers. Although other states once regulated hospital rates, only in Maryland does the practice continue. In this Commentary, we describe the Maryland system, discuss why regulation in other states failed, and suggest that other states should consider regulating hospital rates.

In 1976, when the system began full operation, the adjusted costs per admission in Maryland hospitals were approximately 26% higher than the national average. Between 1977 and 2009, Maryland hospitals experienced the lowest cumulative increase in cost per adjusted admission of any state in the nation. For fiscal year 2009, the average cost per admission at Maryland hospitals increased by only 2% compared with an estimated 4.5% increase for the rest of the nation.​ Because the HSCRC regulates the amount hospitals can increase (“mark up”) their charges, Maryland also has the lowest absolute charges of any state.

Why has regulation succeeded in Maryland? First and foremost, there is the HSCRC’s enlightened design with its legislated independence, broad enforcement powers, and discretion to chart its own course. Accordingly, changes the HSCRC sees as advantageous can be instituted without additional legislative action. Most stakeholders—hospitals, payers, and patients—favor the system. Hospitals appreciate the transparency and equity of the rate-setting process, the enhanced compensation by public payers, and the elimination of protracted rate negotiations with each payer. Payers value the clarity and parity of the HSCRC-approved hospital rates, the absence of hospital-driven cost-shifting, and the containment of continually increasing costs. Patients welcome the unfettered access to care.

Although as many as 30 states once regulated hospital costs, by 1991, only Maryland continues to use an all-payer rate-setting system. While the reasons varied state by state, fundamental to the decrease in the rate-setting system was federal policy, beginning in the 1980s, that replaced the regulatory model with deregulatory market-driven schemes. Managed care, capitation, and diagnosis related groups, not rate regulation, became the mantra to control increases in health spending.

The Maryland experience demonstrates that an enlightened independent public utility can be empowered to successfully stem inflationary growth in hospital spending. Is this the time for other states to consider or reconsider using rate regulation to control hospital costs?

http://jama.ama-assn.org/content/306/10/1137.full?etoc

And…

A National Health Program for the United States: A Physicians’ Proposal

By The Writing Committee (PNHP’s proposal)
The New England Journal of Medicine, January 12, 1989

Payment for Hospital Services

Each hospital would receive an annual lump-sum payment to cover all operating expenses – a “global” budget. The amount of this payment would be negotiated with the state national health program payment board and would be based on past expenditures, previous financial and clinical performance, projected changes in levels of services, wages and other costs, and proposed new and innovative programs. Hospitals would not bill for services covered by the national health program. No part of the operating budget could be used for hospital expansion, profit, marketing, or major capital purchases or leases. These expenditures would also come from the national health program fund, but monies for them would be appropriated separately.

Global prospective budgeting would simplify hospital administration and virtually eliminate billing, thus freeing up substantial resources for increased clinical care. Before the nationwide implementation of the national health program, hospitals in the states with demonstration programs could bill out-of-state patients on a simple per diem basis. Prohibiting the use of operating funds for capital purchases or profit would eliminate the main financial incentive for both excessive intervention (under fee-for-service payment) and skimping on care (under DRG-type prospective-payment systems), since neither inflating revenues nor limiting care could result in gain for the institution. The separate appropriation of funds explicitly designated for capital expenditures would facilitate rational health planning. In Canada, this method of hospital payment has been successful in containing costs, minimizing bureaucracy, improving the distribution of health resources, and maintaining the quality of care. It shifts the focus of hospital administration away from the bottom line and toward the provision of optimal clinical services.

https://pnhp.org/publications/a-national-health-program-for-the-united-states

And…

Hospital Payment Policy in Canada: Options for the future

By Jason Sutherland
Canadian Health Services Research Foundation, March 15, 2011

Canada’s publicly funded healthcare system is facing increasing cost control pressures. Hospitals alone represent a substantial burden on provincial health budgets, accounting for 28% of total costs. Presently, in the Canadian system, the primary source of funding for hospitals is through a global budget. Under this model, a fixed (global) amount of funding is distributed to each hospital to pay for all hospital-based services for a fixed period of time (commonly one year). Global budgets:

* Are based on historical spending, inflation, negotiations and politics in many provinces, rather than on the type and volume of services provided.
* Constrain hospital spending growth and create budgetary predictability; however, its consequences may be decreased services and increases in waiting times.
* Do not provide incentives to improve access, quality or efficiency of hospital care.

Funding hospitals on the basis of the type and volume of services they provide has become the international norm. Known as activity-based funding (ABF), these systems have been systematically supplementing global budgets in public and private insurance-based health systems around the world. ABF:

* Provides powerful financial incentives to stimulate productivity and efficiency: efficient hospitals retain the difference between the payment amount and the hospital’s actual cost of production.
* Is associated with higher volumes of hospital care, shorter lengths of stay, and yet has not been linked to poorer quality of care.
* Is linked to higher overall spending, due to higher volumes of patients being treated, and evidence of lower cost per admission is mixed.

Combining properties of ABF and global budgets may optimize the strengths of both global budgets and ABF. Many countries that have ABF to fund their hospital systems utilize a blend of global budgets to control spending, while instituting an ABF mechanism to create incentives for hospitals to provide timely and equitable access, appropriate volume of care, and efficient care.

http://www.chsrf.ca/PublicationsAndResources/ResearchReports/CommissionedResearch/11-03-15/88814df8-66e9-4db0-9cd6-b48370af5f66.aspx

Much attention is being directed to Maryland’s all-payer system of rate setting for hospitals since it has been effective in shifting Maryland from a state with amongst the highest hospital costs to a state with the lowest absolute charges. Should we ignore these findings and merely proceed with the relatively ineffectual tweaks of the Affordable Care Act? Or should we adopt an all-payer system for all hospitals? Or should we change to a system of global budgeting for hospitals?

Unfortunately, the Affordable Care Act provides only illusions of cost control for hospitals. As an example, the early experiences with accountable care organizations have failed to demonstrate any significant cost savings. If we really do want to improve value in our hospital spending, we are going to have to look beyond the Affordable Care Act.

What makes Maryland’s approach unique is that hospital rates are set by a commission that has the power to regulate the rates paid by all private and public payers, including Medicare and Medicaid. They have been able to get the pricing right, to the satisfaction of hospitals, payers and patients.

So why hasn’t their all-payer approach been adopted by more states or by the federal government? It is because those that support deregulated, market-driven schemes are in control of the political process. We are being guided by the philosophy that government is always bad, even when it’s good!

In  contrast to all-payer, a single payer approach establishes global budgets for hospitals, much like global budgets for police and fire departments, schools, public libraries, and other institutions serving the public interest. Negotiated global budgets are the most effective model of ensuring adequate hospital services and resources while preventing waste on superfluous services such as the large bureaucratic monoliths within their institutions. Global budgets provide the best value in hospital care purchasing.

If we can succeed in reestablishing a public service role for government, then wouldn’t it be reasonable to simply enact an all-payer system for hospitals? The problem is that it only makes one change in our fragmented, dysfunctional system of financing care, and not a complete change at that. Under all-payer, only the rates are controlled, but each service still must be accounted for and paid for independently, and the hospitals would still have multiple public and private payers with which they would have to interact.

Canada has had tremendous success with its program of global budgeting for hospitals. As the article from the Canadian Health Services Research Foundation indicates, even the best of processes can benefit from refinement, though decisions will have to be made as to whether “activity-based funding” is a beneficial refinement.

We can applaud the efforts of Maryland which has proven for us that the health care system works better when the government is involved. Now we can go Maryland one better by establishing global budgeting for hospitals as part of a single payer national health program. Then we would have it all.

Number of Uninsured Up Another Million

By John Gever
MedPage Today, Sept. 13, 2011

A record 49.9 million Americans were without health insurance during 2010, up almost 2% from the 49.0 million uninsured in 2009, the Census Bureau reported.

The percentage of the population without insurance rose 0.2 percentage points, from 16.1% to 16.3%, though this was not significant at the P<0.1 level, the agency said.

Results from the agency’s 2010 Current Population Survey also found increases in the number of Americans living below the poverty level (46.2 million versus 43.6 million in 2009) as well as declines in inflation-adjusted median household income. The proportion of the population with private health insurance overall also declined, as did the proportion with insurance provided by employers.

In a statement, the Census Bureau indicated that these trends were outgrowths of the recent recession, even though the economy was officially in recovery during 2010.

The agency noted that the first years after previous recessions were also typically marked by increases in poverty rates and declining income and health coverage.

Regionally, the biggest increase in being uninsured occurred in the Northeast, jumping 0.6 percentage points from the previous year, to 12.4%. But the 2010 rate was still lower than for any other region.

Southern states, on the other hand, had the highest overall uninsured rate, at 19.1%, but this was actually a slight drop from 2009 when the rate stood at 19.2%.

Ironically, individuals with jobs were more likely to be uninsured than the population as a whole. The survey found that, among people 18 to 64 years old who worked at some point during 2010, 28.0 million (19.5%) lacked health insurance.

Also, people with disabilities were hit hard in 2010. Whereas 16.0% lacked health coverage in 2009, last year the figure rose to 17.3%.

Other results from the survey concerning health insurance included:

* Percent covered by private health insurance: 64.0% in 2010, down from 64.5% in 2009
* Percent covered by employer-based plans: 55.3% in 2010, down from 56.1% in 2009
* Percent covered by Medicaid only: 11.2% in both years

In the Current Population Survey, lack of health insurance is supposed to mean that respondents had no coverage at any time during the year. The Census Bureau said the survey includes a series of questions meant to confirm the complete lack of insurance, but it acknowledged that misunderstandings by respondents are common.

Consequently, the survey’s final tally “more closely approximates the number of people who were uninsured at a specific point in time during the year than the number of people uninsured for the entire year,” according to a disclaimer in the report.

John Gever is senior editor at MedPage Today.

http://www.medpagetoday.com/Washington-Watch/Washington-Watch/28488

Hospital Association and others support raising Medicare age to 67

Medicare eligibility age should go up, hospitals say

By Susan Jaffe
Politico, September 8, 2011

The American Hospital Association has a strategy for heading off any more Medicare payment cuts: Tell Congress to get the money from Medicare beneficiaries instead.

The association is urging its nearly 5,000 members to lobby Congress to raise the Medicare eligibility age from 65 to 67, in addition to other money-saving alternatives.

http://www.politico.com/news/stories/0911/63020.html

And…

The health industry case for raising Medicare’s eligibility age

By Sarah Kliff
The Washington Post, September 14, 2011

The Health Leadership Council, a consortium of 47 health industry leaders including Aetna, Pfizer and the Cleveland Clinic, will vote Wednesday on whether to endorse raising Medicare’s eligibility age. It’s “very likely” that the group will throw its weight behind the proposal, says HLC vice president Michael Freeman.

States, employers and seniors would all suffer if the Medicare eligibility rules were changed. It would shift about $11.4 billion in new costs to those parties while saving the federal government only $5.7 billion, according to the Center on Budget Priorities and Policy.

“This policy does nothing to control costs,” Sen. Bernie Sanders, an independent from Vermont, wrote in a memo obtained by the New York Times. “It simply shifts substantial costs from Medicare to other parts of government and to private and public employers.”

The Budget and Policy center estimates that if the Medicare eligibility age were raised, seniors under age 67 would have to spend $3.7 billion more in out-of-pocket cost. For many in the political system, that’s enough to reject the idea out of hand. But for some in the health-care system, that’s a profit waiting to be made.

http://www.washingtonpost.com/blogs/ezra-klein/post/the-health-industry-case-for-raising-medicares-eligibility-age/2011/09/14/gIQAJJ8sRK_blog.html

Comment: 

By Don McCanne, MD

Most of us who believe that the health care system should be designed to serve patients are enraged by America’s health industry leaders who believe that the system should be designed to serve the industry. Yet who has red carpet access to Congress and President Obama? Aren’t we going to do anything about that?

Gov. Shumlin announces appointments to Green Mountain Care Board

SEPTEMBER 13- MONTPELIER – Gov. Peter Shumlin today announced his appointments to the Green Mountain Care Board, a body that is central to the implementation of health reform in Vermont.  The Board is responsible for creating the first single payer health care system in the country, which will control costs and guarantee coverage regardless of employment status.

“In putting together this team, I looked for five really smart people who are fully committed to the goal of controlling health care costs, achieving universal coverage, and who can work as a team,” Gov. Shumlin said. “I also looked for people who could think creatively about how to encourage and reward Vermonters and Vermont health care practitioners for improving health and getting the most value out of our health care dollars.”

The Governor’s appointees include a business person, a practicing Vermont physician, an internationally-known health policy leader, an experienced state leader with extensive health care experience, and an expert in state-based health care reform.  They are:

Chairwoman Anya Rader Wallack, Ph.D. of Calais.  Wallack will chair the Green Mountain Care Board.  Wallack has served as Gov. Shumlin’s Special Assistant for Health Reform since January and spearheaded his legislative effort on health reform during the 2011 session.  Wallack is a native Vermonter who has lived for the past 13 years in Rhode Island.  She staffed then-Gov. Howard Dean on health care in the 1990s and ran the Vermont Program for Quality in Health Care.  More recently she ran the Massachusetts Medicaid Policy Institute and served as interim President of the Blue Cross Blue Shield of Massachusetts Foundation before launching a consulting business in state health policy.

 Al Gobeille of Shelburne.  Gobeille owns a restaurant business in Chittenden County.  He is active in the Lake Champlain Chamber of Commerce and serves on the Shelburne select board.  He also is a board member of the Visiting Nurse Association and a member of the state of Vermont’s payment reform advisory committee.

Karen Hein, M.D. of Jacksonville.  Hein is immediate past President of the William T. Grant Foundation, which funds research to improve the lives of adolescents throughout the U.S.  Previously she served as Executive Officer of the Institute of Medicine, overseeing the IOM Quality Initiative and numerous projects and publications aimed at informing efforts to improve health care delivery.  Hein was a Robert Wood Johnson Health Policy Fellow with the U.S. Senate Finance Committee in 1993-94.  She also is a longstanding faculty member at Columbia University and the Albert Einstein College of Medicine, where she has conducted extensive research on adolescent HIV/AIDS.  Hein has served on a number of non-profit boards, including the Dartmouth Medical School Board of Overseers and the board of RAND Health.

Con Hogan of Plainfield.  Hogan has worked for the past 10 years as an international consultant and co-authored two books about Vermont health reform with Dr. Deb Richter.  Previously he served as Secretary of Human Services under Governors Dean and Richard Snelling.  Hogan was President of the Montpelier firm International Coins and Currency from 1980-1991.  Before that he served in numerous positions in the State’s Department of Corrections.  Hogan is a well-known single payer advocate who has authored several books on Vermont health reform.

Allan Ramsay, M.D. of Essex Junction.  Ramsay is a family physician in Colchester.  Ramsay has been a professor in UVM’s Department of Family Medicine since 1980.  He has been a national leader in developing unique models for making sure that patients’ wishes are followed at the end of their lives.  Before coming to Vermont, Ramsay served as Medical Director for an HMO in rural Colorado and served in the National Health Service Corps.

Gov. Shumlin said he was pleasantly surprised at the level and volume of talent exhibited by applicants to the Green Mountain Care Board.  More than 100 people applied for the five jobs.  A nine-member nominating committee reviewed their applications and forwarded to the Governor 22 candidates who they deemed “qualified” to meet the requirements set forth in Act 48, the state’s health reform law.  Gov. Shumlin thanked the nominating committee for their work and also thanked those who applied for the board and were not chosen as appointees. 

“All of the candidates showed a strong commitment to meaningful health system reform and had impressive skills and experience,” the Governor said. He said that in making his choices, he focused on competence, experience, and a proven ability to affect real change in the health care system. 

“These five people have their job cut for them,” Gov. Shumlin said. “But I have no doubt that they will rise to the challenge and lead Vermont toward a bright future in which all of our citizens can afford access to quality care and our health care system is an asset unmatched by that of any other state.”

The Green Mountain Care Board will begin work on October 1.

Hospital Association and others support raising Medicare age to 67

Medicare eligibility age should go up, hospitals say

By Susan Jaffe
Politico, September 8, 2011

The American Hospital Association has a strategy for heading off any more Medicare payment cuts: Tell Congress to get the money from Medicare beneficiaries instead.

The association is urging its nearly 5,000 members to lobby Congress to raise the Medicare eligibility age from 65 to 67, in addition to other money-saving alternatives.

http://www.politico.com/news/stories/0911/63020.html

And…

The health industry case for raising Medicare’s eligibility age

By Sarah Kliff
The Washington Post, September 14, 2011

The Health Leadership Council, a consortium of 47 health industry leaders including Aetna, Pfizer and the Cleveland Clinic, will vote Wednesday on whether to endorse raising Medicare’s eligibility age. It’s “very likely” that the group will throw its weight behind the proposal, says HLC vice president Michael Freeman.

States, employers and seniors would all suffer if the Medicare eligibility rules were changed. It would shift about $11.4 billion in new costs to those parties while saving the federal government only $5.7 billion, according to the Center on Budget Priorities and Policy.

“This policy does nothing to control costs,” Sen. Bernie Sanders, an independent from Vermont, wrote in a memo obtained by the New York Times. “It simply shifts substantial costs from Medicare to other parts of government and to private and public employers.”

The Budget and Policy center estimates that if the Medicare eligibility age were raised, seniors under age 67 would have to spend $3.7 billion more in out-of-pocket cost. For many in the political system, that’s enough to reject the idea out of hand. But for some in the health-care system, that’s a profit waiting to be made.

http://www.washingtonpost.com/blogs/ezra-klein/post/the-health-industry-case-for-raising-medicares-eligibility-age/2011/09/14/gIQAJJ8sRK_blog.html

Most of us who believe that the health care system should be designed to serve patients are enraged by America’s health industry leaders who believe that the system should be designed to serve the industry. Yet who has red carpet access to Congress and President Obama? Aren’t we going to do anything about that?

Number of uninsured climbs to highest figure since passage of Medicare, Medicaid

50 million uninsured shows urgency of enacting single-payer Medicare for all: national doctors group

FOR IMMEDIATE RELEASE
Sept. 13, 2011

Contact:
Garrett Adams, M.D., M.P.H.
Steffie Woolhandler, M.D., M.P.H.
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org
Local physicians in 43 states available for comment (See historical table of uninsured by state below).

Official estimates by the Census Bureau showing an increase of about 1 million in the number of Americans without health insurance in 2010 – to a 45-year high of 49.9 million persons, or 16.3 percent of the population, under the bureau’s revised calculation method – underscore the urgency of going beyond the Obama administration’s federal health law and swiftly implementing a single-payer, improved Medicare-for-all program, spokespersons for Physicians for a National Health Program said today.

Employment-based coverage continued to decline. The bureau said 55.3 percent of Americans were covered by employment-based plans in 2010, down from 56.1 percent in 2009. It was the eleventh consecutive year of decline, from 64.2 percent in 2000.

In Massachusetts, whose 2006 health reform is widely viewed as the model for the federal health law, 370,000 people remained uninsured in 2010, representing 5.6 percent of the population, a jump from 4.3 percent who were uninsured in 2009.

Some states posted greater than a 3-percentage-point to 5-percentage-point increase in their uninsured rate, namely Idaho, Louisiana, Mississippi, Montana and South Carolina. In terms of absolute numbers, Louisiana had the largest increase in the number of uninsured, 240,700, followed by New York (177,700) and South Carolina (173,300). (See link to table of historical state-based data below.)

Among various population groups, the greatest loss of coverage was among working-age adults between the ages of 35 and 64, people with incomes below $49,999, and people with disabilities. Hispanics continue to disproportionately face uninsurance (30.7 percent), compared with blacks (20.8 percent), Asians (18.1 percent) and non-Hispanic whites (11.7 percent).

About 7.3 million children remain uninsured, the bureau said. Young people between the ages of 19 to 25 had a drop of 1.6 percentage points in their uninsurance rate, a figure the Census Bureau suggests is linked to the federal health law’s provision that allows dependent children to be covered under a parent’s health plan.

Lack of health insurance is known to have deadly consequences. A 2009 study in the American Journal of Public Health showed that 45,000 deaths annually can be linked to lack of coverage. Along the same lines, studies have shown that uninsured people with chronic illnesses like heart disease often delay or forgo care, often leading to serious complications of their medical condition and, in some cases, premature death.

“Tragically, we know that the new figures of uninsured mean a preventable annual death toll of about 50,000 people — that’s about one death every 10 minutes,” said Dr. Garrett Adams, president of PNHP, a nationwide organization of 18,000 physicians.

The Louisville, Ky.-based physician said that even if the administration’s new health law works as planned, the Congressional Budget Office estimates 23 million people will remain uninsured in 2019.

Adams was in Washington today, testifying before a subcommittee of the Senate Health, Education, Labor and Pensions Committee on the topic, “Is poverty a death sentence?”

Significantly, the Census Bureau said the number of people living in poverty, 46.2 million, is the largest number recorded in the 52 years such estimates have been published.

The increase in the uninsured would have been significantly higher had it not been for an increase in the number of people covered by government health programs such as Medicare, Medicaid, and military health care. Some in Congress have urged substantial cuts to such programs, particularly Medicare and Medicaid. If implemented, such cuts would almost certainly increase the uninsured rate in years ahead.

“The only remedy for this persistent problem is to insure everyone,” Dr. Adams said. “And the only way to insure everyone at a reasonable cost is to enact single-payer national health insurance, an improved Medicare for all. Single payer would streamline bureaucracy, saving $400 billion a year on administrative overhead, enough to pay for all the uninsured and to upgrade everyone else’s coverage. The new system’s bargaining clout would also help rein in rising costs.”

Dr. Steffie Woolhandler, professor at the City University of New York School of Public Health and visiting professor of medicine at Harvard Medical School, noted that the Census Bureau was once again silent on the pervasive problem of “underinsurance.”

“Not having health insurance, or having poor quality insurance that doesn’t protect you from financial hardship in the face of medical need, is a source of mounting stress, personal bankruptcy and poor medical outcomes,” Woolhandler said.

Referring to the Affordable Care Act, she said, “The new law’s subsidies for health insurance will not be sufficient to provide quality and affordable coverage to the vast majority of Americans. Tens of millions will remain uninsured, underinsured and without access to care. We need more fundamental reform. We need a single-payer national health insurance program.”

*****

Historical state-by-state data on the uninsured from 2007-2010, compiled by PNHP staff from the Census Bureau’s newly adjusted data, can be found here: https://pnhp.org/docs/2011/Uninsured-by-state-2007-2010.pdf

Physicians for a National Health Program (www.pnhp.org) is an organization of more than 18,000 doctors who support single-payer national health insurance. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Census numbers on the uninsured

Income, Poverty, and Health Insurance Coverage in the United States: 2010

U.S. Census Bureau
September 2011

Income

Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009.

Comparing changes in household income at selected percentiles shows that income inequality is increasing.

Poverty

The official poverty rate in 2010 was 15.1 percent — up from 14.3 percent in 2009.

In 2010, 46.2 million people were in poverty, up from 43.6 million in 2009.

The number of people in poverty in 2010 is the largest number in the 52 years for which poverty estimates have been published.

Health Insurance Coverage

The number of uninsured people increased to 49.9 million in 2010 from 49.0 million in 2009. In 2010, the percentage of people without health insurance, 16.3 percent, was not statistically different from the rate in 2009 (16.1 percent).

The percentage of people covered by private health insurance decreased in 2010 to 64.0 percent (195.9 million). The percentage and number of people covered by government health insurance increased to 31.0 percent and 95.0 million in 2010.

The percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010 from 56.1 percent in 2009 (decreased to 169.3 million from 170.8 million).

The percentage and number of people covered by Medicaid in 2010, 15.9 percent and 48.6 million, were not statistically different from 2009 estimates.

The percentage and number of people with Medicare coverage in 2010 increased to 14.5 percent and 44.3 million.

In 2010, the uninsured rates decreased as household income increased — 21.8 percent of people in households with incomes ranging from $25,000 to $49,999 were uninsured; 15.4 percent of people in households with incomes ranging from $50,000 to $74,999 were uninsured; and 8.0 percent of people in households with incomes of $75,000 or more were uninsured.

U.S. Census release:
http://www.census.gov/newsroom/releases/archives/income_wealth/cb11-157.html

Full report (95 pages):
http://www.census.gov/prod/2011pubs/p60-239.pdf

Comment: 

By Don McCanne, MD

This Census report for 2010 shows that 919,000 more people were uninsured this past year than in 2009. This may be considered a ho-hum statistic by those who seem to be reassured by the provisions of the Affordable Care Act since the Act would expand coverage. However, there are other reasons to be very concerned, not the least of which are the statistics on income and poverty from this same report.

Of significance is the fact that this report counts anyone who was insured for any part of the year as being insured. It leaves out from the count of the uninsured those who have gaps in their coverage even if they were uninsured for most of the year. This results in a serious undercount of of those impacted by not being insured.

Another important deficiency is that this study makes no effort to quantify the rates of under-insurance. Employers and insurers have been redesigning their insurance products to shift more health care costs to the patient. Many studies have shown that this has impaired access to care and has caused significant financial hardship. The Census report is silent on this problem.

What is the shocker in this report is that these unfavorable insurance statistics are imposed on a background of declining income and expanding poverty. Median household income has dropped to $49,445 while income inequality is increasing. Further, the number of people in poverty (46.2 million) is the largest number in the 52 years for which poverty estimates have been published!

Anyone who has studied the Affordable Care Act realizes that health insurance policies will be very expensive even though they have relatively low actuarial values (leaving the patient responsible for 30 to 40 percent of health care costs). The new national standard in health insurance is “unaffordable under-insurance.” The subsidies for the premiums and for out-of-pocket spending have been shown to be inadequate for far too many people, again impairing access, creating financial hardship, and even leaving tens of millions with no insurance at all.

Had we enacted a single payer national health program, we could have included everyone, while eliminating under-insurance by providing first dollar coverage. We could have paid for it by eliminating the profound administrative waste that uniquely characterizes our system, and by introducing the other efficiencies of a single payer system. Wouldn’t it have been nice to be rid of the problem of the uninsured and under-insured so that we could intensify our efforts to improve income and reduce poverty? Or are those just not our national priorities?

Census numbers on the uninsured

Income, Poverty, and Health Insurance Coverage in the United States: 2010

U.S. Census Bureau
September 2011

Income

Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009.

Comparing changes in household income at selected percentiles shows that income inequality is increasing.

Poverty

The official poverty rate in 2010 was 15.1 percent — up from 14.3 percent in 2009.

In 2010, 46.2 million people were in poverty, up from 43.6 million in 2009.

The number of people in poverty in 2010 is the largest number in the 52 years for which poverty estimates have been published.

Health Insurance Coverage

The number of uninsured people increased to 49.9 million in 2010 from 49.0 million in 2009. In 2010, the percentage of people without health insurance, 16.3 percent, was not statistically different from the rate in 2009 (16.1 percent).

The percentage of people covered by private health insurance decreased in 2010 to 64.0 percent (195.9 million). The percentage and number of people covered by government health insurance increased to 31.0 percent and 95.0 million in 2010.

The percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010 from 56.1 percent in 2009 (decreased to 169.3 million from 170.8 million).

The percentage and number of people covered by Medicaid in 2010, 15.9 percent and 48.6 million, were not statistically different from 2009 estimates.

The percentage and number of people with Medicare coverage in 2010 increased to 14.5 percent and 44.3 million.

In 2010, the uninsured rates decreased as household income increased — 21.8 percent of people in households with incomes ranging from $25,000 to $49,999 were uninsured; 15.4 percent of people in households with incomes ranging from $50,000 to $74,999 were uninsured; and 8.0 percent of people in households with incomes of $75,000 or more were uninsured.

U.S. Census release:
http://www.census.gov/newsroom/releases/archives/income_wealth/cb11-157.html

Full report (95 pages):
http://www.census.gov/prod/2011pubs/p60-239.pdf

This Census report for 2010 shows that 919,000 more people were uninsured this past year than in 2009. This may be considered a ho-hum statistic by those who seem to be reassured by the provisions of the Affordable Care Act since the Act would expand coverage. However, there are other reasons to be very concerned, not the least of which are the statistics on income and poverty from this same report.

Of significance is the fact that this report counts anyone who was insured for any part of the year as being insured. It leaves out from the count of the uninsured those who have gaps in their coverage even if they were uninsured for most of the year. This results in a serious undercount of of those impacted by not being insured.

Another important deficiency is that this study makes no effort to quantify the rates of under-insurance. Employers and insurers have been redesigning their insurance products to shift more health care costs to the patient. Many studies have shown that this has impaired access to care and has caused significant financial hardship. The Census report is silent on this problem.

What is the shocker in this report is that these unfavorable insurance statistics are imposed on a background of declining income and expanding poverty. Median household income has dropped to $49,445 while income inequality is increasing. Further, the number of people in poverty (46.2 million) is the largest number in the 52 years for which poverty estimates have been published!

Anyone who has studied the Affordable Care Act realizes that health insurance policies will be very expensive even though they have relatively low actuarial values (leaving the patient responsible for 30 to 40 percent of health care costs). The new national standard in health insurance is “unaffordable under-insurance.” The subsidies for the premiums and for out-of-pocket spending have been shown to be inadequate for far too many people, again impairing access, creating financial hardship, and even leaving tens of millions with no insurance at all.

Had we enacted a single payer national health program, we could have included everyone, while eliminating under-insurance by providing first dollar coverage. We could have paid for it by eliminating the profound administrative waste that uniquely characterizes our system, and by introducing the other efficiencies of a single payer system. Wouldn’t it have been nice to be rid of the problem of the uninsured and under-insured so that we could intensify our efforts to improve income and reduce poverty? Or are those just not our national priorities?

VA experience suggests that most readmissions may not be preventable

VA Experience Shows Patient 'Rebound' Hard To Counter

By Jordan Rau
Kaiser Health News, September 12, 2011

The Veterans Health Administration, the largest integrated health care system in the country, has long employed many of the approaches Medicare is pushing on all hospitals to cut unnecessary readmissions. But new data show VA hospital patients are just as likely to end up back in a hospital bed as are patients at private hospitals.

Studies have found the VA does better than most hospitals in following appropriate guidelines for the best care to give patients.

The new statistics underscore how hard it may be for hospitals to stop patients from rebounding back through their doors, a major goal of Medicare as it seeks to curtail the nation’s ballooning health costs.

http://www.kaiserhealthnews.org/Stories/2011/September/12/VA-readmissions.aspx

Comment: 

By Don McCanne, MD

Obviously, when a patient is discharged from a hospital, every effort should be made to avoid slip-ups that might result in an unnecessary readmission soon after discharge. Yet many patients have serious, unstable conditions that can require readmissions that are unavoidable.

Differentiating avoidable from unavoidable readmissions can be very difficult. This report on VA hospital readmissions reveals that it may be nearly impossible, or that the numbers may be negligible. The VA already has in place guidelines and systems that should prevent unnecessary readmissions, yet their readmission rates are the same as private hospitals.

This brings into question the current efforts by Medicare to save costs by penalizing hospitals for readmitting patients. This policy could be particularly harmful if it resulted in the refusal to readmit patients who really needed to be back in (e.g., manage them in the emergency room and then send them back home).

Although quality improvement should be a continuing effort, this is simply another example of the totally inadequate cost containment measures of the Affordable Care Act – measures that only pretend that we are going to control costs. We need a massive overhaul of the financing system if we ever expect to bring costs under control – yes, a single payer national health program.